The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-06-08
NEWBANKINCLAW
Preparations for Putting 1t into
Effect in Progress.
Deputy Comptroller Discusses
81 me Reforms Still Needed.
CAUSE OF FAILURES.
1mprudent Concentration of
Funds in Few Hands,,
At Present There Is No Way to
Prevent It.

Washington, June appropriations
are being made by the treasury de-
partment for the prompt carrying into
effect of the various provisions Of the
new currency law.
A list of all national banks ar
ranged by states. showing the capital
and surplus of each, is being prepared
by the comptroller of the currency for
use by the secretary's office in connec-
ton with any applications that may be
received from banks for the formation
of national currency associations pro-
vided for by the new law. Deputy
Comptroller of the Currency T. p
Kane, in answer to an inquiry as to
what was being done toward preparing
| recommendations for amendments to
the national banking laws for submits
sion to the national monetary COM
| mission, stated that this matter would
be taken up and carefully considered,
but as yet nothing has been done. Such
amendments will be recommended as
experience in the practical administra-
ton of the laws has been SHOWN TO
be necessary.
The national bank act has worked
very satisfactorily and successfully, he
stated. and no radical change IN the
laws is deemed necessary. There are
number of provisions, however,
which need amendment so as to make
| their terms more explicit or definite.
correct Inconsistencies and antiquities
which have crept into the statute
through amendments from time to
| time and to supply additional provi-
| sionS necessary to meet new conditions
and changes in banking methods and
practices which have developed since
| the present bank act was adopted A
years ago.
| There are a number Of administra-
tive regulations of the comptrollers in
| regard to the management of banks
| and the conduct of their business
which, it is said. should have the force
| of law. in order that the comptroller
may have the power to correct unsatis-
factory conditions and dangerous prac-
tees found to exist In banks which
while not a violation of the banking
laws. invariably lead to disaster. AL
though Deputy Comptroller Kane
thought it unwise at present to go into
details it is well known that for lone
time the comptroller's office has i'm
portuned congress to make certain
changes in the law which would result
In greater security, especially to cred
itors of banks.
Cause of Bank Failures.
More bank failures, it is said, have
resulted from the excessive or impru
dent concentration of funds in ths
, hands of single or allied interests thar
, from all other causes combined. Th'
onlclals say it matters not so far a.
the security of such funds is concerned
, whether the liabilities consist of direc
: loans made in excess of the limit il
. violation of the statutory restriction o
the discount of commercial paper be
yond the limits of prudence and safet.
but within statutory authority.
realizing the dangers of such sit
uatlon endeavor has been made b,
2 official supervision of administrativ
regulation to supply a protection t
| the depositor. which the law does no
afford him, by insisting that the ag
r sregate liabilities of any person or O
any company. corporation or firm o
allied interests for direct loans an
discounted commercial paper shall b
g Kept within the limits of prudence an
: sa1ety, but as there is no authority G
9 law TO support such regulation in 1t
e appHcatlon to the latter, when disre
o sarded, application can be made onl
TO the conservative judgment of tn
directors of the bank as to the danger
attending such a policy. Unfortunate
Re ly Tor the welfare of the bank such ad
" monltlons, incapable of enforcement,
le Is stated. are too frequently unheede
Ie ana instead of liabilities of this natul
o pelng reduced. in some instances the
a are gradually increased, particularly
lie II the Officers or directors of the ban
IS are Identified with or interested in tt
borrowing concern.