CHAPTER VI.. A Chapter on Savings Bank Frauds.

A CHAPTER ON SAVINGS BANK FRAUDS.

"There is such a powerful element of failure in all human affairs, that a shrewd man is always saying to himself, 'What shall I do, if that which I count upon does not come out as I expect?' This foresight dwarfs and crushes all but men of great resolution."--Companions of my Solitude.

In this chapter it is our intention to describe with more or less minuteness the principal cases of frauds in Savings Banks pretty much in the order of their occurrence, and also to speak to some extent of the results which followed from them. How the progress of legislation was affected by these frauds has been already shown; and with the object of making more clear the legislation of 1844 and 1848, we have already entered into the details of the notorious Cuffe Street Bank failure, and one occurring in England prior to those dates. So far as we have been able to ascertain, the first case of fraud in a Savings Bank occurred at Carnarvon in the year 1824. In this case the actuary received deposits to a large extent for which he in no way accounted. Up to 1848 no less than ten cases, other than those already referred to, occurred, in all of which the trustees promptly paid the claims. These cases include the frauds which took place in Carmarthenshire, Northamptonshire, and Cumberland, one at Mildenhall in Suffolk, and another at Mitcham in the same county. In the latter case the secretary managed to embezzle a sum amounting to near 12,000l., and then made off; Mr. Hoare, the eminent brewer, paying down no less a sum than 7,000l. to atone for his neglect, and the other trustees making up the amount by subscriptions of 1,000l. and 500l. each. Into any further particulars of the above cases it is impossible to enter, inasmuch as they have never been allowed to transpire,--precautions which, so long as there were no efficient remedies at hand, were both wise and magnanimous. The catalogue, however, can be made black enough and full enough without such cases; and it is to others which have been exposed in all the fulness of their iniquity down to the minutest details that we will now turn. Claiming priority in all respects was the fraud on the County of Kerry Savings Bank at Tralee.

The Tralee Savings Bank was established in 1823, many of the noblemen and leading gentlemen of the neighbourhood taking part in its formation. The secretary from the commencement was Mr. John Lynch, who was appointed by a majority of the trustees at a salary of 60l. per annum. From the commencement the bank was held at the house of the secretary, and was open from two till four every Monday. Among the directors there were five clergymen, and the rest were highly respectable gentlemen of Tralee. The same might be said of the twenty managers, nearly half of whom were clergymen. The Rev. A. B. Rowan was treasurer of the bank. In the pass-books were abstracts of the Rules and Regulations of the bank, and these were headed by the following motto:--

"For age and want save while you may, No morning sun lasts a whole day."

Other useful injunctions were given in sober prose, such as "Examine your pass-book, and see that the entry is correct." "If you lose this book, give immediate notice at the bank, otherwise you may be defrauded." With what feelings the pages of the books containing this sage advice would be turned subsequently, we leave the reader to judge after he has learnt more. Of course, Lynch was highly respected in the town: one witness describes him as, from the first of his connexion with the bank till the exposure, a man above suspicion; and Mr. Rowan, the treasurer, told the Committee of 1848, that he believed the public generally "had more confidence in Mr. Lynch than they had in many, or any, of the trustees themselves." (839.) That he was clever, as well as "correct," is manifest from the fact that he succeeded for sixteen years in carrying on, unsuspected by anybody, a complete system of frauds of different kinds, by which he appropriated to his own use during that time no less than an average of 2,000l. a year. He seems to have commenced his dishonest practices soon after the formation of the bank; but until 1832 his peculations were of small amount. From 1832 to 1847 he practised every possible description of fraud, and though some of them might have been detected by a rigid system of check, nearly all of them were remarkable for the ingenuity they displayed: "The contrivance and adroitness with which he managed these frauds," says one who subsequently went over the accounts of the bank, "were so ingenious as almost to defy detection." One of his practices was to account for a less sum than he received from a depositor, and this description of fraud he managed as follows (and this is a case which actually occurred): He received for lodgment three sums of 30l., 15l., and 27l. in one day, without any assistance or supervision from trustee or manager. These amounts he entered in his books as 3l., 5l., and 7l. respectively, and pocketed the difference. The manager at the close of the day, in examining and certifying the business done, marked the three entries as correct, as he found that they tallied exactly with the amount of money received into the bank. No sooner, however, was the bank closed and the acting manager left, than Lynch completed the case he had commenced by securing himself against exposure in the event of the depositor seeking to withdraw any of the sums named. The burden of the fraud was made to fall upon the funds of the bank by the actuary now altering the bank books to make them agree with the money actually deposited; and this he did in the cases in question by putting an 0 after the figure 3, the figure 1 before the 5, and 2 before the 7. In this way Lynch netted, with little or no risk of detection, a matter of 57l. in one day. This was only one mode adopted. He likewise received money out of office hours, which he never entered in any day-book or accounted for to the manager. To preserve himself, however, as in the previous case, he never forgot to post the amount in the ledger, so that whenever it might be claimed it would appear to the debit of the bank and at once be paid. Of course, there was here the absence of everything like check or audit. Other descriptions of fraud may be left to be given in the culprit's own words.

