Show T = t 1 Modern High Standards It I t I of Living Are to Blame I for Bank Defalcations rw u l5r v h i f t 1f r jI 4 a tit wow 4 t i Cpl F 4 jIl Jai Y Y fhtksN < pY rJ > i > nryf T A H Vf YrJ SOH f ° 1 J fi 6 J I If tt to ioI < < tjj v A > l l > k > Y w aS i I JI 4 L 1 f zc j I i r 1C pt w I i kXt 1 n I q Jk t u I eoeo e e oo oooo G I SAYS MR MOXEY 0 I When you can go Into a restaurant at two oclock In the morning and behold 60000 worth of womens gowns at the tables and 3000 worth of o food In process of consumption something Is wrong It Is not only this sort of life In New York but In a more sinister 0 way the sight and example of It which Is bringing about a degradation o of the sense of common honesty 0 e The laxity with which the criminal laws of our land are enforced by many of the judges of our courts hal nuch to do with encouraging bank 0 f I o officers to misuse the funds In their keeping o rZ oeoawoe > ea i AA Now York Is to blame for it f OravjvhJBkflrcU jy JUaiCTl r gray e rctI 1 grayclad a slender gentleman Yet astonishing neatness and a certain amiable precision of speech leaned hack In his bfllce chair with his hands I behind his head and smiled alertly writes Frank C Drake in the Now York World Such is a first impression Impres-sion of Edward P Moxey whose offl clal title Is Expert Bank Examiner for the United Slates Department of Justice and such were his words In speaking of the epidemic of bank defalcations de-falcations which has been sweeping over the country Whereas Mr Moxeys business Is to lilt about the country and peer unexpectedly unex-pectedly over the shoulders of the cashiers of national banks here and there In order to find out If their cash balances are nil right and whereas Air Moxey had found some 30 of these KUttlonieii with tholr cash balances all wrong and to their great grief and annulment has put them in tho penitentiary peni-tentiary and whereas Mr Moxey fresh from sending John It Walsh of Chicago to Join tho others has come to Now York to look Into tho bookkeeping book-keeping of Charles W Morse mid Alfred Al-fred II Curtis on trial for trying It Is roicgud to buy a national bank with Its ou money therefore does the said Edward P Moxoy speak with some authority of hank defalcations and their causes You mean the Broadway New York I asked Broadway Blamed I mean tho Broadway1 Now York ho answered quietly I mean the gorgeous hotels and restaurants the bars the gambling houses the myriad theaters and palatial apartment houses tho turning of night into day I mean the Hood of money In New York upon which this life Is borne along the craving for vast incomes by which alone such a life can be lived To say that oven a bare majority of the tens of thousands of men who nightly swell the crowd of amuse nment crazed Hpendors who live In 5000 apartments and whose touring cars congest tho streets are doing this with money which Is hcnestly theirs Is absurd They aro not earnIng earn-Ing this money they I ate elthe juggling jug-gling other peoples cash or they are gambling with their own When you can go Into a restaurant at two oclock In the morning and behold GO000 worth of womens gowns at the tables niiil 3000 worth of food In process of consumption something is wrong And when you observe half u million dollars worth of automobiles waiting to take this one supper crowd to their homes or elsewhere you may beMire be-Mire that there Is queer bookkeeping somewhere All Copy New York It Is not only this sort of life In New York but In a more sinister way oe < c K felt i and example of it which Is Ringing < about a degradation of tti d sense of common honesty throughout tho country That fine American asset as-set the Now England conscience has become an object of jest And as I Bald New York Is to blame As In all other matters theatrical literary and artistic the other cities and towns take their cue from New York As New York lives so they nil wish to live Today in towns as small as 25000 population there arc springing up allnight grill rooms with Hungarian Hun-garian orchestras wherein the young business men of these communities must foregather if they are to be 1 litho li-tho social swim with their local smart set The young banker or business man in fie smaller community comes to Now Jork Ho Is taken In hand by his business acquaintances hero and I shown about tho town His hosts spend money on a scale which dazzles him They take him to luxurious hotels and cafes where they and the head waiters know each other byname by-name and where he Is Introduced to a scale of living lit only for men of millions He wonders how his friends manage