Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1910-07-09
NO MORE BANKS TO
BENEFIT BANK
PROMOTERS
Comptroller Of Currency Has
Plan 10 Prevent Needless Null
tipIicatjon Where Community
Does Not Need it.
Morning journal Bureau,
6l3 Munsey Building.

The comptroller Of the currency "a
the future win take quite drastic ar-
ton to curb the multiplication of ma
tienal banks in various parts of the
country, where the need for them is
they arc organized principally to
benefit the promoters.
The national bank law leaves the
comptroller small room for discre-
ton or action in the premises, but
such authority as he does possess un-
der the statutes he proposes to exer-
else in behalf Of sound finance.
When application is made at the Of
flee Of the comptroller for the es-
adjustment OF q national bank, If
the papers are in proper form and 1t
Is shown that the preliminaries to the
organization of the bank have been
duly performed, there is little left for
him To do but to issue the charter.
The law does not give him authority
to question the needs of the commun-
ity or 10 bother much about the like
hhood of the bank being Il financial
success
But the comptroller has hit upon
two courses of action which he thinks
will have 4 restraining influence up
on the great multiplication of such
banks.
In the first instance he has issued
an order directed at the promoters of
national bank shall he a bona fide
resident. the correspondent OF the
proposed national bank shall be a
bona fide resident OF the town or
city where the bank Is to be estab-
lished and that he shall personally
own a certain number OF paid-up
shares'ih the concern to be establish
ed. i
It appears that in various parts of
the country a class Of professional
bank promoters has grown up. They
go from place to place, get local cap
italists interested, and resort to more
or less devious ways to secure the
charters for banks, making a profit
able commission on the stock they sue
coded in selling before M after the
institution is chartered. The ruling
Of the comptroller is intended to stop
this method Of organizing banks.
The other course of action looks TO
AiAt AfNfAAftANARh VI VI ~ a. ~
may violate the loan regulations Of
the banking act, or otherwise strain
their credit and run along OF the
verge of ~suspensionf According to n
statement Of the comptroller. some
banks impair their capital in vari-
ways ana place themselves be-
yond the line of safety contemplated
in the banking act. Il Is a fact that
the examiners in the performance OF
duties discover these conditions
and report them to Washington. Tn
the act the comptroller has no
authority 70 close such a bank. In
the majority Of cases the trouble
comes about by over-loans.
II has been customary in such cases
to make a demand upon the directors
the situation he corrected. and
The use oil moral suasion and
patience 10 bring the bank again To
q solvent safe condition. Many
about the only way To remedy
Is to call nn assessment mp
On the capital stock. = course which
more or less friction among the
'tockhoiders and generally results ln
+, depreciation Of the securities of the
The bank Get provides that ia eases
where over-lnana have been made 90
he point OF impairinK the soi,ency 81
he bank that the comptroller may APP
~ e. the solicitor Of the treasury
or n forfeiture - the charter. The