Evening star., 1944-01-13
District Groups Urge
Measure 10 Protect
Banks in Check Fraud
Reilly, McGorroehx
jones Among Witnesses
Before House Group


District banks and business houses
which each month cash thousands
of Government payroll checks, would
be relieved of financial RESPONSE
bility in cases where checks were
fraudulently drawn by dishones,
employees, under provisions of legis.
lation discussed at hearing today
before the House District Subcom-
mite on Insurance and Banking
headed by Representative Lesinski
Democrat. OF Michigan.
The proposed legislation is in the
form OF an amendment to the Uni.
form Negotiable Instruments Act
AS the act now stands, the final in.
dorser is responsible. In most cases
OF embezzlement and fraud, however
the miscreant is usually found to be
insolvent, and the banks. as exlar.
antors OF the final Endorsement. f1nc
themselves liable to the employe,
OF the embezzler.
The new provision would make
the employer, even If it happenec
to be the Government, responsible
fof the honesty of its employees.
! Reilly Among Witness. N
Witnesses at today's hearing in
cluded John A. Reilly, representise
the District Bankers Association
Joseph McGarraghy, chairman OF
the Low and Legislative Committee
OF the Washington Board of Trade
c. Clifton James, counsel for the
District Building and Loan Associa.
tions, ana several Washington
bankers.
At the conclusion of the hearing
Mr.. Lesinski said he believed the
full committee would support tn,
desired protection.
Mr.. Reilly spoke for 81 banks ane
trust companies with 80 branche.
where checks are cashed for tn.
public. He emphasized that tn,
proposed legislation was needed
particularly in Washington, because
between July Is, 1888, and March
81, 1887, three District banks wer.
"victimized" to the extent of NOR.
than 100000 by the fraudulent &C.
tivities of an official of the Govern.
ment named Stitely."
Reno E. Stitely, former Nationa
Park Service auditor, is serving 8
6-to-12-year sentence for embezzle.
ment Of $4,000 of Government
funds in fraudulent payrol
voucher scheme.
Five States Adopt Plan.
The pending legislation is spon,
sored by Chairman Randolph of tn,
House District Committee and pro.
poses a 26-word amendment to tn.
present law. Five States-Idaho
Illinois, Massachusetts. Montans
and Louisiana-have approved sim.
liar legislation and the American
Bankers Association has recon.
mended similar action in all States
Among District bankers present a
the hearing today were: Rutherfore
Dooley, vice president of the Ma.
tional Bank of Washington; Fred.
erick P. H. Siddons, vice presiden
and secretary of the American
Security g. Trust Co.; George A
Gidden, president of the Nationa
Capital Bank; L. Clark Brown. vice
president of the Union Trust Co.
Francis G. Burrough, vice president
OF Riggs National Bank; George O
Vass, vice president and cashier o1
Riggs Bank; Thomas M. Groom
president of the Bank of Commerce
& Savings; c. B. Radcliffe, vice
president of the Munsey Trust Co.
James G. Rogers of the firm O,
Hogan 81 Hartzell, counsel for thu
District Bankers Association anc
the Riggs National Bank; w. c
koontz, president of the Anacostis
Bank; John C. w. Beall, chairman
OF the Executive Committee of thu
East Washington Savings Bank,
Robert H. Lacey. cashier Columbis
National Bank; Fred Mckee vice
president Security Savings & Com.
merce; L. P. McLachlen, presiden,
OF the McLachlen Banking Corp.
Richard A. Morris, executive yict
president Lincoln National Bank,
G. F. Burton, president of the Cit,
Bank, and Bruce Baird, president
National Savings & Trust Co.