Omaha daily bee., 1891-11-14
Mrcu NEEDED RFroRn.

y mum NbEDEb hEFON"
II is said that a resolution is already
drawn, TO be introduced in the house Of
representatives Immediately after the
organization, ordering IN investigation
OF the comptroller OF the currency. The
provocation for this is the failure Of the
keystone, Maverick and several other
national banks, under circumstances
which appear to show a lack Of due Wig
lance and care on the part Of the comp
troller. In the case Of the Keystone
bank the investigation developed that
there had long been n condition Of
affairs which IL would seem could not
possibly have escaped detection by an
examiner who properly attended to his
business, and it was also made to appear
that the com ptroller of tho currency
was less careful than he should have
been when possessed of the informa-
tion said to have been given him
by the examiner. 1t will be re-
m%embered that tho bank was com
pletely plundered, and that besides the
heavy losses of individual ~depositors the
state of Pennsylvania and the city
Of Philadelphia lost very large
sums. The operations by which this
wholesale robbery was accomplished eX-
tended over a considerable period. The
recent disastrous failure of the Maverick
bank of Boston, while not presenting
similar details to that of the Keystone
bank, none the less indicates
an equal lack of vigilance on the part of
those whose duty it is to protect the
public against such occurrences.
These failures have strongly empha-
sized the fact that very little reliance
can be placed upon bank examinations
as now conducted, and that n radical re-
form in this particular is urgently
needed. This must be provided for by
law and not left to the dis
erection of the comptroller. 1t
is stated that Secretary Foster has adj
vised that official to change his ways of
doing business, so far US the matter of
bank examinations is concerned, sug-
gesting among other things that
iners be transferred from one district to
another, so that bankers would not know
by whom their institutions were to be
examined, and also that exam
iners should be required to insti-
tute an entirely new investigation
every time they looked into the &C
counts of q bank, but no heed has been
given to any of these judicious sugges-
tions. 1t is perfectly clear that there is
little security for depositors in the pres
ent system, and it must be reformed if it
is desired to maintain public confidence
in the banks. There is another matter
which also calls for congressional atten-
ton, and that is the responsibility
of bank directors for the proper
management of the institutions with
which they are connected. Under the
law as it stands, and as it has peer inter-
preted by the supreme court bank
directors are practically without any
responsibility to see that the law is prop
erly complied with and that the business
is carried On with reference to the
security of depositors. 1t is doubtless
true that in the great majority
of cases personal interest is a
sufficient incentive to bank directors to
maintain u vigilant watch OF even the
details of the business, but the failures
of banks show that all do not do this,
that some regard their duties as merely
~perfunctory, and 1T certainly could not
be otherwise than beneficial, alike to
the hunks and to the public, to pre-
scribe by law the duties and responsible
tiles OF bank directors.
Such failures as those of the Keystone
and Maverick banks inevitably create
distrust and furnish an excuse for war;
fare upon the national bank system.
Therefore every friend of the system
will desire and welcome legislation de-
signed to insure greater security and
protection to the public.