The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1915-07-28
THE BANK EXAMINER.

OldIS ooilh AoS
made a confession. I'm an article
carried in the Sunday News, reply
ing to some statement previously
made in that paper to the effect that
a bank in the lower part Of the State
was short of necessary funds, and
that the bank examiner in 9 recent
examination had failed to discover
this fact, MI. Mauldin indicates that
some irregularities were discovered
at the examination and that these
were called to the attention of the
President by letter and then adds
''The fact is, as I am informed, it
was the report of this examination
and the letters pursuant thereto
which brought about the employment
of auditors for making a MORE
COMPLETE AUDIT of all the books
and accounts of the bank THAN
WAS POSSIBLE FOR THE BANK
EXAMINER TO MAKE WITHIN
THE LIMITED TIME AVAILABLE
FOR THAT PURPOSE.
In the above quotation, we have
italicized certain words to call at
tentfon thereto. In the first place,
we are informed that it costs the
banks as much now to have their
books examined by the bank exami-
ner as it did, before this Office was
created, to employ competent audi
tors once a year to audit the books.
It is true that the bank examiner
comes around three or four times a
year, while the auditor came but
once a year; but with the latter we
had q real examination of the books
and accounts of the bank, while with
the latter, to use his W words, such
an examination is not possible in
the limited time available for that
purpose
Take the case of this bank. Did
anybody know the condition of the
bank after the examiner left? It
seems that it was impossible to get
at the real status Of the bank with
out employing expert auditors, an
entirely useless expense if the office
Of the bank examiner was doing
thoroughly the work assigned it by
law. And we do not mean to say
that the bank examiner is, ~neglectful
of his duty. We only call attention
to the facts, and prefer to believe
that the trouble lies Just where MI.
Mauldin says it does, and that it is
not possible to make these examina-
tons in a thorough manner with the
time available.
Only last year a small bank in thu
county was checked up by the bank
examiner, and some small .~discrepan-
cies found; it had been regularly
checked before and no discrepancies
found, and yet the cashier of this
bank, at the last examination, was
some eighteen thousand dollars short,
and had been short for a period of
four years in some amount, which
amount constantly grew larger. We
are willing to allow that this discre-
pancy could not be discovered on the
face of the books; it never can. And
an examination which looks to moth
ing but the face of the books is no
examination. When the books of
the large corporations are examined,
and it appears that there r a thous-
and accounts on the books, a letter
is mailed to each of the debtors
stating the condition and amount of
the account, and asking if it is cor
rect. If three years before the
Bank of Calhoun Falls failed such
letters had been mailed to those per-
sons who appeared to owe obligations
to this bank, and tofthe depositors
thereof, as would have been done by
. good auditor, this shortage would
have been discovered while the short
age was still small.
But this examination was prevent
ed by the fact that the legislature
had provided that the banks should
pay four fees a year to have their
books inspected by a state officer,
and they did not feel that it was
necessary to have a further inspec-
ton, especially in view of the added
expense. All of which goes to show
that the Office of state bank exami-
ner may be a fat political job, but
it does not furnish the people with
the proper inspection and eXamina-
ton of the condition of these fnan-
cial institutions.
The truth is that the State should
have nothing to do with examining
banks. The state might properly