Evening star., 1915-04-13

Q]
manding an itemized description OF all
tho loans in the bank, with view TO
determining. the letter says. how much
commercial paper the bank holds tnat
is eligible for rediscount with the fed
eral reserve bank of this district He
expresses the opinion that this bank
does not carry as much paper OF the
class eligible for rediscount as II snouio
carry for its volume Of deposits. AS
has already been mentioned in this
statement Washington Is not a COM
mercial city and there Is not as mucn
borrowing here for commercial pur
poses as in other cities Of this size ,I nnI
the Riggs National Bank has It's tuii
share Of comm ercial accounts. ana We
believe has as much hign-ciaSs COLI ui
mercial paper as other pahks N ~ nhe
city. When it was impractioable to oo
tain commercial paper OF class tna.
the bank was willing to accept II nas
made Investments In high-ciass us.ea
bonds which could be readily CONVEX ''0
into cash. h,~b
"The Riggs National Bank has nasa nasa
annrecfation Of the facilities anorded
by the federal reserve system. aI'o -
in position to use the system 80 70. %
as It expects to find occasion 70 90 so.
1t is q fact, however. that more tnan
one half Of the banks in the Cniteu
States including many that are iai ~
than this one. do not belong ~ W.
ne tional banking system or the ieoelai o.
reserve system, and consequently, are
unable to use their facilities AZ AZ: !
does not necessarily follow. theFeIuie 3.
that because a bank Is not IN posi.lo
to use the federal reserve eysseni .sa
IL is in an unsound condition. ana tne
law has never conferred upon the con
troller OF the currency autnorty ~
require that any particular pols.
the assets Of a national BANK snan o9
reserve bank. Furthermore. We nave
reason to believe that he is not at
tempting to use such authority gen
orally, and We object to MS atee!hpt
to apply such special rule upon TINS
bank The ability of this bank 10 con
vert it's assets and to pay cash upon
demand was sufficiently demonstrated
in the summer and fall OF 1919. Wnsii
in pursuance to the demands or tue
United States government at the IN
stance OF tho controller of the currency
and Secretary of the Treasury. and Tor
the most part amid the panic ana
financial disorder occaS1oned py tne
outbreak Of the European war. 1t paid
off the sum of S1.200.o00 Of govern
ment deposits.
Burdens and Ve1attons.
TT is impossible within the limits to
which this statement must be confined
to give any adequate idea Of the bur
dens and vexations to which this bank
has been subjected during the past
year by the controller. His peremptory
demands for statements of various
kinds, all made under q time limit and
with threats that fines would be i'm
posed for delay, have necessitated the
constant employment OF an extra
clerical foroe. The bank has been d1s-
eliminated against and embarrassed IN
treatment in the transaction Of routine
business at the controllers office 1t
has been for years and is now the rep
resentative Of a large number OF ma
tional banks located in different parts
of the country in their relations with
the controllers ofica- Other banks IN
this city perform similar services FOR
out-of- town banks, and so, also, 90
private firms. During the past year
when the Riggs National Bank has at
tempted to perform customary services
Of this character 1t has been met at
the controllers Office with the state
ment that tho banks interested should
communicate with that Office direct.
"Following the prudent policy pur-
sued by many other national banks,
early in August, 1914, the Riggs Ma
tional Bank made inquiry at the con-
troller's Office to learn how much cur
rency printed from its plates was
available for immediate use. in case
| III
tional amount under the provisions of
the Aldrich-Vreeland act. This In
quiry precipftated series OF letters.
offensive in tone and character, de-
manding information and statements
Of various kinds. although no knew
that II this bank concluded to make
application for currency under the
Aldrich-Vreeland act upon any Sc
curity other than government bonds.
such application would be made through
he Association
Washington, D. c.. and the collateral
offered would be passed upon and ac-
cepted by that association. which would
then have guaranteed the application
to the controller.
ct should be remembered that at the
very time that the controller was thus
questioning this banks ability to take
out emergency currency, he was using
his influence, notwithstanding the dis
turbed conditions of the time and the
danger of a general panic. to have
public funds. amounting in the aggre-
gate to a very large sum. peremptorily
withdrawn from this bank.
There could be no moro conclusive
proof of the animus that has inspired
his entire course than is afforded by
those actions, and In view of them tho
reader will be able to judge how much
sincerity there Is in his professed
anxiety to protect the stockholders Of
this bank from its officers.
500 Day Fine.
Tho outcome Of this year Of con-
tinuous assaults upon the bank has
been that on tho 30th day Of March,
1915. the controller formally assessed a
continuing fine Of 500 per day against
the bank, and directed tho treasurer
of the United States to withhold the
interest due April / upon the govern
ment bonds Of which tho bank Is the
| owner. Tho Riggs National Bank has
responded by q petition for an injuno-
| ton to restrain him from unlawfully
| interfering with tho bank.
Tho explanation Of tho course fol-
lowed by him and by tho Secretary Of
tho Treasury is believed to be correctly
given in the banks letter to tho con-
| troller, dated March 8. 1915. in which
! he was notified Of the final determine
| tion Of tho bank to resist his unlawful
| demands.
'CHAs. c. GLOVER, President.
| IN E. ALLIES, Vice President
| "WM J. FATHER, Vice President
'HENRY H. FATHER, Cashier"
Letter From Bank Officials
to Controller Of Currency
| <<~