compcurr_1929

ANNUAL REPORT OF THE

Comptroller of the Currency

DECEMBER 2, 1929

UNITED STATESGOVERNMENT PRINTING OFFICE

WASHINGTON: 1930

For sale by the Superintendent of Documents, Washington, D. C. - - Price $1.25 (Cloth)Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TREASURY DEPARTMENT

Document No. 3018Comptroller of the Currency

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CONTENTSPage

Submission of the report 1Legislation recommended:

Amendments to national bank act 1-10Amendments to the laws of the District of Columbia 10, 11

Branches:Statement relative to 11Domestic branches of national banks

Table showing, by States, number and manner of acquisition ofbranches during year ended October 31, 1929 12, 13

Table showing, by States, number and class of branches closedduring year ended October 31, 1929 13, 14

Organization and liquidation of national banks, year ended October 31,1929, and since establishment of system 15, 16

National banks in the trust field:Statement relative to 16-18Fiduciary activities of, in 1929, segregated according to capital- ___ 19, 20Fiduciary activities of, by Federal reserve districts, June 29, 1929-_ 21

National-bank failures:Statement relative to . 22-25Financial operations of division of insolvent national banks from

September 30, 1928, to September 30, 1929 . . 25, 26Capital, date of appointment of receiver, and per cent dividends paid

by insolvent national banks, the affairs of which were closed duringyear ended October 31, 1929 26, 27

Bank failures other than national, year ended June 30, 1929 . 28National-bank circulation:

Statement relative to ~ 28Bond transactions relative to, year ended October 31, 1929 - 29Statement of capital stock of national banks, national-bank notes,

and Federal reserve bank notes outstanding, bonds on deposit, etc.,November 1, 1929 29, 30

Redemption of national and Federal reserve bank circulation, year endedJune 30, 1929 30

National banks of issue 30, 31Condition of national banks at date of each report called for during year

ended October 31, 1929 31Principal items of resources and liabilities of national banks, October 4,

1929, by States . 32, 33National-bank liabilities on account of bills payable and rediscounts at

date of each call during year ended October 31, 1929 34Loans and discounts of national banks:

Classification of December 31, 1928, and June 29, 1929-_- 35Classification of, by reserve cities and States, June 29, 1929--., 36-39Comparative statement of, for the last three fiscal years, in central re-

serve and other reserve cities, all reserve cities, and elsewhere-- 40Comparative changes in demand and time deposits, loans and discounts,

United States Government and. other bonds and securities, and theamount of lawful reserve of national banks since June 30, 1925 40

United States Government securities held by national banks June 29,1929:

Classification of, by reserve cities and States 41-43Investments of national banks:

Comparison of, June 30, 1928, and June 29, 1929 43United States Government, domestic, and foreign bonds, securities, etc.,

owned by national banks June 29, 1929:Classification of, by reserve cities and States 44-47

ni


IV CONTENTS

Per capita individual and savings deposits in all reporting banks June 29,1929:

Statement, by States, showing approximate population, individualdeposits, per capita individual deposits, savings deposits and percapita savings deposits 48, 49

Savings deposits and depositors in all reporting banks, according to classof banks, June 29, 1929 50-55

Earnings, expenses, and dividends of national banks:Comparison of, years ended June 30, 1928 and 1929 56Abstract of

By reserve cities and States, year ended June 30, 1929 57-66By Federal reserve districts, year ended June 30, 1929 67, 68

National-bank investments in United States Government and other bondsand securities, etc., loans and discounts, and losses charged off on accountof bonds and securities and loans and discounts, years ended June 30,1918 to 1929 69

Number of national banks, capital, surplus, net addition to profits, divi-dends and percentage ratios, years ended June 30, 1914 to 1929 69

National banks classified according to capital stock, December 31, 1928:Number, loans and discounts, bonds and securities owned, aggregate

resources, capital, surplus and profits, and total deposits of 69, 70National-bank examiners, list of, November 1, 1929 70-75Convictions of national-bank officers and others for violations of the

national banking laws during the year ended October 31, 1929, list of_. 75-79Federal reserve banks:

Assets and liabilities of the 12 Federal reserve banks combined, as ofthe last weekly statement date in October, 1920 to 1929 80

Principal assets and liabilities of the 12 Federal reserve banks com-bined, on the last weekly statement date in each month, fromJanuary, 1925, to October, 1929 81

Percentage of bills discounted secured by United States Governmentobligations to total bills discounted and purchased by Federalreserve banks at the end of each month, year ended October 31,1929 82

Federal reserve bank discount rates in effect November 1, 1929, dateestablished, and previous rate with respect to all classes and maturi-ties of eligible paper 82

Discount rates prevailing in Federal reserve bank and branch citieson bulk of loans of each class made by about 200 representativebanks during week ending the 15th of the month, October, 1928, toOctober, 1929 82-84

Rates for money in New York:Range of, monthly in the year ended October 31, 1929__ __ 85Comparison of range of, annually from January, 1920, to October,

1929 . 86New York clearing house:

Statement relative to transactions of, year ended September 30, 1929. 87Clearing house associations in the 12 Federal reserve bank cities and

elsewhere:Statement relative to transactions of, year ended September 30, 1929_ 87

Banks other than national, June 29, 1929:List of officials of State banking departments and number of each class

of banks under their supervision from which reports of conditionwere received 87-89

State (commercial) banksSummary of resources and liabilities of, and comparison with

June 30, 1928 90,91Loan and trust companies

Summary of resources and liabilities of, and comparison withJune 30, 1928 92,93

Principal items of resources and liabilities of, in June of eachyear, 1914 to 1929 94

Stock savings banksSummary of resources and liabilities of, and comparison with

June 30, 1928 _ 94-96


Banks other than national, June 29, 1929Continued.Mutual savings banks Page

Summary of resources and liabilities of, and comparison withJune 30, 1928 96-98

Depositors and deposits in mutual and stock savings banks, by-States, June 30, 1928 and 1929 98-100

Number of savings banks (mutual and stock), number of depositors,amount of individual deposits, and average amount due eachdepositor in years ended June 30, 1914 to 1929 101

Private banksSummary of resources and liabilities of, and comparison with

June 30, 1928 101-103All reporting banks other than national

Summary of resources and liabilities of, and comparison withJune 30, 1928 103-105

Resources and liabilities of each class of 106Principal items of resources and liabilities of, on or about June 30,

1925 to 1929 106National banks, June 29, 1929:

Summary of resources and liabilities of, and comparison with June 30,1928 ." 107, 108

Banks, all reporting, June 29, 1929:Summary of resources and liabilities of, and comparison with June 30,

1928 109-111Abstract of resources and liabilities of, by States . _. 111119 tIndividual deposits in, classification of 120Resources and liabilities of, years ended June 30, 1925 to 1929 121Principal items of resources and liabilities of, in the continental United

States, as compared with similar data for member banks of theFederal reserve system 121

Money in the United States:Stock of, years ended June 30, 1914 to 1929. 122Circulation statement of United States money, June 30, 1929 123Imports and exports of merchandise, gold and silver, calendar years

1914 to 1928, and from January 1 to September 30, 1929 . 124Banks in District of Columbia:

Number, capital, individual deposits, and aggregate resources of,June 29, 1929 125

Earnings, expenses, and dividends of, other than national, six monthsended December 31, 1928, and June 30, 1929, and comparison of, inyears ended June 30, 1929 and 1928 125, 126

Building and loan associations in the District of ColumbiaNumber of loans, installme nts on shares, and aggregate resources,

years ended June 30, 1909 to 1929 I 126, 127Building and loan associations in the United States:

Statistics relating to, by States, year ended 1928 127Mortgage loan investments held by, in 1927 and 1928, by States 128Failures of, each year 1920 to 1928 . 128

Monetary stock of principal countries of the w o^rld:Statistics relating to, at the end of the calendar years 1927 and 1928. 129-137

Federal land banks, condition of, September 30, 1929 138, 139Joint-stock land banks, condition of, September 30, 1929 140, 141Federal intermediate credit banks, condition of, September 30, 1929 142National agricultural credit corporatio ns 143United States postal savings system:

Statistics relating to activities of, years ended June 30,1928 and 1929_ 143-147School savings banking:

Statistics relative to, in each State, in school years 1927-28 and 1928-29-__- _ . 148

Savings banks in principal countries of the world:Statistics relative to, as of various dates-.__. . 149-151

Resources of leading foreign banks of issue:Statistics relative to, on or about June 30, 1929_m 152Expenses of the Currency Bureau:Summary of, in the fiscal year ended June 30, 1929 - 153


VI CONTENTS

APPENDIXPage

Digest of decisions relating to national banks 157-226TABLES

No. 1. Comptrollers and Deputy Comptrollers of the Currency 227No. 2. Names and compensation of officers and clerks in the office of the

Comptroller of the Currency, October 31, 1929 227-229No. 3. Number of national banks organized since February 25, 1863,

number passed out of the system, and number in existenceOctober 31, 1929 229

No. 4. Authorized capital stock of national banks on the 1st day of eachmonth from January 1, 1925, to November 1, 1929, bonds ondeposit to secure circulation, circulation secured by bonds, law-ful money on deposit to redeem circulation, an'd national-banknotes outstanding 230

