The Washington times., 1911-01-08
CONTROL OF BANKS
HANDLING SAVINGS
Comparison of Methods in
New York and Washington
Favor This City.
BY l. A. FLEMING.

| lions, one ana all, are unueF Ine QlTeCI
supervision Of the Comptroller of the
Currency; they are examined by trained
Federal examiners, and have to report
| to the Comptroller five times year,
each time furnishing an. elaborate and
detailed statement of their condition-an
open book to experts trained in the
reading of facts and figures and max
ing comparisons. In the event of
! trouble being detected, remedy must
be found forthwith under threat of
drastic action.
New York savings banks are exam
ined once every two years. This In
itself is q grave error. Fraud may
| hatch. develop, and play havoc with the
| savings of years in less than half of
that time A careless board Of directors,
no less Ienient than the State super
| intendent of banks, would easily pave
the way for official rottenness. And the
opportunities are enormous.
The savings banks of New York State
have in their care aggregate resources
of 81, ,S6S G43, 900. There are SS5 savings in
stitutions, and individual accounts of
| z, ,S66, $40 people.
Despite the prescribed limitations as
to investments In which savings funds
may seek, employment, the aggregate
surplus of these savings banks has de-
crea sed during the past year by ST.
446.S34 These figures actually repre-
sent the decrease in the market value
Of the securities held by institutions.
| During the same year the liabilities
of these institutions were further IN
creased by the deposit of $J4,009,OOO
added savings.
From 1875 to 1907 the relative sur
plus of the savings banks never fell
below s per cent. 1t is now less than
| : per cent, and in some individual cases
less than 2 per cent.
These conditions are beginning to
cause comment and to attract the at
| tention of financiers. but State Super
intendent Cheney, while admitting that
| "a serious problem confronts our saw
| ings banks declares that New York
| has the best banking laws. and they
should be left for the present as they
are unless some crisis were-to disclose
| in them some defect not now suspected.
II is possible that the Washington
Savings Bank and the Carnegie Trust
Company disclosed the defect. A rem
| edy ought TO be devised and put into
effect.
Washington bankers haSSiling the saw
ings of the people prefer real estate in
vestments, at a percentage of a low
valuation, to any other form OF EN-
ployment Of money, though they han
die collaterals as security for loans on
a basis that always makes II possible
to liouidate loans in short order on de-
mand While real estate loans are not
as easily turned into cash, they are
carried on such a basis that permits OF
sale on short notice.
Moreover. as we have stated before,
Washington is the one city that must
prow-the law has made it imperative
| IL the United States is to go forward.
and the census just completed shows
that 1t is.
Some score additional Congressman
will come to Washington in the near
| future The increasing business OF the
| Government means more help ana
| larger disbursements of funds-and the
! tvice-a-month disbursement Is the as
| surance of steady business for the mer-
| chants of the city, while, all in all; the
certain development OF the city anu tle
| enhancement of its property value Is
assured Therefore real estate loans
are desirable savings investments, trust
company investments, and occasionally
the place for the investment OF surplus
funds of national banks through the re-
ceipt of mortgage notes as collateral for
| loans.
Washington bankers have much SYM
nathy for ]. T. Howell, president of the
closed Carnegie Trust Company. Ac-
LnowIedeed a clean, capable banker,
held in high esteem, he yielded to the
| lure of the $4,000 a year salary. In the
hope of being able to~retire In few
| wears. rather than plod along at S6,OO
| a wear with the Fourth Natlonal BANK
| of Nashville. He probably did not know
| of the condition of the trust company
| or hoped to be able to save 1t, but his
| ninistrations came too late. He IS TOO
| good a banker to be long unemployed,
and the condition of the Carnegie Trust
| vent that he will not be blamed in
| financial circles for the catastrophe.
This week the national banks and
many of the other financial institutions
| in the city hold their annual elections,
| first of directors and then of officers.
Frequently the unexpected has hap
| pened, but the program, in the matter
| of officers, is reasonably well defined
| this wear. There is likely to be but one
change in the roll of presidents, there
NAV. be two or three new vice presi-
| dents and indications are fora rather
more than usual change in director
| ships. . ~
So far as indications so, about the
oniv Change in the presidency of any
| hank is indicated by the almost certain
| election of A. G. Clapham as president
| Of the Commercial National. There viii
he a number of changes in the direc-
| tory of this institution and also in the
| dIrectory and perhaps additions to the
roster of the official staff of the United
| States Trust Company. So Tar as
| known no other important changes are
scheduled, though they may develop.
| The outlook for the local security
market is good, although the action
of the last few days might be taken as
| indicating a let-up in the investment de-
mand. II is more probable that it was
simply weekend cessation of buying
and that there will be plenty of busi-
mess during the present month and mp to
| the summer months. Heavy distribu-
tion of dividend and some interest pay
ments will be made within the next
! sixty DAYS, including the quarterly divi
dend of $3.50 a share on 10000 shares
of gas stocA
) Annual reAprts of the various public
. utility corpofations will be made To
Congress within the next few weeks and
,,o,y be effective in stimulating activity,