Directors are also trustees of the shareholders and depositors. As was said in another case: "The directors of a banking or other corporation are in the management of its affairs, only trustees for its creditors and stockholders, and are bound to administer its affairs according to the terms of its charter, and in good faith. If they fail in either respect, they are liable to the party in interest who is injured by it for a breach of trust, and may be made to account with him in a court of chancery."

DUTIES OF DIRECTORS.

There are several classes of bank directors. Belonging to one class are those actuated by selfish and sinister motives. Their first aim is not to promote the general welfare of the community and safeguard the interests of their stockholders and depositors, but they seek to use the bank as a means of furthering their own individual interests, and seem wholly indifferent to the moral duties and obligations which their position of trust imposes upon. them.

Such men, through friendship and close alliance with other directors on the same board, frequently get into absolute control of the bank, and thus are enabled to employ an undue proportion of its assets to their own personal advantage, or to foster and promote enterprises in which their friends are interested.

A bank should constantly seek to enlarge its sphere of usefulness, but it cannot do so by permitting its officers or directors to tie up its resources in a few favored enterprises, regardless of the just and legitimate demands of its other depositors.

If actuated by honest motives, directors will first consult the legitimate demands of business, and exercise extreme caution and conservatism in granting accommodations to themselves.

A very large per cent. of bank failures are directly or indirectly due to the excessive borrowing of its officers and directors. How important then that a bank should scrupulously endeavor to exclude from its directorate those who are suspected of selfish or ulterior motives. Such directors are not only a menace to the bank, but to the whole community as well.

Another class of directors are those who, while they do not seek the directorate for the purpose of appropriating the bank's funds for use in their own schemes and enterprises, do so with the thought uppermost of increasing their own standing and prestige in the community. Such a motive in itself may not be wrong, providing those moved thereby are conscientious and faithful in the preformance of their duties. But directors so prompted are often conceited and have an exaggerated idea of their knowledge of the banking business. In their desire to become the controlling influence in the Board they become dictatorial and overbearing, and will sometimes sacrifice the interests of the bank in order to get their own way. As long as the presence of such

men is tolerated on any Board there will exist a lack of harmony and unity in that body; and harmony is absolutely essential to the efficiency of any Board of Directors. A good rule to observe is that whenever any matter is seriously opposed by even one or two members it should at once be dropped, unless contrary action is plainly for the best interests of the bank.

A third class of directors are those who perhaps have become identified with the institution through no efforts of their own, but have been chosen, either on account of their popularity, their sound business judgment, or their identification with many business interests.

In the election of directors, the stockholders of a bank aim to secure men who will attract business, and in their eagerness to get such men, they often choose those whom they know will never take an active part in the bank's affairs. These directors, not realizing, perhaps, the true nature of the obligations assumed by them, become careless and indifferent concerning the affairs of the bank. They attend Board meetings irregularly, and consequently do not keep in touch with the business transacted. When they do attend many things come up of which they are entirely ignorant, and as a consequence they are compelled to make inquiries concerning matters which have already been duly considered and

acted upon by the Board. The other directors are thus put to much annoyance and loss of time through their inattention and negligence.

While a bank director identified with various business interests is undoubtedly in a position to bring business to his institution, yet his very position of prominence in the business world may redound to the injury of the bank. Being represented on the Boards of numerous concerns, the occasion may arise which will necessitate his dealing with his own bank as a representative of some of the other interests with which he is connected, and under such circumstances the interests of the two may conflict at the expense of the bank. Nevertheless this fact in itself should not be sufficient to deter banks from choosing men of affairs as directors, but it should rather be the reason for making them use greater diligence in ascertaining the character of those who are chosen.

While a "dummy director" may sometimes serve as a drawing card because of his wealth, his popularity, or his reputation for sound judgment, he cannot according to his oath of office "diligently and honestly administer the affairs of the association." No one has a right to accept and serve in such a fiduciary position unless he is willing to give a proper share of his time and talent to the faithful discharge of his trust. Every director should attend