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 was for one bank to go into voluntary liquidation and transfer its assets to the other association. The absorbing association usually entered into an agreement to assume certain liabilities of the liquidating bank. If shareholders' interests were to be continued, it was necessary for the absorbing bank to increase its capital stock in an amount equal to the capital of the liquidating association, and to sell the additional stock to the shareholders of the latter. As the shareholders of a bank increasing its capital had the common law right of participating pro rata in an increase of the capital of their association, it became necessary to secure from them waivers of their right in order to dispose of the stock to the stockholders of the association which was to be absorbed.

This method of procedure was attended with a great deal of difficulty and delay and in some instances the purpose sought to be accomplished was prevented by the refusal of shareholders to waive their rights. Under such circumstances it became necessary to deprive certain shareholders in the liquidating association of stock in the absorbing bank, or to induce the holders of stock in the latter to surrender a portion of their original holdings to be sold to shareholders in the liquidating bank.

The amendment proposed was in line with the law of the State of New York, which conserves the rights of all shareholders, either to become stockholders in the absorbing bank, or to be paid the liquidating value of their stock, which arrangement permits the surrendered stock to be sold to other interests.

In objecting to this proposed amendment to the law Mr. Murray simply did not understand the necessity for it and made no effort to inform himself on the subject previous to appearing before the Commission. Consolidations or mergers of banks were by no means as frequent during the brief period of his former connection with the Comptroller's office as they were subsequent to that time. Mergers overnight were not thought of in those days. Statutes that worked very well in years gone by had become wholly inadequate to meet the changed conditions in banking methods in later years. This was true of many of the provisions of the national banking laws which had not been amended between the date Mr. Murray left the Comptroller's office in 1899 and the date of his appointment as Comptroller in 1908. But these provisions of law, while generally admitted to be defective and inadequate during his former connection with the office, were allowed to stand as they were because of the apparent impossibility of impressing upon the legislative branch of the Government the necessity for their amendment.

The faultiness of Mr. Murray's objections to the amendments proposed, however, was his lack of familiarity with the banking laws and their practical operation. This ignorance was further displayed by his dissent to the proposition to amend Section 5220 of the Revised Statutes in regard to the voluntary liquidation of banks.

A bank under existing law may be placed in voluntary liquidation by the stockholders owning two-thirds of the stock, without the consent or approval of the Comptroller. When such a bank has deposited lawful money with the Treasurer of the United States to provide for the redemption of its outstanding circulation, as it is required by law to do within six months after being.

voted into liquidation, it passes from under the supervision of the Comptroller of the Currency into the hands of its shareholders and the Comptroller does not again exercise supervision over it, except in event of default in the payment of a creditor. When a creditor obtains judgment against a liquidating bank in any court of record and makes application to the Comptroller, accompanied by a certificate from the clerk of the court that such judgment has been rendered and has remained unsatisfied for a period of thirty days, the Comptroller may appoint a receiver for the bank and proceed to enforce the individual liability of its shareholders for any unpaid debts to creditors.

It was a very common thing for the Comptroller's office to receive complaints from creditors of banks in process of liquidation that the affairs of the bank were not being properly managed. The suggested amendment to the law proposed that the Comptroller should be given authority to require reports from banks in voluntary liquidation, and to make such examinations of their affairs as might be deemed necessary in the interest of creditors and stockholders, to the end that settlements might be effected as expeditiously as possible and that all the creditors and shareholders might receive the full amount to which they were entitled.

Because of the opposition of Mr. Murray, or failure to support almost every essential suggestion that was made on that occasion for amendments to the laws, and the apparent unfavor-able attitude of the bankers who were present at the hearing toward any legislation in the nature of increasing the supervisory powers of the Comptroller, or imposing any additional restrictions upon the banks, the recommendations then submitted and the prolonged discussion that followed, amounted to naught.

While Mr. Murray objected to almost every recommendation made to the Commission, he suggested nothing in substitution, except to allow the law to remain as it was. He said:

I think the law is all right as it is. If the Comptroller has the power to make the officers stay within it it is all right as it is today (December 2, 1908) with the exception of a little smoothing out here and there.

In consequence of the attitude of Mr. Murray, the amendments then proposed were discarded entirely by the Commission, and the Secretary of the Treasury was requested to have prepared and to submit at a later date such recommendations as he and the Comptroller should agree upon. Subsequently other recommendations were submitted to the Commission, but they had no bearing upon the important provisions of the law which needed amending in the interests of the better security of the depositors in the banks and the correction of the incongruities and ambiguities in the statutes at that time.

This fact Mr. Murray learned in the course of time and was forced to realize the necessity for and the potency of the amendments suggested in the practical supervision of the banks. Five years later, on January 8, 1913, he declared before the "Money Trust" Committee of the House of Representatives that the whole system of bank examination was illogical and unscientific, and suggested a number of amendments to the law, some of which were unnecessary and others impracticable and inadvisable.