The Plymouth tribune. (Plymouth, Ind.) 1901-1911, 1906-09-06
EXAMINERS ARE EASY.
3ank's Condition is Judged by Sur
face Conditions.

Do bank examiners examine? Is
heir examination worth anything?
the public protected against loss
their work.
Such questions as these are inevi-
ably suggested to the average man
disclosures like those in progress
II Chicago. In connection with the
allure of the Milwaukee avenue
ank, although that was state bank
md was examined by state agents
No bank inspection will protect
he public against downright dishon-
sly on the part of the banks Off
ers. This may be taken as the fficial
md final statement of the control
cr's office. Banking always has been
and always will be a business in
'hich the head of the bank must be
rusted and trustworthy.
1t has been shown repeatedly that
collision between two officials in a
ank Tor sometimes merely the dis
honesty of one officiaD will deceive
he best bank examiner in the en-
hoy of the government A good IL
ustration of this fact took place in
he failure of bank not long ago at
Redbank, N. ]. One of the best ex-
lminers on the controllers force was
sent to look into the affairs of the
institution. He spent several days
going over the securities and books,
and then called the directors togeth-
err and reported that the bank was
perfectly sound, and that he would
recommend that it go on.
At this moment the cashier of the
ank came in.
"You are entirely mistaken, gentle
men," said the cashier. "This bank is
busted"
The examiner and directors looked
at the man in amazement.
1T is very simple" said he. eff
you will wait moment / will go in
to the cellar and get some papers"
Presently the cashier returned with
some loose sheets which had been
removed from the ledger They con-
tanned the record of deposits. Most
of them were of money which had
been put in for saving, and to draw
interest, but it was one of the banks
liabilities, and it put a very different
face on the matter.
Until the dishonest bookkeeping
was disclosed the affairs of the bank
appeared all right. There was no
way in which the examiner could tell
that loose paper had been taken
from the ledger-unless indeed he
were gifted with some Sherlock
Holmes instinct beyond the ordinary
equipment of the accountant.
In other words, the national or
state bank examiner is not Sher-
lock Holmes. In most cases he judg-
es banks condition by surface con-
ditions. Only when rumors of some
thing wrong have come to him does
he try to insert the probe below the
surface. And, even then, he has
small chance of outwitting the sharp
and crooked bank officials who are
on the ground and who have every
chance to cover their tracks.
Hbw little chance there is for
hank examiner to do detective work.
There are literally hundreds of
banks which are kept from failure by
the supervision and wise restraint of
the controller" said an official of
that department to correspondent.
"Of these cases the public never
hears. That is necessary. When
bank fails it becmes public, but when
the officers are told to cali in some
loans, or to replace bad paper with
good securities, the public does not
know about it. All the public knows
is that the bank goes on doing busi
ness and does not fail. There are
hundreds of other cases, too, where
directors are warned that they are
leaving the business too much to the
bank officers"
There are 70 national bank exam
liners to examine 1906 national banks.
Last year these examiners made
total of 11,716 examinations. Anv-
body will see from these figures that
an examiner does not linger long
over one bank.
What the examiner does is to look
over the securities, check up the
amount of loans and discounts, see
what proportion they bear to the
capital and assets, and generally to
make sure that the books of the bank
do not show anything contrary to
the. national banking act. The ex-
animation is, in fact, more check
on the officers way of doing business
than precaution against actual dis
honesty.