The morning news. [volume] (Savannah, Ga.) 1887-1900, 1899-12-28
TRYING TO SAVE BANKS.

From the statement of the national bank
examiner who made an investigation Of
the affairs Of the Globe National Bank Of
Boston, which failed so a few days ago.
il appears that the bank was in bad way
as far back as last September. At that
time the bank examiner found that the
president had borrowed from the bank
500. 90 The banks capital was only
81. 000OD0. and therefore under the law he
could have borrowed only 10000. Some
Of the presidents friends got together and
made up the amount. Soon after. how
ever il was discovered that there were
10000 Of the banks checks outstanding,
of which there was no mention on its
books II was also found that two or
three persons had been loaned a much
larger amount than the Law permitted, and
that one Of the Dsuks customers had made
overdrafts for more than $4,000
1t seems that all of these matters were
fixed up in some way. and the bank was
allowed to continue business. But the ex-
pedients did not save the institution. A
bank so conducted was bound to fail soon
CT or later.
A question which presents Itself is, why
did not the Controller of the Currency
close the bank as soon as it was diseov-
cred that its business was not being con-
Quoted in accordance with the law? If he
had done that, he would have done his
duty. He might have been severely crit
icised by those who would have lost money
by the closing of the bank. but the public
would have approved his course. His &C
ton would have had the effect Of strength
ening confidence in the governments man.
agement of national banks.
The same course was pursued with the
Globe National Bank as was pursued with
the Philadelphia bank. of which the late
Mr.. Singerley was president. The bank
examiner found that Singerley had drawn
out for his own use more than half of the
banks capital. Hoping, however, that he
would be able to pay 1t back in good time,
and that the bank would thus be saved,
the Controller of the Currency permitted
the doors of the Institution to remain
open.
The same excuse is offered for permit
ting the Globe National to continue doing
business as was given in the case Of the
Philadelphia bank. The officer who ex-
amined the Boston bank in September says
in defense of his course that if he had
closed the bank at that time, it would
have caused not only "the failure Of that
bank. but also. by reason of its relations
10 other banks, brokers and business
houses, the probable failure of several i'm
portant business firms and individuals"
The law does not permit the Controller
Of the Currency any such discretion as
was exercised in this instance. No doubt
he did what he thought was the best thing
to do under the circumstances, but would
it not be better TO have 1t fully understood
that the Controller of the Currency has
TO discretion-that he must comply strict
" with the law? 1t may be that If 1t had
not been known that violations of the
banking act were frequently overlooked
no such violations would have occurred
in either the Boston or the Philadelphia
bank. 1t is seldom that a bank that is
wisely and conservatively managed, anc
whose officers are strictly honest, fails
AS a rule the banks that fail are thosf
whose officers speculate with its funds.