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 receiving a private school education in Richmond, he attended the University of Virginia. He began the active work of his life in his father's office at the age of eighteen years. While so employed he attracted attention by the publication of a pamphlet entitled "A Manual of Investments," which became so popular that it was issued yearly for some time. He became a partner with his father in the banking and brokerage business and later engaged actively in the material development of the South. He organized and consolidated the Seaboard Air Line and was elected the first president of this company in 1900. He also served as president of other railroad companies of less mileage and was president of the Bank of Richmond and of the Southern Investment Company. He was director of several other trust companies, banks and other corporations, and was recognized as one of the leading financiers of the South.

Mr. Williams was appointed Assistant Secretary of the Treasury on March 24, 1913, and was placed in charge of the fiscal bureaus of the Treasury Department. He remained in this position until his appointment and qualification as Comptroller of the Currency. The statutory period of Mr. Williams' appointment expired February 2, 1919, but he continued to discharge the duties of the office until March 2, 1921, under authority of the Act of Congress approved March 2, 1895 (28 Stat., 808, 844), which authorized the continuance in office of all officers under the Treasury Department after the date of the expiration of their statutory terms pending the appointment and qualification of their successors, and also waived the requirement for a new bond during the continuing period in the discretion of the Secretary of the Treasury.

Considerable opposition was made to Mr. Williams' confirmation as Comptroller, and charges were filed against him with the Committee on Banking and Currency of the United States Senate in connection with the absorption of the United States Trust Company by the Munsey Trust Company and the deposit in the latter company of one million dollars of public moneys taken from the Treasury of the United States, as explained in the foregoing chapter. These charges were investigated by the committee. Testimony was taken and reported stenographically. The report may be found in a pamphlet entitled "Confidential Hearings before the Committee on Banking and Currency, United States Senate," sixty-third Congress, Second Session, January 14, 1914.

As a member of the Federal Reserve Board Organization Committee, Mr. Williams took an active part in the formation of the Federal Reserve Districts and other work incidental to the inauguration of the new banking system.

The administration of Mr. Williams was distinguished at the outset by a rigid enforcement of the banking laws, and much good was accomplished by him in compelling the banks to observe the law and to respect the requirements of the Comptroller's office. His official career in the Treasury Department was more or less turbulent from the beginning, and his administration of the Currency Bureau was considered by many of the banks the most radical and exacting of any in its history. Before his appointment to official position in the Treasury he had the reputation of being a man of strong impulses and prejudices, courageous, blunt and outspoken, unwilling to accept advice or suggestion, lacking in suavity, but entirely devoid of subtlety, and relentless toward those with whom he had business or personal differences.

These characteristics were strongly manifested in his official intercourse and dealings with some of the banks and throughout his administration of the Comptroller's office.

Unlike his immediate predecessor whose oft declared policy was to "always pursue the course of least resistance," Mr. Williams never hesitated to pursue the course of most resistance when he deemed it necessary to accomplish what he believed to be right or to secure the correction of what he believed to be wrong. He never compromised with what he considered to be wrong to avoid contention or resistance, no matter how formidable, or criticism, however severe.

It was not so much what Mr. Williams did when he was Comptroller that subjected him to so much criticism and made his administration so unpopular as it was the manner in which he did it. Another Comptroller might have done the very same things or followed the same line of policy without arousing the antagonism that he did by pursuing a more tactful course. But tact-fulness was not one of Mr. Williams' cardinal virtues.

Mr. Williams was a man of very warm friendships and of many excellent qualities of head and heart, generous, of recognized ability, and of unimpeachable integrity and honesty. Apart from his controversial characteristics it must be conceded, even by his critics, that he was one of the ablest officials, and without doubt the most forceful Comptroller of the Currency who ever occupied the office.

Aldrich-Vreeland Emergency Currency Law

On January 1, 1914, twenty-one national currency associations had been formed in different sections of the country under authority of the Act of May 33, 1908, known as the Aldrich-Vreeland emergency currency law, but no application for the additional currency provided for by this act had been received from or currency issued to any of these associations, although periods of money stringency had existed in sections of the country which would seem to have made an issue of this currency desirable. The high rate of interest charged on this currency probably deterred banks from taking it out. An occasional application was received from individual banks for additional circulation authorized by Section 3 of this act, but none was issued, and no so-called emergency currency was issued to any association or bank until after the outbreak of the war in Europe, which created a condition of affairs in this country threatening a serious business and financial crisis.

Immediately preceding the declaration of war the resources of the banks in New York City had been heavily drawn upon to meet the demands incident to large expectations of gold to Europe and sales on the New York Stock Exchange of enormous amounts of American securities for foreign account. Further shipments of gold and sales of securities were anticipated. To prevent a general demoralization of the market the stock exchange was closed on the morning of July 31, 1914, and remained closed until December 12 following, when trading in stocks was resumed under certain restrictions prescribed by the special committee of the stock exchange.

The New York Clearing House statement for August 1, 1914, showed that the reserves of the New York banks had been reduced $43,599,500 below the amount held the preceding week and that the deficiency in reserves amounted to $17,425,750. In May, June and July nearly $100,000,000 of gold had been exported to Europe. To meet further maturing obligations in Europe, for which payment in gold was demanded, J. P. Morgan & Company organized a million-dollar syndicate, and later another syndicate was organized, called the Gold Fund Pool, to take care of the foreign exchange market.

At this juncture the Aldrich-Vreeland emergency currency measure proved of great aid to the financiers and bankers. Although this law had been in existence since immediately following the panic of 1907, it had never been utilized and probably never would have been had it not been for the grave emergency created by the European war.

The Secretary of the Treasury realized the gravity of the situation, and on August 3 announced through the press that the Treasury Department was prepared to immediately issue to national banks in New York City $100,000,000 of additional currency authorized by this act.

To facilitate the issuance of emergency currency, Congress, under date of August 4, 1914, amended the Act of May 30, 1908, authorizing the Secretary of the Treasury, in his discretion, to waive the provision in the original act, restricting the issuance of additional currency to national banks which had outstanding bond secured circulation equal to forty per cent, of their capital stock. The act was further amended to increase the amount of currency which a bank was authorized to issue from one hundred per cent, of capital and surplus to one hundred and twenty-five per cent, of capital and surplus, and repealed the provision limiting the total issue of such currency to $500,000,000.

Immediately following these amendments to the law additional currency associations were rapidly formed in different sections of the country. On October 1, 1914, forty-four of these associations had been organized, covering nearly every State. The number of national banks composing these associations aggregated 2102 and their capital stock and surplus amounted to $1,197,-771,000. The total amount of emergency currency issued aggregated $382,502,645.

The situation was further relieved by the New York Clearing House Association which, on August 3, 1914, commenced the issuance of clearing-house loan certificates. Between August 3 and October 15 following, $124,695,000 of these certificates were issued. The last of these certificates were cancelled on November 28, 1914, and on July 8, 1915, the entire Emergency Currency issues had been retired, except $171,703.11 issued to the First National Bank of Uniontown, Pa., which had failed and had been placed in the hands of a receiver January 18, 1915. After that date this emergency currency was provided for by the deposit of lawful money.

The Clearing House Associations in Chicago, St. Louis and other large cities also issued clearing-house certificates, but by December 1, 1914, all such certificates had been paid or were called in for redemption.