Haworth knew better than neglect to make out and send the proper “returns;” the expedients, however, by which he contrived to get them, false and true, signed, were wonderful for their cunning and daring rascality. It is impossible to spare space to describe them in detail. “Is it your belief,” said Mr. Sotheron Estcourt to the Rochdale witness, “that the returns were always properly furnished?” “I should say so,” said Mr. Taylor; “Mr. Haworth was exceedingly exact!” When asked why the managers and trustees did not look at the papers to which they put their names, Mr. Taylor said, in justice to these men, that “George Haworth's power of deception was very great, and they were deceived by him.” When it suited him he would deceive a gentleman into taking office, and then constantly deceive him in the execution of the duty allotted to him. He went to one gentleman and asked him to become a trustee; the person excused himself on account of his business occupations and the risk; Haworth said that the responsibility was with Government, and showed him a draft bill which had never been passed into law! Satisfied on this point, the person then inquired as to his duties. The arrant rogue said he wanted his name to act as a check on the managers, and sign orders for money which they had audited; for “the managers manage the bank.” When Haworth had obtained the names of gentlemen to act as trustees, &c., on some false pretence or other, he had the audacity to trade upon their names. If any poor person, on becoming a depositor, began to express any doubt about security, Haworth, “who was much looked up to in the town by the poor,” made answer: “Thou seest the names of these gentlemen; what dost thou think of them?” Having succeeded so thoroughly in beguiling those persons who ought to have acted as a check upon him, all the rest was comparatively easy to a clever and shrewd person like Haworth. Him task was far easier, indeed, than that of some of the Irish actuaries; and once the ascendency gained over the trustees, nothing but close attention and a vigilant confidant were required. The first defalcation was traced back to 1837, and consisted of his forging the receipt of different persons whom he represented as having received certain sums of money. The great bulk of the fraudulent transactions was accomplished, however, by the actuary keeping two sets of books, one of which, marked, “H,” were his private books, and the other the public ones. In his private book were found the accounts of nearly a thousand depositors, who, it seems, had been carefully chosen as having the largest sums in the bank, and who generally were bringing additions to their store, and seldom drawing upon it: these moneys he accounted for, “for he was exceedingly exact,”—but only in his private books; he never entered them in the regular bank books, and they were never acknowledged by any one but himself. Under any sort of supervision or audit from a disinterested second party, the discrepancies must have been found out; the trustees, however, as we have seen, did just as they were ordered, without ever thinking of questioning anything; and the yearly audit, which this “exact” man insisted upon—he made himself! “The following is another instance,” to quote from a little pamphlet published at the time, “of Haworth's cunning and duplicity:—A friendly society of Ploughboys deposited on a given day 30l., which was properly entered in the book, and laid before the trustees. Shortly afterwards the actuary must have erased the word 'deposited' and substituted 'withdrawn,' at the same time placing the figure 1 before the 30, thus making it appear that the society, instead of depositing 30l. had withdrawn 130l.” With this last instance of his villany in his raid on the Ploughboys' money, we leave George Haworth to the deliberate judgment of posterity, in the hope that this case may always be the blackest page in the catalogue of such crimes.
The effect of this fraud, when the depositors found that no help was coming, was most disastrous; some of those who had lost considerable sums of money took to hard drinking, declaring that they would spend their own money themselves: the feeling found expression in such phrases as, “We will spend our money rather than a George Haworth shall have it.” If the moral influence associated with such habits as those of economy and forethought were not annihilated, they seemed to be, and the lessons as well as the savings of years lay buried in this bad man's grave. The Rochdale bank was never re-opened; the bank at Heywood, a small town about four miles distant, was entirely closed by the shock which followed after Haworth's decease; and in many towns in the North of England, but especially in Lancashire and Yorkshire, the case exerted an evil influence for many years on the spread of provident habits, and is still bitterly remembered.
