Omaha daily bee., 1895-12-03
THE NATIONAL BANKS.


The present comptroller of the cur
rency is friendly to the national bank
system. but he believes that it can be
| improved and recommends amendments
| to the law for this purpose. He would
have officers and directors of national
banks held to a more rigid responsibility
| and made subject to removal by the
| comptroller for violations of law and
mismanagement. There are sound rea-
sons for this recommendation. COncCding
that as Il rule bank officers and directors
are careful in the management of their
institutions, and strictly conform to the
requirements of the law, still the his
tory of bank failures shows that laXity
exists and that the periodical eXamna
tons made are not il perfect safeguard
against miSmanagcment and violations
of the law. Perhaps giving the comp
troller of the currency power to remove
officers and directors would not be, but
it is highly probable that it would have
the effect to induce greater care and
vigilance on the part of those RESPONSE
bic for the proper and honest manage
ment of the banks, and this is certainly
to be desired. Another judcious recon-
mcndation is that once year the di-
rectors of national banks be required
TO make an examination of the affairs
Of their institutions and submit II re
port to the comptroller. This would
insure thorough inspection of the
banks annually by the directors, n thing
not now, it is believed, generally done.
Indeed, it is safe to assume that the
directors of Il large proportion of the
more than 3,700 national banks in the
country are never informed, from per-
Sonal examination, as to the exact CON
dition Of the institutions under their
charge. II is too commonly the case,
there is every reason to believe, for di-
rectOrs to be content with Il perfume
tory inspection, accepting, rs many
bank examiners do, the statements of
the executive officers. Evidence of this
is furnished by almost every bank fail
ure that has occurred since the national
system was founded. No less commen-
dable Is the suggestion regarding the
restriction upon loans to executive Off
GERS and employees of banks
No honest bank official will object to
these recommendations of the comp
troller of the currency, the embodiment
of which into law would impose no
onerous duty nor any obligation not
entirely legitimate and consistent with
sound business principles. 1t must be
the desire of all national bankers to in
crease and strengthen public confidence
in the system and the tendency of such
requirements, enforced by law, as the
comptroller recommends, would GER
tainly conduce to this. 1t Is not to be
supposed that the proposed amend
ments to The law would be an absolute
remedy for mismanagement or entirely
do away with practices that have led to
so many failures, but there can be no
doubt that they would be productive of
improvement and would operate to
the safety of the banks.
Men of all parties agree that it would
be wise and just to allow the national
banks to issue notes TO the par value
of the bonds deposited to secure circu-
lation. This has been advocated by
Senator sherman and other distin-
guished iinanciers. The notes would be
equally safe if this were done and it
would enable the banks to increase the
supply of currency some $40, 900.
The suggestion as to reducing the tax
on circulation will not have general
popular approval. The views of Comp
troller Eckels regarding the retirement
of the legal tender notes are merely an
echo Of his superiors in the admins