The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1886-12-01
And He Sends Back Notice OF His
Theft to the Bank Directors.

Yesterday afternoon a rumor was current
that another defalcation had occurred and
that the Canal Bank was the sufferer. Later
in the afternoon the Directors sent out the
following statement:
The Directors of the Canal National Bank
authorize the statement that Mr.. Howard L.
Blackstone, the Discount Clerk, and an otfic-
lal who commanded the entire confidence of
the Directors, has proved to have embezzled
the funds of the Bank and has absconded.
Inc amount Of loss as near as can be ascer-
tanned, is twenty-five thousand dollars, $685.
O0O) Mr.. Blackstone has confessed that he
began to speculate few years ago in Maine
Mining stocks and lost money In these oper-
atiOns
Reporters for the PRESS Immediately pro-
ceeded to obtain such information in regard
to the affairs as it was possible to seizure. 1t
appears that ON Wednesday Mr.. Blackstone
obtained Thanksgiving vacation from the
Bank, and proceeded to New York. From
that city he wrote letter to his wife which
was the first information the poor woman
had that her husband had yielded to tempta-
ton and become an exile from his home
The letter was dated November 23rd, so
that it would seem as if it must have been
written before he left town, and that he had
premeditated the step he had taken for some
time, feeling that his guilt could not much
longer be hidden from the eyes of the Bank
officers.
The letter stated that sad misfortune had
come upon them but they must bear it as
others had done before them. He was de-
faulter and an exile. In the year 1881 a
friend of his asked HIM to invest some money
for him in shares in a certain Maine mining
stock. He, Blackstone, made the purchase,
and the speculations proved successful. The
success of his friend induced him to specu-
late in this mining stock on his own account
He, too, was fortunate in his first venture
Again he tried and again he won. Then his
luck turned Loss followed loss, and to re-
trieve himself, he took the Banks money
until his regulations amounted to $4,000
Then he felt it was useless to contend with
fate, all must be discovered, and his down
fall was certain. 1t was useless for him to
face the ruin he had caused. and it was bet
ter for them all that he should go. He en-
closed a deed of the house and land he
owned, and his family occupied in Deering'
which he requested his wife to hand to Mr..
Peters, the paying teller of the bank and al
so to inform the bank of his theft. he made
no mention of the methods by which he had
robbed the bank, but bitterly repented the
wrong that he bad DONE He gave no hint
as to where he had gone, or as to his future,
and the remainder of the letter was taken up
with matter that had no connection with the
bank.
HIS METHODS NOT KNOWN.
1t has just been stated that MIR. Blackstone
did not tell in the letter how he succeeded in
stealing the money The directors have not
yet discovered how it was done. No money
passed through his hands, :or at least, very
little, AT times he had occupied the posi-
tions of acting cashier and paying-teller,
when Mr.. Somerby or Mr.. Peters were away
on vacations, or temporarily off duty, and he
always performed their work with the great
est exactness, and skill Besides being dis
count clerk, he was also in charge of the
general ledger accounts.
Hon. Fred E. Richards, State Bank Ex-
aminer. was seen at the Falmouth Hetel last
night, and asked how Blackstone could have
got so much money, Mr.. Richards
said that it was most remarkable case; and
it was difficult to see how it could possibly
have been done by a discount clerk. When
the duties Of a discount clerk are considered
the remarkable nature of the defalcation will
be apparent, For cashier or paying teller
to steal is comparatively easy, for they han
die the money; but the discount clerk han
dies no money achdterer. The following
extracts from the Practical Banker. a recent
work by Albert S. Bolles, editor Of the
Bankers Magazine, and an authority on
banking, show the duties of the discount
clerk:
When bank discounts note the interests de-
for the balance.
The Offering Book, containing record of the
elsewhere. Some banks enter in this
book loans already made to the borrower so that
directors may have before them, when they meet
all the essential facts necessary to transact their
business intelligently.
Accepted paper [notesl is now taken by the dis
ing and general character, and then ''tlmes'' each
note, Z. E., writes IN pencil on the back the due
date OF the note. The notes are then entered in
what is termed the Dealers Discount Book which
usually is ruled to permit, first, the maker s:name
then the endorser's, the place of payment due
date. and = g number of days to run, discount
amount OF exchange charged and net proceeds
For the latter amount there is separate column
for each of the ledgers, so that all the amounts
belonging to anyone ledger, appear only in one
column. From this discount book the discount
clerk makes his statement, and posts his ledger,
or Dill book. and his ticklels. Before putting
away the notes he cheeks" them back on the
ssTtcklers." These Ticklers are very Important
books. Why they have been SO called'is scarcely
known, but probably from the habit of tickling or
checking of the entries. There is usually one
Ticker for each month in the year. The
total footings OF these Ticklers will present the
n Dicanunfad vapd fba
of these total daily amounts is taken at least as
often as once each month"; and proved with. the
General Ledger.
There are Discount Ledgers, which are opened
in the same manner as personal ledgers, but en-
brace the accounts only of customers who get
notes discounted. They contain a record of every
note discounted, the date of discount the endors-
er or security therefor, and the time of maturity
they also show the liability OF each customer as
endOrSer for others on discounted paper 1t is
desirable to keep this record to guard against
losses. If two dealers should exchange notes or
endorsements and put them in the same bank
these books would bring the fact to light. They
days.
From these ledgers the discount clerk aseer-
tains the amount of discounts set down in the Of
fering book. He keeps daily supervision over
them, cancelling the paid notes as fast as they
mature by drawing line across the figures with
The discount clerk has the possession of the
greater part OF bills receivable, (the notes due the
bank) in which the resources of the bank are in
vested. These are in his custody, are deposited
by him at night In compartment Of the vault as
signed to him and taken out on the next morning
by himself. If any Of the officers wish to examine
notes they do so ia bis presence or require him to
show them. BY this method his responsibility is
kept distinct from that of the other clerks and Of
fcias.
The discount clerk is i'm frequent intercourse
with the customers of the bank.
The offers (0f notes. apply to him after adjourn
ment TO tnd out what opposition has been made
of their applications.
The discount clerk, as will be seen from the
foregoing description of his duties, does not re-
ceive or pay out any money 1t is not easy there
fore, for him TO perpetrate fraud on the bank.
Such being the regulations by which the
discount clerk is hedged about, it seems al
most inconceivable, Mr.. Richards said, that
Blackstone could have got away with S25,-
600. There has been but one case on record
in the country where discount clerk has
done such thing and Mr. Richards thinks
that Blackstone has made the second case.
Gibbons relates this instance, which occurred
in the Second Bank of the United States.
The discount clerk selected some notes after
they had been discounted and filed away.
which he thought would be least likely to be
wanted before maturity, and through the
help of an outsider, hypothetical, l. e.,
pledged, them for loan Of money. When
the time of maturity drew near he selected
others of longer date, and substituted them
for those first distracted, which were res
tored to their proper places among the other