New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-09-28
RIDGELY ON BANKING.
Controller Says Directors Should Be
Held to Strict Letter of To,r

Philadelphia. Sept. 27-The PenpsvIvan;a Rart-
ers' Association began its twelfth annual r,oa+,z
to-day In the ballroom OF the Bellevue Stratford
Hotel. Two sessions were held one I'm the fore
noon, at which William G. Read,no 90 vyn,,a-,.
port Penn. the president of the association daI,
cred his annual address, and another tbIs aftarroo
when several men prominent in financial circles
spoke Inc principal address OF the afternoon
was that delivered by William B. Ridgely. Con-
troLer OF the Currency. who discussed Bank Di-
rectors."
Mr.. Ridgely spoke. in part. as follows:
.,I Except from very rare and exceptional causes.
tSee is ne1eT psncs or Runs due TO false
OF bank or trust company 1t is almost always
combined When bank does fall it is the fault
blame perhaps more than the directors may but p9 the ne
the directors and they are to bamethess IS uPS be
whole board as a board and the members as in
perhaps only few Of the directors to so manage
The business Of the bank as to bring insolvency
detai! the acts or crimes which wreck bank; the
done. but It is their fault, If they allow themseves
70 pc Kept In ignorance or 10 be deceived and thus
of bank TO keep themselves Informed about its
business and to so direct its affairs to prevent
:. Far the most frequent cause of bank troubles
ures-is the granting of credits beyond the le-
gal and prudent limits to the officers or to one
owned and managed by the officers or directors Of
tne park or In which they have directly indirect
~ some large pecuniary interest.
condition 1t IS in grave danger, for it's entire safe
" depends on the success of outside enterprises,
AND the man who should protect the bank has
perhaps greater interest in protecting the other
concern. 1t is probably the most common, serious
derelcton of duty the part of directors to allow
such condition this gradually to obtain in
bank. II may sometimes be done honestly
the result of bad Judgment only but in my expert
ence II is the most frequent cause OF dishonesty
and fraud among bank officers. l do not remember
a case where a bank officer had the moral courage
70 let loans Of this kind carry down his bank
or postpone the catastrophe in hopes that some
fortunate circumstance might intervene to him
and conceal his fraud.
am aware that it Is sometimes advisable and
necessary 10 secure as bank directors who
can control important accounts and bring business
70 bank. am not objecting 10 this, when It IS
done in good faith and the business is for the
interest Of the bank 1t is good business good
banking, however, TO have men the board whose
interest lies in borrowing from the bank more than
they should prudently or can legally loan. who
would under any circumstances. be tempted to
risk large Of the money OF the bank to protect
their own interests rather than those Of the bank
No who would accept a place on a bank
board under such circumstances can be proper
member OF II.
II may be urged that II bank directors are TO be
held TO such strict accountability 1t will be diff
fcult TO get the right kind of serve on bank
boards. My reply TO this is that It is new re-
lists in the law as IL has been construed by the
Supreme Court. Nothing you I say or do will
change this. If what 1 may say shall call this
fact home to bank directors. and prompt them to
fuller realization OF their duties and responsible
ties. shall be content.