Should Banks Be Required to Adopt the Reporting Requirements of the SEC?
by Louis A. MACKENZIE Partner, New York Office
Presented before the Columbus Chapter of The Ohio Society of Certified Public Accountants—December 1965
TONIGHT I have been asked to discuss with you for a few minutes the question, "Should Banks Be Required to Adopt the Reporting Requirements
of the SEC?"
Let me be brief. The answer to that one, at least in my opinion, is an unequivocal yes. But, is the answer that simple? For a few minutes, let us consider the recent legislation affecting bank reporting.
About one hundred years ago an event took place that has had a profound effect on the banking industry. That event was the approval by President Lincoln of the Act of February 25, 1863, providing for a system of national banks chartered and supervised by the Comptroller of the Currency, under the general direction of the Secretary of the Treasury. This Act, known as the National Currency Act, and referred to by many as the Free Banking Bill, attracted scant notice in the Nation's press of that day; as a matter of fact, in one New York City daily it was covered by the following three-line insert in a column on Washington miscellany:
The Free Banking Bill, it is understood, was approved by President Lincoln early in the week. In spite of the lack of publicity, I am sure that everyone in this room will agree with me that, with the stroke of a pen, President Lincoln set in motion a chain of events that in time helped to stabilize and strengthen the Nation's economy. Regulation, in short, has been healthy, for the aims of the federal government in its supervision of banks has been to protect depositors' funds and to assure the ability of banks to continue service to their communities.
On August 20, 1964, just a little over a hundred years after the signing of the National Currency Act of 1863, President Johnson signed into law the Securities Acts Amendments of 1964 whereby, among other things, public disclosure provisions concerning certain financial information became applicable to unlisted corporations having $1 million or more of assets and 750 or more stockholders of a single class. These provisions extend to the banking industry.
This Act, unlike the 1863 Act, has received reams of publicity,