Uncle Sam, Detective

  VII

  A BANK CASE FROM THE OUTSIDE

  "It is astonishing," said Gard, the bookkeeper, "how few people knowanything about their own business. Take bank accounts, for instance.Many people have money in the bank which lies there inactive. There isnot one man in five, having such an account, who can tell the amount ofit."

  This statement was launched during the evening meal at Mrs. Hudson'svery respectable boarding-house in the prosperous little town of NewBeaufort, which slumbers in one of the valleys of central New York.

  "I must take issue with you there," ventured the elderly rector of theEpiscopal church who, being a widower, boarded with Mrs. Hudson. "I, forinstance, have managed to save a little money for old age and I can tellthe amount of it to a penny."

  "And I know just how much I have on deposit," insisted Miss Dolan, theschool-teacher.

  "And I am quite sure of mine," asserted a buxom widow who had collectedlife insurance.

  "As a test of my contention," said Gard, "I am willing to pledge a boxof candy to each of the ladies and cigars to the gentlemen who will setdown the exact amounts of their inactive accounts in the First Nationalbank and then prove their figures correct by application to thecashier."

  This proposal appealed to those who had been drawn into the incipientcontroversy. Next day they asked for the figures, and each had won hisreward. Gard seemed chagrined that his theory should have thus gone tothe winds, but he cheerfully stood treat.

  For he had established a fact very important to him. The inactiveaccounts of the First National bank of New Beaufort were intact.

  This was one of the first steps in an investigation of a financialinstitution which, while seemingly in the best of condition, wassuspected of having been looted for hundreds of thousands of dollars.Special agents of the Department of Justice knew that an official ofthe bank had been trading heavily in Wall Street and that he had lost.Gard, a member of this new detective force of the Federal Government,had been sent to investigate. Representing himself as a bookkeeper hehad secured a position with the leading grocer and had come to boardwith Mrs. Hudson.

  He stayed three months. At the end of that time he reported theshortage, fixed the blame upon the man responsible for it, showed themethods used, cited the accounts from which the money had been stolen,told what accounts were still intact. Yet he had never been inside thebank, had seen none of its books, had consulted with nobody familiarwith them, had received no confessions. The manner in which heaccomplished these seemingly impossible ends illustrates mostexcellently the methods used by this new detective agency of theGovernment.

  It was a strange conspiracy of circumstances that brought to NewBeaufort detectives from three different services on the night, twomonths later, that Conrad Compton, the enterprising citizen and banker,was giving his big party.

  There was McCord, a plain-clothes man from New York. McCord would nothave been in New Beaufort but for the ramifications of the New Yorkpolice department in keeping track of these middle class criminals wholive through the trade of burglary--a calling that is sometimes refinedto art. And the police department would not have come into possession ofa certain tip if "Speck" Thompson had not done his bit up the river andreturned to his old haunts so broken that he chose to become a stoolpigeon because he was no longer up to second story work.

  Speck had found that "Dutch" Shroder had arranged to crack a safe andthat the scene of the cracking was New Beaufort. He had tipped thematter off to the police, and hence McCord's presence in a communitythat was far from metropolitan. He represented the first of thedetective services.

  The second such service was represented by Ogram Newton, a bank examinerin the service of the treasury department. His district was central NewYork. For three years he had been taking an occasional look into thebooks of the various national banks of his district, checking up assetsand liabilities, inquiring into the value of the paper held by thebanks. Two weeks before Conrad Compton gave his party Newton had been inNew Beaufort and had gone thoroughly into the affairs of the bank. Itsbooks were models of efficiency and there was no flaw to be found in anyof its securities or loans. Newton had given the institution his O. K.and had passed on to other towns.

  But there was a feeling of unrest that haunted the young examiner. Itseemed that his subconscious mind was aware of an oversight that hadbeen made by his working faculties. He was not able to sleep well ofnights, and in his sleep the various accounts of the New Beaufort bankinsisted on visualizing themselves. Finally the recurring accountseliminated themselves with the exception of one which persisted. Theloans and discounts account kept thrusting itself into hisconsciousness.

