Perth Amboy evening news., 1920-05-29
u FINANCIAL
SITUATION SAFE
Great Increase in Bank Depos-
ts--New Charters Granted;
Finances Strong Generally
BY w. S. MANN
Copyright. 1920, By The Washing
ton Star.)

ton starr
WASHINGTON. May 29-In some
respects ancient quip anent the opal
timist who sees the dOughnue and the
pessimist who sees the hole may be
applied to the financial situation In
| the United States.
With bond issues to be l~iquidated
a huge floating debt to be financed,
and mounting current expenses to be
met the hole takes on alarming pro-
| portions, but a review of the national
banks of the country shows IL is sur
rounded by a most substantial amount
of dough" a fact from which optim-
lists and others may subtract much
comfort.
Ten years g there were 7,6S6.239
deposit accounts in the national
banks of this country. At present,
according to the latest figures com
piled by the controller of the currency
the number is S19.121, 249, an increase
just short of $50 per cent. And with
all this volume of business there has
not been a national bank failure
within the last fiscal year that in
volved 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 335
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 for
new national bank charters. including
state banks and trust companies seek
ing to be converted into national in
stitutions, or for permission to in
crease the capital of banks already
established.
The strong financial condition of
the country at large as reflected in
the national banks Is also shown In
the state and private Institutions,
M ugh the federal government Is not
so directly concerned. During the
last fiscal year there were but forty
five state banks and trust companies
in the country which failed, the num-
Der being scattered through nineteen
states.
In a summary recently sent direc-
tors of national banks Controller John
SHELTON Williams makes the follow
ing reference to the banking situa-
ton in general:
1T is the Judgment of the con-
troller hat our entire banking sys-
tenn is showing steady improvement In
stability, progress and purpose. The
tendency In most of the states is to
increase the efficiency and vigilance
of supervision over banking institu-
tons and cooperation with those
earnestly mindful of their response
bilitieS and duties of their communi-
ties; and in the vast majority of
banks there Is warm sympathy with
these purposes.
IL To- ar.a4sfxrtK,r 20 Ard thu crnnt
majority of state bank supervisors
and examiners very effective cola
borers 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
ton 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 be-
ing shown by the American banks,
national and state
Operation under the federal reserve
act and a more careful supervision of
the activities of national banking by
the treasury department are credited
with having reduced to a minimum
the bank failures of those institutions.
Greater care is being given to the Sc
lection Of bank examiners and new
men are given a period of training
with those long in the service. More
time is devoted to examinations. the
work Is done more thoroughly, and
the real condition of the banks is 40.
curately as~certained.
When conditions are revealed that
require correction the examiners take
up the situation personally with the
directors and insist on corrections.
When 1t can be remedied Immediately
this Is done; and when changes of
policy or other procedure requiring
time to work out is involved, the di-
rectors 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
limiting the interest rate charged bor-
rowers, and that defining h 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 racttlf