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The Romance And Tragedy Of Banking | by Thomas P. Kane



Problems And Incidents Of Governmental Supervision Of National Banks

TitleThe Romance And Tragedy Of Banking
AuthorThomas P. Kane
PublisherThe Bankers Publishing Co.
Year1922
Copyright1922, The Bankers Publishing Co.
AmazonThe Romance & Tragedy of Banking

By Thomas P. Kane, Deputy Comptroller Of The Currency

Volume I and II

To My Associates And Co-Workers In The Office Of The Comptroller Of The Currency, And In The Field Service, This Book Is Affectionately Dedicated

-Introduction
SOME years ago at a banquet given by the Bankers' Association of the District of Columbia, I sat next to an eminent jurist of the District Bar. During the course of the evening our conversation drifte...
-Chapter I. The National Bank Act And Its Origin
IT never has been definitely determined who is entitled to the most credit for having originated the National Bank Act. Like all important instruments of this character, it is conceded to be the produ...
-The National Bank Act And Its Origin. Continued
The first plan suggested by Secretary Chase in his report for 1861, was evidently based upon the assumption that the war was to be of short duration, and while this plan had already been partly adopte...
-Chapter II. The Currency Bureau
THE National Currency Bureau, or the Office of the Comptroller of the Currency, as it is generally known, was established May 9, 1863, by the appointment and qualification of Hon. Hugh McCulloch as Co...
-Composition Of The Currency Bureau
The Currency Bureau is composed of seven divisions, each of which has a chief and a corps of clerks with distinct and well defined duties. The regular working force of the office, January 1, 1922, inc...
-National Bank Circulation First Printed Under Contract
The Bureau of Engraving and Printing, in which all national bank notes and other securities of the Government are now printed, was organized in 1862, under authority of an Act of Congress, approved Ju...
-First Bank Organized
It is generally conceded, and the fact is borne out by the records of the Comptroller's office, that the first bank to open for business under a national bank charter was the First National Bank of Da...
-Chapter III. Hugh Mcculloch
HUGH McCULLOCH was appointed Comptroller of the Currency, March 9, 1863, and held the office until March 8, 1865. He was born at Kennebunk, Maine, December 7, 1808. In 1824 he entered Bowdoin College,...
-Mcculloch's Annual Reports
During the twenty-two months of McCulloch's incumbency of the office of Comptroller of the Currency, he made two annual reports to Congress. The first report was devoted almost entirely to a review in...
-Mcculloch's Circular Letter To The Banks
One of the most notable documents ever issued from the Comptroller's office was a circular letter addressed by McCulloch, in 1864, to the managers of national banks. This circular contains so many exc...
-Appointment As Secretary Of The Treasury
Mr. McCulloch resigned the position of Comptroller March 8, 1865, to accept appointment as Secretary of the Treasury, and served in the latter capacity until March, 1869. He was again appointed Secret...
-Selection Of Mcculloch To Organize The Bureau
The selection of Mr. McCulloch as the first Comptroller of the Currency to organize the Bureau and start the machinery of the national banking system in operation was a most fortunate one, as no man o...
-Chapter IV. Freeman Clarke
FREEMAN CLARKE, of New York, the second Comptroller of the Currency, was appointed by President Lincoln, March 21, 1865, to succeed Mr. McCulloch, but resigned July 24, 1866, having retained the offic...
-Clarke's Annual Report To Congress
The principal topics discussed by Mr. Clarke in his first and only report as Comptroller of the Currency, were the evils resulting from a redundant and irredeemable currency and an adjustment of the t...
-Bank Failures During Mr. Clarke's Administration
There were two other national bank failures during Mr. Clarke's administration, the Venango National Bank of Franklin, Pa., and the Merchants National Bank of Washington, D. C. The former was placed i...
-Bank Failures During Mr. Clarke's Administration. Continued
The day following this $50,000 deposit Paymaster Robinson became uneasy as to the safety of the funds in this bank, and transferred his entire balance, amounting to $51,252, to the credit of the Treas...
-Failure Of The Venango National Bank
The failure of the Venango National Bank of Franklin, Pa., was investigated by the same committee. This bank was a designated public depositary. At the time of its failure the public moneys on deposit...
-Removal Of The Currency Bureau To New York
No amendments to the National Bank Act were passed during Mr. Clarke's administration. But he renewed the recommendation of his predecessor, Mr. McCulloch, for the separation of the Currency Bureau fr...
-Chapter V. Hiland R. Hulburd
HILAND R. HULBURD, the third Comptroller of the Currency, was appointed February 1, 1867, and served until April 3, 1872. Mr. Hulburd was born in 1829, at Worthington, near Columbus, Ohio. His father...
-Payment Of Interest On Bank Balances
In his earlier reports Mr. Hulburd devoted a good deal of attention to the practice which prevailed to some extent among the banks at that time of paying interest on bank balances. He criticised and c...
-Operation Of The Reserve Laws
To more clearly illustrate the operation of the old law in this respect let it be assumed that a country bank having net deposits of $1,000,000 was required to maintain a reserve in lawful money of fi...
-National Bank Circulation V. Government Issues
Although the national banking system had been in operation less than five years when Mr. Hulburd was appointed Comptroller, it appears that the question was then being agitated of doing away with the ...
