Modern High Standards
of Living Are to Blame
for Bank Defalcations
•••••••••••••••••••••••••••••••••••••••••••••••••••a
SAYS MR. MOXEY: ?
_ •
•
“When you can go into a restaurant at two o’clock in the morning and •
behold $60,000 worth of women's gowns at the tables and $3,000 worth of J
food in process of consumption, something is wrong.” •
“It is not only this sort of life in New York, but, in a more sinister •
i way, the sight and example of it which is bringing about a degradation 2
' of the sense of common honesty.” •
“The laxity with which the criminal laws of our land are enforced by *
i many of the judges of our courts has much to do with encouraging bank •
1 officers to misuse the funds in their keeping.” •
“New York is to blame for it.”
Gray-whiskered, gray-haired, gray
eyed, gray-clad, a slender gentleman
of astonishing neatness and a certain
amiable precision of speech leaned
back in his office chair with his hands
behind his head and smiled alertly,
writes Frank C. Drake, in the New
York World. Such is a first impres
sion of Edward P. Moxey, whose offi
cial title is “Expert Bank Examiner
for the United States Department of
Justice," and such were his words in
speaking of the epidemic of bank de
dications which has been sweeping
over the country.
Whereas Mr. Moxey's business is to
flit about the country and peer unex
pectedly over the shoulders of the
cashiers of national banks here and
there in order to find out if their cash
balances are all right; and whereas
>Ir. Moxey had found some 30 of these
gentlemen with their cash balances ail
wrong and, to their great grief and
amazement, has put them in the peni
tentiary; and whereas Mr. Moxey,
fresh from sending John R. Walsh of
Chicago to join the others, has come
to New York to look into the book
keeping of Charles W. Morse and Al
fred H. Curtis, on trial for trying, it
is alleged, to buy a national bank
with its own money; therefore does
the said Edward P. Moxey speak with
some authority of bank defalcations
and their causes.
“You mean the ‘Broadway’ New
York?” 1 asked.
‘‘Broadway” Blamed.
“1 mean the ‘Broadway’ New York,’
he answered quietly. “I mean the
gorgeous hotels and restaurants, the
bars, the gambling houses, the myriad
theaters, and palatial apartment
houses, the turning of night into day.
I mean the flood 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 even a bare majority
of the tens of thousands of men who
nightly swell the crowd of amuse
ment-crazed spenders, who live in
$5,000 apartments, and whose touring
cars congest the streets, are doing
this with money which is honestly
theirs is absurd. They are not earn
ing this money; they are either jug
gling other people’s cash or they are
gambling with their own. When you
can go into a restaurant at two o’clock
in the morning and behold $60,000
worth of women’s gowns at the tables
and $3,000 worth of food in process
of consumption, something is wrong.
And when you observe half a million
dollars’ worth of automobiles waiting
to take this one supper crowd to their
homes—or elsewhere—you may be
sure 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,
the sight and example of it, which is
bringing about a degradation of the
sense of common honesty throughout
the country. That fine American as
set, the 'New England conscience,' has
become an object of jest. And, as 1
said, 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 all wish to
live. To-day in towns as small as
25,00i) population there are springing
up all-night grill rooms with Hun
garian orchestras, wherein the young
business men of these communities
must foregather if they are to be in
the social swim with their local smart
set.
“The young banker or business man
in the smaller community comes to
New York. He is taken in hand by
his business acquaintances here and
shown about the 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 by
name and where he is introduced to a
scale of living fit only for men of
millions. He wmnders how his friends
manage to share in this prodigality,
and bit by 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; ‘it's
Part of the game.’ And back to his
heme town goes the young banker,
filled with dreams of sudden wealth
and all the gay life that goes with it.
First Step to Ruin.
“Too often this person starts to lead
the gay life before he has got the
sudden wealth. He sees the rich cus
tomer of his bank rolling up to the
door with a big deposit or to get a
letter of credit for a trip abroad. He
suspects—perhaps rightly—that their
money came by some financial leger
demain as his New York friends have
described with so much relish. Per
haps, he tells himself, it isn't their
money at all. Why, then, shouldn’t
he manipulate it for his own gain;
w’hy isn’t it anybody's to play with
who can get his hands on it? The
life he has seen, the methods he has
learned are destroying his sense of
property. He is somehow getting it
into his head that this money placed
in his keeping is a sort of common
property and that, so 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 so.
