The Cairo bulletin., 1906-09-28
SAYS DIRECTORS
SHOULD NOT Be
DUMMIES
CONTROLLER OF THE CURRENCY
POINTS OUT DUTY TO
BANK OFFICIALS.
LEGALLY RESPONSIBLE
AS Shown BY Court Decisions For
President, Cashier and Those
Whom They Employ or Elect
to Fill Places.

Philadelphia Sept Speaking
before the Pennsylvania Bankers AS
sociation today William Barrett Ridg-
ley, comptroller of the currency, in
part said
Except from very rare and except
ional carses, such as sudden panics
or runs due to false rumors. there Is
never any reasonable excuse for the
failure of a bank or trust company
1t is almost always the result of in
excusable folly and incompetence or
dishonesty and fraud, and often due to
all of these combined, When a bank
does fail, it is HE fault Of the board Of
/ directors. Many others may be TO
blame perhaps more than the direc-
| tors, but the final responsibility of
! bank management rests upon the di.
| rectors. and they are 10 blame, that It.
| the whole board as a board and the
members as individuals are to blame
| if they allow the officers or perhaps
only a few of the directors. TO so
manage the businegs of the bank as
70 bring on insolvency It may be
the president or cashier who commits
| in detail the acts or crimes which
wreck a bank; the directors may be
entirely ignorant of what is being
done, but II is their fault if they al
low themselves to be kept in ignOte
ance or to be deceived and thus per
nit it to be dcue 1t is he duty Of
! the directors of a bank to keep them
selves informed about its busine Is
land 10 so direct its affairs as to pre-
vent its failure.
The laws under which most joint
stock banks are organized define the
duties and responsibilities of direc
tors in practically the same terms.
The National Bank Act provides that
"The affairs OF each association shall
be managed by not less than five
directors and that each director
when appointed or elected shall take
an oath that he will, so far as the
duty devolyes on him. diligently and
hoenstly administer the affairs of such
sociation. and will not knowingly
violate, cr willingly pcrit to be vio-
lated, any of the provisions of this
title"
We see from supreme court decis
ions that the highest courts have de
cided and confirmed what is the IN
.evitablc conclusion from any thought
rul consideration of the subject, that
directors must actually direct the af
fairs of their bank. and for drcc |
TER 10 fail 20 do so is To violate his /
oath and Iii obey he law in man |
ncr for which be is not only morally |
but legally responsible.
In great many cases directors
faithfully consccntiously and efficient /
ly perform lheig duties. believe th" /
cases Of This kind increase In number |
cycry year II is becoming more and /
more common to find directors max /
irg or causing TO be- made thorough .
examinations and aud rs of the bank I
books, and checking mp not only tn
clerks and minor officials. but also .
the presidents cashiers and managing .
off rs. There are. however still .
too many cases where tbo directors .
content themselves with choosing offI-
GERS when they believe 10 be honest
and competent and leaving every
no ug TO them Fortunately when the
right kind of officers are chosen the
results obtained are often quite as
good as when the directors follow mp
The business more closely
The success gained is a tribute
mainly to the judgement of directors
IN choosing their officers and the
honesty and ability Of the American
bank Of GERS The results are bet
ter than one might have supposed,
mt they are not as good as they I
should De. The weakness and shame
ri American banking Is that more Oft
go than it should happen. there are
-caudaluus failures g banks which
have been robbed aud looted by uni-
-or- who had $50 gained the confidence
1l their harebp'dcr- and directors aS
leo De- given absolute control uf fhe
business With little ur un supervision.
.hcck or exami-ation on thc part of
hc directors
There Is un excuse fr such robbery
1f "a biuF De- can mot happen where
ho directors are honest and doing
heir duty. T. Is no answer for The
directors go say fbcy had confidence
n their officers and did uoJ know the
.eal condition u is their bu i3ess
md their sworn duty. t0 know the
-0nditl-n. and 10 prevent such steal z
nE
lt IS no answer. either 60 blame :
he bank examiner or the supervising
tContlnued on Second Psgel