"He that maketh haste to be rich shall not be innocent."
--PROVERBS 28:20.
The victim of moral overstrain is the central figure in many novels and
countless magazine stories. In most of them he finally repents him fully
of his sins past and returns to his former or to some equally desirable
position, to lead a new and better life. The dangers and temptations of
the "Street" are, however, too real and terrible to be studied other
than in actuality, and the fall of hundreds of previously honest young
men owing to easily remedied conditions should teach its lesson, not
only to their comrades, but to their employers as well. The ball and
chain, quite as often as repentance and forgiveness, ends their
experience.
No young man takes a position in a banking-house with the deliberate
intention of becoming an embezzler. He knows precisely, as well as does
the reader, that if he listens to the whisper of temptation he is
lost--and so does his employer. Yet the employer, who would hold himself
remiss if he allowed his little boy to have the run of the jam-closet
and then discovered that the latter's lips bore evidence of petty
larceny, or would regard himself as almost criminally negligent if he
placed a priceless pearl necklace where an ignorant chimney-sweep might
fall under the hypnotism of its shimmer, will calmly allow a condition
of things in his own brokerage or banking office where a
fifteen-dollars-a-week clerk may have free access to a million dollars'
worth of negotiable securities, and even encourage the latter by
occasional "sure" tips to take a flyer in the market.
It is a deplorable fact that the officers of certain companies
occasionally "unload" undesirable securities upon their employees, and,
in order to boom or create a "movement" in a certain stock, will induce
the persons under their control to purchase it. It would be a rare case
in which a clerk who valued his situation would refuse to take a few
shares in an enterprise which the head of the firm was fathering. Of
course, such occurrences are the exceptions, but there are plenty of
houses not far from Wall Street where the partners know that their
clerks and messengers are "playing the market," and exert not the
slightest influence to stop them. When these men find that they and
their customers, and not the clerks and messengers, are paying the loss
accounts of the latter, they are very much distressed, and tell the
District Attorney, with regret, that only by sending such wicked and
treacherous persons to State's prison can similar dishonesty be
prevented.
Not long ago the writer became acquainted with a young man who, as loan
clerk in a trust company, had misappropriated a large amount of
securities and had pleaded guilty to the crime of grand larceny in the
first degree. He was awaiting sentence, and in connection therewith it
became necessary to examine into the conditions prevailing generally in
the financial district. His story is already public property, for the
case attracted wide attention in the daily press; but, inasmuch as the
writer's object is to point a moral rather than adorn a tale, the
culprit's name and the name of the company with which he was connected
need not be given.
He is now serving a term in State's prison and is, the writer believes,
sincerely repentant and determined to make a man of himself upon his
release. For present purposes let him be called John Smith. He was born
in New York City, in surroundings rather better than the average. His
family were persons of good education and his home was a comfortable and
happy one. From childhood he received thorough religious instruction
and was always a straightforward, honest and obedient boy. His father,
having concluded from observation that the shortest route to success lay
in financial enterprise, secured a place in a broker's office for his
son after the latter's graduation from the high school. John began at
the bottom and gradually worked up to the position of assistant loan
clerk in a big trust company. This took fifteen years of hard work.
From the day that he started in filling inkwells and cleaning out ticker
baskets, he saw fortunes made and lost in a twinkling. He learned that
the chief business of a broker is acting as go-between for persons who
are trying to sell what they do not own to others who have not the money
to pay for what they buy. And he saw hundreds of such persons grow rich
on these fictitious transactions. He also saw others "wiped out," but
they cheerfully went through bankruptcy and began again, many of them
achieving wealth on their second or third attempt. He was earning five
dollars a week and getting his lunch at a "vegetarian health restaurant"
for fifteen cents. The broker, for whom he ran errands, gave away
thirty-five-cent cigars to his customers and had an elaborate luncheon
served in the office daily to a dozen or more of the elect. John knew
one boy of about his own age, who, having made a successful turn, began
as a trader and cleaned up a hundred thousand dollars in a rising market
the first year. That was better than the cleaning up John was used to.
