Every evening, Wilmington daily commercial., 1906-04-19
Bank Directors and Bank Money.


Bank Directors and Bank Money.
Referring 70 the resolution introduced
In tho United States Senate by Senator
TSllman, calling for an investigation Of
the charges that directors Of banks and
other financial institutions have made
contributions for political purposes Of the
money committed 20 their charge, with
. view 20 prosecutions where the circum-
stances may warrant such action, the
Morning News makes this surprising state
ment: "Republicans and Democrats
alike make up the bank boards Of direc-
tors and they have a right to give away
their own money, so long as they protect
their depositors. The profits belong to
The stockholders Of the banks, and the
directors themselves are usually the
largest stockholders"
This is a strange doctrine, indeed. Il
ascribes to the directors Of, say a national
bank, the right to give away all the profits
Of the bank TO political committees, thereby
dispensing with dividends on the ground
that they care usually the largest stock
holders" the assumption being that
thereby they would be merely giving
away their own.
But this assumption does not hold good.
II does not always follow that the largest
holders Of stock are directors of the in
stitution. The holder of a single share
may be a director, while the holder of a
large number-any number short Of the
majority which would enable him to
elect himself-may be unable to secure
seat on the board The stockholders
elect the directors, and majority vote
prevails. Qualifications for a director
ship do not comprise the possession Of
any number of shares; one share is sufi-
cicnt.
Next comes the question Of the right Of
tie directors TO give away the profits Of
the bank-the property Of tho stock
holders. According to the logic Of the
Morning News, they have a perfect right
TO vote the banks money 70 political pur-
poses. Where do they get such a right ?
Docs the law or the charter Of the bank
confer It upon them Can they in any
manner justify such contributions on the
ground that the money is thereby applied
TO any legitimate purposes of the institu-
tion
We are aware that in at least one cam
paign- that Of lS96-the argument was
advanced that the interests of all financial
institutions were threatened by the Demo-
cratic party's open advocacy of silver in
fation, and therefore, contributions OF
money held by these institutions for the
purpose Of securing the defeat Of the
Democratic party we're a legitimate al
we'll as a practical move But this wal
merely a contention Can any word o
law be found that will excuse, much les
warrant, the appropriation Of such none,
to political purposes
In the campaign Of 1896 this question
was fairly presented to the directors of a
least one bank in the city of Wilmington
The proposition was made for an appro
priation out Of the bank funds in aid O
the political campaign for the cause o
sound money. At least one directo
opposed voting dollar Of the bank
money for political purposes. Their owl
money, their personal holdings, he pointe
out, they could do as they pleased with
They could make contributions to th
cause of the sound money campaign, a
he had done, for be was not an advocat
Of silver initiation, but he insisted tha
they had no right to use the bank
money for any such purpose.
There can be no doubt Of the soundne,
Of this argument, Il is true that in lS9
there was just reason for alarm that th
success of the party of silver inaatlo
would do grave injury to all financial il
stitutions, but even this did not aiior
justification for wrong doing That n
precedent was an evil one is attested b
the continuance Of the practice in subs
quent campaigns, when the danger
grave financial injury through the succe
OF any one political party had pass,
over.
It is true that bank directors shave
right TO give away their own money
but their own money only. They ha'
no right to give away the money that
entrusted 70 their management, exec
in the regular and lawful way Of provi
ing for the legitimate expenses Of the
stitution and the payment Of dividends.