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Show . Dishonest Bank Officials. Editor Intermountain Catholic: j iTf E SIMPLE miners discussing the yy shortage in bank accounts, were surprised to learn from the daily press that two semi-officials of a bank could for ten years systematically purloin pur-loin the funds unbeknown to those who should protect the bank and its creditors. cred-itors. Is this so? If there is no protection pro-tection for the bank in this respect, then the safety of the strongest bank financially is at the mercy of dishonest officials. Two of our party, claiming to be bookkeepers, gave their view of the question. Tom Brown argued that with the present system of expert bookkeeping, and auditing accounts, such as exists in our lodge or In railroad rail-road offices, it, could not be carried on for three months; that a leakage would be discovered at least in the annual summing up of all accounts. John Jones says that two in collusion could do the work and escape detection. He gives this example to illustrate how it could be done.. A. B and C are depositors de-positors Jn a bank; they are absent and draw occasionally on the funds. To take a certain sum from the vaults, A's supposed check is in evidence to balance. To square A's account at the end of the month B's supposed check to A is in evidence, and to square B's account, C's supposed check is drawn In favor of B. By manipulating in this manner, it can be carried out indefinitely indefi-nitely without arousing suspicion. This is Jones' explanation. Brown maintains that this is impossible, or maintains that this is impossible. 'Who is right? Can you explain th intricacies of banking, or show if it is : impossible to carry out a conspiracy ' for a number of years to rob a bank in a systematic manner. OLD MINER. Park City, July 7. 1902. The above inquiry opens a very wide field ,and we have not the space to go into the matter, as fully as requested. Briefly, however, we would answer our correspondent as follows: The modern system of banking is in substance, this: A customer brings his money to the bank and leaves, taking simply the promise of the bank to pay it back to him. There is no security for this promise (except in the case of an investment bank, with which we are not now dealing). The promise of the bank to repay the money mon-ey is usually in the form of a pass book, issued by the bank to the customer. cus-tomer. As the customer wants his money he signs w rit I en orders for it, usually in the form of checks. These checks are held' by the bank as receipts, re-ceipts, until such time as the customer custo-mer brings in his pass book, when they are returned to the customer, and the amount thereof entered in the pass book. This is usually done at the end of each month. If an employe of the bank, wishing to steal some of the customer's cus-tomer's money, should forge his name to a check, that check would, in the ordinary course of business, find its way to the customer, and thus the fraud be detected. In order to cover his tracks, therefore, the dishonest employe em-ploye must get hold of the pass book and falsify the entries therein, so that It will nnrrocnrtn rl wttVi tVio ammint actually due the customer. Inasmuch as all payments of money must pas3 j through the hands of the paying tel-lefr, tel-lefr, it is evident that he must necessarily neces-sarily be a party to any such fraud as above mentioned. He would know-that know-that the check was forged, not only by the handwriting, but by the circumstances cir-cumstances surrounding its presentar tion for payment. The paying teller should, therefore, never be allowed to write up a pass book. Neither should it be done by the receiving teller, r the bookkeeper. A third clerk should do it. and the same clerk should not be allowed to write up a book twice in succession. These precautions would almost surely result in some customer receiving his pass book showing a false entry, and then the whole thing would be made known. Notwithstanding all these precautions, precau-tions, however, a conspiracy might exist ex-ist among a number of the employes of the bank, the paying teller, the bookkeeper, the cashier and the clerks who wrote up the pass books, and the money of depositors might be stolen for years, the shortages being transferred trans-ferred from one account to another in such' a fashion as to escape detection. Of course if a customer holds security for his money, he does not care what the bank officials or employes may do, because it cannot cause him any loss. It is difficult, however, to imagine any such wholesale rottenness existing exist-ing for ten years under a competent manager. The manager of a bank is usually a good judge of human nature, na-ture, and in selecting and retaining employes he considers all of their surroundings sur-roundings and habits. He himself should be a man above reproach in all of his dealings, and thus set a good example to his employes. "Like master, mas-ter, like man," applies particularly to : I C"""S back will naturally pattern after his employer. If he sees his employer engaging en-gaging in speculative or questionable enterprises, using the money of "depositors "de-positors for such purposes, he will in-evitfjly in-evitfjly imitate that example when he gets a chance. The moment that the manager of a bank learns that an employe em-ploye is gambling, e'ither in stocks or with cards, he should at least caution h.i to stop it urVer penalty of dismissal, dis-missal, and should thereafter check all of his accounts with the utmost care. If the offense is repeated, dismissal is the only safe course. The case of a lodge, or a railway, is not a parallel one. In these instances the money is deposited in a bank, and checks are drawn upon the account by the officials of the lodge or railway. The pass book shows the amounts of deposits and the items drawn against the account. Any check drawn by the lodge or railway official for an improper im-proper purpose,-being a matter of permanent per-manent record, would be sure to be detected within a few months by those whose duty it is to examine the accounts. |