The Washington herald., 1910-10-16
COMPTROLLER LAYS
PLANS FOR BUREAU
Will Keep Firms from Using
Undue Credit.
BANK SoLvENCY PROTECTED
New Organization Not to Interfere
with Credit AGencies-Origin of
Idea with Murray-Work Already
Under Nay-Burenu Not Now In
tended for National Banks.

Bankers Of Washington are much inter
ested in the proposed plan of Comptroller
OF the Currency LAWRENCE b. Murray to
establish in connection his his office a
/ credit bureau where will be registered
al borrowings of corporations. firms. and
/ individuals from national banks. 1t re-
ceives their unqualified Endorsement,
chiefly since it will work TO their dis
tinct advantage. in that by the inter
! change among the bank examiners of in
formation gathered, borrowers viii be
prevented from obtaining resources when
their credit has been exhausted in an
other section OF the country.
There is. however, considerable misun-
Outstanding as TO just what the new
bureau will undertake To do. and the
methods to be employed by Comptroller
Murray in gathering information In
view of this fact. Mr.. Murray has con-
scented 10 make public in an interview his
Ideas and Intentions with the result that
"a great IDEAS of the erroneous impression
gained viii be dispelled
Origin with Murray.
The plan has been a favorite one with
Mr. Murray practically ever since he took
up his position as Comptroller The idea
OF establishing such a bureau was mat
ter of discussion very early I'm his term,
but. due 10 the fact that there was no
appropriation for carrying out the work,
little progress was made. The primary
details of the scheme were. however.
made known TO the bank examiners
working under Mr. Murray. and each
took up actively the work in his own
district.
Probably the best results gained IN this
way were attained by Frank L. Norris.
national bank examiner for Philadelphia.
chairman or the Third district, and now
general chairman Of the committee of
five examiners summoned 10 Washington
from different sections Of the United
States 10 aid in the formation OF the
bureau. To his chief Mr.. Norris submit
ted "a method embracing three divisions
by which the information required for
the bureau could be obtained.
TO Determine Credit.
These methods of determining credits
are. first. through the credit departments
Of individual institutions. through clear
ing-house associations embracing given
number or banks in a section OF territory,
and through a central bureau Of credits
TO be organized and maintained by the
banks Of the United States.
The city bank. according TO Mr.. Nor
ris' report, as rule maintains a credit
department which collects data relative
TO the credit OF prospective borrowers.
This department, however, fails OF lis
purpose. since the only means by which
il can secure any information whatever
are either through the borrower himself
ov through mercantile agencies.
In respect 10 the first OF these sources.
the statement OF the borrower IS often
unable OF verification because OF the
fact that irresponsible note brokers often
extend the paper over widely separated
sections OF the country. The same con-
dition OF affairs. Mr.. Norris believes, ex-
lists In the mercantile agency. The in
formation gathered by the agency has for
its chief source the borrower himself. and
the ultimate result is OF no more value
than when gathered at first hand.
The second factor-that OF the infor-
nation gathered from clearing house ex-
aminers. public accountants. and inter
change of credit data by the clearing
house associations. Mr.. Norris character
ICES Of great value. although he thinks
that one great source that OF periodical
examination of banks-has been neglect
ed. Banks oftentimes are prevented
BY stress of competition from supplying
to the clearing houses all the data OF
their clients that is needed. and II is a
fault that should he remedied.
Organize Central Bureau.
As to the point Of the establishment Of
a central bureau 10 be available 10 the
banks themselves, Mr.. Norris is en-
thusiastic. He spoke in Philadelphia a
short time ago before the examiners OF
his district. outlining in brief what such
an organization could accomplish. He
said.
'If a central bureau 81 credit were or
ganized 10 attain the maximum result II
should include as subscribers not only
the national hanks. but the State insti-
buttons, and should be maintained by a
pro rata assessment upon its members I'm
proportion TO the gross liabilities Of the
associated banks. The criticism may be
offered that il would be impTacticable TO
make the association or va1ue without ,ns
Of the banking departments
of the respective States; that in order 20 !
determine the line OF given borrower |
his existent accommodation IN every lend |
ing institution I'm the United States should |
be known to the bureau. II IS admitted |
that such criticism Is reasonable and
that the difficulties Of obtaining a perfect |
community Of interest are great. but they |
are not insUperable."
Wrong interpretation.
This idea has been interpreted by many
as indicating a belief that the bureau |
would be organized by the Comptroller /
but be open to inquiry from banking in |
and in fact. serve the same |
service as a private credit bureau. That |
there is a demand for such service on /
the part of bankers Of the United States
is unquestioned. but such plan is not |
al present under consideration h, the
II should be distinctly understood that
The plans now under process Of develop |
ment by Mr. Murray merely include the
gathering Of the information for the use
IF the bank examiners. The facts and
lata collected by each in his OWE district
S 10 be tabulated and put into form
hat will be Of service 10 all the Others.
Such data could be gathered by semi
annual or even annual reports, and will
give evidence Of the existence Of any ex-
tended lines of credit that may furnish
ground for anxiety.
The Comptroller realizes that TO nut
'uch bureau into operation at the high