'Cbe Conservative. 11
larger standing army and navy to carry
oat that policy than if the islands are
retained nuder the absolute sovereignty
of our country. In this case Washing
ton will be the capital and center of all
negotiations. With Mr. Bryan's scheme ,
there will be a capital at Manila as
well as at Washington , a president in
v the Philippines as well as in the United
1 States , one set of ministers there as well
as here. As a result all foreign nations
will be face to face with an unparalleled
situation which will be fraught with
greater danger to the United States
than the establishment of permanent
sovereignty in the islands. If Mr.
Bryan would exercise the same kind of
a protectorate that Great Britain , Ger
many and France do over some of their
dependencies , there might be no dan
ger but in each of these countries
there is no such thing as real indepen
dence. A resident minister of the pro
tecting government practically controls
the affairs and policies of the protected
country.
Filipinos Need Supervision.
Another serious problem will confront
the successful consummation of Mr
Bryan's plans. He will have been com
pelled to meet the condemnation of the
moral sentiment of the country for al
lowing those men again to come into
power in the Philippine Islands who
have encouraged the Filipinos in that
class of warfare which is distinctly bru
tal and has cost the lives of so many
American soldiers. He will be obliged
to recognize those unscrupulous Filipino
leaders who sent lying circulars all over
the islands appealing to the masses of
the people to rally to the standard of
Agninaldo and to drive the Americans
out of the country , declaring that
wo were infinitely worse in character
and nature than their former rulers , the
I Spaniards , and who systematically en
deavored to poison the minds of the
ignorant natives in their opinions of
American men and women and the
American government.
I am one of the many who have a
very high idea of the Filipinos' capabil
ities when well guided , and who frank
ly give them credit for all that they did
in time of peace before they lost their
heads and in a fanatical and extreme
jingo spirit determined to fight the
Americans , listening to no reasonable
plans for a settlement of the difficulties
and consequent establishment of as
largo a degree of autonomy as possible
under American sovereignty. It is not
possible , however , to close our eyes to
the tremendous problems and complica
tions which will face Mr. Bryan if he
is elected , and which will bring about
even greater chaos than there has been
at any time in the past.
When we who were out in the Phil
ippines for a long time and saw the
development of events there urge the
reelection of President MoKinley , we dev
v * .4 J
t in all honesty and in the sincere be-
ief that such a result will bring the
greatest benefit to the Filipinos as well
as to Americans. John Barrett , former
minister to Siam , in Chicago Record.
BANK DEFALCATIONS.
Defalcations of bank officers and
clerks are not so uncommon as to excite
jreat surprise , but when they rise to the
magnitude of $700,000 , they rather take
away one's breath. Yet it is perhaps
easier to mystify the accounts and make
away with that sum in a bank which
constantly handles fifty million dollars
ihan $70,000 in one which has only five
millions to look after. Still more diffi
cult would it be to spirit away $7,000
from a small bank in a small town
where the eyes of the superior officers
can see everything that goes on , and
where even the neighbors can discern
any signs betokening that a bank clerk
s living beyond his salary. Every bank
defalcation , large or small , ought to
; eaoh a lesson , ought to make the next
one more difficult of accomplishment ,
ought to contribute something to
the protection of the banking
business and of society. The
American Bankers' Association has
lor years maintained a bureau for the
detection and prevention of forgery and
sneak thieving. By careful study of the
methods , mental processes , and haunts
of the rascals that "work" the banks
from the outside , the bureau has largely
reduced the amount of successful frauds
and has landed in the penitentiary most
of the fraternity who perpetrate them.
The Alvord case and the Sohreiber case
show that there is work for a bureau
which shall apply itself to frauds hatched
inside of the banks also. It is easy to
say that this is a duty which each bank
must perform for itself. But suppose it
is not done. Is it not cheaper to have
the necessary work done , or at least
mapped out , systematically by the as
sociation , than not done at all ?
Government Examiners.
Some people think that this is the duty
of the National Bank examiners. Ac
cordingly , whenever a defalcation oc
curs , especially if it has been of long
continuance , there is a general disposi
tion to censure the examiners and to put
blame on them for not detecting the
shortage at its beginning. But the truth
is , that system of public examinations
was never intended to deal with frauds
concealed by false bookkeeping. To go
beyond the bookkeeping requires per
sonal inspection of all the assets , 'and
not only that , but investigation of the
solvency of the bank's debtors. A
few years ago a bank failure occurred at
Albany , where the books showed the
proper surplus , and where the bills re
ceivable corroborated the books ; but the
bills were themselves fictitious. The
makers of them were men of straw.
Obviously , a bank examiner who should
pursue his investigations beyond the
showing of the books might use all his
time on one or two banks. It may hap
pen that some very large investments
easily tested will attract his eye , and
lead him to a special investigation which
may have important consequences , but
as a rule he has to assume that the books
are correctly kept , and that the assets
are what the books show them to be.
Such an assumption may be erroneous ,
but generally it is the condition upon
which alone he can get through his work
atoll.
The public have not yet learned in
what manner Mr , Alvord accomplished
his gigantic fraud. Ordinarily the note
teller's desk would be the last place
where such fraud would be looked for.
It would be idle to speculate on the de
tails before they are actually disclosed.
The only thing that can be said at pres
ent is that Alvord had been in the bank's
employ so long that he was implicitly
trusted. Nobody suspected him. It is
often said by high bank officials , "You
must trust somebody ; if you lose oc
casionally , it is one of the necessary
evils of the business. " This excuse
will not pass muster in a case where
$700,000 goes wrong. The Alvord case
proves that nobody should be implicitly
trusted in the sense that his accounts
should not be subjected to occasional
scrutiny with the object of finding out
whether they are right.
Chocks Necessary.
No bank officer or clerk , however
high , has any occasion to feel mortified
if his department is made the subject of
special investigation at unexpected
times , any more than the bank itself
has for feeling hurt by the government
examinations. The feeling of implicit
confidence in old and tried officials may
be a credit to human nature , but it is
not the kind of credit that will make
good a deficiency of $700,000. Probably
the Alvord case will lead to a minute
examination of all the note tellers' ac
counts in all the banks , but that is not
sufficient. The Alvord case will in time'
be forgotten , and the business will fall
back into the old routine , with general
confidence in command of the situation ,
unless some system of checks is devised
which shall be self-perpetuating. It is
the proper function of the clearing
house association to devise such system
and to see to its enforcement. There
are some outside pointers that might be
helpful. Usually the defaulting bank
official betrays by his style of living the
fact that he spends more money than
his salary can account for. It is said
that Alvord kept horses and carrifiges
and a naphtha launch , and was living
at the rate of $20,000 a year , his salary
being $8,500. If this be a fact , it ought
to have been known to the higher bonk
officers and to have put them on inquiry.
We can all be wise after the event.
Anybody can look the door after the
horse is stolen. What is needed is
rightful use of the wisdom so learned ,
and such application of it that bank de
falcations may be rarer and rarer as time
goes on. New York Post.