New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-10-04
THE. KINGSTON DEFALCATION.

The Ulster County Savings INSTITUTION d'
Kingston has closed it's doors under extraordi-
nary circumstances. A fortnight ago discovery
was made that its treasurer had Incorporated
about $4,000 of its funds. A run upon the
bank followed at once amid great excitement
on the part of the depositorS Other banks canle
Ia lis assistance, funds were advanced, demands
were paid, and the popular apprehension was
mieted after two or three days. Moreover, 1t
was with considerable apparent pride and COM
placency that the announcement was maze III
behalf of the bank that its affairs were IN good
order. and the general impression was conveyed
that the institution was deserving OF generous
svmrathy on account of its misfortune so quickly
and bonorably repaired. BY way OF confirming
IFS Mace in the good opinion of the community
and demonstrating its stability, the trustees
made an elaborate statement OF its affairs, re-
sources and prospects. They not only gave out
the assurance that depositos were absolutely
secure with a surplus of quarter OF a million
dollars to guarantee them, but even went SO far
as 70 express the deliberate conviction that there
was no safer place in the county to deposit
money at a moderate but sure rate OF interest
with undoubted security. These broad asser-
tons produced the natural effect, deposlors lel'
their savings with the bank, new deposits were
made. and the general public supposed that oil
was we'll.
Suddenly it is announced that the stealngS,
instead of amounting to $4,000, reach total
If almost half million. The bank examiner is in
charge. and the outlook for depositors is exceed
ingly gloomy. BY what process OF reasoning the
trustees. men well known for their experience III
affairs. presumably selected to oversee the opera
tions of this bank because their sagaclty ana IN
iegrity had been demonstrated were able 10 az
rive at the conclusion that the institution was
solvent. and not only safe but notably strong is
exploined in the statement they have just issued
Bnt this statement by no means exonerates
them. trustee, and especially a trustee
of a savings bank, takes upon hlmsel1
no slight burden of responsibility when ne pre-
sumes to assure the public that the business
committed to his charge is in sound and pros
nerous condition. This is the fact when no sus-
melon has been aroused in any quarter; when
there is reason to suppose that every employe
has done his full duty, and no special cause for
anYious scrutiny exists. The obligation is Ger
family not less solemn and Welghty wneh oil
important officer has been proved o thief when
II is acknowledged that considerable sum OF
money has been artfuly distracted; when pub
lie solicitude is aroused; when the savings and
tbe comfort of depositors are at stake, and when
the thrifty Door seem to be peculiarly menaced'
These we're the circumstances under which the
bewildering assurance of the Kingston trustees
was given to the world They had made care
ful investigation they declared; they knew all
that was 70 be known about the affairs OF the
hank and over their names they assured all
concerned in the most positive and unequlvoca
manner that the welfare Of depositors was not
involved 1t is no explanation now to say that
thev we're deceived. Why were not the ac-
counts examined by an expert?.
There is one circumstance or set OF clrcum-
stances worthy, it seems to us, OF particular
consideration. Ostrander, the treasurer OF the
bank. we are told, was a man highly esteemed
and trusted by the community, and his name
and presence were supposed to impart sense
Of security to all who had dealings with the
bank. But now that his rascality has come to
light it is glibly remarked that no one ought TO
have been surprised at the discovery OF his real
character His mode of life was ostentatlous
and lavish. He lived in fine colonial mansion,
eaborately furnished and decorated: he kept a
dozen servants: his equipages were numerous
and well apponted he spent much time at
high-prioed summer resorts, and his wine-cellar
was his special pride. His salary was $4,000
wear. and he was not supposed to have indie
pendent resources but it does not seem to have
occurred to the trustees to ask him or one an
other from what source he drew the means OF
supporting this expensive establishment Pos
sibly these gentlemen imagined that this was
none of their business but if so, we cannot
agree with them. 1t is now seen by others, and
possibly by them, that the relation between
Ostranders probable income and his notorious
outlay was a subject which it was not only their
right but their duty to consider and investigate.
It is true that when all possible checl-s and
balances have been applied faith must ultimate
" be reposed in one or more individuals but
the trustees cannot shuttle off their responsibility
by this argument. There had long been cir
cumstances in the life of Ostlander calculated TO
arouse their suspicion; they knew a fortnight
40 that he was a thief; and on top of this dis
covery they permitted themselves to impose
grossly upon the depositors of the bank their
own credulity having been previously imposed
on. Altogether, this appears to be one of the
most singular and dscreditable episodes in the
history Of financial institutions.
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nENACE To THE LORDS