But he was a sensible boy and had made up his mind to succeed in a
legitimate fashion. Gradually he saved a few hundred dollars and, acting
on the knowledge he had gained in his business, bought two or three
shares in a security which quickly advanced in value and almost doubled
his money. The next time as well fortune favored him, and he soon had a
comfortable nest-egg--enough to warrant his feeling reasonably secure in
the event of accident or sickness.
He had worked faithfully, had given great satisfaction to his employers,
and presently had a clerical position in a prominent trust company
offered to him. It seemed an advance. The salary was larger, even if
absurdly small, and he gladly accepted the place.
Shortly after this he had his first experience in real finance. The
president of the company sent for him--the reader will remember that
this is a true story--and the boy entered his private office and came
into the august presence of the magnate. This man is to-day what is
commonly known as a "power" in Wall Street.
"My boy," said the president, "you have been doing very well. I have
noticed the excellence of your work. I want to commend you."
"Thank you, sir," said John modestly, expecting to hear that his salary
was to be raised.
"Yes," continued the great man. "And I want you to have an interest in
the business."
The blood rushed to John's head and face. "Thank you very much," he
gasped.
"I have allotted you five shares in the trust company," said the
president. "If you take them up and carry them you will feel that you
have a real connection with the house and it will net you a handsome
return. Have you any money?"
It so happened that at this time John's savings were invested in a few
bonds of an old and conservatively managed railroad. His heart fell. He
didn't want to buy any bank stock.
"No," he answered. "My salary is small enough and I need it all. I don't
save any money."
"Oh, well," said the magnate, "I will try and fix it up for you. I will
arrange for a loan with the ---- Bank on the stock. Remember, I'm doing
this to help you. That is all. You may go back to your books."
Next day John was informed that he had bought five shares of ---- Trust
Company stock in the neighborhood of three hundred, and he signed a note
for one thousand four hundred and twenty-five dollars, and indorsed the
stock over to the bank from which the money had been borrowed for him.
The stock almost immediately dropped over fifty points. John paid the
interest on the note out of his salary, and the dividends, as fast as
they were declared, went to extinguish the body of the loan. Some time
afterward he learned that he had bought the stock from the magnate
himself. He never received any benefit from it, for the stock was sold
to cover the note, and John was obliged to make up the difference. He
also discovered that ten or fifteen other employees had been given a
similar opportunity by their generous employer at about the same time.
John, in prison, says it was a scheme to keep fifty or a hundred shares
where it could easily be controlled by the president, without risk to
himself, in case of need. Of course, he may be wrong. At any rate, he
feels bitterly now toward the big men who are at large while he is in
jail.
John continued to keep up with the acquaintances formed during his years
in the broker's office, many of whom had started little businesses of
their own and had done well. Part of their stock-in-trade was to appear
prosperous and they took John out to lunch, and told him what a fine
fellow he was, and gave him sure tips. But John had grown "wise." He had
had all the chances of that sort he wanted, and from a bigger man than
any of them. He ate their lunches and invited them in return. Then he
economized for a day or two to even up. He was not prosperous himself,
but he did not accept favors without repaying them.
One thing he observed and noted carefully--every man he knew who had
begun a brokerage business and kept sober, who attended to business and
did not speculate, made money and plenty of it. He knew one young firm
which cleared up fifteen thousand in commissions at the end of the
second year. That looked good to him, and he knew, besides, that _he_
was sober and attended to business. He made inquiries and learned that
one could start in, if one were modest in one's pretensions, for two
thousand five hundred dollars. That would pay office rent and keep
things going until the commissions began to come in. He started to look
around for some other young man who could put up the money in
consideration of John's contributing the experience. But all the men he
knew had experience without money.