Lynch held uninterrupted sway of the Tralee bank for a long series of years, contriving to make away during the time with many thousands of pounds; but retribution, though long in coming, arrived at last. "The mill of God grinds late," says the Spanish proverb, "but it grinds to powder," and the proverb meets with its exemplification here. A trifling incident, as has often been the case before, led the way to the full exposure. Lynch fell ill, to an extent which, though the bank was held at his own house, precluded him from giving those precise instructions which are eminently necessary in dealing with such fragile machinery as that with which he had managed to work so long. It was usual, it seems, to make weekly requisitions to the treasurer of the bank for money to meet the demands upon its funds, and the subordinate on the occasion in question asked for more money from that functionary than had been credited to him altogether. The treasurer, the Rev. A. Rowan, like the rest, had unbounded confidence in the secretary, and had given himself little trouble over the affairs of the bank. At a time when it must have been evident to all that several thousand pounds sterling stood to the credit of depositors, Mr. Rowan was satisfied to think that two or three thousand pounds formed the capital of the bank. It is on record that he several times spoke of the small amount of money in the bank, and innocently pointed to the fact "as a sign of the depressed state of the country." How this illusion was at length dispelled we leave Mr. Rowan, himself to tell. "As I knew that the requisition of April 3d was for more money than there was in the bank, I went to Mr. Lynch, and said there must be some mistake somewhere, and told them to stop taking in any more money till it was cleared up. The next day Mr. Lynch being ill in bed, sent for me, and made a confession that he had committed frauds; but he stated no amount. I then seized his books and papers and everything I found connected with the bank, and swore information as to the facts." The books were then subjected to a thorough examination, and "frauds of every possible character," to the extent of 36,000l., were found to have been committed. At the trial which ensued, Lynch pleaded guilty, and was sentenced to fourteen years' transportation.

The other modes of enriching himself to which we have not yet referred may be given in Lynch's own words. Soon after his apprehension he made a confession of his malpractices, in order to exonerate a clerk of the bank who had been arrested at the same time, and who was at first thought to be an accomplice, and we take the man's own account of his ingenious trafficking in forged pass-books as the most lucid one that could possibly be given. "A depositor lodged money with me," said the actuary; "I entered it in the pass-book, but not in the receipt-book. He subsequently lodged more, say with Mr. Fitzgerald, and it was duly entered in the pass-book and the receipt-book. For these depositors there necessarily was no account to be found in the bank books, and the party paying him upon notice given would thus be presumptively implicated." He proceeded to give another instance of his artifice: "I frequently took an old pass-book and tore out the bonâ fide deposit leaf; I made an entry therein in a fictitious name, and a quasi deposit, as if it were some years antecedent. During bank hours I used to hand in those books to whoever might be in the bank, directing notice to be given for the amount, as though the depositor had left it with me for that purpose, as it were, some days antecedently. The manager entering such notice was thus presumptively implicated; and as the course of the bank unfortunately was to 'keep' and not relodge sums 'noticed for,' the manager of the day marked it as 'kept,' which meant, given to me to give to the quasi depositor." "Kept!" What a fund of irony there is in that one word so applied! In one or other of the modes described, this actuary, "respected by all who knew him," contrived to "keep," and, what is worse, to spend, 36,000l. of the hard-earned savings of the poorest classes around him. His estate at the time of his apprehension was worth something like 3,000l.; this property Lynch offered to give up in full, "leaving not even a bed for his daughter;" but on Mr. Pratt's being applied to for advice, that gentleman recommended the treasurer not to fall in with the offer, inasmuch as it would be "a compounding of the felony." (825.) Mr. Pratt had arrived by this time at Tralee, and was engaged in the investigation of the affairs of the bank, and in making his awards in the case. That investigation showed the most culpable neglect on the part of the managers and trustees: Lynch had been engaged in his nefarious practices for fifteen years, and yet till the day he made his confession a breath of suspicion never reached one of them. The confidence of the trustees in the man was so unbounded, that one trustee would sign anything he wished; and the other, who generally acted, signed because he saw the name of his fellow-trustee. Mr. Pratt ascertained that here, as at Cuffe Street, the law had been systematically violated; depositors had put in money to any extent; they had deposited their money at all times, and under all kinds of circumstances; charitable institutions deposited their funds without any limitation, one fund having at one time had as much as 5,000l. in the bank. Mr. Pratt, in making his awards, had to take all these facts into consideration, giving satisfaction so far as it was in his power to those who had made their deposits legally, and refusing it in all other cases. In this way he made awards on the trustees of the bank to the sum of over 16,000l. The trustees disputed their liability on the strength of the Act of 1844, and when the case was brought before the Court of Queen's Bench the decision of the barrister was set aside. To this day, we believe, the unfortunate depositors in the Tralee Bank have in no sense, either by private benevolence or Government aid, been recompensed for their loss.