“Indeed,” said Mr. Moxey with a
certain stern tingle in his voice, “the
attitude of trusteeship has suffered a
shocking change in recent years. I
say in recent years, not because I am
one of those pessimistic old fogies
who think that people generally were
more honest in other days, which they
were not. but because it has been my
experience of many years, that these
periods of defalcation come in cycles.
Whatever the cause, there are cycles
of honesty and cycles of dishonesty;
and the present is a cycle of dishon
esty with its cause in modem stand
ards of enjoyable living.
, Laws Not Enforced.
And let me make my opinion em
! phatic that the laxity with which the
criminal laws of our land are enforced
by many of tbe judges of our courts
has much to do with encouraging bank
officers to misuse the funds in their
keeping. These officers 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
results of a trial, before the too fre
quent judge whose 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 bank's funds to promote enter
prises in which the bank's officers
have interested themselves. In many
cases the bank officer is made an j
officer of the outside corporation,
which fact is heralded to the world
with all the advertising skill of the
promoter, and upon the reputation of
his name many are induced to buy
stock. Now, one of the main reasons
which animated the promoter in finan
cially interesting the banker was that
if at any time the concern required
financial assistance—which is invari
ably the case—it could readily be
obtained through him from the bank
of which he was an honored and
trusted officer. Experience shows
that what was at first a small loan
soon increases in amount until a
point is reached which means disas
ter to all parties interested if 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 reputa
tion as a financier and a man of in
tegrity.
Glitter of Speculation.
“Then, too, it often happens that
I instead of becoming financially inter
| ested in new projects or outside busi
ness enterprises the bank officer suc
| cumbs to the seductive influences of
speculation. He 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
effort.
“He pursues the same method that
is followed by those who buy or sell
stocks, grain or cotton on a margin.
His 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
j 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 be met.
Having exhausted his own money, j
and being convinced that his ideas!
as to the future course of the market
are 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-!
ket as a lamb, and In consequence is
thoroughly fleeced.
Instances Innumerable.
“But there are many, many causes,”
continued Mr. Moxey.with a brisk lit
tle sigh. "A large bank in one of our
eastern cities was wrecked through
the speculations of its president in
stocks; another one through specu
lations of its cashier in the
same market. Some years ago a
large bank in the middle west was
wrecked by its vice-president in an at
tempt to corner the wheat market;
while a bank in a southern city was
wiped out of existence by its presi
dent’s and cashier's speculations in
the cotton market. The number of
cases that could be cited are in
numerable, and there is not a section
of the country that has escaped. The
number of bank' wrecks piled upon
the financial beach is a silent monu
ment to this truth.
“But no president, vice-president,
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 re
garding what is being done in their
presence that bank officers are en
abled and, in many cases, encour
aged to take the bank’s money. If
bank clerks tvould do their full duty
there would be fewer cases of defalca
tion by the officers than in these
sorry times.
Bank Clerks Tempted.
“And in this connection let me re
mark that while the bank officer is
surrounded on all sides by temptation
and some criminally use the bank's
funds, one must not for a moment
think that they are the only ones
connected with the institution who
are subject to temptation and who,
far too often, listen to the voice of
the tempter and become defaulters.
Every clerk in the bank, whether he
handles a dollar of the bank’s money
or not, is subject to many, if not all
of the temptations that beset his su
perior officer. The defalcations by
the clerical force of banks can be
traced to nearly all the causes enum
erated as being the cause of 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 foi
speculation, in the stock, grain or cot
ton market, or for games of chance at
the- gambling house, or for betting at
the race track, or for extravagant liv
ing, etc., has been encouraged to take
his first false step by the loose man
ner in which the affairs of the bank
were conducted and its accounts kept.
He saw the slip-shod way in which
things were done, by every one con
nected with the bank, that clerical
errors in the books were not located
and corrected, and that general mis
management prevailed. Is it any won
der that he used the funds of the
bank and took the chances of 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 v-ho is merely a
clerk in the bank and whose misdeeds
are usually traceable to a lack of prop
er supervision of his work by his
superiors is generally brought to book
for his dishonesty. He is usually con
victed, poor fellow. He has no influ
ential associates to use their power to
shield him. He has no money or
wealthy relatives or friends to employ
able criminal lawyers to defeat the
ends of justice. The bank officer, on
“The New England Conscience Is Now a Jest. The Present Is a Cycle of Dis
honesty Due to Moder.i Standards of Luxury.”
ing according to the size of his opera
tions and the fluctuations of the mar
ket, before he is hopelessly involved
and financially unable to return the
money of the bank which he has used.
