The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1906-08-20
BANK EXAMINER
DOES NOT PROTECT
Nothing Can Take the Place of
Genuine Integrity in
Handling Funds.
CONTROLLERS ASSISTANT
MAKES GOOD EXPLANATION
Creation of a Robbers Fund"
Is Suggested as One Pos
sible Solution.
spec!e! - The Trihnnn.

WASHINGTON, Aug. l9-"Is the
regular inspection of bank by bank
examiner no guarantee of safety to the
stockholder or depositor1 was the
question asked one OF the principal Of.
hcers of the bureau conducted by the
Comptroller of the Currency, while dis.
cussing the recent bank looiings at Chi
cago and Birmingham, Ala. The Comp
troller is the officer who has charge Of
the National banks OF the United States
and his bureau is pretty wise on bank
ing matters.
"No, sir, it is not, '' was the decided
reply. 81 do not care how expert
bank examiner may be, or how many
years of experience he may have had.
he can not take the place Of good old
integrity in the banking business. a
bank without that is just as dangerous
as it ever was, and it must always re
main so, ] could cite YOU many in
stances to prove it, but perhaps one
striking one would do as we'll as a
dozen. Over in New Jersey there was
National bank in which we heard
needed instanter. We sent one of our
best. He examined the bank thor.
oughly, going over all the assets and
liabilities with care. and when he was
through he said to tho assembled di-
rectors, who had been scared by the
cashier s claims that the bank was in
solvent: Gentlemen. your bank J all
night. There are some loans here which
are not good enough. but they are not
overwhelming in amount, and if YOU
make them good by assessment on your
stockholders or ont of your own rockets
do not see why you can not 90 ahead
Cashier Knew Better.
Just then the cashier came in from
iunch and the statement of the cx-
aminer was repeated 10 him You wait
until | go down cellar and I I'll show
you whether the bank is solvent was
his reply. He went to the cellar and
out OF box dug up a bundle of loose
ledger leaves which had been removed
from the books and concealed there.
These showed mass of inactive ac-
counts, deposits of good size made for
the interest they would draw and sell
dom checked against, hut aggregating
many thousand dollars. They would
have to be paid If the bank went into
addition 10 the bank S liabilities-so
large, IN fact, that they made good the
cashier S claim that the bank was
lnsoIvent. There was case where the
examiner and all the bank officers ex-
cept two-the cashier and the rascal
who had concealed the loose leaves
were deceived. This case. like many
others, makes it plain that if bank is
not ofhcered by honest men no ey-
amlper can guarantee safety.
1.-The bank examiner is a safeguard
against recklessness, or ignorance on
the part Of the bank IS officers. and he
will set things right if the bankers.
through age or loss of health or any
other cause, begin to lose their bust
ness acumen-tbeir banking sense-and,
in fact, he is good enough guarantee
n ncs
except dishonesty. But the latter is
something no examiner can save a bank
from. Good od-fashioned integrity
must always be the backbone of the
banking business, and my advice is
that whenever you lose your conf.
dence in your bankers honesty. his
strict up and down ghtforwardness
it is time you get another banker.
New System Suggested.
"There is one system which might
be adopted FOR the National banks of
the country, and might also be adopted
by a State for its banks, and that is
robbers fund. Ff the law provided
that all the banks should pay GER
tain per cent of their gross business
into such a fund, and that all steal.
ings from any OF them should be i'm
mediatcly made good from that fund
as soon as discovered it would. [ think.
confidence in the banks. If the fund
was also used to run down and prose
cute dishonest bank officials it would
also have a good effect, In that way
if bank was looted, as the one in
Chicago was, the depositors would be
paid on the spot, and the robbers fund
would take charge Of the bank and re-
alize as much as it could out of clos
ing up it's affairs. Of course, the de-
feet in that system would be that the
banks run by honest men would have
10 be paying the losses caused by the
thieves, and, therefore, / apprchend
that some bankers having confidence in
themselves and their subordinates
would rot take kindly TO the idea.
Such system could not, for that
reason, be put into operation unless done
by a general law making the fund
part Of the entire banking system and
obliging all banks 10 subscribe TO it
whether they wanted to or not But I
think it would have certain tendency
to unity and centralizc tho banking
business, and materially stif'en It's re,
sponsibility as a whole. This would bo
especially true if the system were
adopted for National banks and copied
with fidelity by all the States for all