Evening star., 1919-01-22
NEW HIGH RECORDS
SET BY THE BANKS
Controller Williams Reports a
Prosperous Year, Despite
the War Burdens.
RESOURCES 19 BILLIONS

| National banks prospered last year,
and their resources, earnings and de-
posits set new high records. in spite
of war burdens. according to the an
nuaI report of John Shelton Williams,
| controller of the currency. Mr.. VIII
| Iiams' report was the last he will
make during his present term. which
expires February 2.
The report stated that the success
of the financial management OF the
war largely was due to the conser-
vative policies of the banks and the
| federal reserve system. The con-
| trol1er also paid tribute to efficient
| direction of individual institutions.
| Mr.. Williams report covered the
| year ending October 81. 1918 II
stated that half the $4,000 900
/ Of liberty bonds marketed to that
/ date were sold through national
| banks. Yet the banks deposits in
! creased nearly 1000, 0o0, ,000. In spite
| of the big demand for credit, interest
! rates were kept low and stable. There
were but two failures during the MS
| cal year.
Says "Catastrophe' Was Averted.
| A financial catastrophe" which
would have seriously affected banks
| and business in general last year, was
| averted, said Mr.. Williams, by the
| government taking control of the
| railroads.
| Resources of the 7.705 national
banks on November 1, 1918, were re-
| ported as s19,S21, 100000, as compared
| with aggregate resources of S22.371.-
! 000,0o of the 21,175 state or private
| banking institutions last June. Gross
| earnings of the national banks in the
| year ending last July 1 were $s13.00O,-
! GEO, an increase of nearly $300-000,000
over the earnings for the year just
preceding the outbreak of the Euro
pean war. and net earnings were $212,-
100000, d new high record.
Banking Power Discussed.
| The banking power of the United
States last June was calculated by the
controller at S39, ,0S2, 0o0, ,000, an increase
in the year of $4,SG9,000,00o. This in-
cluded national and state Institutions
capital surplus, profits. circulation and
deposits and federal reserve banks capi-
tai and deposits.
The banking power of the United
States today is estimated to be seven
times greater than in 1890" said the re-
| port.
| Discussing failure of national banks,
| the controller contraSted present condi-
tious with those of the panic of 1893,
| when 155 national banks, with liabilities
| of more than S80,000,0 600, suspended Ia
the first year of our war, on the other
hand, there were only four national
| bank suspensions, representing liabili-
| ties of about SS0O,oo
| Advocates Guarantee of Deposits.
"An insurance premium of $50 per
million dollars of deposits would be
sufficient to guarantee the deposits of
all national banks against loss, pro-
vided the percentage of loss shown
in the last four and half years is
maintained" said the report, scom.
menting on the recommendation fer
government guarantee of deposits Of
declared, would bring many millions
of dollars from their hiding places.
The controllers report shows that
between June, 1916, and June. 1918,
deposits in savings banks increased
from $5,0SS 100000 to S5.471. .000, 900,
despite the large purchases during
the war of liberty bonds. The num-
ber of savings depositors also in
creased from 11,14S,000 to 11,379.090.
Recommendations Renewed.
The controller renewed many of his
former recommendations for legtsla-
ton, including the following: To pre-
vent officers of banks from borrowing
from their own institutions; to limit
direct and indirect loans to one indi-
yidual, firm or corporation; to provide
for removal of directors guilty of per-
sistent violations of the national bank
acts; to authorize national banks to
establish branches, and to provide for
rotations and vacations for book
, keepers.