-Banknote Redemption Agency
In his report for 1868, Mr. Hulburd urged upon Congress the establishment of an agency for the redemption of national bank notes at the principal center of trade. He stated that while objection was ma...
-Instances Of Theft In Connection With Currency Shipments
In 1864 a number of packages of notes shipped to western banks were found on reaching their destination to be short of the required amount by one sheet in each package, each sheet containing four note...
-Bank Failures During Hulburd's Administration
In the report of Comptroller Hulburd for 1866, three banks are listed as having been placed in the hands of receivers during the three years of existence of the national banking system. The cause assi...
-Bank Failures During Hulburd's Administration. Part 2
It was alleged that the receiver disposed of a large amount of these securities at auction, at ruinous rates, to Isaac H. Knox, an alleged confederate of the receiver, and that through a conspiracy, t...
-Bank Failures During Hulburd's Administration. Part 3
These bonds, it was claimed, had been selling from fifty to seventy-five cents up to that time, and the opinion publicly expressed by the receiver that the land grant would fail and thereby make the s...
-Amendments To The Laws Enacted
During Mr. Hulburd's administration, the law was amended to provide a penalty for imitating national bank circulation; for the refunding of excessive tax on circulation; restricting State taxation of ...
-Chapter VI. John Jay Knox
JOHN JAY KNOX, the fourth Comptroller of the Currency, was appointed April 25, 1872, to succeed Mr. Hulburd, and served until April 30, 1884. He was born at Knoxboro, Oneida County, New York, in Marc...
-Mr. Knox's Annual Reports
Of the twelve annual reports made to Congress by Mr. Knox during his long service as Comptroller, perhaps the most interesting, at least the one that seemed to be most in demand, is the report for 187...
-Resumption Of Specie Payments
The next important event that occurred during Mr. Knox's administration of the Currency Bureau was the resumption of specie payments on January 1, 1879. The Act of January 14, 1875, provided for and ...
-The Freedman's Savings And Trust Company
The most disastrous bank failure that occurred while Mr. Knox was Comptroller was that of the Freedman's Savings and Trust Company, which suspended June 29, 1874. While this institution was not under...
-Real Estate Loam By National Banks
Frequent efforts were made to secure an amendment of the national banking laws to permit loans to be made upon the security of real estate. Bills of this nature were introduced from time to time and p...
-Interpretation Of The Banking Laws
The rule laid down by the Supreme Court of the United States for interpreting the national banking laws is, that the intent, not the letter of the statute, constitutes the law. The same court has al...
-Banking Conducted On Widely Different Lines Than Formerly
Banking today is conducted upon widely different lines to what it was when the Bank Act of 1864 was enacted, and the law has not kept pace with the constantly changing conditions. Competition with tru...
-National Bank Failures
During the twelve years that Mr. Knox presided over the affairs of the Currency Bureau, there were seventy-three national bank failures. The largest of these was the National Bank of the State of Miss...
-Charges Preferred Against Mr. Knox By The United States Attorney
In October, 1879, the United States Attorney preferred charges to the Department of Justice at Washington against the Comptroller of the Currency, John Jay Knox, alleging that although the bank had be...
-Mr. Knox's Reply To United States Attorney's Charges
Under date of October 29, 1879, Mr. Knox made a full and detailed reply to the charges of the United States Attorney and enclosed with it a report from the receiver of the bank, to whom he had referre...
-Mr. Knox's Reply To United States Attorney's Charges. Part 2
Mr. Knox denied that the criminal sections of the national banking laws imposed any duties whatever upon the Comptroller of the Currency, but that it was the duty of the United States Attorney to pros...
-Mr. Knox's Reply To United States Attorney's Charges. Part 3
The failure of this bank was the subject of a Congressional investigation, under authority of a resolution adopted by the House of Representatives on February 10, 1874, a full report of which was made...
-Inadequacies Of The Law And Recommendations For Amendments
As heretofore stated, Comptrollers in the earlier years of the Currency Bureau were less disposed than some of those of later years to supply deficiencies in the statutes by administrative regulations...
-Amendments To The Law
Act of June 8, 1872: Authorizing the Secretary of the Treasury to receive United States notes on deposit from national banking associations in sums of not less than ten thousand dollars, and to issue ...
-Chapter VII. Henry W. Cannon
HENRY W. CANNON, the fifth Comptroller of the Currency, was born at Delhi, N. Y., in 1850. He was educated in the private schools at Delhi and at the Delaware Literary Institute. After serving as a cl...
-Cause Of The Financial Troubles Of 1884
In endeavoring to assign a cause for the financial troubles of 1884, Mr. Cannon, in his annual report to Congress for that year, stated that: The many profound students of political economy have for ...
-Failure Of The Marine National Bank Of New York
There were thirteen failures of national banks during Mr. Cannon's administration, not including the Metropolitan National Bank of New York, which suspended during the panic of 1884, but resumed busin...
-Failure Of The Brokerage Firm Of Grant & Ward
The firm of Grant & Ward was organized in 1880 and originally consisted of Ferdinand Ward, Ulysses S. Grant, Jr., and James D. Fish. General U. S. Grant did not become connected with the firm until su...
