The New York herald., 1878-02-07
THE FINANCIAL ROU2.
Heavy DefalcatiOn in the Bank of
North America.
UNDETECTED FOR YEARS.
The Confessed Misappropria-
tions Of a Teller.
OTHER BUSINESS EMBARRASSMENTS.

Wall street agitated by reports OF another de-
alcatlonr yesterday At arst by vague rumors, then
in moro definite form circulated the story OF a
heavy loss by moneyed institution at the hands
oil one OF It's servants. Toward the close OF
business 1t became known that the insti-
tuition which had sustained the loss was
the Bank of North America. No. A Wall
street. and the amount was stated to bo about
SlO0 0o1 Tho chief teller Mr. Augustus NJ. Turney,
was the defaulter. HIS peculations had been made
TO cover losses IN speculation Tor period OF years,
during all of which time. II was stated, the bank
had remained in ignorance of his evil doines and of
the liberal way In which he helped himself to It's
funds
On learning SO much Of the story a HERALD reporter
called at the bank, the officers declined to make
any statement at first. They aterward said that
statement would DO sent to tho HERALD In the even
Inc. Pcudng the preparation OF this stale
ment one Of the officers of tho bank ad-
mitted the truth OF the foregoing reports.
NO explanation, however, offered to the
manner IN which the defaultcr had covered up his
tracks When asked whether the capital OF the bank
would be scaled down meet the deficiency the
President SAID he the largest slockholder was in
favor OF making the loss rather than cutting down
the capital He further SAID that the amount men.
sequently the cashier. Mr. Joseph A. Beardsley,
when asked why tho operations Of Mr. Turney lad
not been discovered sooner declined 10 explain II
was asked whether fass entries had been made to
the losses and he said there had been false
entries. Prominent business men who discussed the
reports OF the dealcation current vt loss TO
explain how II could have remained unde-
tecod If only person concerned
in Tho steal. They said you must choose
between carclessness aud conspiracy. One gcntle-
| man, tho manager OF large moneyed corporation,
said emphatically SIT the cashiers place to
make this discovery and cannot understand how 1t
could have renamed undetectcd by him II false
entries were made"
Tho following is the statement prepared by tho
President OF the bank and forwarded to tho HERALD
office last evening for publication -
THE PRESIDENTS CARD.
NEw YORK, Feb. Q. 1878
To EDITOR TIE HERALD:-
| We desire to INFORM the public OF the following
lacts:-On the morning OF Saturday. the I'd inst, upon
the commencement OF an examination by th3 Bank
Department, the pay ing teller Of this bank confessed
that ho defauitcr 10 the amount OF $780, 600 He
five years, ana Was much respected anu trusted He
is now under arrest. Since this discovery the bank
has been thoroughly cxaminedby the Official State
examiners OF the Bank Department and they have
made their report TO tho superintendent OF that de-
partmen'. by his permission we publish their
conclusions 10 the condition of tho bank.
They llnd the ummpaircd capital Of the bang after
tue deiaeaon, over all ITS debts and Liabilities, alter
charging against all contingent liabilities and ex-
ciudog from their computation all assets cassed by
them AS contingent, to he $1l6,SY5 Al.
We have recovered, since this result was reached,
from the dealcat,on, $le o2o 81, re-
ducng the amount OF the loss by the defalcation 10
TO Ssl, $40 43 and increasing tho sound cash capital
according to the examiners estmatc To $732 9z4 9S
| WILLIAM DOWD, President.
WHAT THE EXAMINERS SAY.
| Last evening Mr. A. B. Kirkland. OF Albany, and Mr.
william Lumms, Of New York. bank examiners,
made statement Of their examination to the writer.
! They said:-"rhe low figures at which the stock Of
the Bank VI North America has recently sod and the
fact that, although State Institution, tho bank
bad been officially examined by the
Banking Department induced Mr. Horny L.
