, 1873-05-01
tho authority Of tho Govornmont to prosecute
thntr h11afnaRa


Cashier Of tho Atlantic National Bank, OF Now |
York City, and tho consequent failure Of tho
ban'k, nust attract tito attention Of tho public to
tho Incompetence Of tho syHtom Of examination
which tho Government cxorolsos ID the caao Of
tho National Banks. Though tho downfall Of
tho Atlantto National Dnnk is by no meann tho
only case IN point 1t iB tho most notable and
fragrant instance Of tho failure On tho part Of
tho Government to afford tho poop1o tho protoo-
tion against fraud which It advortlsos to glvo by
chartorlng National Banks and roaervinB tho
right Of supervision. There Is goncral public
confidence III a National Bank on account
Of tho namo It oarrios, and the con-
noction which 1t ia popularity supposed to
have with tho General Government Whom
peop1o deposit In private bank, they first In
form themselves concerning tho character and
responsibility Of tho bankers In tho BANJO mannor
as whom they havo business with othor private
persons In whom It is nooospary to roposo trust.
This ia not alwaya, nor usually, tho caao with
rcfcronoe to tho National Danke. They arc
gonorally regarded as part Of tho system Of tho
Government. It is known that they hnvo spo-
cal Advantages md, 1t is supposed, arocontrollod
by certain flxod regulations. There Is regular
Government Bank Inspector for every district,
whoso dutioa aro naturally conBtr1nd to ho in Tho
intoroas Of tho public It has como to DO bo-
loved on account Of those orou1nstances, and
tho Govornmont is cloar1y responsible for
tho impression, that tho National Banks offor an
absolute guarantee Of anfoty to their depositors
and customers. In deforonco to this impression,
tho Government must etther givo bottor pro-
teotion than it has afforded within tue past yoar,
or e1so It should Withdraw its Examiners md
give tho public to understand TINT thoy muat
tako caro- Of thor own intorosts.
In tho caHo OF tho Atlantic National Bank, It
is impossible TINT deliberate syatom Of stealing
could 1ayo boen carriod on for yoase, and to tho
amount of several hundred Thousand dollars, il
tho Govornmont examination Ind boon At oil
worthy Of tho namo. Taintor'a Rtoalings OK
hauHtcd tho capital Of the bank, tho sur
plus TINT had boon accumulated, tho spo-
cial deposits, mud tho moat Of tho regular
deposits, amounting to moro tim 100000 in
all. Yot, to oil appearances, nobody had any in-
formation Of this condition OF things until T9in-
tor himself exposed 1t. It IL now stated that'tho
ban1l WAS examined twice In 1879, and that tho
Examiner reported TINT tho capital Of tho bank
was seriously impaired. II this ie truo, whnt
good did the report 10 tho public or tho deposit
tora7 It could not have boon q warning, for 1t
WAS kept quiet. It is significant that thoRo IN :
n n
after tho banks which they concern havo run to
tho oud of the ropo aud loft nothing for tho,pno-
plo wllo hayo trusted thom. Thero might
as woll bo no bunk examination go
far as the public interest is concor7. rod,
II unfavorablo reports aro to DO filed
away in tho archiyoa Of tho Treasury Depart
mont at Washington. It is well known that tho
Bank Examiner ut this point recently forwarded
special report concerning certain National
Bank aftor examination. It is only fair to pro-
eumo that tho condition Of tho institution was
such as to require special report. Eet tho "
port is not made public. In what way, TIM, can
the proaont Ryatom Of bank examlnatt~ III urotoct
tho pubio7 Should this parti". liar bank foil
somo months from now, th~ comptrollor will be
| ablo to point to tho rar ort TIM local Bank Ex
om;,,or ,ron,a In ~ -'of'' 'uo 'oo"' -,
am1nos "oo1" w luscious OF having dono Iii
autyi but m what WY would tito public b
helped byy1.... =. thts7
Vae otably bad feature Of tho examination
a7as'.tn is that tho Bank Examiner ia paid by tn
W.nks, each ono contributing it's share. It iB III
!, duty to make ut leaat two denominations aurln
the year; he may mako othora at his optiol
His position is ono throu: sh which ho may maj
himRelf extremely ann nying, and, ii not
honest man, he has o pportunittos for lovyi1
b1aokmnl TINT aro ncqualod in any 9th
Government place. Yet 1t ie notorious tn
Bank Examiners 70 appointed On po1tle
grounds like other' ,fficia1a IN tho Civil sor'1s
a former Comptre .lor Of tho Currency folio"
tho popular pra .tico Of appointing relatl'
whoao exploits were finally exposed. i
process Of aacertainlug the statua
q National bank honestly IL very simp
The capital !, stock, tic surplus, II thefe
any, aud Il % amount Of the deposits, arc kno'
It lis ther The duty Of tho Examiner to ascort'
how tt Ia money Ia used, Hc count5
money .on hand, aud ho o1aminos tho collatet
On " Itch money has bccn loaned. thoror
noce untant Gnu therefore speedily arriVo q
no. nal condition Of tho conccrn. Ihoro
Aaos, however, In which tlo Examiner may
J deceived. There is nothing to prevent q
, tional bunk borrowing any neodod amount
. money, aud holding it just long enough Tor
ar Examlnor to count, without his knowledge
nd without exciting suspicion TINT itwn7 borro
bio for tho occasion. Wlilo such things aro
10 aib1o; while failures as DISASTROUS
10Y those OF tho Atlantic National j
md and tho Ocoan National Bank In
tho York, and tho Scandinavian National Dans
Chicago, nny occur without giving tho pu
ssi- my atmonition, thon thezo lasome dehc1ono
nal tLo Government systom Of examination vi
! Of cannot bo too quickly supplied.
ors All National Danks and nll owners Of Natl
ont Bank stock aro interested III having these OF
IN tions removed. Tho pooplo do not undoss
I'M tho aofocts, but thoy cannot fail to note th
4 Ia. gultg Tho fault doos not iio wholly In tho
the tom of examination ind tho porslatonco
out which special roportH are kept from tho ru
,u. 71.1.u H.. ,,,-,, hout avatem hnnGHt mud c