Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-09-14
THE SITUATION BETTER
Report to the Treasury Regarding Bank
Affairs in New Orleans.
Suicide of One Bookkeeper, Arrest of
AnOther-HOw the Union Bank
Was Looted.

Mr.. Coffin, acting controller Of the cur
rency. has received telegram from Ex-
aminer Escott, in charge CT the Union Ma
tional Bank of New Orleans, which re-
Gently closed its doors, saying that the
situation Of affairs in New Orleans was
much improved, and that no further trou-
Bile was anticipated. He also says that one
CT the two bookkeepers of the bank under
suspicion committed suicide by poison, and
that the other one is under arrest.
The controller of the currency and his
assistants have been criticised by persons
opposed to the national banking system be-
cause of their apparent lack of information
as to the condition of the Union National
Bank in advance of the final crash. In
explanation of the course of the office in
this matter Acting Controller Coffin made
public some of the correspondence on the
subject.
From this it appears that March 2, 1895,
a letter was addressed to the president of
the Union National Bank saying:
The examiner states that he could not
verify the accounts your individual
ledgers as they are not properly kept, and
states that new ledgers will be opened
soon. This matter should have your early
attention"
Advice to the Bank.
Again, October 10, 1895, another letter
was addressed by the controller to the
president of this bank, from which the
following extract is taken:
ut appears that you tried for short
while the skeleton ledger for keeping indi-
vidual accounts, but that you abandoned
same in March last. You are respectfully
informed that the experience of this office
ccnvinces the controller that the best sys-
tenn of keeping accounts with individual
depositors Is that which shows the daily
balance with each depositor and enables
the bank to make daily proof of such
balances. 1t has been found by experience
that this system does not involve much
greater labor than the old-fashioned ledg-
er, with such books as are used In connec-
ton with it, and whatever additional LABOR
is involved is amply compensated for by
the satisfactory results attained.
AT any rate, If a ledger which enables
the bank to take a daily proof of these
balances Is not used, then ledger with
balance column showing the balance due
each depCSitor every time his account
changes should be used and where such a
balance column ledger is used trial bal
ance of such ledger should be taken off at
least once a month.
"Of course the aggregate of balances due
individual depositors as shown by the in
dividual ledger should always agree with
the balance of individual deposits on the
general ledger. Too great attention to this
department of banks accounts cannot
be given by its managers. for it is here
that defalcations by officers and employees
of the banks have been most successfully
CT rcealed
In this connection 1t is respectfully suy-
gtsted that the surest preventive against
"rongdoing or dishonesty is some system
which provides that the work of each
on1cer and employe in a bank is verified
ana checked by some person other than
himself
please bring this communication to the
immediate attention of your directors for
consideration. and request them to unite in
making prompt reply over their individual
signatures"
The Banks Reply.
In letter dated October "a. 1895. the
president replied to letter of October 10 On
this point as follows:
Your letter of October 10 has been re-
cefved and duly laid before our directors
Tor their consideration. They have de-
cided to adopt the skeleton ledger for in
olvldual accounts as suggested and l am
ordering the ledgers' for use as soon as
received"
In his report Of an examination on March
g. 1856. the examiner said:
Bank is introducing the Boston or skele
ION oally balance system, but as vet the
transferred accounts have not been yeri-
ned And, further. that it was not n-ac-
ucapie Tor him 10 take off balance of
accounts on individual ledgers as instruct
ed' because the transfer Of accounts fron,
the Old system of ledgers had nor hsan
completed DeeH