. The Saturday evening post. esand make both ends of the banks statementsmeet properly. So more and more the customgrew, in state and state savings banks, of dis-regarding the current market value of bondsin the report required of them by law andrelying on the apparently undeniable fact thatthese bonds would be good at their , of course, was done with the consent and approval oflaw and authority in the various states. It remained for the coming of war to bring the nationalbanks into this situation. But when in 1914 all sorts ofAmerican securities were dumped by European capitalupo
. The Saturday evening post. esand make both ends of the banks statementsmeet properly. So more and more the customgrew, in state and state savings banks, of dis-regarding the current market value of bondsin the report required of them by law andrelying on the apparently undeniable fact thatthese bonds would be good at their , of course, was done with the consent and approval oflaw and authority in the various states. It remained for the coming of war to bring the nationalbanks into this situation. But when in 1914 all sorts ofAmerican securities were dumped by European capitalupon the American market in the first excitement ofEurope over war, the comptroller of the currency recog-nized the awkward situation into which capital was forcingthis country, and instructed the national-bank examinersthat national banks need not be required to charge downtheir bond holdings to current prices. The situation beingforced by capital through the banks upon the states 28 THE SATURDAY EVENING POST December IS, 1920. and nation, it willhe seen, was em-barrassing in theextreme. The na-tional banks heldan investmentalmost equalingthree-quarters oftheir capital stockin railroad andother public serv-ice bonds. Tothem, in companywith the savingsbanks and the in-surance com-panies, had comea total loss meas-ured by currentprices rising intohundreds of of dollarsthrough the fall ofthe values of itssound, high-grade,low interest bear-ing bonds. Theywould be all essen-tially sound, it wasbelieved, at matu-rity, and obviouslyit would not do toalarm the publicthrough publishedstatements of thefigures at whichhanks bondhold-ings could be liq-uidated at currentprices, when theremust he and wasto be no liquida-tion of banks, especially now at the opening of the war. This, t hen, was the first relation which corporate capitalforced upon a reluctant Washington under the pressure ofwar or approaching war. The comptroller of the currency,in fact, interested through this unplea
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