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.