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 until February 2, 1914, when John Skelton Williams qualified as Comptroller and assumed charge of the Bureau.

During the vacancy, which covered a period of ten months, the Bureau was in charge of the writer as Acting Comptroller.

During this period, in consequence of a change in the political complexion of the Federal administration at Washington, a great deal of constructive work was necessary. Congress had been convened in extra session and bills were under consideration proposing material amendments to the banking and currency laws, which required the preparation of a great amount of statistical data for the information of the Secretary of the Treasury and the Banking and Financial Committees of the Senate and House of Representatives. Aside from this consideration and passage of the Federal Reserve Act, the principal events of the period were the failure of the First-Second National Bank of Pittsburgh, Pa., and the suspension of the United States Trust Company, of Washington, D. C.

The First National Bank of Pittsburgh was an old institution, having been chartered August 5, 1863, with an authorized capital stock of $400,000.

The bank was last examined before merger with the Second National Bank of Pittsburgh in September, 1912. The examiner then reported the capital to be impaired thirty per cent. The board of directors were notified of the impairment and were advised that if the deficiency was not made good without delay they would be required to call a meeting of the shareholders for the purpose of assessing the stock or placing the bank in voluntary liquidation. The directors were financially unable to restore the impaired capital and were fearful that any attempt to make good the deficiency by assessment of the stockholders would precipitate a crisis which would probably close the bank. Negotiations were then renewed with the Second National Bank of Pittsburgh, which had been started sometime previously and abandoned, for the consolidation of the two banks. These negotiations were conducted by Oscar L. Telling, the irresponsible president of the First National Bank, in conjunction with the Messrs. Kuhn, who were heavily interested in both banks.

The scheme to merge the two banks was cunningly devised and successfully forced through, as subsequently disclosed, against the earnest protests of certain substantial stockholders of the Second National Bank, who, however, failed to make their protests known to the Comptroller's office until after the merger.

The Second National Bank was also an old institution, having been organized December 11, 1863, with an authorized capital of $300,000.

While negotiations for the merger of the two banks were pending, several conferences were held by the Messrs. Kuhn, Telling and the national bank examiner with Comptroller Murray at the office of the latter in Washington. What understanding was reached at these conferences the records of the Comptroller's office do not show and no official connected with the office was present at the conferences other than the Comptroller and the bank examiner.

The First National Bank was voted into voluntary liquidation by its stockholders April 19, 1913.

The Second National Bank increased its capital stock to $1,600,000 on April 21, 1913, purchased the assets of the First National, assumed its liabilities and merged its business with the latter bank under the title of First-Second National, with a combined capital of $3,400,003.

Comptroller Murray's term expired April 27, 1913, and the duties of the Comptroller then devolved upon the Acting Comptroller.

The First-Second National Bank was then past due for examination in regular order, and as the records of the Comptroller's office did not show the condition of the consolidated bank or what had been done toward the elimination of the objectionable assets on which the losses were estimated which impaired the capital of the First National, two of the most experienced examiners in the service were instructed, under date of May 21, 1913, to make a thorough examination of the bank, but owing to the fact that one of them was then engaged upon some special work, the examination was not commenced until the first week in June following.

As the examination progressed, a condition was disclosed which the examiners regarded as so serious that a conference with the Acting Comptroller in Washington was requested.

John Skelton Williams was then Assistant Secretary of the Treasury and was slated by the Secretary of the Treasury for the vacancy in the office of Comptroller of the Currency.

The law provided that the Comptroller of the Currency should be appointed by the President upon the recommendation of the Secretary of the Treasury, and confirmed by the Senate for a term of five years, and should discharge the duties of his office under the general direction of the Secretary of the Treasury. He was held, however, to be independent of the Secretary, inasmuch as the Secretary had no power to remove him. The Deputy Comptroller was a Civil Service employee appointed by the Secretary of the Treasury for no definite term, and could be removed by the Secretary at any time. During the absence or inability of the Comptroller, or during a vacancy in that office, all the duties, powers and responsibilities of the Comptroller devolved by law upon the Deputy as Acting Comptroller, but he had not that independence of the Secretary that the Comptroller had.

While acting during the absence or inability of the Comptroller he was expected to carry out the Comptroller's policies and be governed by his rulings and interpretations of the law, whether such policies, rulings or interpretations were in accord with his views or not. When acting during a vacancy in the office he was expected to confer with the Secretary of the Treasury in regard to the more important affairs of the Bureau and be guided by his instructions. But whatever he did under such conditions, whether right or wrong, he was expected to assume responsibility therefor. He could not divest himself of such responsibility by claiming that he followed the direction of his official superior, because the law vested in him the right to exercise his own judgment, by conferring upon him all the duties and powers of the Comptroller when so acting.