67TH CONGRESS,} SENATE. { REPORT No. 524. BANKING CORPORATIONS IN DISTRICT OF COLUMBIA. FEBRUARY 23 (calendar day, MARCH 1), 1922.-Ordered to be printed. Mr. BALL, from the Committee on the District of Columbia, submitted the following REPORT. [To accompany S. 3170.] The Committee on the District of Columbia, to whom was referred the bill (S. 3170) regulating corporations doing a banking business in the District of Columbia, having considered the same, report favorably thereon with the recommendation that the bill do pass without amend ment. In further support of this measure it is desired to include some correspondence from the Commissioners of the District of Columbia regarding the bill. COMMISSIONERS OF THE DISTRICT OF COLUMBIA, EXECUTIVE OFFICE, Washington, February 18, 1922. Hon. L. HEISLER BALL, Chairman Committee on the District of Columbia, DEAR SENATOR BALL: The Board of Commissioners of the District of Columbia desires to bring to your attention the imperative need of authority to control the formation and opening for business in the District of Columbia of banking corporations organized under the various State laws. In this connection we would urge upon Congress the speedy enactment of a general banking law for the District of Columbia, as there are at this time five banks being organized under State laws. Pending the passage of such a law, we suggest that, if possible, there be added to the District of Columbia appropriation bill a section to the effect that after the passage of said act it shall be unlawful for any incorporated bank to do business in the District of Columbia without having first obtained the approval and consent of the Comptroller of the Currency. When Congress enacted the national bank law it deemed it wise to empower the Comptroller of the Currency, who is charged with the administration of the act, to inquire into the character and the ability of those who seek to use other people s money for the purpose of doing a national banking business, to ascertain whether business conditions in the community where the proposed bank is to be located render it reasonably certain that the corporation can secure a sufficient amount of business to prevent the capital paid in from being impaired to the loss of innocent stockholders by expenses that exceed the profits, and to grant or refuse a charter in his discretion. When the Congress, legislating for the District of Columbia, passed a law authorizing the formation of trust companies to engage in business in the District it clothed the Commissioners of the District of Columbia with the same discretionary powers with respect to proposed trust companies in the District as it granted to the Comptroller of the Currency in respect to proposed national banks. In all of the States that grant charters to corporations to do a banking business powers similar to those exercised by the Comptroller of the Currency and the commissioners are conferred upon the banking departments. There is no banking law in the District of Columbia similar to the banking laws of the States; hence there is no official here who has the power to inquire into the organizations of a proposed commercial State bank that seeks to do business in the District of Columbia and determine whether or not it shall be permitted to enter upon that business. The absence of adequate legislation has resulted in 30 State-chartered institutions (in business and in the process of formation) coming into the District of Columbia. In addition to these State banks there are 15 national banks and 6 trust companies. While the door through which additional national banks and trust companies may enter is guarded by responsible public officials who have the power to protect the investing and the banking public in its relations with such institutions, the door through which State-chartered banks may enter is open and unguarded and there is no protection to the investing and banking public in its relations with such banks. The purpose of the proposed law is not to narrow or restrict competition nor to prevent reliable and responsible persons possessing the requisite knowledge and skill from entering the field of banking in the District of Columbia in competition with the existing institutions but to place the entire banking situation in the city of Washington more completely under the authority and control of a responsible public official who is clothed by law with the power to guard the interests of the investing and the banking public. We earnestly recommend the speedy enactment of such a measure as herein described. Very respectfully, THE BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA, By CUNO H. RUDOLPH, President. Hon. L. HEISLER BALL, COMMISSIONERS OF THE DISTRICT OF COLUMBIA, SIR: The Commissioners of the District of Columbia have the honor to submit the following on Senate bill 3170, Sixty-seventh Congress, second session, entitled "A bill regulating corporations doing a banking business in the District of Columbia," which you referred to them for report as to the merits of the bill and the propriety of its passage. The commissioners believe that there is an imperative need for this proposed legislation. There are at the present time five banks being organized in the District of Columbia under State laws. When Congress enacted the national bank law it deemed it wise to empower the Comptroller of the