Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1882-02-11

lie. IniS IS the SAD story which the ULoBk
carries 10 the breakfast tables of its readers
this morning.
For some time past rumors have been cur
rent that there was trouble with the acdounts
of Douglas. ~. Vanderhoof, chief book
keeper OF the First National bank.
The statements were denied by him
and the officers of the bank had such
confidence in his integrity that they declared
it impossible for the street reports to be true.
An investigation, however, was quietly insti-
tuted and chiefly conducted by President 81.
P. Upham and CASHIER Bailey IN person. The
late pedestrian on Third street during the past
two weeks might have noticed the gaslights
brightly burning in the First National bank
as these officials were poring over the ac-
counts to ascertain the crookedness Of their
hayward bookkeeper.
To understand the situation it should be
noted that Mr. Vanderhoof was the bookkeep-
er OF the bank. There were numerous corps
of assistants, bat all of the accounts merged
into the boo6s which he kept and from which
be furnished the daily balance sheet for Off
cIal inspection This enabled him to present
3 proper balance sheet for scrutiny, even
though the books of the other accountants
did not verify his fgures.
The investigation of the officers soon de-
veloped that there was something wrong, and
Mr.. Vanderhoof was pulmply charged with
the offense. He frankly admitted to them
that he was defaulter, and stated the amount
which he had embezzed--the figures given
proving to be substantially correct
now IT WAS DONE.
AS he was the bookkeeper and handled no
money whatever, in fact had no more access
to the cash than an outsider, and as there was
no collision with any other employe of the
bank the first question which arises is how it
was possible for him to be an embezzler.
1t was the very fact that it seemed
impossible for anyone in his position to COM
nit robbery which rendered it comparatively
simple and easy. There is desk in the bank
to which clerk is assigned for the purpose
of supplying customers with drafts upon
Eastern or foreign cities. The draft or
blank exchange books were in charge
of this clerk and he filed out the
drafts as customers might require. The drafts
were not good until signed by the president,
that Vanderhoof, during the temporary alb
sence of the exchange clerk USUALLY at his
noon Iunch), would 60 10 the book of blank
drafts and draw upon Chicago for
one, two or more thousand dollars
as the case might be, and taking The
draft to rear of the bank where one of the ex-
ecutive officers was to be found would estere
their signatures. He was s. trusted emp1oye,
quick penman and in the absence of the
proper clerk, or even when there was an extra
rush and the clerk Was present it was no I'M
usual thing, for the officers would sign it
without question when he presented it
to them, supposing it to be for some
customer who was buying exchange. AS a
rule, these drafts were for one or two
thousand dollars, drawn upon some Chi
cago bank, and payable to the order of
different stock and commission brokers with
whom he was conducting option deals. These
drafts were the means which he used to sup
ply himself with margins for his operations.
As the drafts are all consecutively mum
bered and the draft books are supplied with
stubs, it was necessary to have the stub
which correspondent to the number of the
draft used made all right. He had different
ways of classifying these stubs. Sometimes :,
for Instance, when he had drawn draft
to thu order OF one Of his COM
mission brokers for two thousand dollars
he would make the stub for two dollars and
pay the money to the teller rs though he had
sold draft for that amour Again he would
I'll out, or partially fill out stub and mark it
s'Error, Void,'' indicating that mistake had
been made in filing out the draft for the cor
responding number, and that it had been
destroyed while in reality he would have filled
It in the manner indicated and secured the Of
fetal signature which rendered it the equIva-
lent to cash. At the frat of each month the
Chicago banks, with whom the First Ma
tional kept accounts, sent in their statements
of the drafts which had been
paid by them accompanied by the
Cancelled drafts as vouchers, just as a business
returned to compare with his office record.
These statements and returned drafts went to-
Mr. Vanderhoof as the chief bookkeeper for
examination and checking off and
he consequently had to pass up
on his own rascality. 1t was then
only necessary for him to falsify the exchange
account figures on his balance sheet to cor.
and IL was reasonably well concealed. The
amount OF money which bank of the pro-
portions of the First National keeps on de-.
posit with its correspondents made it an
easy matter after the draft was once secured
to keep an ample margin for their payment
and carry false balance on the books OF
the bank.
Nearly all the crooked work has taken
place since June, 1881, and almost all OF
The drafts have been upon Chicago. The
fraudulent drafts have been collected and are
in the hands of the bank officials, aftordine
damaging evidence of the young mans guilt
The New York correspondents Of the bank
retain the drafts they pay as their own
vouchers, and the bank has sent for them
TO continue the investigation further. Some
fraudulent drafts on New York have been dis
covered but it is not thought that they cover
any very large amount. Nearly all of the
drafts run to the order of stock and grain
brokers, showing that he was specializing
largely and used the funds for margins. IL
fact that was his only method for realizing
money, and, II he wished to secure the Cash
for other purposes he could first use the drafts
for margin for his deal, and then if ht
won, or only lost portion
of what he had put up, hi
could call upon his broker for the difference
in money, and thus secure cash without
awakening suspicion that he had used the bro
ker as an innocent medium for cashing {