  "By Jove!" he exclaimed suddenly to himself. "The entries in thataccount, the amounts of money that have been run through it, are out ofall proportion to the other business of the institution. Something iswrong with loans and discounts."

  So Newton hurried back to New Beaufort and was that night a guest atthe party given by Conrad Compton, with whom he had built up afriendship through years of association in the line of his work. He wasto take a further look at the loans and discounts on the morrow.

  The Department of Justice is the prosecutor in cases of violations ofthe national banking law. Its work is entirely apart from that of thebank examiners of the treasury department. The New York office of thisservice, as a matter of daily routine, received the information thatDavid Lorance, assistant cashier of the First National bank of NewBeaufort, was regularly placing heavy buying and selling orders with acertain broker in Wall Street.

  For this reason, Agent Gard got the assignment to come to New Beaufort,and was thus the representative of the third detective service. Hiswindows at the grocery store looked out upon the side door of the bankopposite. He was bland and inconspicuous, but he was an expertaccountant, had taken a degree in the law and worked three nights a weekin the gymnasium in New York when he was in town.

  The Compton home stood on a hill just back of the town. It was known asStone Crest and was the most ambitious establishment thereabouts, beingalways pointed out with pride to visitors. The banker was a widower, butgiven to entertainment and to charity. The members of the board ofaldermen often met at Stone Crest to discuss those matters that had todo with the well-being of the town. Teas were given there whenever itscharitable women were inaugurating some new venture. The party to-nightwas a semipublic affair, for it was in commemoration of a centennialanniversary of that occasion when the first settlers had fought offattacking Indians from their stockade through a day and night.

  Conrad Compton was a tall, graceful, nervous man, with a high foreheadand a mass of wavy hair. His features were of a perfect regularity andthe whole face was so small as to give it somewhat the appearance ofthat of a woman, an impression that was heightened by its absolutepallor.

  Ogram Newton, the bank examiner, watched his host narrowly as hereceived his guests, as he directed their entertainment by a party ofprofessionals who had been brought up from New York for the occasion, asthe ices were served. He thought the banker was a bit paler than usualand his natural nervousness seemed somewhat accentuated. Once during theevening he had drifted into the library which happened to be empty ofguests, and had found the host peering out of a window that commanded aview of the town.

  "I trust you will pardon my preoccupation," said the banker, turningagain to his guests, "I seem to have a way of feeling lonesomest when Ihave most company."

  McCord, the plain-clothes man, had vacillated between his hotel, therailway station, and those streets that gave views of the alleys leadingpast the back ends of establishments that might contain safes worthraffling. Occasionally his eye fell upon the lights in the house of thebanker on the hill, and wandered to the chief financial establishment ofthe town. Yet all was so serene in this eddy of the world that the hourof solitude that followed eleven o'clock seemed such an age that itdrove him to bed.

  As the time drew on toward twelve there was no sign of life in thevillage. The lights in the drug
stores, the restaurants, thedelicatessens where ice cream is served to the small town lovers, hadone by one winked themselves out. The owl car of the trolley line thatran through the village had deposited its last late revelers ateleven-thirty. The swinging arc lights at the street intersectionsoccasionally sputtered fitfully and glared again. A dynamo whirreddistantly at the electric light plant.

  Gard, the special agent of the Department of Justice, was one of the fewmen in the town who was awake except those who had been guests of thebanker and who had lingered to an hour which was almost unprecedented inNew Beaufort. They would have gone home at eleven, but the bankerinsisted that they remain for further entertainment on the part of hisNew York musicians. One song called forth another and the quality of themusic proved so much more pleasing than that of their customary localtalent that they forgot the passing of time. The special agent sat on ahill near the Compton home and smoked a pipe.

