The Washington times., 1915-04-13
Comptroller Explains
Position of Department

| sIldHJS WHICH ndO Decn maze tnOSe
officers personally, sometimes directly
on notes signed by themselves and
| sometimes indirectly on dummy notes
| signed by clerks Of the Riggs National
Bank, or OF other banking Institutions,
or by outsiders, which said dummy
/ loans were usually secured by col
| lateral provided by the officers OF the
Riggs National Bank.
Calls For Reports.
| 1T was believed to be desirable and
| important, In order to determine the
present true condition Of the Riggs Ma
| tional Bank, and the sums Of money
which the bank was rightfully entitled
| to and which II might not have collected
from its debtors. that these special re-
ports e1,sus shouid sa be fIrnished to the Comp
toned in the letter aforesaid.
You acknowledged receipt of the
letter from this office Of January 20.
| 1916, under date Of February 1, 1915, and
refused to furnish the special reports
| called for
This office could not accept as an
excuse for your refusal the claim made
money which the national bank exam
liner found the riggs National Bank
lending to it's own officers at the time
| OF his, examination last summer on
loans, amounting. to some. hundreds Of
| thousands Of dollars, had nearly all
| been paid Their repayment did not
dispose OF unsettled and important
questions affecting the condition OF your
| bank.
| 1T is instructive. though not reassur-
| ing. just here to point out that these
payments were largely made by trans
| ferring the loans of your offices to other
national banks and to some of the trust
companies of the District. The reports
! OF national bank examiners to this Office
| indicate that the money being borrowed
| a In "a n q
and from trust companies of the Dis
trict, by four of the senior and Junior
active officers of your bank amounted to
| more than seven hundred and nifty
| thousand dollars (S75O000).
Speculative Securities.
- nese loans were all being carried by
banking Institutions in which one or
more Of your officers were either direc-
tors or employees and by two of the local
trust companies. and were secured main
| " by stocks and bonds, many Of the
| stocks decidedly speculative, such as
Greene Cananea Copper. lanston Mono
type, Nevada Consolidated Copper, Mis-
souri, Pacific Railway American Can
common. Reading common, Baltimore
and Ohio common, United states Steel
common Pacific Gas and Electric Com
| pany common Wabash AZ, Pacific Coast
| second preferred, lnited States Rubber
preferred lnterContinental Rubber COM
| mon, Pittsburgh Coal preferred. Wash
ington Railway and Electric, Sea aboard
| Airline preferred, Southern Railway pre-
| TERED, Utah Copper, and Washington
| Utilities Company stock, and there were
| nypothccated in these loans nearly all
Of the stock Of the Riggs National Bank
owned by the borrowing officers.
| TT should here he noted that In the
| opinion of this office no excuse has
| ever been given for the action of your
president in getting $4,000 OF money
| from the bank, without the knowledge
- 49,
on note signed by the assistant pay
| ing teller OF the bank SALARY. s2,lcW
for use IN one of his &C. G. Glovers'
personal real estate deals or trans
actions.
"The statement that the real estate
notes arising from the deal might be
sold to a customer, or customers, of
| the bank and thus accommodate such
| customer does not relieve tbs dunn
my or concealed loan Of odium,
Wrong Ethical Standard.
The practice which appears to have
been in vogue in your bank for some
years past, for the officers, or junior
clerks of your bank, to borrow Its
funds, sometimes In their own name
and sometimes in tho name OF dunn
| mics and sometimes as dummies for
others, on speculative stocks and bonds.
is unbusinessllke. sets very bad ex-
| ample to the banks other employees,
and Is. in fact. thoroughly reprehensibls
| and cannot be too strongly condemned
| notwithstanding the fact that your
| president, AS late as January II. 1915,
referring to the sS65no Of money hor-
| r0wcd by him in the name OF the pay
| ing teller of the bank. said. when being
| examined under oath ! did not see
| any reason why II should not be done
| in that way and again on March ;.
1915. after he had had opportunity OF
rejecting upon his conduct. made the
following statement: Il did not con-
slider 7 was doing anything wrong IN
| dicating an ethical standard which is
not consistent with the recognized con-
ceptions oc sound banking.
"Thc suggestion You have offered that
the bank examiner should. himself, get
from your books the details as to your
| dummy or concealed loans. I regret
to say. can hardly be regarded as being
offered in good faith. In view of the
testimony given under oath by different
officers of Your bank that, in reporting
| dummy or concealed loans to the dis
count committee and to tho board OF
directors. tho names Of the real borrow
Crs were not made known-'as far as
know they only knew the name Of the
person who gave the note (Testimony
of Vice President Flather under oath,
January Is, 1870. and the subsequent
testimony of your paying teller on
|
the books or records which would show
positively which loans were dummy
loans, and that in order to select such
loans from the records he would have
to rely on memory.
Interview At Treasury.
"The statement also made by the hank
as to the interview at the Treasury IN
December. 1919, in connection with the
unwarranted and malicious attack In a
New York newspaper upon certain
Treasury officials concerning the actor
Of the depa artment in saving a local trust
company from disaster Is misleading
and grossly distorted. AS matter OF
fact. at the interview referred to tbs
vice president of the Riggs National
Bank confessed :hat he had visod oI
approved as true, before their publiCa,
ton, the statements, shown to have beer
false, published in tho New York news
PAPER. This admission was made by
, Vice President Allies OF the Riggs IA
tional Bank in the presence of the Sec
rotary of the Treasury, Mr.. Elliott
: counsel and myself, President Glover