with the probability of future distribution of some additional amounts. Total costs of liquidation of these receiverships to date have amounted to but 5.48 percent of total recoveries. In other words, of each dollar realized from the liquidation of assets and stock assessments, 94.52 cents have been available for return to depositors and other creditors. It will be impossible to effect termination of all existing receiverships during the forthcoming year although substantial progress to that end will be made.

A statement of total receipts and disbursements of receivership funds in connection with the liquidation to date of the 367 receiverships still in process of liquidation is given in the following table:

Liquidation statement, 367 active receiverships as of Oct. 31, 1939

Data as to deposits and amounts of dividend payments, by percentage groups, with respect to the 367 receiverships still in process of liquidation and for all other receiverships administered from the year

Number and deposits of national and District of Columbia State banks placed in receivership period Apr. 14, 1865, to Oct. 31, 1939, by groups according to percentages of dividends paid to Sept. 30, 1939

1 Including building and loan associations.

2 Deposits for banks restored to solvency unavailable.

Including 1 bank eliminated as an insolvent national bank through revocation of receiver's commission as of the date of issuance.

• Exclusive of 1 receivership finally closed during year ended Oct. 31, 1933, but reopened as a receivership and again finally closed during the year ended Oct. 31, 1938.

Administrative policies of the Comptroller's office with regard to liquidation and the methods urged upon receivers in the discharge of their duties are determined and limited by the fact, kept constantly in mind, that the Comptroller of the Currency is by statute a trustee who holds and liquidates the assets of each insolvent national bank for the benefit of the depositors and other creditors through receivers appointed for such purpose. Expenses of liquidation are kept at a minimum and continual pressure has been, and is now, exerted on receivers to bring about the early termination of the trusts in their charge. An effort is also made to avoid such severity in liquidation methods as would work unnecessary hardship on individual debtors or would cripple or disrupt the community without, however, losing sight of the needs of depositors for the return of their deposits at the earliest practicable date.

The liquidation of those insolvent national banks which suspended during the banking holiday of 1933, or just prior thereto, presented new problems of administration requiring prompt solution. Among these was the proper method to be employed in the liquidation of the vast amount of general market securities held in the portfolios of these banks as secondary reserves or acquired from collateral held to secure the obligations of debtors. Experience quickly proved that receivers acting independently of each other were in no position to sell these securities efficiently upon a falling market and likewise demonstrated that efforts to do so introduced a confusing element into the national security markets, and in fact defeated the very purpose thereof. The Comptroller, therefore, early in 1932 established an office in New York City, headed by a special liquidator of securities, to assist receivers in the liquidation of this type of asset. General market securities, at first consisting of bonds only but later stocks and other types of securities, were forwarded by receivers to the Federal Reserve Bank of New York, where they were held for safekeeping until sales could be effected. Sales were negotiated by the special liquidator from time to time after a careful study of the securities to be sold and the capacity of the market to absorb offerings made, having in mind the interests of depositors and other creditors for whose benefit the sales were to be effected. However, need of this special provision for the liquidation of securities no longer obtains, and arrangements have been made for the closing of the special liquidator's office as of November 30, 1939. During the period of nearly 8 years since organization of the special liquidator's office the total proceeds of all sales effected have amounted to $163,438,463. Of this total $155,084,084 was realized from the sale of bonds having a par value of $227,590,598, while the balance of $8,354,379 resulted from sales of stocks and other types of securities. Another major problem was encountered in connection with the immense amount of real estate acquired through foreclosures and settlements consummated both before and after suspension of the banks involved. All types of real estate were held in large volume, of which prompt and satisfactory liquidation was impossible because of the limited demand therefor and a falling market. If the real estate were to be held for any considerable time, large expenditures for operation, taxes, and rehabilitation were inevitable, while if forced sales were attempted by the receivers, the resulting sacrifices

as were necessary to preserve the creditors' equities were authorized with, however, the imposition of rigid restrictions on rehabilitation costs and the refusal to authorize expense of such nature without reasonable assurance that the funds so invested would be recovered. The situation required a solution that would relieve the depositors of this burden and in 1935 resort was had to auction sales with satisfactory success. A total of 182 advertised sales of this character involving 7,659 separate parcels of real estate owned by 305 receiverships have been held and this aid to liquidation has been a great factor in expediting distributions to creditors and in the prompt termination of scores of receiverships. The auction method is now being used much less extensively and is largely confined to those cases where a normal demand for the type of real estate held does not exist or where such action will remove the immediate obstacle to termination of a receivership. During the past year receivers have sold, with and without the aid of auction sales, a total of 3,705 parcels of real property, but there remains unsold an aggregate of 9,323 parcels of which 78 percent is held by two receiverships. The remaining realestate holdings are valued by the receivers at approximately 45 million dollars and consist of 162 bank buildings, 748 store or office buildings, 458 apartment buildings, 4,567 dwellings, 275 farms, 2,482 items of vacant urban property, and 631 miscellaneous parcels of other types.

