The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-03-11
WEDNESDAY, MARCH IL, 1908.
The road OF duty Is long, rough
and bounded by no horizon nut
death. Let us march onward then
boldly. and without spnrinE our feet.
Sand.
THE NEED OF. BANK INSPECTION.
Among the several good Bills which


Among the several good bills which
were introduced in the Legislature and
which died or were choked to death in |
committee, none was moro worthy |
than that to create Bureau of Banking, !
as provided for In the Constitution. The
need of such a bureau was emphasized
by the recent failure of a State bank
in the city of Portsmouth. This insti-
tuition, with total assets of 100000, of
which 100000 was the peoples money
on deposit for safe keeping, was loot
ed of nearly 100000 by one man.
This bank had president and board
of directors, all Of whom are pronln-
ent and trusted citizens, and 1t was
their duty to see that the affairs of
ene bank were honestly conducted. But
eaey took too much for granted. They
pinned their faith to the cashier and did
not inspect his accounts as closely as
they should have done. The cashier
took advantage of their confidence and
Systematically robbed the hank for a
period OF ten years, appropriatng, all
told more than half of the banks as
sets And the probability is that the
thefts would have gone on indefinite
ly without discovery. II they had not
been revealed by the panic. II is to be
presumed that the president and drec
tors exercised general supervision
over the affairs of the bank; that they
counted the cash, looked over the books
and made signed reports TO the State Cor
eoration Commission as provided in our
present law, declared dividends to
stockholders which the cashier told
them had been earned, went to their
homes, ate, slept and were happy in the
consciousness of having done their
duty to the best of their ability. But
the trouble was that the president and
directors did not have expert knowl
edge OF the banking business. They
did not know how to examine the books
and accounts of the banks officers.
The cashier was an-eXpert manipula-
tor and was too sharp for the presi
dent and directors. But could he have
deceived an expert bank examiner? If
tho State had had first-rate system
of examination, is It possible that the
Portsmouth cashier could have robbed
the Bank for ten years without being
detected?
II not too late TO correct great err
ror and wrong to the public, as we'll as
to the banks themselves, let the Legis-
lature take up the subject promptly
and with earnest effort, and enact a
law at this session providing for a
Bureau OF Banking and such necessar-
les as will make it effective.
1t is already provided in section 1863
of the Code that the State Corporation
Commission shall, not less than once a
year, and at such other times as they
may deem necessary. cause to be ex-
amined each and every bank hereto
fore or hereafter designated as a State
depositary.'' But there is a bit OF
grim humor in this. The State regularl,
examines the banks in which her funds
are deposited, but other banks in which
the peoples money is deposited are MOI
examined, unless one-flfth of the stock
holders. representing one-fifth of tn,
amount OF capital stock, request 1t. An,
examination in such conditions woul
be sure to place the bank under sus
picion and injure, IL not destroy, 1t
credit The State ought to follow tn
lead of the United States and requir
that all institutions receiving money o
deposit be examined regularly by a
expert, and that 1t publish reports q
often as they are made, upon call, b
the national banks