No. 5. National banks reported in liquidation from November 1, 1928, toOctober 31, 1929, the names (where known) of succeeding banksin cases of succession, with date of liquidation and capital-_ 231-237

No. 6. Capital stock, surplus, undivided profits, and aggregate resourcesof banks consolidated under act of November 7, 1918, asamended February 25, 1927, for the year ended October 31,1929, as shown by their last reports prior to consolidation. _ 238-243

No. 7. National banks consolidated under act of November 7, 1918, theircapital, surplus, undivided profits, and aggregate resources,year ended October 31, 1929 244, 245

No. 8. State banks and national banks consolidated underact of Febru-ary 25,1927, their consolidated capital, surplus, undivided prof-its, and aggregate resources, year ended October 31, 1929 246, 247

No. 9. Number and capital of State banks converted into national bank-ing associations in each State and Territory from 1863 to Octo-ber 31, 1929 248

No. 10. Conversions of State banks and primary organizations as nationalbanks from March 14, 1900, to October 31, 1929 248

No. 11. Number of national banks increasing their capital, together withthe amount of increase monthly for years ended October 31,since 1924 249

No. 12. Number and authorized capital of national banks chartered andthe number and capital stock of banks closed in each year endedOctober 31, since 1913, with yearly increase or decrease 249

No. 13. Total number of national banks organized, consolidated under actof November 7, 1918, insolvent, in voluntary liquidation, andin existence on October 31, 1929 250

No. 14. Changes of corporate title of national banks, year ended October31, 1929 251, 252

No. 15. Changes of corporate title incident to consolidations of nationalbanks, and of State banks with national banks, year endedOctober 31, 1929 253, 254

No. 16. National banks chartered during year ended October 31, 1929._ 254-258No. 17. National banks chartered which are conversions of State banks

during year ended October 31, 1929 258No. 18. National banks, by States and geographical divisions, organized,

failed, and reported in voluntary liquidation during year endedOctober 31, 1929 259

No. 19. Number and classification of national banks chartered monthlyduring year ended October 31, 1929 . 260

No. 20, Principal items of resources and liabilities of national banksclassified according to capital stock, December 31, 1928 260-268

No. 21. United States bonds on deposit to secure circulating notes ofnational banks in years ended October 31, 1900 to 1929 269

No. 22. Profit on national-bank circulation, based upon deposit of $100,000United States consols of 1930, etc., at the average net price,monthly, during year ended October 31, 1929 270

No. 23. Investment value of United States bondsPanama Canal bondsand 2's of 1930 271

No. 24. United States bonds (circulation)Monthly range of prices inNew York, November, 1928, to October, 1929, inclusive. 271


CONTENTS VII

PageNo. 25. Number, capital stock, and circulation outstanding of national

banks issuing circulating notes, together with, number andcapital stock of national banks not issuing circulating notes,June 29, 1929, by reserve cities and States 272, 273

No. 26. National-bank notes issued, redeemed, and outstanding, by de-nominations and amounts, on October 31, each year, 1918 to1929 274

No. 27. National-bank currency issued to banks monthly from November1, 1928, to October 31, 1929, and since 1863 275

No. 28. National-bank notes received monthly for redemption duringyear ended October 31,1929 275

No. 29. National-bank notes received at currency bureau and destroyedyearly since establishment of system 276

No. 30. National-bank notes issued and destroyed, etc., account of active,insolvent, and liquidated banks, years ended October 31, 1914to 1929 276

No. 31. Amount, denomination, and cost of national-bank currency re-ceived from Bureau of Engraving and Printing, year endedOctober 31, 1929 277

No. 32. Vault account of currency received and issued by currency bureauduring year and amount on hand October 31, 1929 277

No. 33. Vault account of currency received and destroyed during yearended October 31, 1929 _" 277

No. 34. Amount of currency received for redemption, by months, fromJuly 1, 1928, to June 30, 1929, and counted into the cash of theNational Bank Redemption Agency 278

No. 35. Amount of currency received by National Bank RedemptionAgency for redemption in year ended June 30, 1929, fromprincipal cities . 278

No. 36. Cost of redemption of national-bank notes during year endedJune 30, 1929 , 278

No. 37. Classification of Federal reserve currency redemptions, amount re-deemed, number of notes, cost of redemption per 1,000 notes,and amount assessed upon Federal reserve banks, year endedJune 30, 1929 1 279

No. 38. Taxes assessed on national-bank circulation, years ended June 30,1864 to 1929; cost of redemption, 1874 to 1929; and assess-ments for cost of plates, etc., 1883 to 1929 280

No. 39. Federal reserve notes outstanding according to weekly state-ments (amount issued by Federal reserve agents to Federalreserve banks, less "unfit" notes redeemed), and collateralsecurity therefor, from November 7, 1928, to October 30, 1929. _ 281

No. 40. Federal reserve notes, segregated by series, printed, shipped, andcanceled, issued to banks, retired, and destroyed since organiza-tion of the banks, with balance in vaults and amount outstand-ing October 31, 1929 282-284

No. 41. Aggregate amount of Federal reserve bank notes printed, issued,canceled, and redeemed, by denominations, since inaugurationof the Federal reserve system, and amount on hand and out-standing October 31, 1929 284

No. 42. Taxes assessed on Federal reserve bank currency, cost of redemp-tion, and cost of plates, years ended June 30, 1915 to 1929 285

No. 43. National banks in charge of receivers during year ended October31, 1929, capital at date of organization and at date of failure,causes of failure, dividends paid while solvent, and circulationoutstanding, etc 286-299

No. 44. National banks in charge of receivers, dates of organization,appointment of receivers, and closing, with amounts of nomi-nal and additional assets, amounts collected from all sources,loans paid, losses on assets, expenses of receiverships, claimsproved, etc., to October 31, 1929 300-331

No. 45. National banks restored to solvency after having been placedin charge of receivers 332, 333

No. 46. Dividends paid to creditors of insolvent national banks duringyear ended October 31, 1929 . 333-338


VIII CONTENTS

PageNo. 47. Dates of reports of condition of national banks from 1914 to

1929 339No. 48. Condition of foreign branches of National City Bank and Chase

National Bank, of New York, N. Y., and- First National Bankof Boston, Mass., on June 29, 1929 340-345

No. 49. Number, capital stock paid in, circulation outstanding, andaggregate resources of national banks at date of each reportfrom February 21, 1921, to October 4, 1929, money in the UnitedStates, June 30, each year, etc 346

No. 50. Abstract of reports of condition of national banks in the centralreserve cities of New York and Chicago, in other reserve cities,and elsewhere, October 4, 1929 347

No. 51, Abstract of reports of condition of national banks in central re-serve and other reserve cities and country banks at date ofeach call during year ended October 31, 1929 348-351

No. 52. Classification of amounts "due from" and "due t o " banks re-ported by national banks, according to reserve cities and States,at date of each call during year ended October 31, 1929 352-367

No. 53. Classification and demand and time deposits in national banks,according to reserve cities and States, at date of each callduring year ended October 31, 1929 ___ 368-383

No. 54. Classification of bills payable and rediscounts of national banksaccording to reserve cities and States, at date of each callduring year ended October 31, 1929 _' 384-393

No. 55. Classification of cash in vaults of national banks, according toreserve cities and States, at date of each call during year endedOctober 31, 1929 1 394-397

No. 56. Gold and silver coin, certificates, legal tenders, and other cur-rency held by national banks at date of each report fromFebruary 21, 1921, to October 4, 1929 398

No. 57. Gold, etc., held by national banks in the central reserve city ofNew York at date of each report from February 21, 1921, toOctober 4, 1929 399

No. 58. Reserve computation of national banks, according to reserve citiesand States, at date of each call during year ended October 31,1929 400-415

No. 59. Abstract of reports of condition of national banks, at date of eachreport from February, 1920, to October, 1929 416-425

No. 60. Abstract of reports of condition of national banks, according toreserve cities and States, at date of each call during year endedOctober 31, 1929 427-543

No. 61. Abstract of reports of condition of national banks in each Federalreserve district at date of each call during year ended October31, 1929 544-549

No. 62. Classification of loans and discounts of national banks accordingto reserve cities and States December 31, 1928 550-553

No. 63. Classification of United States Government securities owned bynational banks, according to reserve cities and States, December31, 1928 554,555

No. 64. Classification of investments of national banks, according to re-serve cities and States, December 31, 1928 556-559

No. 65. Principal items of resources and liabilities of national banks ac-cording to counties in each State, by Federal reserve districts,March 27, 1929 561-625

No. 66. Abstract of reports of earnings, expenses, and dividends of nationalbanks, according to reserve cities and States, for the six monthsended December 31, 1928 626-637

No. 67. Abstract of reports of earnings, expenses, and dividends of nationalbanks, by Federal reserve districts, for the six months endedDecember 31, 1928 638,639

No. 68. Abstract of reports of earnings, expenses, and dividends of nationalbanks, according to reserve cities and States, for the six monthsended June 30, 1929 640-651

No. 69. Abstract of reports of earnings, expenses, and dividends of nationalbanks, by Federal reserve districts, for the six months endedJune 30, 1929 652, 653


CONTENTS IX

PageNo. 70. Abstract of reports of savings and State banks in the District of

Columbia at date of each report during year ended October 31,1929 . 654

No. 71. Abstract .of reports of loan and trust companies in the District ofColumbia at date of each report during year ended October 31,1929 655

