Evening star., 1920-02-15
No BANK CRASHES
i AFFECT DEPOSITS

u "v6Vu OI VVtuV
5 For the first time in ffty-seven
years. covering the most active period
Of American finance, a twelve-month
has passed without witnessing the
failure of national bank in this
country involine a loss to depositors.
This is one of the outstanding fea-
lures Of the .nfty-seventh annual re-
port Of the controller of the cur
rency. submitted to the Speaker of
the House Of Representatives this
week. the report covering the fiscal
1874 until 1914 there was an average
: of seventeen national bank failures
per year. but the number steadily de-
creased until there were but three
1918.
The resources of all national banks
on Noember Il. 1919. were $22.444
S92 00O-an increase of $2.S23.5SS.c00
over the corresponding call of the pre-
ceding year The increase in re-
sources of the national banks of the
United States in the six years since
1913 is $11, ,5S5 100000, or 107 per cent.
sir0ss and Net EarninEs.
In the twelve months ending June 80,
1919 the gross earnings of the ma
tional banks. which are under super
vision of the controller. were SSlO.-
$50. .008;~a their net earnings $240.-
$4,000. The net earnings for the year
ending July I. 1914, were $149.21O.lfl.
Therefore the increase for 1919 over
1914 is s91.025.s29: the increase in
these five years exceeding by $4.49l.-
as the increase which took place IN
the forty years preceding 1914.
The banking power of the country
as represented by capital. surplus, de-
posits and circulation of all banks.
as of June 80. 1919. was $4o. o.'oo.ooo.-
coo. an increase over the year be1ore
of $S673,000,O00 This makes the pres
ent banking power of the Cnlted
States nine times what it was in leso.
thirty years ago. and three times the
total banking power of the world TOT
that year.
During the year covered by the re-
mort there were forty-fve failures of
state banks and trust companies. 10
Gated in nineteen state. On this point
Controller John Shelton Williams
says: s. conn
NAMES now number over $1,000. 1t Will
be seen that, formidable as the mum
her Of failures of state banking IN
stitutions may seem by contrast win
those of national banks. they really
amounted to only about Two lot
1000 Of the number OF state panKs anu
trust companies doing business i
sP.y Allies First" In Suggested.
The suggestion is made that Ger
nany,s vast internal debt should %
eubordinated to the payment OF the al. ; ;
He'd nations The internal German dept
Is largely owed by the government 10
the junker or former governing anu cap
Nalistic classes. and the subordination
of her internal debt to her externai oo,
firations would require the junkers ana
other capitalists Of Germany, wnlie
waiting until their country can pay m
terest on their holdings. 70 go 10 WIZ III
and II, so doing aid in increasing tne |
productive capacity Of the nation Is
Dointed out that the United states. TOT
several years after 1t had acnieveo IN. !
dependence and before the governmen'
and resources could be co-ordinated, |
vas compelled to postpone payment to
domestic creditors. even including tne
overdue salaries Of revolutionary ON
GERS. and the paper currency OF tnat
day was even below tnat OF many
Although the bankers OF this country |
are pictured as having not only reiraln-
"a from extortion. but discouraged IN
others, they have not as yet Deen aDie
10 restrain "the individual extravasance
and Indulgence. luxury and display
which constitute the most serious peru
20 us." nor ito limit the crazy rapaclty !
6eveloped IN some OF our leading NOUS
tries among men who should Know De.. S
ter" The. controller: hopes that the
sfeady conservative: influence Of the
SsnEinr noVer win bring about a policy |
With manufacturers and other business i
men Of accepting for the present smaner
profits With . view to building up gen
future and the HABIT Of thrift ana
economy among the masses OF the peo-
-. Ne concludes that II these couId 90
SF0uGht about .he financial ana com,
Rerc3al problems of the world would
eInrooch solution. and the country pc !
enabled to aid more surely and sw11tiy
n the ere-estabiishment of business and |
cnnfidence at home and abroad on a |
basis more solid and enduring than ever
before.
neee~-epas Bs,kiIx Changes.
rwenty-nine Recommendations for
changes in the banking laws. are made
nv the controller, most OF them OF
minor nature. One important recon-
mendation 10 that national banks De
authorized. with proper restrictions, 70
establish branches. Another wouio
require officers and employees OF ma
tional banks to give surety bonds. ana
. third would prescribe penalty 1or
making false financial statements as
basis for loans. Limitation OF the IN
veetment which a national bank may
make in bank building also is sug-
rested. as excessive investments OF
many bank failures in the past
or the 311 national banks increas-
ing their capital during the past year
there were in the New England states
Six with capital increase OF $S57.loo;
in the eastern states. hity-hVe win
states, eighty-six- with increase OF
S8.7i3.000; middle western states.
eighty-one, increase $16.200.000: west
eru states, fifty-one, increase $3,6SO.-
eco: Pacific states. thirty. increase w.
41O. 900; total increase. $45,145.OOO.
In the last fiscal year the control
Ter reports th2 three bank presidents.
one vice prJgident, eleven cashiers
and assistant cashiers and ten others
were convicted Of criminal violation
cf the national banking law and SEN
fenced to terms of imprisonment from
: six months to ten years and TO the
payment of fines for varying amounts.
warns Against Artificial Figures.
A warning that bank figures may
become artificial and that large
volume of money cannot mean an in
decrease in production is contained
in the report, and the controller
points out that the output of basic
materials in the year 1919 shows
marked reduction from the high
points Of previous years. Specific in
stances include the following: BIZ
luminous coal, 10000, 900 tons re-
duction from 1918: anthracite coal.
12.000.0 900 tons reduction from 1918;
steel ingots. 100000 tons ms reduction u
duction from 1914: wheat. 16.000.00O
bushels reduction from 1915: corn.
l42.O00,000 bushels reduction from
1917: copper, seo.ooo.25s pounds re-
att is clear" adds the report. that
no country can be enriched by merely
Increasing prices Of products pro-
duced and consumed by it's own peo-