Vilas County news. [volume] (Eagle River, Vilas County, Wis.) 1896-1927, 1897-11-29

was promptly made. The bank was
kept reasonably strong in cash, and
at the time 1t closed had balance Of
about $50, ZOO on hand and in CORES
pendent banks. 6
II examined this bank in 1895 and
1896 and again just before 1t closed.
The last being made about two years
subsequent to the first examination.
In '95. and SO found nothing in the
conduct OF the bank which caused
me to suspect anything criminal upon
the part OF anyone. The books did
not disclose that methods had been
employed to increase out Of all pro-
portion the deposits upon certificates.
The loans and discounts showed for
themselves and Tailed with the state
ents made for that class Of the
banks resources. The daily state
ments balanced accurately and the
books upon their face seemed prop
erly kept. In some respects found
the system OF bookkeeping defective,
one of which was this, the bank had
never kept record Of the cancella-
ton of it's certificates Of deposit, the
aggregate amount of outstanding GER
tificates from the organization having
been kept in daily balances only
This is not an exceptional omission,
however, as have found a number Of
banks which had neglected to enter
the cancellation OF paid certificates.
The bank examiner has no authority
to prescribe or dictate the method Of
bookkeeping banks shall employ. But
in the case OF this bank, as in all
other similar cases, directed the at
tention of the officers Of the bank to
the omission OF what regarded an
element OF good bookkeeping, and
they promised to comply with my sug-
gestions. There was nothing in this
emission to cause suspicion, espec-
tally in view OF the fact that the GER
tifcate OF deposit record had been
kept in precisely the same way from
the first day of Organization of the
bank. Had the examiner been vested
with the power to prescribe the book
keeping methods of the bank, and to
require this particular account to
have been differently kept, IL would,
in my opinion, still have failed to
show the existence Of certificates Of
deposit which the cashier desired to
conceal He would simply have not
entered them at all or would have SO
entered them as to make the entries
conceal dishonest transactions. The
only method by which these frauds in
this bank could, under the circum-
stances. be detected was to request
all the holders of certificates and pass
books to present them at one time.
This was done after the bank was
closed and revealed at once the fact
that the certificates of deposit and
pass book balances represented liza
bilities immensely larger than APP
peared in the banks books and state
n ents. Prior to the discovery of the
fraud the examiner would have been
guilty of the greatest abuse of au-
tt ority had he ordered any such pro-
ceedings.
I'm my examination just previous
to the closing of the bank, discov-
cred a large shortage in the loans
and discounts and other irregularities,
which had not appeared at the pre-
ceding examinations, and was led by
what found to advise the directors.
(whom had called together) to dis
charge the cashier, to put the pres
ident OF the bank In active charge,
and to rectify the banks records and
entries in every particular Ca months
continuous labor for several account
arts) intending to return in few
days to make further investigation.
devoted Thursday and Friday, Oct
Is and 16 last, to this examination;
the president took practical charge
on Saturday, and ON the following
Monday evening. the cashier made a
written confession of the method
and extent OF his Misrepresentation of
the banks funds. / will add in this
connection that few days before
making the last examination, the
president OF the bank called at my
Office and informed me that he did
not like the way things were running
at the bank. / told him that had
been trying for some days to get away
from the Office to make an examina-
ton OF his bank, and would do so as
soon as work in the Office would per-.
u it.
'sIf upon the examination of bank
the examiner finds that its capital is
impaired so as to jeopardize the in
terests of its depositors he is author
lied to give it's officers thirty days
notice to make good such impair
ment. This is the limit OF his au-
thority except that in case the i'm
pairment is not made good within the
time specified, it is then his duty to
publish the exact condition Of the
bank in a local paper. While this
bsnk has been re-discounting con-
siderable amount of it's paper. up to
this time, facts had not been ascer-