The Washington herald., 1915-05-03
The Comptroller and the Riggs Bank.

dering nowadays the great public interest taken
OF which enough evidence is the long columns
devoted to the affair in the newspapers-n the
controversy that has arisen between the Riggs Ma
tonal Bank in this city and the Comptroller of the
Currency. One of the national banks of the coun-
try has had dispute with government officer re-
garding various matters which on their face seem
to be of comparatively small moment. Why should
there be much bother about it?
The reason is that this matter brings up for
settlement certain fundamental principles govern
ing the relations between the national banks and
the Treasury Department which have never been
adjusted as they should have been in former years.
Directly speaking, the question involved is the
extent OF the power over these national banks and
institutions that can be legally exercised by the
Comptroller OF the Currency. How far does his
control OF the national banks go? Just what can
he do and just what can he not do in the line of
inquiry and restraint? The law the subject is
vague. and there is subject in which the banks
can have any greater interest than in judicial
exposition and definition OF these statutes. Mani
testify also. the interest OF the general public is
las great that of the banks.
Is there any limit to the comptroller's power
and if so what is the limit? That is the real ques-
ton up for determination. He has general
power given him to ascertain the condition" Of
the banks. He has the right TO require not less
than five reports from the banks during each year
and these reports must follow set form which
the comptroller prescribes, exhibiting in detail
and under appropriate heads the resources and
liabilities OF the associations at the close of bust
ness any past day specified. Also the comp
troer has right to call for special reports from
any particular association whenever the same
is necessary in order to obtain full and COM
H.
is in the present case that there is no doubt at
all that the condition OF the Riggs National Bank
is as satisfactory it possibly can be- The bank
is, beyond any shadow OF doubt, sound and SOL
vent. There j. no intimaton even, under
stand it, that its capital OF 100000 and its
surplus OF 100000 is in the slightest way im-
paired. If it be admitted that the condition" is
not cloudcd in any way, has the comptroller
tatcd by malice or by other motives than those
OF an official and rightful desire to obtain knowl
edge as to the banks financial status? Can he
ask any question he wishes to ask, regardless OF
purpose motive any other restraint whatever:
There is, OF course, doubt to the right
OF the comptroller TO impose penalty for a
refusal OF the officials OF a bank TO answer any
question that is proper; but this all marks back
to the proprlety OF the question asked in any
specific 1t is also plain think, that the
management OF a bank not be held down to
any cast iron rule in the management OF its al
fairs. Banking customs differ in different local.
ties. In many parts OF the country the banks
never do brokerage business at all or perform any
OF the functions ordinarily performed by a pri-
vatc banking house. but in other parts OF the
country the banks are the only financial firms or
houses that serve the community and if they were
decline doing business for their customers OF
the kind that is ordinarily transacted by private
banking houses in the large cities, these customers
would be left without any one who could do this
business for them. In this city the Riggs National
Bank originally private banking house, and
greater or less extent has, since its Inaugural
ton a national bank, continued to maintain its
old time relations with its depositors and to do for
them the general kind OF business that it
did when it private bank We think that
this is largely the custom of all the banks in this
city. They act agent for their dcpostors in the
buying and selling OF stocks and sometimes OF
real estate and other commodities in way that is
not done by banks in New ork or in perhaps
most other cities in tho country. There has never
been any secret OF this. The custom has been
general and has greatly accommodated our COM
munity. If the offcnse OF the Riggs Bank-sup-
posing that there has been offcnSe-consists in
no than this. it will not be anything that
will be seriously considered by the people OF the
whole country.
Bearing all this in mind the reason NAV be
in clearer light just why banking officers
all through the United States take such an in
tcrc>t in the present case. Are they compelled
to answer every question that the Comptroller of
the Currency may fit to address to them?
Almost every locality in the United States has
ways OF doing business peculiar to itself adapted
to the locality and the result OF long years of
custom Must all these conform to the views and
standards set up by some bureaucrat in Wash
irgton2 Is our banking system to have any hex-
bility at all or must it be of an ironcad nature
that changes not either in the North or South or
in the territory east west OF the Mississippi
River And has the Comptroller OF the Currency
power to step into any bank at any time and when
he finds anything in the management of the bank
that he does not particularly like impose fine
upon tho management?
All this is of special importance just at the
present time when the new Federal reserve bank
ing system is being inaugurated. There can be
nothing more fatal to the success OF this system
than for tho national banks OF the country to get