Currency, who is charged with the administration of the act, to inquire into the character and the ability of those who seek to use other people's money for the purpose of doing a national banking business, to ascertain whether business conditions in the community where the proposed bank is to be located render it reasonably certain that the corporation can secure a sufficient amount of business to prevent the capital paid in from being impaired, to the loss of innocent stockholders, by expenses that exceed the profits, and to grant or refuse a charter in his discretion. When the Congress, legislating for the District of Columbia, passed a law authorizing the formation of trust companies to engage in business in the District it clothed the Commissioners of the District of Columbia with the same discretionary powers with respect to proposed trust companies in the District as it granted to the Comptroller of the Currency in respect to proposed national banks. In all of the States that grant charters to corporations to do a banking business, powers similar to those exercised by the Comptroller of the Currency and the commissioners are conferred upon the State banking departments. There is no banking law in the District of Columbia similar to the banking laws of the States, hence there is no official here who has the power to inquire into the organization of a proposed commercial State bank that seeks to do business in the District of Columbia and determine whether or not it shall be permitted to enter upon that business. The absence of adequate legislation has resulted in 30 State-chartered institutions (in business and in the process of formation) coming into the District of Columbia. In addition to those State banks there are 15 national banks and 6 trust companies. While the door through which additional national banks and trust companies may enter is guarded by responsible public officials who have the power to protect the investing and the banking public in its relations with such institutions, the door through which State-chartered banks may enter is open and unguarded, and there is no protection to the investing and banking public in its relations with such banks. The purpose of the proposed law is not to narrow or restrict competition nor to prevent reliable and responsible persons possessing the requisite knowledge and skill from entering the field of banking in the District of Columbia in competition with existing institutions but to place the entire banking situation in the city of Washington more completely under the authority and control of a responsible public official who is clothed by law with the power to guard the interests of the investing and the banking public. The commissioners recommend the speedy enactment of the bill and suggest that its provisions be embodied in the District of Columbia appropriation bill now pending before the Senate. Very respectfully, THE BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA, By CUNO H. RUDOLPH, President. CONGRESS READJUSTMENT OF PAY OF THE ARMY, NAVY, MARINE CORPS, COAST GUARD, PUBLIC HEALTH SERVICE, AND COAST AND GEODETIC SURVEY. FEBRUARY 23 (calendar day, MARCH 2), 1922.-Ordered to be printed. Mr. WADSWORTH, from the special committee appointed in accordance with the provisions of section 13 of the act approved May 18, 1920, submitted the following REPORT. The special committee of the Congress appointed in accordance with the following provision of the act entitled "An act to increase the efficiency of the commissioned and enlisted personnel of the Army, Navy, Marine Corps, Coast Guard, Coast and Geodetic Survey, and Public Health Service," approved May 18, 1920 And provided further, That a special committee, to be composed of five Members of the Senate, to be appointed by the Vice President, and five Members of the House of Representatives, to be appointed by the Speaker of the House of Representatives, shall make an investigation and report recommendations to their respective Houses not later than the first Monday in January, 1922, relative to the readjustment of the pay and allowances of the commissioned and enlisted personnel of the several services herein mentioned [the date for making this report was subsequently extended to the first Monday in March, 1922]— submits the following report: The committee was organized on August 22, 1921, and, after securing the cooperation of the heads of the executive departments concerned, proceeded to conduct public hearings relative to the pay and allowances of the officers and enlisted men of the several services. All the services concerned have been heard, through 67 witnesses. In addition a large amount of statistical data and written evidence was presented to the committee. The inquiry of the committee has been broad in scope and included many details. The testimony presented has abundantly established the fact that living costs are about 100 per cent greater than in 1908, when the last permanent pay schedule was established, and about 75 per cent greater than in 1913, before the war. While the act approved May 18, 1920, gave a certain amount of relief (approximately 20 per cent increase), it absorbed only about one-third of this increased cost of living in the case of officers, leaving about two-thirds to be borne by the individual. Actually, the purchasing power of the present pay is much less than that of 1908. |