The Richmond palladium and sun-telegram., 1910-10-30
Best Way to Obtain lnforma-
ton Concerning Values and
Credits Has Been Worrying
U. S. Officials.
COMPTROLLER MURRAY
MADE INVESTIGATION
And as a Result Of His Inquiry
Has Obtained Valuable In
formation Which He Will
Make Use Of.
eY SIDNEY EsPEy.

eY SIDNEY EsPEY.
Washington. Oct. 29.-From recent
inquiry as to the methods employed
by national bank examiners in max.
ing examinations of banks, Comptrol
Ter of the Currency Murray has been
able to obtain some very valuable in
formation which he intends to use in
administering his ONCE in the future.
Expressions from the agents of the
federal government have been receiv.
ed and will be used in the future as
q basis for further improvement In
the methods of bank examination.
The best way to obtain information
concerning the value and credits in
a country national bank has been the
source of particular trouble to the
comptroller of the currency. In this
relation Mr.. Murray says:
I'm making q first examination Of q
national bank In small town. 1t 10
often helpful to the examiner to note
the principal places of business and
men. az seen by walking through the
business section of the town on the
evening preceding the examination.
1t II of use in determining whether q
man is a "one thousand man" or "a
five thousand man" II you wish to
gain an idea of the size Of his store
and the scope Of his business.
What 70 Necessary.
"In determining the value OF the
assets of the country bank It II ne
cess4fy 70 txke Into consideration
cash items. loans and discounts. real
estate and mortgages. stocks and
bonds and the balances in the bank
Bonds and stocks, 10 q rule are quot
ed in financial journals. In this kind
Of bank. the items are usually few
checks. coupons. protest fees, small
items OF discount or interest awaiting
adjustment and occasionally small ex-
'pense items. II there is found over
due paper and large personal checks
of officers or employees then careful
consideration must be given and
careful inquiry made.
"As to real estate. the bank build
ing has two values, one II it is to be
kept as the home Of a going bank
and another II it is to be sold When
q building II to be sold so many diff
ferent things affect its value that It
is idle to discuss II, as each case must
stand by itself Other real estate tax.
en- for debts. may be scattered from
Maine to California and large part
Of the Information necessary to make
an estimate must be gathered from
the bank records.
THE loans and discounts" Mr.
Murray states. 'tare usually the heart
of every examination. Same banks
have q large home demand. and at
times are large borrowers themselves
to meet home needs. In a bank Of
this nature, 1t is well to have one Of
the directors go over the notes with
an examiner. especially at the first
examination.
Are Easily "Pumped."
"a great deal Of information" Mr..
Murray says, can be obtained from
the tellers, bookke3pers and clerks
without them knowing that they are
giving 1t. d..
1T has been q SURPRISE" he contin-
ued. to find on what small informa-
tion loan il made in some banks. II
the ofncers and directors are careless
about such matters. the bank is sure
to lose.
ITO sum 1t all up. the most import.
ant thing. after totaling the notes to
see II they agree with the general
ledger, Is to get line on the officers
and directors, to see II they are care
full men and capable and know the
business"
In speaking Of banks generally. Mr..
Murray came to the conclusion that
there Is no more important bank ON
cial than the oflcer who is in charge
OF the credits. Let the other depart
ments be ever so efficient" he says,
.'in collecting deposits, they cannot on
set the failure Of those who loan the
funds to secure their safe return.
Vital as is the credit man, be he pres
ident, vice-president, or cashier. the
bank examiner holds a similar posi-
ton towards the loans Of every bank
he visits He Is supposed TO be the
credit man not for one bank or for
one town. but for an entire district
Some Of the considerations which
affect the Judgment OF commercial
risks" the Comptroller continued. @are
the nature of the business: do credit
ors have . greater risk In the busi-
ness than the owners: do quick an
sets exceed the quick liabilities; have
the owners other property: are they
making or losing money: have they
the reputation Of paving their bills
promptly or Of taking long time In
accounts: Is the loan