move him to another district. Such a recommendation is ridiculous. No, do not rotate dishonest or inefficient examiners-discharge them. Politics should be a stranger in the Comptroller's office. The efficiency of the service has been greatly increased by the partial elimination of politics from its operations. The service would be still more efficient if politics were wholly eliminated. Every appointment from comptroller down should be based solely on merit. The Comptroller should be a man of ripened judgment, the possessor of demonstrated common-sense, or he should be a brilliant find. The examiners should be men of broad experience, or none at all. There is no place on this force for narrowness, developed or undeveloped. The tenure should be good behavior and efficient service. The salaries should be sufficiently large to anchor men of average ability to the positions.

There should be two supervising examiners. The clerk in charge of the reports division should not be a clerk-he should be chief of examiners. He should have had experience as an examiner, and he should know as much as, if not more, than the average examiner in the field, and he should receive full cash value for his knowledge. Much of the best work of the examiners goes to waste because it is never viewed by intelligent eyes. The significance of important information is not appreciated, and therefore is not called to the personal attention of the Comptroller. Mishaps that might have been avoided follow, and the examiner suffers personal humiliation and public condemnation in consequence. It may be asserted, without fear of successful contradiction, that the reports of the Comptroller's examiners, excepting a very few of the examiners, present the condition of banks with faithful accuracy. If properly analyzed and promptly acted upon, many bank troubles might be averted.

In this connection, however, bear in mind the grave responsibility resting upon the Comptroller's shoulders. It is easy to recommend closing a bank, but his action is final and he must be sure he is right before going ahead. You know the mere act of closing a bank's doors causes a shrinkage in the value of its assets. Therefore, the Comptroller is not likely to order the closing until it becomes absolutely necessary. The public will never know how many lame and halting institutions have been restored to health and vigor by the efforts of the Comptrollers and their assistants. The public hears

of the lost banks only. The public seldom knows that a bank is in bad condition until all efforts of the Comptroller's office to save it have failed. And remember this, that no matter how skillful the Comptroller and his assistants, they cannot prevent inefficient officers from making bad loans; they cannot stand at the elbow of the loan man during every minute of the business day; they cannot prevent a dishonest officer or clerk from stealing, for they cannot pick out prospective thieves and watch them night and day. Bad loans and steals may be discovered, but they cannot be prevented.

SUPERVISION AND PUBLICITY

ADDRESS DELIVERED BY J. A. S. POLLARD, CASHIER OF THE FORT MADISON SAVINGS BANK, FORT MADISON, IOWA, BEFORE THE MISSOURI BANKERS' ASSOCIATION AT KANSAS CITY, MAY, 1905.

We have heard much talk about such national regulation and supervision of railroads, which have become national in their influence and operations, as will render justice to shippers, big and little. There is a demand for federal supervision of the life insurance companies in which such immense sums belonging to the people are invested. I see no danger to free institutions in federal regulation of rates charged by the great public utilities; and why any institution, be it life insurance company, trust company, or private bank, asking for the unrestricted investment of the public dollars, should not have every safeguard of legislation which experience has proved conducive to the interest of bank depositors, is beyond the comprehension of a few million citizens who claim to possess average intelligence. As a rule banks are under supervision of either national or state authority; all of them should be under legal regulations, for they are to some extent public institutions for the custody of the people's credit. The bank's charges are regulated by state laws with penalties for excessive rates. It is eminently right that the banks should be under supervision and regulation, and there is no sound reason why immense corporations, doing a larger business than any bank, reaching in their scope not merely a limited list of depositors, but practically the entire population of the country, should

not be required to take the three degrees of supervision, cash capital, and publicity, and ride the same legislative goat so familiar to the banking fraternity.

The greatest value of supervision by official legislative authority, is in the publicity entailed. Publicity is one of the greatest modern remedies for financial ills. It is only another name for commercial information, and few banks have ever suffered losses which might not have been avoided by complete and accurate information. It is the handmaiden of public opinion; it prepares the way and makes effective our great governing force.

The lazy man was directed by high authority to visit the ant and learn the lesson of industry, and the man who fears publicity can be escorted to the bank where a working model of publicity is in successful operation without revealing any craft secrets.

Had the trusts and combinations been subjected to the same publicity, inspection and supervision as the bank, many of those which have caused our financial equilibrium to wobble at times would never have been able to float their securities on the troubled sea of commerce. Both nation and state demand the right to supervise and regulate the banking business, and what we need to separate the good trust from the bad is the same magnifying glass, tests, and scales as are now employed with banking institutions.

