St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1885-09-25
Numerous Interesting and Instructive Ar
tiole8 Prepared for the Bankers
Association.
Views of Bank Examiner Drew Upon De-
faleations and Prevention of Lcsses
Therefrom.
INSTRUMENTATION of Capital
to Labor.
Defects of the Silver Dollar--Busi-
Ness in the West--BankerS'
Excursion.
American Bankers.


first work of the day was the disposition of
the resolution offered yesterday, asking that
! the silver bill of 1S7Sbe suspended and for the
substitute offered by Mr.. Flanagan of New
| YOrk. asking for the unconditional repeal
| of the Bland law. Mr.. HarrOn of Iowa
offered q substite to the original reso-
| luton, making the silver dollar equal with
! gold. This was lost, as was also the Flani-
gan amendment, and the original resolution
was carried by large majority. Lyman J.
| Gage was reelected president of the asso-
citation, and the remaining officers were
also reelected. Col. Nelson of Alabama
read paper on the prevention of risks in
collections. An address by W. P. Drew,
national bank examiner Of Philadelphia,
on Gefalcations, followed. he said that
scarcely any subject pertaining to the con-
duct Of banking and other moneyed insti-
tutions can be OF greater practical utility
than that which involves the discussion of
! the best method of
PREVENTING DEFALCATIONS,
| including in that comprehensive term rob-
| berries Of all kinds, whether perpetrated in
the front OF banks by tellers, clerks, book
! keepers, runners, etc, individually, or by
| cOlluSion among themselves or conspiracy
| with outsiders, or concOcted in the parlOrS
of banks by presidents, cashiers or directors.
AS TO the organization of a bank, particu-
| larly as regards its working force, some
rules may be cited which, in practice, seem
to have attained the force Of Well-recOg-
| nized principles. Prominent among these
is to separate the handling and custody OF
money and other funds from the clerical
force Of the bank. Banks have been
! robbed Of large sums by detailing a book
keeper to the counter OF teller during the
! latIpV'c 1hCGIoOn Hauinu in hic QOnfrOl
both ends of such accounts as belonged on
his ledger, he was free to plunder ad libi-
tum until the telIers return. Tellers should
be intrusted with cash only. Tellers have
been known to embezze large sums by car
rying in their cash worthless and fictitious
checks and memoranda representing money
distracted for their private use. The prac
tice of intrusting call loans and securities to
the custody Of d teller III his leash" is
VERY OBJECTIONABLE,
as such items are fegitimately no part of the
| true cash, and in case of their abstraction
by him question might possibly be raised
as to the liability Of his bondsmen. The
| custody Of the funds of a bank should be
divided between the cashier or president
| and the teller, the former having charge
of the reserve or other unemployed funds,
| and the latter that of the counter or work.
! IiiSS S6loIA VI LliC DtIIh' NIStIiJ CiAlOCLAlC-
ments OF cash would have been prevented
by such a division of responsibility. Gus
tody of collaterals for loans should not be
with the person who has charge OF the
! paper supported thereby, and necessary
powers Of attorney may be kept apart from
the securities to which they apply. Indi-
Yidual bo0kkeeperS should be rotated with
out notice, thus preventing them from de-
frauding their banks by collusion with de-
positors. For cashier to keep the general
ledger is Objectionable. In the proper
management or administration Of a bank
TIE ONE REQUIREMENT
which should be uniformly insisted on is
accuracy in The work of the bank-in al
settlements and in all accounts. ''Short
cash" and cover cash." and differences in
ledgers and accounts, should be vigorously
excluded. The Importance of this require
ment readily suggests itself. Every em-
ploye and officer Of a bank should be
obliged to take leave of absence for short
time. at least once every year, thus expos
ing his work to the inspection OF others,
and hence deterring him from attempting
| faLslflcati0n Of his accounts. Correct forms
OF organization and wise methods in man
agement should be supplemented by thor
Ough, frequent and unexpected eXamina-
tiOns by officers and directors. 1t is true,
indeed, that, notwithstanding wise organ
izatioD, judcioIls administration, and thor
| ough examinations Of banks, defalcations
may yet possibly be perpetated by trusted
managers aud employees, still. if any occur
after all reasonable labor, care, and vigi-
lance on the part Of directors, the latter
| will not be involved, even indirectly, in
THE DISGRACE OF THE ACT.
a paper by Edward Atkinson of Boston
Problem was presented, Mr.. Atkinson not
being present. In it lie says: The matter
seems to ne so simple and so plain, that [
cannot fully comprehend the reason for the
obscurity which has been thrown around it
III the multiplicity Of books, essays and
speeches upon the subject; except upon the
assumption that [ am myself incapable of
graSping the fundamental principles Of
money and the functions in legal tender
acts, and that l therefore fail to penetrate
below the surface of the problem. It seems
to me that the confusion of ideas which
prevails in respect to what is called bimet-
aiiSm grows wholly out of a confusion of
terms. BimetaliSln and monometalism
have learned sound, and they fall readily
from the lips; but when one speaks of bi-
legal-tenderism and of mono-lagal-tender-
| ism, the discussion becomes vague. Yet the
latter terms are the ones that should be con
sidered. The question is not as to the coin
age OF one or both metals into money: it is
whether or not debtor shall have choice
| as to
WHICH COIN he WILL USE
in meeting a contract, while the creditor is
deprived from any power Of choice as to
which metal he will receive. Now, it is
| very plain that both metals were used as
money metals, and bimetalic system pre-
| vailed before any acts of legal tender eX-
listed. Both metals were used as money
metals even before the states or nations had
assumed the sole function of coinage. Both
metals are used to-day by races or nations
to whom the very conception Of a legal
tender is unknown. BimetaliSm is, there
fore, well grounded in the nature Of things.
What is called in the language Of the
| street leash trade" is immeaSuTably great
er than credit trade. Cash sales or sales
on very short credit, are vastly greater in
value than sales on which payment is de-
! ferred for any great length of time. De-
| ferred payments OF the kind likely to be
affected by any change in the relative
VALUE OF THE PRECIOUS METALS
are practically limited to mortgages OF real
estate-Tairoad bonds and public securities.
| The cause of anxiety to the honest advo-.
| Gates Of what is known as bimetalism
may therefore be limited to the fear lest
! such obligations may become a heavier
mortgage at maturity than at the date of
obligation. Has the lender a fear
that he may be paid in a medium.
which shall have less purchasing power?
Then the charge for the use of money must
be increased. Would it suffice to-day for
| the United States to promise Davment in