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Show I PLEA SOUNDED TO ALLOW FDIC BANK CONTROL Present Plan Rapped by Speakers at Convention An urgent request for centering center-ing federal supervision of banks with the Federal Deposit Insurance Insur-ance corporation and criticism of present supervision methods were sounded Wednesday at opening of the thirty-eighth annual convention of the National Na-tional Association of Supervisors Supervi-sors of State Banks at the Hotel Utah. Gurney P. Hood, hank commissioner commis-sioner of North Carolina and association as-sociation president, pointed out In his address what he called past and present weakness in bank supervision. su-pervision. Before opening his talk, he warned he was going to speak "candidly, regardless of whom this address hits." Chief Speaks The convention delegates' heard a message trom the FDIC h?acl himself at an afternoon session. Leo T. Crowley of Washington. D. C, head of the corporation, spoke. Mr. Hood reported that since the national banking system was begun be-gun 75 years ago, M.402 national hanks have been chartered, but that only 5247 such institutions were in existence at the close of business October 31. 1938. That means 9153 have gone out of business. 63 per cent of the total," to-tal," he asserted. "It is difficult to conceive why so many banks, after being chartered, were permitted per-mitted to fail. Naturally, the question ques-tion arises: 'Was supervision effective?' ef-fective?' The answer apparently is 'no.' " He struck openly at the Federal Reserve system, asserting that since Its inception. In 1914, there have been more bank failures thnn prior to then. Ineffective supervision super-vision has been exercised over state member banks as well as national banks, he charged. . Mr. Hood did not confine his attack at-tack to federal supervision, but included in-cluded his own group of state supervisors, su-pervisors, citing examples of state hanks going out of business as evidence evi-dence of "negative supervision." M ould Make Change He recommended that the office of the comptroller of the currency he abolished and its duties transferred trans-ferred to the FDIC and that authority to examine state member mem-ber banks by the Federal Reserve system be delegated to the F D I C. "Just so long as states have the authority to charter banking institutionsand in-stitutionsand I seriously doubt if (Continual on Pas Sevtn (Column One; Conclave Leaders Suggest Federal Action toil ' 4; At O SPEAKERS AT FIRST DAY SESSIONS OF STATE BANK SUPERVISORS' CONVENTION Lc T. Crowley, left, and Gurncy P. Hood brought messages la delegates BANKING SUPERVISORS SUGGEST FDIG HANDLEJLL BUSINESS in conservative fashion, acquiring only sound evidence of debt and carrying them at reasonable values. val-ues. He thanked state bank commissioners commis-sioners and supervisors for cooperation coop-eration with the F D I C Discussing "Municipal Securities," Securi-ties," Edward A. Wayne, chief bank examiner of South Carolina, said his studies of municipal debt indicate the -great majority of our municipal units are in good financial shape, well managed, with sound outstanding obligations presenting perfectly legitimate and proper Investment for bank funds." -The bankers of the United States obviously hsve reached the same conclusion, as evidenced by their growing interest in this field of Investment," he asserted. Issues Warning He warned, however, of "danger signals" In any rapidly Increasing debt of a municipality, continued reliance upon "floating debt" and any rapid rise In tax delinquency. R. N. Sims of New Orleans, association as-sociation secretary-treasurer, could not attend because of illness. His reports were read by John D. Hos-pelhorn, Hos-pelhorn, deputy bank commissioner commission-er of Maryland. The financial report re-port said that state banks of the nation Had columned total w sources at the end of June, 1939, of S40.454.162.170, compared with total resources of all national banks of 133.180.578,000. Addresses of welcome were given by R. F. Starley, Utah state bank commissioner and convention host, and Mayor John M. Wallace. (CoaUaoaS Tnm rtn Ootl this authority can be taken from them they will have the responsibility respon-sibility and duty of supervising these banks and doing all that Is possible to make them safe and sound for depositors and stockholders," stock-holders," Mr. Hood said. "There is no just reason why ths United States government should have three separate agen-1 dee, all authorized to supervise banking institutions, when ons agency could do a much better Job and would receive the better support sup-port of the people and of congress. con-gress. -The logical federal agent to perform this service Is the Federal Fed-eral Deposit Insurance corporation, corpora-tion, as it is theonly federal agency that has a direct Interest in all of the banks represented. Its member banks must be kept sound, or the corporation will fail. If the corporation fails, it will be the death knell of private ownership owner-ship of banks In this country." Reveals Improvement Mr. Crowley told delegates that the last year has seen a "continued "contin-ued Improvement In the condition of our banking system." 1 "We-have' seen "theTiumber of banks continue to decrease as a result, principally, of weeding out uneconomic units; we have seen the banks as a whole achieve a sound and healthy asset position; we have seen depositors of insured banks that encountered difficulty freed of any inconvenience or distress dis-tress through prompt operation of the federal deposit Insurance plan." Mr. Crowley said that banks, as a rule, are managing their assets |