to share In this prodigality and bit bv bit he finds out They tell him funny stories of transactions which reduced to a proper financial analysis are defalcations pure and simple or at best plain gambling Everybody does It they say Its part of ttio game And back to his homo town goes the young banker filled with dreamsj of sudden wealth and all the gay life that goes with It I b I First Step to Ruin Too often this person starts to lead I the gay life before be has got the sudden wealth lie sees the rich cue I tomur of his hank rolling up 1 to the I door with a big deposit or to get a letter of credit for a trip abroad Ho I I suspects perhaps rghtly that their money came by some financial leger demrJn as his New York friends have I tlescilbed with so much relish Perhaps Per-haps he tells himself it Isnt their money at all Why then bhouldnt ho manipulate It for his own gain why isnt it anybodys to play with who can get his hands on it Tho I life he has seen the methods ho has I learned are destroying his sense of property Ho IH somehow getting it I Into his head that this money placed In lilac keeping Is a sort of common property and that HO long as he can keep his books looking technically right he may Juggle with It for the benefit of his own personal pocket He really comes to believe seriously that this is FO Indeed said Mr Moxoy with a certain stern tingle In his voice tho attitude of trusteeship has suffered a shocking change In recent years I say in recent yearn not because I am ono of those pessimistic old fogies who think that people generally were I I more honest in other days which they were not but because It has been my experience of many years that those periods of defalcation come In cycles Whatever the cause there are cycles of honesty and cycles of dishonesty and tho present Is a cycle of dishonesty dishon-esty with its cause In modern standards stand-ards of enjoyable living Laws Not Enforced Amid let me make my opinion emphatic em-phatic that tho laxity with Which the criminal laws of our land are enforced bv many of the Judges of our courts bus much to do with encouraging bank olllcers to misuse the funds In their keeping These otllcers see too many cases of the difficulty In convicting a dishonest bank official when defended by a shrewd criminal lawyer and they are therefore willing to take the chances of detection and even the resultsof a trial before the too frequent fre-quent judge whoso Interpretation of the law admitting of evidence and charge to the jury are all in favor of the accused There are many direct causes for bank defalcations but the primal cause Is the desire for luxury fostered In the great cities Of late years the chief Immediate cause Is the using of the hanks funds to promote enterprises enter-prises In which tho banks officers hale Interested themselves In many cases the bank officer Is made an officer of the outside corporation which fact Is heralded to tho world with all the advertising skill of the promoter and upon the reputation of his name many arc Induced to buy stock Now one of the main reasons which animated tho promoter In financially finan-cially Interesting the hanker was that If at any time the concern required financial assistance which Is Invarl ably time cnlleIt could ioadlly be obtained through him from the bank of which ho was an honored and trusted olllcer Experience shows that what was nt first a 1 small loan soon Increases In amount until a point Is leached which means disaster disas-ter to all parties Interested If additional addi-tional aid is not given Then It Is that the demand for money must be met to prevent the bankruptcy of the new corporation and the consequent loss not only of the money Invested by the banker and his many friends but also the loss of his own reputation reputa-tion as a financier and a man of Integrity In-tegrity Glitter of Speculation Then too it often happens that instead of becoming financially interested inter-ested in new projects or outside business busi-ness enterprises the bank officer succumbs suc-cumbs to the seductive Influences of speculation lIe tries his hand In the stock grain or cotton market with the belief that In this way he can amass a fortune In a short time and without I effort r ntlIi Ji f dFeSaTne methocr tnat Is followed by those who buy or sell stocks grain or cotton on a margin Ills whole Idea is to get rich quick and in order to accomplish this he either buys or sells the largest amount possible with the smallest amount that his broker will accept as margin A slight adverse change In the market price of the commodity or security In which