When the blow first fell with all its crushing weight upon the people, they are described as having borne it "with wonderful patience;" then this state of things was followed by a period of stolid indifference to all the ordinary maxims of thrift and prudence, as if their treatment had destroyed the growth of provident habits. So much is evident from the statements of a respectable solicitor at Tralee who was examined before the Committee of 1848:--

"Can you state (Mr. Herbert to Mr. Justin Supple, 872), from your own knowledge, what class of persons the depositors are, generally speaking?--Generally speaking, they are composed of servants, artisans, mechanics, and small shopkeepers. There are a few of a higher class, but they are very few indeed. I have pass-books with me amounting to about 16,000l., and I assure the Committee that there is not a case in which I could not point out a more or less considerable degree of hardship." He then stated several cases.

(878) "Can you state from the general feeling of the country, what evil consequence will be the result of the failure?--Taking the failure," says the witness, "in connexion with the years of famine, I think the consequence will be to drive the classes which have been hitherto industrious and economical in their habits, to vice and wickedness, because the dissipated characters who have saved nothing, or did not take the trouble of saving, now look upon the poor industrious creature who has been cheated, laugh at him, and tell him that they have spent their own money, while the industrious man has had somebody else to spend his for him."

The agitation was at its height in Tralee when news came that the neighbouring Savings Bank at Killarney had stopped payment. Mr. Pratt had not even finished his awards in the one case before he was required to investigate this fresh iniquity. It would seem that the exposure of the one actuary had led to closer investigation on the part of the trustees of the Killarney bank, and the earlier development of the fraudulent proceedings of the other official. Here again the frauds were found to be of an ingenious character, and might have been continued over an indefinite period, but that the trustees were compelled by the force of public opinion in the neighbourhood to do the work they had taken upon themselves. As it was, the deficiency was found to amount to 20,000l.: the entire liabilities of the Killarney bank were 36,000l., but the money in hand and the property of the actuary, who decamped, which was calculated to realize about 5000l., reduced the loss to the former sum. As the average amount due to each person was 45l. we may well conclude that the majority of the depositors were of the poorer classes. Though the real loss was less than in the case of the Tralee Bank, the bank at Killarney was found to have been managed with greater carelessness; the trustees and managers professed to make a yearly audit of accounts, but this to all intents and purposes meant nothing more than taking the actuary's word for everything. The details of this fraud have never, so far as we can find, been made the subject of a searching public investigation, so that little more is known than that the frauds in question were of the usual character. Mr. Pratt, in a short report which he presented to the Lords of the Treasury after he had visited the place, said that he found the one case to be very similar to the other (Tralee), both as regards the actuary and the managers. In both cases the accounts of the treasurer were correct, and in both had the trustees grossly neglected their duties. Here again he made awards against the bank to a large amount, and in one respect these awards were much called in question. This public officer received much blame, both in and out of Parliament, for the character of his decision, whereas it seems quite evident now that he simply endeavoured to carry out the regulations of a most imperfect law.

The law of 1844, there can be no doubt, was unjust in the case of one class of depositors at Killarney. On the clauses of this Act, Mr. Pratt was compelled to award to those depositors who had contributed their money after 1844, only the surplus money which was left after the depositors who had made legal deposits before 1844 had been paid their claims in full. This decision was, of course, come to on the ground that the trustees had not assumed the responsibility provided by Mr. Goulburn's Act. In this way the depositors before 1844 got 20s. in the pound, whereas those coming after that year only got 3s. in the pound, and a further small instalment afterwards when the actuary's property was realized. The decision might be right in the eyes of the law, but the law was most unjust that rendered such a decision possible, or proper.

