Morning journal and courier. [volume] (New Haven [Conn.]) 1848-1894, 1891-07-24
A Sermo on For Bank Directors.

The severe punishment meted out to the
bank swindler, Bardsley, is unquestionably
an exemplary one, but it is a question
whether it will deter others from appro-
priating bank funds to their own use, or
whether 1t will merely impress them with
the prudence of exercising greater caution
and finer ingenuity in making away with
the money entrusted to their care. As we
have asserted on previous occasions, these
defalcations would be made impossible If
the business of banks were conducted on
more solid principles than at present pre-
vail. The frequency of these bank swim
dies proves incontestably, that there is an
objectionable looseness somewhere. in ex-
amining accounts; and this looseness is as
incontestably to be laid at the door of those
officials who are paid to do their duty but
who neglect it.
There are siXty-one national banks and
eleven trust companies in the city of Bos-
ton, and We venture the bold assertion
that there are not in all the seyenty-two
boards of directors who are responsible for
the proper transaction of the business of
these institutions seyenty-two directors
who know how to direct a bank or who are
capable of filling the offices to which they
are appointed. For the most part, bank
directors are mere figure heads who meet
at stated times, gossip about mercantile
paper and other collateral subjects, pocket
their fees and go about their business.
The absurdity lies in the board of directors
itself. To examine properly and faithfully
into the accounts of bank would require
board of directors to give their whole
time to the business. Every entry on the
books, every check, every account, every
voucher, every bond, every dollar of the
deposits would have to come under their
studious consideration. There would have
to be verifcation of every item in the
accounts of treasurer, cashier, teller and
other officials who have the handling of
the money. As it is, there is an examina-
tion, more or less complete, al stated inter
walls, in which nothing is exhaustiyely
done. All that is expected is that every
thing shall tally; and if the books show
that everything does tally, the directors
are content, and the soundness of the bank
and its business direction are vouched for
by them. But, conceding that everything
is properly done by the directors, that the
accounts are examined with the greatest
care and conscientiousness, the meetings
of the directors are too far apart, and the
swindler has his opportunity in the in
terim.
The only remedy for this uncertainty
and the only method of putting a stop to
these huge and ruinous defalcstions is a
daily examination and verifcation of the
accounts. Cash, papers, entries, loans,
vouchers, checks, accounts, and everything
else pertaining to the transactions of the
bank should be examined at the close of
each business day. This, and this alone,
will make swindling impossible A
thorough reform should be made in the
manner of proceeding hitherto followed by
bank directors; and still greater care and
efficiency would be forced upon them if they
were compelled to give bonds for the prop
er performance of their duties 1t is
good thing to catch and imprison default
ing bank officials, but this, after all, is on
ly locking the stable after the horse has
been stolen. 1t is better far to begin fur
ther back and to make it impossible for a
bank official to plunder this funds in his
charge, and to keep on plundering them
through long series of months, sometimes
wears.