Then by chance he met a young fellow of bright and agreeable personality
whom we shall call Prescott. The latter was five or six years older than
John, had had a large experience in brokerage houses in another city,
and had come to New York to promote the interests of a certain copper
company. John had progressed and was now assistant loan clerk of one of
the biggest trust companies in the city, which also happened to be
transfer agent for the copper company. Thus John had constantly to
handle its certificates. Prescott said it was a wonderful thing--that
some of the keenest men in the Street were in it, and, although it was a
curb stock, strongly advised his new friend to buy all he could of it.
He assured John that, although he was admittedly interested in booming
the stock, he was confident that before long it would sell at four times
its present quotation.
Meantime the stock, which had been listed at 2-1/4, began to go rapidly
up. Word went around the trust company that it was a great purchase
anywhere below 10, and John, as well as the other boys employed in the
company, got together what money he could and began to buy it. It
continued to go up--they had unconsciously assisted it in its
ascent--and they bought more. John purchased seventy-five shares--all
the way up to 8 and 9. One of his friends took eight hundred. Then it
dropped out of sight. They hadn't time to get out, and John, in prison,
has his yet. But he still had faith in Prescott, for he liked him and
believed in his business capacity.
The stock "operation" over, Prescott began to prospect for something
new, and suggested to John that they form a brokerage house under the
latter's name. John was to be president at "a fixed salary." It sounded
very grand. His duties at the trust company began to seem picayune.
Moreover, his loss in copper had depressed him and he wanted to recoup,
if he could. But how to get the two thousand five hundred dollars
necessary to start in business? Prescott pleaded poverty, yet talked
constantly of the ease with which a fortune might be made if they could
only once "get in right." It was a period of increased dividends, of
stock-jobbing operations of enormous magnitude, of "fifty-point
movements," when the lucky purchaser of only a hundred shares of some
inconspicuous railroad sometimes found that he could sell out next week
with five thousand dollars' profit. The air seemed full of money. It
appeared to rain banknotes and stock certificates.
In the "loan cage" at the trust company John handled daily millions in
securities, a great part of which were negotiable. When almost everybody
was so rich he wondered why any one remained poor. Two or three men of
his own age gave up their jobs in other concerns and became traders,
while another opened an office of his own. John was told that they had
acted on "good information," had bought a few hundred shares of Union
Pacific, and were now comfortably fixed. He would have been glad to
buy, but copper had left him without anything to buy with.
One day Prescott took him out to lunch and confided to him that one of
the big speculators had tipped him off to buy cotton, since there was
going to be a failure in the crop. It was practically a sure thing. Two
thousand dollars' margin would buy enough cotton to start them in
business, even if the rise was only a very small one.
"Why don't you borrow a couple of bonds?" asked Prescott.
"Borrow from whom?" inquired John.
"Why, from some customer of the trust company."
"No one would lend them to me," answered John.
"Well, borrow them, anyhow. They would never know about it, and you
could put them back as soon as we closed the account," suggested
Prescott.
John was shocked, and said so.
"You are easy," said his comrade. "Don't you know that the trust
companies do it themselves all the time? The presidents of the railroads
use the holdings of their companies as collateral. Even the banks use
their deposits for trading. Didn't old ---- dump a lot of rotten stuff
on you? Why don't you get even? Let me tell you something. Fully
one-half of the men who are now successful financiers got their start by
putting up as margin securities deposited with them. No one ever knew
the difference, and now they are on their feet. If you took two bonds
overnight you might put them back in the morning. Every one does it.
It's part of the game."
"But suppose we lost?" asked John.
"You can't," said Prescott. "Cotton is sure to go up. It's throwing away
the chance of your life."
John said he couldn't do such a thing, but when he returned to the
office the cashier told him that a merger had been planned between their
company and another--a larger one. John knew what that meant well
enough--half the clerks would lose their positions. He was getting
thirty-five dollars a week, had married a young wife, and, as he had
told the magnate, he "needed it all." That night as he put the
securities from the "loan cage" back in the vault the bonds burned his
fingers. They were lying around loose, no good to anybody, and only two
of them, overnight maybe, would make him independent of salaries and
mergers--a free man and his own master.