The next Savings Bank failure in the order of its occurrence, which has been made the subject of any investigation, was that at Auchterarder, in Scotland, in 1848. The Committee of 1849 were appointed to inquire into the case, as well as the Irish cases already spoken of, but we do not find that any evidence was taken on the failure in question. It seems, however, that the Auchterarder Savings Bank was a branch of the important institution at Perth: notwithstanding this, it was locally managed, the local trustees, furthermore, being held responsible for any irregularity. This small bank was originally established in 1841, the principal landed proprietors and ministers of various denominations taking part in its organization. In seven years the number of depositors had reached to 2,000, and as the total amount standing to the credit of each person was less than the average of 10l. they must have consisted of the very poorest part of the population of this rural district. The number of managers amounted in all to forty; but the ruling power was John Findlay, cashier and parochial schoolmaster, and the sole paid officer of the bank. In December, 1848, a trifling inaccuracy was found out in his accounts, when he lost no time in absconding. It was then seen that he had within seven years appropriated 1,500l. to his own use. The liabilities of the bank were 4,300l., whilst the available assets only realized 2,774l. The dividend, given out of this money, a subscription entered into by the trustees and their friends, and the sale of the defaulting actuary's small estate, ultimately reached to eighteen shillings in the pound. What benefit it was to the poor people at Auchterarder to be connected, as one of several branches, with the flourishing concern in the neighbouring county town, we are at a loss to understand. This connexion did not preserve the accounts from being tampered with; it seems to have afforded no check: and when a paltry sum of 150l. was needed to reimburse this deserving population in full, the Perth institution came forward with--nothing better than advice! It surely cannot be a matter of surprise that the bank was "never re-opened," and that "no private gentlemen could be found to undertake the trouble or risk for the future."

We have hitherto been concerned almost entirely with Irish Bank frauds; henceforth we shall have to deal exclusively with English ones. Not only on account of the date of its occurrence, but from its magnitude and enormity, the fraud on the Rochdale Savings Bank deserves the first place. It is not too much to say that no Savings Bank defalcation equalled this one in the depth of its iniquity and cunning, and in the disastrous effects which followed, affecting as they did the growth of provident habits not merely in that particular locality, but throughout the entire kingdom.

The Rochdale Savings Bank was commenced in 1818, or immediately after those institutions were recognised by the State. It seems to have been started in the usual way, and to have progressed with great rapidity,--the community about Rochdale forming a very favourable specimen of the Lancashire people. In 1822, George Haworth, a young man of twenty-one, succeeded his father, John Haworth, who had been actuary of the bank since its commencement. As the son remained with the bank almost till its affairs were wound up in 1849, he may be said to have been associated with it through its whole course of thirty years. When very young, this man appears to have shown extraordinary energy and talent for business, and each year he not only added to his engagements, but seemed to accomplish all he undertook with equal readiness. In addition to his duties at the bank, he first took an agency for the sale of wool, then, as now, the staple trade of the town; then he obtained an agency for the sale of porter, both from a Dublin and a London house. Latterly, however, he had advanced himself to the dignity of cotton spinner, and was occupier of a large factory; was at the same time a land agent, estate agent for several gentlemen who possessed large properties in the neighbourhood, an insurance agent, and valuer and receiver of rents for the Lancashire and Yorkshire Railway Company. Not less on account of his more private character than from those multifarious matters with which he was connected, Mr. Haworth was a man of mark in the place. He was a member of the Society of Friends, and this of itself was a password to the trust and confidence of many men. Whenever anybody wanted a chairman, or sought a little patronage for anything literary, scientific, or charitable, resort was had to "Friend Haworth;" "he always patronised such things as far as he could;" and who could do more, especially one who was "not himself a particularly talented man?" "Talented" he might not be in the ordinary acceptation of the term, nor indeed need he have been, to do this much; but never was there a man more talented in the art of deception. "He deceived everybody by an appearance of wealth." He lived handsomely, "though scarcely with any particular extravagance;" he was above mere "gig respectability," and rode in his carriage. "For the reputation of honesty, probity, and wealth," said Mr. Taylor, "there was no man in Rochdale who stood higher;" and so far did he disguise his real character, that his most intimate friends were those who were most deceived by him. "He was not only," says a friend of ours, who himself suffered by his frauds, "never suspected of doing wrong, but he was regarded as above suspicion and uncommonly safe."

