Evening star., 1939-01-25

StlIuJe OF BANK
ing, at the Willard Hotel last night.
During the past year the three
Federal supervisory agencies and
the several State supervisors of
banking agreed upon uniform bank
examinations and procedures, as
well as upon uniform published re-
ports of condition, that cannot fail
to be mutually beneficial to all
banks. Chairman Crowley added
introduced by Paul j. Seltzer, in
stitute forum chairman, Mr. Crowley
spoke on What the Federal Deposit
Insurance Corporation Proposes to
Do About Banking and the Coun-
try's Banks
A basic assumption that must
underlie any sound program for
banks, Chairman Crowley said, is
that the business cycle is recurrent
element in economic history that
will not soon, if ever, disappear.
Granting this hypothesis, the OBJ
jectives must be first, to lessen the
extreme swings of the business
cycle-in other words, to impede
infationary and deflationary forces,
and second. to prepare our financial
institutions to Withstand what
swings will occur despite all human
efforts to control.
Control of Cycles Sought.
Bankers are naturally interested
in the means to that first objective
control of the business cycle AS
evidence of its Importance to our
program, it is significant to note
that more than half of the legisla-
tive developments during the past
five years have been directed toward
this objective.
Our program for the future. Mr..
Crowley asserted naturally is aimed
at elimination of the factors that
caused our banking troubles in the
past. Many failures and millions of
dollars of the losses the banking
system has had to absorb can be
traced to the accumulation of un-
desirable and worthless assets and
to comparable types of mismanage-
ment.
Difficulties of hundreds of other
banks can be traced to the failure
of managers properly to dispose of
assets which, though acceptable at
the time acquired, ultimately be-
came worthless. Such assets, repre-
senting known losses, were carried
for years without any reduction
through charge-offs or the estab-
Ishment of reserves.
The prescription for building bet
ter banks and bankers has been
stated many times in many parts of
the country. The training of
capable bank managers must be the
starting point. Government super
vision can in no wise replace good
of depositors' funds, the speaker
said.
A banks assets are one of the
principal factors which determine
its success or failure. There are
some few legal and regulatory re-
strictions to the acquisition of assets
of certain types, but by and large
the choice of assets offers a wide
field for exercise of the initiative,
judgment and ability of bank Off
GERS.
Insurance Vital Factor.
Given capable management, sound
and consistent supervision, and a
fair degree of success with measures
that have been adopted to prevent
violent upheavals, our banks as a
group should become and remain
sound, dependable parts of the Ma
tons economy-structureS of stone
and mortar rather than houses of
cards, Mr.. Crowley continued.
To protect the sound banks from
uncalled-for and unnecessary raids,
a number of steps have been taken
Creation of the Federal Deposit In
surance Corp. was probably the
greatest factor in re-establishing on
what should be permanent basis
the confidence of our people in the
financial institutions that serve
them.
Bank failures are no more likely
to stop completely than are failures
of other types of business enterprise
Adherence to proper managerial
practice and the type of supervision
Tor which the corporation stands will
probably keep the number of bank
failures at minimum, however, and
In the few cases where banks do
close, deposit insurance will elimi-
nate losses to depositors and will
consequently remove the economic
waste and the aura of social menace
that formerly attended the collapse
OF financial institutions.
The business slump of 1887 fur
nlshes a real test of the validity OF
this claim. Coming as it did, much
more abruptly than the decline Of
the early thirties, the recent de.
preston set a stage for popular
reaction that was unprecedented.
In no part of the country and al
no time during the decline wa.
there the slightest furry of distrust
or panic on the part of bank deposi.
tors. Not single insured banl
found itself in difficulty because o.
the depositors, Chairman Crowley
concluded
Loan Firm Elects Officers.
Directors of the Northwestern
Federal Savings & Loan Association
were elected at the annual meetins
of shareholders as follows: William
x. Copenhaver, E. V. Crittenden
w. S. Dewhirst, Howard S. Gott
r. L. Houston Jones, DR.. Frederick
L. Lewton, Jesse H. Powell, Georg,
E. Scott, DR.. w. w. Stockberger
w. R. Tuckerman, Stanley D. Willis
The new directors elected th'
officers of the association as follows
E. v. Crittenden, president; w.
Dewhirst, vice president; R. L
Houston Jones, executive vice presi
dent; Howard S. Gott, secretary
treasurer; William X. Copenhaver
attorney; Richard H. Gibson, as
sistant secretary.
Secretary Howard S. Gott reported
As per cent increase in total say