The Washington times., 1916-01-10
Comptroller, in Annual Report,
Urges Action to Protect Bor-
roWers Against Usury.
1000 PER CENT IS CHARGED
Sworn Statements Show Many
National institutions Collect
Exorbitant Rates on Loans.

New Federal banking Laws more fu'ly
to protect depositors, especially aralnss
usury. are urged by Conntroller or thc
Currency John Skelton Nil'iar, in his
annual report made pubic TO-DAY.
The Comptroller asks particularly for
AN amendment to permit the depart
lnent Of Justice to bring suit against
usurers on information furnished NY
the Cornptroler's office. He incorporates
in his report to support this plea. sworn
statements from national bahks III
Texas, Gcorsia. Oklahoma and I.ou'si'
ana, showing they had been iend1nS
money at rates OF from 20 to 200 per
cent.
Comptroller Williams asks in all FOR
twenty-four amendments to strengthen
the Federal banking laws against i'm
lroper practices. lie reviews at great
length a consistent campaign made by
him over period Of several months
to force the discontinusnce Of the nr2c-
tee by many banks of Charging usuriots
rates. He publishes correspondence
with the banks, with the National
Banking Associations, With State Sd
porintendcnts. and others on the sub
5ect. This correspondence shows he
says, that there have been many shall
low attempts TO Justify usurious charges.
One bank president he shows,
sought to defend usury on the ground
that it VAS a Ions established practice.
Others declared that it meant failure
to small banks. hut the Comptroller
points out that no bank has been forced
out OF business because compelled to
keep within the law in its interest rates
Urges Bank Consultations.
FIe suggests in small communities
where hanks aIlesedly cant get along
On the legal rates, that number of
small institutions, unable to prosper,
be consolidated thereby saving the
overhead expense ;hat some such cities
and towns can not carry.
Affidsvits from some fifteen or TWEEN
ty national banks, are submitted in the
report. giving list of the usuricLs
loans made h these different banks TO!
various periods. The names OF the
hanks, and the borrowers. however. are
united The tables give The amount
# the loans, the time for which made,
and the rate OF interest charged in each
instance. The rates run in some cases
mp to more than Geo pei cent Refrr'
."nce is made to three nationa! banks
the average rates which they charge
on all loans are %. 30 and ~ per cent,
per anrS-l respectively.
Attention is called to the fact that that
usurious charges are in tht main
exacted from helpless borrowers,
caught in tho pinch OF necessity. The
Comp:rollcr urges that for the protec-
tion IF The faithful and inteliisent
vast majority from unfair competition
and unjust odium. the laws should force
the unfaithful and incompetent to con,
form to sound banking principles and
t1 mid in ,lcyelopjn. instead Of DESTROY
ing communities.
After giving tremendous hgures 70
show the. growth and strength OF the
national hanks. the Comptroller takes
up his suggestions to strengthen the
banking laws and protect stockhold- :
ers, depositors. and the public
Safeguard For Banks.
"The establishment Of the Federal
Reserve Bank" he says. makes 1t
practically impossible for any ma
tfonal hank operating in accordance
with the provisions OF the national
bank act and managed with ordinary
honesty. intelligence, and efficiency to
fail. Banks nearly always are brok-
en-, not by the failure of customers to
whom they have lent money. not by
bank robbers who have come from
dissipation of the banks funds
through loans to their own OFFICERS
and directors, or to interests ailied
with or controlled by those officers
and directors. or else by direct defal
cations and embezZlements by trusted
officers. IL these evils are remedied--
and they can be remedied II certain
simple and much needed amendment S
can be secured TO the national bank
act--failures among national banks
can be reduced to negligible mum
her. or be absolutely eliminated.
The Comptroller then repeats the
recommendations made ir his last
annual report and urges these twelve
additional amendments:
THAT officers OF national bank be
prohibited from borrowing funds OF
the banks by which they are EN-
ployed;
to a firm in which a director may be
a partner without formal authority OF
the board of directors of the bank
tavinS the CUSTODY Of Of its funds money
ur securities. and all officers. teilers
or other employees of the bank en-
gagged in the handling Of its none!
shall furnish surety bonds preferably
the bonds OF an established surety
.'To limit direct and indirect loan,
to one individual firm, or corporation
ITO prevent or limit orerdrafts.
Certificates of Deposit.
~That all certificates OF deposit mus
he signed by two officers OF the bank
and penalty provided for the issue o
any such certificate not signed by tw'
officers.
To forbid any officer or emploNe o
2 nationel bank from erasinC or causini
Ia he erased or removed. either by aci
or abrasion. any entries on the book
~ snv national bank. Where cntrie
Lave heen made Inadvertently or crrone
uuslV and il Is desired 10 correct then
hey should be Cancelled bN having ,hre
ines drawn acroes them in black or re
NIX in such a manner as TO indicate II
"ancellatiOn but not 10 make IL tnpoSSI
Vie to decinher the ORIGINAL enLr} Ma
ioral hanks have suffered serious losse
ROM erasures aud ChanRed "ntrieF b
dishonest hookkseUers aud Officers I
conceal OF TO falsify transactions,
To limit interest maid on deposits /
"A maNimum Of nor Cent. unless III
highest rate CharEed on long time pspe
nv tile Federal reserve bank OF the dis
l.. IL hltHf a NNaT