Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1909-05-04
Continued from Friday Issue.)

CONTINUED from Friday Issue.)
Behind this recommendation Of the
banking commission was the long and
honorable precedent established by the
liquidation Of national banks. A COM
parison between the costs Of New York
state and national receiverships Is
somewhat impressive in this connec-
ton. The average ratio Of expense in
winding up the New York state banks
and building and loan associations was
1901 per cent Of receipts. During one
year the average was 81 per cent. AS
already stated, the cost has reached 80
per cent. On the other hand, the aver
age cost Of liquidating thirty nine ma
tional banks in New York state was
only 8.92 per cent. The average cost
of liquidating four hundred and sixty
eight national banks scattered all over
the United States was 7.42 per cent. In
many cases the administration Of a
national bank receivership cost AZ per
cent of the nominal value of the assets
and rs per cent Of the amount collect
ed. No case is more striking than the
very latest, that Of the National Bank
of North America in New York city
a Morse bank The receiver was a
trained and trusted national bank ex-
aminer, and the expense Of winding up
its affairs was II per cent Of the mon
ey collected and seven-tenths Of one
per cent Of the assets. This bank paid
every depositor dollar for dollar and in
terest; and 1t was wound up in less
than a year.
Uncle Sam was a good model in this
respect, for the controller Of the cur
rency had established the custom Of
putting national bank examiners on
the job Of Iquidating failure banks
He has the right to name laymen, but
1t is not often done. So an experienced
hand takes the helm and, in most cases,
he simply gets a per diem for his work
What is more important, the receiver
of a national bank Is the attorney and
agent for the depositor. The New York
state receiver was often the agent for
himself.
AS soon as Governor Hughes was
acquainted with all these facts he ac-
cepted the suggestions Of the banking
commission and, at his instigation,
bills were introduced at Albany pro-
viding for changes in the banking laws.
None aroused such bitter discussion as
the, statute which put the liquidation
of failed institutions into the hands Of
the superintendent Of banks. But 1t
was to no avail; the measure was
adopted and became law exactly one
year ago.
BY its provisions the superintendent
Of banks has the authority to install
one of its deputies as receiver of a
failed institution. The deputy is re-
quired to give bond. The superin-
tendent names the counsel. The aid
and advice of the courts are only in
voked when absolutely necessary.
Publicity must attend the collection
and expenditure Of all moneys.
This new banking law became a sort
Of Magma Charta for the bank deposit
tors Of New York state; likewise 1t in
sured a square deal for the failed bank.
The very first case that came under its
provisions gave impressive proof Of its
economy and efficiency.
The Home Bank Of Brooklyn, an in
stitution with assets Of $4,000, closed
Its doors. Superintendent Williams
took charge and named as receiver G..
S. Leonard, who had been for years one
Of the most capable and trusted Of the
state bank examiners and who knew
the banking business thoroughly. He
was made a special deputy superinten-
dent. Instead Of long, expensive re-
ceivership that wound lazily through
the courts and became enmeshed In
legal red tape, the affairs Of the bank
were cleared up in what seemed an in
credibly brief time.
In exactly forty-two days after the
bank failed the receivership ended and
the institution was able to resume
business. Nothing could be more elo-
auent Of the new order Of things than
this simple schedule Of expenses:
Salary of special deputy su-
perintendent go. $50. ....$ 900 ~
Clerical assistance 4Oo.V4
Miscellaneous expenses, includ-
ing printing, stationery and
advertising go. 80. iS''o
Total ........... ........ .$7,2OO.79
This expense account Is significant.
In the first place, there Is no charge for
counsel fees, which shows that In many
cases a capable, trained man can go In
to a bank and clear 1t up without re-
course to law or legal advice.
In the second place, the pay OF the
receiver Is just about the maximum per
diem of a bank examiner. In this case 1t
averaged about $15.S5 a day. The re-
ceiver considered it adequate compen-
sation for his labors. When you COM
pare this modest stipend with the huge
fees Of receivers who operated under
the old law you get new idea of the
economy and efficiency Of the new sta
tute.
This table shows what some receiv-
erships cost in time and money under
the old order Of things, and 1t makes
striking contrast with the statement Of
the Home Bank: