Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1898-01-26


ted more ccnscientiously or carefully
in the past than our State bank exam
nations. There are two examiners for
the national banks Of the State, though.
fewer in number than the Institutions
under the supervision of this depart
ment. Notwithstanding this. there has
been no other case Of embezzlement in
any State institution for many years
Whlie during the same time have DC
CURED large number Of serious defal
cations in the national banks of the
State. While do not contend that our
system is superior to that of the ma
| t!onal government, | do insist that il
is equally as good, that the results
therefrom have been fully as satisfac-
tory, ana that there is no more occ1-
sion for change in the State system
than in the national system
While as has already been stated |
! fully agreed with others that it would
| be wise to have some provision of law
! requiring IA verification of depositnrs'
! books, careful consideration of the
| matter compels me to admit that it is
not Of so great Importance as would at
| first appear. The value of the pro-
| lection it would give has been unduly
maSnified as depositors in our savings
banks are reasonably safe without it. |
| In majOrity of our banks the bust !
ness is so conducted that two or more |
persons have access to and make en- |
tries upon the depositNrs' books. They
have occasion. from day to day, in their !
regular work, to verify and compare !
these books with the depositors ledger |
and in this way each is constantly YER
flying the work Of the other. 1T is safa !
to estimate that out If the 167. s97 |
dep0sitors' accounts in the banks Of
the State more than 10000 are being |
constantly verified in this way. The |
proposed law would. therefore, give |
no additional protection to large |
majority of depositors. 1t would be
impracticable to provide for the yeri-
fcation Of deposits without making tn r.
law apply To all savings banks. Such
a provision would consequently put a
large amount Of labor upon the bank
officials and an expense upon a large
percentage, for the advantage simply |
that would accrue to a small percent
age of depoStors. In other states. hay
ing various methods OF verifying depos-
itnrS accounts. embellishments have
frequently occurred and the methods
employed have not apparently decreas-
I'd the number Of Declarations.
our people and the officials of our
savings banks have reason, however
To he proud of the remarkable record
Of the state institutions The loss to
the deDcSitors in the Lubec Savings
bank is a serious one, and one that we
fully appreciate and regret But when
W. consider that this is the only defal-
cation that has occurred out Of more
than 5000 coo 900 that have been
handled and discussed by these insti-
buttons IN the past twenty-five years
we feel il to be record that should
give great confidence in the present
system and satisfy depositors that
their funds are reasonably SAFE with
out further legislation.
This department has always appre-
ciated the Importance of careful and
thorough examination of the different
institutions. While it is the duty of
the examiner in every way possible to
guard depositors against losses from
the general supervision
of these institutions by this department
covers much wider scope. The ex- {
aminer should see that all the books
of the banks are properly kept that
reserve funds are kept up to the proper
limit: that the profits are legally dis
tributed: that the losses are properly l
apportioned and not allowed to accu- ;
mulate against future deposits: that /
all investments are made in accord !
ance with law. and that in all other
things the general affairs of these in |
situations are conducted in a business /
like way and in compliance with the v
laws under which they are operating.
These laws. enacted by the State are }
founded upon the experience of the }
past There are also ether general |
principles, under which banking bust Il
ness is conducted. which this depart +
m"nt should insist upon being observed
by each institution. The results of +
an examiners efforts in all these par /
ticulars contribute more towards the Il
general prosperity of cur savings g
banks than if he directed his attention d
more particularly to matters of such W
rare occurrence az embezzement |,
The trustees are the legal custodiars II
Of the funds of their bank. and upon /
hem more than anyone else rests the II
for their safety They ii
alone have the power to select those a
who are to handle these funds They -
should employ only those in whom they
have the utmost confidence and then
give the matter such personal atten- ;,
ton that any serious loss of this kind "
would be Impossible. The law does
lot authorize this department to insist ="
hat they make a Verification of do =
)ositors' books. nor does ii in specific u
terms require them to do this,-yat l
hey certainly have the power to do 80 II
f they deem it adViSa BILE | wish. cI
therefore,. to repeat my recommends II
ion made in 1895. THAT the trustees h
should have this done under their per- tt
'onal supervision, once in every two Of Il
hree years. by some one other than the V
egular employees of the bank" Had eli
his rule been adopted by the trustees Ia
If the Lubec Savings bank ten years d,
,go, the present unfortunate conditions nj
in that institution would have been IL
avoided and the depoSitors saved the
l.,-e.