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State Bank Examiner Makes Reply to Criticisms of His Department
Tells of Conditions Facing Closed Banks
Gives Circumstances Surrounding Appointments of Winnsboro, Florence Receivers at Orangeburg, and Other Cities-Speaks of Taking Over of Bank of Edgefield and Comments Generally on Banking Situation.
The full text of the reply of Albert what S. Fant, bank of the state South Carolina, to criticisms made against his department by witnesses testifying the house investigatcurities ing committee is given herewith.
M. B. Huggins, Chairman, and Investigating the State Bank Examiner's Office. Gentlemen: beg acknowledge recepit copy the testimony and before your commitcharges against my administration examiner. The communication and repeat the answers, attempt follow serially the take the banks which the has arisen the they appear Bank, Winnsboro. Question made the matter appointing receiver the Winnsbank. The committee course, prescribes the method selecting receiver, also neither participate, having merely the depositors' meeting which named receiver. There however four the testifies. witness states that receiver appointed best his think Mr Turner right. known him all my and had business dealings the receiver selected should Elliott the assist Mr. with the the any obtainable. fixing the Mr. Turner and Mr. Elliott Mr. Turner's named at while Mr. Elliott's salary fixed the amount he had receiving officer the bank. One witnesses testifies to effect and none testify contrary. the assistant not certainly within the the depositors and fix this was province, under law, but the explicit and aries fixed agreed to the positors are excess of the should be that the under the direction the court allow such salaries permits. With purpose defend criticize action the depositors fixing salaries, palpably certain large the to less than the allowed by The question asked the bank yet paid dividend. need scarcely answer this except unusual could pay diviunless receiver sacrifice the the without their ulterior value. Another rather whimsical charge that the meeting that bank could pay the dollar What did day, that the bank of its appraised could cents the dollar that this valuation might be apconditions said further should stocks and bank 100 the dollar. This based the unbiased checking the examiners department. This, course, account 30 loss assets that variable closed banks reason long there their made the that the Winnsboro was rectness and there hidden the examiners. This, however, reference that existed in the with which reports showed been tending period of several One the outstanding features dealing the gally speaking, excess officers the and that was small caused indorsement of two notes $1,253.20 Attention duly totaling called this closing report as October preand this national banking system does charge man's $610.67 scarcely furnished for prosecution president standpoint. feature this activities which really office line Mr Elliott and family inating this the though merally legally the law and statute that permits this office either to arbitraricharge off paper direct internal the over heads of directors thereof provide that attention be called and the this through the ignored by the officials the whose interest may have been not certainly affirm that instance my question has asked the the the former shall further this report touching this general losses in the Winnsboro stocks bonds. Knowing how such securities appreciate or depre- ciate and being fully cognizant the established banking consequent the hope that and in meantime the directors would special effort measurably repair the losses. In the interim had frequent the president and attorney the looking doubtful any depositor the bank suffered its closing he she would not at the the former the letter the law has the public, well to the As has already stated, the charge pass the being doubtful worthless, but no one enpowered charge except the directors the ratified that full adjudge the strength the the examiner, examiner, has such paper charged The examiner, then, could scarcely held responsible for allowing bank to function such paper receivables the directors themselves have not charge What in the Winnsboro just am did the day meeting. the report with stated the positors that after the selected the report would be turned over him and copy filed clerk court provided by This As transpired appointment the expected for transacare by receiver under the made the duty the
The Bank of Union, Union.
The kiting the Bank of the National pared with several as high fifty planation. however, steadily but well of the $379 charged the bank. have hand the American State the state ceipts state for banking the showing this kiting depaid regularly manded that stopped. the examiner will state here explanation demand the charges by president department the bank such that all coming should be stopped. This was both by this are being hanletter kite the manner, was mitted to the treasurer and paid the regular state warrants, as the bank its by early as October wrote The Bank Union had been virtualwrecked its former American president State bank, in which this paragraph The directors, feelthat bank still had the community, thank trustworthy of the report, were placed charge, its through the ficulties. Bowling mended as financial and Manufacturing feel tegrity stated credit. Union suffered have illegal practice the closing several banks and the stopped. had felt the serious Again November 1929 Mr. Ross fects. After conference with rectors, was decided make the practice kiting effort have out behalf panies charge the belief once. this office the For two be disconyears, net taling Ross date report dated May were reply by $14,000 fact, the showed steady had this out Kennedy until about before the owing tragic closed, and further Maynard president of the entailed loans made by Mr. Ken- First National consequence our the deposits the progress, banks one hundred fifty thousand dol- that lars testimony of under preceding its There assure you that this matter widespread agitation attended within the state which trust meet reflected this was wish during Mr. advise the Kennedy's report, has conditions been), but due the run referred Mr. evidence that the recovery of the the the like and that than hopeful, statequote here the of the the that he had read aminers, Royden Watkins and had had read to him copy the examination Of any July 21, this respect due officers bank, the order the condi- because explicit and properly sistant the situation appears signed and returned this office the condition the President majority the directors when did and find time follow that time the former manageget every The law the bank, that reports its that fore the board Despite the depositors the be placed the trary, this office helds such verifihands reading report change The Mr. board the appears the first of eight (copy board on file) the president This bank has paid 55 per cashier resign and persuaded Mr Kennedy take The condiexpenses, has tion bank has assets which should that President Kennedy has perhaps other the the bank has The condition the was interest deevidently fair evidenced conserved. statement of one your witnesses the terrific pressure put on whose testimony that the the bank unusual good from made difficult this office tried carry the President and face above. conditions appears to the best inThis run terests depositors to continue than during that few banks Examiners called meeting of the whatever capital condition might board and have situation, the board passing the Bank of Dillon, Dillon resolution. The Bank Dillon formed it the sense the First judgment and opinion the board National and the Bank Diland the Dillon. of the bank, The basis for the best the fixed the the oper- this The and that think and believe pletion the that the bank has in hand sufficient course, upon the co-operation assets fully protect the depositors provided to operate. further resolved, That the board directors hereby does, pledge full support and operation the in financing this "If will allow, and the be until fall, the plan time charge the the old capital paid the placed on "Believing be the interest and welfare the ner the examiner allow assist President Kennedy working out his plans for the The charge that president of the title certain real estate the bank and this with the Nicholson Bank Trust company borrow $10,000 for benefit of the bank, might arraignment the officertainly not bank examiner's office. however, that the for the of the the not any case for the the president, offense either legal moral. The further charge that the bank used tax payment made by Mr. Nicholson care delayed payment draft made by one not offense either morally or law. When deposit made in all intents and purposes that and long as the bank Whatever my techfeel continuing the Mr. Kennedy's for interests of the and should his by believe that would eventually put the bank upon his plants contemplated strengthen the depleted
American State Bank, Gaffney The criticisms evolved from the reference American State Bank Gaffney system "kiting" alleged been the American and the First National Bank The bank examiner could scarcely be expected with his and many duties up residence that vicinity for the ing that the law system