No. 72. Principal items of resources and liabilities of each savings andState bank in the District of Columbia, October 4, 1929 656, 657

No. 73. Principal items of resources and liabilities of each loan and trustcompany in the District of Columbia, October 4, 1929

No. 74. Principal items of resources and liabilities of savings and State 658banks in the District of Columbia on or about October 1, 1914to 1929 659

No. 75. Principal items of resources and liabilities of loan and trust com-panies in the District of Columbia on or about October 1, 1914to 1929 659

No. 76. Individual statements of resources and liabilities of the 22 build-ing and loan associations in the District of Columbia, June 30,1929 660, 661

No. 77. Summary of resources and liabilities, receipts, and disbursementsof building and loan associations in the District of Columbiafor the six months' period ended on or about December 31, 1928_ 662

No. 78. Summary of resources and liabilities, receipts, and disbursementsof building and loan associations in the District of Columbiafor the six months' period ended on or about June 30, 1929 663

No. 79. Abstract, by States, of resources and liabilities of State (commer-cial) banks June 29, 1929 664-671

No. 80. Abstract, by States, of resources and liabilities of loan and trustcompanies June 29, 1929 672-679

No. 81. Abstract, by States, of resources and liabilities of stock savingsbanks June 29, 1929 680-683

No. 82. Abstract, by States, of resources and liabilities of mutual savingsbanks June 29, 1929 684-687

No. 83. Abstract, by States, of resources and liabilities of private banksJune 29, 1929 688-691

No. 84. Abstract, by States, of resources and liabilities of all reportingbanks other than national June 29, 1929 692-699

No. 85. Abstract, by States, of resources and liabilities of national banksJune 29, 1929 700-707

No. 86. Aggregate resources and liabilities of State (commercial) banks,June, 1925 to 1929 _._ _' 708

No. 87. Aggregate resources and liabilities of loan and trust companies,June, 1925 to 1929 708

No. 88. Aggregate resources and liabilities of stock savings banks, June,1925 to 1929 1 709

No. 89. Aggregate resources and liabilities of mutual savings banks, June,1925 to 1929 : 709

No. 90. Aggregate resources and liabilities of private banks, June, 1925 to1929 710

No. 91. Gold, silver, etc., held by banks other than national, June, 1914to 1929 710

No. 92. Statement of resources and liabilities of the chartered banks ofCanada, September 30, 1929 711

No. 93. Summary of the principal items of resources and liabilities of thechartered banks of Canada, monthly, year ended September 30,1929 711

No. 94. Comparative statement of the transactions of the New YorkClearing House in each year ended September 30,1854 to 1929_ 712, 713

No. 95. Comparative statement of the clearings, etc., of the New YorkClearing House, years ended September 30, 1929 and 1928 713

No. 96. Exchanges, balances, percentages of balances to exchanges, andpercentages of funds used in settlement of balances by theNew York Clearing House in each year ended September 30,1893 to 1929 713, 714

No. 97. Comparative statement of exchanges of clearing houses of theUnited States, years ended September 30, 1929 and 1928---- 714-717


X CONTENTS

PageNo. 98. Comparative statement of transactions of clearing-house associa-

tions in the 12 Federal reserve bank cities, and in other citieswith transactions of $1,000,000,000 and over, in years endedSeptember 30, 1929 and 1928 718

No. 99. Number and liabilities of State, private, and national banks whichfailed in each State during the six months ended December 31,1928 719

No. 100. Number and liabilities of State, private, and national bankswhich failed in each State during the six months ended June 30,1929 720,721

No. 101. Number and liabilities of State, private, and national bankswhich failed in each State during the year ended June 30,1929 722,723

No. 102. Number and liabilities of State, private, and national bankswhich failed in years ended June 30, 1914 to 1929 724

No. 103. Statements of resources and liabilities of the individual nationalbanks (States, Territories, and towns arranged alphabetically)at close of business December 31, 1929. {Omitted from thisreport and published as a separate table.)


REPORTOF THE

COMPTROLLER OF THE CURRENCY

TREASURY DEPARTMENT,OFFICE OF THE COMPTROLLER OF THE CURRENCY,

Washington, December 2, 1929.SIR: I have the honor to submit the following annual report in

accordance with the provisions of section 333 of the United StatesRevised Statutes, covering activities of the Currency Bureau, inthe year ended October 31, 1929. This is the sixty-seventh reportmade to the Congress since the organization of the bureau.

LEGISLATION RECOMMENDED

Amendments to the national hank axt

The experience of the postwar period has been of sufficient durationto permit a comprehensive appraisal of the effect of the new economicand social conditions upon our system of banking, Briefly stated, itmay be said that banking is following in the wake of the trend ofbusiness in general toward larger operating units with stronger capitalfunds and more experienced and highly trained management. Thenatural result has been that the larger cities are being favored withbanking organizations of great financial stability with the capacityto render a better and more diversified type of service.

In the principal cities, therefore, in various parts of the country,there have grown up through mergers and. through increases in thevariety and volume of business banking institutions which for strengthof capital and management technique were unknown in the pre-warperiod. There have been no failures of any of these types of metro-politan banks. They are giving the general public a safer and highertype of banking service than has hitherto been known. Their sta-bility rests upon the great diversity of banking business to which theyhave access and to the further fact that they are able to secure themost highly trained and experienced talent. These banks compriseboth unit and branch banking institutions.

The aggregate of all the banking resources in the United States isabout $72,000,000,000, held by a little more than 25,000 banks (as ofJune 29, 1929), but 250 banks hold resources to the aggregate amountof approximately $33,400,000,000.

While the largest and strongest banks with the bulk of the bankingresources are in the large cities, about three-fourths of all the banksin number are in the smaller towns and cities and may be classed as


2 REPORT OF THE COMPTROLLER OF THE CURRENCY

country banks. It is these banks which serve directly the agricul-tural communities. ^ They operate with small capital funds and arevery much limited in their ability to employ a trained management.The economic developments of the postwar period have had the effectof decreasing the opportunities of these banks to operate with profitand it is this situation to which I should like to direct your mostserious consideration.

We are faced with the fact that during the 9-year period fromJuly 1, 1920, to June 30, 1929, inclusive, about 5,000 banks,nearly all in the agricultural communities, closed their doors andtied up deposits of approximately Sl^ OOjOOOjOOO.1 These failureshave not been limited/ to any one section of the country, althoughthey have been most prevalent in the agricultural districts. Up toNovember 1, 521 banks with deposits of about $200,000,000 had sus-pended during the year 1929. The number of failures by Statesduring the fiscal years ending June 30, 1921 to 1929, inclusive, is asfollows:

Maine . - _'New Hampshire . _Vermont _ . _.MassachusettsRhode Island _ . __ .Connecticut

Total New England States . . . ._ _. . . .

New Jersey . - .__.-_._._.--. - _ ._ ._ . .PennsylvaniaMaryland - - . - - -District of Columbia

Total Eastern StatesVirginiaWest Virginia J. ._ - -_North Carolina - -- -- --South CarolinaGeorgia __FloridaAlabama - _Mississippi . .Louisiana . ,Texas .ArkansasKentucky Tennessee

Total Southern StatesOhioIndiana -IllinoisMichiganWisconsin _ _ _ . . . .Minnesota . ._ .Iowa - _ _-Missouri ._

Total Middle Western States .._North Dakota ._ .South DakotaNebraska _ KansasMontana - _ . -Wyoming

Stateand

private

311

1512

2310265

41292198

170293110224033

178804056

1,1702878686357320

386241

1,241

38526427918213652

National

1113

2

11111

1624

122112134S1

3983

122

81313g

68815

188

5128125511

i These figures embrace only those banks which actually went into the hands of receivers* They do notinclude about 500 banks which suspended business but were later reopened after reorganization} oftenresulting in depositors and shareholders voluntarily suffering some loss.


REPORT OF THE COMPTROLLER OF THE CURRENCY

ColoradoNew MexicoOklahoma

Total Western StatesWashington.. .Oregon _California - - - . . . . . . . . .IdahoUtahNevadaArizona .. ._-. . . .__. . .

Total Pacific StatesThe Territory of Hawaii. ..

Total United States

Stateand

private

6040

174

1,572= = = = =

41361348]32

27

180

1

4,228

National

162053

305

87

1625

4

3

63

697

As will be observed from the foregoing table the failures of Statechartered banks greatly outnumber those of the national banks, butsmall national banks have not been immune to the conditions whichare causing the failures of small country banks generally. As anillustration of the wide scope of this economic condition, it may besaid that in seven States over 40 per cent of all the banks in existencein 1920 have failed and in six States between 25 and 40 per cent.In 26 States, or more than one-half the total, over 10 per cent of thebanks that were in operation in 1920 have since failed. When it isconsidered that no important failures have occurred among banks inthe larger cities, the ratio of failures in the country districts is evenhigher.

We have here, therefore, a strong contrast between city and countrybank operations. Whereas the depositor in a large city bank, whethera wage earner or a business man, has had full protection, the depositorin the small country bank has suffered severely from the inability of somany of these banks to meet their deposit liabilities. The farmingcommunities have not been afforded the protection for their savingswhich has been available to depositors in the large cities.

