The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-10-25
BANK EXAMINATIONS.
How Officials May Remove One Cause
of DiSfrust of Banks.

At the risk of repeating what has often
been published in these colt INNS, the Finan-
of the Tioga IN. Y.) National which is
closed. owing to the discovery of a shortage
of some $4,000 or $4,000 in the accounts of
aged the institution. For years past-just
now many is not yet known, although the
shortage extends over a decade-this official
has been stealing the banks funds. The
directors, of course, did nor know it; the
president who happened to be a United
States senator paid little or no attention
to the bank; the cashier, brother of the
president, was in i'll health, and the assist
ant cashier had a clear field to himself.
FINALLY, national bank examiner, one of
the maligned class blamed for not main
tanning all the financial institutions of the
country in permanently solvent condition.
with this clew traced the crime to it's
source. The closed bank was not an mpor-
nounced that the stockholders will make
good the deficiency. If there had been a
law on the statute books stating in so many
words that the directors were responsible
Tor the shortage, little sympathy would be
wasted on them as the victims of the
forcement of this penalty. AS it is. the
closing of the bank will bring distress. and
will bring loss on many innocent persons.
The federal courts, it is true, in some cases
suits of their negligence, but what is really
needed Is q law clearly defining this re-
sponsibility At the present period of the
nineteenth century it is disgrace 10 the
management that any institution should be
forced to suspend owing to a criminal mis-
appropriation of it's funds. The remedy is
so easy, so simple and 80 inexpensive, tina t.,
failure to adopt it should be made a clear
ground for action to recover in case of neg
ligence. The sentiment of the country is
rapidly approaching this point of view. If
bankers wait for 1t to crystalline in the form
OF specific legislation, it is merely to con-
fess in advance that they are Indifferent to
their responsibilities or incompetent to con-
duct their affairs. So far from waiting, the
ofncials OF the properly conducted financial
institutions, which far outnumber those
whose management is lax, owe 1t to them
selves TO remove one of the most aggravat-
ing causes that feed the ill-founded distrust
in banks. The injury growing out of the
First National of Tioga case does not end
with the pecuniary loss that may happen
to fall on a few persons 1t adds one to the
many cases that any banker can recall,
which, While unimportant in themselves, are
cumulative in molding sentiment.
TO repeat here how this reform may be
brought about is superuous. Bank exam
nations by government experts, as at pres
ent conducted can never be perfect. owing
to limited time allowed for the work. They
can be made more thorough If Congress will
airy, but there is no necessity for waiting
until this is done. Improved bookkeeping
methods and the shifting of clerks afford
protection, but occasional Independent ex
amiHations by paid experts representing re-
sponsible corporations devoted to that
venting wrongdoing. Perhaps some day in
the future the government may force the
banks to protect depositorS through the
maintenance of a common safety fund, but
the way to avoid this expense, so far as the
honest institutions are. concerned. is to force
narrow way followed by directors who real
ly direct