The Leon reporter. (Leon, Iowa) 1887-1930, 1913-08-28
WHAT HAVE THE BANKS TO
FEAR?

Many national bankers express
fear of the Owen-Glass bill because Of
the powers-in the original draft
very large, since much reduced
which it lodges in the hands OF the
government. Government control or
national banks is no new thing. the
government has large powers in this
field already. How has it exercised
them? Like Patrick Henry, we
know no way of Judging the future
save by the past.
Under existing national banking
laws, the powers of the government,
exercised through the Comptroller or
the Currency, are not only exceeding
ly wide in their range but altogether
summary in their character. mat
official may close national Dank
which he believes to be insolvent at
his pleasure. There is no limit to
this power. Its exercise rests upon
his judgment.
This is power for use in eX-
tremes, but the ordinary powers OF
supervision are Draconian in the Sc
verify of their provisions. The comp
troller, may in the person OF his eX-
aminers, go into the minutest details
of any bank s operation, examine
any ana all records, and compel the
testimony under oath of any official
or employee And the power OF the
comptroller's office over details or
business is absolute. Any note, or
security held by national bank may
be passed on unfavorably by the eX-
amner and summarily ordered sold.
If he dsapproves of John Smiths
note, the bank is tod to get rid OF
Mr.. Smiths paper. 1t gets rid or IT.
There is no limit to this power.
But hold. This is not wholly true.
There is a limit-not legal but prac-
teal. 1t is imposed by the very ma
ture of the power and its exercise.
Certain kinds of power need prac-
tically no checks and balances, be-
cause the attendant responsibility is
so great that it serves as an auto
matte corrective of any tendency to
the powers abuse. OF this charac-
ter is the power over life and death
of national banks given the comp
troller of the currency. The conse-
quences of it's abuse would be SO
grave, so far-reaching and so COM
pletely without remedy that the
chance of such abuse is reduced APP
parently to the vanishing point. We
do not, at this moment, recall
single instance where it has been SER
iOusly charged that the comptroller
has, by ruthless use of his powers,
worked injustice or precipitated local
panic.
This is not because the comptrOll-
er's office has escaped criticism.
Criticism in plenty there has been,
but of precisely opposite character.
The comptroller's office has been ac-
cused of being too conservative, too
lenient, too slow to use the knife.
banks that ought to have been sent
to the electric chair, and, in the case
of individual pieces of paper held by
wholly solvent banks, of "bearing all
things, believing all things, hoping
all things, enduring all things.
Local clearing houses, before positive
action, have frequently growled and
grumbled: THE time for action was
long ago, but what could we do? The
comptroller was satisfied; we could
not seem to show hostility to COM
petitor."
Now the powers granted to the
federal reserve board will affect the
general welfare of all national banks,
or of banks over wide region, some
what as those granted under the pres
ent law to the comptroller affect in
dividual banks. What reason is there
for supposing that they will not be
exercised with even greater cOnserva-
tiSm than that which has, under
many administrations, characterized
the administration of the comptroll-
er's office? In view OF the history of
government control of national banks
what have national banks to fear
from government control?
1--WE pause for reply. st. Louis