The Milan exchange. (Milan, Gibson County, Tenn.) 1874-1978, 1881-12-10
Report OF the Comptroller Of the Cur,
rCnCy.

WASHINGTON, December :.
The Comptroller OF the Currency, in his
annual report, says the recent failure Of the
Mechanics Bank, Newark, has called the
attention of the public directly to the duties
Of Bank Directors and Of Examiners Of Ma
tionsl Banks. Sections Of the Revised
Statutes and by-lawS OF the National Banks
are cited, and the report continues:
1.-The duty OF Board OF Directors il
plainly defined, and, however innocent they
may be Of any intention to wrong, they are
responsible for the safety OF the funds COM
mitted TO their care. II It can be shown
any Of them had notice Of illegal transact
tons, it is serious question whether they
are not legally bound to make good the
loss which may occur; and IL is question
whether they are not also liable for losses
which may occur from neglect OF duty,
even without notice. IL this is not "A inst
and proper construction Of the present law,
then IT becomeSa question for the cOnsid-
GRAFTON OF Congress whether additional ley
islution upon this subject is not required.
The Examiner can have but limited kuowl-
edge OF the habits aud character Of those
employed in q bank. II the Teller is maxi
ing false entries, and daily abstractng the
funds OF the bank; if bCoN-kGeper is
keeping false accounts, and render
ing untrue statements; il the Cashier
is placing forged paper among the bills re-
CtlNHblt dNu upon the IeElSltT-OOOkS, ana
transmitting such paper to distant places
where it is purported to be payable, it is not
possible for the Examiner Ia u day or two
to unrayel this evil work, VIII. Ch may have
continued for months, and obtain a correct
balance sheet. Examinations should be
periodically made by Il competent commit
tee, selected from the Board of Directors.
They have the whole resources Of the bank
at their command, and il they have any rea-
son TO suspect dishonesty or fraud, it is
their business to investigate thoroughly,
and they should employ experts to assist
them In so doing. The Directory must
continuously look after its own serv-
ants. The Examiner looks after the
acts of the Directors. The report of
the Examiner is confidential. 1t is
for the use OF the ComptrollGr's Office only,
and is in no sense 4 certificate of the good
condition OF bank. In many instances the
capital stock of Il bank has thus been found
to be impaired and the deficiency been made
good without the knowledge of the general
public. In other instances banks have been
obliged to pass their usual dividends, using
/ their earning to liquidate all bad and doubt
/ ful debts. The number of banks passing
dividends the present year is 10; in 1850,
23O; in 1879, 3O4, and in 1878, 343. Hun
dreds of instances occurred annually, and
| many are occurring daily, wherein banks,
| under the reports of Examiners, are notified
of violations OF the act and are brought un-
der discipline OF the law The records of
this office show only one among all the Ex-
aminers ever appointed who has been found
/ guilty of any wrong doing"
Speaking of the Pacific National Bank Of
Boston the Comptroller says the Directors
/ had full information in reference to the ir-
regular and illegal methods of the bank,
! which have since caused its ruin. His let
ter in any properly conducted bank, adj
dressed by him to the Board Of Directors,
! composed, as is the case in these instances,
/ of prominent merchants and business men,
should have been sufficient to correct the
abuse, and save the bank from the disaster
which occurred. The law should certainly
offense for an officer of bank clandestinely
to make loans. either by the use of certiii-
Gates, rs in this case, or otherwise.