TIIK FAKMKR AND TIIK BANKER. 151 



Under our national banking laws tins, of course, is not mate- 

 rial, as the bonds deposited are ample security for the notes, 

 but the principle is the same. 



All states provide for state supervision of banks. Officers 

 are appointed to examine the books and securities from 

 time to time, and if, in their judgment, the funds are being 

 unwisely invested, to take measures to compel reform or 

 closing. It is a physical impossibility for these officers to 

 personally examine all securities and count the money in the 

 vaults. In the main they must rely on the books. Official 

 examinations are not therefore very effective as against actual 

 crime, but should prevent unbusinesslike methods, which are 

 often the first steps to crime. Much depends upon the capacity, 

 vigilance, and honesty of official bank examiners. Farmers 

 should understand this, and should aid legislation for the 

 effective inspection of banks, and insist upon the appointment 

 of men of higli character to such positions. 



They should promote legislation positively forbidding the 

 loan of the bank's funds to any officer or employee of the 

 same bank. This would work inconvenience and hardship 

 in many cases, for heavy depositors are the most profitable 

 customers as borrowers, and, indeed, must borrow, when they 

 need to, or they will deposit where they can, and it often hap- 

 pens that tliese same men are large stockholders in banks and 

 the most desirable for directors and officers. And yet it is to 

 loans obtained by inside influence, which would not have been 

 made except for sucli influence, that most trouble comes to 

 banks. If permitted at all, I do not see how sucli loans can 

 be controlled or restricted, and can therefore see no safe way 

 except to positively prohibit them and endure the incon- 

 venience. 



