Litchfield enquirer., 1881-11-10
Can Bank Defalcations be Prevented,

Can Bank Defalcations be Prevented! !
 Tn an.able article onthis question. the Hart ford Courant comes to the conclusion that the
 detection of the defaulting bank officer is. as it were, matter of accident Bank accounts are so intricate and extensive, the knave has so much tune and opportunity to plot conceal ment, and the detective processes are at SO tremendous disadvantage, that the defaulter usually continues his evil work for years, often through life, undiscovered. Therefore, says the Courant. honesty is the only safe reliance, after all. Too true, yet how are we to distin- tinquish between the mere show and the reali- ty of honesty2 Cashier Baldwin had all the usual indications of honesty and none of those of dishonesty. Yet he was thief, forger. and perjurer. We do not by any means suppose that most honest people would be- came rogues if they imagined they could do 30 without being caught Yet we do believe that ninety-nine out of every hundred men who turn from honesty to rascality ia positions of high trust are tempted to it by the over confidence with which thelr previous good character has inspired those chiefly intrust- ed.
 We often hear it said that self-inter est will
 make men watch the custodians of their money sharply enough without any interfer- ence of government ID their behalf. Experience does not sustain that idea Cashier Baldwin would have gone on to the end of his life cheating the Directors of hls bank, had not the approaching government examination made further concealment impossible. It was from the bank examiner that he ran the extreme risk of detctiou year ego which could only be avoided by the boldest and the riskiest of forgeries. Boards of directors are often con- posed of wlse and shrewd business men. but they as often exercise little control of the af- fairs they are supposed to direct Some one officer, paid to do the business, giving his whole time to it, is the real manager. The
 director, who gets no pay, and consequently spends little time in the service of the compa- ny, knows almost as little about the real con- dition of it's affairs as the stockh0lder who merely invests his money, draws his dividends and is satisfied Is it not time to do away with directors who fail to direct, and to ap- point other officers, and pay them enough, to at least exercise some real supervision of cor porate affairs? In no other way can bank or other large corporation impose any effectual check upon it's regular officers.
 There is no other reasonable course, unless, l indeed, it is thought best to trust entirely to ] government supervision, whichis apparently all
 the serious present difficulty that stands in way of the bank defaulter. In that case the government examinations should
 .,,..o .ho...s~, and the st0ckholder -, --E-.e public should lock to these ex- -ninations to protect their interests
 After all, government methods give the pri- vate corporation It's most useful hints as to the oversight of officials. The government pro- ceeds on the principle that every official should be brought to strict account, and that no character for honesty, however perfect, should excuse any officer from careful super vision, or his accounts from thorough exami- nation. As natural consequence, while hun dreds of banks and other private corporations have been ruined by defalcations, the national government, with its infinitely larger concerns, has lost next to nothing in that way. We cannot but attribute this to the fact that the government, from long experience, has found it's safety not in looking for an honesty which is nowhere invariably to be found, but in imposing such wise rules of supervision over the acts even of it's highest officers as removes the opportunities and the temptations to dis honesty. as a..,,