The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1898-12-06
He then says:


The habitual disregard Of the present
provision by the officers of so many banks
interferes with the proper supervision of
the banks by the comptroller, and tends
TO create Indifference to the other restric-
tons Of the national banking law.
The failure of the present law to pro-
vide the power to apply personal pen
atty for the making of excessive loans
sometimes embarraSses the comptroller in
endeaVoring to check tendencies toward
recklessness in loaning which point to the
ultimate ruin of a banking institution.
As before stated, the present provision,
when properly altered. should allow the
banks of larger communities to have more
nearly the privilege of loaning given per
cent of their total assets to Jne individual
winch now belongs, under a strict com
pllance with the present provision, to the
banks of the smaller communities From
this privilege they are now debarred by
The desired results can be obtained. in
our Judgment, by adding, after the words
in section 500, ''shall at no time exceed
one-tenth part Of the amount of the CAPT
tai stock of such association actually paid
in, the following words:
Provided-That the restriction of this
section as to the amount of total liabili-
ties to any association, of any person. or
of any company, corporation or firm for
money borrowed, shall not apply where a
loan in excess of One-tenth part of the
capital stock shall be less. than two per
cent of the total assets of said bank at
Ythe time of making said loan Said loan
shall be at all times protected bv collat-|
eral security equal to or greater in value
than the excess in the amount of said
loan over one-tenth of the capital stock
A strict and personal penalty, enforcea-
bic by the comptroller, should then be
provided for infractions of the amended
section by the officers of banks, to enable
the comptroller to successfully enforce
general and strict compliance with its
terms.
The comptroller then presents a series
of tables showing the general effect
of such an amendment upon the bust
ness of banks in its relation to existing
loans.
Under the head of insolvent banks the
comptroller discusses in detail his rul-
ing of May g. 1898. reversing the former
position Of the office in refusing to re-
wise an assessment against stockhold-
ers when an error in the first assess
ment became manifest.
He states that in eight banks a re-
vision of the first assessment has been
made. In three cases he has made a
second assignment against stockholders
in the interest of depositors. and in five
cases he will make returns to stock
holders of sums illegally collected from
them
He states that in the administration
of insolVent banks in the interest of
creditors he has effected annual savings
approXimating 100000.
The comptroller makes a statement
in reference to bank examinations, as
follows:
The appointment by the comptroller to
these important positions of competent
and able men, is one of the most sacred
duties of his office. To protect by every
possible safeguard their independence and
disinterestedness is equally important.
With this latter object in view, the comp
troller has forbidden the practice which
he found in existence in some of the larger
cities, of the employment of the exam
liners by banks Of their district in special
examination work for the benefit of the
bank, and not for the comptroller's office
This practice had a tendency to interfere
with the rigid impartality which should
characterize the work of a government
official
During the year the comptroller has ex-
tended over tire cities Of New York Bos-
Ton, Philadelphia and Baltimore the sys-
tenn Of semt-annual visitations by exam
liners, in force in all other sections of the
country lie has utilized, with some ben
eft, the examiners in Investigations into
the credit Of heavy debtors Of banks.