GOVERNMENT CONTROL OF BANKS AND 

 TRUST COMPANIES. 



BY WILLIAM BARRET RIDGELY. 



[William Barret Ridgely, comptroller of the currency, born in Springfield, 111., July 19, 

 1858; graduate of Rennsalaer Polytechnic institute, 1879; engaged in mining, manu- 

 facturing and banking in Springfield until 1899, when he became secretary and vice 

 president of the Republic Iron and Steel company; appointed comptroller of the 

 currency of the United States Oct. 1, 1901 ; has written many articles on banking 

 problems.] 



The passage of the National Bank Act, or National Cur- 

 rency Act as it was called, may be considered the beginning of 

 the federal control of banks. This has now been exercised for 

 more than forty years with most satisfactory results, both to 

 the government, the banks and the people who have done bus- 

 iness with them. It has resulted in an excellent system of 

 banks, honestly, ably and well managed. The figures in regard 

 to the number of failures and loss to depositors show an un- 

 equalled record of soundness and safety, and, contrasted with 

 the previous records of state banks and even with the better 

 and stronger state banks and trust companies which have ex- 

 isted alongside of the national banks, make a strong argument 

 in favor of national control of institutions of this character. 

 The total loss in over forty years is less than eight one hun- 

 dredths of one per cent of the average amount on deposit. 

 The volume of experience gained during the forty years' con- 

 trol of the national banks is probably the greatest accumula- 

 tion of such experience which has ever been made, based, as it 

 is, upon the control of a greater number of banks, more wide- 

 ly distributed, doing a larger volume and variety of business 

 and covering a longer period than has ever been exercised in 

 any other country. As a matter of fact, other countries do not 

 attempt such a complete control or examination of banks as 

 we do in the United States. The nearest approach to our na- 

 tional system is in some of our state bank departments. 

 State banks, and especially the mutual savings banks in sever- 

 al states, are quite closely controlled in their management 

 by specific statutes and are frequently and thoroughly exam- 

 ined. But there is no other system of banks over which there 



441 



