The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1906-09-28

bank books. and checking up not only
the clerks and minor officials, but also
the presidents. cashiers and manag-
ing officers. There are. however, still
too many cases where the directors
content themselves with choosing Of
ficers whom they believe to be honest
and competent and leaving everything
to them. Fortunately. when the right
kind of officers are chosen. the results
obtained are often quite as good as
when the directors follow up the bust
ness more closely. There is much to
be said in favor of one man manage
nlent Of any business, and especially
of a 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 we'll as the most successful rail-
ways. industrial and commercial en-
terprises. owe their commanding sue
cess to the genius of one strong man
who. by his force and high character,
has completely dominated their af.
iairs.
When a board Of directors finds such
a man, or when he finds himself and
chooses a board OF his own to sup
port him. it makes great bank. In
most cases even where great genius
is not chosen. the directors elect to
Office men of high character and suf-
ficiently ability American banks. GER
tainly since the civil war, have been
very successful. The record of the
national banks is remarkable in the
small number of failures and the COM
paratively small amount lost to de-
positors of the many billions OF dol
lars on deposit. The trust companies
and the banks CT many states have
highly satisfactory and commeniable
records. These records have been
largely made by banks run entirely by
their officers with little real supervi-
sion 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 Of
ficer. The results are better than one
might have supposed, but they are not
as good as they should be. The weak
ness and shame of American banking
is that more often than it should hap
pen, there are scandalous failures of
banks which have been robbed and
lotted 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 supervision. check or examination
on the part of the directors
There is no excuse for such robbery
of bank. 1t can not happen where
the directors are honest and doing
their duty. 1t 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 condi-
ton, and to prevent such stealing.
1t is no answer, either, to blame the
bank examiner or the supervising au-
thority. The examiner and the bank
ing department may or may not be to
blame. Sometimes they are at fault in
not having discovered conditions soon
er. But the examiner can not and
should not be expected to entirely pre-
vent wrond doing in bank except SO
far as fear OF detection may do so.
The examiner does his duty if he dis
covers 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 directors business to prevent it.
II they do not, they are guilty of GRIM
inal intent or almost equally criminal
neglect. No officer can rob and ruin
a bank, unless the directors are his
confederates or his dupes.
For probably the same reason that
We all think all men are mortal, but
ourselves, bank directors are apt to
believe their bank and it's officers are
exceptions to the rule and to feel such
absolute confidence in them as to al
low them to continue to run the banks
business as they always have done,
without close supervision and with lit
tie or no searching examination. 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 faithful? Hap
PLY in the great majority of cases they
do But they must remember, it is
men with just such regulations who
occasionally turn out to be scoun-
drels, and are discovered too late to
have been faithless to every relation
in life and to have robbed and deceived
every one who has trusted them. How
frequently it seems that they plumber
the most ruthlessly those whom they
would seem most in honor bound to
protect? 1t must be remembered that
it is only men who have the talents
to establish reputation for capacity,
probity, and honor, who get the chance
to commit such crimes They are gen.
orally men of unusual talents bank
wrecker is never fool. 1t takes
rather exceptional ability to first ac-
quire position where it is possible,
and then to carry out the plan. Only
a man of considerable nerve and cour-
age would dare to try such a thing, or
could carry it on without early dis
! covery. What l wish to impress most
| on any bank director who may happen
to hear or read what l say, is that
it is men who have just as high reputa-
tons and stand just as we'll among
their friends and associates as the men
| you are trusting, who occasionally
commit these gigantic frauds in bank
management. No bank director or
shareholder who hears or reads this
can fail to remember case or many
cases where men whose intimate
friends and closest business associates
had the same reason to trust them as
you have to trust the officers of your
swindled their closest friends and
neighbors 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 re-