has the control of untold millions, sometimes we must expect to see it:  the magnitude of the temptation will occasionally prevail over the feebleness of human nature.  But error is far more formidable than fraud:  the mistakes of a sanguine manager are, far more to be dreaded than the theft of a dishonest manager.  Easy misconception is far more common than long-sighted deceit.  And the losses to which an adventurous and plausible manager, in complete good faith, would readily commit a bank, are beyond comparison greater than any which a fraudulent manager would be able to conceal, even with the utmost ingenuity.  If the losses by mistake in banking and the losses by fraud were put side by side, those by mistake would be incomparably the greater.  There is no more unsafe government for a bank than that of an eager and active manager, subject only to the supervision of a numerous board of directors, even though that board be excellent, for the manager may easily glide into dangerous and insecure transactions, nor can the board effectually check him.

The remedy is this:  a certain number of the directors, either those who have more spare time than others, or those who are more ready to sell a large part of their time to the bank, must be formed into a real working committee, which must meet constantly, must investigate every large transaction, must be acquainted with the means and standing of every large borrower, and must be in such incessant communication with the manager that it will be impossible for him to engage in hazardous enterprises of dangerous magnitude without their knowing it and having an opportunity of forbidding it.  In almost all cases they would forbid it; all committees are cautious, and a committee of careful men of business, picked from a large city, will usually err on the side of caution if it err at all.  The daily attention of a small but competent minor council, to whom most of the powers of the directors are delegated, and who, like a cabinet, guide the deliberations of the board at its meetings, is the only adequate security of a large bank from the rash engagements of a despotic and active general manager.  Fraud, in the face of such a committee, would probably never be attempted, and even now it is a rare and minor evil.

Some such committees are vaguely known to exist in most, if not all, our large joint stock banks.  But their real constitution is not known.  No customer and no shareholder knows the names of the managing committee, perhaps, in any of these large banks.  And this is a grave error.  A large depositor ought to be able to ascertain who really are the persons that dispose of his money; and still more a large shareholder ought not to rest till he knows who it is that makes engagements on his behalf, and who it is that may ruin him if they choose.  The committee ought to be composed of quiet men of business, who can be ascertained by inquiry to be of high character and well-judging mind.  And if the public and the shareholder knew that there was such a committee, they would have sufficient reasons for the confidence which now is given without such reasons.