The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-05-21
NEW LAW PROTECTS
LOAN COMP NIES
Currency Comptroller Can
Closely Watch Affairs
of Corporations.

Recent operations Of firms and indi-
viduaIs in the District show the wisdom
Of the bill passed by the last Congress
placing building and loan associations
under the supervision of the Comptroller
Of the Currency" declared Commission
er Mcfarland this morning.
Commissioner Nacfarland pointed out
that had there been such a law year
ago, Il IS probable that the failure of
the First Cooperative Association OF
Georgetown. and the Potomac Building
and Loan Association would not have
occurred.
Two years ago. after conferences with
the Comptroller of the Currency and
officials OF prominent financial institu-
tions of Washington, bin was sub
mitted to Congress by the Commission
ers, which at the last session became a
law.
Would Have Prevented Losses.
"If our bill had bC9n passed when IT
was first offered two years ago. said
Commissioner Macfarland. there would
not have been the losses which have
been incurred IN the recent failure Of
the Davis concern.
Under the law as it stands now the
Comptroller has power TO take posses
sion of any company or association
whenever in his Judgment it is in
solvent or is knowingly violating the
laws under which such company is in
coTporated, and 10 liQuidate the sane
in the manner provided by the laws OF
the United States in respect to national
banks
Practically all of the building and
loan associations saw the wisdom of
having such a law for their protection,
lie. and helped us ia framing 1t and adj
vOcating IL before Congress. But there
was an interested opposition on the part
of few individuals which delayed &C
ton. This delay has cost some of our
citizens dear.
Examination of Accounts.
Under the law. the Comptroller of
tie Currency is authorized whenever
he may deem it useful to cause eXami-
nation TO be made into the condition of
any building or loan association located
or doing business in the District of Co
lumbia. the expense to be paid by the
association examined, and after the 1st
OF July next every building or loan as
sociation IN the District of Columbia
snail make to the Comptroller OF the
Currency at least one report during
each year. according to the form which
may be prescribed by him. verified by
Inc oath or affirmation of the president
or secretary of such association, and
attested by the signature OF at least
three Of the directors All building as
sociations organized after the passage
OF the act which was approved March
last must be Incorporated The act
also requires that every such associa-
ton shall keep on deposit with the
Comptroller Of the Currency not less
than 10 per cent of its capital and sur
pluS as security for its depOsitors and
creditors. and as guarantee for the
faithful performance of It's contracts
Tie act contains penalties for the viola
ton of its provisions.
II believe its operation VIII be most
wholesome. II must be remembered that
the building and loan associations pIay
an important part in the business ar,
fairs Of the people of the District, and
that the deposits in the building and
loan associations Of the District are
about Sl4 0o0.oO0. while the deposits in the
national banks are about so, 000, 600