The failure of the bank examiner to discover this shortage was the subject of considerable public criticism. He was summoned to Washington by the Comptroller and instructed to bring with him all of the verification returns covering his several examinations of this bank, as it was not understood why this shortage was not discovered, if bank balances had been properly verified. These returns showed a number of discrepancies in the accounts of correspondent and reserve banks, and an attempt to reconcile any one of them would have led to a detection of the shortage. When asked for an explanation as to why he neglected to reconcile these differences, the examiner stated that he relied upon his assistant to do that work for him, and that his instructions to him were that if he found any differences in the returns to call his attention to them and to file all others. He stated that his clerk had neglected to perform this duty and that when the defalcation was discovered, and the manner in which it was effected disclosed, he examined the verification returns of some of the banks whose accounts were reported to have been manipulated and learned for the first time of these discrepancies, and that his clerk had not brought them to his attention, but filed them away without examination. The Comptroller, however, held the examiner responsible for the negligence of his irresponsible clerk and required him to tender his resignation.



Copied from an original photograph made about 1897, and secured through the courtesy of C. A. Farnesworth of the Union Trust Co., Cleveland.