The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1905-07-13
CRITICISMS ARE
OFTEN TOO HARSH
DEPUTY COMPTROLLER SAYS THE
FAuLT-FlNDING is DONE BY
PERSONS WHO DO NOT KNOW
LAW OR CIRCUMSTANCES.

Washington, July 12.-As the result of
inquiries received at the office of the
comptroller of the currency in regard to
the recent failures of national banks in
Illinois and Kansas, with which c. j.
Devlin was connected, Deputy Comp
troller T. p Kane today issued the fol-
lowing statement supplementary to that
made last Monday:
while the law prhibits a national bank
from making a loan in excess of ten per
cent of Its capital to any Individual COM
pany, firm or corporation, there is no
limit as to the amount of commercial
or business paper which a bank may
discount, but when the comptroller Is
informed through the reports of the bank
examiners that the bank has discounted
an excessive line of business paper of
any one interest, all he can do is to adj
wise that such liabilities be reduced to
prudent limits.
In the case of the First National bank
of Topeka, Kan. the report of an exam
iration made in March, 1905, the last ex-
animation previous to the failure), but
one excessive loan was shown, and that
was not to any one of the Delvin corpora
lions, and that the report of the condition
of the bank of May 20 did not show any
excessive loans. While 1t is imprudent
and unsafe for a bank to discount an
excessive line of paper for any one inter-
est, or affiliated concerns, 1t is not UNI
lawful.
1.-THE same conditions prevails in the
Illinois banks as was shown in the
Topeka bank"
As to the statements that corporations
are favored, Mr.. Kane said:
THE only exception made in section
$500, United States revised statutes In
favor of corporations is that the liabill-
ties of the different members OF cor
poration are not required to be included
with the liabilities of the corporation for
money borrowed in fixing the limit OF
loans but the corporation itself Is sub
ject to the limit as any Individual, com
pany or firm, the liabilities of members
of unineorporated companies or firms are
required to be included with the companies
or firms liabilities for money borrowed In
determining the limit
There were several of the Devlin cor
porations, each independent of the other
but Is practically operated and controlled
by the same individuals. Under the law
q bank could loan to each Of these cor
porations an amount equal to ten pei
cent of its capital, and in addition thereto
discount its commercial or business paper
actually owned by the person negotiating
the same to any amount. The aggregate
of such loans and discounted papers
however, might exceed the limits Of pru,
dence and safety but not the yiolatiYe OF
the restrictions fixed by law
"Sincere and intelligent discussion of the
manner in which public officials discharge
their duties is generally wholesome ana
frequently productive of beneficial results
but erroneous criticism is not only harm
,, full in its effects but unjust to those
against whom it is directed, and wher
applied to bank constitutions or fedora
supervision is generally founded upon ig
noranee of the facts. or of the law OF
of both, and therefore misleading and ac-
eomplshes no good purpose"