The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-09-28

2AID, FRIDAY, SEPTEM
tally of bank. when you have the right
man in the right place. 1t IS apt to be
vigorous, efficient and successful. Many
of the great banks of the world, as well
as the most successful railways, indus
trial and commercial enterprises, owe
| their commanding success to the genius
of one strong man who, by his force and
high character, has completely dominated
their affairs.
Records Are Remarkable.
When a board of directors finds such
man or when he finds himself and
chooses a board of bis own to support
| him. 1t makes a great bank. In most cases
even where a great genius is not chosen.
the directors elect to office men Of high
character and sufficient ability. American
banks, certainly since the civil war, have
been very successfully. The record of
the national banks is remarkable in the
small number of failures and the COM
raratively small amount lost to depositors
of the many billions Of dollars on deposit.
| The trust companies and the banks Of
| many states have highly satisfactory and
eommendable records. These records have
been largely made by banks run entirely
by their officers. with little real super
vision by the directors, for such man
agement has been the rule rather than
the exception.
The success gained is a tribute mainly
to the Judgment of directors In choosing
their officers and the honesty and ability
of the American bank officer The results
are better than one might have supposed.
but they are not as good as they should
be. The weakness and shame of Ameri-
can banking is that more often than 1t
should happen, there are scandalous fall
! ures of banks which have been robbed
and looted by officers who had so gained
the confidence of their shareholders and
directors as to be given absolute control
of the business with little or no super
vision, check or examination on the part
of the directors.
No Excuse for Such Robbery.
There is no excuse for such robbery of
a bank. 1t can not happen where the
directors are honest and doing their duty.
| It is no answer for the directors to say
they had confidence in their officers and
did not know the real condition 1t is their
business and their sworn duty, to know
the condition, and to prevent such steal
ing,
1t Is no answer either TO blame the
bank examiner or the supervising au
thority. The examiner and the banking
department may or may not be to blame.
ing discovered conditions sooner But the
examiner can not and should not be ex-
| pected to entirely prevent wrong doing In
bank except so far as fear of detection
may do so. The examiner does his duty
| if he discovers dishonesty and crime after
| it is committed. He can do nothing until
| some perhaps all, the harm Is done;
until the loan Is made, the forged note
| is in the bank, the fraudulent entry
| made and the money gone. 1t is for the
=, examiner to discover fraud. 1t is the di-
| rectors' business to prevent 1t. If they
| do not, they are guilty of crinpinal in
tent or almost equally criminal neglect.
| No officer can rob and ruin a bank, I'M
less the directors are his confederates or
| his dupes.
Their Banks an Exception.
| For probably the same reason that we
| all think all men are mortal but ourselves,
| bank directors are apt to believe their
bank and its officers are exceptions to
| the rule and to feel such absolute conf
| dence in them as to allow them to con-
| tinue to run the banks business as they
| always have done. without close super
| vision and with little or no searching 'ex-
animation. Have we not. they say to
! themselves, known these men all their
| lives? Are we not sure they are honest?
Do we not know they are able and faith
Happily
cases they do. But they must remember
1t is men with just such regulations who
occasionally turn out to be scoundrels,
| and are discovered too late to have been
faithess to every relation in life and to
have robbed and deceived every one who
has trusted them. How frequently 1t seems
! that they plumber the most ruthlessly
| those whom they would seem most in
honor bound to protect?
Ttisfni al Ia q
who have the talents to establish reputa-
ton for capcity, probity, and honor, who
get the chance to commit such crimes.
They are generally men of unusual tall
ents A bank wrecker is never a fool 1t
takes rather exceptional ability to first
acquire a position where 1t is possible,
and then to carry out the plan. Only a
man of considerable nerve and courage
would dare to try such a thing, or could
carry 1t on without early discovery. What
| wish to impress most on any bank direc-
tor who may happen to hear or read what
| say, 1t that 1t is men who have just
| as high reputatio and stand just as well
among their friends and associates as the
| men you are trusting. who occasionally
commit these gigantic frauds in bank
! management. No bank director or share
holder who hears or reads this can fail
| to remember a case or many cases where
| men whose 1ntlmOIe TRENDS ana CLOSEST
| business associates had the same reason
| to trust them as you have to trust the
officers of your bank. have shamefully
| robbed and swindled their closest friends
and neghbors bringing shame. sorrow
and ruin on all who had blindly depended
| upon them Your men may be all you
/ think them; most of them are; let us hope
/ that all of them are; but you who are
| both morally and legally responsible can
not afford to take the chance without do
ing your duty and adopting all reasona-
| BILE measures to protect those who have
the right to look to you for protection
and to safeguard as well your own prop
| erty and reputation.
Must Not Resent Supervision.
No man who is in charge of bank and
| intends to conduct its business honestly
and legally, can resent any amount of
| supervision or examination by his board
| of directors. | do not mean by this Of
ficious Interference or meddling with the
smaller details of the daily business. Any
| man who is fit to run bank at all should
be given sufficient authority and not be
hampered with too numerous Instructions
But in the language of Justice Severens,
quoted before:
| at is the right and duty of the board to
maintain a supervision of the affairs of
the bank: to have a general knowledge
of the manner in which its business is
conducted. and of the character of that