The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1912-06-07
Bv GEORGE CLINTON.

each bank.-the report which states in
black apd white what the directors
think Of thetg own bank: IS: g.
Wien Mr.. Murray assumed Office
about 5000, or between 80 and 40 per
cent Of the national banks, had no fby,
Jaws and therefore made no provision
Tor examining committees. They now
all have adopted bylaws suggested by
the comptroller and are fitted sout
with regularly appointed examining
committees. When carbon copies OF
the reports are sent to the comptroller
a study will be made Of them which
will be supplementary to the stndy
made in the bank. In this way 1t is be-
lieved that the depositors and stock
holders will. have double check
against loss from defalcation and
forgery. al
..2rr Some Specimen Cases.
Here are some of the cases which
moved the comptroller Of the currency
to act: >5@~"
George w. Coleman, bookkeeper Of
the National City bank of Cambridge,
Mass, kept a small personal account
on the individual ledger. He would
kite" his own checks through a Bos-
ton curb broker and abstract them
from the mail as they came back from
the clearing house, as the cashier
never saw the contents Of the clearing
house letters and simply posted the
totals of the letters on the cash book
The general ledger and the general
cash book were kept by the cashier
In order to make the total amount of
deposits in the Individual ledger agree
with the amount shown by thes gen
eral ledger. Coleman resorted to false
debit entries (plugs) and the reduc-
ton of balances when carrying for
ward accounts. Within five years
Coleman looted the bank of more than
100000 and he Is now serving long
term in the state prison. The direc-
tors noticed the reduction of the de-
posits in the bank, but attributed it to
competition. The defalcation was not
discovered until the books were ex-
amined by the auditors of the Harvard
Trust company, to which concern the
directors had agreed to sell out
Henry NJ bearing, cashier Of the Al
bion National bank Of Albion, Mich,
is serving term in prison. A search
of the cashiers desk, after the closing
of the bank, disclosed leaves removed
from the loose leaf individual and saw
ings depositors' ledgers carrying cred
It balances aggregating $185,317.41,
which of course represented a short
age in each Of an equal amount. This
method of towering" had been in
vogue since the bank began business.
The cashier stated to the examiner
that he found no difficulty at all in
deceiving the directors. The bills re-
ceivable were added by him on an add
ing machine; the list was checked
with the notes Of the directors, but at
no time the cashier stated, did the
directors check the total of the add
ing machine list with the general
ledger. The assistant cashier stated
that practically all of the manufacture
ing customers notes owned by tho
bank were forgeries.
Not Balanced for Three Years.
Earl Stannard, bookkeeper Of ma
| tional bank at Pomona, CAL, is under
arrest on the charge of abstracting
more than $4,000 of the funds of tho
bank. One Of his methods 1t is al
legged was that employed by Coleman
! of extracting the clearing items
from the morning mail before they
were seen by the cashier or others
oil company in which he was interest.
ed. OF the fifty-six pages of inactive
accounts, thirty-six, 1t is charged, were
! falsifled for total Of more than $780,
| 900. Not for over three years had the
| active and inactive ledgers been foot.
| ed and balanced on the same day.
F. T. Arnold, cashier of the First
! National bank Of New Berlin, N. Y,
is awaiting trial because of an esti-
! mated shortage of about $150,00O in
the deposit account. He is charged
with issuing certificates of deposit
which he failed to register, or If regis
tered the entries were for a lower
amount than the face Of the certih-
cate called for. It is understood that
no one but Arnold was allowed to
make any entries in the certificate Of
deposit register, which is wholly in
his handwriting and presents many
evidences of erasures and changes IN
figures. It Is said he concealed his
work in several other ways
Best Plan.