The Washington times., 1915-04-13
CONTINUED from First Page)

'On April D, the Comptroller or tne
Currency addressed letter to the
bank directing its attention TO various
false statements which had been made
by Its officers under OATH and what
are regarded as deliberate efforts to
deceive the department. and notified the
bank that in view of the unsatisfac-
tory and dangerous conditions which
have come to light as the result Of the
Investigations of the bank by this Of
flee and the national bank examiner;
ments made by your officers under
! oath or otherwise. and your long-con-
! tinued defiance Of the law and disre-
gard for the Instructions of this office,
you are hereby notified that the Comp
| troller Of Currency will, until further
tional Bank as depositary for the re-
serves Of other national banks.
Loans To Officers.
The following extract is from letter
addressed by the Comptroller of the
Currency to the Riggs National Bank.
July %, 1914:
You are hereby admonished that this
office strongly disapproves of the policy
and practice of having the president,
vice president, and cashier of a national
bank conduct brokerage shop, or busi-
ness within, and as a part Of, the busi-
ness of the national bank, buying and
selling speculative and wildcat stocks
! and other securities on commission and
| using the bank as the agency for car
rying, on margin, stocks and other Sc
curties thus bought and sold and dealt
in.
The books Of your bank show that
| large sums of money are being loaned
| on speculative securities to the officers
| of your bank and to it's clerks and en-
ployes in these speculatiCns. This Of
| flee regards this as a demoralizing ex-
ample to other employees of your bank.
| III <,f tia l.Nny ~ H.
cashier of your bank aggregating $685.
500, YOU declare that these loans were
| secured by high-class, marketable local
| and out-of-town stocks and bonds. hav-
| ing market value of $70,000,' although
at today's prices they hardly cover the
! loan.
Among the high class, marketable
local and out-to-town stocks and bonds
| note the following:
Market
| value.
200 shares ST. Louis and San
Francisco preferred stock 900.
100 shares Rock Island Rail-
| road preferred stock............ ~
| 100 shares Rock Island Rail-
| road common stock ............
+ 100 shares Missouri Pacific
| Railroad stock .................. 81
200 shares Inspiration Consoll
| dated Copper stock ............. IS
$50 shares Intercontincntal
Rubber stock Observation-Disclosures. IA
Among tho stocks sect ring the loans
| to your assistant cashier, which you
! approvingly refer to as recognized
stock exchange collateral 7 notice 1oo
| shares Of American Can, at IS and 200
shares Of Missouri Pacific, at a'4.
Fathers Security.
| Among the stocks securing the loans
| to Vice President F'lather Of s63. 100
appear 4l5 shares OF Greene Cananea
| Copper stock etc.
such securities as these I should
hardly expect to find in the loans OF
| conservative bank officers. and their
clerks who should certainly be expect
collateral placed upon the loans which
they may require the bsnk. whose in
terests they have sworn to safeguard
and protect, to make to themselves.
1T appears that for the sake Of the
commissions collected by your officers
| in buying and selling bonds and stocks.
| you have been executing orders for
women dncludng Treasury employes).
Young men. clerks. professional and
| business men, who have been tempted
lHtions, which have proved in various
cases costly and damaging. II not ruin
Gus. To facilitate these operations
| there is, 1t appears, installed in your
| ing you with stock brokerage house
in New York, and two private tcle-
| phone lines connecting you with two
stock brokerage offices in Washington.
Women Borrow On Stocks.
THE books of your bank showed at
| the date of the last examination that
| nearly 81. 900. 900 of the funds of the bank
| were being loaned to some forty or
| fifty women on stocks and other sCcuri-
| ties, many of them Of a highly specula-
| tive character, which had been bought
! n those
| of your bank. and for which your Off
GERS had duly collected their commits
| sonE.'
Some Of these loans had sufficient
| margin. but others were but scantily
| secured. But few. iS any. Of these wom-
| en- had any balances with your bank
upon which they might have drawn to
make good shrinkages in their collater-
| al. and as much of the collateral was
of a slow character, it is uncertain
| what the results would have been, or
would be. If it should have been neces-
| sary, or should be necessary for You
| to call those loans.
"As an example of the evils which
have resulted from the policy and
methods pursued by your bank In this
connection, ! will cite the case of -
| who. it appears, purchased in January
| last-whether through your active So
| licitation or otherwise | am not inform
| ed 900 shares of Rock Island preferred
stock and 500 shares of Rock Island
| common stock, at a cost of S26 9S7. 80
| These stocks in the brief period of six
months have shrivled up so that today
| they are worth at current quotations
scarcely 5000, showing a loss to your
unfortunate customer. including inter.
est, of more than $500.
| The commission which you collected
of s1S7.5O, it seems to me. Is no Compen,
| sation for the injury inflicted upon your
| unhappy client, who was. as you pre-,
sumably knew when you made the
transaction for him. a man of limited
credit and means. and in no condition
| to engage in such a speculation. He Still
owes you, I understand. approximately
$4,000 on extremely doubtful security
, You inform me that he has given yol
as further protection against the cos
of the Rock Island stock now valued
at only $1,000 $4,000 Of notes of the
- Company.
Asks For Correction.
II regret to have to inform YOU tina
! this office has evidence which indicates
that other statements recently sub
mittcd by you and other officers of you
hank to this Office. under oath. in addi
which your attention has been spe
cifcally called in this letter. are alst
untrue.