-Legislation Recommended
No amendments to the national banking or currency laws were enacted during Mr. Cannon's administration, and the only material amendment recommended by him was in connection with cotton loans by the ba...
-Chapter VIII. Administration Of Comptroller Trenholm
WILLIAM L. TRENHOLM, the sixth Comptroller of the Currency, was born at Charleston, S. C, February 3, 1836. After graduation from the South Carolina College he became a partner in the commercial house...
-Unprecedented Reduction In Circulation
The first year of Mr. Trenholm's administration of the Currency Bureau was marked by an unprecedented reduction in national bank circulation. During that year the circulation was reduced $56,593,533, ...
-Comptroller Trenholm's Circular Letter To The Banks
In 1887 Comptroller Trenholm sent a circular letter to all the national banks inviting them to submit such suggestions for amendments to the national banking laws as, in their judgment, would tend tow...
-Plan For National Currency Reform
Rand, McNally's Banking Magazine for May, 1888, contains an interesting article contributed by Comptroller Trenholm, outlining a plan for national currency reform. This plan contemplated the formatio...
-Failure Of The Fidelity National Bank
The most notable bank failure that occurred during Mr. Tren-holm's administration was that of the Fidelity National Bank of Cincinnati, Ohio, which closed its doors June 21, 1887, and was placed in th...
-Peculiar Construction Of The Law
Although the Comptroller of the Currency was empowered by law to close and appoint a receiver for any national bank known to be insolvent, at the time of the failure of this institution a peculiar con...
-Criticisms Of Official Supervision Of The Banks
Whenever a national bank has failed, no matter from what cause, the system of official supervision by the Comptroller of the Currency, or of examination by a national bank examiner, has been subject t...
-The Chicago Wheat Deal
The failure of the Fidelity National Bank of Cincinnati was the result of Harper's speculations in the Chicago wheat market. He is reported to have commenced his operations in 1886, the same year in w...
-Suggested Amendments To The Banking Laws
In his first annual report to Congress Mr. Trenholm submitted a number of suggestions for amendments to the banking laws. He took the position that as the interests of the Government in connection wit...
-Heterogeneous Currency System
Mr. Trenholm regarded the greenbacks, or United States notes, as the frailest element in our heterogeneous currency sys-tem, and in classifying the money of the country in the order of its value, plac...
-Four Amendments To The Law
During Mr. Trenholm's administration four amendments to the national banking laws were passed, as follows: The Act of May 1, 1886, providing that any national banking association might by a vote of i...
-Chapter IX. Edward S. Lacey
UPON the resignation of Mr. Trenholm, President Cleveland, a few weeks before the close of his first term, nominated the Deputy Comptroller of the Currency, Jesse D. Abrahams, to be Comptroller, but t...
-National Bank Failures During Comptroller Lacey's Administration
During the three years and one month of Mr. Lacey's term as Comptroller, there were one hundred and thirty-eight failures of national banks. Ninety-one of these went into voluntary liquidation after c...
-Failure Of The Keystone National Bank
The Keystone National Bank was originally a State institution, doing business under the title of the Keystone Bank of Philadelphia. It was converted into a national association July 30, 1875, with C. ...
-Failure Of The Spring Garden National Bank
The failure of the Spring Garden National Bank followed closely upon that of the Keystone National. This bank was also originally a State institution, doing business under the title of The Spring Gard...
-Failure Of The Maverick National Bank
The Maverick National Bank of Boston was originally a State institution. At the time of its conversion into a national association in December, 1864, its capital stock was $400,000, and its liabilitie...
-Laws Relative To National Banks
On June 2, 1892, a committee was appointed by the United States Senate, under authority of a resolution adopted by that body, to inquire whether the laws relative to national banks and the customary p...
-Necessity For Some Limitation Upon The Discount Of Commercial Paper
The conditions disclosed by the bank failures above mentioned and others that occurred during the year 1891, led Mr. Lacey to express the opinion in his report for that year that some limitation shoul...
-Suggested Amendments To The Law
Most of the recommendations for amendments to the banking laws urged by Mr. Lacey upon Congress were in relation to the note-issuing function of the banks. Some of these proposed amendments have been ...
-Chapter X. A. Barton Hepburn
THE eighth Comptroller of the Currency, A. Barton Hepburn, was appointed to succeed Mr. Lacey, August 2, 1892. He was born at Colton, N. Y., July 24, 1846. He received his preparatory education at St....
-National Bank Failures During Mr. Hepburn's Term
Seventeen national banks were placed in the hands of receivers during the year covered by Mr. Hepburn's first and only report to Congress, but only seven of these failures occurred during the nine mon...
-Failure Of The National Bank Of Guthrie, Oklahoma
Included in these failures was that of the National Bank of Guthrie, Oklahoma, which closed its doors on June 13, 1892. It appears that the capital of this bank having become impaired, the Comptroller...
-Annual Report Of Mr. Hepburn
The one annual report made by Mr. Hepburn to Congress, covered a period of only three months of his own administration and nine months of that of his predecessor. In this report he commented upon the ...
-Amendments Recommended
Among the amendments to the national banking laws recommended by Mr. Hepburn, which have not since been adopted, are the following: 1. That the tax on national bank circulation be repealed and that t...
