Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1910-07-13
OF CURRENCY
FOR sTRIcTE6 ENFORCEMENT
OF NATIONAL LAWS
POORLY MANAGED BANKS
INDUCED TO LiQUIDATE
While Comptroller Can Not Enforce
Such Liquidation, He Can Wieid
Strong Influenoe-Pian Would Bring
About Fewer Bank FaiIures-Morai
Effect Valuable.
Especial Correspondence


Washington. July 13.-Compsroller OF
the Currency Lawrence o. Murray mas
set out on a stricter policy as to ma
tional banks that are not in sound con-
dition. Mr. Murray has been gradu-
ally putting down the screws on the
national banks that are loosely con-
Quoted. Now he is prepared 10 60 in
fact is already going, a step farther
The policy Of the comptroller will
be to induce the voluntary closing
down OF business and liquidation OF
national banks whose management Is
incompetent, careless. reckless and un-
satisfactory and which require four or
more examinations year.
Such a policy carried out in any
thing like good faith would practically
put an end to bank failures in the
United States. save in cases where
theft led to insolvency
The comptrollers office finds that
practically all the bank failures pro-
coed from banks that should have vol
unfairly quit business and wound up
their affairs. If such banks can be
eliminated from the equation, there will
be little room left for failures.
limo to Enforce Laws.
It is the theory of the comptrollers
office that the time is at hand to SO
enforce the banking laws 10 make
bank failures practically nil. OF course
thefts and such unavoidable events
will always provide few failures.
The comptroller is not specifically
empowered to force a bank into vol
untary liouida ton. But il two-thirds
of Its stockholders desire that ii go
into voluntary liquidation, then liqui-
da,ion is carried out. In the absence Of
specific authority, however, Comptrol-
Ter Murray will take the view that I'M
less the people responsible for the con-
duct Of bank conduct il along safe
and lawful lines, then It is the inten-
ton of congress that it shall not exist.
Plan is Outlined.
Mr.. Murray is going to carry out his
plans about like this.
When any national bank is found to
need four or more examinations year,
the question Of voluntary liquidation
will be taken up by the com ptroler
with the officers and the full board OF
directors The objections to having
the bank continue will be set before
them.
The comptroller will insist on one OF
three courses being taken and one OF
three things being done. He will insist
the bank be at once placed in satisfac-
tory condition in accordance with the
report OF the examiner; or, that new
MANAGEMENT be provided If the OLD
manasement can not put the bank into
satisfactory condition; or that volun-
tary liquidation be determined on and
the banks affairs wound up.
Can't Force Voluntary Liquidation.
Now, while the comptroller can not
force voluntary liquidation he can
WELD powerful influence over the
bank officers and directors by present
ing them the advantages OF auie'ls
closing up business and hauoatlns
while there is time and when every
thing can be settled in full as COM
pared with the disadvantages Of suffer-
ing a failure, in which case stockholm
ers will be liable for twice the amount
of their holdings. What would newt
ably follow in the ordinary case would
ne complete reorganization or Volun-
tary liquidation.
Il is pointed out that the moral ef-
feet of the comptroller setting out on
policy OF this sort would be to bring
hanks pretty sharply up TO the scratch.