Evening star., 1897-01-12
BANK EXA M | NATIONS
Controller Of the Currency Ecksls Talks on
the Subjsets
The Object OF Such Investigations
ana the Methods PnRnned by On
cials CondacttnET Them.


In the course Of general conversation
in regard to national banks, Mr. Eckels,
controller Of the currency gave q Star re-
porter some interesting facts about the ex-
aminations that are made from time to
time to see that the national banks are
keeping strictly within the. spirit and let
ter of the law in the conduct of their bus
mess. fE.
With special reference to the duties de-
volving upon the controller and the ex-
aminers in making these examinations, Mr.
Eckels said: =
''The original intention of the national
bank act was that examinations should be
made for the purpose Of ascertaining If
the capital stock of bank was impaired,
so that in such cases an assessment might
be made upon the shareholders to make
such impairment good. The theory of the
in the fact that they were considered to
be fiscal agents of the government. The
examiners discharge their duties under di-
rection from the controller. but under the
most favorable circumstances the exami-
nations must be infreQuent and limited III
the time occupied in making the same.
1t is not expected that those who have
the direct management on the bank ana
are responsible to tne SnarenOlOSTS 1OT
such management should place upon the
controllers Office the duty of supertntend-
ing at all times ard under all circumstances
every detail of the banks affairs. 1t would
be quite impossible for such officers to
regulate the individual conduct of the
banks affairs or those employed in the
bank. This supervisory control was in
nowise intended by the law to relieve the
directors and officers of the bank from
Individual responsibility on their part, but,
instead, was intended to emphasize their
duty in this respect. AS rule, the ex-
animation Of national banks is made semi
annually, unless the conditions are such
as to require more frequent supervision.
Methods of Examination.
"The original object of ascertaining
whether or not the capital stock Of bank
is impaired has from time to time been ex-
tended for the benefit of the creditors and
shareholders, so as to prevent any irreg-
ularities and violations of law, niisappro-
priation of funds or mismanagement on the
par, of officers of the bank. In these
things the examining officers cannot do
more than adopt such methods of examina-
ticn as within the time limited for the
same enable him to obtain the best in
fcrmat1on possible. They endeavof as far
as possible to detect criminal violations of
law, where such have occurred; in this
shareholders. The method Of examination
has from time to time been changed, in Or
der to make such examinations more thor
ough and to better the work accomplish
ed a very wide field Is undertaken to be
covered. In all cases examinations are
made without notice to the banks, and as
unexpectedly as possible. They are COM
menced either at the close of business or
at the opening of the bank in the naosning,
because 1t would be impossible to make
comparison of all the assets of the bank
with the books while business was in pro-
gress.
The First Duty.
Upon entering the bank, the examiner
takes charge of all it's assets. and retains
them IN his possession until he has counted
the cash and verified all items Of stocks,
bonds, loans and discounts, balances on the
ledgers and other books used. He counts
the cash. examines the list of loans and
discounts. and the collateral held for the
same. He notes all loans and discounts
made to officers and directors Of the bank,
and the enterprises in which such officers
or directors are engaged. He takes off bal
ances from individual ledgers and verifies
outstanding certificates of deposit. He ex-
amines the list Of stocks and securities, and
the minutes of the shareholders and dis
count committees meetings. He compares
the banks copy of the last report of con-
dit1on made to the controller Of the cur
rency with the books of the bank covering
that date: He examines into the condition
OF tnelf lawful money reserve for thirty
days preceding the examination, and he
sends out vertf1cation circular on blanks
furnished him by the controllers office to
all banks to which or from which balances
are SHOWN to be due, and to all parties
from whom money has been borrowed on
ollis payable, certificates of deposit or
notes, and rediscounted; to all ofiicials in
whose name state, county or municipal
FUNDS are deposited, and to all parties to
whom items have been sent for collection"
II Criminal Violations Are Found.
Whenever criminal violations Of law have
been ascertained, under direction given him
by the controller, such violations are re-
ported to the United States attorney for
the district in which the bank Ia located
Tor such action as he may see fit to take
The duty of prosecuting such offenders de-
wolves upon the Department Of Justice but
IN all such cases the controllers office and
the Department Of Justice work together
1t has been at times difficult to secure con-
Vlctlons IN bank cases, largely because the
persons under trial have heretofore held q
good reputation and commanding positions
IN the community, and in consequence have
friends to take an interest in preparing a
proper defense. 1t has also been found that
when such convictions have been obtained
almost Immediately the friends Of the con-
Vlcted set about to secure Endorsements for
a pardon. The rules now In vogue with re-
spect to pardons, both at the Executive
Mansion and the Department OF Justice,
make 1t much more difficult to obtain an
Intervention of executive elemency. The
President has very wisely taken the posi-
ton that these ofrenses having been so dis
tinctfvely committed by those placed in po-
sluons OF nduciary trust, the offenders
should be held to much more strict &C.
countahility than those who are not occu-
pytng that position
Chilean Clains CSahmfssion.
AS result Of protracted negotiation the
United States aud ChueAn claims oom-
mission. which expired by Limitation near
ly two years ago, Will probably be reor-