consisting of uncollected assets, uncollected additional assets, and uncollected stock assessment; and also a recapitulation of remaining assets: book and estimated values, showing uncollected assets, uncollected additional assets, uncollected stock assessment, and a total of the remaining assets. And then under liabilities we show secured liabilities at date of suspension; unsecured liabilities at date of suspension, additional liabilities established, total liabilities of this date; secured and preferred liabilities paid in cash (paid by conservator); unsecured liabilities offset; unsecured liabilities for which receiver's certificates have been issued; unpaid secured liabilities (both proved and unproved) unsecured liabilities not paid or proved, total liabilities accounted for. And then we show collections and disbursements: Collections from all sources, showing cash collected from assets and stock assessment; cash collected from interest, premium, and rents; cash collected by receiver, and held as trustee for owners; Reconstruction Finance Corporation loans received (loan to conservator); total collections to be accounted for. Disbursements of every character, showing secured and preferred liabilities paid (including dividends) (paid by conservator); collateral account (collections held by secured creditors and not yet applied); advances in protection of assets (taxes, insurance, etc.); expenses of receivership (expenses and advances by conservator); dividends paid to unsecured creditors (paid by conservator); Reconstruction Finance Corporation loans repaid; cash in hands of receiver and Comptroller; and total collections accounted for. In addition to that, there is an annual report of the Comptroller published each year; the year terminates on October 31, and in that report several hundred pages are devoted to the administration of the liquidation of closed banks. Senator COUZENS. Individually, or collectively? Mr. O'CONNOR. Both. For instance, I will give you individually what we show. All collections by receivers, collection and offsets allowed; collections from stock assessments. This is for each bank, Senator. Amounts borrowed Senator COUZENS (interposing). Let me understand it. Do I understand that you put in a detail of this trust in your report; of each trust? Mr. O'CONNOR. Yes; of the 1,500. I am pleased you asked that, Senator. Amounts borrowed from the Reconstruction Finance Corporation; dividends paid by receivers to secured and unsecured creditors; distributions by conservators, payments to secured and preferred creditors; offsets allowed and settled; disbursements for protection of assets; receivers' salaries, legal and other expenses; conservators' salaries, legal and other expenses; a table showing the status, progress, and results of liquidation of all national banks placed in hands of receivers from the date of the first national bank failure in 1865 to October 31, last, the end of the fiscal year in the Comptroller's Office; separate tables giving dates of appointment of receivers; capital at date of organization and at date of failure; dividends paid while solvent; total deposits, bills payable, and rediscounts at date of failure; also tables showing assets at date of failure, additional assets acquired subsequent to failure; offsets allowed; disposition of all collections and dividends paid to creditors of all insolvent national banks, this information being given in detail as to each and every national bank in liquidation. Now, I have given you two methods of rather wide publicity, and the third method which we pursue is to call in a committee of the larger depositors of the trust-advising the receiver to do so, whenever he has the sale of some rather important asset of the trust. And the subcommittee knows that we cannot make a sale of property without a petition filed with the court setting forth the price, and the appraisement, and a hearing on it, and then the court, if he feels it fair and equitable to the trust, will permit it to be sold. I can give you a good illustration right in this city. We have a rather large building; it is owned by one of the receivership banks in Washington, and we were offered $400,000 for it, cash. The receiver and representatives of the Comptroller's Office went into the matter rather carefully, and I, myself, went down to the building and went through the nine floors, and through the stores and the offices, and we declined the $400,000 offer, and within 30 days the offer was raised to $450,000. Before we accepted that we called in a committee of five or six representing the largest depositors in that bank. We asked them for their judgment of the matter and gave them all the information we had. They came up to my office. I talked to them personally about it. They all felt that we should accept it, felt it was a very good offer. And we had for their information the income from the building, the taxes, and the upkeep, and everything. That offer was filed with the court for approval, and the court has given 2 or 3 weeks of published notice to that petition, and it is in its file and it will be acted upon on the date fixed in that petition. That is an illustration of the way these receivership matters are handled. Senator GLASS. Mr. Comptroller, while you have available for all interested parties and for the public information of the sort recited by you, you give out that information through your regular force, do you not? You do not employ an expert publicity agent? Mr. O'CONNOR. No; I have no such agent. Senator GLASS. That is contrary to law. Mr. O'CONNOR. Yes, sir. Senator GLASS. But it looks to me like every bureau in Washington