-Chapter XI. James H. Eckels
JAMES H. ECKELS, the ninth Comptroller of the Currency, was appointed April 26, 1893, and served until December 31, 1897, a period of four years and eight months. Mr. Eckels was born in Princeton, 11...
-Panic Of 1893
Within a little more than a month after Mr. Eckels assumed charge of the Currency Bureau the country was plunged into one of the most violent and memorable financial panics in its history. National, S...
-The Model Receiver
Of the large number of receivers appointed, and of examiners placed in charge of suspended institutions, only one man proved to be a recreant to his trust and the confidence reposed in him by the Comp...
-Ex-Convict Receiver And Examiner
The most remarkable case, however, was that of the appointment of an ex-convict as bank examiner and receiver. Previous to his appointment this man called in person upon Mr. Eckels and presented lette...
-Suspensions During The Panic Of 1893
Returning to the subject of the panic of 1893, of the one hundred and fifty-eight national banks that suspended during the report year of that period, thirty-eight were in the Southern States, forty-n...
-Shrinkage In Assets And Liabilities
A comparison of the figures in the report of the Comptroller for 1893 with those of the report of 1892 shows a shrinkage of $400,531,613 in the aggregate resources and liabilities of the national bank...
-Cause Of The Crisis Of 1893
Immediately following this panic and since, various theories were and have been advanced by financial experts and political economists as to the causes which produced this crisis. Heterogeneous and co...
-Most Important National Bank Failures During The Panic Of 1893
The two largest failures of national banks that occurred in 1893 were the Columbia National and Chemical National Banks of Chicago, 111. The capital stock of each of these banks was $1,000,000, and th...
-The Chemical National Bank Of Chicago
The Chemical National Bank of Chicago was organized December 15, 1891, with a capital stock of one million dollars. It suspended in May, 1893, but was not placed in the hands of a receiver until July ...
-The National Bank Of Kansas City, Mo
The National Bank of Kansas City, Mo., was organized April 13, 1886, with a capital stock of $1,000,000. It suspended temporarily during the panic of 1893, but resumed business October 9 of that year,...
-Failure Of The National Bank Of Illinois
The National Bank of Illinois at Chicago was organized August 29, 1871, and was placed in the hands of a receiver December 21, 1896, after having passed successfully through the great Chicago fire and...
-Amendments To The Law Recommended
Many amendments to the banking laws were recommended by Mr. Eckels in his five annual reports to Congress, some of which have since been adopted. Such as have not been enacted into law are the followi...
-Chapter XII. Charles G. Dawes
CHARLES G. DAWES, of Illinois, the tenth Comptroller of the Currency, was appointed to succeed Mr. Eckels January 1, 1898, and continued in office until September 30, 1901. Mr. Dawes was born at Mari...
-Liquidation Of Receiverships
At the date Mr. Dawes assumed charge of the Currency Bureau there were one hundred and twenty-one banks in the hands of receivers. All of these receiverships had progressed to a greater or less degree...
-Second Assessment Of Stockholders
Another important change in the interests of the creditors of failed banks was put in operation by Mr. Dawes almost immediately after assuming charge of the office. It had been the previous practice ...
-National Bank Failures During Mr. Dawes' Administration
Thirty-four national banks were placed in the hands of receivers during Mr. Dawes' administration. The most important of these failures were the Chestnut Street National Bank of Philadelphia, Pa., and...
-Failure Of The Globe National Bank
The Globe National Bank of Boston, Mass., closed its doors December 21, 1899, and was placed in charge of a national bank examiner in the hope that its affairs might be adjusted so as to permit the ea...
-Defalcations In The First National Bank Of New York
In October, 1900, a large defalcation was discovered in the First National Bank of New York City. During the progress of the regular examination of this bank by the national bank examiner, the assista...
-The Currency Laws
In his first annual report to Congress Mr. Dawes devoted considerable space to a discussion of the banking and currency laws of the United States, which, he stated, seemed to ignore the interests of t...
-Preferment Of Note-Holder To Depositor
The fundamental basis of all the currency reform plans that were proposed while Mr. Dawes was Comptroller, contemplated making the note-holder a preferred creditor over the depositor. Mr. Dawes held t...
-Preferment Of Note-Holder To Depositor. Continued
If then, there is no inherent moral right to establish a preference of the note holding creditors of an insolvent bank as against the deposit holding creditors, in the distribution of the assets of an...
-Amendments To The Banking Laws Recommended By Mr. Dawes
In his annual reports to Congress Mr. Dawes recommended the following amendments to the banking laws: That the limitation placed upon the liabilities to any association of any person, company, corpor...
-Reserve Cities With Population Of Twenty-Five Thousand
In April, 1900, the Finance Committee of the United States Senate requested an expression of opinion from Mr. Dawes on a bill then pending before that committee to permit cities with a population of t...
-Amendments To The Banking Laws
While only two amendments to the national banking 1aws were enacted during Mr. Dawes' administration as Comptroller, one of these had a very important bearing upon the growth of the national banking s...
-Chapter XIII. William B. Ridgely
WILLIAM B. RIDGELY, of Illinois, the eleventh Comptroller of the Currency, was appointed by President Roosevelt, to succeed Charles G. Dawes, October 1,1901, and served a period of six years and six m...
