The Portland daily press., 1898-01-26
THE SAVINGS BANK REPORT.

The most interesting parts of Bank
Examiner Timberlake's report are those
which deal with the Lubeo savings bank
and the safeguards needed to protect the
money deposited in savings institutions.
There is not much strictly new about the
Lubec bank, but there is clear explanation
of how Mr. Foster was able to embezzle a
large per cent of the deposits in the bank
without detection. He kept two books
one of which contained the truth, and the
other lie. The latter he showed to the
Bank Examiner when he made his period
ical visits. 1t showed the banks condi-
ton to be sound, though it disclosed at
the same time a falling off in deposits.
1t was this gradual falling off Of deposits
which finally led to Mr.. Fosters exposure
for the Bank Examiner on account of 1T
recommended the closing up of the bank
or it's union with the Eastport bank, and
this brought matters to crisis. The
Bank Examiner seems 90 have been not
at all at fault. in the matter. lie gave
the bank as thorough an examination as
he gave other banks, and aslthorough las
has been customary with previous bank
examiners and as could be given with
the assistance at his command. Not the
same can be said of the trustees. They
were guilty not only Of gross negligence,
but of false swearing as well. Under the
law it was the duty of the treasurer once
a year to cause to be entered in suitable
book the net sum of each individual de-
post at fixed date, and to ascertain the
aggregate of all such deposits, and whether
1t agreed with the other books OF the
bank, and the trustees were required to
state under oath once year whether this
had BEEN done. Last year the trustees
made oath that this trial balance had been
made and that the accounts agreed, when
as.matter of fact they had made no per-
sonal examination or investigation what
ever. Had the trustees performed the
duties that the law imposed upon them
and which they were under the most sol
emn obligation to perform the defal ca
ton which occurred would have been
practically impossible. They deserve to
share Treasurer Fosters punishment
Discussing the precautions needed to
prevent such occurrences as this at Lubec
the examiner refers to the plan of calling
in the deposit books for inspection, recon ;
mended some years ago by the Hon. f.
e. Richards, and points out that with the
present clerical for ee in the department
such comparison would be absolutely i'm
possible, and while he agrees with the
other examiners that such comparison
would be valuable safeguard if practi-
cable, he is inclined to think that it's value
has been somewhat overestimated. In
the large banks where a number of per-
sons are employed 1t is really not nesded,
since the books from day to day pass
through different hands, each verifying the
entries of thesother. But it it is not need
ed in large banks that would be sufficient
reason for excepting them, SO that there
would be no Inconsistency in making a
law which would apply this test to small
banks where it may be needed, and where
1t could be applied without great diff
Guilty. 1t would have been very simple
thing to call in all the books of
the Lubec depositors once year, and if
this had been done many poor fishermen
in that locality wouldlnot now be lament
ing the loss of their hard earnings, as
Mr.. Foster would have been compelled to
be honest by fear of exposure.