Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1891-12-03

Iueu'OIdHuum list OF nOtSS. OUT IQlS
memorandum list may have in it notes
which were received subsequent to the
time up to which he examined or be notes
las In the Keystone easel which have never
been entered"
POINT FROM THE KEYSTONE BANK.
Beside this the keystone affords plain
evidence of the case with which notes re-
ceived by the bank for discount can. under
the present system, be kept out of the
books of record Again, the deposltors'
books cannot be criticised by such an ex-
aminer. The Keystone bank shows how
the depositors accounts can be manipulated
and | say unhesitatingly that the national
bank examiners. cannot detect such manip-
ulation. He has no time to compare the
depositors books with the ledger, and I'M
less that is done the examiner is
entirely at the mercy of the bank eff
Gals
Collections form a very impo1t ant part
of the business of national bank. Yet
the original entry Of the account for the
collection is purely a memorandum, and
the defalcations from this account which
have been made public show how easy it
is to steal from this, and no examiner can.
under the present system, be sure of the
correctness of this record.
NON PROFESSIONALS WON'T DO.
As to the examinations by bank direct
ors and court examiners, Mr.. Warrington
said:
''Such examinations cannot be depended
upon for similar reasons, but beside these
there are others which do not seem to be
generally appreciated. None of these ex-
| aminers are professional accountants, al
though ] believe the examiners for the
courts have the power to send for a pro-
fessional accountant. Not being profess
sionaIs, it is almost beyond the range OF
possibilities that they would discover any
fraud unless it was very patent. These
! examinations are generally per, Odical aud
preceded by notice to the officials. Even
where there is no reason to suspect fraud
and where the accounts actually are COR
rect, such examinations practically amount
| to an acceptance of the statements made
| by the officials.
Such examinations are rarely made to a
date later than two weeks prior to the
actual examination. and it needs very
little acune en- to see what a splendid
chance for manipulation the officers have
and how beautifully they can hoodwin
the examiners. Bank history furnishes
only 100 many instances Of this being
done. | have seen mortgages deposited
as collateral without any assignment to
| the borrower. | have seen deeds fragrant
ly imperfect put in as collateral. | have
seen security bonds drawn where two per-
sons became security where the words,
we Jointly and severally.' we're omitted. |
have seen insurance policies fled which
neither contained the distance of the lot
from given point nor the number of the
| houte. | have seen the note describe one
kind of collateral actually deposited to be
different. Once | recoliect seeing about
$50 900 worth of securities entered by way
of memorandum and not scratch of a
pen to show that those which were en-
tered were all which should have been
i entered.
"Time would fail me to recount all the
errors of omission and commission which
in an experience of thirty years have
passed under my notice. But in all the
cases mentioned committees of directors,
and in some cases court examiners, Ia,
failed to notice the irregularities. Phil
delphia Times