Omaha daily bee., 1898-12-11
DO BANK EXAMINERS EXAMINED

When a national bank suspends and
it is found to have been robbed by its
officers, the first thought Is apt to be
that the bank examiner has been dere.
lict. Indeed, under whatever circum-
stances a bank fails the disposition is
to attach more or less blame to the ex.
aminer, who Is commonly supposed to
exercise a constant surveillance and
supervision over the operations Of the
banking institutions within his juris-
diction. PROFESSIONALLY there have
been many cases Of dereliction on the
part of bank examiners, not all of
whom have been thoroughly qualified
for their duties. Doubtless there have
also been instances Of collision between
these officials and dishonest bank Off.
GERS. But there is warrant for the be.
lief that very generally bank exam.
liners are faithful and honest.
These public servants will be crate.
full to Hon. Thomas L. James, formerly
postmaster general and now president
Of the Lincoln National bank of New
York. for what he says in the current
number Of the North American Review
upon the question which heads this
article. The matter also possesses m
interest for all who do business with
the national banks. There is q com
mon misconception Of the duties of the
bank examiner. He does not exercise
supervision over the banks in his dis.
trict; he has no authority with respect
to the judgment Of the officers and d.
rectors of q national bank in the man.
agement Of its business; he has no
power to dictate to these officers in the
making Of loans or the acceptance of
securities. AS Mr.. James says, the ex.
aminer sis not responsible for the man.
agement Of the bank, nor would it be
possible to SO extend the powers Of q
national bank examiner as to give him
this authority, for to do that would
make an irresponsible and outside OIL.
cial really the manager of the business
Of the bank" The function Of the
bank examiner Is to determine, after
the bank has acted, the character and
value Of the securities and the indorse-
ments, upon the credit Of which money
Is loaned. That involves judgment on
his part just as much as it involves
judgment on. the part of the officers of
the bank. He examines thoroughly, If
he does his duty, the assets and liabili.
ties Of the bank and acquaints himself
fully with its condition as shown by
It's books. IF the business Of the bank
has been honestly conducted" says Mr..
James, 'and If an expert accountant
who is a master in ~concealing dishonest
transactions has not manipulated the
books, this examination will reveal with
absolute accuracy the condition Of the
bank" Thus it is seen that the ex-
aminer, when exercising the utmost
care in his work, may be misled as to
the true condition of a bank and report
as sound IN institution that is really
rotten. This has often been done and
when the inevitable collapse came the
examiner vas blamed for not having
discovered what had been most in
geniously concealed by dishonest book
keeping. Mr.. James suggests that the
best that bank officers can do Is to
adopt reasonable, thorough and com
petent bookkeeping methods and after
that they must rely upon the faith
which they repose in their employees.
There is a great deal Of responsibility
resting upon the bank examiner and no
one should be appointed to that posi-
ton who has not q very thorough &C.
Quaintance with the banking business,
besides being a man Of the highest
character for integrity. The object of
bank examiners is to protect depositors
and their importance ear be understood
when it is stated that the aggregate
deposits in the national banks on Sep
TENDER 20. according to the report OF
the comptroller Of the currency,
amounted to over two thousand mil
lions of dollars.