-Extension Of The Corporate Existence Of National Banks
When Mr. Ridgely assumed charge of the Currency Bureau, the first matter of special importance to engage his attention was the question of the second extension of the corporate existence of national b...
-The Baltimore And San Francisco Fires
The great conflagrations in Baltimore and San Francisco, which completely destroyed millions of dollars of banking property and devastated the principal business sections of those cities, occurred dur...
-The Chicago National Bank
What might have proved a very disastrous failure in December, 1905, was averted by the wise and timely course of Mr. Ridgely, with the co-operation of the associated banks in Chicago. The Chicago Nati...
-Legality Of The Action Of The Clearing House Banks
Notwithstanding the undoubted wisdom of the course pursued by Mr. Ridgely and the associated banks of Chicago in thus averting a disastrous bank failure and a serious disturbance to the financial and ...
-The Bigelow Defalcation
On April 24, 1906, the Comptroller's office was startled by the receipt of a telegram from Milwaukee, Wis., stating that Frank G. Bigelow, the president of the First National Bank of Milwaukee, was a ...
-Culpability Of The Bank Examiner
The failure of the bank examiner to discover this shortage was the subject of considerable public criticism. He was summoned to Washington by the Comptroller and instructed to bring with him all of th...
-Bank Failures During Mr. Ridgely's Administration
During Mr. Ridgely's administration eighty-three national banks were placed in the hands of receivers. The most sensational of these failures was that of The Citizens National Bank of Oberlin, Ohio, ...
-Bank Failures During Mr. Ridgely's Administration. Continued
About this time the bank was due for examination and the examiner was likely to drop in any day. The president was anxious to conceal from the examiner the large unlawful loan to Mrs. Chadwick, and co...
-Obligations Of Directors
On one occasion a prominent member of Congress, who was at that time president of a national bank, called at the Comptroller's office for a conference in regard to several excessive loans that had bee...
-Failures Of The National Bank Of North America And The Amsterdam National Bank Of New York City
The failures of the National Bank of North America and the Amsterdam National Bank of New York City, which occurred during the last year of Mr. Ridgely's administration, while not involving very large...
-New Amsterdam National Bank
The New Amsterdam National Bank was closed under similar circumstances and liquidated with like results. The capital of this association was $1,000,000, its deposits $3,269,000, and its total liabilit...
-New Amsterdam National Bank. Continued
Upon taking charge of the bank one month later, the examiner who had been appointed temporary receiver, found that the rediscounts were several hundred thousand dollars greater than the amount reporte...
-Ridgely's Policies Of Administration
Mr. Ridgely's administration of the Comptroller's office was not characterized by any spectacular, sensational, or demagogic methods. His policy was to require the banks to observe the law and to enfo...
-The Crisis Of 1907
For ten or twelve years immediately preceding the panic of 1907, there was a steady increase in prices generally and in all forms of commercial and industrial activities, legitimate and speculative. L...
-The Crisis Of 1907. Part 2
It did not take the examiner more than a half hour after entering the bank to discover that it was not only hopelessly insolvent, but that its operations were fraudulent in the extreme and criminal, a...
-The Crisis Of 1907. Part 3
This decision of the court, therefore, sustained the position taken by the Deputy Comptroller in the beginning, contrary to the advice of his counsel. Returning to the panic of 1907, from which this ...
-The Crisis Of 1907. Part 4
In an address before the bankers of the District of Columbia and Maryland he advised them to use their reserves whenever they had a pressing demand for loans. This, he said, in substance, was what a b...
-Life Of Receiverships
The average life of receiverships of national banks is about four years. The shortest receivership in the history of the national system was that of the Metropolitan National Bank of Cincinnati, Ohio....
-Ridgely's Annual Reports
During Mr. Ridgely's term of six and one-half years, he submitted seven annual reports to Congress, his first report covering eleven months of the term of his predecessor, Charles G. Dawes. In conclud...
-Ridgely's Annual Reports. Continued
But even this limitation upon the bond-secured circulation should not have been imposed. The banks should have been permitted to increase or reduce their circulation at their discretion. The few insta...
-Ten Amendments To The Banking Laws
During the seven years that Mr. Ridgely was Comptroller there were ten Acts passed by Congress amendatory of the national banking laws, as follows: The Act of April 12, 1902, authorizing a further ex...
-Chapter XIV. Lawrence O. Murray
LAWRENCE O. MURRAY, the twelfth Comptroller of the Currency, was appointed April 28, 1908. He was born in Steuben County, New York, in 1864. He was educated at Addison College, Niagara University, and...
-Bank Examiners And Bank Examinations
A successful administration of the Currency Bureau depends largely upon the efficiency of the force of national bank examiners and the thoroughness and reliability of their work in connection with the...
-Bank Examiners And Bank Examinations. Part 2
When an examiner satisfies himself that the books of original entry are correct and the assets found in the bank are equal in value to the amount called for by the books, he is bound to assume that th...
-Bank Examiners And Bank Examinations. Part 3
In addition to the periodical examination made by the national bank examiner, every bank should be required by law to have an annual audit made of its affairs by a competent accountant, in order that ...
