Evening star., 1926-08-22
BANKERS URGE CLOSE GUARDING
OF ALL IDENTIFICATION PAPERS
Danger of Carving Personal Checks and Similar
Matter Is Great, as Shown by Local Example.
No Danger of Deposits Here.

and are then and there given SO long,
| a day or two, to make good the short
age. or the controller will take
charge. Nor are any sores permitted
to reach the danger zone.
Overdue paper, OvelrllaftS of any
size. notes secured by insufficient col
lateral. Over.eXtended credit to cor
pOratiOns or partnerships as we'll as
individuals, doubtful paper. borrow
ing from different banks too heavy
in the aggregate. these and all other
things that might in any way impair
the assets of hank are all an open
book to the bank examiner and can
not he concealed Get rid of this"
is the order and the directors are
made to understand the situation at
the close of the examination. The
controller is informed also and issues
his orders for action.
More than that, the Washington
Clearing House Association. composed
Of national banks and one trust com
pany. is very active in its espionage
of the banking business.
y number of banks were organized
here in the last few years for the
express purpose of making some one
bank president and furnishing jobs
for others. There was No especial
call or need for their coming into seX-
1stence. Their careers were generally
cut short. funds became scarce and
not infrequently checks were not paid
promptly when drawn on these insti-
tutions.
Without much publicity the proper
officials were informed of the situa-
ton and in short time the officers
of the banks referred to passed out
of the picture.
But not a depositor lost a dollar.
The guardians of the dollars of
Washington depositors, ever vigilent,
looked after that.
Against the Rules.
Continuous borrowing by member
banks is not what the Federal re-
serve system was established for.
In other words. 1t is not a money
making scheme. but was designed to
help the Nation over the rough
places to increase the circulation of
money when the needs of the country
demanded 1t and to reduce it again
when the passing needs had been
Sated
That the system has served its
purpose is admitted on nearly every
hand. While it has it's enemies the
S-NNNiifoA'li vi Nlt SlcIn dIltdu VI
all other financial legislation should
be readily accomplished.
Gov. Seay says:
In 1925 there We're II banks bor-
rowing from the reserve system con-
tinuously. OF that number IA had
been borrowing since 1915. Con-
tinuous borrowing is not in the in
terest of the member bank and is
bound to lead to an involved situ-
alton. 1t ought not to be permitted.
National banks, and for that mat
ter other fiscal institutions. have
made a most phenominal gain since
the establishment of the reserve
system. In the fifth district national
banks had deposits of S32S,000.000 in
1914 and in 1925 $917. 900. or 179
per cent increase. while the State
banks increased 1G2 per cent"
Washington bankers are not found
in the list of continual discounters.
indeed some banks here are not using
the rediscount privileges with any
freedom at all.
Mercantile obligations at this time
are not pressing for funds and most
Of the banks can care for their de-
mands without much trouble. Rates
are holding steadily around 6 per
cent.