The San Francisco call., 1909-10-31
By Jack Iungrneyer


N 1t seem plausible that clever
w swindlers and confidence men
may succeed IN robbing bank
ing institutions OF large sums OF money
and EtiIl remain within the bounds OF
the law while efecting their steal
That such thefts are daily accom-
plished. however. outside the covers of
the best sellers" as a matter Of sober.
verihable fact viii no doubt come as
a surprise TO the average person only
roughly familiar with banking sys-
TEN and practice. That the seemingly
inpregnabIe strongholds Of finance ma
be successfully tapped for large sums
Of money al the hands Of their deposi-
tors. and that the institutions are I'm
potent TO secure legal redress under
the present statutes is TO say the least
disillusioning. A fact 1t nevertheless
remains.
According to canvass taken
among the san Francisco banks.
scarcely & fortnight passes that evil
oence does not come TO light proving
some depositor engaged IN the near
criminal practice Of drawing from one
or other OF the local institutions money
that Is not his. So adroitly is this
manipulation accomplished that the de-
poster may be in possession OF the
banks funds 10 the amount Of thou
sands OF dollars without in the least
making himself liable to criminal pros
ecution for his act.
This practice OF virtually obtaining
money under false pretenses without
actually breaking the law in so doing
is known as check kiting" 1t is a.
rather simple little performance in a
systematic Jugglery OF deposits and
checks. whereby man may double or
triple his working capital-pyranid
$500 until II becomes $1,000, for in
stance-without the necessity OF bur-
dening his friends with a hard luck
story, without mortgaging his prop
lrty. without the usual delay incidental
to securing the requisite cash or credit
when the demand becomes pressing,
without even paying interest on the
sum obtained.
The possession OF the cash or credit
thus hlched may be enjoyed anywhere
from p hours 10 10 days II one man
is operating alone: indefinitely where
two or more are engaged in the scheme.
Where one man engages in the practice
OF kfting the matter is Of course little
more than an involuntary loan on the
part OF the bank in favor OF the de-
positOr, on account OF the short period
OF time during which the kiter is In
possession OF the money. But where
two or three clever kiters operate sys-
teulzticaIlys where thousands of dol
alars OF the banks funds are held out
and enjoyed without the payment OF a
cent OF interest. the affair becomes
an actual steal from the institution
And when this operation is constantly
enected and repeated in every city in
the United States. the loss TO banks
through this channel OF leakage alone
he-omes formidable. The loss 10 Cali
fornia banks through kiting for given
,ersod has been estimated by several
81 Francisco bankers as amounting
~ fully one fourth as much as that
sustafned through outright bank rob-
beriea Reports from other states show
ar even greater proportion in favor
Of kiting losses
How Operation Is Accomplished
Check kiting is successfully accom-
nlfshed through a variety OF systems.
ire Simplest and most frequently en-
Moved IS that where one man operates
= double the capital he has on de-
posit at some bank For instance.
a. Rlack. a real estate speculator,
hse on deposit IN the crocker National
.~-1r s5 900. At the Bank OF Califor-
Dc---- |aroea% 90 nno