The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-04-09
William B. Ridge|y Makes In
tsTesting Address on Banking
THE INTERESTS REPRESENTED
Meeting of the American Academy OF
Political and Social Science Is
Largely Attended and Many
Learned Addresses Made.

Philadelphia. April S.-A convention OF
national Importance, especially to Indus
trial interests. began here today, the oc-
casion being the eighth annual meeting
of the American Academy of Political
and Social science.
Delegates from many cities assembled
at the Manufacturers club and nearly
all great corporate interests were repre-
sented The chair was occupied by
Frank A. Vanderlip, former assistant
secretary of the treasury and now vice
president of the National City bank Of
New York.
The subject under consideration dur
Ing the session is The Government in
Its Relation to Industry" which is sub
divided and taken up in detail
The first branch of the topic was THE
Government Regulation of Banks and
Trust Companies and addresses were
delivered by William Barret Ridgely,
comptroller of the currency, who spoke
on "The Control of National Banks
Frederick D. Kilburn, New York state
superintendent of banks, THE Control Of
Trust Companies" and Prof. Frederick
A. Cleveland of the New York universi-
ty, 'The Financial Reports of National
Banks as Means of Public Control
Mr.. Ridgey's Speech.
Mr.. Ridgely said:
Under our dual form of government
In which certain powers are given the
federal authorities and all others reserved
to the states the question of government
tai control of banking and other corpora
tons is rather difficult and complicat-
e Al.
bank act or national currency act as it
was first called, may be considered the
beginning of the federal control of banks.
This has now been exercised for more
than forty years with most satisfactory
results both to the governments, the banks
and the people who have done business
with them 1t has resulted in an excel
lent system of banks, honestly, ably and
we'll managed The figures In regard to
the number of failures and loss to deposit
tors show unequaled record of sound
ness and safety, and contrasted with the
previous records of state banks and even
with the better and stronger state banks
and trust companies which have existed
along the side of the national banks,
make a strong argument in favor of nat
ional control of institutions of this char
acter.
Total Was Light.
The total loss in over forty years is less
than eight one-hundredths of | per cent
of the average amount on deposit. The
volume of experience gained during the
forty years control of the national banks
is probably the greatest accumulation of
such experience which has ever been
made, based, as it is, upon the control of
a greater number of banks, more widely
distributed, doing large volume and
variety of business, and covering a
longer period than has ever been exer-
cised in any other country
When the act was first passed, there
was much question whether the induce
ments offered the banks were sufficient
to induce them to submit to examina-
tion, restriction and control by the Uni
ted States. Many of the early banks were
organized, or converted from state to
national as much more from patriotic
motives from hopes of increased pro-
fits. The fact is the circulation has never
been very profitable, never enough
as to induce the banks to take out
nearly the maximum amount permissible
or possible.
The maximum percentage of possible
circulation was issued in 1882 and was
sL6 per cent. This gradually declined to
2.H per cent in 1892, and has since then
steadily increased to "a. per cent in 1903.
An additional inducement for banks TO
submit to federal control is the greater
confidence in which the banks under ma
tionaI supervision and control are held
by the people. This has steadily increased
since the creation of the system as the re-
suit of the examinatios and published
ports. and that this is justified is shown
by the comparative statement of the fail
Ures of national and state banks. From
the date of the organization of the nation
al system to the date of the last call for
report of condition. January q, 1904, there
were organized 7,0S3 national banks. OF
this number 404 became insolvent and /. 499
have gone into voluntary liquidation,
leaving5,1S0 in operation on January 22,
1904.
Control of Trust Companies.
''Whatever regulation or control there
II to be of the trust companies must
come for the present at least from the
state governments. Federal control of
the national banks has been so satisfac-
tory and successful that there is some
desire expressed for federal control of
other banks and trust companies. There
has not been. however, so far as | know,
any practical suggestion made by which
institutions can be forced or persuaded to
submit to federal control especially If 1t
is to be more severe than that now ex-
perienced by the states. Fenederal con-
troll. therefore. does not seem to be a
present practical question.
No Attack on Trusts.
Do not misunderstood this as in any
degree an attack on the trust companies
or as unjust criticism of them by a par
tsan of national banks. The trust COM
panies can have no better friend than l
am. l believe in them thoroughly; l
recognize the great value of their past
services and their possibilities for good
ir the development of our country in the
future There is abundant field and scope
for both the national banks and trust
companies, but they shoc&d work in har-
mony, aiding and supplementing each
other.
l speak in the interests Of both, and in
advocating more careful control and con-
seravtive management. l do so in the
interest of the many splendid banks of
both kinds whose able honest. conserya-
Hyc management. with or without restric-
live laws. Is entitled to the protection
which only such laws give them
against not only the competition but the
danger to their institutions and the whole
country which may come from Institutions
whose management Is In less honest or
leaa af7n hauda