-Bank Examiners And Bank Examinations. Part 4
After Mr. Murray publicly suspended the examiner in this case he detailed another examiner to make an investigation for the purpose of determining whether or not the regular examiner should have disco...
-Bank Examiners And Bank Examinations. Part 5
All of these questions and many others of a like nature an examiner should be familiar with, in order that he may pass intelligently upon the paper, contracts, agreements, collateral and securities he...
-Bank Examiners And Bank Examinations. Part 6
This type of man will not infrequently be found in a bank that has failed and has been placed in the hands of a receiver, or one that is in a very unsatisfactory and uncertain condition because of the...
-Bank Examiners And Bank Examinations. Part 7
In this class of banks the capital may be found to be impaired by losses, necessitating an assessment upon the stockholders, or a threatened impairment because of the indeterminate value of their loan...
-Bank Examiners And Bank Examinations. Part 8
This is only one of the many delicate and desperate situations with which the Comptroller and the bank examiners have to deal in connection with the supervision of the banks. For every failure of a na...
-Rotation Of Examiners
The rotation of bank examiners has been frequently suggested as a means of increasing the efficiency of the force and the effectiveness of examinations, but this practice never had been followed to an...
-Bonding Of Examiners
The law never required a national bank examiner to give a bond, and bonds never were required of them until Mr. Murray's administration. At the hearing before the National Monetary Commission in Decem...
-The National Monetary Commission
The Act of May 30, 1908, known as the Emergency Currency Act, provided for a National Monetary Commission, to be composed of nine members of the Senate, to be appointed by the presiding officer of t...
-Fee System Of Compensation
The fee system of compensation of national bank examiners was principally, if not wholly, responsible for the impression that prevailed, and which the indiscriminate remarks of Mr. Murray intensified,...
-Fee System Of Compensation. Part 2
Mr. Cortelyou, who was Secretary of the Treasury at that time, injected some sensible views into the discussion of this subject. He stated that his experience had been that it was not possible to devi...
-Fee System Of Compensation. Part 3
While this section of the original bank act was very ambiguously drawn, it fixed a limitation upon the discount of bills of exchange and in that respect was better than the present law. The Act of Jun...
-Fee System Of Compensation. Part 4
Of the numerous amendments to the national banking laws that have been adopted since the enactment of the original Act of 1863, practically all have been in the interest of greater latitude or privile...
-Fee System Of Compensation. Part 5
If Mr. Murray had carefully read and considered the suggestion contained in this recommendation, as he should have done before his appearance before the National Monetary Commission, or if he had inte...
-Fee System Of Compensation. Part 6
The recommendation, therefore, to empower the Comptroller to temporarily close and take possession of an institution, such as has been described, when its capital became impaired, was a very proper an...
-Directors' Liabilities
The next amendment suggested to which Mr. Murray dissented was the proposition to make each bank show in its published statements of condition the aggregate liabilities to the association, direct and ...
-Directors' Liabilities. Continued
While this section of the law appears to have contemplated the merging of two institutions, it provided no means for their consolidation. The only way consolidation could be effected under the old law...
-Mr. Murray's Famous Twenty-Nine Questions
One of the most effective regulations that Mr. Ridgely made when Comptroller of the Currency, and one that accomplished the most beneficial results, was the requirement that the board of directors of ...
-Mr. Murray's Famous Twenty-Nine Questions. Continued
No general rule of conduct applicable to all alike can be prescribed for bank management. The element of personal equation enters as largely into this line of business as it does into all occupations ...
-Murray's Internal Management Of The Currency Bureau
Mr. Murray's policies and his methods of putting them into force were as pronounced and peculiar in the internal management of the Currency Bureau as they were in his outward dealings with the banks a...
-Murray's Internal Management Of The Currency Bureau. Part 2
This policy of administration originated with Mr. Murray. He is entitled to all the credit that may be due for any good results and all the blame that attaches to the failure of such a policy. At a d...
-Murray's Internal Management Of The Currency Bureau. Part 3
Real estate loans were passed without notice, and in many cases the aggregate investments of a bank in this class of securities exceeded its capital stock. The law permitted a national bank to own on...
-Examiners' Fees
National bank examiners were not salaried officers at that time. Their compensation consisted of fees assessed against the banks examined, and the rate of such fees was fixed by statute. All banks lo...
-Characteristics Of Murray's Administration
A marked characteristic of Mr. Murray's exploitations of his so-called reformatory measures was the reflections that he invariably cast upon the methods or policies of his predecessors, in making publ...
-Characteristics Of Murray's Administration. Part 2
The practice of making simultaneous examinations whenever they could be arranged between state and national examiners prevailed in the Comptroller's office for years before Mr. Murray became Comptroll...
-Characteristics Of Murray's Administration. Part 3
It was the elaboration of this limited scheme that suggested to Mr. Murray the gigantic and impossible undertaking of establishing an extensive credit record for the whole United States, such as the p...
-Characteristics Of Murray's Administration. Part 4
At the hearing before the National Monetary Commission Mr. Murray opposed the recommendation made by the Deputy Comptroller for an amendment to the law authorizing the Comptroller to close and take te...