It is true that some persons now and then expressed their surprise that George Haworth should act as actuary to a Savings Bank, and moreover attend so closely to his duties there when his hands were otherwise so full; but Haworth deceived even these people by putting his connexion with the bank on the ground of charity, and an anxious desire to promote the happiness of his poor fellow-tradesmen,--for whom indeed he was each day laying up increased stores of untold misery. Clever to the last, but supposed by some--of course wise after the event--to have gradually failed in heart and strength after losing his father-in-law, who it now seems was his confidential assistant and accomplice, he escaped his justly-merited punishment in this world, and by an inscrutable Providence was allowed to die unmolested on the 19th of November, 1849. Deluded to the last, his fellow-townsmen considered his loss irreparable; it was a general feeling that this man should have a public funeral, and it was nearly being so concluded when the relatives of the deceased stepped in and wisely put their veto upon it. Strange to say, but only in keeping with the unnatural strangeness of the whole affair, suspicion never entered into the heads of any one, high or low, in connexion with the bank, till this man was far beyond the reach either of earthly anger or law. The trustees and managers were called together after the funeral; and so ignorant were they of the real state of the case and the true nature of their late actuary, that they thought they were met simply to elect his successor, and were actually prepared with different nominations, and not to hear from the dead man's attorney that the "wealthy and respected man" had been for twenty years trading on the falsest of false pretences, and fattening on the hardly-earned scrapings of the poor whom he had so patronized.

Haworth's solicitor told the unwelcome story of a deficiency. Enough was said to make the trustees at once decide to call in the depositors' books, and in the course of a few days it was ascertained--though it took a much longer time to credit it--that the liabilities of the bank amounted to 100,403l., that the total assets were calculated to realize 28,686l., and that the deficiency amounted to the enormous sum of 71,715l. In the course of two or three weeks the trustees made the announcement of the defalcations to the public, with what result may be better imagined than described. At first the depositors took the matter very calmly--a feeling in which was mingled incredulity; and a disbelief that they would be allowed to lose so much money got possession of the people's mind. The general opinion was, till undeceived, that the Government would have to stand to the loss. Of course this made it all the more deplorable when the real facts became known. One of the witnesses who was examined before Mr. Slaney's Committee on the savings of the middle and working classes (1850), gave the following evidence of the feeling in Rochdale at the time:--"I was in Lancashire some time ago, meeting with large bodies of working men at the time of the failure, and I shall not soon forget some remarks that were made about the Government. One man said, 'Dr. McDowall came here, and told us that the Government was a set of robbers, and that they did not care about the property of the working men.' He said, 'I did not believe Mr. McDowall then; but when I see there is no security for the savings of the working men in the Savings Bank, and we supposed Government had them under their protection, I believe now that Mr. McDowall was right, and that Government cares nothing about either the poor man or his savings.'" Of course we give this extract simply to show the effects of the fraud on the minds of the poorer classes, for nothing could be more unfair than such conclusions. Soon the depositors came to look the loss fairly in the face; they elected a committee of their number to act for the rest, and Mr. Taylor, the witness before the Committee of 1858, was appointed chairman; they agreed to avoid litigation if possible, and relied on private benevolence and the possibility of a grant from Government to make up the deficiency. The sum of 17,000l. was readily subscribed among the trustees and their friends; another sum of 17,000l. was realized out of Haworth's estate, and ultimately the managers were enabled to give a dividend to depositors of 12s. 6d. in the pound.

Thanks to Mr. Taylor's intelligent evidence, we have not only gleaned the above particulars, but we are enabled to give some account of the way the Rochdale frauds, which entailed so much misery and so much loss, were accomplished. As the first question likely to arise in the mind of the reader would be, doubtless, to ask where were the trustees, it would be wise to dispose of it first. Haworth "was exceedingly respected, and everybody had faith in him," says Mr. Taylor, naïvely; "but from what we discovered, he must have been exceedingly designing for many years." In no instance that has come within our notice were the trustees, who ought to have been this man's master, so completely his tools. Haworth was so much the factotum of the bank that he really appointed the trustees; and so "designing" was he, that when he got some one appointed who was likely to attend to his duties, or be otherwise troublesome, he took care to keep the knowledge of the appointment to himself. Mr. Taylor gave his own case in corroboration. This gentleman found out afterwards, that he had been appointed a manager in 1838, and never was aware of the interesting fact till the bank failed in 1849. "I never was at any meeting; I never was called upon to attend any meeting; and I can name several others in the same way."

