Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1873-05-01

safety, security, ana uniformity OIL the
currency is assured. The stockholders
and people have other and equally i'm
portant objects to attain in becoming
parties to, or interested in, national
banks The stockholders wish to pro-
vide for safe and rcnumerative invest
ment of money. They and business
men generally, also, look to national
banks as affording a secure and ready de-
pository for their surplus funds-that is,
for the money for which they have no
immediate use. There are, also, other
considerations which enter into the for
nation of banking institutions, but it is
safe TO say that profit and deposit are
the main inducements. But for these
objects, no bank would be established
or maintained. To secure profit to the
stakeholder and security to the deposit
tor, every conceivable guard, almost,
has been thrown around their govern
ment and management. Notwithstand-
this, we are almost daily-certainly
weekly-startled by the announcement
of some defalcation, of such extraor-
binary proportions that the entire CAPT
tai of the bank and the funds of the de-
pOsitors are swept away. The response
bility is thrown upon the shoulders of
the unlucky and criminal defaulting of
ficer. We are told that it is the ''same
old, old story of stock speculations, or
other efforts to get rich hastily. We
used the word "unlucky,' not because
it is any excuse for man to use the
funds of a bank for his own purposes,
but because if he had been "lucky," as
the world call people '1ucky," no one
would have ever known that he was a
criminal. The blame and responsibility,
in our Judgment, does not rest solely,
or, even, mainly, with the defaulters.
With the checks and guards of the ma
tional bank system, defalcation ought
to be impossible. We use the term de-
falcation as it is. generally understood
that is the continuing misrepresentation
of the funds of a bank, covering per-
iod of weeks, months or years. Of
course, it is possible for bank
officer to steal the funds of the
bank and run away, the slme as-and
with greater facility-a burglar or other
thief. In the defalcation of the cashier
of the Atlantic National Bank of New
York, which has just been brought to
light, we are told that it has been going
on for weeks and months, if not years.
During that period the national bank ex-
amincr has made at least two cXamina-
tions, without discovering anything
wrong except some bad debts. The
periodical statements required by law
have been made and sworn to as scor-
rect by the directors !; the president, di-
rectors and other. officers of the bank
have had constant access to the books,
papers, securities and funds of the bank,
and yet this four hundred thousand dol
lars has vanished! We doubt if it would
be now known but for the confession of
the cashier The trouble which existed
there-as it undoubtedly exists in all
banks, to a greater or less extcnt-was
that too much was left to the cashier.
His statements were relied upon, be-
cause it was less trouble than it would
be to examine for themselves We have
had so many of these defalcations lately
that it is time that bank officers and eX-
aminers awake to their duty If they
do their whole duty, defalcation can
not take place. 1t is for this purpose
they are elected, and statements required
of them under oath. AS we view it,
they are hardly less criminal than the
defaulter himself. A pra4er discharge
of their duties would prevent the missp-
preparation of fpQds, the loss of the
stockholders andadeposltors, and prevent
the crime ifself. A similar responsible
ity-but 1ot,to so great an extent--rests
upon the examiner. The law, if we un-
/ derstandit, requires him to make an ex-
animation, The instances are very rare
when any examination is, in fact, made
We have known Of examiners. under
the old State lS..w of banking, who did
Ao' n"'0 " capacity or aolllIy 10 MAKE
an exar .nination They were compelled
TO axe the statement of the bank as an
examination. 1t is not for the interest
of the bank or the public to have this
class of officers or this kind of examina-
TONS Every defalcation is loss not
only to the stockholders and depositors
of the bank, but to the general public.
All are therefore interested in having
these officers do their duty. The fault
is not in the system, but in the officers
The profit to the shareholder and the
security of the deposit can and will be
rendered as certain as the value of the
bank bill, if the officers but do their duty
personally and not by proxy This il
the lesson we read in the Atlantic Ma
tional Bank defalcation.