Evening star., 1920-05-29
FINANCIAL. OUTLOOK
OF NATION BRIGHT
Banks of Country Shown to
Be Surrounded by Plenty
of "Douqh."

In some respects the ancient quip
anent the optimist who sees the
doughnu and the pessimist who sees
the hole may be applied to the finan-
c1al situation in the United States.
With bond issues to be liquidated a
nuge noating debt to be financed, and
mounting current expenses to be met,
the mole takes on alarming proper
tions. but a review of the national
banks of the country shows it is sur
rounded by most substantial amount
OF dough-" a fact from which opti-
mists and others may subtract much
comfort
Ten years ago there were 7.6S6,23a
deposit accounts in the national banks
OF this country. At present, accord
ing to the latest figures compiled by
the controller of the currency, the
number is 19,121.249. an increase just
short of $50 per cent. And with all
Deen national bank failure within
the last fiscal year that involved the
loss of one dollar to a depositor
During the six months of the cur
rent fiscal year. which began October
81 last. charters were granted to 355
new banks. and the capital of 100
banks already established was in
creased. The growth. affecting a to-
tai of 545 institutions. was confined
to no one section of the country
forty-five states being represented in
the list.
There are at present S.032 national
banks in operation, and there are
now pending S22 applications either
Tor new national bank charters, in
Guiding state banks and trust COM
panies seeking to be converted into
national institutions, or for permis-
sion to increase the capital of banks
already established.
he OF A. -
country at large as reflected in the
national banks is also shown in the
state and private institutions, though
the federal government is not so di-
rectly concerned. During the last
fiscal year there were but forty five
state banks and trust companies in
the country which failed, the number
being scattered through nineteen
states.
In summary recently sent di-
rectors of national banks Controller
John Shelton Williams makes the
following reference to the banking
situation in general:
ut is the judgment of the controller
that our entire banking system is
showing steady improvement in sta
bility. progress and purpose. The ten
dency of most of the states is to in
crease the efficiency and vigilance of
supervision over banking institutions
and cooperation with those earnestly
mindful Of their responsibilities and
duties of their communities, and in
the vast majority of banks there is
warm sympathy with these purposes.
Effective Co-Laborers.
1T is gratifying to find the great
majority of state bank supervisors
and examiners very effective Co
laborers with this department., to the
common end of establishing in this
country a general banking power
strong and impregnable. deserving
and possessing the confidence of the
entire world and prepared to do a
great part in the work of rehabilita-
tion everywhere. 1t is a fair state
ment that the most cheering and re-
assuring features of the entire pres
ent situation are the splendid condi-
ton and the fine spirit which are being
shown by the American banks. national
and state"
Operation under the federal reserve
act and more careful supervision OF
the activities of national banks by
the Treasury Department are cred
mum the bank failures of those in
stitutions. Greater care is being
given to the selection Of bank exam
iners and new men are given a period
OF training with those long in the
service. More time Is devoted to ex-
am1natlOn, Ine WOTk Is QOne more
thoroughly. and the real condition of
the banks is accurately ascertained.
When conditions are revealed that
require correction the examiners take
up the situation personally with the
directors and insist on corrections.
When it can be remedied Immediately
this is done. and when changes Of
policy or other procedure requiring
time to work out is involved, the
directors are required to sign agree
ments to bring about the desired cor
rections. The appointment of a chief
examiner for each federal reserve
district has permitted a closer over
sight of the men in the field and the
work of actual examination.
In consequence violation of the law
by banks is less frequent today than
ever before. particularly the law linn
iting the interest rate charged bor-
1owers and that defining the limit of
loans to each borrower. Excessive
loans and imprudent extensions OF
credit to directors and their business
concerns, formerly frequent causes Of
bank disasters, have been the object
of special corrective attention during
recent years, and a higher business
and moral standard of banking is the
result.
Copyright, 1920.)