Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1914-05-11
Il. GO0DINGFIHD
ANSWERS QUERIES
ASKED NLETTER
Continued nom page one,

Continued nom page one1
for borrowers? why did he not,
therefore, report to the governor that
advances to the extent of 500 ,000. 90,
extending over q period of many
| years, had been made by this bank
to the county auditor whose only
known means were his monthly sal
airy? <... - = III
Section 25S7 of Chapter 15S of the
Session Laws of 1905, referring to
banking corporations reads, as under.
The treasurer and the registrar
of public accounts Of the territory
shall, not less than two nor more
| than four times In each year, make
an examination into all the affairs of
each corporation formed under this
chapter, and for that purpose may
exaniine any oflicer and the agent
of the same under oath. and shall
| make fun and detailed report Of
the condition Of the corporation to
the governor. and no such Corporas
ton shall be subject to any other
Visitorial powers except those which
| are vested IN the courts Of justice,
| This law was repealed BY Act rs
of the Session Laws Of 1913, Section
of this Act Is as follows:
| sThe duties Of bank examiner shall
be to make thorough examination
| of the affairs and conditions Of every
banking corporation tother than IL
Irrational bank and trust company do.
| ing business within the territory and
torganized under the provisions Of any
Law now Or hereafter enacted BY the
Legislature OF the. Territory Of Has
iWaii, or otherwise; and also Of any
fIduciary company doing business
within the territory. as defined IA Act
IS of the Session Laws Of 1905; ana
also to make q thorough examination
of the affairs Of any copartnefship or
individual that may be carrying on
now, or hereafter, q banking and or
Trust business.
Under the heading Liability Of
Bank Examiners fpage 49, III the
before mentioned Manual for Audi.
tors, the Following recognized rule is
quoted, namely:
The certification Of bank bal.
ance sheet involves the thorough ex.
animation and exhaustive testing OF
every account In the general ledger,
the counting of the balance of cash IN
hand, the examination of all notes
ftespecial care being taken to note
that all overdue notes are properly ex-
plainedl and the inspection of all se-
clirities whether owned by the bank
or held as collateral for borrowers.
The work Of examining the secur.
tiles and collaterals is one OF the most
important branches OF the examina-
ton. Extensive defalcaticns have
been covered up by the failure to en-.
dorse partial payments on notes. Ali
the securities should be produced Isl.
simultaneously and should remain IN
the auditors sole keeping until the
inspection is completed. Extensive
frauds have been known to remain
lirndetected through failure to observe
this simple precaution
/ prefer not TO make any comment
on the last part of query No. 8.
Question No. 4. Was it not illegal
for the county auditor to issue a war
rant for some $4,000 to Carl s..
Smith, an attorney, to whom the
claim had not been assigned, in set.
Element of a damage suit against the
county, the payment being made Al
/ days prior to the authorization by the
board Of supervisors?
In reply to the above query, \
would state that at the meeting OF
the board of supervisors, held Aug
ust 5th, 1906, the county attorney was
asked by the board for an opinion re.
garding the legality of the county
auditor issuing warrants without the
approval of the finance committee
and passed by the board Of superyi-
sors. The county attorney rendered
the opinion that "if the claims were
legally examined. approved and pass
ed upon by the board of supervisors,
certified to and signed by the chair.
man of the board and the county
clerk. the auditor must issue war
rants for the payment of said claims 8
A resolution to. the above effect was.
duly passed at the above meeting of
the board Of supervisors.
when Warrant No. 1884 for So
425.22 was issued and made out per-
sonaily Ca rare occurrence1 by the
county Auditor, on November 30th.
1903, to Carl s. Smith, in settlement
OF the damage case of Kunlazo Matsu-I
mura vs.. the County of Hawaii, there
was no assignment of this claim from
Matsumura (the plaintiff) to Carl s.
Smith on file in the auditors office,
as the assignment, in the handwrit-
ing of Carl s. Smith was made two
days later, on December End. 1909.
The claim, also in the handwriting OF
Carl S. Smith, was allowed by the
board of supervisors on January 10th,
1910, for the full amount, $S,425.22,
and this date Of authorization was en-.
.torsed on the claim, countersigned