The vault was in the basement just below the loan cage. It was some
twenty feet long and ten wide. There were three tiers of boxes with
double combination doors. In the extreme left-hand corner was the "loan
box." Near it were two other boxes in which the securities of certain
customers on deposit were kept. John had individual access to the loan
box and the two others--one of which contained the collateral which
secured loans that were practically permanent. He thus had within his
control negotiable bonds of over a million dollars in value. The
securities were in piles, strapped with rubber bands, and bore slips on
which were written the names of the owners. Every morning John carried
up all these piles to the loan cage--except the securities on deposit.
At the end of the day he carried all back himself and tossed them into
the boxes. When the interest coupons on the deposited bonds had to be
cut he carried these, also, upstairs. At night the vault was secured by
two doors, one with a combination lock and the other with a time lock.
It was as safe as human ingenuity could make it. By day it had only a
steel-wire gate which could be opened with a key. No attendant was
stationed at the door. If John wanted to get in, all he had to do was to
ask the person who had the key to open it. The reason John had the
combination to these different boxes was in order to save the loan clerk
the trouble of going downstairs to get the collateral himself.
Next day when John went out to lunch he put two bonds belonging to a
customer in his pocket. He did not intend to steal them or even to
borrow them. It was done almost automatically. His will seemed
subjugated to the idea that they were to all intents and purposes _his_
bonds to do as he liked with. He wanted the feeling of
bonds-in-his-pocket. As he walked along the street to the restaurant, it
seemed quite natural that they should be there. They were nearly as safe
with him as lying around loose in the cage or chucked into a box in the
vault. Prescott joined him, full of his new idea that cotton was going
to jump overnight.
"If you only had a couple of bonds," he sighed.
Then somehow John's legs and arms grew weak. He seemed to disintegrate
internally. He tried to pull himself together, but he had lost control
of his muscles. He became a dual personality. His own John heard
Prescott's John say quite naturally:
"I can let you have two bonds, but mind we get them back to-morrow, or
anyhow the day after."
John's John felt the other John slip the two American Navigation 4s
under the table and Prescott's fingers close upon them. Then came a
period of hypnotic paralysis. The flywheel of his will-power hung on a
dead centre. Almost instantly he became himself again.
"Give 'em back," he whispered hoarsely. "I didn't mean you should keep
them," and he reached anxiously across the table. But Prescott was on
his feet, half-way toward the door.
"Don't be a fool, Smith," he laughed. "What's the matter with you? It's
a cinch. Go back and forget it." He shot out of the door and down the
street.
John followed, dazed and trembling with horror at what he had done. He
went back to the cage and remained the rest of the day in terror lest
the broker who owned the two bonds should pay off his loan. But at the
same time he had quickly made up his mind what he should do in that
event. There was more than one loan secured by American Navigation 4s.
He loosened a couple in one of the other piles. If the first broker came
in he would take two bonds from one of these. But the broker did not
come in.
That night John wandered the streets till nearly daylight. He saw
himself arrested, ruined, in prison. Utterly fagged next morning, he
called up Prescott on the telephone and begged him to return the bonds.
Prescott laughed at his fears and assured him that everything was all
right. Cotton was sure to go up. An hour later the broker who owned the
bonds came in and took up his loan, and John removed two American
Navigation 4s from another bundle and handed them to the loan clerk. Of
course, the numbers on the bonds were not the same, but few persons
would notice a little thing like that, even if they kept a record of it.
They had the bonds--that was the main thing.
Once more John rushed to the 'phone, told Prescott what had occurred and
besought him for the bonds.
"It's too late now," growled Prescott. "Cotton has gone down. I could
only get one back at the most. We had better stand pat and get out on
the next bulge."
John was by this time almost hysterical. The perspiration broke out on
his forehead every now and then, and he shuddered as he counted his
securities and entered up his figures. If cotton should go down some
more! That was the hideous possibility. They would have to put up more
margin, and then--!