Of course Haworth took care to make a show of having trustees. When the same witness was asked (qu. 3,175), if any attended, he said that "one or two attended occasionally; one very old man indeed, who was Haworth's tailor, really was a trustee, and he attended, I dare say, once or twice a month, and sat in the bank; but he was a very imbecile old man, and would do whatever George Haworth told him to do." Sometimes Haworth had to manoeuvre a little in order to get his returns signed, and then he would resort to the trustees whom he in a manner kept in stock. A case in point is recorded. A gentleman named Chadwick was passing the bank during one of Haworth's times of need, and the actuary called him in, and asked him to be kind enough to sign a return. Mr. Chadwick naturally hesitated, as having nothing to do with the bank. "But thou art a manager," said Haworth, showing him his name, for the first time, in a printed list; and Mr. Chadwick, thinking that he had perhaps just received this mark of the actuary's esteem, at once fell in with his request, and signed the return.

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. 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.

* * * * *

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; 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.

The Bilston Savings Bank was established in 1838. Nothing unusual marks its early history, except the fact that the man who ultimately managed all its affairs and so largely embezzled its funds was prominently active in its establishment, and was one of the original trustees. To show the estimation in which the Rev. Horatio S. Fletcher was held by his fellow townsmen in 1838, we need only state that in that year, being before simply perpetual curate of the parish, he was presented by them with the incumbency of St. Leonard's, Bilston, worth 700l. a year. That he should take a large share of honorary employment after this was only what might have been expected. Whether expected or not, he did undertake many offices. In 1839, Mr. Fletcher, in addition to being a trustee, was made secretary to the Bilston bank. In 1849, he also became treasurer. Not content with this monopoly of offices, he soon afterwards took upon himself--for there is no record of his having been appointed to the office--the work of actuary. The whole of these offices, and the entire system of check which they are properly supposed to give to each other, Mr. Fletcher held till 1861. And why not? The man was universally known for his charity and benevolence: as the principal clergyman of the place, did he not teach mercy and charity; and, as a magistrate, did he not uphold the majesty and dignity of the law? Since the way in which trust is reposed in individuals can never be fully explained nor made the subject of rigid rule, who could better be relied on than the Rev. H. S. Fletcher, Incumbent of the parish, and Justice of the Peace? Nothing can be more easy than to say now, that it was consummate folly to allow one man to hold the important offices he did; but who would think of saying so much then? Suffice it to say, that this man, like so many more of whom we have had to speak, contrived to ingratiate himself into the good will of all around him, and had that peculiar kind of cleverness which succeeds in getting his application and zeal laid to the credit of his disinterestedness and charitable disposition. Since the subsequent facts make it impossible to put a kinder construction upon them, all the rest follows in this case simply as a matter of course.

On the 3d of January, 1862, the announcement was made in the Times newspaper that the Bilston bank had come to a sad end, and that defalcations to the amount of 8,840l. had been found out in the accounts of the treasurer of that bank. How these frauds, which extended over several years, were accomplished, and how they were found out, remains to be seen. We will reverse this order, and speak of the exposure first. In the spring of 1861, Mr. Tidd Pratt, the energetic Registrar of Friendly Societies--whose name indeed seems almost synonymous with such subjects--visited Bilston, and delivered a lecture on "Benefit Societies." In the course of that lecture Mr. Pratt alluded to the cognate topic of Savings Banks, and spoke of the necessity for regular accounts and regular returns in connexion with them. He then took the opportunity to refer to the "very irregular manner" in which the accounts of the bank in their own town were kept. Now, it must not be supposed that Mr. Fletcher had forgotten his returns; he was far too careful for that; he knew the penalties attaching to such neglect. It seems that both weekly and annual returns, although they were habitually and carefully "cooked," were regularly forwarded to the National Debt Office. The "Returns" to which Mr. Pratt appears to have pointed, were those called for annually by the House of Commons, with the object of improving the law of Savings Banks; and these returns, from 1855 to 1861 the factotum of the Bilston bank had constantly neglected to send. Mr. Pratt, in continuation of his statement afterwards, confessed he knew nothing of the circumstances of the bank, further "than that his suspicions were always aroused in cases where he found any accounts were not properly rendered." There can be no doubt about it, that this reference roused the "reverend defaulter" to a sense of his danger; for it subsequently transpired that not a penny was abstracted unlawfully from the bank after the week of Mr. Pratt's visit and lecture. Furthermore, not only was the culprit aroused, but the trustees were awakened to some sense of their responsibility, and very soon afterwards there was a movement amongst them for a change in the management and an overhauling of the books of the bank. In a very few weeks after Mr. Pratt's visit a new set of managers and trustees were proposed, and Mr. Fletcher was deputed to see them, and endeavour to get them to act. In July the appointments were legally made, including that of Mr. Hawkesford to the post of actuary. Then quickly followed the disclosure which indeed, sooner or later, was now inevitable. The new actuary got the books from the parsonage--the bank being held in the school-room of the church--and was not long in finding out some of the discrepancies with which they abounded. On first discovering the frauds the actuary spoke to the treasurer, who promised to confer with him about them; on finding out the magnitude of the defalcations, he again mentioned the matter, choosing an extraordinary time, not however without its significance--of a Sunday after the usual service. The clerical delinquent acknowledged his guilt, and said, "He was very sorry, but never intended to defraud the depositors of a shilling." It will be seen, however, that the fraudulent transactions were of such a nature as not to admit of any extenuation, and to render condonation of any sort impossible. The feeling produced by the disclosure was painful in the extreme, and the country spoke out with vigour on this extraordinary and merciless breach of trust. The local magnates, indeed, and the body of trustees who had allowed these frauds to run on, spoke with bated breath of the "deficiencies" of the Bilston treasurer; the Times, on the other hand, spoke far more in accord the with the general feeling of the country, when it characterised "this man Fletcher" as "the meanest, the most cowardly, and the most cruel of swindlers." Under his manipulations, the Bilston bank was a Savings Bank in nothing but the name; there were trustees, but they were tools; rules, properly certified, but never obeyed; accounts made out and "cooked," but never checked or audited. The trustees did just what they were bid, and the real operator at the bank did just what he chose. This clergyman and magistrate was a swindler, his books a heap of lies, his balance-sheets pure fiction.