The development of the procedure to be followed in obtaining newly available loans from the Reconstruction Finance Corporation, and the distribution of the proceeds thereof to creditors likewise presented a new problem. These loans were obtained in large volume, but the age and advanced stage of liquidation of most of the active receiverships now preclude any further benefits being obtained from this source although loans can still be procured wherever circumstances warrant. Since the passage of the Reconstruction Finance Corporation Act in 1932, 2,321 loans have been obtained for the benefit of 1,125 receiverships on which advances of 395 million dollars were made by the Corporation. Practically all of the original loans were repaid in full with interest, the loss ratio being only five one-thousandths of 1 percent of the total advances. Only 13 of these loans remain unpaid on which the balances due as of October 31, 1939, amounted to $1,786,227. Many banks have found these loans to be desirable investments, and during the last 3 years, 94 receiverships have obtained loans aggregating $94,659,760 from 45 lending banks. Wherever possible, these loans are placed with banks in preference to the Corporation. All of such loans have been repaid with interest except 6, on which, as of October 31, 1939, the unpaid balances amounted to $856,100. No loss is anticipated to any bank by reason of any of these advances.

The Comptroller's Bureau has, through the Division of Insolvent National Banks, taken a very active part in the management and liquidation of each receivership. In accordance with provisions of the statute, all compromise settlements and sales of assets are submitted to the Comptroller for consideration and approval before submission by the receivers to courts of competent jurisdiction. All questions of offset as well as the rights of alleged preferred or secured creditors are submitted to the Comptroller for consideration and instructions. Receivers are not permitted to make expenditures of

trust funds for the preservation or protection of assets except as to very minor items without first informing the Comptroller of the facts and receiving necessary authority therefor. All general administrative expense is carefully reviewed and receivers must have the approval of the Comptroller's office for the employment and salaries of those persons whose assistance is considered necessary in the handling of liquidation activities. The careful supervision and management of receiverships require sufficient competent personnel in the Division of Insolvent National Banks to perform efficiently the various necessary functions thereof and, in order to handle the large volume of work involved in these numerous activities, it has been necessary to greatly expand the personnel of the Division from time to time. The Division of Insolvent National Banks now consists of 290 Washington office employees under the direction of a chief supervising receiver assisted by two supervising receivers in charge of the various Division activities. This supervisory personnel was supplemented as of September 30, 1939, by 135 field receivers and approximately 1,500 field receivers' assistants of various kinds. The present Washington office and field personnel is, however, much reduced from the maximum thereof, since during the period of extreme activity following the national banking holiday, there were approximately 425 Washington office employees, and 5,000 field receivers and receivers' employees. The present Division personnel will continue to decrease as the volume of Division activity diminishes and particular functions thereof are terminated. Costs of maintenance of the Washington office and personnel of the Insolvent Division are ratably assessed against insolvent national banks, while salaries of field personnel and other costs are paid directly from funds of particular receiverships involved.

In carrying out the task of supervision numerous policies have been developed which have been impressed upon both the office and field personnel. Receivers have been expected to use constructive methods in dealing with the individual debtor, permitting him to continue as a productive member of the community while programs of payment were determined upon and carried out. While this may have slightly prolonged the process, it has saved much of the dislocation and distress that usually follows upon the liquidation of any body of assets. Receivers have been expected to use meticulous care in the study of each asset, however small, and to overlook no opportunity to make recoveries for the depositors. Bad or doubtful obligations have been freely compromised upon orders of courts of competent jurisdiction. Except in very rare instances no settlements of this type have been made without the debtors having first submitted sworn financial statements for investigation and verification by the receivers. While the collection of such a large volume of miscellaneous assets has necessarily entailed a large amount of litigation, this has been held to a minimum. Just as the details of liquidation receive the benefit of the experience of the administrative section of the office, questions involving litigation are likewise carefully reviewed and supervised by the office of the General Counsel of the Treasury. Therefore, as a general rule litigation has not been instituted in any case unless settlement by negotiation proved impossible and then only when it appeared that probable recoveries would justify the expense. Through the medium of this supervision it has been possible to keep