New-York tribune., 1910-09-11
TO PROD BANK EXAMINERS
Controller Murray Believes That
Failures Are Unnecessary.
WILL VISIT ALL DISTRICTS
To Ascertain if Examiners and
Bank Directors Properly Dis
charge Their Duties.
IFron The Tribune Bureau.

IF'rom The Tribune Bureau
Washington. Sept. 10.-Laurence O. Muir
ray, Controller of the Currency. intends to
| get first hand information as to why na-
| tfonal bank examiners are unable to de-
| termine the condition of banks in advance
| of failures and why directors of the banks
| do not attempt to correct improper meth
| DDS in their banks which have been brought
| TO their attention. Ever since Mr. Murray
became controller he has been seeking to
| improve the methods of bank examinations,
as he believes that the success Of the gov-
| ernmental control over the national banks
| is dependent almost entirely upon the work
| of the examiners Only this week there
was a shake-up in the ranks Of the exam
| ing force, twenty examiners being sent to
| the new fields.
Another step in the reorganization of the
examining system was taken to-day, when
Mr.. Murray made public letter which he
! is sending to every national bank examiner.
| In this letter Mr.. Murray says that almost
every recent national bank failure could
have been averted if the examiners had
reported actual conditions in time to per
| nit the Controllers office to force a correc-
| tion in the administration of the banks af-
| fairs. Mr.. Murray's plan. outlined to-
examining districts of the country to ascer
tain at first hand why examiners are unable
TO discover and report the true conditions
of bank
In this work he will be accompanied and
| assisted by Oscar L. Telling, formerly a
| national bank examiner. and now chief of
| tie division of the reports in the Control
| ler's office. Among other things the Con-
| troller desires to have personal knowledge
! of whether bank directors are faithfully dis
| charging their duties. Mr.. Murray says
| that he desires this information for the
reason that the excuses offered $y the ex-
aminer in practically every case of failure
was that he unable to determine with
exaCtness the true condition of the bank.
and that the officers and directors would
not correct the conditions brought to their
| attention by him.
| The Controller viii 60 into a, bank ex-
| aminers district on the day the examiner Is
| expected to make an investigation of the
condition Of a particular bank. He VIII
accompany the examiner to the bank ana
| watch his methods of procedure in making
! an examina ton of the books. He will JOIN
the examiner when that official goes before
! the board of directors In neither instance
will he make any suggestions or supple
idea is first to determine the competency
! of the examiner to learn the condition Of
the bank and. secondly. to find out why
| some bank directors do not hold themselves
quite as fully responsible for the condition
| of the bank of which they officers as
they do IN their own business aaffrs.
In his communication to the examiners
Mr. Murray says in part:
/ The Controller also desires 10 ascertain
! why some examiners are capable OF cor
| Tecting. while they are in the bank all tlfe
examiners are either unable or unWllhhs 70
| accomplish like results and only report
! their criticisms to the Controllers s oflce
| withstanding the fact that now thelr
| specific instructions are to call to the at
| tention of the board Of directors all un-
| satisfactory or hazardous conditions. with
a view to having proper corrections nlade
by the board during the process OF the en-
animation.
ports of examinations forwarded to the
Controllers office that it is a hardship, not
only on the examiner, but upon MANY oi
the members of the directory OF country
banks to ask the various boards to meet
with the examiner during the process or at
| the close of the examination
The controller Is of the opinion that a
| board of directors, which will not or can
not meet with representative or the gov
| ernment for a short time twice each year
| to go over in detail the conditions which he
| finds and reports 10 1t is composed ol
| members who are not DONG lhelr dutS III
any sense of the word and ii is now pro
| posed TO find out whether or not the hard-
| ship complained Of by the examiners real!y
exists or if the various directors Of national
| banks do not adequately supervise their
! trust.
| This investigation by the controller and
| his chief of the division of reports Is also
an investigation into the methods employed
| by every national bank examiner, ana upon
seeing them make examination OF sew
eraI banks and afterward holding a meet
ing of the directors, he will be able to de.
teruine whom of hlS examining force, II
anv are inefficient
| The controller believes that an executive
Il officer should know the difficulties encoun-
| tered hv the men in the field, and knows of
no more authentic way of finding this out
| than going into the field himself for the
| nlIrpose of encountering in person some of
| these so-called difficulties