On page X of the text of his report for 1881, Mr. Knox said:

It is recommended that an act be passed during the present session, authorizing any national bank, with the approval of the Comptroller, at any time within two years prior to the date of the expiration of its corporate existence, to extend its period of succession for twenty years, by amending its articles of association. The bill may provide that such amendments must be authorized by the votes of shareholders owning not less than two-thirds of the capital of the association, the amendment to be certified to the Comptroller of the Currency, by the president or cashier, verified by the seal of the association, and not to be valid until the Comptroller's approval thereof shall have been obtained, and he shall have given to the association a certificate authorizing it to continue its business under such extension. Responsibility for the extension of the corporate existence of the banks will thus, in a measure, rest with the Comptroller; and he can require such an examination of its affairs to be made, prior to granting the extension, as may seem to him proper, in order to ascertain if the capital stock is intact, and all the assets of the bank in a satisfactory condition.

Section 3 of the Act of July 12, 1882, above quoted, requires a special examination of a national bank before extension of its charter, and if such examination shows the bank to be in a "satisfactory condition" the Comptroller is required to issue his certificate of extension.

The words "satisfactory condition" always were held by the Comptroller's office, and by its legal advisers, to mean that the bank was in a solvent condition at the time of the special examination, that its capital was unimpaired and that its business was being conducted within the provisions and limitations of the national banking laws.

If the special examination showed an unsatisfactory condition the practice was to notify the board of directors and require the matters complained of to be corrected as a condition precedent to the approval of an extension of the bank's charter. It was not the practice to investigate the condition of the bank running back a number of years into periods covered by former administrations of the Comptroller's office, as was done in the case of the Riggs National Bank, and there was no precedent to be found in the records of the bureau for such a procedure.

The duty and powers of the Comptroller in passing upon applications for extension of charters were believed to be limited to ascertaining "if the capital stock is intact, and all of the assets of the bank in a satisfactory condition".

This was believed to be the intent of the Act of July 12, 1882, and was so understood by John Jay Knox, who recommended the amendment to the law and drafted this enactment, the opinion of Mr. Justice McCoy of the Supreme Court of the District of Columbia to the contrary notwithstanding.

On May 23, 1916, a committee representing the stockholders and board of directors of the Riggs National Bank called in person upon the Comptroller and filed with him a formal application for extension of the bank's charter. The spokesman of the committee, after briefly stating the object of their visit, tendered the application to Mr. Williams, who declined to receive it from his hands and motioned to him to lay it on the desk. The paper was laid on the desk and the committee withdrew.

Under date of June 21, 1916, Mr. Williams addressed a communication to the Riggs National Bank, covering thirteen typewritten pages, in which he called attention to an error in the application, which requested an extension of the charter for the period of twenty years and one day, and required an amended application for twenty years' extension in conformity with law. The amended application was filed on June 26, 1916, in compliance with the Comptroller's request.

In the communication above referred to Comptroller Williams called the bank's attention to Section 3 of the Act of July 12, 1882, providing for extension of charters, and to the construction placed upon the word "condition" by Justice McCoy of the Supreme Court of the District of Columbia in the decision rendered by him under date of May 31, 1916, in the suit of the Riggs National Bank vs. the Comptroller of the Currency et al., in which the court held that the word "condition" comprehended not only the solvency of the bank but the character of the business done.

The communication then referred to the numerous violations of law committed by the bank's officers during the existence of the institution, mentioning the officers by name and the specific nature of some of their unlawful transactions, and concluded with a reference to their refusal to furnish certain special reports called for by the Comptroller and denial of his authority under the law to call for such reports.

It was a serious question, the Comptroller stated, whether the corporate existence of a bank should be extended whose officers had defied his authority and challenged his right to call for information which, in his judgment, was deemed necessary to a proper understanding of the condition of the bank, if the same officers were to be continued in charge of the bank's affairs.

If the practices and methods of these officers, the Comptroller stated, which had been the subject of criticism for years had continued to the date of the application for extension of charter then pending, the extension could not lawfully have been approved, but the records of the Comptroller's office showed that during the preceding eighteen months the unlawful practices complained of had been discontinued and that the condition of the bank had been generally satisfactory, with the exception of the refusal to furnish the special reports called for.

The decision of the court, however, the Comptroller stated, afforded a solution of this phase of the situation, and as the officers of the bank accepted the court's decision as to the Comptroller's authority to call for special reports and the board of directors solemnly pledged themselves to see that the affairs of the bank would in future be conducted strictly in compliance with the national banking laws and in conformity with the lawful rules, regulations and requirements of the office of the Comptroller of the Currency, the Comptroller advised the directors that he had concluded to extend the bank's charter.