  It was twelve o'clock before the party finally broke up. Those of thetownspeople who had come in their automobiles were being tucked into thetonneaus, and those who had walked up the gray macadam drive were justsetting out on foot when the clatter as of a bunch of giant firecrackers called their attention to the village below. From the bankbuilding was seen suddenly to burst a cloud of smoke while, a momentlater, a skylight was broken and a tongue of flame leaped forth.

  "Fire! Fire!" came the shout from a dozen voices.

  Gard had seen more than had the guests of the banker. As he smoked hispipe and watched the village below, the lights in the windows of StoneCrest, and the silent cottage of Lorance, the assistant cashier, he hadseen an automobile, with no lamp showing, creep through the quiet backstreet, purr stealthily into the alley back of the bank and stop behinda small building that shut off his view. Half an hour passed and thedarkened machine reappeared from behind the intervening building,turning into the thoroughfare leading to the southeast and disappearedin the distance at an ever increasing rate of speed.

  When the exploding cartridges in the cashier's drawer at the bank gavethe first warning of the fire, the clamor of the alarm followed andpandemonium broke out in the village. Of the dispersing group on thehill, every one ran for a nearer view of the fire. The musicians, theservants, the master of the house himself, all hurried into the villageto make part of the excitement that prevailed. Stone Crest, the lightsof its entertainment still glowing, was left deserted.

  Gard, the special agent, again acted differently from his fellows byfailing to do the thing which others did. He crossed over from the hillon which he had smoked and hastily entered the banker's house. Arriving,he seemed to know exactly what he wanted. He hurried through the roomsof the house, snapping on still more lights until he found thatapartment which seemed to be the personal retreat of the owner.

  Here he evidently had business. Standing in the middle of the floor helooked about. Thrown carelessly into a window seat he saw two heavybooks of the appearance of ledgers. These he secured and placed on atable in the middle of the room without even examining them. Next hebegan further exploration. When he found the banker's bedroom he seemedsatisfied. On the back of a chair was a coat, evidently that whichCompton had worn until he dressed for the evening. Gard thrust his handinto the inside pocket of his coat and pulled out a batch of lettersthrough which he ran rapidly. He selected two or three, thrust them intohis pocket, returned for the ledgers, tucked these under his arm andleft the house.

  On the way to his lodgings he filed a telegram to the department atWashington which read as follows:

  Compton, cashier in First National bank case, guilty. Lorance probably not implicated. Bank burned to-night by accomplices of Compton. Case complete.

  GARD.

  The manner in which these conclusions were reached are but typical ofthe methods of the sleuths of the Department of Justice. Gard had cometo New Beaufort with but a suspicion that Lorance, the assistantcashier, was playing the market on the funds of the bank. Lorance wasknown to be placing orders with a Wall Street broker.

  At the boarding house Gard learned that Lorance lived modestly in acottage with his wife and babies, had not been seen to make any displayof money, was of sturdy farmer stock. On the other hand the investigatorimmediately picked up the facts that the cashier, Compton, maintained anexpensive establishment, entertained lavishly, was often absent fromtown, was nervous, highstrung, in bad health.

  All these facts led him to watch the cashier rather than his assistant.They led him, also, to some experimental testing of the condition of thebank's accounts. He knew that a dishonest employee of a bank, inappropriating money, had to charge it to some account to make the booksbalance. The large, inactive accounts offer a most tempting opportunityof this sort; but these were found to be intact by his ruse of inducingthe depositors to call for their balances.

  It was to get a better line on the business of the community, andparticularly upon the accounts of Compton, that the special agentsecured a position of bookkeeper in Joy's grocery store. Here he found,in the first place, that the buying of the Compton home was profligateand evidently wasteful. He found, further, that the bills were alwayspaid without question and by check. Knowing of an old trick that hasbrought many a cashier to ruin, Gard sought a way to test these personalchecks to determine whether or not they actually found their way to thepersonal account of the cashier.

