The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1900-11-20
More Stringent Examinations
Needed.

The defalcatiou OF the assistant cashier
OF bank at Newport. Ky. following
close upon other incidents OF q similar
character. seems to point to the need OF .
more stringent system Of bank examina-
ton BY federal and state authorities In
the Kentucky case the shortage in ac-
counts foots up over s20.ooe and II sp-
pears that the embezaiemenf has been go
capital. all the surplus and reserve. all
the property OF The hank OF every de-
scription has been swallowed up by
these enormous peculatIons. II is said
that the onicers Of the bank are wealthy
men. able to make good the losses:
whether or not they win be Obliged 70
save Innocent deposItors Is question.
In this Instance IT seems that there can
be no question about locating the RESPONSE
biiity. The abscondins cashier had lived
The sort OF life that involves an empty
TIL sooner or later as one OF III inevitable
consequences. He II credited In popular
report with about all Of the habits that
make an employer shy when they belong
to his empioye, His misdoinK became
known through one Of the women with
whom he n said to have associated pub
iciy. Gambling on the exchanges. gam
bling with cards. high living OF every de-
scrlption are In the record ascribed
TO him. management that would retain
such man In a posItlAn where he had ac-
cess Ia the cash IL morally responsible for
the consequences.
The fact that stealing could 70 on for 80
many years Undecided calls for = more
complete and careful system Of bank Tex
sminations. rnder the national banking
act. examinations are provided for by fed
erai examiners These of9iciais are eapa-
BILE. painstakins and honest. But their
districts are too large. and the methods
Of investigation which have 20 h. employ
"a are too superficial 20 detect frauds OF
this sort. An expert bookke~per. familiar
with inc ubrineHs OF u psnh a"u Hsfh8
free access to It's records. can cover hts
tracks successfully. Hence II too often
happens that the examiner IL called upon
to lock the stable after the horse IL sto-
Ter.
n i true that the national banking sys-
TEN protect. noteholders absolutely
against loss. No matter ~ IA In this In
stance. the losses are greater than all the
assets OF the institution. every outstand-
ing note OF the bank IA 40 good az gold.
The national treasury holds as security
government bonds for the FUN amount OF
circulation, and has but 90 realize on these
and redeem the banks circulating notes
Hut the depositers are IN different case.
Attracted by the security offered hy the
national hankins systsm. they have placed
keepsax There IL no indemnity fund for
,hem The stockholders may have the
cold eemfort OF knowing that II they had
chosen more ylxilsni directors they ~ould
not have exchanged an Investment for a
liability fsnt tho depesltors are not At
rsais ana excest IN A. Car as this liability
extends under 'h- laws 10 their presee-
lion. they are wlsheat remedy.
A. ions a. banks ere authorized ay the
state the state .aoals exercise SsMlonsly
its power ~ save those who trust To
them from loss The hest safesaara Ia
fEeaasni ana searching examinations
Fer ths meet pass these are not
a. fssaasa a. a. severe a. they
shsald b. Ia vlew 81 The lassrsss.
lnvsissd mere saFseg D, accounts
casa 81 hani, fAee Indebtedness asd aeen-
raniassd securities without psoslnx into
details -ll not sgstiSse tutssaasss n q
sxlsis IN. ssamIaiwx force should se
issss snoush 20 ceysr the xrauna shor.
sssalss ard iss w@ss shsssla be saea that.
V ts r~peri 10 satisfactory this viii n.
eosaRasse saAvAnsse 81 .elvancy re
isfrsa~eaes ef aatsSasl sank faliafs.. ,hs
speFmees aaslaess shas shsy esnasr,
wttasai ess loss " aasiss. mas STAGED
sAsn tassb hxA b. fA- FaAile eeassssee
Never bad say ssstsm ~ ssnslus a psuua.
80 recsfa nan shst 81 tss unlssd state.
Nevertheless. tas vass1esliiY e. saeA o.
susreasss a. have rscsmgy eonr e. isxa.
sassssss sse m~es ~ s-as2-F -asexa.sAs.