It is cause for immediate concern that the operating conditionsfaced by the country banks show no prospect of improvement under-the present system. There are many country banks now operatedat a loss and many others operating upon earnings insufficient tojustify their capital investment. There is not available to me theearning statements of State banks, but taking the national banks asan illustration and the year 1927 as a typical year (later earningfigures not being compiled) 966 national banks operated at a loss andan additional 2,000 earned less than 5 per cent. These constitutedabout 38 per cent of all national banks in the United States.

Comprehensive study of the banking situation for the past nineyears clearly indicates that the system of banking in the rural com-munities has broken down through causes beyond the control of theindividual banker or the local community. These causes are of abasic nature and have many ramifications throughout the greateconomic and social changes which have occurred in the UnitedStates since 1914. I shall not attempt in this report a detailed analysisof this situation except to say that the economic movement away from



a large number of independent local utility and industrial operatingunits toward a stronger and more centralized form of operation inthe large cities has curtailed the opportunities of the country bank fordiversity and extension of business while broadening these opportuni-ties for the large city bank.

Any attempt to maintain the present country bank system by forceof legislation in the nature of guaranty of deposits or the like, wouldbe economically unsound and would not accomplish the purposeintended. If in the free course of business the country bank can notsuccessfully operate as an independent banking corporation, affordingample protection to its depositors and its stockholders, the obligationand responsibility is upon the Government of the United States, atleast so far as the national banks are concerned, to set up a system ofnational banking which will insure the rural communities against thecontinuing disastrous effects of local bank failures.

There have been no general financial panics in this country sincethe warthanks to the Federal reserve system. Any bank can haveaccess, directly or indirectly, to the benefits of the Federal reservesystem to the extent of its sound commercial and business loans andthe decline of the country banks has taken place notwithstanding thevaluable assistance rendered by the Federal reserve system. A Federalreserve bank is not charged with the responsibility of preventingbank failures. I t is beyond the power of the Federal reserve system,as it is beyond the power of any governmental agency, to stand betweenthese banks and insolvency.

In the absence of legislation to remedy the conditions abovedescribed, private enterprise has within recent months^ undertaken tomeet the economic situation presented by the growing isolation of thecountry banks. Local holding companies have been formed in manysections of the country for the purpose of bringing together a numberof banks into a single operating group. The usual procedure is forthe holding company, a State corporation, to purchase a majorityof the stock of several banks, one of which would be a large city bankwhich in effect becomes the parent bank of thegroup. Themanagementpersonnel of the central bank becomes in practice the responsiblemanagement for the entire group. Through such a group system itappears to be possible to make a close approach to a form of branchbanking whereby each operating unit leans for support upon thecentral bank, or upon the holding company, and receives the benefitsof its moral and financial support; its prestige and good will; its ex-tension of the wider type of banking service; and the benefits of itshighly trained management.

This holding-company movement is of such recent developmentthat complete statistics are not yet available as to the number ofcompanies in operation or the number of banks taken over. Itappears that in many cases some of the most responsible bankers andbusiness men of the community have been instrumental in the organi-zation of these holding companies and this it would seem is a sufficientindication of the seriousness of the purpose behind the movement.However, these holding companies are attempting to do under thesanction of existing laws, which are crudely adapted to the purpose,what should be made possible in a simpler manner by new legislation.If branch banking were permitted to be extended from the adequately


REPORT OF THE COMPTROLLER OF THE CURRENCY 5

capitalized large city banks to the outlying communities within theeconomic zone of operations of such banks, there would be no logicalreason for the existence of the local holding company and it wouldgive way to a system of branches operated directly by the centra!bank of the group.

These conditions would seem to warrant a further amendment ofsection 5155 of the Kevised Statutes of the United States as amendedby the act of February 25, 1927 (U. S. Code, title 12, sec. 36), known,as the McFadden Act, to permit national banks, with the approvalof the Comptroller of the Currency, to establish branches within thetrade areas of the cities in which such banks may be situated. Thesetrade areas may in some cases be coextensive with Federal reservedistrict lines; in other cases they may be of a more limited extent,but in my judgment they should not extend beyond Federal reservedistrict boundaries, except to take care of a few exceptional caseswhere a trade area may extend from one Federal reserve districtinto another, nor should a bank be permitted to establish a branchin another city in which there is a Federal reserve bank or a branchthereof.

Under such a system of branches there would gradually be extendedto the agricultural communities from the large city banks a safe andsound system of banking which would render remote the possibilityof bank failures. There would, however, be no compulsion uponunit banks to enter a branch organization. The two systems ofbankingunit banking and branch bankingwould no doubtoperate side by side for an indefinite length of time; that is to say,there would be in every rural section some unit banks well organized,competently managed and held in high esteem by the community,which would continue to operate advantageously.

These suggestions for branch banking are made not with theintention primarily to deal with the question of the decline in thenumber of national banks through defection from the national to theState systems, but rather as a, remedy for what appears to be a seriousand fundamental weakness in our systems of banking both nationaland State. Such a grant of power to the national banks would,however, give them such an outstanding operating advantage that itwould seem reasonable to expect that the exodus of banks from thenational system would practically cease and that many now underState supervision would return to the national charter which theyhave forsaken.

Any such legislation, based not upon the theory of equalizing thenational with the State bank charter powers but giving a real ad-vantage to the national charter, would be fully justified under exist-ing conditions which seriously jeopardize the maintenance of thenational banking system. The State legislatures have for yearsgiven to the State banks operating advantages which the nationalbanks did not possess and it is in this situation that we find themotive for the abandonment of national charters. There is appendedhereto a list of 127 large national banks which have within the past10 years given up their national charters for the purpose of operat-ing under State charters.



Name and location of bank State Capital Resources

Year ended Oct. 81,1920Third National Bank of AtlantaMerchants National Bank of the City of New York-Security National Bank of Los Angeles : . .Farmers National Bank of FresnoMercantile National Bank of San Francisco

GeorgiaNew York.California

dodo

Year ended Oct. 81,1921National Reserve Bank of Kansas CityMidwest National Bank & Trust Co. of Kansas C i t y -Lincoln National Bank of RochesterFirst National Bank of ClevelandUnion National Bank of NewarkUnion Commerce National Bank of Cleveland-_Canal-Commercial National Bank of New OrleansNational Bank of Commerce of ToledoCentral National Bank of St. LouisNational Commercial Bank of ClevelandLiberty National Bank of New YorkNational Bank of Commerce of Kansas CityUnion National Bank of PasadenaRidgewood National Bank, RidgewoodNational Bank & Trust Co. of Pasadena

Missourido

New York-.OhioNew Jersey,.Ohio..Louisiana...Ohio-Missouri. _.OhioNew York..Missouri-_-California,.New York..California. _

Year ended Oct. 81,1922First National Bank of FresnoFirst National Bank of BerkeleyFirst National Bank of BakersfieldAtlantic National Bank of the City of New YorkBank of New York National Banking AssociationNational State & City Bank of Richmond

dododo

New Yorkdo

Virginia -Year ended Oct. 81,1928

Merchants National Bank of San Diego.Lowry National Bank of AtlantaIrving National Bank, New YorkBank of North America, PhiladelphiaMerchants National Bank of San FranciscoFirst-Second National Bank of Akron _Importers and Traders National Bank of Now YorkMerchants National Bank of Raleigh _Luzerne County National Bank of Wilkes-BarreBattery Park National Bank of New YorkAmerican National Bank of San Francisco _Ninth National Bank of Philadelphia

CaliforniaGeorgiaNew YorkPennsylvaniaCaliforniaOhio.New YorkNorth Carolina..Pennsylvania.. .New YorkCaliforniaPennsylvania-__

Year ended Oct. 81,1924Fourth National Bank of CincinnatiWells Fargo National Bank of San FranciscoNational Exchange Bank of BaltimoreLafayette National Bank of Buffalo,Continental National Bank & Trust Co. of Kansas City-Northern National Bank of Toledo..Long Beach National Bank, Long BeachSecond National Bank of ToledoCorn Exchange National Bank of Chicago

Year ended Oct. 81,1925First National Bank of Oakland-Fifth National Bank of the City of New YorkGotham National Bank of New York. _National Union Bank of Boston

OhioCalifornia..Maryland-New York.MissouriOhio.California..OhioIllinois

CaliforniaNew York

do._Massachusetts. .

Year ended Oct. SI, 1926Manufacturers & Traders National Bank of BuffaloCoal & Iron National Bank of the City of New YorkFirst National Bank of HammondPlanters National Bank of RichmondNorwood National Bank of GreenvilleNational Exchange Bank of ProvidenceFirst National Bank of JamaicaCity National Bank of Plainfield.-State National Bank of North TonawandaPhoenix National Bank of HartfordNational Exchange Bank of LockportSecond National Bank of HobokenFirst National Bank & Trust Co. of UticaNational American Bank of New YorkNational Butchers & Drovers Bank of the City of New

York.

