Evening star., 1923-12-14
DAWES HITS CRITICS
OF NATIONAL BANKS
Controllers Appeal to Coun-
try for Their Preservation
and Protection.

Henry NJ. IaweS, controlier OF the
currency. made an open appeal to
the country in his annual report to-
day for the preservation and protec-
tion of the national banks.
The national banking system, he
said, deserves more consideration
than II recently has received. He in
sisted that it is now n question for
Congress to decide whether the sew
eral unfavorable factors bearing on
the system shall continue or whether
I'VE shall sit idly by and apatheti-
cally watch its refrigeration"
One OF the principal influences cited
by Mr.. Dawes was the persistent
suggestion" that the office of con-
troller of the currency be abolished
Another factor characterized as
equally important is the agitation
over branch banking.
Outlines Controllers Policy.
The controller, Mr.. Dawes asserted.
possesses many powers susceptible of
arbitrary and rigid enforcement but
he declared it is not now the policy
and never has been to employ them
in any way that would not further
the banking interests of the coun-
try. He declared the controller al
ways should act as a co-ordinator and
use his broad powers only for the
specific purpose of seeing that the
affairs of national banks are admin
iStered in accordance with the laws
and to protect the national fnStitu
tions from encroachment of other
banking interests against whom they
have been powerless because Of fed
eral limitations.
THE Office of the controller of the
currency has to be organized for
Quick and summary decisions" said
Mr.. Dawes. "A mob of depOsitors is
never complacent enough 10 await the
the Federal Reserve BOARD is COM
posed of the men OF ability and force
of character that has typiffed this
board in the past. each member in
Self-resprCt will insist on expressing
himself and impressing his personal
ity on any proposed methods for re-
lief, and the fire wagon, If IL arrives
at all, will approach in orderly and
wisps OF smoke have floated away and
the ashes cooled.
Cites Prejudicial Suggestions.
81 cannot resist a feeling little
short of resentment that so many
suggestions and so many tendencies
seem directed along lines prejudicial
to the national banking system. If
we are to have national banking
system over which the government
exercises supervisory control, that
control must be in the hands of an
independent executive and not the
representative of a preferential cred
itor. The only fair and only logical
thing to do is either to continue the
present system with an independent
controller or abolish the system en-
tirely'
The branch banking problem. the
controller said. presents clean-cut
issue as to whether the country pre-
fers a system of privately owned
branch banks or n reserve system
under federal control. The question.
he added, was interviewer. both with
the life of the federal reserve system
and the life of the national banks.
which are compelled by the federal
reserve act to retain membership In
the reserve system.
Held Essentially Monopoly.
Branch banking, the controller as
sorted was essentially monopolistic,
and. he added, that to assume that
half a dozen or a dozen state banks
would not have some mutually of
action in states where they con-
trolled a large portion of the bank
ing interests was to ignore the fun
damental basis of human action.
IF any lessons are to be drawn
from the development of large in
dustrial enterprises in the United
States" he said. 'it is that the
principle of Capitalization, when
once inaugurated. will proceed. un
less interfered with by governmental
action. to point Of complete con-
centration in an individual or
group dominated by an individual.
Should a situation of this kind de-
velop in any federal reserve district
the federal reserve bank there either
would be eliminated as a factor In
the financial community or would be
virtually under the control of such a
group"
The constructive course. the report
declared. lies in relief for the ma
tional banks. Such a program, Mr..
Dawes said. should permit continue
tion OF state bank privileges on their
present level. while at the same time
the operations of the national in
stitutions would be lifted up to the
same plane of competition. He said
that at present the national banks
were handicapped by hard and fast
obligations to the federal govern
ment which they were bound to OBJ
serve.
Declines to Make Suggestions.
The controller declined. however,
to make recommendations to Con-
gress for national bank relief at this
time. He preferred, he said, to allow
Congress to solve the branch banking
problem. after which the situation
will be clarified, so that suggestions
for improving the conditions faced
by national banks may be made with
some hope of beneficial results
Turning to bank operations, the
controller reported that dividends
aggregaung s17s.OOs.O0o were paid
by the national banks in the year
ending November /, the greatest
issue ever made by the national
banks OF the country. He reported,
also, that s203.5O0.O00 had been add
ed to the combined profits account
of the national banks in the same
period. This represents an increase
Of more than $20,0O0,O0O over the pre-
ceding year In the earnings of the
national institutions.
DUEL AVERTED AS WIFE