St. Landry democrat., 1881-12-17
Report Of the Comptroller Of the Cur.
rency.

WASHINGTON, December 2.
The Comptroller Of the Currency, in hi
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
tional Banks. Sections of the Revised
Statutes and bylaws of the National Banks
are cited, and the report continues:
The duty Of Board Of Directors is
plainly defined and, however innocent they
may be or 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, 1t Is serious question whether they
are not legally bound to make good the
loss which may occur; and it is question
whether they are not also liable for losses
which may occur from neglect of duty,
even without notice. Ii this is not a just
and proper construction Of the present law,
then 1t becomes a question for the consld-
Grafton OF Congress whether additional ley
lslation upon this subject is not required.
The Examiner can have but limited knowl-
edge of the habits and character of those
ing false entries, and daily abstracting the
funds OF the bank: if a book Keeper is
keeping false accounts, and render
Ing untrue statements; il the Cashier
Is placing forged paper among the bills re-
celvable and upon the register books, and
transmitting such paper to distant places
where 1t is purported to be payable, it Is not
possible for the Examiner in day or two
10 unrayel this evil work. which may have
continued for months. and obtain correct
balance sheet. Examinations should be
periodically made by u competent commit
tee, selected from the Board Of Directors.
They have the whole resources OF the bank
m rvru md nd hoy, have
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
look after its own sery-
ants. The Examiner looks after the
acts OF the Directors. The report of
the Examiner is confidential. 1t is
for the use of the Comptroler's office only,
and Is IN no sense certificate of the good
condition OF bank. In many instances the
capital stock of a 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
lul debts. The number OF banks passing
dividends the present year is 1,5; in 1880,
!3o; in 1879, 304, and in 1878, 343. Hun
1reds OF instances occurred annually, and |
many are occurring daily, wherein banks,
lnueI the reports vi Examiners, are notified
u violations OF the act and are brought I'M
Ter discipline OF the law. The records of
his Office show only one among all the Ex-
miners ever appointed who has been found
utility OF any wrong doing"
Speaking OF the Pacific National Bank of
Boston tue Comptroller says the Directors
lad full informal on in reference to the ir-
egular and illegal methods of the bank,
which have since caused its ruin. His let
er, In any properly conducted bank, adj
ressed by him to the Board of Directors,
As is the case in these instances.
t prominent merchants and business men.
hould have been sufficient to correct the
buse, and save the bank from the disaster
Ihch occurred. The law should certainly
e SO amended as to make it a criminal
ffense for an officer of Il bank clandestineiy
D make loans. either by the use of certlti-
ates, as in this case, or otherwise.