Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-12-12
GOOD BANKING YEAR
Controllers Report Shows
Big Growth of Business.
DEPOSITS OF is BILLIONS
Only -Four Real Failures Among
1000 National Institutions.
cLEAR1NGs OVER 1853 BILLIONS
Enormous Increase Shown in the
Past Ten Years-Decrease in
Only Seven Cities.

Another year of prosperity and solid
growth for American banks is recorded
in the annual report of the controller OF
| the currency, presented to Congress to-
day. Not only the national banks, which
come directly under the control and
| supervision Of the currency bureau. are
included in the comprehensive review OF
banking conditions, but state banks, saw
ings banks. trust companies and other
| financial institutions-some 1880 others
are represented.
| During the fiscal year of 1910 the COM
bined resources of the 1000 national
banks of the United States grew to APP
proxirnately $1,000, 100000 September
| last their loans and discounts had
reached the immense sum Of S. 400, OO0.O COO,
| an amount never before equaled In the
| history Of the national banking system
since its creation In 1864. At the same
| time they were counting nearly 10000
600 Of overdrafts in their assets. prac-
tice which there Is no law to stop.
Growth in Ten Years.
Combining all. other banks in tho United
States and its island possessions with
those OIL tile udtlOHdl SS otCAA oaAN oAAS'
ling an estimate for those not reported,
| it is evident from the controllers re-
port that the banking power Of the ma
1897 of all sorts Of banks. with capitai
of $1.15O,OOO,O 600 and individual deposits
Of $7.6SS,OO000O. to more than 21,uU
banks, with combined capital close 10
81. 0o0. 0o0, 900 and individual deposits OF
nearly $4,000, 100000. The deposits have
more than doubled in little more than
a decade, and in the same time the
combined loans and discounts have grown
to more than 1000, 100000.
The volume Of business is rejected in
reports which have been assembled from
1877 clearing house exchanges, showing
combined clearings of $3.50 ,OO0, O0O,OGO for
the year ended September 80, as against
81 81, 200, 100000 for 1909. With the excep-
Greensburg, Pa; Fremont, Neb.; Frank
lin, Pa; Colorado Springs, Col, and
Vicksburg, Miss, the year showed an in
creased volume Of business transacted.
ton represented 50 per cent of the clear
ing Of all associations Of the country,
and during the current year has reached
$1O2 600. co., 600, some 0oO.OO0OOO greater
than in 1909. For these enormous
than s4,ooo:oooooo were sed.
Four National Bank Failures.
Four actual national bank failures
marked the year. Final settlement Of the
affairs Of eighteen insolvent banks was
made, in which depositors received nearly
Sc per cent These administrations were
made at an average cost Of about 8 per
cent on the collections. Prom the date
Of the first failure, In 1866, 514 national
banks have been placed in the hands of
receivers and % of them have been
restored to solvency. More than $3,3OOOoO
in dividends was paid to depositors OF
insolvent banks during the year.
On the whole, it appears from the re-
port that national banking conservative
ly conducted is profitable enterprise;
The net earnings of the 1000 national
banks during the year were more than
1854 600 900, from which dividends OF
sos. 900. 600 were paid at the rate OF more
than 10 per cent on their capital. The
government. too, has prof1ted from the
existence Of the national associations, for
since their beginning it has received more
than soc. 100000, Of which more than ~
per cent has been for circulation tax on
the bank notes they issue.
Due to Bad Management.
With the exception Of banks which have
become insolvent as a result Of defalca-
lions or other dishonesty, failures have
been almost wholly due to incompetent
or reckless management the report says,
and persistent violations Of the national
banking laws and the practices govern
ing conservative banking.
"A large percentage of the banks that
have failed should have gone into vol
untary liquidation before they reached
the conditions which precipitated the fail
ure," says the controller.
The report leaves no room to doubt that
it is the intention of the present adj
ministration to rid the national banking
system Of weak banks by guiding them
into voluntary liquidation. combination
with stronger institutions wherever pos
sible, or to discontinue business as a last
resort where there Is no probability other
than failure. In this way, the controller
believes, depositors can be paid in full
and shareholders can save some OF their
investments and escape the double liza
bility.
During the year 115 national banks went
into voluntary liquidation, many Of them
yielding to that policy: some were alb
sorbed, other consolidated; many left the
national banking field and continued as
state organizations, and some discon-
tinusd business altogether.
1T is the purpose the report says,
ITO get out Of the national banking sys-
tern every bank which is managed in such
a careless, reckless and speculative or
incompetent manner as to endanger the
safety Of it's depositors.
Market for Bonds.
National banks, of course, provide the
principal market for United States bonds.
Their investments in those securities have
increased $1O,OOO,OOO in the last year, and
they now hold $3.50. 600. coo in those bonds,
of which approximately $7OOOOO,OOO are
2 per cents.
Clearly, 1t is evident that the national
banking system has experienced its great
est growth in the last ten years. More
| than half the national banks now in ex-
| istence have begun business within that
| time and have a combined capital of
$3.50, 100000. During the last ten years
| the number Of banks in operation has in
! creased by 1858 and the authorized capt.
| n IN