Lama, the present Acting superintendent
to order examination. rhe investigation was
begun upon Saturday morning last, ID inst, by u.s.
During the progress OF the examination, which was
conducted IN very thorough manner, heavy deiai-
cation by the first teller Of tho bank Mr. Turney was
developed The amount OF the dealcation was ascer-
tanned 10 be just 500, 900 The dea utter confessed
til ms crimnal'ty haa been occasoncd BY losses
specuiatons dating far back 1869 BacK friday
hc hal successfully covered up the dohcit by atera.
tons of hs book, aud IL had remained undiscovered
and unsuspec,ed, increasing IN amount to the
PRESENT tlIae Since It's discovery the bank
officers have recovered through tho aeauiter $l6 200
~ cash. reducing the gregute loss to $S4 600 Thoy
also ee certain OF recovering upon the tecr's bonds
$l0, QUO more, which viii leave the net $6y, 900
1he state examiners have concluded their invesIi-
gation Dut 40 not ieel warranted ia publ ishing
IL until II has becn submitted TO Mr.. Lamb
who Will soon arrive from Albany We learn, now
ever that TIC to al impairment OF the capital stock of
tho bank, including the balance OF some old
losses by overcerti1cation in 1873 aud pro-
viousy-the details Of which were made known
TO the pablo ut the t,me-wiII be S2s3, 900
The depostors necd have no apprehension as 10
the safety OF their iurd since this impairment will
anect Ee stockholders only, and the present iDvest
Ration has Deeh mado In thorough manner, the
assets OF the bank the colaterals oil every loan
having been taken at their actual market value. rnc
impairment oil S2S3 600 wus calculated upon
OF actual loss OF 500, 600 by the delaication.
AS stated, has been reduced since $lo, 800; the
remaining flS3,000 was made up ol Old losses on
loans over ccrtGcations and discounts which tue
baDk had been carry Ing along IN hopes OIL reducing
tnem The examiners have INSISTED that they should
be charged ort, ana that only such remaining coat-
erals US had market value should oe counted against
them The osnK is strong IN Cash .tems, i,s dis
counts are carefully made, ana the directors
considering the propr'cty OF their reducing
the stock or making It again up to par. There is,
therefore, no whatever nend any m orc
serious results than another unfortunate shock TO
public confidence and severe lesson 10 the
officers aud stockholders Of TINS insltu.
ton. Tho statement of tho examiner IL
may be really said, represents tho darkest aspect
OF the case. The bank holds ccraIn contingent
assets which they estinate worth possibly $50 OyO
but this OF course, could hot be taken account
uutil realized upon The liability, Also oil s63 700 Is
The bank officers are assured by very high legal
thority tnat refusal to pay 1t Will be sustaned ut
the same time, tbis beng present liability, the
amincrs were obliged TO count II as such.
THE BANK.
Tue bank has a capital OF 81 600. 600. Tho net pro-
1ts last yoar werc stated to be 500 300 tho officers
are:-william Dowd PRESIDENT; Henry A. Kent, H. j.
hosfora. Watson H. Case, John }. Donaldson, WiIiam
B Leonarj, Edwin Buckley, John f. Devlin, Harvey
Kennedy, John B. Norris. Norman Peck anu Henry
Havcmeyer, drcctorh Tue original was granted
by the STATE Ia 1851 On January g. 1900 IL was re-
organized. Mr. Joseph A. Bcardsley Is the cashier.
The late Mayor Havemeycr was once president oi tho
bank and bust OF the deceased Mayor Is sot in con-
spicuous niche IN tho bank building.
TBE ARREST
Abou; hai-past avo O'Clock last evening Detectives
nxy yttI rtun unI Nm
watched Mr. rurney's movements since hts con.
icsson last Saturday, arrested MN and conveyed hun
to Police HeadquarterR Mr.. Turney has lived In bis
own house, ut Nc 90 West 1921 street, and Is man
OF family. He Is said TO have been a prominent