The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-04-08

or $21. us, 5S4.62. The total loss to de-
positors in Al years on deposits now
amounting to almost three and one
half billion dollars, has been less than
80 million dollars. The cost of HQuida-
ton, based on the total amount COL
lected from assets and from assess
ment on shareholders was SIS, 5S9, 1922 or
S.3 per cent. The causes of failure have
been classified as follows:
Excessive loans, per cent. 22.S1
Fraudulent management and de-
,t7,Sioo,is S 90 oe
General stringency and panic. 1878
Comparing the result of failures and
liquidations among the national banks
with the figures in regard to the fall
ures of state banks fro m1S6S to 1896,
as given in the report of the cOmptrOl
Ter of the currency for 1896, the last
date to which complete figures are
available, it will be seen that while
only So per cent of the number OF ma
tional banks in existence failed during
this time, 17.6 per cent of the other
banks in existence failed. And while
the national banks which have failed
up to 1896 paid to their creditors rs Fer
cent in dividends, the state and other
extremely difficult to get accurate fig
ures in regard to the cost of liquida-
ton of state and other banks which
failed, but it is certainly very much
higher than the cost of liquidation of
national banks.
Probably the greatest good which is
done by the currency bureau is when
1t is discovered through the reports
that a bank has made such losses as to
involve an impairment of capital or
possible insolvency. In more cases
than many people are aware of the
comptroller of the currency, with the
aid of the bank examiner, is able to
save a bank which, without interven-
ton and assistance would have failed.
OF course it is essential to success~ln
this that the matter be kept absolutely
secret and it rarely becomes known to
anyone outside of the bank and the
comptroller's office what has been the
condition of a bank OF what steps are
necessary to save it. 1t is the exper-
fence of the office that where the Off
GERS of a bank are honest, truthful
and make complete statements of their
difficulties that in most cases addf-
tional security can be obtained for
doubtful paper or such a contribution
made by the directors or other stock
holders that the impairment of capital
or insolvency can be entirely removed
and there are many banks in the
United States today that have been
saved in this way and are now not
only thoroughly solvent but highly
prosperous institutions This system
of examinations, of course, is Tar from
perfect. The examiner cannot, in the
time at his disposal, make such an ex-
animation as will always result in the
detection of fraud and viOvltiOnS OF
law If the officers of a bank or any
of them are dishonest, beingin the bank
every day, they have every advantage
over an examiner, and are very fire.
Quently able to deceive him. NO sys-
tenn of examination can supply ability
or ensure honesty in bank manage
ment This must be supplied by the
officers and directors, and upon them
the responsibility must rest In any
well managed bank the work of the
examiner ought to be supplemented
and aided by longer continued ana
more thorough examinations by the
directors themselves or some one ap-
pointed by them independently OF me
men who regularly have charge OF the
funds and accounts. 1t is not to De eX-
pected that an examiner can or Will
detect every case of dishonesty ana
fraud, and it is rather surprising than
otherwise the number of cases exper-
fenced and capable examiners VIII De
tect and from what slight cues the
discoveries are often Slnade-
s'The national banks which had D Z
per cent of the capital in 1882, had
50 per cent in 1892, 52.4 per cent.
in 1902 and 50.43 peracent- in 1903
were 397 Der cent. on the whole IN
1852. were 37.S per cent. in 1892. 1872
per cent in 1902. and S2.S in 1908.
Some of this apparent decrease may
| be possibly due to more complete re-
turns from the banks other than ma
! tional which are now obtained, but
there is no doubt of the fact that the
I tendency is for the banks other than
national banks to increase more rap
/ idlv This is true in spite of the fact
that the law of March II, 1900. 3 Il
thorizing the organization of national
4 banks with capital as low as $25, 600
has resulted IN the conversion of a