he Is speculating wipes out his margin and a call from his broker for additional margin to carry the transaction must bo met Having exhausted his own money and being convinced that his Ideas as to the future course of the market aro correct he makes the false step of borrowing money from the bank and using It as margin with his broker It Is only a question of time vary a 1 ket as n Iamb and In oaci4 + nce I I thoroughly lleoced Instances Innumerable But there are many many causes continued Mr Moxey with a brisk little lit-tle sigh A largo bank in one of our eastern cities was wrecked though tho speculations of Its president III stocks another one through speculations specu-lations of Its cashier In tho same market Some years ago a large bank in tho middle west WRit wrecked by Its vlcopreshlent In an attempt at-tempt to corner the wheat market while a bank In a southern city was wiped out of existence by Its presidents presi-dents and cashiers speculations In the cotton market The number of cases that could bo cited lure innumerable in-numerable and there is not a section of the country that has escaped Tho number of bank wrecks piled upon the financial btacli is a silent monument monu-ment to this truth But no president vicepresident cashier or assistant cashier of a bank can use Its funds for his own profit without the fact being known to at least a portion of the clerks and it Is through their silence or stupidity regarding re-garding what Is being done in their presence that hank officers aro enabled en-abled and in many cases encouraged encour-aged to take tho banks money If bank clerks would do their full duty there would ho fewer cases of defalcation defalca-tion by tho officers than in these sorry times Bank Clerks Tempted And in this connection let me remark re-mark that while the bank officer Is surrounded on all sides by temptation and some criminally use the banks funds one must not for a moment I think that they are tho only ones connected with the institution who are subject to temptation and who far too often listen to the voice of tho tempter and become defaulters Every clerk In the bank whether ho handles a dollar of the banks money or not is subject to many if not all of the temptations that beset his superior su-perior officer The defalcations by the clerical force of banks cnn be traced to nearly all the causes enumerated enum-erated as being the cause of defalcations defalca-tions by officers But at bottom the fault is with the officers Many a bank clerk who has been unfaithful to his trust and has used the funds of the Institution with which he was connected for speculation in the stock grain or cotton cot-ton market or for games of chance nt the gambling house or for betting at the race track or for extravagant living liv-ing etc has been encouraged to take his first false step by the loose manner man-ner In which the affairs of the bank were conducted and Its accounts kept He saw the slipshod way In which things were done by every one con r ctm 1OIt the bank that clerical errors In the tr oKsw re not located and corrected and that general mismanagement I mis-management prevailed Is It any wonder won-der that ho used the funds f the bank and took the chances of detection detec-tion with such a condition of affairs surrounding him The marvel Is that under such conditions more do not succumb to temptation The defaulter who is merely a clerk In the bank and whose misdeeds are usually traceable to a lack of proper prop-er supervision of his work by his superiors is generally brought to book for his dishonesty He Is usually convicted con-victed poor fellow He has no Influential Influ-ential associates to use their power to shield him He has no money or wealthy relatives or friends to employable employ-able criminal lawyers to defeat tho ends of justice The bank officer on r C 1 + a at I 4 t a 4 i S 1 > I 7 o I it I r u r pr r lh t 11 6 jT o r 1 t J 1 The New England Conscience Is Now a Jest The honesty Due to Modern Standards of Present Luxury Is II Cycle of Dla ing according to the size of his opera I tlons and the fluctuations of the market mar-ket before ho is hopelessly involved and financially unable to return tho money of the bank which he has used Ho now speculates 111010 wildly than before and upon a much larger scale with the hope that one fortunate turn of tho market will enable him to niako enough money to squat himself with the bank In his ease history only repents Itself Ho went Into the mar I the other hard having what his clerk sorely lacks too often Just escapes the 1lIIIIIRIlIucIII whIch his crlmlnnl acts leml1llI |