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banks, constitute a less objectionable mode of remunerating directors than any other indirect mode, or than most other direct modes. The Legislature, however, seems to have contemplated that the motive for accepting a directorsbip shall consist in being a stockholder, and thereby a participant in the general profits of the bank. We infer this from the requirements of law, that the director of every bank shall own at least five hundred dollars of its capital; divesting himself of which causes a forfeiture of his office. No mode of compensation is so pure as what proceeds thus from a ratable interest in the common loss and gains of a bank; and should a negation of other compensation deter small stockholders from accepting a bank directorship, large stockholders could be substituted, and banks would thereby become assimilated to private institutions that are managed by their owners—the most efficient and honest of all management. A man may, however, properly refuse the office of bank director, unless he can obtain for his services a sat. isfactory pecuniary compensation ; and banks must comply with such a requirement, if suitable men are not otherwise obtainable ; but such a contingency promises to be remote, under the avidity for accidental distinctions by our citizens, consequent, probably, on their legal equality. But when such a contingency shall occur, a direct compensation will generally be purer than any indirect, and a definite compensation cheaper than an indefinite; and usually money is the most economical mode of paying for services that are not to be deemed honorary.


The law usually regards bank directors as an entirety under the title of a Board. The duties and


which are conferred on the Board by the charters of Safety

Fund Banks, may be classed as legislative, supervisory, and appointing. The legislative power consists in creating such offices as the business of the bank shall render necessary, regulating their duties and salaries; directing the modes in which the bank shall be conducted, and generally all that pertains to the management of the stock, property, and effects of the Corporation. The appointing power consists in selecting proper incumbents for the created offices; while the supervisory power is indicated by all the foregoing, and by the ability to dismiss the appointees at pleasure. But a man cannot properly supervise himself in the performance of public services, nor limit and regulate their extent, nor fix his compensation therefor; hence the pow. ers of the Board can be exercised efficiently only on persons who are not members thereof. Nor is the inexpediency of uniting in the same person the duties of grantor and grantee, master and servant, agent and principal, a contrivance of man ; it proceeds from his organization. No person can sit at a Board of Directors without observing that agents who are not directors, are supervised more freely than agents who are directors. A practical admission of this is evinced by some discount boards, who, in deciding on paper offered by directors, vote by a species of ballot, while in other boards, the offered notes are passed under the table, from seat to seat; and a note is deemed rejected, if, in its transit, some director has secretly folded down one of its corners. Had the United States Bank been supervised by a board disconnected from executive duties, it would not have permitted its chief officer to persevere in the measures which ultimately ruined the Corporation, though its capital was thirty-five millions of dollars. Even the separation of a Legislature into two chambers, checks the esprit du corps and pride of opinion, which would urge

one chamber into extremes, with no means of extrication from a false position. A separation operates like the break of continuity in an electric telegraph, arresting a common sympathy, passion, or prejudice, which, in a single chamber, rushes irresistibly to its object. Still, in many banks, (the Bank of England included,) the President (entitled Governor, in the Bank of England) is the chief executive officer, as well as head of the legislative department. The Bank of England is, however, controlled by twenty-four directors, the largeness of which number naturally mitigates the influence of the members individually, and hence diminishes ratably the objection against its executive organization. Such an organization may operate well where the Board consists of a small number of members, yet the good is not a consequence of the organization, but in despite thereof; for whatever weakens the power of supervision, must diminish its benefits. The joint stock banks of Eng. land are all controlled by officers called Managers, and who are not members of the Board, though they sit thereat ex officio, for mutual explanation and instruction.


That the Board should legislate, supervise, and appoint, but not execute, occasioned, probably, the exclusion from the directorship, that early prevailed and widely continues, of the person who occupies the office of cashier, and who, with us, was once almost universally the chief executive bank officer. But the executive power, however located, should centre in only one person; a divided responsibility creating necessarily a divided vigilance. Thirteen men acting as an executive will not produce the vigilance of one man multiplied by thirteen : but rather the vigilance of one man divided by thirteen. The inspection of a picture

by ten thousand promiscuous men will not detect as many imperfections in it as the scrutiny of one person, intent on discovering to the extent of his utmost vigilance ; hence large assemblies refer every investigation to a small committee, the chairman of which is expected to assume the responsibility of the examination, while the other members are more supervisors than actors. Here again, as in most other modes which business assumes, by chance apparently, our organization dictates the mode. When, therefore, we want an army of the highest efficiency, we possess no alternative but to entrust it to a single commander-in-chief; and if we want a bank of the highest efficiency as respects safety and productiveness, we must entrust it to a single executive, under any title we please, but to one man, who will make the bank the focus of his aspirations, and know that on his prudence and success will depend the character he most affects, and the duration of his office, with all its valued associations and consequences.


If the proposed organization is the best that can be devised for a bank, the magnitude of power to be delegated is no proper argument against its delegation, but only a motive of prudence in selecting the delegate. A man of known skill and established fidelity is not always procurable for the proposed duties, especially by small banks that cannot render available a breach of the Tenth Commandment, by enticing from his post the skillful officer of some other Board. But, providentially, the world is not so dependent on a few eminent men, as their self-love and our idolatry may believe. Every well organized person possesses an aptitude to grow to the stature of the station in which circumstances may place him ; and some of the most successful bankers of our

State acquired their skill after they became bankers. The like principle is discoverable in all occupations, the highest not excepted. Few of our judges, generals, diplomatists, legislators, or civil executives, were accomplished in their vocation before they became invested there with. Skill is consequent to station and its excitement, though a vulgar error expects (what is impossible) that official dexterity and competence should be possessed in advance.


On the chief executive should be devolved the responsibility of providing funds to meet the exigencies of the bank ; hence he is entitled to dictate whether loans shall be granted or withheld, and the length of credit that shall be accorded to the borrowers respectively. With him rests also a knowledge of the banking value of each customer ; he should therefore be permitted to select from applicants the persons to whom alone loans shall be granted. The responsibility should also be cast on him of making the bank pecuniarily profitable to the stockholder; hence he will be stimulated to obtain good accounts, and extend business to the utmost capacity that his judgment will justify. On his untiring vigilance should be reposed the safety of the capi. tal; hence no loans should be granted with whose security he is dissatisfied, nor any except those with which he is satisfied-even the improper negation of a loan being usual. ly a small evil to the bank, how important soever it may be to the proposer. The Bank of England, with a capital of about (including surplus) $90,000,000, entrusts the loaning thereof to the Governor alone. He has under him a subgovernor, selected from the directors, while an executive committee, designated by the board, may be consulted by him; but the committee employs itself in digesting matter

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