The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-11-23
SHOWS The SAFETY
Of NATIONAL BA'..Kl
Reports o 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.

Washington, Nov. 19.-Controller of
the Currency Williams has issued a
statement In which he declared that
there were fewer bank failures re-
Gently than In the past, by reason Of
the improved system of bank exam
inaticn 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 prio, to June 80, 1914, provided
We accept az criterion the reduced
proportion of losses sustained by de-
positors Of failed banks to fetal de-
posits 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 one-thousandths
OF one per cent OF the aggregate de-
posits OF the national banks during
those years. During the nscal 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
one-eighth of what these losses aver
aged during the preceding thirty
three years.
This great reduction in losses IL
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 Jaw intended for their protection
and the protection OF their depositors
and shareholders.
THE figures show that II the gov
eminent or an insurance company had
been insuring deposits of all national
banks from the years 1881 to 1914. 1t
would have been necessary to charge
the banks an annual premium of %
cents per thousand, or $3.50 per mill
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-
cuced that the payment of less than
Ia cents per thousand, or less than
$35 per million Of deposits, would
have been sufficient 20 insure the pay
ment In full of all depositors of all
the national banks which have failed
during the past three nscel years.
These figures were developed as a
result OF a special investigation re-
Gently made by the controller OF the
currency into the subject Of national
bank failures In the United States for
the past thirty-six years, or since July
/. 1881, which has Just been COM
pleted. The investigation was not car
ried beyond 1881 because detailed ng-
ures for those earlier years arc not
available.
The record shows that the total
approximate loss to depositors for
these thirty-a.x years ON account OF
$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, $1.0Is.63S.
Tho largest loss to depositors re-
ported for banks failing in any one
year was for the year ending June
so. 1897. when The los, es to depositors
Aggregated t3.s15.sos. and represent
ed 1b2 one-thousandths OF ! per cant
Of tho Aggregate deposits Of all ma
tional banks at that time. The pro-
portion of losses to the total deposits
OF all banks for that particular year
was more than forty times as great
years.
In 1897 the total deposits Of all
national banks amounted to 3215.000.-
900. and tho losses to depositors from
failed banks amounted. as above stat
ed. to $3,815,e0s. For the last year
deposits amounted to &l2.7ss, 600. 900.
or over Ave times what they were In
1897. and yet the total losres to de-
positors OF banks which failed in the
year amounted to only about $685.
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. 1877.
thirty-six were restored to solvency.
OF the number that failed eleven were
lOcatad fha aitias