The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1925-12-17
FEWER LAWS FOR
BANKS DEMANDED
Comptroller Says National
institutions Are Feeling
the Restrictions.
M'FADDEN BILL URGED

around them by federal statutes, and
greater freedom for them is de-
scribed as imperative, in the annual
report of J. w. Mcintosh, comptroller
of the currency. The comptroller
cited detailed statistics to show an
increasing exodus from the national
banking system and predicted it would
continue until the national banking
laws are amended.
To accomplish the needed relief,
Mr.. Mcintosh strongly urged enact
ment of the McFadden bill, measure
which was passed by the House last
congress, but which never was reached
by the senate.
at is a we'll known fact" the re-
port added, "that many national banks
are anxiously awaiting enactment OF
such bill as that which failed at the
last session of Congress. If they can
not at this time obtain some such
amendments to their charter powers
as are therein proposed, there will be
still greater exodus from the ma
tional system"
National Banks Declining.
Mr.. Mcintosh said that although
the resources of the national banks
had steadily increased from year to
year and the condition of the individ-
ual banks remained strong, the rela-
tive increase nevertheless in the total
resources of the national institutions
has been slowly falling off as COM
pared with the resources of state
banks and trust companies. He esti-
mated that during the forty year
period ending with July 1, 1924, the
total resources Of national banks had
fallen from rs per cent of the total
banking resources of the country to
about AZ per cent. The past il
months, he said, had witnessed a
further shinkage in the proportion OF
the total resources held by the ma
tional banks.
"These facts present serious stu
alton for the consideration of the
Congress-" the comptroller said, "and
am directing attention thereto at
this time chiefly for the purpose of
showing that the adverse conditions
of national bank operations are be-
coming daily accentuated.
The national banking system is a
time honored federal instrumentality.
The charter powers of the individual
national banks are derived solely
from the Congress. Twice in the his
tory of the United States, namely,
after the Civil war and
Immediately preceding the World
war, the federal government was able
to enforce banking policy at time
of great financial stress through it's
authority to use the national banking
system as an instrument for the
public benefit.
They Must Be Maintained.
"The individual national bank is
always ultimately able to take care
of itself in meeting the competitive
condition due to more favorable state
laws by giving up its national charter
and going into the state system. But
the gradual loss of national banks
and the consequent decrease in rela-
tive sources of the national banking
system is of primary concern to the
national government, not only because
the national banks form the logical
and permanent basis of the federal
reserve system but also because only
through the national banking system
can there be maintained throughout
the United States standardized sys-
tenn of banking subject to the visi-
torial powers of the federal govern
ment and subservient at all times to
the will of Congress"
Notwithstanding the keen competi-
ton put forth by institutions operat-
ing under the more liberal provisions
of the state laws, there were fewer
national failures during the IL months
ended October 81, last, than in the
preceding twelve months. Mr.. McIn-
tosh called attention, however, to what
he described as an over-banked con-
dition in many sections, but said there
was nevertheless a large portion of
the failures attributable to economic
conditions which the comptroller de-
scribed as generally much improved.
During the year mentioned, SO ma
tional banks became insolvent as COM
pared with 1873 national banks for the
preceding year. Mr.. Mcintosh said
that the failures had shown decided
decrease in number in the last half
Of the year covered by his report, the
proportion being So for the first six
months and 35 for the last six.
Failures mostly Small Banks.
A large majority of the failures
were small banks, the report said, and
the total assets of all were materially
less than assets of any one of the
present important urban national
banks. Seventy-one of the insolvent
banks were located west of the Missis-
sippi river, 81 of which were in the
grain country north of Kansas, and 20
in the cattle country of the south
west. There were Is failures in the
three states of North Carolina, South
Caroline and Georgia. The remain
ing twelve were scattered in various
other states.
"While unfavorable conditions have
contributed in large measure to the
closing Of number of these banks"
the report continued, "still it must
be borne in mind that the greatest
number of failures occurred where
the territories had 900 many banks
per capita and where too many bank
charters were issued during the boom
period of the war and Immediately
after peace was declared. Not only
was there insufficient business for the
support of these banks but their or
ganization resulted in hazardous and
unwarranted competition"