ns the
associated life of men, and which gives the American people faith in
their own government, whether they can give a reason, for their faith or
not.

* * * * *

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 lamentable ignorance, both as to the actual existing
provisions of the law and its practical working, and as regards banking
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 prevented 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 responsible
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 provides is based upon what, so far as financial
matters are concerned, is one of the great controlling influences of
human nature, _viz_: self-interest. The stockholders, in order to
protect themselves, are expected to elect Directors w