"Although cognizant of these irregularities and of the accumulating obligations in the bank of the president's private enterprises, the Comptroller apparently could not or at all events did not take measures to stop them by other means than those of expostulation and reproof until matters became so bad that they simply could not be permitted to go further. "When at last drastic measures were decided upon the Comptroller and the State Auditor, acting together on a Saturday afternoon after the vaults of the three banks had been closed with time locks set for Monday morning, notified our Clearing House committee that unless provision were made for payment in full of the deposits none of the banks would be permitted to open for business on Monday morning and they would be put in the hands of receivers. "Business conditions were strained and the time was therefore particularly unfavorable for permitting the failure of three prominent banks. The effects of such a calamity it was feared would have extended far beyond the confines of Chicago. "The situation was thus protected from a general disturbance of public confidence, but it was done at the cost of a very heavy loss, foreseen at the time and since realized by the participating banks. "The statements of the National bank made five times a year to the Comptroller's department, copies of which were rendered to the Clearing House committee and on which it had implicitly relied, failed to disclose these conditions. "I have given you these details of this unfortunate affair because they show so clearly the limitations of governmental supervision of banks under our National banking law as it has been interpreted by the courts and by the legal advisers of the Comptroller's department. "Let me draw your attention to a few of the legal restrictions which limit the Comptroller's power to act in such cases. "1. Under the National Bank Act no obligation due a bank is considered bad until interest is past due six months and not then if it is secured or in process of collection. "2. The Comptroller may appoint a receiver when he concludes that a bank is insolvent. But here again he has been hampered by the legal definition of insolvency, which is 'inability to pay current debts as they mature.' "3. The making of a National bank report to the Comptroller so long as it is in accordance with the bank's books, however erroneous it may be as to actual values, which alone disclose a bank's true condition, cannot be construed as a misdemeanor.