Evening star., 1915-05-16
HEARING To BEGIN
IN RIGGS BANK CASE
Financial Institutions Plea for
Injunction Against Treas
ury Officials
COMES UP TOMORROW
BEFORE JUSTICE mccoy
Comment Made by Controller of the
Currency, Defendant-Bank
Issues Statement.

A hearing in the case of the Riggs
National Bank against Secretary Of
the Treasury McAdoo, Controller of the
Currency Williams and Treasurer John
Burke is set for tomorrow before JUS
tice Mccoy Of the District Supreme
Court. Two delays in the matter of
the hearing have been granted by the
court at the request Of the attorneys
for the Treasury officials. Answers.
in the shape of affidavits. to the
charges made by the Riggs Bank were
filed by the Treasury officials yester-
day, however. and it is expected that
the hearing will be held tomorrow
without further delay. The govern
ment's brief will be filed tomorrow. it
Is said
The Riggs bank has charged the
Treasury ofi1cials with discrimination
against the bank. 1t obtained from the
court temporary injunction restrain
ing the Treasury officials from the col
lection of penalties imposed by the con-
troller for the banks failure to fur
nish special reports. and restraining the
controller from withdrawing the au-
thority of the Riggs bank to act as
depositary of the funds Of reserve
banks. The Treasury officials have
been cited by the court to show cause
why this injuntion should not be made
permanent. On their part. the Treas
ury officials have asked to have the
whole proceeding quashed.
With the filing of the answers of the
Treasury officials. 1t is said. all nego-
tiafons for a compromise which may
have been under way ceased. 1t is ex-
pected that the case will now be fought
through to a finish.
Charges Embraced In Afidavits.
The afidavits filed by the Treasury
officials yesterday charged that the
conduct of the Riggs bank has been
such as to make wise the withdraw
ais of the public funds which had been
deposited with it: charged excessive
loans to officials of the bank; the keep
ing of private accounts in connection
with alleged bank transactions, and
excessive loans to bank officials. 1t is
contended by the officials that the dis
cretion of the Secretary of the Treas
ury and of the controller of the cur
rency in their dealings with the Riggs
bank are not subject to review in the
court.
The affidavits of the government Of
fcials are voluminous. that of the Sec
retary of the Treasury covering some
forty-six closely printed pages, and
that of the controller covering eighty
nine pages.
IL IL peleVed that tneSe amQav1tS out
line the governments defense against
the suit brought by the bank.
When the aftidavits had been filed in
the court, the Riggs Bank officials is
| sued statement replying to the al
legged facts put forward by the Treas
ury officials.
Statement by the Bank.
Chartered as national bank in
ho ctor 80 y,ay, II
oficials. with a capital of $500.O00. the
Riggs National Bank has increased its
capital to $1,O00,000. accumulated a sur
plus OF 100000, now has more than
| $4,000 undivided profits. has averaged
more than 20 per cent dividends, and
has charged off less than $4,000 bad
loans in the practically nineteen years
Of its existence. A bank that had not
been wisely and honestly managed
| could not have earned such dividends
| accumulated such surplus and suffer
ed such a small percentage of loss"
One of the charges of the Treasury
| officials is to the effect that the Riggs
the National City Bank of New York.
This is vehemently denied by the Of
fcials of Riggs Bank, who point to the
ownership of stock In the local tnsti-
tuition to prove their statement 1t
was stated last night that apparently
Secretary McAdoo has attempted to
make q political issue of the matter by
drawing the National City Bank into
it. and that charges of the officials OF
the Treasury appear Ho now TO oe ,a d,restea e 2
as toward the Riggs National Bank.
Controllers Comment.
The controller of the currency. in con-
nection with the answers filed by
Treasury officials to the injunction suit,
gave out a statement, saying. in part:
"Some Of the newspapers have stated
that much of the alleged dissatisfaction
of the bankers Of the country is against
what are described as harsh. inquisi-
torial and troublesome demands of the
Treasury Department for information.
We have heard here few such COM
plants. These newspapers tell us that
fhe bankers fear to voice their griev-
ances. dreading reprisals from the de-
partment. This really is an accusation
against American bankers of remarka-
BILE lack of courage. 1t would be diff
cult to make me believe that the men
of the general character of our bank
ers could be intimidated by any power
so thoroughly that they would submit
to wrong or injustice without protest
or resistance. Nevertheless. these pub
lications. however severely and unjust
ly they accuse our bankers. do much
good, unntentionally and indirectly. Be-
lief in the public mind in the vigilant
and rigid enforcement Of the law by
this department will do more than any
other Imaginable force to maintain
public confidence in the stability and
integrity of our banking system.
"The Treasury Department Is the
public health department of our finan-
cial community. Its duty requires It to
be especially rigid and careful when
there is trouble or threat, or danger
of trouble, and to inspect all premises.
houever safe they may appear, or how
ever much confidence we may have in
them.
Policy Of the Department.
"This department has no purpose to
be exacting or tyrann!cal. Its policy Is
to labor to establish uniform stability
and adherence to the laws and ethics
and principles of sound business. SO
that public confidence may be estab-
Ished on those foundations surely and
securely in every part OF the country.
We hope earnestly that our efforts will
bring such results. One of the best
effects for which we hope is that the
Close inspections and Inquiries we have
conducted-and 1t will be understood
that we cannot discriminate-will en-
list the close attention of directors to
of banks they are supposed to control.
These directors usually are the most
substantial men of their communities.
Where they can be induced to give
their close personal, active and tntelli-
80 pti 20