The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-10-16
STATE SUPERVISION
DEP0sII0Rs' GUARD CT \ J
President Williams. Of, American
Bankers Asks Radical Trust 4
N Company Reforms. 4

8 COmpany He4OI1ns. Ji
St. Louis. Oct. 16.-The American
Bankers association convened today
forts thirty-second annual convention
when the trust companies section was
called to order at the Olympic theater
simultaneously with the gathering OF
the savings banks section at Schuyler
Memorial hall. The meeting Of the as
ISOLATION as whole will not take place
Hundreds Of bdhkers representing
every state and territory, as well as
the United States dependencies are
here as delegates.
Declaring that trust companies were
never closer to the confidence Of the
people than today and that never were
they more worthy of this trust, but en-
phasizing the necessity Of continued ef-
fort to increase the safety Of these in
stitutions, President Clark Williams
opened the convention Of the trust COM
pany section Of the association.
" Employees as Guards.
Following an Endorsement of state SUI:
the Real Estate Trust company of Phil
.adelphia as an example, President Will
Jams offered resolution, which is a
radical departure in the history Of trust
companies. .@*E.
II Believe that it would be of meal
culable benefit to the trust company
system as a whole,' he said, eff by
resolution we direct that copy of
some such notice. as the following be
generally distributed with the recon-.
mendation that it be promulgated IN
every trust company In the land: !.
Every employee of this company If
hereby notified that if at any time he
has knowledge of any irregularity or
| in. connection with The business Of the
company it shall be the duty of such ar
employee to at once notify the execu
Live committee of the board Of direct
lors Of such Irregularities, who will, il
their discretion. withhold the name o.
their informant. -. Ill III 81. -
/ Ts.Should it be found that any EN-
ployee has. had knowledge of such If
regularities and has not reported tn.
same to the executive committee, sucl
employee will be deemed to have hae
guilty knowledge and will be dealt will
accordingly" u
il Discussed Declarations.
Pierre Jay, commissioner of banking
! of Massachusetts, spoke before tn,
trust section of the association on "De
faleations: What Can Be Done to De
crease Them9''- II, ~. !, ~ ::
Mr.. Jay said in part: sss.
- The president Of a large suret,
company. recently told me that his com
panY had averaged one bank embezzle
ment case a month for the past twenty
two years, When you consider tina
there are eight or ten other surety com
panies issuing. fidelity bonds to ban]
employees, which are probably havin,
proportionately similar experiences, AM
when you consider that perhaps tw
out of three of the minor embezzle
ments never reach the surety compa
MES, but are made good by relative
and friends, or are charged to prof
and loss, think I am safe in estimat
ing that new case Of bank embezzle
mentois being discovered in the Unite
States on every day in the year. j
proportion to their number Of banks thi
would mean, say eighteen a year i
Missouri, fourteen in Illinois, sever
/ teen in, New. York. re- * :.
AS remedies against present %condi
t1ons, MI. Jay suggested:
j system of accounting 4.ss
T. Second-The best accounting syste,
j obtainable having been installed. tie e1
|, tries made underSit should be audite
as frequently as5possible. ss$- 1
i Mr.. Jay then added: ~, !
Il lit has occurred to me that itsWonl
be perfectly feasible for a number q
banks in city or district or a stat,
national banks, savings banks and trus
;. companies combining together; II e. al
slrable, to form a mutual auditing q!
! ISOLATION, which should employ aecpu1
tants by the year and conduct audi
! ot' the members Of the association, al
sesslng them only the actual cost {
the audits. - :
? but, however serious such defalc;
; lions OF tellers, bookkeepers and clerk
may be, they are not to be compare
, in disastrous result with the maxim
= OF excessive or unsound loans and Il
vestments by trusted officers of bank
believe that, to prevent suc
losses, legislation should be enacted !
every state similar to the law recent
4 passed In New York, which would cor
y pei the directors Of every, bank al
trust company to make at least tiu
examlnat1ons each year Of It's conditiit
9 thru the medium Of an examining cor
! mittee, which should not. contain al
officer or member of Its executive COZ
mittee; such committee to make i sWo1
report In duplicate, one copy to beHpr
j. scented at the next directors and ne:
/ stockholders' meetings, and the other
= be filed with the state banking &dana,
!. ment; the report, in addition to a We,
: He'd statement Of the bank 81 .conditio
to contain a list Of its assets, with &
Z committees valuation Of them, sho,
. ing which Of them they consider wort
less or doubtful and which of the &
- curities held as investments or as cl
. lateral are not readily marketable: al
' in which loans and Investments the Z
< rectors or officers are interested, d
e ing the names of the directors or: Of
a GERS in each case. asz> .: s@t
III 3 & = 4 : * UNI. &
!: PAuI. CONSTANCE man