The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-10-22
SENATOR Weeks
RAPS Williams
Speaker Before Credit Men
Again Criticnes Comptrol-
Ter of Currency.
TAKES SIDE OF BANKS
Says Doubts That Treasury Official Is
Fitted for Office Now Have
Become Convictions.

Iiyered before the New York Credit
Mems Association at the Hotel Aston to-
night. Senator John W. Weeks, OF Massa-
chusetts. said:
I'm an address delivered before the
Kentucky Bankers Association on Octo-
br 6, the Comptroller of the Currency, to
whom have referred as having been one
of those who has. in my opinion, been
inclined TO embarrass and restrict rather
than. facilitate reasonable business OPP
erations. took occasion to make an ex-
tended reply to my criticisms. When Mr..
Williams was appointed Comptroller OF
the Currency. / greatly doubted hit fit
ness for that particular position as did
many others who had to pass on the ap-
pointment. Being now somewhat more
familiar with his temperament and his
manner of conducting his office, my
doubts have become convictions.
II did not, however, make criticisms
of the comptroller for personal reasons,
but simply TO illustrate what ] think
is a growing and bad practice in connec-
ton with our government, and Mr.. WILL
Jams in his reply seems to lose the point
which I am trying to make. / might
state II little more specifically. ] at
tempted in the argument which he criti-
cises TO point out the undesirability OF
bureaucratic governmental interference in
the conduct of business and especially
In cases where the bureau officer was
not acting under specific provisions OF
the law. but under rules promulgated by
himself or whims which happened to
appeal to him for the time being.
Williams Cites Law.
IN looking for concrete examples OF
this kind. 1 found what seemed to be
some of the most fragrant breaches OF
-, - ,INR-s % IL
comptroller's office by Mr.. Williams. and.
as l was addressing an association OF
bankers. it seemed particularly appro-
pirate that should refer to these Iactiv-
titles of the comptroller, with which they
were more or less familiar. TO illustrate
my contention.
MFR. Williams cites the law In his
address 10 show that he has authority to
make examinations of the affairs of a
national bank at anytime. 1 did not
even suggest that he has not such
authority and I have not criticised him
for examining any bank If there was
good reason for doing so. What
did criticise was his telegram asking
why a higher rate of interest than six
per cent was beng charged and his
implication, and threatening tone. which
accompanied the suggestion that no
higher rate should be charged. His con-
tention that a six per cent rate of In
terest should have been maintained Is
borne out in his Kentucky speech.
THE whole controversy rests on the
general theory propounded by the
comptroller that he has some jurisdic-
ton over the rate of interest which a
bank shall charge. That I deny. He
has, however, clouded the contro-
versy by the manner in which he has
discussed It before the Kentucky bank
ers. He stated in that address that he
sent the wire to which / have referred
to bankers in New York and Boston
and that 1t related entirely to loans
made on collateral, presumably made to
a greater or less extent on speculative
securities: but in hiA reply he would give
the impression that he was trying to
protect those making small loans from
country banks which he states. have
been charging exorbltant rates to
borrowers.
That contention is evidently an after
thought. because he did not send tele-
grams to country banks and IT is evident
ly very recently that the department
has taken notice of the rates which
have been charged BY certain banks in
the South and Southwest. Now he uses
these instances to appeal to the prejudices
and sentiments Of those whom he Is
addressing rather then relying on the
case in controversy.
Banks Run for Profit.
THE comptroller must know. as every
one else does who knows anything OF
the subject, that there is a vast differ
ence in the quality even of brokers loans
or of loans on collateral. dependent or
whether the broker keeps an account ir
the bank where he is borrowing, on his
general standing, character and worth
| and on the marketable character of tht
securities which he offers as collateral
doubt II there is a bank in the country
which does not vary the rate which 4
| charges on loans OF this and every othei
| kind, basing its variation in rate on thu
above and many other similar considera
| tons.
Banks are not. elemosynary institu
tons: they are associations of people
who have invested their capital for profit
and, yet. Mr. Williams. in order to try Il
demonstrate his point that he should II
| some way control rates. relates an in
stance in which one bank has conducted
affairs in what he terms a REASONABLE,
manner, building up. as a result. a very
large surplus, while the other which
practiced extortion had CALLED to accu
mulate any surplus. and he comments or
this result as follows:
The bank that lends at such rates Il
destroying its constituency and is at thu
same time committing slow but sur,
suicide
That being the case. why should thu
| directors and the stockholders who have
| invested their money for profit permit
such a course TO be followed, and is il
necessary or desirable for the Comptrol
Ter of the Currency to make himself tht
guardian Of the affairs of the stock.
bo,darz NJ a hank in such manner"