The Washington times., 1909-08-14
Comptroller of Currency Has
New Rating Since His
Investigation.
LACK OF KNOWLEDGE
SHOWN IN REPORTS
Small Per Cent Familiar With All
the Details of Their
Institutions.

A starting lack Of knowledge Of the
business details of their institutions IS
disclosed in a report made TO Comptrol-
Ter of the Currency Murray 10y the di-
iectors IF national banks throughout
the country.
Mr.. Murray has been doing a lot Of
houseclean'az, IN his department since
his appointment by President Roosevelt
He began with the bank examiners, and
went after them so severely for inef-
fciency that lie had row on his hands.
Now Mr.. Murray is after the directors
of national banks. There are $1,000 of
them. and a short time ago they were
ast0nished to receive a letter from the
Comptroller Of the Currency asking
them what they knew about the loans
and discounts their cashiers were max
ing. the signatures and collateral OF
borrowers, and the general habits OF
employees Of their banks. In other words
Mr. Murray wanted TO know if the d.
rectors were really directing.
There were twenty-nine questions In
the letters sent out, and a good many
of the directors fUmed and snorted al
the curiosity of the Comptroller. Mr..
Murray, however, being the boss Of
national banks, they answered his ques-
lions. and incidentally disclosed some
interesting if not startling information.
State of Affairs.
There are about 1000 national banks
in the United States, with about $1,000
directors. Sixty-two per cent Of these
directors were present when the Comp
trollers letter was considered by their
respective boards.
The information now In the possession
OF Mr. Murray is to the effect that only
Is per cent Of the national bank direc-
Iors are familiar with the conditions Of
their banks in all details. Four per
cent practically admitted that they knew
nothing of the state of the banks with
which they are connected
Loans were approved by directors in
only 81 per cent Of all cases. The Of
fcers had fun control and used their
own judgment as 10 loans in nearly one
half of all the Institutions. Eighty per
cent Of the directors could not certify
10 the genuineHess of signatures on
notes discounted by the banks. Sixty
per cent tacitly allowed officers TO per-
nit overdTafts
Is Wrought Up.
Comptroller Murray IS particularly
wrought up over the laxness displayed
in the examination Of loans and collat-
eral by directors.
In 500 cases this examination was
made only once a year. in only one
half Of the banks was the condition of
the reserve regularly inquired into by
counted periodically by committee OF
the directors in a substantial majority
Of the institutions.
Violations Of the law BY national
banks do. not appear so strange to
Comptroller Murray since the replies 10
his letters have come I'm. Hardly more
than one-half Of the total number Of
directors have read the national bank
act It's requirements imposing obllga-
ri0ns upon directors have not been read
by more than 50 per cent Many OF these
directors who admitted that they wers
rot familiar with the national bank oct
said they had read the letters Of cTitl-
cfsm sent out BY the Comptroller. and
had taken steps TO correct the state OF
affairs complained Of.
Not Content.
The Comptroller, however. is not rest
ing content with promises He has
CLASSIFIED every national bank in the
United States Those whose directors
admitted that they were not familiar
with the workings Of their institutions
have been classed as had banks. anC
will now be subjected 10 four eXamlna
tions each year, at which the attendance
Of all the directors is necessary. The
good hanks are examined in this manner
onlv twice q year.
AS soon as the conditions e. a bad
bank have been remedied 10 meet =.
requirements OF the Comptroller. they
are taken OF the had" list BY pur
suing this method Of hammering away
at the banks, Mr. Murray hopes TO ina
press upoa every director ia the c0untr7
his personal obligation to the bank wit
which he is connected.