Down in the vault where the depositors' bonds were kept were two piles
of Overland 4s. One contained about two hundred and the other nearly six
hundred bonds. The par value of these negotiable securities alone was
nearly eight hundred thousand dollars. Twice a year John cut the coupons
off of them. Each pile was marked with the owner's name. They were never
called for, and it appeared that these customers intended to keep them
there permanently. John, realizing that the chances of detection were
smaller, removed two bonds from the pile of two hundred Overlands and
substituted them with Prescott for the two Navigation 4s.
Then cotton went down with a slump. Prescott did not wait even to
telephone. He came himself to the trust company and told John that they
needed two more bonds for additional margin to protect their loan. But
he said it was merely temporary, and that they had better even up by
buying some more cotton. John went down into the vault and came back
with four more Overland 4s bonds under his coat. He was in for it now
and might as well be hung for a sheep as for a lamb. He was beginning to
get used to the idea of being a thief. He was, to be sure, wretchedly
unhappy, but he was experiencing the excitement of trying to dodge Fate
until Fortune looked his way. Cotton still went down. It never occurred
to him that Prescott perhaps had not bought all the cotton. Now that he
is in prison he thinks maybe Prescott didn't. But he kept going down
into the vault and bringing up more bonds, and, getting reckless, bought
more cotton--quantities of it. In a month sixty bonds were gone from the
pile of two hundred. John, a nervous wreck, almost laughed, grimly, at
the joke of _his_ being short sixty bonds!
At home they thought he was getting run down. His wife--! He was so
kind and thoughtful that she had never been so happy. It made her
fearful that he had some fatal disease and knew he was going to die. Up
at the bank John made a separate bundle of sixty bonds out of the pile
of six hundred so that he could substitute them for those first taken if
the owner called for them. It was not likely that both owners would call
for their bonds on the same day, so that he was practically safe until
one or the other had withdrawn his deposit.
About this time the special accountants came around to make their annual
investigation. It was apparently done in the regular and usual way. One
examiner stood inside the vault and another outside, surrounded by four
or five assistants. They "investigated" the loans. John brought them out
in armfuls and the accountants checked them off and sent them back. When
John brought out the one hundred and forty bonds left in the bundle of
two hundred Overland 4s he placed on top of them the pile of sixty bonds
taken from the other bundle of six hundred. Then he took them back,
shifted over the sixty and brought out the bundle of six hundred
Overland 4s made up in part of the same bonds. It was the easiest thing
going. The experts simply counted the sixty bonds twice--and John had
the sixty bonds (or Prescott had them) down the street. Later the same
firm of "experts" certified to the presence of three hundred thousand
dollars of missing bonds, counting the _same_ bundle, not only twice,
but five and six times! You see, Prescott's John had grown wise in his
generation.
After that he felt reasonably secure. It did seem almost unbelievable
that such a situation could exist, but it was, nevertheless, a fact that
it did. He expected momentarily that his theft would be detected and
that he would be thrown into prison, and the fear of the actual arrest,
the moment of public ignominy, the shock and agony of his wife and
family, were what drove him sleepless into the streets, and every
evening to the theatres to try to forget what must inevitably come; but
the fact that he had "gone wrong," that he was a thief, that he had
betrayed his trust, had lost its edge. He now thought no more of shoving
a package of bonds into his overcoat pocket than he did of taking that
garment down from its peg behind the door. He knew from inquiry that men
who stole a few hundred dollars, and were caught, usually got as long a
term as those who stole thousands. If he stole one bond he was just as
likely to get ten years in State's prison as if he stole fifty--so he
stole fifty, and when they were wiped out he stole fifty more--and,
well, if the reader is interested he will learn before the end of the
story just what John _did_ steal.
Somehow, Prescott's speculations never succeeded. Occasionally they
would make a good turn and get a few bonds back, but the next week there
would be a new fiasco, and John would have to visit the Overland 4s
again. That performance of the accountants had given him a huge contempt
for bankers and banking. He knew that if he wanted to he could grab up a
million any day and walk off with it, but he didn't want to. All he
desired now was to get back to where he was before. All the speculation
was in the hands of Prescott, and Prescott never seemed worried in the
least. He called on John almost daily for what extra bonds were needed
as additional collateral, and John took his word absolutely as to the
result of the transactions. He could not do otherwise, for one word from
Prescott would have ruined him.