He now speculates more wildly than
i before and upon a much larger sca'e.
with the hope that one fortunate tur
of the market will enable him to ma'
I enough money to square himself wit
the bank. In his case history on
repeats itself. He went into the mar
' the other hand, having what his clerk
sorely lacks, too often escapes the
just punishment which his criminal
acts demand.”
To Help Cause in Pacific State.
Dr. Martha Hughes Cannon, former
ly a state senator of Ctah, has gone
to live in California with the intention
'■f helping the women of that state to
ecual suffrage. He is described as
• erful and ndtty sneaker
Story Should be Remembered.
In speaking of the death at Mainz of
Gottlieb Glaser, the old prompter of
the Stadttheater of that city, a Bos
ton paper says: “He was modest in
his work and did it without show or
bluster. As he lived, so he passed
away, and a short paragraph was all
that the press bestowed upon him.
This one story should be remembered:
One evening the house was crowded
in honor of a popular tenor. At that
time when he should have done his
best the tenor's voice suddenly failed
him. He looked helplessly toward the
top of the house, the members of the
orchestra became nervous and the
audience shared in the discomfort. But
help came—not from above, but—
from the prompter's box. He realized
the situation and began where the
tenor had left off and for the first and
only time sang an operatic solo. The
audience applauded wildly, the ten'm
bowed and the leader of the orches
tra banged his applause with his baton
on the prompter's box and shouted:
Bravo, Glaser.”
Rerrember the Pioneers.
It may be that some of the yon
generation are inclined to •
debt they owe to the m ■
even to scoff at their :i -o.
ideals. If this is true it .
and there is all the
the perpetuation of j .. 01
tior.s and the wielding of pioneer in
f iance To belong to such an organ
ar t n is to be insr-ribed on a role of
honor In this new country it is al
most a title of neb 'ity The sons and
s a dsons of th s r u: ■ ly men and
women should <> s! their history
d iraditions and r s rva them from ■
>n
"ater Main.
ee-i t’ e means
ae \ia.er mains
• o.
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Forest experiment stations will soon
be established in a number of the na
tional forest states of the west accord
ing to plans which have just been com
pleted by the Fnited States forest
service. These new stations are ex
areas will furnish the most valuable
and instructive object lessons for the
public is general, for professional for
esters, lumbermen and admisinstrative
officers of the national forests.
In the recently established station
on the Coconino national forest one of
the first problems to be taken up will
be the study of the reproduction of
western yellow pine and the causes of
its success and failure. A solution of
this problem of how to obtain satisfac
tory reproduction of the yellow pine
is of the greatest practical importance
to the southwest, since the yellow
pine, which is by far the most val
uable tree there, is in many cases not
forming a satisfactory second growth.
The study will be carried on largely
by means of sample plots.
Other studies which will be taken up
soon are a study of the light require
ments of different species at different
altitudes and the construction of a
scale of tolerance which will be based
on the actual measurements of the
light intensity, and not only, as has
hitherto been the case, on general ob
servations alone; the taking of
meteorological observations to deter
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pected to do the same for development
of American forests as agricultural ex
periment stations have done for the
improvement of the country’s farms.
As a first step in this work an ex
periment station has already been es
tablished on the Coconino national for
est in the southwest, with headquar
ters at Flagstaff, Ariz. Stations in
other national forests will be estab
lished later, and it is the intention ulti
mately to have at least one experi
ment station in each of the silvicul
tural regions of the west.
One of the most important parts of
the work of the new experiment sta
tions will be the maintenance of model
forests typical of the region. These
mine the effect of the forest upon tem
perature, humidity, melting of snow,
wind velocity, etc.; a study of the rela
tive value of the germinating power
of seeds from trees of different sizes,
ages and degrees of health; and sim
ilar studies of value to the region. A
complete collection of the flora of the
forest will be made to form a herba
rium.
These stations will carry on scien
tific experiments and studies which
will lead to a full and exact knowledge
of American silviculture, and the indi
rect benefits of the forests and will
deal particularly with those problems
of particular importance to the regions
in which they are located.
