The Birmingham age-herald., 1914-10-10
BANKS |RRHATED BY THE REQUESTS FROM COMP PTROLLER Think Much of the InfOrma- ti0n South Is Entirely
 Unnecessary BUT ALL ANSWER
 VERY COURTEOUSLY New York Banks Not Overcharging Interest Rates-Characte of
 Customer Is Always
 Considered
By HOLLAND

By HOLLAND
 New York, October 9-tSpecal)--If the executive officers of national banks in other parts of the country are receiving communications from the comptroller of the currency similar to those which have been received recently by the officers of the New York city banks the comp troller's office at Washington must re- ceive a bulky maily almost every day. Bankers in this city do not understand why the comptroller should deem 1t ex- pedient to forward so many requests for information as he has recently been do- ing. The latest of these communications intimates that the comptroller is anxious to learn whether any banks have been ex- acting more than per cent for loan ac- commodations or for the renewal of loans and whether any of them exacts bonuses or commissions. Bankers have turned to the national banking law wondering whether they would be able to discover in the law any authority for demanding information of this kind. The statute appears to limit the authority of the comptroller so that he can do no more, dldci lfc idWt thdu tO SCiiu d fioliOI oi examiner to national bank.
 Nevertheless a polite request from the comptroller for information is backed by the moral influence and authority of his office, and to decline to furnish in- formation would be likely to subject bank to suspicion.
 If the comptroller learns that any of the national banks of New York have been exacting more than per cent or have covered an increase beyond that rate by exacting bonuses commissions the Clearing House association members will be astonished. There is not a bank in New York which is a member of the federal reserve system and is under the authority of the federal government which is even suspected of having demanded more than s per cent for making loans to customers or when renewing loans Some of the largest of the banks have given even better terms than these to their GUS toners.
 Of course such proposition as the mar keting of the new notes issued by the state of Tennessee or the making of call loans is of different character from the making of loans to regular customers of banks.
 A Difference of Sentiment
 In the large financial centers the senti- ment in which the office of comptroller ol tiit currency IS ne1Q differs rom that which is characteristic of the so-called interior and especially the smaller banks ot the country In the large financial cen ters the authority as well as the moral Influence of the comptroller of the cur rency is recognized and respected but in many of the interior banks the office of the comptroller of the currency is ire quently looked upon with something like awe. Therefore, such a request as the comptroller has made a day or two ago Of banks in New York occasioned a lit- tie irritation, possibly. but that was all. The replies which were prepared and sent to him were, so far as is known, prae- tically of like tenor They might have been compacted into a single word-"no"
 An Unintended Effect
 Here, as well as in Chicago and Bos- ton and other large financial centers. the recognition is general and cordial of the earnestness and sincerity of the pur- pose of the treasury department at Wash lnston to give such aid as it reasonably can In facilitating the work of the Amer lean bankers who are now attemptinp to restore normal money market and finan- cal conditions. If there is any criticism It IS kindly, and it Is based wholly on the apprehension that the treasury de- partment may be unwttingly creating some embarra ssment
 
 large financial centers that the criticism comes that the treasury department is seeking some political capital Those who nave made this criticism are not men of finance, but are politicians. But it may be that in the effort of the administra ton at Washington thoroughly to cooper ate with all who are attempting to sa cure the return of normal conditions tbere has been unwittingly, even unconsciouslv some mistake made. Apparently the ad- mnistration, or that part of it which is associated with banks and financing is anxious that the national banks shall not take undue advantage of demands for money py exacting a greater rate of n- terest for accommodations than Der cent
 Many factors enter into the considera- tlon or what are reasonable rates for bank accommodations. One of these is the credit of customers. Private informant ton which has reached this city from some parts of the west intimates that many would be glad to borrow of the banks and would be, willing to pay in excess of per cent, but the communications which nave been received from the treasury de- partment have made bank officers appre- hensive lest they be subject to rebuke lh case their rate for accommodations sometimes exceeds 6 per cent.
 The question of credit enters into the PtCc'thf dS d ldCtOf WHICH IS lO De cOn- siuered. One man or one corporation may have standing which is rated at A-A-1. He. or it, would expect and be entitled to a better rate than a man whose standing was not gilt-edged. and yet Who was known to be an honorable bl s- ness man, who paid his debts, but whose capital was small. Therefore to bring the moral influence or those in authority at Washington to bear upon the national banks so that they would be restrained from exacting more than per cent will inevitably result in making it difficult probably impossible, for some who would gladly borrow and who are honorable to obtain needed funds. This applies especially to the re- moter parts of the country, those whose banking facilities are represented by banks of small capital and resources. Fortunately the new federal reserve sys- te mis likely to be in operation before the close of the present year, possibly within the next six weeks. This new organza- i tioE will. of itself, tend to eliminate em- -arrassment of the kind which the comp troller of the currency and the Secretary of the Treasury now in all sincerity ap- | pear to believe really exists.