National Batik Failures.
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��NATIONAL BANK FAILURES.
By George H. Wood.
��Occasionally the attention of the daily press of the country is called to the provisions of the National Banking Law by the announcement of the failure of some national banking association, and immediately it teems with comments, and recommendations as to amendments which should be made to render the law effective. These recommendations and comments usually show the most lament- able ignorance, both as to the actual existing provisions of the law and its practical working, and as regards bank- ing matters generally. In the case of the failure of the Middletown National Bank of New York, the advice which has been given in the columns of the press seems of itself to be sufficient, if it had been given sooner, to have pre- vented the disaster. The Directors have been blamed, very justly too, for they looked on while their President run them into all its difficulties, and as usual the Bank Examiners have been held respon- sible for the disaster. Some have even gone so far as to suggest that a provision be added to the National Banking Laws punishing Examiners who do not detect irregularities in the banks which they examine.
The provisions of the National Bank Act as they now stand are as perfect, theoretically, as they can be drawn, to protect both the depositors and the stockholders. The law provides for the publication of sworn reports, from time to time, of the condition of each national bank. These reports must be sworn to by the President, or Cashier, and their correctness must be attested by the signatures of at least three Directors. These reports are required five times
��a year and it is impossible to see- how, if the Directors do their duty fully and honestly, any delinquency on the part of the officers of the bank can fail to be detected by them. Under the law, the stockholders elect the Directors, at least five in number. The officers of the bank are elected or appointed by the directors and are subject to them. Thus far the protection the Act pro- vides is based upon what, so far as fi- nancial matters are concerned, is one of the great controlling influences of hu- man nature, viz : self-interest. The stockholders, in order to protect them- selves, are expected to elect Directors who will look out for the mterests of all.
The sworn reports made to the Comp- troller of the Currency are published in. the newspapers where the banks are located, and a copy sent to that officer that he may know that the law in this- respect has been complied with. The stockholders can inspect them at any time as they appear, and can note any changes which occur in them from time to time. The stockholders are also at perfect liberty to make any inquiries that they may deem fit, in any direction which their intelligence may suggest to them.
In addition to the protection which the law gives to the stockholders, and also to the depositors, by requiring the publication of reports of the condition of the national banks. Bank Examiners are provided in the law ; these Bank Ex- aminers are appointed by the Comptrol- ler of the Currency, and make their ex- aminations at any time that he may deem fit.
A Bank Examiner to afford perfect
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