Mr. Pratt was sent for to examine into the state of the bank immediately after its condition became known, and it is to the account which he himself subsequently gave to the depositors that we are indebted for most of the particulars which elucidate Mr. Fletcher's mode of operation, when in the thick of his guilt. Mr. Pratt stated, that from 1848 to January, 1861, there did not appear to have been any meeting either of the trustees or managers, for the purpose, according to the rules, of auditing or settling the weekly accounts. The Rev. R. J. Heafield, a trustee and manager of the bank, confessed at the trial of Mr. Fletcher, at the Staffordshire Lent Assizes, 1862, his own culpable negligence in the following words:--"The weekly returns signed by me were prepared by Mr. Fletcher. When I signed them, I never in any way compared them with the books. They were presented to me either by Mr. or Mrs. Fletcher, and I took no measures to verify their accuracy." What might not a designing man do with such a tool as this? Having subdued his trustees in this way, the rest was, as we shall see, quite easy. The books at the bank were, it is only fair to say, kept quite correctly; so were the depositors' books. According to the evidence of Mr. Pratt: "In the day-book everything was entered with scrupulous correctness; and 1200 depositors out of 1400 had brought in their books, and he did not believe an error had been discovered." Mr. Fletcher chose a somewhat simpler course of action, which we will describe. His duty as actuary of the bank required that he should furnish weekly returns of the transactions to the National Debt Commissioners: the correctness of these returns were to be checked by the treasurer, which office he of course filled himself. All that was necessary to the perpetration of fraud was that this actuary-treasurer should be on easy terms with his conscience, and this unfortunately was the sad state of the case. Deceive the Commissioners by falsified returns, and any amount of money, under the peculiar arrangements of this bank, might be pocketed without fear. In order to help himself to a full solution of the case, Mr. Pratt brought these returns down from London, and compared them with the bank accounts, with the following result:--"The whole of the Returns he held in his hand were signed by Mr. Fletcher, as actuary and manager. In the statement dated January 1, 1859, the amount received was returned at 234l. On looking at the books for that day, he found it should have been 334l., therefore 100l. had been abstracted on that day [cries of 'Shame,' and sensation]. On the 8th of January, he found the payments were set down at 174l., whereas they had only been 74l., thus showing that the treasurer had put another 100l. in his pocket that week. In the return dated January 29, the receipts were set down at 183l., and the payments at 148l., whereas the former ought to have been 283l., and the latter 48l., thus taking to himself 200l. [renewed sensation]." So on through almost all the weekly accounts of three or four years. There seems to have been no other fraudulent transactions than those of this simple but abominable kind; the whole defalcation had taken place in this way, and it was made manifest that no one but the treasurer had participated in it. It is fortunate for the depositors that the frauds were found out when they were; but for the negligence in sending the required returns ordered by the House they might have been continued for an indefinite period. As it was, the assets of the bank realized in the first instance ten shillings in the pound; towards the close of 1862, another dividend of half-a-crown in the pound was paid, and since that time a third small amount has accrued to the depositors, who are never likely to be completely reimbursed of their loss. In 1862, Mr. Fletcher was tried before Baron Channell, and found guilty of "appropriating money with intent to defraud." His counsel, however, having made an able defence, characterised by the judge as being as subtle as it was ingenious, the point as to whether the prisoner was a "trustee" at the time of appropriating the money--this being one of the facts upon which the indictment was based--was reserved, and he was released on heavy bail. Into the further history of this man, the sequestration of his living by the Bishop of Lichfield for the behoof of the depositors, the repeated failures of justice in his case, his eventual imprisonment for two years, it is not befitting that we should enter, these being items of almost current police intelligence.

