Real estate loans were passed without notice, and in many cases the aggregate investments of a bank in this class of securities exceeded its capital stock.

The law permitted a national bank to own only such real estate as was necessary for its immediate accommodation in the transaction of its banking business, and such as it should acquire in good faith in satisfaction of debts. Realty taken for debt, however, was required to be disposed of within five years from the date it was acquired.

As illustrative of the unwarranted construction placed upon this statute by Mr. Murray, the following case in point is cited:

The representative of a small country bank near by called in person at the Comptroller's office one day and inquired of the Deputy Comptroller whether there was any legal objection to his bank purchasing a vacant piece of ground around the corner near where the bank was located for the purpose of providing hitching posts for the horses of country customers when they came to town, the street on which the bank was located being so narrow that the authorities would not permit the parking of horses thereon.

The Deputy Comptroller advised him that the bank could not lawfully acquire real estate for that purpose, that if the bank had a right to purchase this lot and erect a shed and hitching posts thereon for the purpose of furnishing stable accommodations for customers' horses it would also have the right to build a blacksmith shop on the lot and shoe the horses, but as it was no part of the legitimate or incidental business of a bank to furnish livery or horse-shoeing accommodations for its customers the purchase of real estate for that purpose could not lawfully be made.

Not satisfied with the opinion of the Deputy Comptroller on the subject the representative of the bank appealed to the Comptroller, who informed him that the office would interpose no objection to the bank making the purchase.

Some time thereafter a story appeared in the press, attributed to Mr. Murray, and went the usual rounds, to the effect that when the John R. Walsh bank of Chicago was in an insolvent condition and needed the attention of the Comptroller, the Comptroller's office was frittering away time in carrying on a controversy with a little bank in a nearby town over the question of its right to purchase an insignificant piece of real estate. The purpose of this innuendo was to unjustly reflect upon the previous administration of the bureau, while the facts were that there was no correspondence with the bank on the subject at all and that the Walsh bank failed five years before the incident related occurred.

In his supervision of the banks Mr. Murray seemed to be governed by the rule of action which he was heard frequently to express, that, "It is always best to pursue the course of least resistance". This course of action appeared to control his dealings with the banks after the first jolt he received, occasioned by the unfavorable criticism of his famous twenty-nine questions, as the one likely to meet with the least opposition from quarters that might produce the most resistance.

Such a policy, of course, would naturally be received with favor by such of the bankers as desired to manage their banks in their own way, unhampered by law or the interference of the

Comptroller. And this view of the matter appeared to be entertained by some of the members of the National Monetary Commission, as manifested on the occasion of the hearing before that body, where Mr. Murray probably conceived the idea of interfering with the banks as little as possible, as it was subsequent to that hearing that he changed from an extremely radical to an ultra conservative policy.

If bankers did their banking wholly upon capital furnished by themselves and their stockholders, instead of upon the money of their depositors, they might very properly claim the right to be let alone to manage the affairs of their institutions in their own way. But when they receive and accept a charter from the Government to do a business within well-defined restrictions, and know what those restrictions are when they accept them, it is their duty to conduct that business within the limitations prescribed by law and to strictly observe the requirements of the statute. And it is the duty of the administrative official who is charged with the supervision of the banks to enforce an observance of the laws regardless of whether it is annoying to the banks or not, or what his own judgment may be of the statutes. Directors of banks are sworn not to violate the law and the administrative official is bound by a similar oath to execute it. There is an obligation on both which neither can evade without being false to his trust. The banker who trades upon the confidence inspired by the fact that his bank is under governmental supervision as a means of securing the deposits of the people in his community, and then objects to or resents interference by the Government in the exercise of its supervisory powers, maintains a very inconsistent and untenable position, to say the least. And the public official who accepts and is charged with the duty of enforcing an observance of the banking laws enacted by Congress in its wisdom for the government of the banks in the safe conduct of their business, and sets his judgment against the will of the law-making power as expressed in such laws, by refusing to enforce their observance because he does not approve of them, has such an improper conception of his duties and responsibilities as to render him temperamentally unfit to hold any administrative or executive position under the Government whose laws he has sworn to obey and execute. And when he fails in his duty to the Government and the people by neglecting or refusing to perform those duties he becomes a law breaker himself, as much so as the banker who violates the laws enacted for the government and control of his bank, and the one should be just as much amenable to punishment as the other.

If the laws, or any of them, enacted by Congress for the regulation of the banks are inadequate, too severe, or incompatible with banking or business interests, it is for the Congress to amend or repeal them and not for the administrative official, who is charged with their execution, to refuse to enforce them, or to amend them by administrative regulations. That such laws failed of enforcement or were amended by administrative regulations during Mr. Murray's administration, will be demonstrated further on in this volume.

President Taft in his public utterances on this subject expressed himself very forcibly as follows:

I know that sometimes in the zest and enthusiasm of reform there is an impatience with legal limitations and statutes that seem to be directed against that reform, or to prevent its immediate accomplishment, such as to lead us to disregard it or to ignore it.

The first thing that we have to do after arousing the people to the necessity of a change, is to change the law and not rely upon the executive himself to ignore the statutes and follow a law unto himself because it is supposed to be the law of higher morality.

If you depart in any way from the law as it is, you are led into a wilderness.

And again:

There is a tendency among some of our best fellow citizens to hold the executive responsible for not doing a great many things that it is the business of Congress to do, and for the Executive only to follow after they have laid down the rules. That does not rid the executive of the responsibility of recommending changes in the law. But it does prevent him from going ahead and executing those changes without the co-ordinate action of the legislative branch of the Government.

If this rule of conduct applies to the Chief Executive, and under the Constitution of the United States it certainly does, how much more forcibly should it apply to subordinate administrative and executive officials in the service of the Government.

Numerous reports of examinations of banks, disclosing violations of law that were passed by Mr. Murray without any action, contained also recommendations from the examiners for a strong letter of criticism to be written by the Comptroller, insisting upon the immediate correction of objectionable features to which his attention was called, and which the examiners in their individual efforts had failed to have adjusted by the directors while they were in the banks. But in a majority of such cases no action was taken by the Comptroller, so intent was he in carrying out his policy of pursuing the course of least resistance by not writing the banks letters that were calculated to annoy them in regard to what he termed non-essentials, but which were absolute violations of law.

When the trial of John R. Walsh was under way in Chicago, a former Deputy Comptroller of the Currency testified for the defense that in making excessive loans Walsh had done nothing more than was done by a majority of the banks at that time, with the full knowledge of the Comptroller, and that violations of law of this nature were only perfunctorily criticised by the Comptroller's office, stamped fac-simile signatures being used on circular forms in calling the attention of the banks to violations of the statute. This statement was true as far as it related to the printed forms and fac-simile signatures used in calling attention to violations of law shown by reports of condition of the banks, but it was not true in respect to letters written on examiners' reports. And the reason why forms were used in the first instance was because of the large number of violations of law of various kinds disclosed by reports of condition, which made it a physical impossibility for the limited force of clerks in the Comptroller's office to write an individual letter in each case. But Mr. Murray solved this problem, in pursuance of the course of least resistance, by not writing any letters at all on reports of condition, no matter what violations of law were shown, thus reducing the number of letters that were previously written which he considered of an annoying character.