The New York herald., 1878-02-07
THE FINANCIAL ROU1.
Heavy DefalcatiOn in the Bank of
North America.
UNDETEcTED FOR YEARS.
The Confessed Misappropria-
tions Of a Teller.
OTHER BUSINESS EMBARRASSMENTS.

UIHEk BUOlNESO NEUTRALITY-SUSPICIOUS.
Wall street was agitated by reports OF another de-
falcatlor yesterday. AT arst by vague rumors then
in moro definite form was circulated the story OF a
heavy loss by moneyed institution AT the hands
oil OF It's servants. Toward the close OF
business II became known that tho inst-
tuition which had sustained the loss
the Bank Of North America No. A Wall
street. and the amount was stated TO be about
500, 0oa The chief teier, Mr. Augustus NJ. Turney,
was the defaulter. His peculations had been made
losses IN speculation for period OF years,
during all of which time. II was stated the bank
had remained in ignorance OF his evil doines anu OF
the liberal way in which he helped himself to It's
funds
On learning SO much OF the story HERALD reporter
called at the bank, the officers declined TO make
any statement ut first. they atterward said that a
statement would DO sent to the HERALD In the even
Ing Pcudng the preparation OF this stale
ment one Of tho officers Of tho bank ad
mitted the truth OF the foregoing reports
No explanation, however, was offered as to the
manner which the deiaultcr had covered up his
tracks When asked whether the capital OF the bank
would be scaled down to meet the deficiency the
President SAID he the largest stakeholder was in
favor OF making up the loss rather than cutting down
toned was the only loss sustained by the bank Sub
sequently the cashier. Mr. Joseph A. Beardsley,
when asked why the operations OF Mr. Turney lad
not been discovered sooner declined explain 1t
was asked whether faise entries had been made to
cover the losses and he said there had been no false
entries. Prominent business men who discussed the
reports Of the deialcation loss TO
explain how could have remained unde-
tectod II only ono person was concerned
IN tho steal. They said you must choose
between carclessness aud conspiracy. One gcntie-
man, tho manager OF large moneyod corporation,
said empha.ically SIT was the cashiers place to
make this discovery and cannot understand how 1t
could have renamed undetected by him II no false
entries were made"
The following IS the statement prepared by tho
President OF the bank and forwarded to tho HERALD
o1ice last evening for publication -
THE PRESIDENTS CARD.
NEW YORK. Feb. Q. 1878
To THE 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 th9 Bank
Department. the pay ing teller Of tins bank confessed
that he deaultcr 10 the amount OF SlO0,600 He
has boon In the service of the bank for twenty
hvc years, and Was much respected aud trusted. He
Is now under arrest Since this discovery the bank
has been thoroughly examined by the Official State
examiners OF the Bank Department and they have
made their report to tho Superintendent OF that de-
conclusions ss 1'ss'D s"e conaiSa Of .n@ banH
They lind the umimpaircd capital OF the bank alter
the dcaication over a It's debts and Liabilities, alter
charging against It all contingent liabilities and cx-
cudiog from their computation all assets classed by
them as contingent, to be $7l6,ss5 Al.
We have recovered, since this result was reached,
from the um taken IN the deiaication $l6 o.
ducing the amount of the loss by the defacalion
according TO the examiners estimate to S732 9z4 9S.
WILLIAM DOWD, President.
| WHAT ExAMIxKRs SAY
Last evening Mr. A. b. Kirkland. OF Albany, and Mr..
| william Lummis, Of New York. bank examiners,
made statement Of their examination to the writer
They aid:-"rho low figures At which the stock Of
the Bank VI North America has recently sold and
fact that, although a State institution, the bank
hal never been officially examined by the
Banking Department Induced Mr.. Horny L.
Lamb, the present Acting Superintenoent,
to oricr examination. The investigation was
begun upon Saturday morning last, ID inst, by u.s.
During the progress Of tho examination, which was
conducted IN very thorough manner, heavy deiai.
cation by the nrst teller Of tho bank Mr. Turney
developed The amount the defalcation was ascer.
tanned 10 be just $780, 600 The defaulter confessed
til II his crminaty hau been occasioned BY losses IN
specuat ons dating far back as 1869 BLACK friday
Hc had successfully COVERED up the dohct by aitrra
tons Of hls BOOK, aud II had remained undiscovered
ana unsuspected, increasing IN amount to the
officers have recovered through tho aeiauer SIG 900
III cash. reducing the aggregate loss To $S4 900 Thoy
aso eel certain OF recovering upon the eiIer's bonds
lhe state examiners have concluded their investi-
CATION, but 10 not ieel warranted in publ shi ing
| IL until II has boon submitted 10 Mr. Lamb
who Will soon arrive IRON Aiuuny. We learn, now
ever that Tie total impairment OF the capital stock of
tho bank, including the balance Of some old
losses by overccrtlnca,,on in 1873 and pro-
viousy-the details OF which were made known
to the pablo ut the tlme-wili be $3.50, 900
The depos,iors need have no apprehension as 10
the safety OF their iuEd since this impairment will
uecl The stockholders only, and the present nvest
gation has bec.i made in a thorough manner. the
assets oi the bank AM the colaerals oil every loan
having been taken at their actual market value. Tnc
impairment OF S2S3 600 calculated upon basis
OF actual loss OF 500, 600 by the deiaication.
As stated. II has been reduced since 300; tho
remaining flS3,000 was made up ol old losses on
loans anu over ccrtncatons and discounts which tue
bank had been carry Ing along IN hopes reducing
| tnem The examiners have INSISTED that they should
be charged out, ana that only such remaining coiat-
erals ne had markcJ value snoud oe counted against
them 1he Dsnk Il strong IN cash itcms, its dis
counts are carefully madc ana the directors
are considering the propr,ety OF their reducing
! the stock or making II again up to par. There u.s.
therefore, no reason whatever to apprc any
serious results than another unfortunate shock TO
officers aud stockho oIders of TINS institu-
ton. Tho statement oi the examiner. Il
may be really said, represents tho darkest aspect
| oil the case. The bank holds certain contingent
assets which they estimate worth possibly $50, 900:
but this OF course, could hot be taken into
uutl realized upon. lbe liability, also oi $685. UU0 Is
rererce,s dgmcnt not VET cunnrmed nv IN, courI
The bank officers are assured by very high legal au-
thorty tnat IA refusal to pay IT will Dc sustained; ut
the time, tis being present liability, the ex-
| amincrs were ob sed to count u us such.
THE BANK.
Tue bank has a capital ol $1,000, 600 The net pro-
ns last ycar were stated to be 500, boo Tho officers
are:--Wiliian Dowd, President; Henry A. Kent, y. j.
hosiora Watson Il. Case. John }. Donaldson, Wilnam
| H. Leonard, Edwin Buiklcy, John II. Devln, Harvey
! Kennedy, John B. Norris. Norman Peek anu Hcury
Havemeycr drcctors The original charter was
by the state 10 1851 On January :, 1sGo 1t re-
organized. Mr. Joseph A. BcardsIey IL the cashier.
Tue iate Mayor Havemcyer once president Of the
bank, ana bust OF the deceased Mayor Is set In a