The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-01-14
TO AVOID EMBEZZLING.
British System of Inspecting Banks
Costs More but Is Safer.
New York Advertiser.

%NSN Ohn A. htADNAs
Three defalcations in two weeks-one
amounting to 1854, OO0-has brought up again
the comparison between the English and
Theft by means of crooked bookkeeping is
almost unknown across the ocean, while it
appears to be the easiest method of bank
robbery here. J.. Dobson Good. of Chicago
and New York, whose career as a public ac-
country for more than twenty-five years
makes his opinions on the subject of es-
pecial value, says that the stockholders
business to have examinations made for
them as is the fashion in England.
They should not trust their money" said
he, ITO a management that is satisfied with
the well-nigh valueless examinations made
is as much use in holding an examination at
a stated time as there Is in sending one po-
hceman to notify. a burglar that another
policeman is coming to arrest him. And
there is as much use In examining the books
of a bank without including the passbooks
as there Is in loading a cartridge without
any powder. There can be no better illus
tration of the truth of my statements than
had suddenly Jumped in at his ledgers. or if
his passbooks had been called In, could his
stealings have gone on uninterruptedly for
nine years? OF what earthly use were the
examinations made by the State officials in
that time?
bank have their own auditor. 1t is their
money that is at stake; not the money
of the bank officials, and they have COM
mon sense enough to have a constant
watch kept over their interests. These aud
itors are privileged to go TO any part of
the bank at any time and examine any
books which they choose. When they make
their full they do at
unexpected times, at least twice a year
every passbook is called in and written
up Independently. No thief can find a way
to beat that system. And then, again,
men who gain their titles by years of study,
practice and experience. Examiners are
not made there for doing good 'heeling'
work in a political campaign.
Some of the work | have seen in my
ten years here is absolutely farcical. For
instance, an examiner that / know to
be nothing more than an ordinary book
;tor. made a thorough examination of a
big bank not long ago in five days. /
know of no responsible auditor that would
have undertaken to do such a task with
weeks. 1t would be simply a mechanical
impossibility to do it thoroughly in less
time.
majority of banks call protecting the stock
holders interests. Is it not absurd?
1.-The sooner the stockholders demand
that competent men only be appointed as
State and national examiners and that the
for one at least as good as the English sys-
TEN, the better it will be for their pockets
and their business standing. Then they
should adopt the idea of private
ssntatives for their own benefit. The chief
objection raised over here is that ii costs
too much. Why, 5000 a year. which is as
little as a responsible man VIII accept
narad to the average defalcation. This
system of private examination is growing
in favor constantly with private organi2a-
tons and 1t puzzles me why the banks of
this country should be, in the great ma
iority of cases. willing to go without ade-
uuate protection