Mr. Murray's policies and his methods of putting them into force were as pronounced and peculiar in the internal management of the Currency Bureau as they were in his outward dealings with the banks and the bank examiners. When he assumed charge of the Bureau he manifested a disposition to pursue a very radical course. This was during the last year of President Roosevelt's administration. After the change of administration from President Roosevelt to President Taft, and the severe criticisms to which Mr. Murray was subjected by some of the newspapers and bankers of the country for some of his administrative acts, what promised to be at the outset a very radical policy, unlike that of any of his predecessors, was suddenly changed to the opposite extreme in his attitude toward the banks. He not only abandoned his dictatorial style of correspondence, but discontinued writing any letters to the banks based upon the conditions shown by examiners' reports, except in a very few instances.

Prior to the passage of the Act of June 22, 1906, which increased the limit of loans that the banks could lawfully make, fifty per cent, of the banks violated the law by making loans in excess of the legal limit - not always the same banks, but always about the same proportion. When the law was amended, Mr. Ridgely, who was then Comptroller, determined to put an end to such violations of the statute, even to the extent of instituting suit to forfeit the charter of any bank which persisted after due warning in disregarding the limitations, and he so advised all the banks in a circular letter calling their attention to the amended law and explaining its provisions. This action on the part of Mr. Ridgely had the effect of greatly reducing violations of law of this nature.

An examination of the reports of condition of the banks made under the last call immediately preceding the change in the law showed that nearly sixty per cent, of the banks reporting under that call had excessive loans. The reports under the first call made several weeks after the law had been amended, and after the banks had been notified that it was the purpose to strictly enforce an observance of the limitation, violations of law of this nature had been reduced to about twenty-five per cent, of the banks reporting, and many of these loans were made before the law was amended and could not be reduced until maturity. Each succeeding call showed a further reduction, and the reports made under the last call immediately preceding the date that Mr. Murray assumed active charge of the Bureau showed the excessive loans had been reduced to about thirteen per cent, of the banks reporting, and in this number were included as excessive loans balances with banks other than national which were then treated as loans subject to the limit, but subsequently were not so considered. Eliminating this class of loans from the calculation would reduce the number to about ten per cent.

Before Mr. Murray took charge of the Currency Bureau, it had been the uniform practice of the office from the beginning of the national system to write letters to the banks based upon examiners' reports, and upon reports of condition made by the banks, calling their attention to every violation of law shown and requiring them to be corrected. The banks were also required to make reply to such letters, stating what had been or would be done toward complying with the office instructions. These letters were very effective in securing results, and in the event of the subsequent failure of a bank, were relied upon largely by United States Attorneys to aid them in securing convictions for criminal violations of law. They were also effective in establishing the individual liability of officers or directors for losses sustained by a bank on loans and transactions involving violations of law.

At that time probably seventy-five per cent, of the examiners' reports, and about the same percentage of reports of condition made by the banks, disclosed violations of law of one kind or another, making it necessary to write letters to that number of banks.

This practice was all changed by Mr. Murray. Instead of the Comptroller's office writing to the directors of banks, calling their attention to violations of law and other unsatisfactory conditions, and requiring their correction, the examiners were instructed to convene the board at the time of examinations, take such matters up with them in person and secure their correction before leaving the bank. Or, if this could not be accomplished, to forward with their reports a statement signed by the directors as to what would be done toward complying with the examiner's directions.

This policy was all right where definite and satisfactory results could be obtained, and as far as these instructions related to directing examiners to have matters adjusted as fully as possible before leaving the bank, this practice had been in force for years before Mr. Murray assumed charge of the Currency Bureau, and did not originate with him, as the public was given to understand.

In many instances under Mr. Murray's administration, as well as under the administrations of his predecessors, examiners succeeded in straightening out unsatisfactory conditions before leaving the bank and reported to the Comptroller the conditions found at the beginning of an examination and what had been done toward their correction.

Where a situation could be handled in this manner, much speedier results were obtained than by the slow process of correspondence. But in a large percentage of cases it was beyond the power of directors to make an immediate adjustment of unsatisfactory conditions, and therefore the examiner's efforts to secure correction during his stay in the bank were futile. In such cases, in order to avoid the writing of letters to such banks, examiners under Mr. Murray's administration were instructed to procure and forward with their reports a statement signed by the directors, admitting their knowledge of the objectionable features and promising to correct them as early as possible, and when such signed statements accompanied reports they were usually accepted as satisfactory and the reports and letters were filed away without action on the part of the Comptroller.