The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1861-03-14

The transfer of the business of the Commercial
Bank of London to the London and Westminster
Bank is reported to be in consequence of discovery
OF large fraud 1t is added that the fraud has been
committed by a ledger clerk, named burden, at.
tached to the Henrietta street Branch, and has
been going on fer fourteen years, at the rate of
about $500 per annum.
The Times says The amount is G67 900, and,
although this would not have been sufficient to
affect the solvency of the establishment, reSolu-
ton almost Immediately arrived at that it
would be better to prevent all anxiety and alarm by
transferring the business to the London and West.
minister Bank, and thus assuring the depOstOrs of
their perfect safety.
The fraud just detected is stated to have been
committed by ledger clerk, named burden, and
is believed to have been carried on without any &C.
complete in London. by simply retaining portion
of the funds paid in by customers, who were duly
credited for such amounts, which were afterwards,
however, written off to the credit of fictitious ac-
count, said to have been opened in the name of a
confederate in the country. Upon any absence of
burden from his post some of the discrepancies be-
tween the pass books of the customers and the
ledgers of the bank would have been certainly dis
covered; and hence, although it was strict rule of
the bank that every clerk should periodically absent
himself for holiday, he diSregarded that rule and
was never away for a single day-the branch ap-
parenty being far less under the supervision of the
directors than the parent establishment in 10th
bury. His misappropriations have been going on
for many years. few days back, however, a
paralytic seizure incapacitated him from attending
to his duties, although he pertlnaciously made an
effort to do so, and the whole affair at once be-
came known.
1t remarkable that in July, 1860 after the oc-
currence of the Pullinger frauds, the directors
instituted, as they imagined, strict inquiry into
the entire conduct of the establish ment, in order to
see that every possible check was in operation
throughout, and that this inquiry terminated in
impressng them with a conviction that there was
no conceivable mode in which fraud by any OF
the officials could for any period escape detection.
The Times has the following remarks on this ex-
traordinary case:
To this ledger clerk seems to have belonged
the sole duty of transferring from the pass-books
to the books of the bank the accounts of the GUS
| toners. The customers, of course, examine their
pass books 1t was necessary, therefore, that these
should be correct, and they were correct The
managers and the directors examine the books OF
the bank 1t was necessary that these also should
be correct, and they were correct. But they were
correct in relation to very different tests. No one
ever thought of examining whether the pass-books
really agreed with the ledgers. For twelve years
no one has ever looked over that clerks work and
seen how he did it, if any one had done so, be would
have found that, while the pass-books represented
the actual transactions between the bank and its
customers, the ledgers represented fanciful and
unreal state of things, of which nothing was true
but its statement of the total of the sums received
and paid. If suppose that this clerk had a
thousand accounts to pass into his edgers, and that
to each of these accounts, on any given morning,
tlUU was PAID IN, we see dI moment now easily
the fraud could be accomplished. One of these
accounts was his own, opened under a fictitious
name. When he came to copy the thousand pass
books, he deducted, will suppose, el0 each from
the El00 which each had paid in, and he added the
aggregate of these deductions, for 50, 800, to his
own account. This is all he had to do. He could
then draw out his f9, 800 as soon be pleased, By
the process of signing cheques with the fictitious
name in which he had opened his own account. He
could do this, because the cashiers, when in doub
| aS n q customers balance refer not the
| book, but to the ledger. This process could b.
repeated to any extent. There were only two pre-
| cautions necessary to render detection almost i'm
| possible; the first was to manage that nobody blu
himself should ever post the ledgers or EXAMINE
them and the second was never to draw accoun
down so low as to incur the risk that the cashiers
after reference to the ledgers, might refuse to pay
cheque. And so it did go on for years. Fol
eleven years has this guilty wretch, without thu
| intervention Of one holiday, stood from morning
| to night, guarding the dreaded secret that la,
| constantly before his eyes. No wonder that at las
human endurance could bear no more. and that
| fit of paralysis struck him down. But for thi
| catastrophe the systematic fraud might have con
| tinued for years. 1t might have gone on until tn
| fictitious account had swallowed up so much of thu
other accounts as to occasion necessarily at some mo
| ment an accidental discovery. There was, however
always the possibility that those building specula
| tions other desperate adventures might have
| taken favorable turn, and might have enabled
| the man gradually to blot out the fictitious &C
| count, and to restore the books to healthy con-
| dtion. Who can tell how many Of these thing:
are going on? In the nature of things it is onl,
the failures that are discovered Men such as thes
are in the full current of affairs always hope tina
with the command of money they can make spec
ulations which are not risks and that they can pu
back the money they steal. If they succeed W.
hear nothing of it they fail they sink deeper and
deeper, until they have lost sum which is to-
| large ever to be recovered.
! AFFAIks AT PENsACoLA.-A letter dated at War.