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Among the details of several cases of fraud in Savings Banks that were presented to the Committee of 1848, we find some particulars of the defalcations at Reading and Brighton, which we mention together, inasmuch as the same actuary related them in brief, and in fact was connected with both investigations to which they led.[125] In 1842 a fraud was discovered in the Reading bank through one of the clerks there noticing that a depositor's book did not agree with the ledger account. The books of all the depositors were called in, and great numbers were found not to correspond. Ultimately the frauds were found to have extended over several years, and to amount in all to 3,000l. They were easily traced to the secretary of the bank, who was also the accountant. It seems he took sums of money from depositors, entered them in their books, but not in the ledger of the office; and hoped by constant attention to the work to be present whenever any of the books that had been tampered with were brought to the office. So culpable in this case did the trustees feel themselves to be, that the secretary was allowed to refund the money he had taken, so long as his private funds lasted, and was then quietly dismissed. Being before the year 1844, the trustees were liable to the whole extent of the defalcation, and proceeded to pay off all depositors by means of a subscription amongst themselves, one of them giving 1,000l. Mr. Hatton, then a clerk in the Reading bank, was employed to investigate the fraud and bring matters to a settlement; and this he did so ably, that he was appointed actuary.
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In seven years from this time, Mr. Hatton was engaged upon an equally unfortunate business in connexion with the Savings Bank at Brighton. A deficiency was found out in this bank in 1849, to the extent of nearly 4,000l., and was proved to have arisen from falsifications in the accounts of Mr. Buckoll, who for many years had been actuary of the bank. The first suspicion of anything being wrong was felt by one of the managers, who, somewhat shrewder than the rest, went carefully through the balance-sheet of the year 1848, under the impression that the amount of profits ought to have been larger. He was unable to do more, however, than confide his suspicions to the actuary of the Reading bank, and to request his opinion. After Mr. Hatton had examined into the amount of business done, and compared the business with the capital and the various items presented to him, he expressed his opinion that the profits on the year should have been at least 100l. more than they appeared to be. Strengthened in his opinion by this advice from an experienced actuary, the manager in question, at the annual meeting held immediately afterwards, got up and said that he did not feel satisfied with the balance-sheet, and moved that the meeting should adjourn for a short time for some investigation to be made. A close examination of the accounts was so little to Mr. Buckoll's mind that he “decamped,” leaving a letter for the managers, in which he stated how unworthy he had been of the position he had filled, having committed frauds on the funds of the bank to a considerable extent. A warrant was immediately issued for his apprehension, with a view to criminal proceedings, but he got clear away; and up to within a few years ago had never been heard of. Mr. Hatton, who succeeded eventually to the situation which Buckoll filled, was called in to pursue the investigation into the case, and it is from his evidence before the Committee, already so often alluded to, that we are enabled to extract some account of the way in which the frauds were accomplished. The actuary, it seems, made false entries in depositors' books, false entries in the ledgers, and forged the initials of managers, who were required to certify to each entry in the latter. If he wished to draw 100l. from the funds of the bank, his plan was to get hold of a pass-book,—a new one, if he could not find an old one readily,—forge entries in that book as well as corresponding entries in the ledger; this book he would present to the managers in attendance, who readily paid the amount. In some cases the money was left with Buckoll to pay over to the quasi depositor, as was then too much the custom all over the country. Afraid, however, to do too much of this sort of work himself, he arranged in several cases to have the money paid on what is known as a power of attorney, or an order for payment to a second party. Thus he went among his friends, and represented that some poor person or other had applied to him to withdraw a sum of money standing to his credit; but as he could not act as his agent in the matter, and the party could not himself attend at the bank, would Mr. So-and-so oblige him by simply going and receiving the money? These persons, who in all cases were proved to have been innocent agents in the transaction, relied on the character of Buckoll, who of course was highly respected in the town, and would then hand the money over to him according to agreement. Another mode by which, towards the end of his course as actuary, he contrived to appropriate to his own use several large sums of money, was by taking deposits out of course (as in the case of the Dublin actuary, even in the street), and never in any way accounting for them to the bank. What the trustees were doing during all the years these frauds lasted, how the accounts were made to square, and where the system of check was, does not appear. Mr. Hatton, in justice to the trustees, said they “were as efficient as trustees and managers are found to be;” but this kind of evidence is simply a reflection on the general body of such officers, and scarcely any exculpation of the individuals in question. The system of check was clearly inefficient.
