The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-05-06
.RIDGELY DEFENDS / !
BANK EXAMINERS
Comptroller Of The Currency
Takes Issue With The Jour-
nal on Federal System

Takes Issue With The jour
q nal on Federal System.
u Il Ry,sN w - ern1 ar,e
Washington, q May IN 6. "A diverse com
nlent egarding the d at ion nal bank exam,
ming. system has ~ been zs printed and
spoken IN many qua tiers, since the de-.
falcation9 of Presld lent DE low, y Of itthe
First National Bank of, Milwaukee, be-
came public. A recent q iteriaI in
Tn j gu r n a Iicited the Milwaukee
case, and the failure of; tie q FIRST Ma
tional Bank Of FaribaIlt M III, as .sevii-
q d I9nt OF weakness IN the system Of
y In the Faribaultt Failure the president
Of the bank had been using its funds to
finance his priNate en- ures elsewhere,
W.l A did {, not pay ], and the remaining
assets Of the bank consist largely of
Worthle ss stoc Of scout hern lumber and
plaanta ton comp nies. :lsB N &. y.
III Assailed s. Fa1ib auit
81 AT. Faribault THE creditors held a
meeting, at which the federal exam
l la were we severely arraigned for not
bank, as the president had. been loan
ing money on the, stock of his own COM
Qanles for number Of years. The
journal editorial also expressedsa be-
lief LET that the failure to uncover this
condition evidenced q weakness in the
SYSTEM, and it limited that Eth 8 method
of making appointment ssto the examin-
ing: y! corps by political pFeferment was
N itself bad, IN that IL tended to fill
some at least Of these paames with in
eompetents. 5sss S., ...- -
Not Admitted by Ridgely.
: Controller Of the Currency. William
Barrett .Ridgely does not admit. that
any of these charges is true. Comment:
ing on the criticisms of the service
Mr.; Ridgely, said today, -, =
:, 1.-The. system of, examining national
banks is as nearly perfect as it can
be made under the present law. Every
controller for the. past ten or twelve
be increased, and that the method Of
compensation be changed from fees tt
liked salaries, graded according to the
size Of the banks in the various dis
trlcts. With the, compensation fxeC
an examiner could and would put il
more time in making each examination
particularly, in banks in the smaller
towns in his district - I must not b
understood. as saying. that any of the
work is sighted. I believe the exam
iners perform their duty conscientious
Ily, and that little blame can attach tt
them for the failures which occur.
Can't Conflde in Public.
In the very nature Of things, thi:
office cannot take the public into it,
confidence and publish what the exam
liners find in making their examina
tio1is. The public has no idea as tt
how many irregularities the examiners
discover, in proportion to the number
not disclosed, while going thru a bank
They catch most. Of these things, bu
once in a while something gets away
| from them, and the public learns abou
it, and Immediately wants to know why
the exaAner wasn't more vigilant.
say our Examiners are as vigilant, a.
careful, and as faithful as any corp
Of men en- il the country engaged IL worl
eou dh not b e. IL sism Ra
without his checAnghp all the account
of bank for a Considerable period
The Irregularities at milwaukee, coul,
have been, detected in this way, bu
such. a minute examination would tax
time, and besides, the examiner woul,
have to take with him corps Of assist
arts. The time and the force would b
an expense for which the public woul,
not stand, SO we have the present sys
/ most errors. "i ~ -
Banks Must Employ Experts.
1 '"The only way in which IRREGULAR
ties can be prevented to certainty i
for the bank officers to employ expert
to check up their books periodically
Such system is in operation in th
First National bank Of Chicago, TO
instance, and in other banks that
IS an expert accountant, employed b,
/ the directors, who is paid a good sal
airy. He has9a force Of clerks, and a
intervals during the year he and hi
4 clerks make a thoro examination 8
some department Of the bank. Non
OF the heads Of the departments know
when his section Of the bank is to b
examined, and there is no one in til
bank who can say when a certain de
partment shall Be examined;' for thi
accountant has, by resolution Of tn
directors; been made, entirely independ
.ent Of any Of the officers.
Selection of Bank Examiners.
AS to the method Of selecting ma
t1onal bank examiners, believe it i
all right. Usually the men appointe,
are affiliated with the party in contro
of the federal government. Care
exercised, however, in selecting me-
who have had banking experience, an
who are vouched for by business me,
in their respective communities. Ate
man once gets into the service, how
ever, no attention is paid to his politics
and no removals are made for politica
reasons. We have examiners at wor,
now who were appointed by Mr.. Tren
! holm, who was controller in Cleve
land s first administration, and by MI
4 Eckels, who served in the second Cleve
land administration
Coming back to the system of e.
animation you can say that none ha
4 yet been devised, except the exper
!. examination such as I have mentioned
which will disclose irregularities whe
the president, assistant cashier, an
two bookkeepers have formed con
bination such as was in existence in
4 bank which has recently figured senss
tionally in the press. ~
J. HUNGARIAN PREMIER,
INSULTED, ASKS DUE