The sun., 1919-09-21
WALL ST. ACTS TO
END BOND THEFTS
Careful Scrutiny Of and
Guards For Messengers
Among Suggestions.
BUREAU TO BE FORMED
Known Losses Near Million,
With Many Thefts Kept
From the Public.
BUREAU TO BE FORMED

large amounts OF securities IN the imam
cial district has aroused the brokerage
firms and the surety companies who pro-
tect them against loss to radical action.
the first step Of which will be the forma-
ton of a large investigating bureau. CEN
trally located in the financial district.
through which every brokerage messen-
ger and clerk employed in a position OF
trust will be closely checked up. With
the thefts OF bonds and other securities
Of almost daily occurrence the situation
has become such that those concerns
most deeply interested have decided that
something must be done and done imme-
dlately to check the prevalence OF the
robberies.
Formal announcement was made yes
terday by Joel Rathbone. general mana
ger of the National Surety Company,
which has been the heaviest sufferer from
the Wall Street wave of crime, that
members of Stock Exchange firms and
officials of the surety companies are
working together on a plan for the
amelioration OF the Objectionable general
conditions represented by the many re-
cent thefts of Liberty bonds by stock
brokers' messengers"
Mr.. ttatnD0no lnulcateu tnat IL WAS
likely hereafter that surety companies
will refuse to accept liability for stock
brokers' messengers carrying more than
$4,000 unless accompanied by an armed
guard over 20 years of age. These are
the outstanding developments of the
situation which has had Wall Street by
the ears for several months and repre-
sent the result Of a large number OF
important conferences which have been
held recently by those most concerned
in the AFFAIR. 1t Is believed that these
two steps will go far toward preventing
much Of the thievery which has been
going on.
Whether or not this ruling will ulti-
mately apply to industrial and railroad
bonds as well as to Liberty bonds has
not been determined by the surety COM
pAnies 50 FAR as can be learned. In re-
ply to a question on this point Mr.. Rath-
bone said that up to the present the
whsle trouble seems to be largely with
Liberty bonds. which are so easily nego-
tiated."
Check Up Messengers.
Investigation Of the records Of mes
senger boys employed by stock brokers
over whom surety companies carry
bonds OF protection has been very close,
but in some cases. 1t was said, a GER
tain laxness on the part of the brokerage
house itself In making reports to the
surety company Is responsible for fail
ure to check UP boy who has been
hired. 1t was pointed out that In one
instance a boy had been employed by
firm for quite n length of time before
this firm notified the surety company.
as provided in the bonding agreement,
and on the very day the surety company
received notice that the boy had been
hired as messenger and began TO in
vestigate him II was also notified that
he had absconded with some $40 600 or
$4,000 worth Of various securities.
But the greatest difficulty in the in
vestlgation end OF the business has been
the fact that with only one exception
all of the boys implicated in the various
robberies have been first offenders. They
have been rigidly investigated by che
surety companies and have been found
to have a perfectly clean record
Every surety company has a very
elaborate investigating bureau" one
prominent insurance man declared yes
terday I'VE have ten or twelve men
who do nothing but investigate the rec
ords of persons engaged by various
clients OF ours for positions OF trust
One Of the conditions OF the brokers'
blanket bond under which he Is pro-
tected by us is that as soon as a mes
senger Is engaged by the person or firm
bonded we are to be notified whereupon
we Immediately investigate. Until the
last two or three months no one ever
thought IL was necessary to exercise
extreme care in this work, for no such
condition as we have now had ever be-
fore arisen. Brokers. therefore, were 1
inclined to be somewhat deficient in
promptness. However. that 10 not the
In
which our company has handled no
amount of investigation has led us to
believe that the boy under considera-
ton was other than honest. The same
Investigations made by the brokers
themselves would not have resulted in
anything other than an engagement for
the boy. nor would any surety company
refuse to take a risk on him For their
records were almost invariably clean"
1t was pointed out that both the sure
~ companies and the brokerage firms
feel that the question has now become
sufficiently serious to be beyond a mat
ter OF personal profit and to have be-
come one OF menace to the community
As one man in close touch with the sltua-
ton phrased II yesterday, at In an ex-
preston Of the general postwar rest
lessness, temptation, extraVagance. etc,
which must be checked before any great
cussing the situation and a half dozen
plans are now under serious oonsidera-
ton"
Many Losse' Unprotected.
While the thefts are by no means con-
fined to Liberty bonds and Victory
notes, these form a very impressive pro-
portion OF the aggregate amount Of
securities stolen Estimates of the
number and value OF stocks and bonds
which have disappeared via the alb |
sconding messenger route In recent |
months are very difficult to obtain. 1t |
is known however, that surety COM
panies alone have suffered In excess
of half a million dollars on their poll |
cies. to say nothing Of the tremendous
losses incurred by brokerage firms and |
banks not fully protected by policies.
In addition there have been many in |
stances OF thefts which have never been
reported outside the brokerage and |
surety circles either because they were
too small to be OF interest publicly, or
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