New Yorkdo._

IndianaVirginia. .-South Carolina-Rhode Island. . .New YorkNew JerseyNew YorkConnecticutNew YorkNew JerseyNew York

do. . . . do

$1,000,0003,000,000

600,000300,000

2,000,000

1,000,0001, 000,0001,000,0002, 500,0001, 500,0004,000,000

500,0001,000, 0001, 000, 0001, 500, 0005,000, 0004,000,000

375,000300, 000300,000

500, 000300,000400,000

1, 000,0002, 000, 0001,000,000

250,0001,000,000

12, 500,0002, 000,0001, 500,0001, 500,0001, 500, 000300,000400,000

1, 500, 0002,000, 000500.000

500,0006,000,0001, 500,0001,000,000500,000

1,000,000200,000

1,000,0005,000,000

1,000,0001, 200,0001, 500,0001,000,000

2,000,0001, 500,000250,000

1,000, 000250,000

1, 250, 000200,000150, 000600, 000

1, 000, 000300, 000700, 000

1, 250, 0001, 000,0002,000,000

$27,053,00049,942,0008,358,0006,985,00020,224,000

11,534,00012, 542,00022, 272,000101, 524, 00031,372,00078, 323,00011, 863, 00016,781, 00027, 629,00014, 765, 000

121, 642,00068, 613, 0005,404,0009, 224,0005,490,000

9,771,0006,717,0002* 127,00021, 776,00076,135,00015, 854,000

5,108,00021, 350,000297,935,00031, 490, 00015,052,00022,603,00043, 550,0005, 576, 0005, 018, 000

12, 962, 00025,623 00014, 527,000

12,418,00093,806,00017, 532,0009,128,000C, 499,00015,692,0007,112,00016,477,000132,302,000

11,953,00025,302,00019,371,00017,129,000

61,935,00025,778,0005,433,00017,547,0007,085,000

20, 871,0009, 862,0007,198, 0008, 007, 00017, 714, 0006, 655,0006, 653,00019,821,00012, 576, 00014,447,000



Name and location of bank

Year ended Oct. 31,1927American Exchange-Pacific National Bank of New York...First National Bank of AlbanyWest Branch National Bank of WilliamsportCitizens National Bank & Trust Co. of CincinnatiFifth-third National Bank of CincinnatiMerchants & Manufacturers National Bank of NewarkCommercial National Trust & Savings Bank of Los Angeles.Griswold National Bank of DetroitAmerican National Bank of Newark __Franklin National Bank in New York

Year ended October SI, 1928Union National Bank of Philadelphia._ ...->.-City National Bank of Holyoke National Bank of Commerce in Chicago.National Bank of Commerce in PhiladelphiaHamilton National Bank of New YorkBronx National Bank of the City of New YorkFirst National Bank of Bangor _.Liberty National Bank of CovingtonFirst National Bank in Columbus_Massasoit-Pocasset National Bank of Fall River ___United Capitol National Bank & Trust Co. of New YorkFlushing National Bank, FlushingNational Bank of RochesterBroad Street National Bank of PhiladelphiaNational Bank of North PhiladelphiaNational City Bank of Los Angeles

Year ended Oct. 31, iFirst National Bank of BrooklynSeventh National Bank of New York.American National Bank of RichmondMerchants National Trust & Savings Bank of Los Angeles. _Northern National Bank of PhiladelphiaNational Union Bank of Maryland at Baltimore -Mercantile National Bank in Dallas . - . . First National Bank of Long BeachNational Bank of Commerce in New YorkFirst National Trust & Savings Bank of WhittierBloomfield National Bank, BloomfieldOld National Bank of Grand RapidsHanover National Bank of the City of New York.,Third National Bank of SyracuseLiberty National Bank & Trust Co. of SyracuseChemical National Bank of New YorkChapman National Bank of PortlandLouisville National Bank & Trust Co,, LouisvilleMerchants National Bank of Detroit _..Arcadia National Bank & Trust Co. of Newark. .Seaboard National Bank of the City of New YorkMerchants-Laclede National Bank of St. LouisState National Bank of St. LouisTenth National Bank of PhiladelphiaCommunity National Bank of Buffalo..... _Fordham National Bank in New Y o r k . . . . . . *.___Thamet National Bank, Norwich _Norwood National BankCity National Bank of San AntonioNational City Bank of Akron _National Bank of Niagara & Trust Co., Niagara FallsCitizens National Bank of Raliegh.Murchison National Bank of WilmingtonAmerican National Bank & Trust Co. of Greensboro _City National Bank & Trust Co. of Bridgeport

State

New York.,.do -

Pennsylvania.Ohio

do-New Jersey. . .CaliforniaMichiganNew Jersey. . .New York

Pennsylvania..Massachusetts.Illinois..Pennsylvania..New Y o r k . . . . .

doMaineKentucky..Ohio.Massachusetts.New York

do. . . . . . . doPennsylvania-.

doCalifornia

New York..doVirginiaCaliforniaPennsylvania...MarylandTexas .CaliforniaNew YorkCaliforniaNew JerseyMichiganNew York

do_.dodo

MaineKentucky..Michigan.New York. . . . .doMissouri

do-Pennsylvania...New York

do-ConnecticutOhioTexasOhio-New YorkNorth Carolina.. . . . .doConnecticut.

Capital

$7, 500, 000600, 000500,000

2,000, 0003, 000, 0001. 350, 0002, 000, 0002, 000, 000

500, 000800,000

1,000,000500,000800, 000500,000

1, 500, 000300,000400,000350,000500,000650, 000

5, 000,000200,000

1,200, 000500,000700, 000

1,000, 000

1,000,0001,500,0002,000.0004,000,000400,000

1,000, 0001,000, 000200,000

25,000, 000250,000300,000800,000

10,000, 000300,000400,000

6,000,000400,000750,000

2,000,000200,000

11,000, 0001, 700, 0002,000, 0001,000, 0001,000,000500,000

1, 000, 000200,000

1,000,0001,000,0001,200,000750,000

1,000,0001,000,0001,000,000

Resources

$264,212,00015,154,0009, 657,000

20, 330,00053, 527, 00020, 458,00025,116,00022, 733, 00017, 662,0007, 263,000

23, 044, 0005, 893,0007, 717,00010,732,00019,216,000 i9,986,000 i8,308,000 :5,676, 000 i14,071, 0006,752,000 ]53,144,000 =5,070, 000

22,558, 000 !12, 293, 000 ;6,872, 00010, 898, 000

23,025,00014, 524, 00021,774,000164,645,00010,256,00011,052,00013,950,0006,916, 000

684,456,0005,639,0007,457,00016,666,000209,026,0005, 508,0005,002,000

233,708,0009,750, 00014,679,00026,780,0005,666,000

286,954,00023,751,00021.667,00010,746,00023, 596,0005,616,0005,218,0005,157,00014,040,00015,461,00013,492,0008,679,00012, 285,00011,297,00018, 351,000

Recapitulation by years

192019211922192319241925

Number

5156

1294

Capital

$6,900,00024,975,0005,200,000

24,950,00016, 700,0004,700,000

Resources

$112, 562,000538,978,000137,380,000500, 794,000310,956,00073,755,000

19261927..19281929

T o t a l -

Number

15101635

127

Capital

$13,450,00020,250,00015,100,00082,850,000

215,075,000

Resources

$241,582,000456,112,000222,230,000

1,966, 789,0004, 561,148, 000

7900330 2Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis


Many smaller national banks during this period also relinquishedtheir charters to go into the State system, but the foregoing list includesonly banks of the metropolitan class.

Following the approval of the McFadden Act (act of February 25,1927) several large State banks were converted into national banks,but this gain has been far more than offset by the recent great loss ofnational charters. Boards of directors of banks and their stockholders,in giving consideration to the question of whether the corporationshould operate under the national or the State charter, are not movedby questions of sentiment or patriotism. The fact that a nationalbank is an instrumentality of the Federal Government designed tofulfill* certain public purposes does not seem to be considered anoperating advantage to the bank. The corporation must in the natureoi the case be moved almost solely by consideration of the most profit-able use of the capital invested in the enterprise. In other words,the question of the choice of charter presents to the corporation abusiness proposition. In the history of banking in the United Statessince 1863 banking corporations have switched from State to nationaland from national to State charters as the business advantages laywith the one or the other. From the standpoint therefore of theoperating banker the grant of the wider branch banking powers tonational banks would be considered by him as an invitation to enlargethe sphere of his business operations to the greater advantage of hisstockholders.

The Government of the United States, as distinguished from thenational banking corporation, would be concerned primarily with thequestion of strengthening the national banks as Federal instrumen-talities and with the establishment of a sound system of bankingthroughout the United States. Under the existing trend with theoperating advantage in favor of the State banks the development isin the direction of 48 separate and distinct systems of commercialbanking each under the supervision, control, and direction of aseparate State government with a corresponding disappearance ofthe national banks from the field. ^

It has been said that this situation does not present any cause forconcern for the reason that the Federal reserve system which embracesState banks in its membership has made the national banking systemunnecessary. The Federal reserve act, however, did not set up asystem of banks in the United States. It did set up a system of co-ordination of bank reserves and a flexible currency, which operateadvantageously for all banks. The approach to equalization be-tween the State and national banks afforded by the Federal reservesystem does not involve a rearrangement of charter powers but anextension of the privileges tod the benefits of the Federal system toState chartered banks. If therefore, in addition to these privilegeswhich they derive from the Federal Government, they secure fromtheir respective legislatures charter powers giving them certainoperating advantages over national banks, the Federal reservesystem thus becomes indirectly the means of forcing national banksto take out State charters.

