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 office only sixteen months.

Mr. Clarke was born at Troy, N. Y., March 22, 1809, and was sixty-five years of age at the time of his appointment as Comptroller. He engaged in mercantile pursuits for awhile and subsequently turned his attention to banking. In 1837 he was elected cashier of the Bank of Orleans at Albion, N. Y. In 1845 he removed from Albion to Rochester and became president of the Rochester Bank, treasurer of the Monroe County Savings Bank, and subsequently president of the Monroe County Bank. He also held the office of treasurer and director of the Rochester, Lockport and Niagara Falls Railroad Company, president and treasurer of the Rochester and Genesee Valley Railroad Company, director of the Mobile and Ohio Railroad Company, treasurer and director of the House Telegraph Company, and a director of the Western Union Telegraph Company. He was one of the first directors of the Fourth National Bank of New York City, and also a trustee and subsequently vice-president of the Union Trust Company of New York. He was vice-president of the Whig State Convention in 1850. In 1852 he was a delegate to the Whig National Convention, and was vice-president of the First Republican Convention in New York State in 1854. He was a Presidential elector in 1856, and in 1862 was elected a representative from New York to the Thirty-eighth Congress, serving on the Committees on Manufactures and Invalid Pensions. In 1867, after leaving the Comptroller's office, he was elected to the New York State Constitutional Convention. In 1870 he was again elected a representative from New York to the Forty-second Congress, in which he served on the Committee on Appropriations, was re-elected in 1872 to the Forty-third Congress, and was a member of the Committee on Foreign Affairs.

He died at Rochester, N. Y., June 24, 1887.

There is very little to be said of Mr. Clarke's administration as Comptroller of the Currency, as he remained in office a very short time, and nothing occurred during his brief term of any particular moment, except the steady growth and development of the national banking system. During his term, over two hundred and eighty-three new banks were added to the system and seven hundred and thirty-one State banks were converted into national associations.

The first failure of a national bank occurred during Mr. Clarke's administration. This was the First National Bank of Attica, N. Y., for which a receiver was appointed April 14, 1865, the date of the assassination of President Lincoln, although the death of the President had no bearing whatever upon the closing of the bank. The failure was due to injudicious banking and insolvency of large debtors. This was a small bank, with capital of $50,000, and total assets of only $208,106.

It is evident from this failure that the good advice which Mr. McCulloch gave in his circular letter of instructions to bank managers, hereinbefore quoted, to "distribute the loans rather than concentrate them in a few hands," was not heeded by the managers of this institution, and disaster was the consequence.

Unfortunately, the same may be truthfully said of many other banks in the long line of failures that have occurred since the inauguration of the national system. The loans of a bank should be diversified as fully as possible and not concentrated, as is so often the case, in a few or affiliated interests, to such an imprudent extent that the failure of one individual or interest may seriously impair the surplus of the bank, or threaten the institution with an impairment of its capital, if not insolvency.

It has been repeatedly asserted that no national bank ever failed whose managers conducted its business within the provisions and limitations of the national banking laws. While this statement is true so far as violations of law by the managers of banks that have failed is concerned, it is not, however, impossible for a bank to fail whose affairs have been conducted entirely within the limitations of the statute. Failures may occur, without the law having been violated, through injudicious banking within the restrictions of law, but beyond the limitations of prudence and safety, as will be shown further on in this volume.