Although only forty-three banks were placed in the hands of receivers during Mr. Murray's administration, the number of actual failures during that period was much greater.

Mr. Murray was decidedly averse to appointing receivers for failed banks and he made such appointments only when a bank was so hopelessly insolvent that a receiver was unavoidable, consequently a number of banks that were insolvent at the time they were closed were allowed to be liquidated by other methods than a receivership, contrary to law, and appear in the reports of the Comptroller as voluntary liquidations.

The largest of the banks that were placed in the hands of receivers by Mr. Murray were the Allegheny National and the Cosmopolitan National Banks of Pittsburgh, Pa., each with a capital stock of five hundred thousand dollars and gross liabilities of $3,854,263 and $1,519,585, respectively, and the Union National Bank of Columbus, Ohio, with capital stock of $750,000 and liabilities of $3,489,674. The two former were closed May 18, 1908, and September 5, 1908, respectively, and the latter December 7, 1911.

The Allegheny National Bank was wrecked by its cashier, who was tried and sentenced to a term in the penitentiary for criminal violations of law. The Cosmopolitan failed because of losses sustained on loans made largely in excess of the legal limit, and the Union because of injudicious banking.

The most sensational and disastrous failure that occurred during Mr. Murray's term was the First National Bank of Mineral Point, Wis., which was placed in the hands of a receiver October 12, 1909. The capital stock of this bank was $100,000, the surplus and undivided profits $31,723, and the total liabilities $668,000. The bank was dominated by Phil Allen, Jr., a prominent citizen of Mineral Point.

During the progress of a special examination of the bank the examiner's suspicion was aroused by erasures and alterations in the certificate of deposit register, which were plainly evident. Thirteen hundred dollars was made to read $300 by removing the figure one, and $6100 was changed to read $1100, by altering the figure six.

Phil Allen, the vice-president of the bank, was questioned by the examiner in regard to these alterations and the consequent discrepancies between the certificate register and the general ledger balance. At first he denied any knowledge of the transactions, but finally admitted that he had altered the record, giving as a reason for doing so that he was worried over a loan that he had made in excess of the limit and had temporarily borrowed from the owners of these certificates, without their knowledge, a sum sufficient to enable him to conceal the excessive loan from the examiner. The examiner then took Allen in the back room of the bank for a conference, as he felt certain that the note file had been tampered with, the notes having been handled exclusively by Allen. They went over the loans and discounts together and Allen picked out notes aggregating $90,000 which he admitted were forgeries. The examiner then called the directors together and informed them of the condition of affairs. They appeared to have very little knowledge of the loans, but were personally acquainted with most of the makers of the notes.

The examiner procured a typewritten confession from Allen in which he admitted numerous forgeries, falsification of the books and reports, embezzlement, abstraction and the whole category of the crimes covered by the penal statute of the Bank Act.

His peculations were carried on and concealed in various ways. In addition to the manipulation of the certificate of deposit register and forged notes placed in the loans and discounts, he had convenient for use a supply of certificates of deposit, printed in blank, with duplicate numbers. He sold notes to customers of the bank who had money on deposit to their credit. In a great many instances these notes were fictitious, and in some cases were the property of the bank. In the bank vault there was a special file containing about five hundred envelopes, in which there were notes, securities, life insurance policies and other valuables belonging to customers which had been placed there by them for safekeeping. Many of these envelopes had been pilfered of their contents, and in some cases good notes had been taken out and forged notes substituted. How much Allen stole by this method probably never will be known, as the bank was not liable for the property left in these envelopes.

The bank was absolutely looted by Allen and some of his associates who had been in control of affairs at Mineral Point financially and politically for years. They used the bank to further their mining schemes and speculations, some of which were financed from the beginning of their development by money borrowed from the bank.

The failure of this bank caused a great amount of suffering and hardship throughout the section in which it was located-

Allen's peculations began as far back as 1893, through the failure of a local industrial venture in which he was heavily interested, and increased year by year until the collapse of the bank in October, 1909. He was a genius in the art of fraud and deception. He carried on his stealings for many years and successfully concealed them from various bank examiners, the board of directors and those who were associated with him daily in the bank. Although a clever forger, a close inspection of his handwriting readily detected the forgery. The system of bookkeeping employed in the bank was so complicated that it was difficult to trace entries through the books. The system of accounting and the manner in which the business of the bank was conducted were no doubt designed by Allen to enable him to carry on and conceal his peculations and fraud. No deposit slips were used. Many of the depositors did not use checks, being furnished with a passbook in which deposits and withdrawals were entered, the bank taking no receipt for such withdrawals.

It was very difficult for the examiner, after taking possession of the bank, to trace Allen's falsifications and peculations. Allen would volunteer no information and render no assistance. He would admit a forgery, defalcation, or falsification of the books only when confronted with absolute proof, and in the most innocent and nonchalant manner say that he was very sorry he had not remembered the transaction and spared the examiner the time and trouble of tracing it out.

He had a very ingenious system of numbering his notes whereby he could with certainty determine whether the signature to a note was genuine or forged. He was the administrator for a number of estates and it was understood that he robbed these in the same way that he did the bank. His total stealings from the bank were reported to amount to over $400,000.

So great was the confidence in him of many of the old customers of the bank and his church-going friends, that some of them would not believe he was guilty of the crimes charged against him until he admitted his guilt, and then one of the old lady members of his church and one of his victims remarked, "Well, Phil may be guilty, but my! he could say a nice prayer."

Allen was indicted, and when arraigned pleaded guilty and was sentenced to a term of ten years in the penitentiary.

Shortly following the closing of the bank, Frank E. Hans-com, the cashier, committed suicide, and his mother-in-law died suddenly the same night from shock on learning of his death. Hanscom was related to Allen by marriage. At first it was not thought that he was implicated with Allen in any of his fraudulent transactions, as no evidence of collusion could be found. But investigation following the failure of the bank disclosed that all the false entries and alterations in the books were made by him, presumably at Allen's instigation, and when he found that discovery was inevitable, he left the bank and killed himself.

It was natural that the indignant depositors in this bank who suffered heavily through the rascality of Allen and the negligence of the board of directors, should vent their indignation upon somebody, and, as usual, the bank examiner was held to be principally responsible.

While a bank examiner is required to satisfy himself as to the value of the paper which he finds in a bank, it is neither the practice nor the duty of an examiner to verify the signatures to the notes. He assumes, as he has a right to assume, that the names signed to the paper are the genuine signatures of the purported makers, unless his suspicions to the contrary are aroused at the time of examination. It is the duty of the officers and of the bank directors to know that the notes they accept for loans are genuine and worth their face value, and this responsibility they cannot evade or shift upon the examiner.

When the directors are obliged to purchase outside commercial paper through correspondent banks in order to find employment for surplus funds, and have to rely upon correspondents' representations as to the genuineness and worth of such paper, they may be in a measure excusable if some spurious or worthless notes occasionally find their way into the bank, but they are inexcusably negligent when they accept and permit to be carried as good assets forged, fictitious and worthless local paper when a casual examination or inquiry in regard to such paper would disclose its worthless character.