Before long the pile of two hundred Overland 4s was gone. So was a large
quantity of other securities, for John and Prescott had dropped cotton
and gone plunging into the stock market. Here, however, they had no
better success than before. Of course, a difficulty arose when the
interest on the Overland 4s came due. The coupons had to be cut by some
one in the bank, and although John usually cut them he did not always
do so. Sometimes the loan clerk himself would take a hand, and call for
a particular lot of bonds. John, however, was now fertile in devices.
The owner of the larger pile of six hundred bonds usually wrote to have
his coupons cut about the twenty-seventh of April. John would make up a
collection of six hundred bonds of the same sort, carry them up and cut
the coupons in the loan cage. The other man generally sent in a draft
for his interest on the second or third of May. But now the bonds were
away, scattered all over the Street. So John started a new operation to
get the bonds back and straighten out the coupon tangle. He substituted
with the brokers an equal number of bonds of other companies, the
interest upon which was not yet due. There was a large block of Electric
5s and Cumberland 4s which served his purpose admirably, and thus he
kept up with the game. When the coupons became due on the latter he
carried back the first. It kept him and Prescott busy most of the time
juggling securities--at least John knew _he_ was kept busy, and Prescott
claimed to be equally so.
There were many loans of brokers and others all secured by the same sort
of collateral. Most of these John appropriated. When it was necessary to
check off the loans, John, having retained enough of the same kind of
bonds to cover the largest loan, would bring up the same bundle time
after time with a different name upon it. If one of the customers wanted
to pay off a loan and his bonds were gone he would be given some one
else's collateral. Apparently the only thing that was necessary was to
have enough of each kind of security on hand to cover the largest loan
on the books at any given time.
Once, when the examiners were at work on the vault, John had to make up
one hundred thousand dollars in Overland 4s or 5s from the different
small loans in the loan vault and put them in a package in the deposit
vault in order to make it appear that certain depositors' bonds were all
there.
The most extraordinary performance of all was when, upon one of the
annual examinations, John covered the absence of over fifty bonds in the
collateral covering a certain loan by merely shoving the balance of the
securities into the back of the vault, so that it was not examined at
all. He had taken these bonds to substitute for others in different
brokers' offices, and it so happened that there were no similar
securities in the building; thus the deficiency could not be covered up
even by John's expert sleight of hand. Of course, if there had been
other bonds of the same kind in another vault it would have been a
simple matter to substitute them. But there were not. So John pushed
the remaining one hundred and fifty bonds into a dark corner of the
vault and awaited the discovery with throbbing pulses. Yet, strange to
relate, these watchdogs of finance, did not see the bonds which John had
hidden, and did not discover that anything was wrong, since, for
purposes of its own, the bank had neglected to make any record of the
loan in question. It would really have been safer for John if he had
taken the whole pile, but then he did not know that the accountants were
going to do their business in any such crazy fashion. The whole thing
came to seem a sort of joke to John. He never took any bonds for his own
personal use. He gave everything to Prescott, and he rarely, if ever,
saw Prescott except to hand him securities.
One day Prescott walked right into the bank itself and John gave him one
hundred and sixty-five bonds, which he stuffed under his overcoat and
carried away. Remember that this is a _fact_.
The thing, which began in August, 1905, dragged over through the
following year and on into 1907. John weathered two examinations by the
accountants, the last being in October, 1906, when they certified that
the company was absolutely "O.K." and everything intact. On that
particular day John had over three hundred thousand dollars in Overland
4s and 5s scattered over the Street.