The announced legislative policy of the so-called McFadden BankAct of February 25, 1927, was parity between the national and Statesystems. The purpose of the bill was to make the charter powers of


KEPOKT OF THE COMPTROLLER OF THE CURRENCY 9

national banks approximately equal in operating advantage tothose of the State banks. Nearly three years of operation under thatact has demonstrated that it has failed of its purpose in this respect.

The theory of parity between the two systems of banks is, in myopinion, economically unsound. Commerce is interstate and isrecognized by the Constitution of the United States as being funda-mentally a national question. One of the primary purposes of thenational bank act of 1863 was to establish a sound and uniform systemof commercial banking throughout the country in order that com-mercial transactions growing out of the production, the manufacture,and the transportation of goods and commodities from one sectionof the country to the other might not be hampered by local bankinglegislation but should have access to a system of banks operatingunder Federal authority and supervision under a single set of rulesand regulations and statutory enactments in order that the free flowof commerce should not be embarrassed by a multiplicity of restric-tions having their origin in local political conditions.

The proposal for the extension of branch banking which is heremade would have the direct effect of establishing a strong system ofbanks in the rural districts and indirectly it would lead to the gradualrestoration of the national banks as the primary system of commercialbanking in the country.

While it would seem to be to the interest of the local bank holdingcompanies to convert their groups of banks into branches after theenactment of legislation as above outlined, there might possibly stillremain in operation some of these local companies and some of awider regional operation. In view of the fact that such companiesare outside of all jurisdiction of the Federal Government and thatthey would be in a position to dictate the policies and .operations ofsuch national banks as they controlled through stock ownership,I further recommend to the^ Congress an amendment to the nationalbanking laws which will bring the operations of such bank holdingcompanies under some degree of Federal supervision where they ownthe majority of the stock of more than one national bank and afurther amendment to safeguard the additional shareholders' liabilitywhich each such bank holding company incurs through the ownershipof the shares of national-bank stock.

Under the present law it is necessary for a national bank, in orderto exercise fiduciary powers, to obtain a permit from the FederalReserve Board. The trust department of a national bank is develop-ing into one of the most important branches of its business. Trustcompanies exercise their fiduciary powers by direct grant of charterpower from State legislatures; national banks should have a similargrant from Congress.

I, therefore, recommend that the law be so amended as to providethat the exercise of fiduciary powers shall be one of the corporatepowers of a national banking association subject to the existinglimitations in regard to State law, etc., now contained in paragraph(k) of section 11 of the Federal reserve act.

I renew the recommendation made in my annual report to theSeventieth Congress that the law be amended to give the comptrollersupervision over the national banking associations going into volun-tary liquidation. Under the present law, the comptroller's authority


1 0 REPORT OF THE COMPTROLLER OF THE CURRENCY

is limited to the appointment of a receiver, provided a bank inliquidation should prove to be insolvent. The reports of the liqui-dating agent are not required under the law, although they arefrequently furnished voluntarily. At present the liquidation of anational bank may be carried on for a period of time and later proveto be insolvent, necessitating the appointment of a receiver. Credi-tors who have been settled with prior to such appointment may thusobtain preference over other creditors. It is believed that it wouldbe a step forward if the liquidating agent of a national bank weremade subject to the comptroller; be required to give bond and torender reports in the same manner as is required of a receiver untilthe affairs of a liquidating bank are finally closed.

It is again recommended that a law be enacted making it a criminaloffense to maliciously or with intent to deceive, make, publish, orcirculate any false report concerning any national bank or any othermember of the Federal reserve system which imputes insolvency orunsound financial condition, or which may tend to cause a generalwithdrawal of deposits from such bank or may otherwise injure thebusiness or good will of such bank.

Amendments to the laws of the District of ColumbiaI renew the recommendations made to the Seventieth Congress

that the following laws be enacted:1. Giving the comptroller the right and power to make regulations

governing savings banks or trust companies doing a banking businessin the District of Columbia with a penal provision for the enforce-ment of such regulation; the regulations to be limited so that theyshall not in any case place restrictions upon such banks which arenot placed upon national banks.

2. Prohibiting the use of the word "bank" or the words "trustcompany" by any firm, copartnership, company, or corporationdoing business in the District of Columbia and not doing a bankingor fiduciary business under the supervision of the Comptroller of theCurrency and providing in the event such title shall be used by afirm, copartnership, company, or corporation doing a banking orfiduciary business, it shall be subject to the approval of the Comp-troller of the Currency.

3. The corporations with their principal place of business outsideof the District of Columbia may not establish offices in the Districtof Columbia and do a fiduciary business without the permission ofthe Comptroller of the Currency and without complying with thegeneral conditions of the corporation laws of the District whichhave been enacted for the protection of those who do business withcorporations with their principal place of business in the District.

While the building and loan associations in the District of Columbiaare examined and supervised by the Comptroller of the Currency,there is no provision of law which prohibits any building and loanassociation from organizing and doing business in the District ofColumbia regardless of its merits. I recommend that a law be passedwhich would prohibit any building and loan association from doingbusiness in the District of Columbia or maintaining an office in theDistrict of Columbia without first securing the approval of theComptroller of the Currency and that any violation shall constitute


REPOBT OF THE COMPTROLLER, OP THE CURRENCY 11a penal offense and be punishable in the same manner as now providedby the act of April 26, 1922, entitled " An act regulating corporationsdoing a banking business in the District of Columbia.77

BRANCHESIn the comptroller's report for the year ended October 31, 1927,

the statement was made that under the provisions of the act ofFebruary 25, 1927, the Comptroller of the Currency had approvedthe establishment of new city branches to the number of 127. Inthe year following 103 new city branches were authorized and duringthe year ended October 31, 1929, the number authorized was 89.Of the 319 local branches authorized by the comptroller 75 have beendiscontinued leaving the total of city branches now in operationauthorized by the comptroller under the provisions of the McFaddenAct as 244.

During the past year 2 branches were added to the system throughthe conversion of a State bank and 82 branches were added throughthe consolidation of State banks with national banks. These addi-tions, together with those branches in the system under date ofOctober 31,1927, less 104 branches dropped through action of directorsand shareholders or liquidation of national banks makes a total of1,061 branches in existence in the national banking system as ofOctober 31, 1929, summarized as follows:

Classes

Statutory-!^Additional offices, c branchesMillspaw Act0 branches

Totals

Inopera-tionFeb.

25,1927

165202

5

372

Inexist-enceOct.

31,1928

469162168

6187992

Author-ized

duringyear

endedOct.

31,1929

282

89173

Closed during the year endedOct. 31,1929

Share-holders

1

1

Direc-tors

1

56

Lapsed

I1011

Volun-tary

liqui-dation

44

2517

86

Totalin

exist-enceOct.

31,1929

427243142

6244

1,061


12 REPORT OF THE COMPTROLLER OF THE CURRENCYTable showing number and manner of acquisition of branches of national banks dur-

ing the year ended October SI, 1929

Char-terNo.

Title and location

Branches authorized duringthe year ended Oct. 31,1929

Undaeract Feb.25, 1927

By con-versionor by

consoli-dationunder

act Feb.25, 1927

Totalnumber

3728

592735381254524917632

34255046

504515599617

S550

200322643

119035155

75891052787038148

374118299123709

1495337

1319313292

237010778130279955

128921326012900

6581461

1103413045

653

ARIZONA

First National Bank of Arizona at PhoenixCALIFORNIA

Citizens National Trust & Savings Bank of Los AngelesMerchants National Trust and Savings Bank, Los Angeles.Seaboard National Bank of Los AngelesSecurity-First National Bank of Los AngelesUnited States National Bank of Los Angeles

DISTRICT OF COLUMBIA

National Bank of WashingtonRiggs National Bank of Washington.

Fourth National Bank of Atlanta.Atlanta and Lowry National Bank, Atlanta-Fulton National Bank of Atlanta.

HAWAII

Bishop First National Bank of Honolulu...MASSACHUSETTS

First National Bank of Boston.Second National Bank of BostonAtlantic National Bank of Boston...Boston National BankNational Shawmut Bank of Boston.

MICHIGAN

Old-Merchants National Bank and Trust Co. of Battle Creek.First National Bank in DetroitNational Bank of Commerce of DetroitCapital National Bank of Lansing

NEW JERSEY

First National Bank of Jersey City _Hudson County National Bank, Jersey City ._New Jersey NationalBank & Trust Co. of Newark.Broad Street National Bank of Trenton

NEW YORK

First National Bank & Trust Co. of Elmira ,Merchants National Bank and Trust Co. of ElmiraBank of America National Association, New YorkBrooklyn National Bank of New York _ ,Chase National Bank of the City of New YorkChatham Phenix National Bank & Trust Co., New York.Claremont National Bank of New York _Harriman National Bank and Trust Co. of New YorkLafayette National Bank of Brooklyn in New YorkLefcourt National Bank and Trust Co. of New YorkMelrose National Bank of New York _ ,Nassau National Bank of Brooklyn in New York ,National City Bank of New YorkPublic National Bank & Trust Co. of New YorkSeward National Bank and Trust Co. of New York ,First National Bank & Trust Co. of Yonkers

16


EBPORT OF THE COMPTKOLLEB OF THE CUBBENCY 13Table showing number and manner of acquisition of branches of national banks dur-

ing the year ended October 81, 1929Continued

Char-terNo.

