Evening star., 1901-12-12
Extension of the Charters of Ma
tional Banks.
CONTROLLER RIDGELEY'S VIEWS
Believes That Many Will Avail OF
the Extension.
V Al U E OF S T o g K

II reads. ..That the controller of the cur
rcncy is hereby authorized, in the manner
pro Nided by and under the condition ana
limitations of the act of July II, 1882, to
extend for further period of twenty years
the charter of any national banking asso-
citation extended under said act which shall
desire to continue it's existence after the
expiration of it's charter.
Such bill was introduced in the last
Congress, and passed the House on Feb
ruary 4, 1901, but on account of the short
ness of the time before adjournment did
not get through the Senate. Everybody
realized that with a republican House
there would be no trouble in getting It
through in this Congress, and that this
would be soon enough, although 1t Is
equally evident that the matter should now
be properly attended to. Many inquiries
are reaching the office Of the controller OF
the currency in regard to the terms of this
second extension of bank charters, and un-
til Congress actually passes this or some
similar act he will be unable to reply def
nitely. Moreover, there is a great deal of
work to be done by the bureau Of engrav-
ing and printing before July IA, 1902, when
the charters will begin to expire. By the
terms of the act of July II, 1852, which will
probably be re-enacted, every bank desiring
to issue circulation will be compelled to
issue notes of different design from those
now outstanding. The law requires the
banks which obtain an extension Of charter
to clean up their old circulation accounts
by the deposit of lawful money to cover
that still outstanding, within three years.
The present controller has recommended
that this period be reduced to six months,
in order to get the work more promptly
through the Office. But in any event,
whether his recommendation is enacted
into law, or whether the existing three
year privilege remains, rush of work will
fall on the bureau of engraving and print
ing as as legislation for the extension
of the charters Is secured.
Controller Ridgley's Views.
Speaking of these extensions to Star
reporter today, Mr.. William Barrett Ridg-
ley, the new controller of the currency,
said:
THE whole question of extensions is as
clear as any other provision of the banking
act. The first charters issued under the
act of 1863 were for a period not exceed
ing twenty years; In some cases the prov-
sion was for nineteen years and In one In
stance for eighteen years. In consequence
a large number of charters began to ex-
pire in 1882 and until the act of that year
was passed many of these banks had to go
into voluntary liquidation and reorganize.
That course will again be necessary unless
Congress passes this Aldrch bill or it's
equivalent, for the extensions of 1882 under
the act of July II, 1882, will on July IA Of
the coming year begin to expire, making
nearly forty years of national banking his
tory. The act of 1882 authorized the eX-
tension of the corporate existence of any
national banking association, which had
reached the termination of it's corporate ex-
iStence by the consent in writing Of share
holders, owning not less than two-thirds Of
the capital stock of the association. The
office furnishes on request formal blanks
and instruction relating to the amendment
of the articles authorizing extension. The
shall be made into the condition of the
bank prior to approval Of the extension
and when found satisfactory the con-
troller'S certificate issues in due course.
This, suppose, will be the plan this time.
There would be, of course, no change in
the body corporate by reason of this ex-
tension
The Dissenting Stockholders.
What becomes of the dissenting stock
holders?" was asked. What experience
has the controllers Office had with the
clause of the old law in regard to appraisal
in cases of dissent? Must this appraisal be
unanlmous?"
ANY shareholder may give notice in
writing to the directors within thirty days
from the date of the certificate of approval
of extension of his desire to withdraw. He
is entitled in doing so to receive from the
association the value Of his shares to be
ascertained by an appraisal made by a COM
mittee of three persons; he appoints one,
the directors another, and these two men
choose third. In case the value so fixed
shall not be satisfactory to him he may
appeal to the controller of the currency,
who shall cause a reappraisal to be made,
which will be final and binding, and If this
reappraisal exceeds the value fixed by the
committee the bank must pay the expenses
Of it; otherwise the appellant pays the
costs"
Does this appraisal value include any
thing for goodwill. or may the majority
carry that with them?
THE value Of that stock should be based
on the banks assets. This has been the
position taken in every case in which there
has been an appeal to the controller Of the
currency. Cases Of appeal have been very
few-not more than half dozen. With
these exceptions, the question Of the value
Of the stock to be paid to the dissenting
stockholder has been settled between the
association and the shareholders or holders
interested. The procedure on appeal cases,
so far as the controller goes, is to make
special examination of the affairs Of the
bank. The controller would, of course,
which the dissenting shareholder appealed.
whether its verdict was unanimous or
merely two to one against him."
Will the Banks Extend.
do you judge that the banks are as
rule going to extend, provided the new
legislation is granted?"
Requests are coming in every day for
information which indicates that such will
be the case. Between July IA, 1902 and
December 81 1903, the charters of $50
banking associations will expire for the
second time. and can only be extended
under provisions of legislation to be en-
acted by this Congress. The others, which
will expire for the first time are not ma
terial to this inquiry as they can be ex-
tended under the act of 1882. This whole
matter Of charter extension Is less COM
plicated than most correspondents seem to
think and do not anticipate any great
difficulties arising under the operation Of
such a bill as that presented by Senator
Aldrich."
win there not be a tendency for the
banks Of low earning power, which have
good assets and high appraisal value, to go
out of business on the expiration Of their
charters?'
That Is. something for the shareholders
of the banks themselves to determine; they
may extend or liquidate: the written con-
sent Of shareholders owning two-thirds of
the stock, provided the necessary legisla-
ton is obtained will extend the charter;
less than that will compel liquidation
There is an observable tendency now to-
ward bank consultations, especially in
Boston and in New York. The economies
of this cOnSOl idaffnn have nofhipO 10