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 president or cashier, and attested by the signatures of at least three of the directors.

From the establishment of the Currency Bureau by McCul-loch, in 1863, to the time Mr. Williams assumed charge of the office, in 1914, there was a great deal of uniformity in the form of reports of condition and no Comptroller ever called for more than five reports during any one report year, which covered the period from November 1 to October 31. Comptroller Williams, however, made frequent and radical changes in the form and called for six reports during the year 1914 and following.

He also enlarged the report blank very materially by adding many new items and schedules, making the report much more difficult to prepare, and more expensive to the banks to publish. It also required so much more time and labor on the part of the employees of the Comptroller's office to examine and abstract that it was impossible with the limited clerical force to complete the work between calls and much of it had to go undone.

Many special reports were called for and the banks were required to furnish a vast amount of statistical and detail information.

In January, 1915, a circular letter was sent to all national banks requiring the discontinuance of overdrafts. The directors were required to adopt a resolution prohibiting any officer or employee of the bank from paying or charging to the account of any depositor any check in excess of the amount to the credit of the drawer on the books of the bank.

Theretofore it had been the practice of the Comptroller's office to discourage overdrafts as much as possible, and whenever the reports of examiners showed overdrafts for any material amount and that the practice of granting them had become habitual on.

the part of the bank, the board of directors was required to collect the loans and to discontinue the practice.

Overdrafts always were regarded by the Comptroller's office as the most objectionable form of making loans, and the practice was discouraged and condemned wherever found to be habitual, but at the same time the impracticability or impossibility of eliminating overdrafts entirely was appreciated, as it was recognized that small overdrafts occasionally were unavoidable. For this reason no Comptroller before Mr. Williams ever undertook to require the banks to prohibit overdrawing entirely.

Comptroller Williams' requirement, therefore, in this respect was regarded by the banks as extremely radical and impracticable, as it admitted of no exceptions, but while it caused a great deal of dissatisfaction it accomplished some good results, as it had the effect of reducing overdrafts from $15,798,224.76, as shown by the reports of the banks under the call of December 31, 1914, made immediately before the issuance of the circular, to $7,046,-524.16, as shown by the reports furnished under the call of March 4, 1915, immediately following.

On October 27, 1915, Comptroller Williams issued another circular to the banks calling the attention of boards of directors to their oaths of office, declaring that they would not knowingly violate or willingly permit to be violated any of the provisions of the statutes of the United States under which their bank was organized, and also to Section 5197 of the Revised Statutes of the United States, which prohibited a national bank from taking, receiving, reserving and charging on any loan or discount made, or upon any note, bill of exchange or other evidence of debt, interest in excess of the rate allowed by the laws of the State in which the bank was located, or when no rate was fixed by the State laws a rate not exceeding seven per centum per annum.

This circular letter then called attention to the fact that the sworn reports of condition of a great many banks showed that the section of the law above referred to was being grossly violated by many banks, and admonished the banks that the law must be strictly observed.

Letters were received from a large number of banks in reply to this circular, stating that it had been their practice to make a minimum charge of from twenty-five cents to one dollar on small loans varying in amount from ten dollars and upwards, running for periods of from thirty to sixty or ninety days. This minimum charge, it was claimed, was necessary to cover the expenses of the bank for postage, stationery and bookkeeping incidental to the loans, and if this expense was to be considered interest charged, the bank could not make the loans without violating the usury laws, as the legal rate of interest on loans of this character would not compensate the bank for the time and clerical labor of passing them through the books. It was therefore claimed that this minimum charge should be considered an expense and not interest.

In response to these protests the banks were advised that the Comptroller had no power to authorize any bank to charge on any loan a rate of interest in excess of the rate permitted by the laws of the State in which the bank was situated, and the report of condition blank sent out with the call of December 31, 1915, required the banks to state the number of loans upon which interest, discount or commission was charged or collected at rates which would amount to more than the equivalent of six per cent, per annum.

The banks were cautioned by the Comptroller to prepare their statements with care and accuracy as the bank examiners would be required to verify the correctness of all reports if any were found to be inaccurate.

The banks were also requested to state whether it was their practice to require borrowers to carry a deposit when loans were granted them, and to furnish complete information as to the connections of officers and directors with other banks or trust companies, their salaries, liability as payers, etc.