THE PINCH HITTER
A Wonderful Part of the Up-to-Oate
Baseball Nine Is He.
“I have followed baseball for some
years,” remarked the man, "and the
more games 1 see the more I wonder
at the mental and nervous make-up of
the man who is sent to the hat in
pinches.
“The pinch hitter, to my mind, is
the most wonderful player of them all.
There are men who can go through
game after game, hitting fairly well
all the time, but the chances are that
they will not make a hit when it is
most needed.
“On the other hand, there are play
ers who can sit on a bench all the
afternoon until the very -],ast inning
and then when sent in at a critical
juncture to bat for some weaker man
are able to land on the ball when a
hit means a run.
“Hitting is so difficult an art, with
all the present-day restrictions in fa
vor of the pitcher, that I admire great
ly the man who can hit at all. But
E-—-—-—- —.—I....
the fellow who is almost certain to
get a hit when it is needed in a pinch
is marvelous to me, especially when
you realize that he has been sitting
around idle all the afternoon and the
other fellows have had a chance to
size up the opposing pitcher by facing
him several times.
“And, curiously enough, when a
pinch hitter gets a regular place on a
team and plays the regulation length
of time day after day he isn’t likely
to pan out at all as a hitter. He is
very apt to fall away down before
three weeks have passed.”
About Due.
Mrs. McGillicuddy, thinking her hus
band was rather late in coming home
on Saturday with his pay, went to
the police station in inquire if he
was there.
“Is my Pat ’ere?” she asked.
“No,” replied the inspector on du
ty, “but sit down; we’re expecting him
every minute.”
A MERE CIPHFR.
Bertha—Bertie, you are simply im
possible.
Bertie—Nothing is impossible.
Bertha—That's what I said.
A Linguist.
The charm of Mrs. Ruth McEnery
Stuart’s negro dialect stories was
greatly enhanced when she read them
herself, as she used frequently to do
in the early days of her fame, for
charity and church entertainments.
Her imitation of the negro dialect was
excellent, and her small son. who was
very fond of her accomplishment in
this line, frequently boasted of it
among the other children. Once, w hen
some of his schoolmates were vaunt
ing the accomplishments of their sev
eral mothers, he was overheard to de
clare:
"Well, my mother is smarter than
any of yours. She can speak two lan
guages.”
"What are they?” demanded his
companions.
"White and colored.”
The extraordinary popularity of fine
white goods this summer makes the
choice of Starch a matter of great im
portance. Defiance Starch, being free
from all injurious chemicals, is the
only one which is safe to use on fine
fabrics. Its great strength as a stiffen
er makes half the usual quantity ot
Starch necessary, with the result of
perfect finish, equal to that when the
goods were new.
Bone of Contention.
“Death usually heals all family dif
ferences,” said the old-fashioned philo
sopher.
“Yes,” replied the shrewd observer,
“but usually the reading of the will
separates them again.”—Detroit Free
Press. _
"Cheap Skates.”
In the town of North Andover, in
habitants have been seen to smile
derisively at the following card in a
hardware show window: “Kittner &
Spinney, Cheap Skates. Come in and
Look Them Over.”
Nothing I Ate
Agreed With Me.
MRS.LENORA BODENHAMER.
-Mrs. Ben ora Bodenhamer, R. 1 . D. 1,
Box 99, Kernersville, Ji. C.. writes:
“I suffered with stomach trouhleand
indigestion for some time, and nothing
that I ate agreed with me. 1 was very
nervous and experienced a continual
feeling of uneasiness and fear. 1 took
medicine from the doctor, but it did me
no good.
"I found in one of your Peruna books
a description of my symptoms. 1 then
wrote to Dr. Hartman for advice. He
said I had catarrh of the stomach. I
took Peruna and Manalin and followed
his directions and can now say that I
feel as well as I ever did.
“I hope that all who are afflicted with
the same symptoms will take Peruna,
as it has certainly cured me. ”
The above is only one of hundreds
who have written similar letters to Dr.
Hartman. Just one such case as this
entitles Peruna to the candid consider
ation of everyone similarly afflicted If
this be true of the testimony of one per
son what ought to be the testimony of
hundreds, yes thousands, of honest, s n
cere people. We have in our files a
great m tny other testimonials.
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