New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-07-05
Fp1rDTLFNT RANKING,

In the afternoon OF life, many years honOIed
and trusted called Honest John" by the peo-
pie when they nominated and elected HIM
Treasurer of Philadelphia, Mr.. Bardsley has
been sentenced 10 imprisonment for fifteen
years. 1t is sad fall No words can tell how
far such an event impairs public confidence IN
men of upright lives and established replta-
ton. The harm one man has done extends
to thousands whose reputation could not be
more unbIemiShed than his was not long ago
but whose most priceless possession, the I'M
faltering trust of others, this act tends to de-
stroy And with him have gone down in dis
honor bank officers formerly of high standing.
The frauds exposed have wrecked other lives
besides those of the guilty and involved multi
tude in losses. The State Of Pennsylvania ap-
pears TO have lost nearly million dollars. The
losses of Philadelphia have also been heavy.
The losses of individual depCSitOrS can as yet
| be only approximately determined. Many firms
have been forced into bankruptcy because of
these banking frauds and the loss of resources
upon which they had depended. 1t happens
that not few of these firms, being engaged in
building operations, were employing large num-
berS of hands. and because of their inability
to carry on their contracts thousands of indus
trious and honest men have been thrown out of
employment, and suffering has come to their
families. Surely calamity so widespread and
far-reaching deserves the most serious conSid-
Grafton.
The lesson which the press seems inclined to
draw from these disasters is that what is called
" One-man banking is peculiarly dangerous. 1t
is said that where the power in a bank is left
.1,o1 %l,,, twin &c nd
the protection of banking institutions are prac-
ticaly lost. There are no longer the checks
upon individual action which the law contem-
plates. 1t is observed that in this respect the
existing laws are clearly inadequate. The dl-
rectors it is said neglect their duty, fail to
oversee the affairs of the bank as they should,
and leave its practical management so far to
single individuals that they have power, for
their private ends, to wreck the happiness OF
thousands of families. As instances there are
named not only the Keystone National Bank OF
PHILADELPHIA. but the Second, Sixth, Ninth, Ma
rine, and Washington National banks of this
city. and ire First National Bank of Buffalo.
II is said. further that the risk is virtually in
creased by decision of the Supreme Court in
the case of the First National Bank of Buffalo,
ualy responsible for neglect of their functions.
| If they leave the whole business in charge OF
one man the public and the depOstors have no
right to blame them. If disaster or robbery fol-
lows they are not personally responsible. Hence
it is urged that the law needs change in this
particular.
One point seems to be overlooked by these
critics There are in this country great many
private banks, in which there is no division Of
responsibility. They are subjected to no official
examination No legal restraints cOnfine their
action. Yet they have a heavy private business,
and hold and manage enormous sums OF money
If restraints imposed by law are necessary to
safe banking, it might be inferred that many Of
these banks-would fail. Yet it seems to be the
fact. on the contrary, that failures among banks
of this sort are comparatively few. The public
has come TO the conclusion, il would SEEM that
these banking houses are at least as safe as the
banking institutions organized under restraint
of law.
An obvious reason is that in the private bank
| ing houses individuals have their own fortunes
at stake Everything they have in the world
| is gone if the house fails. The managers con-
troll a business which is essentially their own
that the officials who practically manage have
only small personal interest Often it hap
pens that they can wreck bank and lose COM
paratively little, while great individual gains
may possibly be secured by speculation or by
| fraud
| It would seem that the remedy is not to be
found in more stringent laws regulating banking
institutions. Experience has taught that these
| restraints of law are on the whole entirely in
ADEQUATE. Evasion of them is not difficult.
The only true protection for those who trust
! their property to the management Of others
is to be found in the individual interest of those
who have that management 1t would be of
little advantage if every director or other official
of a bank could be made personally liable for
all losses. The only result would be that
fewer persons of responsibility and high char
acter would consent to act in such capacity
without the practical control of all affairs.
1t is not to be expected that the public will
in any way be able to protect itself entirely
against the greed or the crime of individuals
who act in a fiduciary capacity. But it is pos
sible for the public to do something for its own
protection. Those who have money to deposit
can prefer the banks which are ably and wisely
managed. lhcY can refuse 10 lhtfuSJ lnelf
funds t. institutions which are not in the hands
of able and worthy men, who have a large per
sonal interest in the management. Wherever
the public thus diScriminateS wisely the losses
by banking frauds are diminished. In Phila-
dclphia there seems to have been a singular lack
of such discrimination. The failures within the
last few months will educate private depositOrs
and those who have charge of public funds to
guard more carefully against miSmanagement
or robbery. Yet it will always remain a fact
that the few individuals whose high character
and personal worth constitute the best possible
security for those who trust them are not by
the majority appreciated as they deserve, nor
are the institutions they manage always pre-
feued by the public
Ts<t NO