32

352723

131803604542

1606784813349

Title and location

OHIO

Second National Bank of Cincinnati.PENNSYLVANIA

Sixth National Bank of Philadelphia . .-.Central National Bank of PhiladelphiaCity National Bank & Trust Co. of PhiladelphiaCommercial National Bank and Trust Co. of Philadelphia-...Corn Exchange National Bank and Trust Co., Philadelphia.,

TENNESSEE

First National Bank of ChattanoogaHamilton National Bank of ChattanoogaUnion Planters National Bank & Trust Co. of Memphis

WISCONSIN

First Wisconsin National Bank of Milwaukee

Totals

Branches authorized duringthe year ended Oct. 31,1929

Underact Feb.25,1927

By con-version

or byconsoli-dationunder

act Feb.25, 1927

84

Totalnumber

3111

10

2173

Table showing number and class of branches of national banks closed during the yearended October 31, 1929

Char-ter

No.Title and location Manner of closing

Branches closed

Branches underact of Feb. 25, 1927

Addi-tionalofficeswhich

becamebranchesFeb. 25,

1927

Branchesauthor-

izedsince

Feb. 25,1927

Statebank

branchesin oper-

ationFeb. 25,

1927,which

were con-vertedor con-

solidated

Total

3538

2491

1928

5161

37412255

CALIFORNIA

Merchants National Trust andSavings Bank of Los Angeles.

Security-First National Bank ofLos Angeles.

DISTRICT OF COLUMBIA

Farmers & Merchants NationalBank of Washington.

Louisville National Bank andTrust Co., Louisville.

NEW JERSEY

First National Bank of Jersey City.Journal Square National Bank of

Jersey City*

Voluntary liquidation.1 board of directors

and 1 resolution ofshareholders and 2lapsed.

Lapsed-

Voluntary liquidation.

ReissuedBoard of directors..

2 ! 36

4


14 REPORT OF THE COMPTROLLER OF THE CURRENCYTable showing number and class of branches of national banks closed during the year

ended October 81, 1929Continued

Char-terNo.

Title and location Manner of closing

Branches closed

Branches underact of Feb. 25, 1927

Addi-tionalofficeswhich

becamebranchesFeb. 25,

1927

Branchesauthor-

izedsince

Feb. 25,1927

Statebank

branchesin oper-

ationFeb. 25,

1927,which

were con-vertedor con-

solidated

Total

117685137923

118442370149913529955658733

1461121231228412122

101121766

3423

11476

4192

1606

150

6229

NEW YORK

Community National Bank ofBuffalo.

Merchants National Bank andTrust'Co. of Elmira.

First National Bank of Brooklyn,New York.

Seventh National Bank of NewYork.

Chase National Bank of the Cityof New York.

Chemical National Bank of NewYork.

Hanover National Bank of theCity of New York.

Harriman National Bank andTrust Co. of New York.

Nassau National Bank of Brook-lyn in New York.

National Bank of Commerce inNew York.

National City Bank of New York.Seaboard National Bank of the

City of New York.National Bank of Niagara and1

Trust Co. of Niagara Falls.Liberty National Bank and

Trust Co. of Syracuse.NORTH CAROLINA

American National Bank andTrust Co, of Greensboro.

Citizens National Bank of Raleigh.PENNSYLVANIA

Tenth National Bank of Phila-delphia.

Commercial National Bank andTrust Co. of Philadelphia.

Drovers and Merchants NationalBank of Philadelphia.

Northern National Bank of Phila-delphia.

TENNESSEE

First National Bank of Chatta-nooga.

Fourth and First National Bankof Nashville.

VIRGINIA

American National Bank of Rich-mond.

Total (29 banks)

Voluntary liquidation.LapsedVoluntary liquidation.

doReissuedVoluntary liquidation.

doBoard of directorsReissuedVoluntary liquidation.

ReissuedVoluntary liquidation.

,-do.do

doBoard of directors..

Voluntary liquidationBoard of directorsVoluntary liquidation

do

ReissuedBoard of directors..

Voluntary liquidation.

10

26 45 104


REPORT OF THE COMPTROLLER OF THE CURRENCY 1 5

ORGANIZATION AND LIQUIDATION OF NATIONAL BANKS

There were 7,506 national banking associations in existence at theclose of the current year, October 31, 1929. This number was lessby 201, or 2.67 per cent, than the number in existence at the close ofthe preceding year on October 31, 1928. The decrease in aggregateresources as evidenced by the last call, October 4, 1929, comparedwith aggregate resources on October 3, 1928, was $1,001,170,000, orabout 3.58 per cent.

This office has during the past year continued to exercise its policyof extreme care in granting charters for national banks, based primarilyon the needs of the community for additional banking facilities.

During the current year 42.43 per cent of the number of applicationsreceived for the establishment of new national banks were approved,as compared with 39.6 per cent the previous like period, 44 per centthe year prior thereto, and 52 per cent the year 1926.

In other words, despite the fact that the number of applicationsreceived remains about the same, the number approved by this officeis constantly becoming smaller and in the current year a less number ofapplications was approved than has been approved any year duringthe past 12-year period, except last year when the number approvedwas 103 against 129 for the current year.

Up to and including October 31, 1929, there have been authorizedto begin business 13,390 national banking associations, of which 4,643were voluntarily closed to discontinue business or amalgamate withother banks, State or National, including those consolidated withother national banking associations under authority of the act ofNovember 7, 1918. Exclusive of banks which failed but were sub-sequently restored to solvency, the loss to the system by banksliquidated through receiverships was 1,241, the number of thesereceiverships being a fraction less than 9.26 per cent of the totalnumber of banks organized.

In November, 1914, there were in existence 7,578 national bankswith capital of $1,072,492,175. Since that date the net decrease inthe number of banks was 72, but there was an increase in capitalof $613,759,490. The capital of the banks in existence on October31, 1929, was $1,686,251,665. In this 15-year period 2,738 bankswere chartered with capital of $354,630,300. During this period,however, 2,810 associations were closed voluntarily or otherwise.

Applications to organize national banks and to convert State banksinto national banking associations were received in the current yearto the number of 304, with proposed capital stock of $68,880,000. Ofthe applications pending 129 were approved with proposed capitalstock of $26,690,000, 120 rejected with proposed capital stock of$34,955,000, and 50 abandoned with proposed capital stock of$6,630,000. National banking associations to the number of 141,with capital of $38,195,000, were authorized to begin business, ofwhich 5 were located in the New England States, 32 in the Eastern,31 in the Southern, 31 in the Middle Western, 22 in the Western,and 20 in the Pacific States. The greatest activity as indicated bythe number of banks organized was in the following States: NewYork, 21 banks; Texas, 11; California, 10; Florida, 9; Minnesota, 7;Illinois, 6; Nebraska, 6; Missouri, 6; North Dakota, 6; New Jersey,5; Pennsylvania, 5; Massachusetts, 4; Washington, 4; and South


1 6 REPOBT OF THE COMPTROLLER OF THE CURRENCY

Dakota, 4. In other States the number ranged from 1 to 3 banks.I t further appears that of the total number of charters issued, 23,with authorized capital of $7,620,000 and resources aggregating ap-proximately $98,216,821, were the result of conversions of Statebanks4, with capital of $375,000, reorganizations of State banks,and 114, with capital of $30,200,000, primary organizations. Thebusiness of 16 State banks with capital of $1,002,500 and assetsaggregating approximately $14,001,432 was purchased by nationalbanks. Conversion of 1 State bank into a national associationbrought into the system 2 branches.

In the year in question 96 national banking associations wereconsolidated into 46 under authority of the act of November 7, 1918,the capital of the consolidated banks being $291,864,075. In someinstances there were reductions in capital and in others increases, butthe net result by reason of consolidations was an increase in capitalstock of $66,856,883.

During the current year there were 34 consolidations under the actof February 25,1927, authorizing the consolidation of 35 State bankswith national banksthe aggregate capital of the consolidating Statebanks being $43,055,000. These banks also brought 82 branches intothe national system and assets aggregating approximately $841,146,433.

The voluntary liquidation of 221 associations represented a capitalof $98,267,500, while the capital of the 79 insolvent banks was$6,575,000. The net result of the changes hereinbefore mentionedwas a decrease for the year in the number of existing banks by 201,but there was an increase in authorized capital stock of $66,662,550.It appears that during the year 335 banks increased their capital inthe aggregate sum of $181,730,125. Of this number 80 banks effectedthe increase by stock dividends, the amount of the increase in thismanner being $20,793,750.

Of the 221 banks reported in voluntary liquidation, 75, with capitalof $6,415,000, were acquired by other national banks, 139, withcapital of $91,672,500 and resources of $2,022,391,164, entered theState banking system, and 7, with capital of $180,000 and resources of$1,010,031, quit business.

NATIONAL BANKS IN THE TRUST FIELDThe development of trust operations by national banks was

evidenced by continued and substantial progress throughout theNation during the past year. The statistics for this function com-piled as of June 29, 1929, revealed that 2,442 national banks hadreceived authority to exercise trust powers, with a combined capitalof $1,218,049,515, representing 32.4 per cent of the number and74.8 per cent of the capital of all banks in the national bankingsystem.

Trust departments had been established by 1,734 of these banksand 75,988 trusts were being administered with individual trustassets aggregating $4,237,648,663. Seven hundred and thirty-six ofthese banks were also acting as trustees for bond and note issuesaggregating $7,370,154,456.