In the first six months they lost one hundred thousand dollars in
cotton. Then they played both sides of the market in stocks and got
badly bitten as bears in the temporary bull market in the autumn of
1906, selling Union Pacific at 165, which afterward went to 190,
Northern Pacific at 185, which went to 200, etc., etc. Then they shifted
their position, became bulls and went long of stock just at the
beginning of the present slump. They bought Reading at 118, American
Smelters at 126, Pennsylvania at 130, Union at 145, and Northern Pacific
at 180. At one time John had five hundred and fifty thousand dollars in
bonds out of the vaults.
The thing might have been going on still had it not been for the fact
that the anticipated merger between John's company and another was put
through and a new vault in a new building prepared to receive the
securities. Of course, on such an occasion a complete examination would
be made of all the securities and there would be practically no chance
to deceive the accountants. Moreover, a part of the securities had
actually been moved when the worst slump came and they needed more. It
was obvious that the jig was up. A few more days and John knew that the
gyves would be upon his wrists. Prescott and he took an account of the
stock they had lost and went into committee on ways and means. Neither
had any desire to run away. Wall Street was the breath of life to them.
Prescott said that the best thing to do was to take enough more to
"stand off" the company. He cited a case in Boston, where a clerk who
was badly "in" was advised by his lawyer to take a hundred and
twenty-five thousand dollars more. Then the lawyer dickered with the
bank and brought it to terms. The lawyer got twenty-five thousand
dollars, the bank got the rest, and the thief was let go. Prescott said
they ought to get away with enough more to make the bank's loss a
million. He thought _that_ would make them see what was the wise thing
to do. Prescott also said he would try to get a lawyer who could bring
some pressure to bear on the officials of the company. It would be a
rather unpleasant situation to have brought to the attention of the
State Superintendent of Banking. John agreed to get the additional
securities and turn them over to Prescott. Unfortunately, almost
everything had by this time been moved into the new vault, and all John
could get was a stock certificate for fifteen hundred railroad shares,
standing in his own name, and seventy-five thousand dollars in notes.
These he gave to Prescott, thus increasing the amount stolen from the
bank without discovery to between six and seven hundred thousand
dollars. This was on the day before the actuaries were to make their
investigation. Knowing that his arrest was now only a question of time,
John, about eleven o'clock on the following morning, left the trust
company for the last time. He was in telephonic communication with
Prescott, who, in turn, was in touch with their lawyer. Unfortunately,
the president of the company had gone out of town over Sunday, so that
again their plans went awry.
For nearly two years John had not known an hour devoid of haunting fear.
From a cheerful and contented youth he had become despondent, taciturn
and nervous. He was the same affectionate husband and attentive son as
before, and his general characteristics remained precisely the same. He
was scrupulous to a penny in every other department of his life, and
undoubtedly would have felt the same pricks of conscience had he been
guilty of any other act of dishonesty. The affair at the bank was a
thing apart. The embezzler of six hundred thousand dollars was not John
at all, but a separate personality wearing John's clothes and bearing
his name. He perceived clearly the enormity of his offense, but, because
he was the same John in every other respect, he had a feeling that
somehow the fact that _he_ had done the thing was purely fortuitous--in
other words, that the bonds had to be taken, were going to be taken
anyway, and that Fate had simply elected him to take them. Surely he had
not wanted the bonds--had had no intention of stealing half a million
dollars, and, in short, was not the kind of a man who would steal half a
million dollars. Each night he tossed, sleepless, till the light stole
in through the shutters. At every corner on his way uptown he glanced
over his shoulder behind him. The front doorbell never rang that his
muscles did not become rigid and his heart almost stop beating. If he
went to a theatre or upon an excursion he passed the time wondering if
the next day he would still be a free man. In short, he paid in full in
physical misery and mental anxiety and wretchedness for the real moral
obliquity of his crime. The knowledge of this maddened him for what was
coming. Yet he realized that he had stolen half a million dollars, and
that justice demanded that he should be punished for it.
