The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-03-26
BANK EXAMINATION.
The Case of the Pacific NatiOnaI-Weak Spots
in the System.
Special to the INDIANAPOLIS Journal

The Case of the Pacific NatiOnaI-Weak Spots
in the System.
Special to the indianapolis Journal.
WASHINGTON, March 25.-The House com
mittee on banking and currency has been for
some days engaged on preliminary investiga-
ton of the suspension and subsequent failure
of the Pacific National Bank, of Boston, Mass
The prime object of the investigation is to as
certain whether, in the opinion of the committee,
| it is necessary to order full and thorough in
vestigation into the failure of the bank and to
ascertain whether the Comptroller of the Cur
rency and the United States national bank ex-
aminer were in colluson with the ex-president
| of the bank. through whose reckless manage
meut the failure was brought about. ma
ority of the stockholders who asked the investi-
cation, in their memorial to the House charge
gross carelessness and inefficiency upon the
part of the government officials There
is in the memorial submitted an open charge of
collusion between the directors of the bank and
these officers Another object of the investiga-
ton is to see if it is necessary to amend the
banking laws in order that the interests of stock
holders and depositors may be more effectually
protected. Both sides to the controversy have
had hearing, but the committee has not vet
SuDulllUSu llS report mus ldf UIe IdcuS dScef-
tanned have shown only what has been devel-
oped in almost every bank failure that has ever
brought poverty and ruin to depositors who have
placed implicit trust in the honor and integrity
of those men intrusted with the care of the
funds of others. The points brought out in
this especial case which are of interest
to the general public are that there are in the
United States only eighteen bank examiners,
and each of these men is charged with the duty
of making year a careful examination of
l44 national banks, or an average of one bank to
each two days of the year In the case of the
Pacific Bank the examiner reported in January,
1884, that the mode of doing business adopted
by the president was dangerous in the extreme,
and that unless the mode was changed it would.
certainly result in disaster The directors prom
ised to follow the advice of the examiner but
failed to do Sc because the president threatened
to resign if the directors dared to talk of an in
vestgation for themselves into the affairs of the
bank. A few months later the crash came 1t was
found that the president had been in the habit of
loaning the credit of the bank to one irresponsi-
BILE broker to the extent of 81 600 900 or more at
time, and that this broker had failed to pay up
The directors looked over the assets and thought
they could resume and come out all right. They
resumed with the consent of the Comptroller,
but they had overestimated the resources and
vitality of the bank, and within sixty days were
worse off than before. Now, the stockholders
who have lost their money by their confidence
| in the men they elected to represent them, de-
sire to throw the blame of their own neglect of
proper precautions upon the officers of the gov
ernment It's the old story of locking the door
when the horse is stolen.