Omaha daily bee., 1893-12-04
AS TO Suspended Banks.

the year seven remained in the charge of
examiners pending resumption.
The aggregate resources and liza abilities on
October 3, 1893, the date of the last report of
condition, compared with those of Septem-
Der 30, 1892, were 800, 531, Glib less. The
shrinkage in liabilities is accounted for by a
decrease between the dates mentioned in
the folio wing items: Capital stock. SS,032,-
gu; individual deposits, S3l4, pos. 653, and
bank and bankers deposits, $751;, 33S, les.
The decreases in resources are as follows:
Loans and discounts, 1921 ,i06. 926; stocks. etc,
1885, 564 ard due from banks and bankers
1890, 961 SOC, including ss,4lo,s15 in gold.
United States bonds held for all purposes
increased az, COL go.
Secret OF the Depression.
The comptroller reasons from the changes
in the conditions that the business dcpres-
sion of the past few months was occasloned
by reason Of depositors Withdrawing so m UGH
money, which caused q sudden contraction
in the volume of money needed or employed
for business wants. by the banks heinc COM
PEELED to call in loans and discounts TO meet
demands of depositors, which prevented the
making of new loans and rendered it hazard
GUS on the part OF the banks to grant re
uewals of credit or extensious.
The suspension of national banks during
the yenr is discussed and also that of re-
sumption, Upon the question of resumption,
the comptroller says.
With o fun knowledge of the general SOL
yency OF tho Institutions and the causes
which brought about their suspension. the
policy was inaugurated of giving all banks
which. under ordinary circumstances would
not have closed and whose management had
been honest, an opportunity to resume bust
ness. This policy was one which seemed to
itself to the comptroller as proper
under the circumstances, ana, it Is believed,
the results have justified the experiment Of
its adoption.
Clearing Loan Certificates.
The matter of clearing loan certificates is
briefly discussed. Upon this subject, the
comptroller SAYS: Briefly stated, they were
temporary loans made by the banks in each
city issuing them, associated together as a
clearing house ASSOCIATION. and were avail
able 10 such banks only for the purpose Of
settling balances due from and to each other.
these balances, under normal conditions of
business, being railways settled in coin or cur
reucy.
Their issuance at so early a date in the
financial arrangement OF the country was
most opportun5 i'll not only preventing an
acute panic, but in tending to restore public
confidence, such action demonstrating that
by mutual agreement of all, the weak banks
of the association would be. so far as de-
positors and other creditors were concerned,
as strong as the strongest.
Bearing upon the question of'what consti-
tutes la wful money reserve the comptroller
| says, after an analysis of the provisions of
the law:
To Promote Conservatism.
sin any view of the matter, however, the
! intent of the law is to compel a bank to re.
tain always on hand a very moderate pro-
! portion OF the money deposited with it for
safekeeping Dy the depositor, who prac-
tically makes a loan to the bank, payable on
Demand, for the use of which he ordinarily
receives 40 interest. The entire effect is to
| exercise a wholesome restraint upon too i'm
prudent an extension of business by Il bank,
and that this intent is recognized as an I'M
DERIVING principle or safe and conservative
commercial banking IS evidenced by the
fact that those banks which are compelled
by law 10 maintain bot Is per cent reserve
nave voluntarily for years past held an av-
erage of over % per cent, the proportion re-
quired for banks located in reserve cities"
Chlnges that Are Probable.
The following amendments are recon-
mended:
One-That every association may issue cir
culating notes to the par value of the bonds
| deposited.
Two-That the semi-annuai duty on circu-
lation be SO reduced as to equal one-fourth
of | per cent per annum.
Three-That the comptroller of the cur
rency, with the approval OF the secretary of
the treasury, be emp wered TO remove
officers ana directors Of n bank for viola
tions of law, first giving such officers aud di-
rectors an opportunity TO be heard, leaving
the vacancy so created to De filled In the
usual way.
Four-That no executive officer of q bank
or employe thereof be permitted 10 borrow
fund of such bank in any manner, except
upon application 10 and approval by the
board of direction.
Fifth-ThaJt the assistant cashier. in the
absence or inability of the cashier of n ma
tional bank to act, be authorized and en-
powered TO sign the circulating notes of such
bank.
S~ixth-That the law may be amended by
appropriate legislation so as 10 empower
some class OF public officers 10 administer
the general oaths required oy the provisions
OF the national bank act.
Bonds OF Bank Examiners.
Seventh-That bank examiners be required
70 a k an oath OF ONCE before entering upon
the discharge OF their duties, and TO give a
bond in such amount anu with such sureties
as the comptroller Of the currency may re-
quire.
Eighth-That the comptroller OF the cur
rency, with the approval of the secretary OF
the treasury, be empowered 10 appoint Two
general examiners OF conspicuous ability and
experience, TO be paid out of the reimburs-
able funds, whose duty it shall be 70 visit.
assist and supervise the various examiners
IN their several districts in order to secure
uniformity in method aud greater efficiency
in work.
Ninth-That the law De 80 amended as 70
provide that tho compensation OF all bank
examiners be fixed by the comptroller of the
currency with the approval of The secretary
OF the treasury.
The question OF loans 70 the directory IS
discussed and a distinction drawn between
directors whe are merely directors and those