I should have said—with the majority of banking institutions, for in some of our states, with excellent laws governing state banks and the national banks of course under federal supervision, the solons, through utter lack of legislation governing private banks, have held out chromos to the men who chose to compete with legally supervised banks without subjecting themselves to any of their restrictions. The supervision or regulation of private banks has been the subject of considerable discussion and comment lately, particularly in the West, and bankers in every state should realize that it is the concern of bankers everywhere to have every institution conducting a regular banking business under proper supervision and publicity; for a lack of controlling legislation too frequently gives the opportunity for improper banking, and improper banking hurts business in every state. It disturbs the principle of faith in humanity, that credit which is the basic principle of the grand action we call business-the scientific direction of profitable human enery.

In Iowa, if a private banker choses to do business without capital, or advertises more capital than he has, he is regarded as an enterprising citizen. If a banker governed by state law does the same thing, he goes to the penitentiary. If a private banker owns enough government bonds, and often even if he doesn't, he can escape all taxation, but the state banker has not that privilege. If the private banker wants to please his farmer friends by carrying their loans in the shape of over-drafts-and nothing pleases an Iowa farmer so much as to be able to say, "I can write my check on a shingle and the bank will pay it if I haven't a cent to my credit" he has no one to question him; but if the national or state banker does that he gets censure from the authorities. If the private banker wants to loan everything he has in the bank to an individual, or invest in real estate or mortgage his safe, he can do so; but the supervised bankers have legal restrictions; so that by subjecting yourself to the excellent state and savings bank laws of Iowa you are denied a dozen rights, both valuable and questionable, which the private banker possesses, and you pay the expense of incorporation, examination, taxation, and published statements for the privilege of getting a legislative "double cross."

Gentlemen, I believe in personal liberty and am too mean a democrat to advocate strong federal control and centralization of financial power in government; but I am with those who are jealous. of forfeiting commercial liberty for an equally dangerous brand of financial concentration; that is, leaving our vast inheritance of wealth unrestrictedly in the hands of a few men whose minds are warped and diseased by an uncontrollable craze for large footings, and I do believe in the government taking a hand wherever necessary to administer justice; that both state and nation should exercise the police power over us impartially and enforce the laws rigidly. I believe the individual citizen has the right, if he is persistent and his friend is indifferent, to borrow all the money he can-it's none of our business, provided it is obtained without misrepresentation and not loaned in ignorance; but I am just as positive that from the commercial discounts of the East to the cattle paper of the West, from Minnesota warehouse receipts to the southern cotton-bills, every man desiring to handle the people's funds as a banker should be subjected to examination, supervision, and regulation and required

to publish sworn statements for the information of those who entrust their hard earned dollars to him for the safety and convenience which the common acceptance of the word "Bank” seems to promise.

I do not wish to reflect upon the honest, well-meaning and uninspected private banker whose sterling integrity and personality enable him to obtain the people's deposits without the capital nor upon the really responsible unsupervised banker who does a safe business and whose only objection to regulation and publicity is that he has been handling the people's credit so long and so independently that he has come to regard it as his own, and hates to be bothered; but I maintain the principle is sound, that the safeguards of legislation-safeguards which have shown in hard, cold statistics that supervision and publicity mean fewer failures and even in occasional failures more ultimate return to creditors, that these safeguards should in every instance be afforded the public which must entrust its credit to the banker, and that no man should be permitted to hang out the sign, "Bank," who is not willing to experience a friendly visit from a competent examiner and swear to and publish reports of the condition of his institution. In my state a private banker cannot use the words "Savings" or "State" any more than he can the name "National," and there's an obvious intent that the public must not be deceived into thinking that he is running a bank under state supervision. For practically the same reason he ought not to be permitted to use the more important and more easily misunderstood title "Bank," under the present lack of governing laws. This is a free country, I admit, but if one desires to do business without supervision, publicity or legal restraints, there are various avenues of trade and commerce open with only the common law to interfere.

Your ordinary citizen would not, if he knew it, shoot skyward in an elevator which had not been inspected by a qualified examiner and had not a published report of its condition hung up in the cage; he would not sit peacefully in his office if he knew that just below him was an uninspected boiler and nothing standing between him and eternity but the personal responsibility of the landlord; but that same citizen will see the gold emblazoned name "Bank" and with no other information than the sign, and perhaps an acquaintance with some one inside, he will give up the product of his toil and