Evening star. [volume] (Washington, D.C.) 1854-1972, 1891-06-13
THE NATIONAL BANKS.
How the Controller Of the Currency Watches
Over Them.


How the Controller Of the Currency Watches
Over Them.
H N TIE MONITOR AND SURVIVOR OF TIE
BANKING sYsTEH-How EXAMINATIONS ARE
HADH III TIE CORPS OF HxANINKRs UNDER Rm
coNTsorcsoNE QUEER IDEAS ~ TO BANKING.
A scandalous failure like that Of the Keystone
Bank directs attention to the wide discretion
and heavy responsibility that lies with the con-
troller Of the currency. He il the umpire Of the
game Of finance, and upon his alertness and
judgment much depends whether honesty or
fraud shall win.
He il more than that; he Is monitor and
supervisor Of the banking system of the nation.
1t IL his duty to watch the banks and warn
them when there appears danger Of their going
to the bad, and In the last extremity to step in
with full authority to take charge and protect
the people against the Napoleons Of finance
His protection does not always protect, but il
usually does, 90 that. as it is figured out, the
average loss under the system 10 about one
twentieth Of per cent
THR CONTROLLERS JuRIsDIcrIoN.
From his Office in the Treasury Department
the controller has to keep his eyes on 8 $50
banks with capital stock ranging from $50 900
to 5000 600 and sggregating more than .
billion dollars. Each Of these banks must re-
port its condition to the department five times
year, and the controller may call upon them
ct any moment without warning for . statement
OF their condition on certain day. All these re-
ports have to be carefully examined and COM
ments published by the banks. II anything ir-
regular or in the least suspicious is discovered
the directors q the bank are notified and re-
quested to correct or explain, as the case may
require. 1t Is the custom to notify each Of the
directors in q separate letter, that there may
be no concealmsnt on the part Of any one Of
them.
THE CORPS OF BANK EXAMINERS.
Besides this there il the control Of the corps
Of examiners, the supervision Of the solvent
banks in many other particulars and the settle
ment Of the accounts of the insolvent, the re-
demption Of old notes and the chartering Of
new aud closing Of old banks retiring from bus
mess, to all Of which the controller must give
his attention. To assist him in this he has
force OF about thirty examiners and ninety-two
other employees. Through this Office the bank
gets its charter to exist. The division of issue
sees to its currency; the redemption division
sees that the old notes are properly chewed up
into material for pulp ornaments which tour
lists fancy; the division Of reports keeps its
weather eye on the banks during their varied
existence, and finally, II they are not well-man-
aged, it becomes the duty Of the insolvsnt d.
vision to close them up and try to satisfy the
creditors. The insolvent division has had its
hands full lately between examinations, iqui-
dations and explanations. 1t is not popular
branch Of this financial system. It was not
provided for In the general plan approved by
Congress, but without approval of the powers
born OF necessity, it came into existence and
plays very important part in the system Of
ports 60 there and the fate of a tottering bank
Is there decided, a. far Is the governments de-
cision goes.
THE HAMMERS DUTIES.
A bank examiner appears to be . very indie
pendent person, clothed with extraordinary
discretionary powers, who may or may not in
form the controller Of all he knows about banks
and banking. There are some thirty EXAM
liners to watch the thirty-six hundred and odd
which he is responsible. He must look into the
affairs Of each bank in his district at least
once year and may be ordered by the con-
troller to make special examinations at any
time. The character Of these examinations de-
ponds largely upon the disposition Of the ex-
aminer and he may or may not report what he
discovers. II he does report he can take his
own time about IL. When the report reaches
the office at Washington it is regarded az a con-
ddential communication merely furnishing in
formation, which the controller treats accord
ing to his own judgment. II an examiner on
going over the accounts of . bank finds that
accounts have been illegally overdrawn, that
one man has been indorsing too many notes for
discount, or anything else that is slightly ir-
regular. he may simply call the attention Of the
officers of the bank to the matter, and If they
correct the fault say nothing Of it TO the depart
ment. II the capital Of the bank IL seriously
impaired 1t is his duty to report the matter
when he discovers 1t, but all examiners are not
prompt to do this. Examiners sometimes try
TO straighten up the affairs Of crippled bank
az nj oil
but this Is rather dangerous venture unless it
happens that those affairs are not particularly
crooked.
TO AID THE BANK IF POSSIBLE.
When bank gets into the hands Of the in
solvent division it IL not apt to get out without
settlement. It is the policy Of the depart
ment to save q bank il possible, and it is not
closed unless it appears to be necessary to fol-
low that course. Often after they are closed
banks escape going into the hands Of Q receiver,
and 1t is claimed that the delay in the Keystone
Bank affair was in accordance with the policy
Of giving banks q chance to make good any
DEFICIENCIES discovered.
There are some odd things in the way Of
banking brought to the attention Of the con-
troller. Occasionally a bank is started by five
sharpers, who want to use the national system
as Q means of securing the confidence Of the
public. whom they design to rob. But the old
| established and highly reputable bankers are
more successful in this line of robbery, when
they 60 at it. than are the professional sharpers.
The strangest people the controller Of the
| currency has to deal with are those who think
they want to 60 into the national bank business
because they have considerable money which
| they do not know how to invest. 1t is aston
| ishing how many there are who start national
banks without the remotest idea how banking
| is done. One man having formed an associa-
| ton with four others about as well informed az
himself deposited the bonds required by law
and then wrote to ask the controller what they
| should do with the rest Of their capital left
| over from the purchase Of the bonds.
Results Of Yesterdays Racing.
At Morris Park.-First race, one mile. Chat
4 a. O A1f