New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-02-16
.KITJNGr CHECKS.

In the proceedings ny WIN"
Shields is trying TO find out what shouiu DC
done with Peter j. Claassen, VINO recently
jumped into n0toriety as bank -wrecker' nucn
has been said about the practice OF kl'ihs
checks. Claassen Peu, Simmons and the rest
Of their crew Of banll-wreckers found IN TINS
mactice an easy method of involving the bank
inc institutions with which they were DONG
business in serious losses Ordinarily 70 kite"
checks is simple transaction. 1t consists III
the exchange ofibank drafts that are more or
less worthless. Hundreds of such transactions
take place in Nhw-York every day. probably
aggreCating in value q million or more OF DOL
lars. 1t may be that most OF them are mno-
cent of any positively dishonest motive but the
operations of Claassen and his gang illustrate
once more. as has already been illustrated many
times. that the banks through which such
checks are moving are left wholly at the mercy
of motives and other intangible things which
are poor substitute for money.
The Claassen! company appear to have or
ganized themselves for long while previous
TO their attack Upon the safe of the Sixth Ma
tional Bank into regular band OF worthless
check dealers They carried on the practice IN
such colossal proportions as to give each OF
them a fictitious fortune the paper guarantee
Of which was kept floating around through
half dozen bahl,s. TO their successful man
agement of this traffic in meaningless paper and
ink is probably tdue the inspiration OF their
scheme to plumber the Sixth National. Gen
orally speaking the purpose OF man who
"lutes" checks is to gain time rather than
money. A, for example, owes b $4,000. The
day comes when he must pay or take ruinous
consequences He has small balance in bank
say $500 10 After banking hoCrs on the day
when payment must be made a gives B a check
for the $1,000. b deposits it in his bank the
next dav and il arrives at As bank the day
after Meanwhile A scurrics about among his
friends TO borrow money enough to meet the
check. He appeals TO c. who has no such sum
rs $4,000 at all But on As assurance that
lit will be all right" he accepts sS7 "a IN
money and AS check, 10 be used Tomorrow
for 1886 4s. and gives a in return his own
check for Slabs This 4 deposits and his
credit is thereby increased 20 $3.50 30, 50
that when the check he gave 10 comes in
there is fictitious but unsupported suficiency
to meet it.
Before the check A gave TO G. has reached
As bank two or three more days have passed,
and thus by securing the kind Offices OF other
friends he can keep his and their worthless
checks in motion almost indefinitely. II final
" he scrapeS together the actual cash which he
should originally have paid, his account be-
comes really good and what might hare been
loss 70 any Of dozen banks is averte1. II a
reasonable degree of care IS taken, the fact
that he has been "kting" checks may not bc
suspected at his bank. His motive in making
a small money payment 20 G, which practice he
continues with each person of whom he Dor
rows. is In order that the checks he gives may
always be written in different figures from
those he receives. This is usually an effective
blind for unless the bank officials have some
outside cause 10 suspect the integrity OF de-
po,ifOr they will rot bee likely to investigate
each deposit and each drait-thc only course
by which the relation existing between drafts
and deposits can be detected.
II j. only necessary 10 multiply the trans
action We have described hy The probable mum
Der of impccunous and uupriuciulcd dopoSitors
in New orr, 10 perceive where the banks would
be if at given moment cash were demanded
for all the paper held by each. In the light Of
the reflections that this suggestion must give
rise TO- and of the Claa>,cn- pcll->immons OK
pQience il would seem Is if bank officials might
wisely consider whether or not law can be
devised competent 10 protect them and punish
the impOstoIs who 50 mcauly abuse their con
hdence.