The Birmingham age-herald., 1913-01-09
NATIONAL BANKING
LAWS INEFFECTIVE,
! THINKS Mr.. MURRAY
Comptroller of Currency
Testifies in Money
Trust Probe
GIVES SMALL PART
OF DATA WANTED
George F. Baker Testifies Today-Is
Member of Triumvirate That
Rules the Financial
World

Washington. January s.-Fau1ts in
the national banking laws were dis
cussed today before the House money
trust committee by Comptroller of the
Currency Lawrence o. Murray. Mr.. Mur-
ray spent more than three hours under
examination by Samuel Untermyer,
counsel for the committee, and agreed
with many of the criticisms of the ma
tional bank act advanced by Mr.. I'm
termyer. He asserted that the act as at
present constituted was ineffective and
inadequate"
Mr.. Murray furnished the committee
such data from his office as President
Taft had directed him to supply, which.
however. was but a small part of the
information the committee asked the
comptroller to furnish.
The committee tomorrow will hear
George F. Baker of the First National
bank of New York, who, Mr.. Inter
nyer says, with James Stillman and
]. p. Morgan. constitutes the trio of
most powerful masters of finance in
Wall street. The connection between
these three men, the institutions in
which they are interested and the funds
controlled by these institutions will
form the basis of Mr.. Bakers exam
ination. He arrived in Washington to-
day with his counsel Fisher A. Ba-
ker, former Senator John c. Spooner
and several other attorneys.
Mr.. Murray condemned without reser-
walton the practice, which he said was
growing evil, of directors or officers
of national banks accepting personal
COMPENSATION from borrowers 10 whom
the funds of the bank are loaned. He
said that legislation should be passed
providing for "criminal prosecutions
of the practice. He favored provi-
sion of law which would prevent the
stock holders of banks transferring
their stock on the verge of collapse
of their banks and also indorsed a
scheme to force banks to make public
the list of securities held as assets by
national banks. Publicity of lists of
stock holders in national banks, he said,
would be beneficial
Questioned by Mr.. Untermyer. Mr..
Murray outlined the methods of the
examination of national banks by Of
ficers and asserted that under the pres
ent system the inspection was ''ineffect-
i've"
"It is merely a superficial examin-
alton, is 1t not?' asked Mr.. Unter-
myer.
Yes, that is about all" replied the
comptroller.
The comptroller said there are about 10o
bank examiners to superintend the affairs
of 1900 banks. In reply to questions he
said that in New York city these inspect
ors worked with the bank examiners of
the Clearing House association and CO.
operated with them in connection with
appraisal of loans and securities held by
banks.
Mr. Murray said his knowledge of clear
ing house associations was merely incl
den tai
I'VE have received complaints from time
to time from banks who said that GER
tain clearing house rules were detrimental
to their business, he continued, but we
have always told them we had no juris-
diction.
The comptroller said that bank exam
iners fixed the value of securities by the
price on the New York Stock exchange
when the stocks were listed there.
Then If the stock quotation is for a
false or fictitious value the examiner ac-
cepts it?" asked Mr.. Untermyer.
Yes said the comptroller.
Mr.. Untermeyer asked about the rela-
tons of the First National bank to the
First Securities company and the Ma
ticnal City bank to the National City COM
record of the relation of these concerns.
But you know that the President and
Attorney General have had these cases
under consideration asked Mr.. Inter-
myer.
Yes" answered the witness
Mr.. UnteImyer further questioned
Comptroller Murray as to the points con-
sdered in connection with the granting of
national bank charters in localities where
banks are already opened. Mr.. Murray
said that in a few cases charters had
been refused because he believed 'the. To-
cality was already overbanked."
do you think this committee can as
certain as to whether or not there is a
of money and credits, with
out knowing the details of the manage
ment of national banks?'' asked Mr.. In
termyer.
Mr.. Murray replied that he could say
nothing on that point and then he and
Mr. Untermyer became involved in a
lengthy discussion of the domination of
rational banks by large depositors, large
stockholders and men who can supply
business to the banks.
Mr. Murray stated that, at the request
of the committee, he had prepared a
statement of the loans of banks which
could loan more than $100o,0oo to an in
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