Evening star., 1927-07-27
BANK CRASHES CUT
BY EXAMINER PLAN
Extension of Clearing House
Examination Is Urged for
Smaller Towns.
BY EDWARD C. STONE.

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BY EDWARD c. STONE.
The extension of the clearing
house examiner plan, which has
worked successfully In 33 cities. to
the smaller communities was de-
clared by John II. Downing of
Louisville. president Of the Clearing
House Section of the American
Bankers Association. to be the most
promising means Of preventing bank
failures. Speaking at Richmond to-
day. before the Convention of the
National Association of Supervisors
Of State Banks, Mr.. Downing de-
clared that organized banking was
interested above every thing else In
making banking safe for the de-
positor and urged each State bank
ing commissioner to put the system
to an early test by setting up In
co-operation with the controller of
the currency, at least one district
clearing house examiner system.
There have been 3.124 bank fall
ures in the United States during the
last seven years, a number repre-
the chartered banks. Mr.. Downing
reported. The method of the guaran-
tee of bank deposits, as a means OF
preventing losses to depositors, has
been tried and found wanting be-
cause it set premium on incompe-
tence and penalized safe and conserv-
ative banking" Mr.. Downing told
the banking commissioners. While
branch banking has been hailed by
it's partisans as a remedy for bank
ing failures, Mr.. Downing said he
sincerely doubted that the American
public was ready for such a develop
ment, as it was contrary to the idea
Of American institutions for one
community to depend for its develop
ment upon capital domiciled in a far
off center whose executives were not
conversant with local conditions
Gives Additional Protection.
An alternative for deposit guaran-
tee and branch banking is clearing
house examiners for banks, on
county. district or even Statewide
scale, Mr.. Downing said. "This Is Of
fered not as a substitute for State or
national supervision, but as a neces-
sary adjunct" he said. Bank ex.
aminers travelling from bank to bank,
town to town, section to section. with
conditions prevailing in one COM
munity entirely different from an
other, can necessarily only touch the
high spots and have not the time,
along with their manifold duties, to
go as carefully into a banks portfolio
and analyze each and every line of
credit and each and every investment,
so well as bank or organization
whose entire duties are within a com.
pact territory, where banks have SIM
liar patronage, similar problems and
similar limitations. The periodical
examiner can find, and does find,
deficits. bad investments, poor loans
But one who is on the ground all
the time can prevent them, and the
saying is, AN ounce of prevention
is worth q pound of cure
Clearing house examination of
banks has been in operation for more
than 20 years, and so far as I am ad.
vised, there has been only one fail.
ure of a bank subscribing to the
system"
Capital, surplus and undivided
profits Of the 1887 State banks in
this country as of March 23 last
totaled S4,547. 7.270.051, or Al per cent
ahead OF the national banks, r. N.
Sims. secretary.treasurer Of the as.
sociation. told the convention.
Mergenthaler Market Leader.
Mengenthaler Linotype led the
Washington Stock Exchange trading
today when 81 shares changed hands,
all but one sale being made at 112.
Ten shares sold at 112h. One share
of Lanston came out at 99k.
Other stocks were firm. Washing.
ton Gas Light sold at IS and Potomac
Electric 512 per cent preferred hit
1o2. Two bank stocks were out,
Security Savings & Commercial again
selling at 405 in a 10.share deal, and
eSxy che ~% %
Trust changing hands at 394B.
Potomac Electric 6s registered
108A. and Washington Gas IS, series
B, came out at 104 As. In the un.
listed department Departmental Bank
sold at 6.
b. & O. Half Year Earnings Up.
June net operating income Of the
Baltimore & Ohio was S5,249,592,
against $5,269,04 in June. 1926. and
for the half year. $22,650,815 against
$20,S3S,512 in the first half of last
year.
There was a gain of s3,S63.S65 in
freight revenues during the half year
period which accounted for the better
showing than in 1926. Passenger
travel fell off. the total half year in
come from this source being SS54,000
less than a year ago.
Returns From Western Tour.
Charles P. Light Of the National
City Co. has returned to Washington
from a trip of several weeks through
the West, visiting the offices Of the
company at Chicago, Los Angeles, San
Francisco and Seattle. He also visited
Yellowstone National Park, and Lake
Louise and Banff, Canada.
Mr. irnf cfafad f0dav that tho crOY
prospects throughout the West are
excellent, especially for wheat and
alfalfa.
Heard in Financial District.
Clarence f. Norment. chairman of
the board OF directors of the National
Bank Of Washington and also presi-
dent of the Norfolk & Washington
Steamboat Co., is home from Atlantic
City, where he spent a few days. He
will return the last of the week to
continue his vacation.
H. E. Mayer, a director In the Bank
of Commerce and Savings, is passing
the Summer at resort on Lake Cham
plain.
Wallace Nick. Stowell, manager of
the branch Of the Lincoln National
Bank at Seventeenth and H streets, is
taking few days rest at Virginia
Beach. ID
President William D. Hoover of the
National Savings & Trust Co. will
leave here Friday to pass a six-wee6
vacation at the Homestead at Hot
Springs, Va.
President Harry v. Haynes Of the
Farmers & Mechanics National Bank
has returned from two weeks visit
at Atlantic City.
Vice President John D. Leonard of
the Washington Savings Bank has
returned from a three-week vacation
spent at his country home near Fred |
erick, Md.