has an expert publicity agent hired. Mr. Comptroller, I note in the newspapers what is a mistake, and I assume an inadvertent mistake. Yesterday, or the day before, when you were testifying, you gave the amount of indebtedness of executive officers of national banks, and the reduction made. You did not mean to have anyone infer that there had been any loans to executive officers since the passage of the Bank Act of 1933, did you? Mr. O'CONNOR. No, Senator; no loans have been made, according to the reports of examinations filed in the Comptroller's office, by any national bank to any executive officer since the passage of the Bank Act of 1933; and the figures that I gave showing the indebtedness of executive officers, both directly and indirectly, the two figures referred to the loans that were then in the national banks as of June 30, 1933. And then I followed that by showing the reduction that had been made. But no new loans to the executive officers have been made since the passage of that act. Senator, might I clear up a matter that Senator Couzens asked about yesterday? Senator GLASS. Yes. Mr. O'CONNOR. I said I would bring the figures today. Senator Couzens, yesterday, when I gave the amount of dividends that had been distributed to depositors in closed banks since March 16, 1933, the total being $644,793,467, the Senator inquired whether I had a break-down showing how much of that sum had been borrowed from the Reconstruction Finance Corporation. I am prepared now, Senator, to give those figures. Senator CoUZENS. Very well. Mr. O'CONNOR. The Office of the Comptroller of the Currency borrowed from the Reconstruction Finance Corporation, from March 16, 1933, to April 20, 1935, $275,181,347. We have repaid to the Reconstruction Finance Corporation Senator BULKLEY (interposing). Is that the gross amount that has been loaned to the banks? Mr. O'CONNOR. Yes; to closed banks. Senator BULKLEY. To closed banks? Mr. O'CONNOR. Yes; about a billion has been loaned to all bank, total. Senator BULKLEY. You mean to closed banks? Mr. O'CONNOR. Yes. We have repaid to the Reconstruction Finance Corporation $160,125,692; not quite 50 percent has been repaid. As we would collect on these assets, of course, we make repayment at once to the Reconstruction Finance Corporation. Senator BYRNES. You say you borrowed $275,181,347 and paid back $160,125,692? Mr. O'CONNOR. That is right. Senator BYRNES. That is more than 50 percent. Mr. O'CONNOR. Yes. I deducted it. You are correct, Senator. Now, all of this amount of $275,181,347 that was borrowed, of course, was not available for dividend purposes. I did not take the trouble to break that down, but I just want to call your attention to the fact that a large part of that sum-not intending to use the word "large" by more than 50 percent-but a large part of it was used for the payment of preferred claims. Senator BANKHEAD. And to recapture collaterals? Mr. O'CONNOR. Yes; and to recapture collaterals, to bring it back into the bank, of course. And a part of it was used to repay the Reconstruction Finance Corporation, and we made a new loan to take care of this and new matters. I have not a break-down of that. I would be glad to furnish it if the committee cares for it. Now, Senator, for the information of the committee, I would like to put into the record a table I used yesterday with reference to the assessment for all purposes for thirteen years on one-eighth of 1 percent, if there is no objection. Senator GLASS. That will be received. (The table referred to is here printed in the record in full, as follows:) Summary of hypothetical projection of a deposit insurance corporation's operating statements, period Jan. 1, 1921, to Mar. 15, 1933 Combined capital and surplus fund of Corporation as of Jan. 1. Combined capital and surplus fund of Corporation at end of $325, 000, 000 818, 181, 112 117, 182, 694 1, 285, 920, 916 2, 221, 284, 722 2,296, 287, 450 35, 000, 000 2, 331, 287, 450 110,002, 728 214, 997, 272 11, 278 $5, 102, 861, 000 $2,296, 287, 450 $1, 010, 366, 534 $1, 285, 920, 916 1 percent.... Total bank suspensions, period Jan. 1, 1921, to Mar. 15, 1933.. National... State member_. Nonmember.. $545, 454, 077 $818, 181, 115 $1,090, 908, 154 $6, 545, 448, 924 11, 278 860 68 1, 092 Total... 2, 020 Total insured banks in the United States as of Oct. 31, 1934, numbered Total reporting banks in the United States as of June 30, 1934, numbered... 14, 125 15, 894 Total insured deposits represented in the attached schedule Such recoveries have been further analyzed and found to occur at 45 Percent 56 25, 15, 8, 5, 3 66. 51 56. 82 The average liquidation recovery percentage of 56 percent used in the calculation herewith represents, therefore, some reduction in the rate apparent for national-bank liquidations on account of the assumed lower percentage of liquidation in banks other than national. The records of my office indicate the average period of liquidation for national bank receiverships liquidated and finally closed during the 13-year period 1921 to 1934, to have been-5 years. The issue of debentures to the Government in an amount substantially less than the total authorized by law would have adequately served to cover the deficits appearing in the attached schedule for the years 1931, 1932, and 1933, and such debentures could be repaid from earnings in subsequent years. Annual investment income, period Jan. 1, 1921, to Dec. 31, 1933, predicated upon an average return of 31⁄2 percent upon invested funds Annual assessment income, period Jan. 1, 1921, to Dec. 31, 1933, predicated upon an assessment rate of % of 1 percent of total deposits of active banks. |