Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1891-12-05


lead ittelf to examination 80
notice. Without
That kind Of examination which
slsts IN checking entries fo.,-i, va
columns and trusting to a trial bsi+s..- Y
lar from being an ideal one and yat ~. i
I tne system In vogue little NOR can l. 9t t11
oy an examiner. He is at all Tune l; ;.,Is
to De deceived by false securities - -ia. y
ilon OF securities, or clever raaninpis,;ss.-l'
/ de has not the time for an exbg1s, i''''oa
I aullhatlcn as a periodical xfni7..;-.
must be to make it efficient. ~ A..
nothing but '1Vam,ue banks and Is r.
tore so ous Of the commercial world ~
ne can know nothing of the si.,os =
the borrowers. The ledger acoo1rt I.
Ie.elng but mass Of figures showins
balance agreeing with a total ~
memorandum list oil notes. hint 81;
memorandum list may have in Il ro -
which were received subsequent h ~
time up to which he examined or ba - .-s
as in the Keystone easel which have &c 80
hecz entered -''7'
POINT FROM THE KEYSTONE BANK
Beside this the keystone affords pi.;,
evidence Of the case with which potas -
eelVed by the bank for discount can ma.
the present system, be kept out Of H.
books of record. Again, the deposito.,i
books cannot be criticised by such an Az
aminer. The Keystone bank shows bon
the deposltors accounts can be nanipulata5
ana say unhesitatingly that the national
bank examiners cannot detect such MANN.
ulatlon. tie has no time to compare tba
deposltors books with the ledger. and nm.
less that Is done tie examiner i
entirely at the mercy of the bank oB
cials.
Collections form very important part
OF the business of a national bank. Yet
the original entry Of the account for fhe
collection is purely memorandum. and
the defAlcations from this account which
have been made public show how easy 4
is to steal from this, and no examiner can
under the present system, be sure of tbs
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.
amlners are professional accountants, al.
though ! believe the examiners for the
courts have the power TO sepd for a pro.
fessional accountant. Not being pr6fes.
sionaIs, it is almost beyond the range Of
possibilities that they would discover any
fraud unless 1t 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 examination, are rarely made to
date later than two weeks prior to the
actual examination and ii needs very
little acuuen to see what a splendid
chance for manipujal the officers have
aud how beautifully they can hood wink
the examiners. Bank history furnishes
only 700 many instances of this being
done. ! have seen mortgages deposited
as collateral without any assignment Is
the borrower. | have seen deeds fragrant.
ly imperfect put in ~ collateral. / have
5ttll stCuIllF Uplus Nl@Wu NQtTt LWQ PER
sons became security where the words,
we jointly and seyerIlly were omitted. |
have seen insurance policies fled which
neither contained tine distance of the lot
FROM a given point nor the number Of the
house | have seen the note describe one
kind Of collateral actually deposited to be
different. Once | recnllect seeing about
$50 900 worth of securities entered by way
Of memorandum and not a scratch Of
pen to show that those which were en-.
tered were all which should have been
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, hl,
failed to notice the irregularities. Phil
1elphia Times