Notwithstanding the above regulations of the government, banks at times become insolvent. It is interesting to note the principal causes of failures among national banks since the inauguration of the national banking system, as indicated in the report of the Comptroller of the Currency for 1920 (Vol. I, p. 183).

The public supervisors of banks have only limited power in closing banks which are headed for insolvency. The federal Comptroller or the State Superintendent can take action against a bank only if it commits a clear violation of the law. If a bank arbitrarily exceeds the powers authorized by its charter, if it continually fails to maintain its reserve, or when it willfully impairs its capital, such offenses may lead to its ultimate dissolution. For these contingencies the national and state laws have given their supervisory officials powers of varying scope. In some states the Superintendent of Banks must apply to the courts for the appointment of a receiver. Until the application is granted valuable time may be lost and the condition of the offending bank may become increasingly unsatisfactory. In other states, laws empower the Superintendent to take immediate possession of the bank's affairs. This official then requests a court to nominate a receiver, who takes charge of the assets and liabilities of the bank. The National Bank Act not only permits the Comptroller of the Currency to assume immediate charge over the affairs of the bank, but also allows him to appoint the receiver.