The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-03-12
The Drfalcssion L. the Union Bank.


The DefaIcasion 4" tho Union Bank.
Once more the news of a heavy defalcation
in q Wall street bank has startled the public,
and spread dismay among the holders of bank
stock throughout the country. The first book
keeper Of the Union Bank, an officer of long
standing and high reputation, Mr.. Brotherson,
left the city on Tuesday last, charged
with robbing the bank of sum var-
ously estimated at from a hundred and
fifty to two hundred thousand dollars. The
circumstances Of the robbery, and of its
detection, were somewhat peculiar. The rob-
berry has been traced backward through the
books for two years; but it is said, and appa-
rently on good evidence, that the first fraud &C.
Cured ten years ago, and that the money which
the bank then lost has never been since made
good. What were the precise relations between
Brotberson and Mott, the person who has been
arrested and held to bail as the accomplice of
the absconding bOokkeeper, it will now devolve
upon the courts to determine it is alleged that
the robbery was effected through the medium of
Mott-namely, that the money was drawn out
on Motifs checks-and that the profits of the
fraud were DIVIDED between tnem
How so large an amount as over hundred
and fifty thousand dollars could be robbed
from bank, and system of fraud could
be carried on for a series of years without
exciting the attention of the managers,
may well excite attention and remark.
Every business man must be aware that it would
be impossible to defraud him to anything like
this amount or 1.-THE of it, without arousing
his suspicious; how the thing could be done in
the Union Bank is proper subject of inquiry.
And when we couple the fact with the disclo-
sures which have been recently developed by
the State invest CATION into the condition Of the
Bank of Pennsylvania-which show, as was
here stated few days ago, that the bank had
actually paid forty seven per cent in dividends
without earning dime and that the directors
habitualy certified to the correctness of state
ments which were palpably false, and could
easily have been proved to be so-we are ire
sistibly led to the conclusion that the dstinc.
ton which has been drawn between bank and
railway management to the advantage of the
former is unfounded, and that both are equally
pregnant with ruin. The closer the facts of the
Union Bank case are studied, the more plausi-
bic does this inference appear The books which
Brotberson must have falsifed in order to exc
cute his frauds must have been checked by
other books in the bank; Brotherson himself,
one would suppose, must have been held in
check by the telers; and besides these subordi-
nate checks, the President and Directors, we
are bound to believe, made regular and for
NAL inspection ofthe books at stated intervals
Yet all these checks seem to have actually
availed nothing even to direct suspicion to an
account which was wrong by over a hundred
thousand dollars and wrong for several consecu-
tive years.
1t would actually seem that the only parallel
to such management as this must be sought in
the City Comptroler's office; in other words,
in the most disgracefully maladministered de-
partments of the city government. There is no
other place publicly known where such care
lessness and acknowledgement could exist for a
week.
The discovery of the robbery still further
illustrates the sort Of management which was
prevalent in the Union Bank. Six weeks before
the bookkeeper absconded, the officers ofthe bank
we're notified by detective officer that Broth
erson was in the habit of gambling continually
and losing heavily. A prudent bank officer
would not have hestated an instant in such
case; whether the employe was OF was not a de-
faulter he ought not to have remained an hour
in the bank after he had been proved a fire.
quenter of gambling houses. But the authori-
ties of the Union Bank laughed at the warning.
They knew better than to entertain suspicious
of Mr.. Brotherson. So the thing went on; the
officer watching the defauter's movements, and
repeating his warnings, and the bank officers
slowly and lazily waking up to the necessity of
some action. When they did decide to act,
they went about 1t so clumsily that the default.
er had plenty of time to make his escape, and
the banking community lost the benefit Of a
wholesome example. One might almost be led
to imagine that the managers of the Union
Bank had been afraid to bring the law to bear
upon their dishonest employee.
As to result, of course, the affair will have
none. No bank defaulter is ever punished here
by the law. Most of them, poor wretches,
endure punishment enough in the disgrace and
exile and poverty to which the crime usually
dooms them. As to the bank, we presume its
credit will be uninjured, and its officers will con-
tinue to rank high among the banking men of
the metropolis.
But these scandals are fast teaching the pub.
lie Of New York that, whatever the pious papers
may say, the only banks in this city which are
managed with due regard to the profits OF the
stockholders and in accordance with the prin
ciples Of trade, sound and political economy,
are the two or three hundred faro banks which
the ardent virtue of Mayor Tiemann is now
battling so Justify to put down.
THE SCHOoLMAsTER ABRoAD.-Every body
,n,ot rood tnark and inuardlv dio.si a varv