Omaha daily bee., 1902-10-05

through the supervision of the national au-
thorities and their checking of dangerous
tendencies are not known to the public, but
there is generally full discussion, of the
question of thoroughness and competency
OF bank examiners when a failure does oc-
cur. AS a rule, a high degree of efficiency
exists in the conduct Of the bank examiner
ships of the country.
Once, when visiting a friend in one of the
suburbs of Philadelphia, l received a mes
sage from a bank examiner who had been
at work in another city. He insisted that
l come at once to Philadelphia. Arriving
there l found him in company with the
president Of a large bank In the city where
he had been prosecuting his duties. A few
moments disclosed the fact that there had
been a defalcation to the amount Of at
least $500 900. AS a result of the examiners
decisive action a large part of the defal-
cation had been recovered before the board
Of directors became aware that there was
any trouble in their institution. Later.
through this defalcation and the depreci-
alton OF certain securities, this bank was
compelled to close. Infraction Of the law
in the extension Of credits through the GER
tihcation of checks sometimes results in the
wrecking OF banks which are otherwise In
good condition.
The Strain of Tragedy.
Throughout the entire history Of bank
liquidation runs a depressing strain Of
tragedy. Three suicides. in quick success
sion. followed the closing Of as many banks
in my own official experience. and / never
ordered the appointment OF a receiver with
out the apprehension tina perhaps l was
I'M uyfftfUUlv nuehfnU anrfhar n m m the laaf
desperate extremity Of those too proud to
face the results Of their own crimes.
Always the two objects first in the pur-
pose OF a comptroller of the currency in
the liquidation Of an insolvent bank are to
close up the transaction with as little delay
and expense as possible ana to realize the
maximum amount from the assets. Often It
is diflcult to accomplish speedy settlement
without heavy sacrifice Of securities, aud
frequently the only way in which to prevent
material shTinkage ia to take sufficient time
to protect the enterprises in the list Of
assets.
The records show, however, that the
cheapest liquidation Of insolvent enter
prises is tina OF national banks. This lis
to be in part accounted for by the fact that
in this phase OF his duties the comptroller
Is unhampered by red tape and has free
authority over the institutions under his
management
From the beginning OF the comptroller
ship up to 1899, for example. the amount OF
nominal assets liquidated was S235. 636. 7ss.
OF these SOL. SIS, ia was actually collected.
with $40. 900, 900 nominal assets still on hand.
The percentage Of total expenses was only
7.15. The percentage which the creditors
OF these national banks received was 1903.
and this has not materially changed in sub
sequent years.
In that year Qs99) Investigation was
made regarding the cost OF collections I'M
der receivers for state and private banks
appointed under authority OF the state
courts. Information was had concerning
2s3 such banks which paid dividends OF
42.97 per cent. The cost Of administration
was 1913 per cent OF the total collections.
or over twice the percentage Of expense Of
liquidating national banks.
OF late years the plan OF consolidation in
the administration OF insolvent banks
which have reached an adyanced stage Of
liquidation has been followed by comp
~trollers with decidedly economical results.
Some thirty different banks. for example.
were placed under one receiver and a small
force OF once assistants at Washington,
with the result that the cost Of the man
agement was reduced TO an average Of only
S427 a year for each bank.