Weekly Chillicothe crisis., 1884-06-05
The Enidemic of Bank Erands.

'NNA''lN way Hdn pdn0'u l'l N'lllt
time without bringing its record Of de-
falcation, and the number of frauds
occurring in banks, and committed by
bank officers, is startling. But ii
would he Il mistake to conclude that
an epidemic of crime is upon US, or
that the men whose laithessncss to
their trust is being brought to light are
monsters. We must look for more
natural and reasonable explanations,
and we can find such without having
very far to 90. The reason why so
many dcfalcationS are Just now coming
to light is, primarily, that recent events
have startled every bank corporation
in New York out of its fancicd security,
and caused general ovcrhauling Of
accounts. The second explanation is
that there has been II culpablc laxity
in the management of many monetary
institutions for some time past,
and that through this laxity individuals
have been in many cases brought into
the presence of temptations which they
had not the strength to resist II is
idle to say that the characters of these
bank officers ought to have justified
the dangerous latitudcpcrmitted them.
The plain truth is that no mans charac.
ter ever ought TO be subjected to such
a strain, and that those who put the
temptation in the path of their fellow,
have themselves TO blame for the out.
come.
The experience of ages is at the back
Of this conclusion. In financial affair,
systems and machines may sometime,
be safely trusted. but men never
Good caSy-going directors are apt tt
shift responsibility on TO the activ,
business man of the establishment, bC
he president, manager, cashier or pay
ing teller. Things goalong 50 smooth,
in his hands that they gradually rcla>
and at last abandon their prccaution,
and their watchfulncsS. With every
such relaxation, however, the danger
is increasing, and when all the bu, ines
has rot iato one pair of hands calamit,
j, not lar of, In every one of the rc
cent cases cool analysis shows that III,
final collapse, the heavy dcfalcation
the malycrsaliOn of trust funds. ha
hrcn made possible only by the nrglcr
of the system which was supposed t,
be in force or by the failure of other
than the actual dcfaultcr to perform
duties intrustcd TO them. And tha
which iustiiics popular diStrust undc
the circumstances is not so much tn
facts of the dcfalcations being revealed
rs the inference inevitable from thos
, facts that the honest officers Of th
crippled banks have been opening tn
/ door wide to fraud and theft by nce
l ligcncc which, in view of its con
| sequences, may well.bc termed Grim
e inal.
q Nor will this popular diStrust be like
e ly to pass away until better guarantee
, are given for the faithful GUARDIANSHIP
of the interests of dcpositors. NeithC
!, names nor regulations will hcnccfort
l. avail to conceal Slovcnly management
4 The public will demand such check
= and balances. so vigorously and pc
Il petually applied, that it will be rs IN
II possible for the president as for III
IS porter TO mcddlc with the deposit
Il The public have learned that concri
tration of power and of responsible
IS in Il banking business is fatal to sccu
u lty. Responsibility and power mu
II be divided for the sake of insurir
Is safety, and in no other way can it |
TT had certainly. To recommcnce on Il
u old footing would be futile. 1t is II,
y n question nearly so much of indivi
w uaIS rs of methods of working. ltwi
therefore be of no use TO seek n renee
=, in men; the systems will have to
'a u, changed so that dependence is no Ion
cr put upon so unstable and precal
,' Gus factor rs human character.
~, " NeW lork IriJUHc.