-Characteristics Of Murray's Administration. Part 5
In order to bolster up some of the doubtful or worthless assets taken over by the new association, the officers or directors of the failed institution were coerced by the examiner into giving mortgage...
-Characteristics Of Murray's Administration. Part 6
Where an examiner was restricted to the statutory fee for a regular examination and was required to remain at the bank until all unsatisfactory conditions were corrected, his compensation in many such...
-Characteristics Of Murray's Administration. Part 7
There was no authority of law to support such a regulation. Any person had a right to subscribe for stock in a national bank who could pay the price of his subscription, even though he did not have an...
-Failures During Mr. Murray's Term
Although only forty-three banks were placed in the hands of receivers during Mr. Murray's administration, the number of actual failures during that period was much greater. Mr. Murray was decidedly a...
-Change Of Location Of Small Suburban Bank
A question was raised during Mr. Murray's administration as to the right of a national bank, organized with a small capital to do business in a suburb or place adjacent to a large city, to change its ...
-A Chicken Bank
In a small country town located a short distance from a railroad there was a State bank in operation which had been reasonably successful in business and apparently supplied the town with all the bank...
-Chapter XV. Interim
THE term of Lawrence 0. Murray expired by statutory limitation April 27, 1913, having extended fourteen months into the administration of President Wilson. The office remained vacant from that date un...
-Interim. Part 2
On one occasion when Mr. Murray was Comptroller he called the Deputy to task for refusing, during his absence, to follow his ruling in regard to the interpretation of certain provisions of the banking...
-Interim. Part 3
Secretary Williams returned on Saturday night to Blue Ridge Summit. Before leaving he requested the Acting Comptroller to advise him by telephone on Sunday afternoon the result of the conference with ...
-Nothing Succeeds Like Success
Eighteen months after the failure, Oscar L. Telling, the former president of the First National Bank, and Francis H. Richard, the former cashier, were indicted by the Federal Grand Jury on twenty-thre...
-The United States Trust Company
The United States Trust Company was organized in 1907, under authority of an Act of Congress approved October 1, 1890, authorizing the formation of trust companies in the District of Columbia with a c...
-The United States Trust Company. Part 2
The directors also entered into a signed agreement promising to charge off certain listed assets which the examiner declared to be worthless and to collect or secure other doubtful or questionable loa...
-The United States Trust Company. Part 3
They also expressed grave doubts as to the solvency of the company and regarded the condition of its affairs as so alarming and the situation so menacing to the banking community of Washington as to c...
-The United States Trust Company. Part 4
The meeting of the board of directors of the company called for nine o'clock on the following morning was never held, but promptly at nine o'clock Assistant Secretary Williams requested the Acting Com...
-The United States Trust Company. Part 5
At a special meeting of the board of directors of the United States Trust Company, held on the night of November 21, a resolution was unanimously adopted requesting the Munsey Trust Company to advance...
-The United States Trust Company. Part 6
The Acting Comptroller replied to this communication in writing under date of December 12, 1913, relating in detail the history and condition of the trust company from the date of its organization to ...
-The Miss Lotta Taylor Episode
In April, 1913, immediately following a change of administration in the Treasury Department an anonymous communication was received by the Secretary of the Treasury in which it was charged, among othe...
-The Federal Reserve Act
On August 29, 1913, a bill was introduced in the House of Representatives by Hon. Carter Glass of Virginia, Chairman of the Banking and Currency Committee, to provide for the establishment of Federal ...
-Chapter XVI. Biography Of John Skelton Williams
JOHN SKELTON WILLIAMS, the thirteenth Comptroller of the Currency, was born in Powhatan County, Virginia, July 6, 1865. His father, John Langbourne Williams, was a well-known banker of Richmond. After...
-The Riggs National Bank Controversy
At the time of the investigation by the Senate Committee on Banking and Currency of the charges preferred against Mr. Williams in opposition to his confirmation as Comptroller of the Currency, Milton ...
-The Riggs National Bank Controversy. Part 2
On March 30, 1915, the Comptroller notified the bank that for failure to make and transmit the special reports called for within the time prescribed, or within five days thereafter, an assessment of o...
-The Riggs National Bank Controversy. Part 3
The court expressed the further opinion that the policy of not designating as reserve agents stock exchange banks as compared with commercial banks, was sound and commendable, and was recognized by Co...
-The Riggs National Bank Controversy. Part 4
On page X of the text of his report for 1881, Mr. Knox said: It is recommended that an act be passed during the present session, authorizing any national bank, with the approval of the Comptroller, a...
-The Riggs National Bank Controversy. Part 5
The Certificate of Extension was signed at nine o'clock on the morning of June 24, 1916, by Deputy Comptroller Thomas P. Kane as Acting Comptroller. Some inquiries and comments were made as to why Mr...
-The Riggs National Bank Controversy. Part 6
In explanation of the stock transactions with Lewis Johnson & Company the bank in its published statement said that in order to facilitate the making of investments by its depositors and customers it ...
-Origin Of The Riggs National Bank
In 1837, W. W. Corcoran established a private bank and brokerage office on Pennsylvania avenue near Fifteenth street, directly opposite the north front of the United States Treasury Department. In 18...
