The Somerset press. [volume] (Somerset, Ohio) 1873-1977, 1882-03-30
Another Surprise.
The oreat bank defalcation in

Another Surprise.
The great bank defalcation in New.
ark, N j.. is another illustration of the
utterly unbusiness-like ways of business
men. An old and prosperous banking
institution has been ruined by the aban-
donment of their duties by the Directors
of the bank. The theory Of the man.
agement of sound bank is that the
Directors know something OF the affairs
and accounts of the Institution with
whose management they are intrusted.
Now and again. like a thunderbolt from
a clear sky, comes the explosion of
bank. Then it appears that the Direc-
tors had no real knowledge of what was
being done with the funds OF the con-
cern and with the money OF the depos-
itors. Their apparent knowledge was
derived from one of the under officers
or employees OF the bank. The Direc-
tors implicitly trusted one man-per-
haps two men-with the management,
which. in theory, was wholly in their
own hands. In such cases, no allow
ance is made for deception or dishOn-
esty, none for errors. In this cay the
Bulls Head Bank H-aa hrcs'rht ~ grief
some years since. And III this way,
business men 70 ON neglecting their du-
ties. secure in the belief that their con-
corn. at least, is far above all human
wickedness and accidents, only to be
astounded when their mistake is dis
covered, .-.,1
The ruin of the Mechanics National
Bank of Newark is, possibly, little
more complete in its way, and the 'im-
plicit coahdeass" CT the Directors in
the Cashier . little more obvi-
susiy bottomless than usual /;
otherwise. the case II not unique.
The Cashier was the cause Of the ruin.
a. other Cashiers, endowed with full
powers and unchecked BY any Directors.
have been, fron time immemorial. Per
hsps the apparent strength OF the bank,
the b gness Of - thar, aad the spot.
less character o( the thief constitute un-
usual features oi this latest defaloation.
But it need not b sxpseted that any oi
these things Will ro1se aaybedy to nsu
viyilance, or viii remind snybody that
the duties they are sAirking as Trustees
or Directors o0gAt lot 10 be any lsageI
delegated to another psMoH. These
things are constantly kppsniag. Fh<
newspapers take uP tAs obvious lesson
and read . wholes5ne lecture to the
men who take 50 much pride in what
thev call their "business methods. y
Then matters move on a. before. II
! does not appear whether anybody ha,
profted by the exposurs Of the humbuS
| Of the aforesaid Is basiness methods. ="
The Newark defallterfs method was
| simple. He was the Cashier of strong
and popular bank. There was paid
up capital Of 500, 900. a surplus oi
$4OO 600, undivided profits of more
| than sos, 600, and heavy depositors in
plenty. The concern kept a deposit
account IN this city, the balance to its
credit being sometimes as much as $2,-
5O0.O00. Baldwin, the Cashier, was al
lowed to draw on that balance when.
ever he chose. Nobody connected with
this admirably managed Newark bank,
out Baldwin. knew the condition Of the
balance to the banks credit in the
New York institution. If any body evel
had any curiosity about the, matter
he asked Baldwin, and this excellent
and highly, respectable Cashier gave
such answer as suited his plans. And
all the while, the Cashier was checking
out of the New York bank the balance
| of the Newark bank and using it for hii
| own purposes. While he was reporting
to the amiable Directors of the Newark
concern that million and y half o
4 monev was on deposit to their credit
he was tampering with that account
Finally, when he had muddled awaN
the handsome sum OF $4,000, 600 or so
/ and there was a deficiency of $40O, O0(
where there should have been a sur
plus of 81 500, 900, the explosion came
The Directors of (! 9 bank-good essl
souls--had known Baldwin ever sinct
he was boy. They repeat. with acer
tain nlaintiveness, that they had i'm
plicit confidence in him; as if he wa,
very much to blame for their implici
confidence, and as If they are wholly
exonerated from responsibilitv becausl
they have been deceived. So Baldwin
went on with his game. using the de
posters none e. ,ur o5s3 which h
! has sci. foruii. There does not seem
to be much to add to this sad ant
disgraceful story. The SUM and sub
stance Of the matter, is that certain re
putable citizens built up bank. at
tracted the deposits of many people
poor and rich, and then left the man
agement of the handsome accumula
tiOns. to all intents and purposes, il. .th'
hands 0f- CO r'"". S:r.s;::.l:ukr e.
temptation. this man has betrayed hi
trust and has misappropriatedt the mon
ev. And yet. the Directors of the banl
are shrewd business msn.-M r 7ssea