LOOSE METHODS

Taranaki Daily News, 30 December 1929, Page 9

LOOSE METHODS

BANKS IN AMERICA.

THEFTS FOR SPECULATION.

New York, Nov. 27.

A large crop of suicides and arrests for embezzlement followed immediately on the stock market crash in Wall Street.

An example of the hold the speculation fever had on the people is shown by the methods adopted by a group of employees in stealing three and a half million dollars from a bank to "play the market.” Six of them began, unknown to each other, to take sums as far back as 1926, when the wave of speculation, commenced. They were senior officers, including the cashier, accountant and vice-president. Gradually they became aware of each other’s speculation, and agreed to work together. They actually held meetings in the directors’ room of the bank after; office hours. One was delegated to place the orders and had a telephone, direct to the broker's office, fitted to his table. As the bank’s auditor work- . ed under the direction of the vice-presi- ■’ dent, he was easily muzzled, but it was more difficult to deal with the inspector of the State Banking Department; it was necessary to fake securi-. ties equal to the amount,. embezzled. When the market began to topple it was agreed to take 350,000 dollars more; from the bank’s funds to boost'the stocks held. Then the crash came. One said subsequently that he was at one time 100,000 dollars ahead of his speculations, but was not content to ’ draw out. The president of the bank is reported to have paid 2,000,000 dol-'-lars into the bonk out of his private - fortune, leaving the shortage 1,500,000. He saved a run on the bank. ■ Those who are accustomed to the Australia and New Zealand system of banking marvel at the loose methods.;; of the American banks. Cashing cheques without funds seems to be a daily occurrence. * - - ' K

How widespread is the loss incurred by individuals ’ through the market crash is not known. It must be very serious to cause the president to summon a national committee to advise him of the effect on industry. The last occasion on which a Presidential Committee was set up to aid industry was in 1921, the year of the worijß slump, when the committee to the president that 6,000,000 were of work. It is estimated that 4,0(W8 000 are workless as a result of the Walrt Street debacle. The losers are said to/ be mainly small speculators.