Savannah morning news. [volume] (Savannah) 1868-1887, 1881-11-09
SYSTEMATIC ROGUERY.
The Use to which stolen RegIstered
Bonds are Put.
Rashinaton Poat.

GofsSfs6SOtS
A new element has been introduced into
the system Of frauds by banks and kindred
corporations which is not at present known
to the public. 1t was explained yesterday
by Treasury official who has had much TO
do with the study of that class of frauds.
1t has hitherto been supposed that q regis
tered bond was of no use to any one but the
payee of the bond, but 1t appears that nearly
all Of the stolen registered bonds can be
very comfortable income. When registered
bond Ia stolen the owner of 1t files a cavest
in the loan division of the Treasury Depart
ment, ana after he proves his loss new
bond is issued to him. Caveats to the
amount of 50, 541 600 are at present fled IN
the loan division, representing so many dol
lars worth of stolen registered bonds. It
has been discovered that the skillful and
talented thieves who have found a new
channel for the use of these bonds, deal with
dishonest officials employed by large co -pora-
tions. Where the defaulter makes use of
the legitimate securities of bank, for pur-
poses OF speculation or otherwise, it Is very
convenient for him, in case of sudden call
upon him for securities, to have in hand
something that will take the place of real
ones. The thieves, therefore, place in the
hands of such dishonest cashiers stolen reg
istered bonds, and receive In return for them
SlmplV Lu0 lUb6T6SG on bQelF JaCe Valu6. Inc
rogue, or combination of rogues, who have
stolen two or three hundred thousand dol
lars worth OF bonds, are thus placed In pos
session OF an income ranging from
ten to fifteen thousand dollars year, as the
case may be. The registered bonds gene
rally have the name of the payee washed
out and the name Of some one of the gang
written on them. Sometimes the numbers
are changed and sometimes they are not.
There are rarely, II ever, any precautions
taken to conceal the character Of the bond,
that would evade anything like an honest
scrutiny Of it. The Metropolitan Bank of
New York only a week or two ago found
among its supposed securities $50, 900 in
stolen Registered bonds. They had been
placed there by the middle man
of gang Of thieves, and this middle
man had received the interest from a
sub ordinate official of the bank. Both of
these men have been convicted and SEN
fenced. There was also a recent case In
Pennsylvania where one Of the numerous
swindling insurance companies had for its
sole capital a collection Of these stolen
registered bonds. All that this mock in
surance company had to do In return for
being allowed to carry half q million of
supposed capital was just to pay the inter
est. The thieves, on their part, had a Sc
cure income without the slightest bit of
risk. In several cases where stolen bonds
have already been found among the secpT
tiles of public institutions, it has been
through the earelessness of bank examin-
ers and officials that such a substitution
could have been possible. The slighteet
examination of the bond. or, at least. the
simplest inquiry at the Treasury Depart
ment, would have been enough to disclose
their true character. Rigid orders will soon
De Issued Tor the REORGANIZATION of all the
securities of banks subject to examination bv
Federal authority. 1t is expected that some
OF the most solid institutions OF the country
will find among their reserves some of the
two millions and odd dollars in bonds that are
at present supplying reserve fund for the
operations OF the skillful thieves who have
found such profitable vein, It is also
thought that the same frauds NAV have ex
tended to other securities, such as State
bonds, railroad bonds and the like. Indeed.
. is the present plan among the large thiev-
ing operators, when they secure unnegotia-
pie paper, to employ it simply % 8 security
Tor dishonest officials,