The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-12-02

The Recent Bank Declarations.
More than year since we ann ounced that
the condition of several Wall street banks was
not safe, and that defalcations to large
amount had taken place, and had been conceal
ed by the managers of the p]undered inssitu-
tons. The statement was promptly and en-
phatically denied by several leading officers in
the banks we mentioned, and perfect storm OF
Indignation arose in certain quarters. We were
confident we we're right, and said SO: but most
Of the bank shareholders and depositols thought
differently, and they were the parties interest
ed, the matter was allowed to rest there Dur
ing the twelve months that have elapsed since
then, events have fully justified the truth Of
what we said. Defalcations to an amount ex-
ceeding half million of dollars have now
come to light, and been admitted by the bank
officers. It is not too much to say that had due
attention been paid at the time to the warnings
of the press, these losses might not have &C.
CURED.
1t is Of course too late to repair them,
and, as usual in such cases, we take it for
granted that the amounts that wi be obtained
by way of damages from the sureties Of the de-
faulters will be merely nominal. The great
question--which will be present at this time to
the mind Of every bank president and director
lis how shall similar accidents be prevented
in future! The temptations to which so many
bank clerks have already yielded are likely to
continue and increase. Money is becoming more
and more valuable, and to a certa class Of
minds the temptation to speculate grows daily
more irresistible. Msny bank teller or clerk
sees that he could make months salary in 40
afternoon simply by borrowing for that short
period few thousand dollars from his drawer;
sist the snare. On the other hand, those who,
holding Office in bank, have been also engaged
in other business, are certain to be suffering
from the prevailing stringency in the money
market; the fatal opportunity they enjoy Of
satisfying their most pre- ssng wants at the ex-
pense of the bank is hard to decline. Add to
this that, in times like the present, the pres-
ding officers of monetary institutions are likely
to be themselves 80 involved in perplexities
and embarrassments that their watchfulnes>
must necessarily be relaxed; and it will be seen
that, without great good fortune and equal eau
ton, the chances are that we shall hear of many
more bank defalcations before long. How can
we proven them?
The men who rob banks are special class
readily distinguishable from all other thieves
cashiers, tellers, and bookkeepers are no
pressed to steal by want As general rule
they receive salaries which enable them to live
comfortably, and are treated with such consi-
deration that feeling of responsibility is natu-
rally engendered in them. They are famil ar
with the sight and contact of money, and feel
none of those wild influences which sometimes
lead to crime in those who are unaccustOmed to
see large amounts together. In short most OF
the reasons which induce men to commit fraud
are powerless on their minds. On the other hand
they are liable to beseized with resistless maria
for speculation, which itself OVERSEES principle
and honesty, and which leads moreover to habits
equally subversive Of all ideas of right. The
bank cashier or teller watches daily the opera
tions of the stock exchange; he sees his friends
and acquaintance making thousands without
labor; he is constantly recommended, openly
or facility, 10 swell his own income in similar
way; and he knows that he has under his hanl
the means to operate, and, in the event of sue
cess, to conceal every trace OF the operation
If he succeeds, as he may do, the sudden influx
Of wealth begets desire for expense and ex-
travagance: on a salary Of 81 500, he finds that,
with the help Of few operations, he can, for
the first six months, spend $4,000; and at once
he sets his household on permanent footing at
thisra The first reverse in his speculations is
the commencement of his downfall. His brokers
require more margins; his creditors demand
payments for furniture and so forth; he mus:
draw on the funds committed to his charge, or
be fails. Always hoping that fate will turn, he
draws deeper, deeper, deeper, until at last
escape Is impossible and he is stamped as de-
faulter.
This ia the process by which bank officers be-
come defaulters What safeguards have been
adopted by the banks to hold 1t In check9
Bank cashiers and clerks are required to give
ecurity in amounts varying from ten to thirty
thousand dollars This Is practice of very
questionable expediency. 1t must often be q
matter Of great difficulty for young men other
wise well qualified to procure bondsmen to the
figure Of ten or twenty thousand dollars: while
all experience shows that when clerk turns
defaulter, he invariably makes away with four
or five times as much. Thus, by the present
arrangement, the clerk IL hampered ct the out
ret, and, II he robs the bank, the latter is not
saved by his security, though his bondsmen may
be mulcted in the amount of their bonds As
a remedial or preventive measure, the system
of bonds must. be condemned ~ useless. This
Is, as we understand, the opinion Of those best
qualified to form . mature judgmen, on the
point.
The best security for the honesty Of cashier
or teller is clearly to be found in tie character
and habits Of the man. The rule is that man
who has led an orderly life from his youth,
who enjoys himself nationally, performs his