The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-11-23
SHOWS The SAFETY
Of NATIONAL BA...K.
Controller Reports q Steady Decline
In Failures In Recent
Year,.
DUE TO CAREFUL SCRUTINY
Examination Methods Improved,
Losses Down to $1,000 OF 1 Per
Cent OF Deposits.

4 ~~1as W. ASOPINcAtSe
Washington, Nov. l9.--Controller OF
the Currency Williams has issued q
statement in which he declared thai
there were fewer bank failures re.
Gently than in the past. by reason oil
the improved system of bank exam
tination and rigid provisions of recent
! laws. His statement follows:
The national banks OF the country
are now eight times as safe as they
were during the thirty three years
period prior to June 80. 1914, provided
We accept a, a criterion the reduced
proportion of losses sustained by de-
positors OF failed banks to total de-
posts of the national banks during
the last three years as compared with
the preceding thirty-three years.
Records which have Just been com
piled show that for thirty three years
from 1881 to 1914 the losses to de-
positors which arose from bank fall
ures averaged annually during that
period twenty-eight ne-thousandths
OF one per cent of the aggregate de-
those years. During the fiscal years
ending June 80, 1915. and 1917. the
percentage of losses OF failed banks
to total deposits of all banks has av-
erAged only about three one-thou-
sandths of one per cent, or less than
ons-eighth OF What these losses aver
aged during the preceding thirty
three years.
This great reduction in losses In
largely the result of the improved
system OF national bank examination:
of the greater thoroughness exercised
in these examinations, and of the
policy OF requiring national banks to
observe more rigidly the provisions of
the law intended for their protection
and the protection of their depositors
and shareholders.
The figures show that IL the row
eminent or an insurance company had
been insuring deposits OF all national
banks from the years 1881 to 1914, IL
would have been necessary to charge
the banks an annual premium OF IS
cents per thousand. or $3.50 per mil
lion of deposits, to cover the actual
LOSSES. but during the past three
years. under improved methods of ex-
animation, the losses from national
bank failures have been so greatly re-
duced that the payment of less than
SI-7 cents per thousand, or less than
sss per million OF deposits, would
have been sufficient to insure the pay
mont in full of ali depositors of all
the national banks which have failed
during the past three fiscal years
These figures were developed as a
result OF special Investigation re-
csntly made by the controller of the
currency into the subject of national
bank failures in the United States for
the past thirty-stx years. or since July
/, 1881. which has just been COM
pfsted. The investigation was not car
risd beyond 1881 because detailed fig
ures for those earlier years are not
available.
The record shows that the total
approximate loss to depositers for
these thirty-six years on account OF
all national bank failures was s3s,-
$4,000, or 1887 per cent OF the de-
posits OF these failed banks. The av-
srage annual loss In the thirty-six
years prior for the entire country
was. therefore. tf,ols.eSs.
The largest loss to depositors re-
ported for banks failing In any one
year was for the year ending June
30. 1897. when the los,s to dspositors
aggregated N.sIs.sas. AID represent
ed iS3 one-thousandths of / per cent
OF the aggregate deposits OF all ma
sionaa banks at that time The pro-
portion of LOSSES to the total deposits
was more than forty times as great
AZ the average for the last three
years.
In 1897 the total deposits OF all
national banks amounted to s2i5. ooo.-
600, and the losses to depositors from
failed hanks amounted. as above stat
ed. TO s3.sl6,Gos. For the last year
deposits amounted to f12,7ss, 600, 900.
or over FIVE times what they were In
1897, and yet the total losses to de-
positors of banks which failed In the
year amounted TO only about Ssss.-
900. and the losses to depositors from
the depositors' losses amounted to for
banks failing In 1897.
"Of the 500 national banks which
failed between 1881 and July. 1917,
thirty-six were restored TO solvency
Of the number that failed eleven were
located In the central reserve cities
OF which one was restored to solvsncy:
sixty three were located In the re-
serve cities. OF which SIX we're re-
stored, and 42s were country banks.
Of which twenty~nine were reopeaed
From 1881 to July, 1917. there were
six national bank failures In New
York city, four In Chicago, and one
IN st. Louis. The failed hanks In New
York city returned to dspositors s42s
p@I cent VI lIleiE uepcbils. lie CT. /
Louis bank paid $3.50 per cent. and
The Chicago bank paid an average of !
100 per. cent, with 1888 per cent of
Interest added.
Among the ffty-four reserve cities |
here are twenty-four citien In which !
here have been no national bank fail |
ares since 1881. The reserve cities I
N which there were no bank failures I
'or the period named are Albany. /
Richmond. Charleston. |
Atlanta. Savannah. Birmingham, Gal |
,eston, Houston. Waco. Chattanooga. |
Cleveland, Milwaukee. st. Paul. Cedar !
Rapids, Des Moines, St. Joseph. Oma- I
IA. Muskogee, Oklahoma City, Tulsa.
Los Angeles. Salt Lake City, and Og- |
len.
The aggregate capital of all hunks
Which failed from 1881 to 1917 was
I77,b3a,0o0, and the aggregate of thelr
deposits at the time Of suspension was
'ls4.s6l.o0o. The approximate aver
ICE payment on deposits was s1.I3
Ter cent, while the average percentage
u losses of depositors to total deposits
II all national banks each year for Il
he period was twenty-three one-thou-
n hA re