, 1877-08-31
THE srENcEn1AN SYSTEM OF BANKING

THE BPENCEn1AN SYSTEM OF BANKING.
1t wns evidently principle with D. D.
SrEscEn, the abscontlcd President Of the
stase Savings Institution, that the funds Of
any bank which lie happened TO manage did
not belong 10 the deros!tora, but were his
own, to uso nnsl n,isnss A. l,o saw fit. Ito
did not even admit TINT any other etockhofl-
ers Ind my interest In ths moneys OH hand !;
II there were losses, they we're tho losses Of
tho depositors; IT tliero were gains, they
"ero sPEscEn's. The history of this intli.
vitlual's banking career, in the smaller towns
OF Illinois mud 1owa IS we'll ns IN Chicago,
proves that he operated OIL this system. II
was tile same System upon whicl, D. +. Al
LEN conducted tho banking business. srEx.
oEn and ALLEN were contemporaries, ant1
whether SPENCER taueht ALLEN tho. syatem,
OF ALLEN taughtit to SPENCER, the result WAS
tho same in both cases,-the depositors
had to stand the loss. Mon operat-
ing on other peoples money nre npt to bo
exceptionally liberal and venturesomo,
whether grain. renl estate, railroads, or stocks
aro the speculations in hand. The deposit
ors having onco 1oft their money In tho
saults which SrESoEn suporintcnded, they
lad no righta which spExcEn Was bound to
respect; he would repay them II his spccula-
ttons turned ont we'll, and merely. keen
the profits; but, If thoy turned out badly,
they must stand tho loss
It WIS in pursuance Of this doctrine that
SPENCER proceeded, rs soon as ho WINS in con-
srol, to Rwell tho Calumet swanp-laud sccuzi-
ties from 100000 Which had been taken
before his time, to over SG0O, 1000. lie took
not only bonds, but stock his purpose WIS to
make the Investment a personal perquisito.
Having only *1oo, coo Of these securities, l,o
would cnt no particular figure in tho mall
agenlent Of tho Calumet scheme; but with
sco0, GOO, partly In stock aud partly In bonds,
ho would be in position to dictate and gob-
ble If the scheme should pan out well; as i.
panned ont badly, 1t wns not SPENCER, but
tie depositors Of the bank, that suffered the
foss
Bnt SPENCER went still further tlan n,ost
OF The personal bankers of Ills style.
There is now every indication that 10 oven
compelled tho dcpositors to pay for tho
stock which lie bought in Ills own untno, md
by which ho Was enabled to obtain control OF
their money for speculative purposes. Mr.
Donplss was an old associate OF SrEYcEn's,
and expresses himself as protty surc' that
this was done. The nao24s opfrGndi seems
10 havo been IS follows: srExcEa borrowed
the money ofdi1arant banks aud individuals
10 buy tho Stock aud within three DAYS. or
aftcr obtaining control OF tho
concern, ho ropaid this borrowed money,
DopniSs soys SPENCER lad no money Of liy
own, 80 that thia prompt repayment Of the
money borrowed to purchase tile stock would
Indicate with to'orab1o certainty tint tho
sum WAS stolen from tho dcposisos. It
looks aa though largo part Of tho 5000, 600
ofhtock nominally held by tho bank itself was
required In much the aa,no way,-oither the
lepositora' money being taken directly to
pay for 1t, or Indirectly by thus compromis.
ing debts owing to tho bunk. vi
Tho investigation into the affairs Of tho
bank, the flight Of SPENCER, aud the sudden
Of Lis c4shiery, give coloring
10 the suspicion that there was at least this
much vilIainy In the concern. There may
havo been good deal moro; indeed, 1t looks
as though srEscEa lad actnally pocketcd q
arge asnount Of tie Sonth Park bonds and
aiken them along Will, him to lefray his ox.
penscs for tho noxt fow years. But, even If
thore has been such uso OF tho depositors'
money as wo hayo described, we think there
y no doubt the Courts will hold that 1t was
which Ia punishable under
le statute as larceny. It Is high tino TINT
iome energetic stepa should be taken to ar.
'est fho alght of SPENCER aud tho othcr ab-
'condcd officers, II indeed II bo not already
90 lato. The only waJ to put permanent
top to tho spancerian system Of banking IL
o send sono Of It's practitioners to tho
Penitentiary.
BRIGHAM YOUNG AND HIS WORK,
Tho character of l3n1onAM YouKu is 4arsIly |
esq deserving Of attention thau the ins.itu. |
tnnH .atfn1t In iaft bal,ipt1 1,tp, - ,,.:t.1