The Comptroller Wins the Battle for the Washington National Bank
A federal judge rules that the Comptroller of the Currency has the final word on bank insolvency, effectively ending the directors' resistance to a receiver.
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It appears that for once in his career as comptroller of the currency, Mr. Eckels has been in the right. Judge Hanford held yesterday that he was when he ordered the Washington National Bank of Tacoma to go into the hands of Stuart Rice, of Tacoma, as receiver, by a telegram from Washington City, dated Monday. This sustained the plea in bar filed in the suit for a temporary injunction commenced by the bank against the comptroller last week. The bank had gone into voluntary liquidation on July 27, although the directors alleged it was not insolvent. The comptroller disagreed, ordered Bank Examiner Clary to take charge, and appointed Stuart Rice as receiver. The directors resisted, but Judge Hanford’s decision effectively settles the matter in favor of the comptroller, ruling that his discretionary power to investigate and judge a bank's insolvency is final and not reviewable by the courts.
“His conclusions as to the facts are final and not reviewable by the courts, so that the decision of the comptroller of the currency in this case that the bank is insolvent is to be taken as a finality.”
This 1893 legal battle over the power of federal regulators versus local bank boards captures the tension between state autonomy and federal oversight. It mirrors contemporary debates about the limits of administrative power during financial crises and the ongoing struggle for civic control in Washington's banking institutions.
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