The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-02-13


In order TO make the situation clear The exam.
liners then 80 on 70 ana the assets. Alter explain
ing the losses on call loans and the depreciation Of
renl estate they say that several loans 10 which they
objected were either strengthened called In. The
loans 10 directors and their firms amounted to
$3.50. 700-'an undue proportion" Two call loans to
directors together $70,0o0) were made each upon
single promissory note Attention 10 called 10 this
point upon general principles, because tho examiners
are OF opinion that unsecured prvmssory notes are
not proper cola,erals Tor ''cal loans" the bank
owns none OF lis own stock, but about one hundred
shares were found among the coliaterals for loans
The Williams loan originated In an overdraft OF
SAIL 900 during the panic Of 1873 Securities were
subsequently given TO the bank from which the So
called ..oan has been reduced 10 $22s, 2SS SO. No
interest has been paid upon 1t since January 1875
except by the collection OF occasional small dividends
upon portion oil the coaierals. The envelope repre-
seLtiug this loan has been counted hitherto as good
Tor the amount due, although the coateras remaining
are worth to-day out Sl44 200 The loss, therefore,
stands without interest," at SS4, 0SS so.
The Denckia loan represents a bad discount, the
amount duo OeIng judgment Tor $27, 1913 60. rheex
aniners have rejected the amount AS total loss.
The great losses OF the bank during the past twelve
years they say have been accustomed by The following
/. Over certiacaton to a large extent for favored
dealers. z Advancing upon unmarketablo securities
g. Inefficient supervision within Its own walls. Tho
management had become lax Had the cashier main
tanned the ordinary checks by one clerk upon another
IN the book entries and In the CUSTODY OF tho Cash
items and had the tellers been accustomed to unex-
pected examinations by him OF their accounts the
grave defaication could nave gone without dis
covery, increasing for more than eight years.
TURNkYs METHODS AND EXPOSURE
The paying teller mudo up Ills and added up
his entries day alter day without supervision. AS his
embeZzement increased no concealed 1t, now by re-
porting larger amount OF iega, tenders than actually
hand now by altering the addition OF his daily
balance book. When examinations made by tue
directors he appears to have had difficulty Ia hiding
1t until 1t reached the sum vi sos, 900 1874 He
tnen asked they state Received the assistance oil
the second teller in the conceament The latter lent
his cooperation, while he saw meanwhile $50, 600
more adoed 10 the som previously aUstracteu. On
December 10 laat $4,000 was taken, making thea
500, 900, figure easily carried upon The books.
1he examiners entered the bank tho murnng Of
Saturday, February 2, without notice, and, proceed
to the elers DESKS took possession oil cash.
hand tne day previous and that morning us larger
Than The TACT seeing that they were TO DO counted
he proceeded almost immediately to tho President
ana acknOw lcdged the deficit, saying tnat It was be-
tween $75, 600 and 100000 Later the day, when
figures were put togeiner 1t found 10 be exactly
the last named sum and that there was also dei-
cheney Of 5000 In the petty cash. Tho deiacation APP
pears 10 have peen caused by losses
eold ana mining stock speculatonS The
$l6,OOO recovered was received alter the
date OF the statement. The telcrs bonds for SIS
are also considered contingent asset The books
Of the bank were in good order, balanced TO date.
Finally, IN regard 10 tue present condition Of the
bank tncy say that alter an investigation, which they
believe " nave been thorough they nd II IN the pos
session OIL a remaining capital VI SIG, S94 al.
The examiners conclude by saylng:-'lt must be
SAID urther that the responsibility the past and
ior the future rests upon the we'll upon
the oncers. IL IL not exaggeratng to say that II a
single one OF their number mad earnestly and intei-
gently done his duty In the EXAMINATIONS, In the
meetings and in general supervision Tho laxy of the
fortunate tcher's embezzloment might have been
checked In -