-Activities Of Comptroller Williams
The law requires every national bank to make not less than five reports of condition each year, according to the form prescribed by the Comptroller, verified by the oath or affirmation of the presiden...
-Activities Of Comptroller Williams. Continued
In his annual report for the year ended October 31, 1915, Comptroller Williams stated that in the autumn of 1914, after the stock exchanges of the principal cities of the country had been closed as th...
-Theft Of Postage And Currency
In August, 1915, the Treasury Department contract with the express company, under which national bank circulation for many years had been shipped to the banks, was discontinued and all shipments there...
-Suit To Enjoin Comptroller
On May 1, 1919, the First National Bank of Canton, Pennsylvania, brought suit in equity for an injunction against John Skelton Williams, individually, not as Comptroller of the Currency, in the Distri...
-Suit To Enjoin Comptroller. Continued
I have had immediate supervision of all correspondence with national banks based upon the reports of examinations made by national bank examiners. The records of the Comptroller's office show that th...
-Last Official Act Of Comptroller Williams
One of the last official acts of Comptroller Williams on the eve of his retirement from office was to make a call upon the national banks for a report of their condition at the close of business Febru...
-Last Official Act Of Comptroller Williams. Continued
At the recent call made by the Comptroller of the Currency on national banking associations for a report of condition, the associations were asked to report on the form prescribed the aggregate amount...
-Chapter XVII. Daniel Richard Crissinger
DANIEL RICHARD CRISSINGER, the fourteenth Comptroller of the Currency, was nominated by President Harding to succeed John Skelton Williams, March 10, 1921, and assumed charge of the bureau March 17 fo...
-Malcontents
While it was usual whenever a change occurred in the executive head of the Currency Bureau for bankers who were dissatisfied with the policies of the former Comptroller to appeal to his successor to r...
-Malcontents. Continued
He stated that he could obtain it by securing the adoption of a resolution by the House calling for the information. The Deputy replied that the House of Representatives had rights in the matter whic...
-Title Of First National Bank
The name First National Bank is the only bank title that ever had a commercial value, consequently this title was very much in demand by the organizers of new banks and by the officers of existing ban...
-Theodore Roosevelt's Methods
When Theodore Roosevelt was President of the United States there was a national bank failure in one of the large cities of the West. The Deputy Comptroller was Acting Comptroller at the time, as he al...
-Theodore Roosevelt's Methods. Part 2
A few hours after the bank was closed and announcement had been made of the appointment of a receiver, the Deputy Comptroller received a telegram from a United States senator from that section of the ...
-Theodore Roosevelt's Methods. Part 3
Your policy in appointing receivers for failed banks is precisely in line with my instructions given on a number of occasions since I have been Secretary of the Treasury, and particularly during the l...
-Suit To Forfeit The Charter Of The First National Bank, Hagerstown, Md
On September 28, 1921, a suit was entered in the United States District Court for the District of Maryland at Baltimore, by the United States Attorney, in the name of the Comptroller of the Currency, ...
-Stock Dividends
When the Supreme Court of the United States, in an opinion rendered March 8, 1920, in the case of Eisner vs. Masumer, decided that stock dividends, when declared by. corporations, were not taxable as ...
-The Fort Dearborn National Bank Of Chicago
During an examination of the Fort Dearborn National Bank of Chicago by the clearing house examiners, commencing November 15, 1921, a condition was disclosed which, but for the prompt and co-operative ...
-Extension Of Charters Of National Banks For The Period Of Ninety-Nine Years
National banks, the charters of which were extended by the Acts of July 12, 1882, and April 12, 1902, began to expire in July, 1922, making it necessary that some steps should be taken to provide for ...
-Branch Banks Or Branch Offices
In a previous chapter of this book Comptroller Lacey was quoted as saying in one of his annual reports, that: Banks are indispensable to the successful conduct of the various business enterprises whi...
-Branch Banks Or Branch Offices. Part 2
Up to the time of this writing (August 30, 1922), twenty-live banks, located in different sections of the country, had been granted permission to open additional offices. Proposed Abolition of the Co...
-Branch Banks Or Branch Offices. Part 3
There is absolutely no more duplication of work in any branch of the business of the two bureaus than there is between the divisions of the respective offices. The work of each bureau is wholly separa...
-Branch Banks Or Branch Offices. Part 4
Iowa, it will be remembered, is entirely an agricultural State, and may be said to be, in fact, one great big farm. Statistics show that about nintey-six per cent, of the industrial activity of the St...
-Branch Banks Or Branch Offices. Part 5
What has been said in regard to the conditions in Iowa and the policies of the Federal Reserve Bank and its examiners may also be said of other Federal Reserve districts where similar conditions exist...
-Branch Banks Or Branch Offices. Part 6
While it would be difficult for the board to act promptly as a whole on all matters, it is very questionable whether they would have the power to delegate to one of their members full authority over t...
-Branch Banks Or Branch Offices. Part 7
Would it be reasonable, therefore, to assume that it would do otherwise or have the same solicitude for the welfare of the general depositor that the Comptroller of the Currency would have? The first ...
-Status Of The Federal Reserve Board
The Federal Reserve Board is not a bureau of the Treasury Department like the office of the Comptroller of the Currency. It is a part of the banking system of the country and not of the Government. If...









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