Kinds of Bank Examination.— Official bank examination includes that fuinished by the Comptroller of the Currency, the Federal Reserve Board in the case of national banks and the supervising officers of State banks i.. the case of State banks; there is also examina tion in many cities by a clearing-house exam iner, for banks members of the clearing-house association. Besides, special examinations are provided for, as already stated, by committees of directors, these examinations being made in some cases by accountants selected from the bank's staff and in others special experts. A few banks have thought it wise to have ex aminations made on behalf of the stockholders generally in addition to the examinations made by the directors.
Importance of Examination.— What can be of greater importance than the thorough, systematic, exhaustive and regular examina tion of our great financial institutions—our National and State banks, trust companies and institutions for savings whose capital and de posits are expressed by billions? What can be more essential to the welfare of a commu nity of breadwinners and dependents upon them than the assurance that those institu tions with which are lodged the means for con ducting the vast enterprises of the country and the earnings which have been won by hard labor are conducted in an honest, businesslike way, prepared to meet the demands that may at any. time be made upon them? And the
key to such a situation — what is it but such thorough supervision, with rigid examinations, as shall inspire confidence and dissipate alarm in hours of financial stringency and tendency to distrust? A mercantile house may fall and the adverse results may he partial and reme dial; but when a great banking institution goes down, credit goes, fortunes disappear, the poor arc left helpless and the talc of suffering is long and grievous.
No banking institution to-day is the right kind which is conducted as such institutions were 65 years ago. In like manner we may believe that in future years new methods, new safeguards, enforced by an impartial, effective system of promotion of the personnel, will give increased efficiency in bank management, resulting in a greater volume of business, fewer bank failures and heavier balances on the right side' of the ledger.
No institution can run itself — except to ruin — least of all a bank. Eternal vigilance is no less the price of liberty than of safe banking; and only those institutions can gain and deserve the public confidence and justify the powers conferred upon them which arc managed under a supervision that is searching and thorough, including examinations which are rigid and relentless.