After leaving the bank John called up Prescott and learned that the plan
to adjust matters with the president had miscarried by reason of the
latter's absence. The two then met in a saloon, and here it was arranged
that John should call up the loan clerk and tell him that something
would be found to be wrong at the bank, but that nothing had better be
said about it until the following Monday morning, when the president
would return. The loan clerk, however, refused to talk with him and hung
up the receiver. John had nowhere to go, for he dared not return home,
and spent the afternoon until six o'clock riding in street cars and
sitting in saloons. At that hour he again communicated with Prescott,
who said that he had secured rooms for him and his wife at a certain
hotel, where they might stay until matters could be fixed up. John
arranged to meet his wife at Forty-second Street with Prescott and
conduct her to the hotel. As Fate decreed, the loan clerk came out of
the subway at precisely the same time, saw them together and followed
them. Meantime a hurry call had been sent for the president, who had
returned to the city. John, fully aware that the end had come, went to
bed at the hotel, and, for the first time since the day he had taken the
bonds two years before, slept soundly. At three the next morning there
came a knock at the door. His wife awakened him and John opened it. As
he did so a policeman forced his way in, and the loan clerk, who stood
in the corridor just behind him, exclaimed theatrically, "Officer, there
is your man!"
John is now in prison, serving out the sentence which the court believed
it necessary to inflict upon him as a warning to others. Prescott is
also serving a term at hard labor--a sentence somewhat longer than
John's. The trust company took up their accounts, paid the losses of the
luckless pair, and, owing to a rise in prices which came too late to
benefit the latter, escaped with the comparatively trifling loss of a
little over one hundred thousand dollars. At once every banking house
and trust company upon the Street looked to its system of checks upon
the honesty of its employees, and took precautions which should have
been taken long before. The story was a nine days' wonder. Then Union
Pacific dropped twenty points more, the tide of finance closed over the
heads of John and Prescott, and they were forgotten.
Had the company, instead of putting itself at the mercy of a
thirty-five-dollar-a-week clerk, placed double combinations on the loan
and deposit vaults, and employed two men, one to act as a check upon the
other, to handle its securities, or had it merely adopted the even
simpler expedient of requiring an officer of the company to be present
when any securities were to be removed from the vaults, John would
probably not now be in jail. It would seem that it would not be a
difficult or complicated matter to employ a doorkeeper, who did not have
access himself, to stand at the door of the vault and check off all
securities removed therefrom or returned thereto. An officer of the bank
should personally see that the loans earned up to the cage in the
morning were properly returned to the vaults at night and secured with a
time lock. Such a precaution would not cost the stockholders a tenth of
one per cent. in dividends.
It is a trite saying that an ounce of prevention is worth a pound of
cure. But this is as true, in the case of financial institutions at
least, from the point of view of the employe as of the company. It is an
ingenious expedient to insure one's self with a "fidelity corporation"
against the possible defalcations of one's servants, and doubtless
certain risks can only be covered in some such fashion. These methods
are eminently proper so far as they go, but they, unfortunately, do not
serve the public purpose of protecting the weak from undue and
unnecessary temptation. Banks and trust companies are prone to rely on
the fact that most peculations are easily detected and severely
punished, but the public interest demands that all business, State,
municipal and private, should be so conducted that dishonesty may not
only be punished, but prevented.
A builder who "took a chance" on the strength of a girder would have
small credit in his profession. A good bridge is one which will bear the
strain--not only of the pedestrian, but of the elephant. A deluge or an
earthquake may occur and the bridge may tumble, but next time it is
built stronger and better. Thus science progresses and the public
interest is subserved. A driver who overloads his beast is regarded as a
fool or a brute. Perhaps such names are too harsh for those who overload
the moral backbone of an inexperienced subordinate. Surely the fault is
not all on one side. While there are no formulas to calculate the
resiliency of human character, we may demand the same prudence on the
part of the officers of financial institutions as we do from nursemaids,
lumbermen and manufacturers of explosives. Though we may have confidence
in the rectitude of our fellows, we have no right to ignore the
limitations and weaknesses of mankind. It would not outrage the
principles of justice if one who placed needless and disproportionate
strain upon the morals of another were himself regarded as an accessory
to the crime.