The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-04-13
NATION AND THE
STATE UNITE IN
BANKING REFORM
Federal and State Banking
Departments Will Work To-
gether in the inspection Of
Indiana Banks.
ASSET JUGGLING TO
BE STOPPED BY MOVE
This Method Not INDUCED in
BY Indiana Banks, But Un-
der Present System It Is a
Possibility.
Especial correspon dent.)


Indianapolis, April 13.-There is a
plan on foot by which the state bank
ing department and the government
banking department will work togeth-
er in the matter OF inspecting banks
all over the state. OF course, the fed
eral government has no jurisdiction
over the state, private. or savings
banks organized under state laws, nor
over trust companies and neither has
the state any jurisdiction over nat
ional banks, but If the proposed plan
is carried into effect, and it looks like
it will be. all examinations will be
made in such a manner as will pre-
vent banks and trust companies from
juggling their assets in order to make
q showing.
Wiies' Statement.
Lawrence A. Wiles. head of the
banking department in the office Of
the auditor of state, said yesterday
that the plan was proposed some time
ago by the controller of the currency
and that the Indiana department
agreed to it.
For instance, it is a fact that many
of the national banks in Indiana are
closely connected with trust compan-
les. In fact, they own some of the
trust companies, though their business
is entirely separate from each other.
Now when the national bank examin-
er comes along to examine the nation
al bank 1t is possible for the national
bank to bring over from the trust COM
pany a lot of cash of securities and
keep them in the national bank until
the examiner gets through. Then they
are taken back to the trust company
where they are kept while the state
bank examiner. who comes along later
is making his examination of that in.
stitution.
Practice Not Common.
1t Is not to be understood from this
that this practice is INDUCED in by
any of the national banks and trust
companies in this state. There is no
proof that 1t is. But under the pres
ent system it can be done that way.
and it is this possibility of crooked
work that the controller of the cur
rency hopes to eliminate.
The plan proposed is that before
the national bank examiner makes an
examination of national bank that
Is connected with trust company he
shall notify the state banking depart
ment and the latter will send a state
bank examiner to make an examsn-
alton OF the trust company on the
same day. Thus each institution will
have to stand alone. It was said at
the office of the auditor of state, yes
terday, that the plan will probably be
carried into effect in short time. as
both the federal and the state depart
ments have agreed to it.
And then the state banking depart.
ment will 60 even further Some of
the trust companies of the state are
owned by private or state banks. and
In such cases simultaneous examin.
atoms of both institutions will be
made. In this way an examination
will show real conditions-not suppos-
ed or fictitious conditions. 1t is be-
lfeved. too, that the banks will not Of
fer any objections to the new plan,
for it will not do any harm to an hon.
est concern.