The Providence news. (Providence [R.I.]) 1891-1906, 1895-09-16
TO STOP DEFALCATI0NS.
More Than $3O,OO0,oO0 Stolen Last
Year In United states Alone.

The excessive number of defalcations
| by persons holding positions OF trust has
| been the means OF causing insurance COM
panies guaranteeing the fidelity OF EN-
| ployes TO get together aud consider ways
| and means for preventing or materially
| lessening the mum Der of defalcations.
The president of one OF the companies
| has issued a circular TO bank officials and
| others In which he makes suggestions
| for the supervision OF employees and for
regulations which would operate as
check on carelessness or intentional fraud.
From figures collated by his company he
states that the amount OF defalcations in
1888 was in excess OF si9, 000 900, and in
1894, in the United States alone S26, zoo
0JO, an increase of more than S6, 600, 900.
lie has little doubt that the unreported
losses, or those which did not gain noto-
riety, would aggregate IS, 600, 900 more,
footing up more than $50, 600, 900 stolen
or misappropriated by employees or Others
entrusted with the handling OF other
peoples money.
The reported stealings Cor the past IL
years foot up $3.50, 00O, 0O0
He says the bulk of the defalcations are
due to the opportunities and tempta-
tions afforded to "trusted employees TO
become dishonest by allowing them the
almost unrestrained control OF moneys
and other avenues OF default, and the lax
ity Of supervision and failure TO exercise
the simplest and most common Gense pre-
Yentive measures.
He suggests remedies in the following
statement: ''If an employe had practical
demonstration that he is subject at any
moment to a personal looking into of
his affairs and books. or a sudden change
OF position without notice, the chances
are that three-tifths of the defaults which
might have occurred would be averted,
the stockholders would be safe from seri-
Gus loss, and no reflection could be cast
on the officers entrusted TO look after and
defend their interests.
"A prominent factor in defalcations
by trusted employees is frequently found
in a certain stamp of stock or prouuce
brokers, through whom speculations on
margin can be conducted without fear Of
detection until the crash comes
"Dissipation. fast living, gambling on
horse races or even bucket shops are all
su bject TO observation from the employers
own acts, but the confidential operations
through broker are of that secret de-
scription that it is impossible to detect
I hem, and only its being made unlawful
for brokers thus to operate for persons in
a fiduciary capacity would he likely 10
prove protection against employees yield
ing TO the inducements offered 10 specu-
late III this manner.
1.-The propriety is suggested OF legisla- |
ton making II penal offense for brokers |
TO operate for persons whom they know |
TO be holding positions of trust and hand |
ling other peoples money.
''lt seems irrational that the brokers, |
who thus constitute themselves the active |
medium through which culprit is able |
10 rob his employer conhdentiaily, should |
20 free, living in opulence on the injured |
employers money, while their tool goes |
% the penitentiary and the employer can
Effect no restitution at their hands. -
Boston Globe.