Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1881-12-15
HE FINANCIAL OUTLOOK.
a Veteran Bankers Warning to Depos.
itors and Stockholders.

| tOTS ana OtOCknOiocTSs
New York Graphic.
The recent Boston bank failures fol
lowing so closely after the collapse OF
the Mechanics national bank has, in a
measure, weakened the confidence OF
depositors and business men, who have
awakened in the fact that the presi.
dents and directors of many of the
leading banking institutions are but
| 6gureheads," and to the necessity of
the adoption of some system of examina-
tons of accounts which will preclude
the possibility of breaches of trust,
large or small. on the part of cashiers
or other officials in the future. So wide
spread is the alarm. and so strong is
the desire manifested to secure honest
and capable bank presidents and d.
rectors-men who will devote their
entire attention to the interest of the
shareholders and depositors-that there
is no doubt that in the annual elections
now near at hand there will be many
changes in the directories OF MANY
banks throughout the country. A few
of the old, cautious bank presidents Of
this city who have weathered not a
few heavy financial storms, and who
are familiar with all the symptoms
that precede a monetary disturbance,
believe that the three crashes of the
past three weeks are but the forerun-
ners Of others, and warn people to take
in sail and be on their guard.
1.-THE bell has been rung," said the
veteran John Thompson, of the Chase
National bank, to-day, "and it will be
well for banks and business men to
exercise more prudence, for it is evident
that there is danger in the atmosphere.
DepositoTs in banks are apprehensive,
and while cannot yet believe a revul-
sion is upon us, yet a few more of these
disasters such as has oveItaken the
Newark and Boston banks will pre-
cipitate pani', and panic will lead
into a revulsion, and a revulsion will
essentially break up the prosperity of
the country. The failures demonstrate
the fact that there is vest deal of
reckless gambling being carried on
throughout the country, which had its
first impulse in the profits when the
boom was on and almost every venture
yielded a profit. We are going too fast.
l refer TO this because in the delin-
quency of bank officers it is often shown
that the defalcation is the outcrop of
a venture. Banks that undertake heavy
negotiations which, if fortune fayors,
will yield enormous dividends, but in
which. if fortune frowns, bankruptcy
is inevitable. must always stand in the
category of doubtful institutions.
"The depositOrs and stock holders in
banks are sufficiently numerous to
make the question of bank manage
ment vastly important. / attach very
little importance to bank examiners OF
official examinations. Their discov.
cries are generally too late to save a
badly managed bank. Having receiv.
ed their appointment at the recommen.
dation of bank officers, they are toe
modest or too squeamish to expose the
small financial deviations of their
friends, even if they are smart enough
to find out their sins of omission and
commission, Bank examinersare moi
bank managers. Examiners can only
expose, Managers are presumed to be
on duty. Directors are presumed tC
direct or manage, and TO them the de-
positOrs and stockholders must look
1t is notorious that boards of directors
are made up of high sounding names
with the object to draw business, and
with no expectation or desire that man,
agement be required. In this fact, in
my opinion, lies the greater portion OF
danger; and the power to secure good
management lies in the hands of the
stockholders at their annual election.
"What can be done to secure the re
forms in bank management necessary
to restore confidence and secure safety
to depositOrs?"
First" Said Mr.. Thompson, "eradi
cate every Ggurehead from the boarC
of directors, and elect directors whc
will direct Second. il an institution
has a multitude of directors, diminish
the numbers to the minimum allowed
by law, so that the old adage, what i!
everybody's business is not my bust
ness, cannot be thrown from one direc
tor to the others. Third. Strive Il
place the management of banks in TIT
hands of stockholders who have tn,
largest interests in its welfare, anC
who will be the heaviest sufferers il
case of disaster. Failing to effec
some salutary guard, sell your share.
start new institution, and be sure tn,
owners and directors can be counted
on your fingers. Depositors can surel,
catch an idea from what have said
L repeat it, my idea is that director
are iduciary agents for the stockhold
ers and depOsitors, and as such fiduci
airy agents they should by law be hell
responsible for the full amount O
losses sustained by bad management O
by neglect of duty, and their liabilit,
should he of fiduciary character, ant
judgements against them should not u
wiped out by taking the benefit of tn
insolvency act. This would secur
good management in banks"