The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1881-12-16
Report Of the Comptroller Of the Cur.
rency.
WAsHINoroH, December &

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 aud Of Examiners Of Ma.
tional Banks. Sections Of the Revised
Statutes and bylaws Of the National Banks
arc cited, and the report continues:
"The duty Of . Board Of Directors II
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 transac-
lions, Il il Q serious question whether they
are not legally bound TO make good the
loss which may occur; and It 70 question
which may occur from neglect OF duty,
even without notice. II this IL not just
and proper construction Of the present law,
then it becomes question for the cOnsid.
Grafton of Congress whether additional leg.
islation 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: il book keeper II
keeping false accounts, and render
ing untrue statements; II the Cashier
Is placing forged paper among the bills re.
ceivable and upon the register books, and
transmitting such paper to distant places
where it Is purp0rted to be payable, 1t Is not
to unrsvel this evil work. which may have
continued for months. and obtain correct
balance sheet. Examinations should be
periodically made by competent commit
tee. selected from the Board OF Directors.
They have the whole resources OF the bank
ut their command, and il they have any rea-
son to suspect dishonesty or s.aud, 1t Is
their business to Investigate thoroughly.
and they should employ experts TO assis!
continuously look after its own serv.
ants. The Examiner looks after the
acts of the Directors. The report OF
the Examiner Is confidential. It Il
for the use of the Comptroller's Office only,
and Is in no sense Q certificate OF the good
condition of bank. In many instances the
capital stock of 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
full debts. The number of banks passing
dividends the present year is It's; In 1880
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 I'm.
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.o
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, ad.
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
be so amended as to make it crimina
offense for an officer of bank clandestinely
to make loans. either by the use of certiti'
Gates, as in this case, or otherwise.
A c0nside rable part OF the report Is given
to the subjects: Substitutes for Money, -
s'Tbe Proportion of Bank checks Used, -
from data furnished by President Garfield;
'.Checks and Drafts in the Principal Cities, .
and the Comptroller says:
ut would be an interesting subject fol
investigation to determine what proportion
the checks received by banks in New YOrh
City on any given day represent the opera.
tons at the Stock Exchange, and what pro.
portions of these operations represent
legitimate, and what speculative, trsnsac'