It is pleasing to add, that in this case the depositors suffered nothing from the frauds. The bank had money in the “separate surplus fund” to the extent of 3,000l., and this, with 600l. which an unfortunate Guarantee Company had to pay for the defaulting actuary, paid nearly all claims.
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From 1851 to 1861 there were numerous instances of frauds in Savings Banks, all which cases will he found included in a list at the end of this chapter, though not described at any length. It is the less necessary to do so, as nearly all of them are fully described in reports made by Mr. W. H. Grey, a professional actuary, who had long been experienced in Savings Bank matters, and who had been sent down by the National Debt Commissioners to investigate such cases as they arose. It would appear from his reports that most of them were imitations on a small scale of the gigantic frauds already described in detail. The common feature of almost every case was extreme laxity of book-keeping;[126] nothing like a proper audit; and signatures given by responsible persons without even a cursory examination. Thus in the Isle of Wight Savings Bank at Newport, Mr. Grey's testimony is, that he found that “fictitious documents, purporting to be signed by depositors, giving notice of their intention to withdraw a part or the whole of their deposits, have been produced by the secretary, on the faith of which cheques have been signed by the attending manager without seeing the pass-book, and without ascertaining whether such sums were really standing in the ledger or not. These cheques have been entrusted to the secretary for delivery to the depositors at any time they might call for them, instead of insisting on personal attendance during bank hours.” The actuary of the Rugby bank committed his frauds in the same way. Again: “In some cases, fictitious accounts had been raised in the ledgers, and closed again immediately fraudulent repayments had been made; and in other cases in which the amounts had been previously withdrawn, the dates of the real withdrawals had been altered into those of the fraudulent ones.” No comparison, it seems, was ever instituted between the cash-book and the ledger, and the system pursued had practically left the whole control of the receipt and payment of about 30,000l. a-year to one individual. The secretary, indeed, William Wheeler Yelf, “was generally much respected in the island,” was distributor of stamps, did a large business on week days, and was employed as a Wesleyan preacher on Sundays; but we have seen how much all this, and more, avails where the man is thrown amongst overwhelming temptations and has no principles to guide him. We have already spoken of many of the results of the Rochdale fraud; the case of the Isle of Wight bank shows that that fraud affected other banks. It was suggested after the failure of the Rochdale bank that the trustees of every other institution should at once set about a rigid comparison of the depositors' books with the books of their respective banks. The Newport trustees at once acted upon the suggestion of the National Debt Commissioners. They established the practice of having the balance-book containing a list of the balances due to depositors always on the table when the bank was open, and of comparing this with the depositors' books brought to the bank. Had not Yelf been a clever swindler, or had the trustees carried the plan to a fair conclusion, he would now have been found out. Mr. Grey thus explains the new deception adopted to conceal the deficiency: “At the annual examination both ledger and balance-book were duly placed in the hands of the managers; but when they had satisfied themselves that all the balances had been correctly transferred, they shrank from the laborious task of adding together two or three thousand accounts, trusting to the secretary's addition.” This labour was just what Yelf wanted. “In point of fact,” continues Mr. Grey, “the addition of each page was correct, but the total of each page was brought into a summary page at the end; and in doing so, 1,000l. was dropped in one place, 1,000l. in another, in the capital column, and 20l. here and 30l. there in the interest column, with some odd money to make up the required deficiency.” Well might the Government actuary add, “From these practices it will be perceived how imperfect a system has been pursued, and how little it was calculated to prevent or discover fraud!”
We come now to a comparatively recent date, and to two frauds in Savings Banks which must be fresh in the memory of every reader. We refer, of course, to the aggravated case at Bilston, and the late case at Canterbury. A witness before the Committee of 1858 expressed his opinion that from that time henceforth the country had done with extensive fraudulent proceedings in any large Savings Bank. It unhappily comes, however, within the province of history to chronicle one such case occurring so late as 1862, and another the facts of which transpired even after the passing of the Consolidation Act of 1863.