  The cashier of a bank is usually the individual who opens the mail, andmany of these have been known to cash personal checks and destroy themwhen they came in for collection, charging the amount to some accountwhere it might temporarily be hidden. To determine whether or not thesepersonal checks were being juggled by the cashier Gard, as the grocer'sbookkeeper, found a pretext to send to the bank for a record of somepersonal checks of Compton's which he had handled a few days earlier.The call was made while Compton was out to lunch, and the checks couldnot be found. Through another dealer Gard succeeded in getting a secondsimilar request made with the same results. He concluded that Comptonwas at least juggling his personal account and charging the amount ofhis personal checks to some other account, probably loans and discounts.

  In various ways the special agent found opportunities, even withoutseeing the books of the bank, of demonstrating to his satisfaction thatthe accounts were being juggled. This was particularly true of newdeposits. When a cashier is particularly hard pressed he may resort to amanipulation of the accounts of current depositors. The system is thesimplest in the world. When a depositor hands in his money, the cashierenters the amount in the pass book of that individual as a receipt.Then, instead of entering the money to the depositor's credit, thecashier puts it into his pocket. Thus there is nothing to show for thetransaction but the entry in the pass book, and that may not bepresented for a long time. The cashier chooses for spoliation theaccounts about which inquiries are least likely to be made. As far asthe books of the bank are concerned they are as though the deposit hadnever been made, and the bank examiner, therefore, has no way ofdiscovering the shortage.

  Gard, through the store for which he worked, made several deposits, and,upon one pretext and another, sent to the assistant cashier of the bankfor the record of them in the absence of Compton. They did not show onthe account of the grocery store and the matter was passed over as amisunderstanding. But a second avenue of misappropriation thus wasdiscovered.

  In this way the special agent was able from the outside to get very goodleads into the condition of the bank and to determine the manner of itslooting when the facts might not have been obtainable by an expertworking from the inside.

  Gard's case was about completed and the Department was ready to act whenthe dramatic denouement came. Arson, suicide and flight are the threeevents most to be expected when the funds of a bank have beenmisappropriated. The young special agent was watching for any of theseat the time of the anniversary party given by the banker. It was inpreparation for any of them that he watched so late on that occasion.

  On the afternoon which preceded t
he entertainment Gard was working overhis books at the store and at the same time keeping an eye on the bank.An hour after closing time at the bank he saw Compton come out of theside door with two books of the institution under his arm. He could makeout that one was loans and discounts. He surmised that they might berecords that were to be destroyed--probably the books that showed hisguilt.

  When from the hillside Gard that night saw the silent car stop back ofthe bank and the flames subsequently break out, he knew what hadhappened. These were accomplices of the cashier who had probably lootedthe bank of any remaining funds and, according to agreement, had set iton fire that the incriminating records of the cashier might bedestroyed. The wily cashier, however, had made sure that the books thatshowed his guilt would not be found, in case the plan was not an entiresuccess. He had removed them himself, but had not as yet destroyed themfor he saw no probability of coming under immediate suspicion. Likewisehad he neglected to destroy certain correspondence that later connectedhim with the parties found to have committed the arson.

  The books taken from the banker's house were found to be the personalledger wherein should have been entered deposits, and the loans anddiscounts ledger in which account Compton had entered the amountsrepresenting all his personal checks. This latter was the account thathad dwelt in the mind of Newton, the bank examiner. The letters thatGard had found in the banker's pockets, though unsigned and mysteriouslyphrased, were later traced to the Dutch Shroder gang. They proved agreat aid to McCord, the plain-clothes man, who had slept peacefullythrough all the clamor incident to the burning of the bank, but who,through them, was able to trace the burglars.

  Compton went to pieces when confronted with the proof that hisderelictions had been found out. When his townspeople came to know thefacts on the following day, they stormed the jail and threatened tolynch him. So determined was their onslaught that the sheriff spiritedthe prisoner away. In desperation he confessed his crimes and exoneratedLorance, the assistant cashier, who in playing the market had onlyexecuted the orders of his superior. Compton lived but six months afterhis conviction and sentence to ten years in the penitentiary at Atlanta.