Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-25
BANKING SITUATION
FOUND FAVORABLE
Commissioners of 80 States
Report Recent Troubles
as Isolated Cases.
BY DAVID LAWRENCE.

Surveying banking conditions from
coast to coast, the State commissioners
of banking have within the last "a
hours given composite expression to
their confidence in the Nations bank
ing structure.
In Geographic statements published
here today, the banking commissioners
Of 80 States made it clear that the re-
cent difficulties have been isolated cases.
In fact, most Of the commissioners
pointed out that such suspensions as
had occurred had eliminated weak
spots" and therefore strengthened the
general situation.
Some of the commissioners suggested
that altogether too much publicity had
been given some bank suspensions with
out q corresponding emphasis on the re-
opening Of banks. In many instances
present dificulties have been traced to
old situations, some Of them three or
four years In duration. A large number
Of States report fewer bank failures this
year than last year.
Trend Generally Favorable.
Cash reserves have been rising in
some Of the States. as compared with
year ago, and the significant thing
about all the ofticial statements from
the bank commissioners is that the
trend Is generally favorable.
Considerable discussion is going on
as to banking supervision. For ex-
ample, the commissioner of banks of
Minnesota, A. j. Viegel, says there is
q marked tendency toward closer SUI
pervision by directors and better bank
management, looking toward greater
profits for stockholders and safety for
depositors."
In the agricultural States, like Iowa,
Kansas and Nebraska, vast improve
ment over a year ago is noted. In
Iowa, for instance, steady improve
ment has been shown this year and
/ L. A. Andrew, superintendent of bank
ing, says that Nearly all Of the banks
In Iowa are in better condition at
this time than at any period for the
past 10 years" Similarly, George w.
Woods, bank commissioner of Me-
braska, states that there have been
less than half as mar, many failures IN
ing commissioner of Kansas, H. w.
Koeneke says that the aggregate cash
reserve is stronger in Kansas State
banks than three months ago."
Defalcations by managing officers are
mentioned here and there as contribu-
tory causes of bank failures, but for the
most part real estate booms and spec
ulations in the last four or flve years
have been mainly responsible for such
difficulties as have occurred. A large
number Of consultations have taken
care of weak situations and the inter-
esting thing about all the statements Is
q feeling that most Of the trouble Is in
the past rather than the future.
Five Failures in California.
Several Of the States report . negli-
gible number OF suspensions for 1880.
California has had only five failures
including national and State banks dur
ing the last year, with banking credit
never more abundant TO meet business
and expansion needs"
The process of purchasing the banks
of doubtful assets Is constantly going
on throughout the country in normal
times and a significant thing about the
bank supervision generally Is that no
new situations are being dealt with, but
| instead matters that have been under
scrutiny for several years.
Thus the banking commissioner Of
Texas, James Shaw, who reports that
the banks in Texas are in good condi-
ton regardless of the fact that some
sections Of the State have made short
crops, expresses the opinion that banks
get in trouble in good times through
unwise granting Of credit, but these
troubles do not show up until hard
times come. Hard times always squeeze
the water out Of fictitious values"
The review of banking conditions
among the State banks where most of
the suspensions have occurred shows
surprisingly few weak spots on the
whole and corresponds with the general
picture of confidence for the trade in
the national banking field
(Copyright. 1e30)