The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1891-12-19
he examines he must discover any fraud of

he examines he must discover any fraud Of
this kind.
Outside Of all these methods there is a
still more dangerous fashion in vogue
among dishonest bank officials-more dam
gerous because it is only possible by collu-
sion among the very highest officers, and
because it seems almost impossible of de-
lection until the crash comes. That is the
carrying of bogus securities, or securities
of greatly depressed values. Experts de-
clare that in this matter, at all events, the
examiners are bound to rely on the word
Of the officials. They say that in the
enormous mass of securities which most
banks carry as collateral for loans there is
such diversity that no examiner could De
expected to know the true value Of all of
them.
The latter forms of robbery appear to
have been practiced in the Maverick bank,
the Keystone and the American Loan and
Trust company. The failures of these
three were among the most astonishing
events in banking circles this year. The
failure Of the Kingston Savings bank. on
the other hand, was of different kind.
Of course there are many dishonest oper
ations IN bank management especially
that cannot be detected by mere exami-
nation of the books of the bank, or by the
supplementary counting up OF the assets.
One favorite method of tellers who are try
ing to cover up their populations is to
credit some heavy depositor with the cor
rect amount of his deposit on his pass
book and omit to enter 1t on the books of
the bank or enter smaller amount than
has really been deposited. This, to be sure,
may be detected at any moment. The de-
positor may ask to have his pass book
written up" by the banks bookkeeper, in
which case the discrepancy would be dis
covered; or he may undertake to draw all,
or nearly all, his money out at moments
notice. But the teller does not venture on
this e.S2edient without being well &C
quainted with the habits of the depositor.
There is a risk, certainly, but there must
cessarily be a risk about every theft.
A safeguard against this, which has
never so far as I know been put in prac-
tice, would be TO send statements of &C
count to all depositors at regular or irreg-
ular intervals, after the fashion of nearly
all large merchants. This would cover
the same ground as the writing up' of
the pass books, but would cover it in q
different way, and should be the duty of
some one in the bank who has nothing to
do with the handling of the money. 1t is
claimed that it is an impossibility to COM
pare the depositors' own accounts with
the banks accounts because of the great
number of pass books that are out, but
such system of statements would bring
about the comparison at the close of any
days business. The objection that the
statements would not tally with the de
positors' own accounts because of out
standing checks is puerile. Such discrep-
aneies could be traced readily, and depos-
itors would gladly aid in SO small matter
in keeping the banks affairs straight.
This form of safeguard, however is not
likely to be adopted by banks generally, on
account of the conservatism which governs
bank management. Yet Moses Taylor,
who was in his day esteemed one of the
shrewdest financiers on earth, was robbed
of 100000 and the theft concealed for
months, when it might have been found
out in three days by such system.
When examiners examine, thefts will be
discovered. Until they do, thefts will con-
tinue to be concealed for a longer or short
er time, according to the luck of the thief
DAVID A. CURTIS.