Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-12-11
URGES INCREASED
LEEWAY FOR BANKS
Controller Says National In
situations Are Changing
Charters for Freedom.

| Bv the Associated Press.
| National banks throughout the
/ country are feeling more and more
! the restriction laid around them by
! Federal statutes and greater freedom
for them was described AS imperative
| in the annual report of j. W. Mcln-
| tosh, controller Of the currency, made
| public today. The controller cited
detailed statistics to show an incfeas-
| ing exodus from the national banking
| system and he predicted it would con
| tinue until the national banking laws
| are amended.
To accomplish the needed relief,
Mr.. Mcintosh strongly urged enact
| ment Of the McF'adden bill. measure
which was passed by the House last
Congress hut which never was reach
! ed by the Senate.
1T is a we'll known fact, the re-
port added. that many national
| banks are anxiously awaiting enact
ment of such a bin as that which
| failed at the last session of Congress.
| II they cannot at this time obtain
| some such amendments TO their
| charter powers AS are therein pro
posed there will be still greater
exodus from the national system
| Mr.. Mcintosh said that although
! the resources pf the national banks
! had steadily Increase from year TO
| year and the condition of the lndl'
| vidual hanks remained strong, the
| relative increase nevertheless. in the
| total resources of the national instl-
| tutions has been slowly falling off as
| compared with the resources OF state
! banks and trust companies. lie
mentioned that during the 4o-Near
period ending with July |, 1924. the
| total resources of national hanks mad
| fallen from - per cent Of the total
banking resources of the country Ia
about ~ per cent. The past IN
months. he said, had witnessed
| further shrinkage in the proportion
of the total resources held by the ma
| tional banks.
| These facts present serious SIT
uation for the consideration or the
! Congress. the controller said. "anc
! ! am directing attention thereto al
! this time chiefly for the purpose oi
! showing that the adverse conditions
| of national hank operations
! are becoming daily accentuated. hs
! national banking system is a time
! honored Federal instrumentahtN. Inc
| charter powers of the 1ndlNlduai ma
/ T1undl
/ The Congress. Twice in the history
/ of the United States. namely, lmnedl
/ atelv after the civil War and lmlne
diatelv preceding the World War the
/ Federal Government was able 10 en-
| force a banking policy at a time ol
| great financial stress through ts
! authority To use the national BANK
! ing system as an instrument Tor the
| public benefit.
Can Give Is Charters.
THE individual national bank il
! always ultimately able to take care
| of itself In meeting the competitive
| condition due to more ia yorable state
| laws by giving up its national Charter
| and going into the State system. Bu'
| the gradual loss of national banks ant
| the consequent decrease in relative
| resources of the national banking
system is Of primary concern TO the
| National Government, not Only ne
| cause the national hanks form The
| logical and permanent basis of th'
| Federal reserve system. but also be
cause only through the national bank
ing system can there he maintained
throughout the United States stand
ardiZed system OF banking subject Il
! the vistorial powers of the Fedora
! Government and subservient at al
| times to the VIII OF OHSltSS
! Notwithstanding the keen competi
ton put forth by institutions oper
ating under the more liberal pro
! visions Of the State laws, there wer,
! fewer national bank failures durins
! the IL months ended October 81 las
F., than in the preceding II months. Mr.
! Mcintosh called attention. however, Il
what he described as an overba mixed
| condition in many sections, but sale
there was, nevertheless, large por
| ton of the failures attributable Il
| economic conditions which the con
| troller described as generally mucf
! improved.
Failures Show Decrease.
| During the year mentioned 50 ma
| tional banks became insolvent as com
| pared with 1873 national banks for the
| preceding year. Mr.. Mcintosh sale
| that the failures had shown decided
/ decrease in number in the last half o
| the year covered by his report. the
proportion being 63 for the first 81,
months and 80 for the last six.
| A large majority of the failures were
| small banks. the report said. and tn
! total assets of all were materially les!
! than assets of any one of the presen
iimportant urban national banks. Sew
! enty-one of the insolVent banks wer.
J located west of the Mississippi River
! 81 of which We're in the grain coun
| try north of Kansas and 30 in tn.
! cattle country of the Southwest. Their,
were Is failures in the three State!
/ of North Carolina. South Carolina ant
| Georgia The remaining - We're scat
I tered in various other States.
! While unfavorable conditions hav.
contributed in a large measure to tn,
4 oil c{p Of of no |.
| the report continued, "still it must h,
horne in mind that the greatest mum
| her of failures occurred where the ter
ritories had too many banks per capita
and where too many bank charter.
| were issued during the boom period
! of the war and Immediately aftel
| peace was declared. Not only wa.
| there insufficient business for the sup
| port of these banks, but their organi
! zation resulted in hazardous and un
warranted competition"
Navy Radio Saves
u. S. 81, 100000 by
Handling Messages
The Navy's expanding radio
service saved the Government
$2,700.000 during the last fiscal
year by handling messages for
various departments that other.
wise would have gone by CONNER
cial companies. Figures made pub