San Antonio daily light. [volume] (San Antonio, Tex.) 1886-1907, 1896-08-12
BANK SWINDLERS.
THEY ARE WARY AND THEIR
SCHEMES ARE MANY.
New York, New Orleans and all Clearing
Houses of the Large Cities Taking
Precautions Against Them.


be surprised at the many schemes
which sharpers employ TO victimize
banks, and scarcely a day passes that,
somewhere in these vast United States
some oily tongued or facile penned in
dividual does not set his trap for the
financial institution.
The method of covering the cashier
with a pistol and, while he strikes a
Delsartean attitude, of relieving the
bank of all available cash, is becoming
obsolete. The cashier might not take
kindly to such proposition, and If
highwayman by reading to him
very active man, might silence the
chapter on Smith & NELSON'S pocket
edition of how to perfOrate the human
body"
1t is the expert penman who is pro-
vided with powerful acids by which
application to paper, alterations may
be made and checks raised, who is the
most formidable foe of the men who
operate financial institutions. Drafts
calling originally for $50 have been
raised to fifty times that amount and
a bank victimiZed.
Business business men have care
fully devised means by which the pos
sibility of fraud have been minimized,
but as the fast as the chances become
more remote the Schemers become
more alert and inventive.
One way by which fraud is quickly
circumvented is through the clearing
houses methods. All checks upon
which any irregularity exists are
promptly detected and che flaws
traced. Still, the clearing house does
not completely check fraud.
Recently TIE following resolution
was passed by the New Orleans Clear
ing, House Association:
Resolved, that on and after the list
day of July, 1896, members of this as
ISOLATION shall not send through the
exchanges any checks, sight drafts,
notes, bills of exchange, or other items
having thereon any qualified or re-
strictive endorsement, such as for ''col-
lection" or for account of" unless all
endorsements thereon are guaranteed
by the bank, members of the associa-
ton, sending such checks, drafts,
notes, bills of exchange, or other
items. Any such item sent in viola
ton of the above arrangements, shall
be returned to the member from
whom they were received.
The necessity for adopting this
course originated in New York when
the clearinghouse of that city adopted
this rule after decision by the courts.
What led up to the whole trouble was
a robbery which had been committed.
The facts in the case were as follows:
A man calling himself Frank SaxtOn
presented to the Eldred bank, Of FL
dred, Pa, draft apparently for ST.
800, drawn by the First National bank
Of Wallingford, Conn, on the National
Park bank of New York, and asked
that it be collected. The draft was
accepted for collection, endorsed For
collection for the Eldred bank, Ed
red, Pennsylvania" The Seaboard Ma
tiOnal bank received it and at once
notified the Eldred bank by mail that
same had been placed to its credit
The Seaboard bank presented it
through the exchange of the New York
clearinghouse to the National Park
bank for payment, and as the paper
looked absolutely regular the National
Park bank paid the full amount.
subsequently the facts were brought
out that the draft had been raised
from So to $500, and so clever had
this been done that it had passed
through a number of hands without
being detected. In fact it was only
discovered through the transactions
between the banks involved
When the National Park bank was
notified by the WallingfOrd bank that
the draft had been raised it made de-
mand on the Seaboard National bank
for the repayment to it of the differ
ence between IS and $500 The Ed
red bank had already parted with the
money.
The SeabOards National banks
books showed that the money had
been drawn by the Eldred bank. A
suit was brought in the Supreme court
to test the question, and the court de-
cided for the defendant, holding that
by the use of the words For collec-
ton" the Eldred bank notified all par
ties through whose hands the draft
passed, the SeabOard National bank
was acting merely as agent and that
it had done all that was expected of it
by collecting the draft and RENTING
the proceeds to its principal, the Ed
red bank.
The case was appealed.from the trial
court to the general term, where decis-
ion was sustained. The Court of Ap-
peals, to which it was next taken, af-
hrmed the decision Of the lower court.
The opinion was in part as follows:
when the draft in question was
PAID by the plaintiff under mistake of
fact, the defendant either owned il or
sinply neid II for collection, as agent
of the Eldred bank. If, how.
ever, the defendant did not then own
the draft, but merely presented II for
payment as agent of another hank n
could not be required IN renay nro