POST MORTEM

News reports from widely scattered cities indicate that the forces of justice are continuing to track down the gentlemen who in our pre-bank-crash era speculated with other people's money or defrauded thousands with their exceedingly watery stocks. The public momentarily roused from its usually complacent lethargy, is clamoring loudly for reforms in banking inspection that recent revelations have shown to be seriously needed. If the clamour persists, some constructive legislation may be forced upon the more or less indifferent state legislatures.

In Cleveland last Wednesday a Federal jury convicted J. Arthur House, president of the Guardian Trust Company, of misapplication of the bank's funds, finding him guilty on twenty-six counts. Cleveland was once very proud of Mr. House, who rose from the position of teller to a place that in one year yielded him an income of over $100,000, more than ten times the salary of the governor of the Bank of England. When his bank closed its doors early in 1933, depositors received one cent on the dollar, and have since received but twenty cents more. In Chicago the government proceeds with its case against Samuel Insull, accused of a stock manipulation that cost the public $100,000,000. In New York a country grand jury has indicted the second group of officials of defunct title mortgage companies within a single month.

The public can derive little cheer from this flurry of legal activity. That the courts of the country have finally taken up their ponderous grinding out of justice is grim consolation indeed. The public's money, its chief concern, is gone for good. Above all, there is no escaping the realization that an efficient system of state inspection would have mitigated many of the evils that have made the present trials a necessity. In many cases, although state laws required periodic bank examinations, inspectors were inefficient in their duties and the laws governing investment of deposits not stringent enough. This crisis in banking has impressed the public with the realizations that a bank inspection cannot be superficial if the depositor is to be adequately protected. The general laxity of banking laws made it easy for the czars of high finance to indulge their drunken greed in the field of shady manipulations. It is true they are returning to sobriety in the prisoners' dockets of our courts, but the morning after headache is largely John Public's.