The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-11-27

mat the practice IL confined either to
a small area or to a few banks?
II Is also worthy Of note that a ma
1orlty OF all the national banks IN TWEEN
ty-one states. including over SIS per
cont. OF the total area of the continental
United States exclusive Of Alaska. adj.
init mat they are charging as high AS
~ per cent. on eome loans. and a ma
Jority OF all the national banks in six
states. h area embraces more than
o~ne-fourth Of the territory OF the con-
oinental United States exclusive Of
Alaska. admit likewise under oath that
they have been charging an average of
~ per cent or more on all Of their
loans.
"of the l.o12 national banks which
certified undss oath that they were re-
ceiving an average of 10 per cent. or
moro on all OF their loans 2 were In I'LL
nois. D In Minnesota. . in Missouri. 20
In Georgia. s In Florida. 81 In Alabama,
? In Louisiana. 3l3 in Texas. II In Ar
kansas. 3 In Tennessee. 90 In North
Dakota, rs in South Dakota, IS In Ne
braska. 8 in Kansas. 3s In Montana. IA
m wyoming. 81 In Colorado. 25 In New
Mexico 500 in Oklahoma, IL in WASH
inSton. 10 In Oregon, 10 In California, 2
In Utah, 1 In Nevada and SO In Idaho.
Banks Got U. 8. Money Cheap.
During the same period while 90
many national banks were charging ex-
cessive rates To customers the Federal
reserve banks were offering money freely
70 the national banks in every part Of
tho country at rates varying from 31h
10 b per cent, according to the class of
pap and h time to maturity. There
was no reason why sound, well managed
TANKS In any section could not have
mi nj fhAAA lnrR ~N>- ~ ~
CURED To supply the needs Of customers.
whether farmers merchants or manu-
facturers. or why the national banks
Duld not have loaned the funds to their
customers In every case we'll within the
rates prescribed by law.
Under such circumstances and with
these facts before you l am confident
you Will revise your opinion hat this
once has done as o express II. "a
great injustice to the great majority OF
bankers throughout the country In max
ing the statement In my circular letter OF
october 81 that the sworn statements Of
condition OF \ great many national
banks show that section bl97. y. =. II.
5. against usury has been grossly VIC
lated by these banks
Concerning your statement that many
millions OF dollars OF money are being
loaned by banks at less than the legal
80 49, loiAN out Tint vHlH lb "A
poor consolation to those borrowers who
have been charged and are being charged
IN so many cases from three to ten
times the legal rate permissible under
the laws of h different States and
under the provisions OF the national bank
vet.
The facts developed in tho ,nvestisa-
ton recently conducted by his Office
with reference to usury have suggested
thu AAafRAhtItN0
banks 30 print hereafter in their pub
lished statements Of condition In maxi
mum rates OF interest charged and the
amount OF money which they may be
lending at rates In violation OF section
5lS7. u. =. K s., relative to usury.
II this II done will not the public learn.
fairly and rightly, which banks in the
matter OF interest charges are conform
Ing to the law and which are not? sub
publication could do no injustice 70
any bank tina honestly tries to keep
Within the laws which all nj directors
have solemnly pledged themselves 20
observe.
ITO illustrate the unfairness OF some
Of the complaints made by usurers and
which reach this office let me take this
occasion to call attention to an attack
made upon the Federal Reserve system
Just a year ago by q certain national
bank which denounced the 81. per cent.
rate for long time paper established at
the outset by Federal Reserve banks
Though soon reduced to 5 per cent?
as unreasonable, eXacting n prohibit
tive 'prejudicial to the new system
and calculated to shake confidence in
the members of the Federal Reserve
Board
A examination Of the complainant
bank which this Office promptly caused
to be made showed that this bank with
assets OF more than a million dollars
had been a gross violator of the usury
laws had been charging It's customers
for money more than ten times the 81.
per cent. rate which IL characterized as
unreasonable. exacting and prohibi-
tive and had In the three or four
months preceding its complain, made
more than 400 loans In amounts from
$50 to over 10000 each on which it
had exacted rates ranging from 10 per
cent. TO 100 per cent. including one
loan Of s2.067 at "a per cent, and an
other for $553 at IS per cent"