The Kootenai herald. [volume] (Kootenai, Idaho) 1891-1904, 1892-04-15


chance to force his balance. but it is very
common in mercantile houses. Yet, in the
recent failure of the Kingston Savings
bank IL was shown that barefaced footings
of this kind were carried in the accounts
of some 20 per cent of the depositors and
the examiners did not find il out.
Another form of fraud which seems so
barefaced as To be impossible of execution.
has been successfully practiced again and
again, we are told, by bank officials. and
Aas escaped the notice even of the sworn
examiners. 1t is almost the exact coun-
terpart of the familiar green goods"
game. Tee teller who has large sums Of
money in his custody will take bills Of
large denomination out of package Of
bills and put small ones in their place
He relies on his Mooney not being counted,
and, incredible as il may seem, the state.
ment is not denied that the official exam
liners have testified that the accounts Of a
bank were all right when some of the
packages of money which they have ham
died were thousands Of dollars short of
the amounts marked on them
An eminent writer on financial matters
has recently assured the public that this is
a common trick. 1t is one that is so easily
detected that the only wonder is it is prac-
tced at all. The only excuse an examiner
can have for not detecting it is that he has
no time TO do his work OF course if he
does not examine he will not find out. If
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 oflicials-more dan.
gerons because it is only possible by colu-
sion among the very highest officers, aud
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 a diversity that no examiner could be
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 a different kind.
OF course there are many dishonest oper
ations in bank management especially
that cannot be detected by mere exam.
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 peculatons is to
credit some heavy depositor with the cor.
rect amount of his deposit on his pass
book and omit to enter it on the books Of
the bank. or enter a smaller amount than
has really been deposited. This, to be sure,
may be detected at any moment The dc-
positor may ask to have his pass book
written up by the banks bookkeeper, il
which case the discrepancy would De dis
covered; or lie may undertake 90 draw all,
or nearly all, lib, money out at moments
notice. But the teller does not venture on
this eXpedieut without being well ne
quainted with the habits of the depositor
There is a risk, certainly but there must
necessarily be a risk about every theft.
"A safeguard against this, which has
never 50 far as | know been put in prac
tice, would be TO send statements of ac-
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 il in
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 bank i accounts because OF the great
number of pass books that are out, but
such system of statements would bring
about the comparison mt 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
ancies could he 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 robbec
OF 100000 and the theft concealed 70.
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
time to he concealed for a longer or short
er time, according to the luck of the thief
DAVID a. CURTIS.