The Washington herald., 1910-12-13

In his annual report to the Speaker OF
the House of Representatives. submitted
yesterday in conformity TO law Law
renee o. Murray. Comptroller of the Cur
! rency. explains and defends his policy Of
placing insolvent national banks in vol
untary liquidation instead of closing them
and appointing receivers.
The Comptroller has been criticised in
some quarters for his policy in this re-
speet. He says:
THE advantages Of voluntary liquida-
and committees OF shareholders. are that
depositors viii be paid in full; the share
holders viii have an opportunity TO save
part of their original investment. the
double liability on capital stock holdings
viii be averted, and the possibility Of fail
ure avoided.
The limited number Of receiverships as
compared with the large number of vol
untary POPULATIONS during the past year
| is due. In a measure. 10 the action of the
Office through the examiners. in securing
the liquidation of certain banks the uiti-
mate failure OF which was only avoided
/ ~ tliah tRAi 20 NA pibNNNAAf-
WoaId Dust Spectators.
Continuing. Comptroller Murray says;
1t is the present Comptroller's earnest
purpose 10 get out Of the national bank
ing system every hank which is man
! aged in such a careless. reckless. specu-
latiye. or incompetent manner as TO en-
danger the safety OF its depositors. A
bank that Is the subject Of constant eriti-
| cisms for persistent and fagrant violations
OF law and is managed in such "a reckless
| careless, and incompetent manner as 10
necessitate frequent examinations, should
60 out of business and leave the field TO
more competent and conservative bank
| ers. that is the bank should go into vol
untary liquidation as soon as II is dem
0nstrated TO a reasonable certainty that
| IL cannot be continued successfully or
/ that the officers and directors cannot or
viii not manage its affairs in accordance
with law and safe banking practices.
! with the exception OF banks that have
/ become insolvent as "A result Of delal-
| cations or other dishonesty, failures have
/ been almost wholly due 10 incompetent
/ or reckless management and persistent
| violations Of the banking law and the
practices governing conservative bank
/ ing As q matter of fact. large per-
/ centage Of the banks that have failed
should have gone into voluntary iiquida-
/ ton before they reached conditions pre-
eipitating failure"
/ For the year ended October 81 last
seven national banks were placed TN
charge Of receivers From the date o.
I the first national bank failure. in 1850,
! there have been placed IN the hands Of
1 receivers 5l4 banking associations. The
affairs Of a3i had been settled up TO the
| close OF the year. At the close of the
year there were still hfty-nine insolvent
national banks IN the charge of receivers
their capital being S.Sa6.oe0 and circula-
/ ton outstanding. $3,Ss5, f63. During the
current year ffty-six dividends have been
/ paid TO the creditors Of thirty-nine insol-
vent hanks. the total disbursements be-
| ing $3.50. 1888
| The total number OF banks In the Unit
ed States and island possessions is -i,Zo5'
OF which 7,l85 are national. l5,9O state
/ and private. and 4,16S nonreporting. The
banking power of the United States, as
Indicated by the showing of the aggre-
gated banks, is as follows. Capital,
81 So. I3S SsS: surplus. Sl.9S0 S22,5S depos-
its, Si5,s s., 6fA; circulation. $6l5.651,5bo
Division of Securities.
The Comptroller reports that Al per
cent Of securities held by the banks are
in railroad and other public service cor
poration bonds; . per cent in state.
county. and municipal bonds; Is per
/ cent in United States bonds; s per cent
/ in bonds not classified; 6 per cent in
stocks. while the remainder about $ per
/ cent is made up of miscellaneous securi-
/ ties. warrants. dc. Railroad and other
public service corporation bonds appear
/ 10 predominate in the investments OF all
banks, except in private and national
banks"
During the year 81 associations hav-
ling aggregate authorized capital stock Of
I $50 760. 600. were chartered.
"The net earnings of national hanks
are shown To have been Sli4l67. 4S9. a.
/ from which dividends were paid 10 the
amount of 500, SOS, o., or 1888 per cent on
! the capital and 665 on the capital and
/ surplus. The net earnings were equiv
alent To 9.67 per cent of the capital and
surplus"