Compared with October 3, 1928, these figures represent a net in-crease in the number of national banks authorized to administertrusts under section 11 (k) of the Federal reserve act of 69, or 2.91


REPOET OF THE COMPTROLLER OF THE CURRENCY 1 7

per cent; an increase in the number operating trust departments of149, or 9.40 per cent; an increase in the number of trusts beingadministered of 12,212, or 19.15 per cent, and an increase in individualtrust assets of $940,338,544, or 28.52 per cent.

The growth in the fiduciary activities of the banks in the nationalbanking system and the increasing popularity with the public of thisimportant department of national bank operations are even moreimpressive when comparisons are made with the activities of nationalbanks in this field just three years ago. In June, 1926, nationalbanks numbering 2,026 had authority to exercise trust powers, with1,104 actively engaged in administering trusts. These banks werethen acting in a fiduciary capacity for 26,053 trusts, with individualtrust assets of $922,328,677, and were acting as trustees for bondand note issues aggregating $2,463,553,316. The figures compiledas of June 29, 1929, represent for the 3-year period an increasein the number of national banks authorised to administer trustsof 416, or 20.53 per cent; an increase in the number of banks oper-ating trust departments of 630, or 57.07 per cent; an increase inthe number of trusts being administered of 49,935, or 191.67 percent; an increase in individual trust assets of $3,315,319,986, or359.45 per cent; and an increase in the volume of bond and noteissues outstanding for which these banks were acting as trustees of$4,906,601,140, pr 199.17 per cent.

As the activities of national banks have grown, so have the earningsthat these banks have reported from this source. For the fiscal yearended June 30, 1929, trust department gross earnings aggregating$20,583,000 were reported, as compared with $16,165,000 in 1928,$10,811,000 in 1927, and $8,255,000 in 1926. ^

Another phase of fiduciary activity which is gaining in popularityis the creation of insurance trusts. While the administration of thistype of trust is a comparatively recent development in national banktrust departments, yet on June 29, 1929, 118 national banks wereadministering 271 insurance trusts representing the proceeds of insur-ance policies aggregating $11,384,632. Some indication of the placethis type of trust will make for itself in the future operations of na-tional banks is evidenced by the fact that 558 trust departments nowhold 9,505 trust agreements which name those banks trustees in thefuture of the proceeds of insurance policies with a present face valueof $375,524,409, an amount aggregating more than one-third of thetotal individual trust assets under administration in 1926 by the 1,104national bank trust departments then in operation.

National banks with authority to exercise trust powers have showncontinued interest in the privilege afforded them to include the words"trust company" in their titles. While only 101 were operating withtrust in their names in 1927, the number has increased to 302 sincethat time, and this method of informing the public of their authorityto engage in trust functions is becoming general in many sections ofthe Nation.

A recent analysis developed that of the 7,536 national banks inoperation, 2,442, or 32.4 per cent, had authority to exercise trustpowers; 2,839, or 37.7 per cent, had capital sufficient to entitle themto apply for permission to exercise trust powers under section 11 (k)of the Federal reserve act, and 2,255, or 29.9 per cent, were ineligible


1 8 REPORT OF THE COMPTROLLER OF THE CURRENCY

to receive permission to engage in trust operations because theircapital was less than that required by the laws of the States in whichthey were located for competing State institutions to receive likepowers.

The accompanying recapitulation segregates national banks intosix classes according to capital and gives detailed information relatingto their fiduciary activities, following which is a table showing con-solidated figures by Federal reserve districts.


Fiduciary activities of national banks in 1929 segregated according to capital

Total

Number of national banks administering trustsCombined capital of national banks administering

trusts ($1,ASSETS

InvestmentsDeposits in savings banksDeposits in other banksDeposits in own banksOther assets

1,734

',615

Total.LIABILITIES

Private trust accountsPrivate trust accounts, incomeCourt trusts (executor, etc.)Court trusts (executor, etc.) income.Other liabilities

Total..Trustee for bond issues.Individual trusts being administeredCorporate trusts being administeredNumber of national banks administering insurance

trustsNumber of insurance trusts being administered (in-

cluded in private trust totals) '____Volume of assets represented by insurance trusts being

administered (included in private trust totals)Number of banks holding insurance trust agreements

not yet operativeNumber of insurance trusts for which banks have been

named trustees but which have not yet become op-erative (not included in private trust totals)

Pace value of insurance policies held under aboveagreements (not included in private trust totals)

3, 506, 744, 2308, 522,124

18,035, 531210, 541, 642493, 805,136

4, 237,648, 663

2, 404, 561, 30618,947, 833

856,009,16216, 246,143

941,884, 219

Bankswith

capitalof $25,000

25

$625, 000

Percent

1.44

.06

212, 28630,1623,922

97, 68534, 604

378, 659

15, 314630

313, 49321, 72427, 498

.01

.35

.02

.05

.01

.01

.14

4, 237, 648, 6631 378, 659 .01

Bankswith capi-

tal over$25,000 to

$50,000

109

$5, 315,000

5, 208, 52828, 025

270,148973, 267338, 877

6,818,845

2,136, 63828,137

3, 458, 58977, \ " '

1,117, 485

6, 818, 845

Percent

6.29 418

52 $40, 690, 000

.15

.331.50.46.0 '

.16

.15

.40

.48

.12

7,370,154,456!

66, 776J9,212

118

271

$11,384, 632

558

9,505

$375,524,409

69,003' 3,446,95l| .051

Bankswith capi-

tal over$50,000 to$100,000

31, 548,125829, 629103, 480

4, 452, 272|

Percent

.909.73

.572.12

3, 206, 948j . 6540,140,454! . 95

14, 507,963167,018

20, 890, 297453, 676

4.121, 5001

40,140, 454| . 95

2.442.79.44

33,195, 8951 .45

104, 652,034; z. y;1.171,870! 13. 7i1, 008, 506J 5. 597, 650,167! 3. 638. 651, 910) 1. 75

123,134,48',

51, 769, 8821. 014,189

57, 532, 3971, 574, 821

11, 243,198

123, 134, 487

57, 561, 743

.0265047

16

$403,338

77\~.51

1.08

.17

.11

3,983383

7

10

$194,599

47

512

$3,023,270

5.97|4.16

5.93

3.69

1.71

8.42

5.39

.80

10, 96:86(23

50

$939,349121

861

$19,324, 484

2.90

2.155.356.729.691.19

2.90

.78

16.429.40

19.49

18.45

8.25

21.68

9.06

5.15

337, 957, 0171, 676, 8372, 329, 888

13, 917, 52730,214, 652

I. 64 3,19.6812. 926.616.12

386,095, 9211

Banks withcapital over

$500,000

248

;749,130, 300

1,027,166, 2404, 785, 601

14, 319, 58"183, 450, 724451, 358,145

191,635, 7523, 357, 530

135, 694, 2753, 057, 850

52, 350, 514

386, 095, 921

9.11 3, 681,080, 297

7.9717.7215. 8518.825. 56

219,093,176 2.S

2,144, 495, 75'14. 380, 329>38,120, 11111, 060, 07673,024,024

9.113,681,080,29:

\ 056, 787, 688

14, 7561,479

3:

75

$2, 095,917

192

1,778

$66, 765,693

22.1016. 00

27.12

27.68

18. 41

34.41

18.70

17.78

36, 3526, 435

56

136

$8,154, 767192

6,338

$286, 007,624

Percent

14.30

72.82

86.3256.1679.4087.1391.40

:6. 87

89.1975.9074.5568.0892.69

86.87

54.44

69.85

47.46

50.18

71.63

34.41

76.16


Fiduciary activities of national banks in 1929 segregated according to capitalContinued

TotalBankswith

capitalof $25,000

Percent

Bankswith capi-tal over

$25,000 to$50,000

Percent

Bankswith capi-tal over

$50,000 to$100,000

Percent

Banks withcapital over$100,000 to

$200,000Percent

Banks withcapital over$200,000 to

$500,000

70

$25,542, 500475

&170, 022,985

128

83

Percent

9.89

13.49

19.4513.96

4.51

27.48

Banks withcapital over

$500,000Percent

Number of national banks authorized to exercise fidu-ciary powers but not administering trusts

Combined capital of national banks authorized to ex-ercise fiduciary powers but not administering trusts.

Total number of national banks authorized to exercisefiduciary powers

Combined capital of national banks authorized to ex-ercise fiduciary powers

Number of national banks having sufficient capital toapply for permission to exercise fiduciary powers atbeginning of 1929 .

National banks having authority to exercise fiduciarypowers which have amended their titles to includethe words "trust company" Oct. 15,1929

708$189,361,900 $1,175,

2,442

$1, 218,049,515 $1

47

i,000

72

800,000

6.64

.62

2.95

152$7, 325, 000

26115 $12, 640, 000

21.47 2533. 87 $24,152, 000

67104 $64,842, 000

10.691.

35.7312.7527.48

5.

141

$24, 465, 400670

32 $112, 912, 230

302

20.64

.66

972

5

34.24

1.

778

58

27.40

19.21

320

97

19.91

12.92

27.43

9.

11.27

32.12

45$106,702,000

293$855,832,300

55

57

6.36

56.35

12.00

70.26

1.94

18.87


Fiduciary activities of nationa