We can only spare a few words to tell how similar results followed in this as in previous frauds. Men declared they would put it out of the power of mortal man to deceive them in this way again. In many cases a degree of recklessness was induced in those who had been cruelly wronged, which could only have been considered excusable if they had lost their all. It is not at all unnatural, that, from what cannot but be considered a defective education, men should so act, and be so ill prepared and disinclined to look evil consequences fairly in the face: still such facts only prove the truth of what we have before urged, that the extent of money loss, through such dishonest transactions as Savings Bank frauds, is but a trifling part of the aggregate misfortune they entail upon the country. Other depositors, it is but fair to say, acted far more wisely. Induced by the counsel and persuasion of those whom they could trust in a time of need, many depositors in other banks withdrew their money, and placed it where alone they could get that security which they so much needed, and several of the Bilston depositors did the same with the sums they obtained. It was represented to them truly, that not only would Government suffer by a run upon the old banks, but, what was of far more importance, they would themselves suffer, and their second period of suffering be worse than their first. Nothing can be so palpably true as that money, completely withdrawn at such times, is oftener wasted than kept, and frugal habits rewarded after this fashion far oftener discontinued than resumed.

And here, it seems to us,--and we mention it, though we are somewhat anticipating the subject--the country is greatly advantaged in having the new system of Savings Banks to point to. What was much wanted in previous cases was some safe place, where timid depositors might resort with their savings, and defrauded depositors go with what they had saved from the wreck. In the Bilston case this privilege was largely used. The Post Office Banks broke many a fall, and they set many on their feet again who otherwise would have been hopelessly overcome by the shock. Two years before it would have been sheer mockery to have told depositors, under such circumstances as those to which we are alluding, not to make a run upon Savings Banks; they had no alternative till, in 1861, that alternative was provided. It would seem, from a memorandum before us, that the authorities of the Postal Banks, without in any way seeking to prejudice the interests of the old banks, did all that was fairly possible towards reducing the disasters which have invariably and inevitably followed previous cases of Savings Bank failures. They instructed their agents, in all cases where, owing to the depredations at Bilston, Savings Bank depositors applied for advice about withdrawing their money, to recommend continued confidence in these institutions; if, however, such depositors were bent upon withdrawing their money, then to advise that it should not be asked for in cash, but by means of a transfer certificate, which would make them depositors under the Crown. The strict fairness of these instructions may be judged by the closing injunction: "Although you may fairly inform those depositors who are alarmed at this failure, that the depositors in Post Office Savings Banks have absolute and direct Government security for their money, you must on no account do or say anything to weaken their trust in the old Savings Banks."

The last case in the catalogue of this peculiar description of crimes is that which occurred at Canterbury during the year 1865. This case is indeed so recent that any lengthy description of it would scarcely be tolerated. We may well spare ourselves the trouble, for the Canterbury fraud was little else than a repetition, on a smaller scale, of the one perpetrated at Rochdale, to which we have given so much space. Nor is it a little singular that the actuary in the Rochdale case was in many respects the prototype of the Canterbury actuary: in the estimation in which both were held in their respective spheres, in their character and occupation, there are several points of close resemblance between them. In the Canterbury case we have the old story of misplaced confidence, want of check, and a constant embezzlement of considerable sums of money extending over a long series of years. The actuary and secretary of the Canterbury bank, Mr. Samuel Greaves, was for many years almost the sole responsible official; of course "he bore the highest possible character for probity and honesty": nor will it surprise any of our readers to be told that it came afterwards to be said of this man, "from his many professions he was thought incapable of such conduct as that which was proved against him." The Canterbury bank was established in 1816. Greaves's connexion with the institution dates from 1830, when he was appointed actuary at a salary of 40l. per annum. The salary, however, was increased from year to year, up to the time of the exposure, when it stood at the respectable figure of 200l. Originally a "hoyman," the actuary of course, and necessarily, engaged in other pursuits than those connected with the bank; and this circumstance, in the same way that it occurred in almost every other fraud of the kind, led to the malappropriation of the money of the bank. It was another case of partial service and partial pay, and an almost unlimited command of money, when among many other business engagements it was always possible that money might be urgently needed. Like Haworth of Rochdale, Mr. Greaves undertook several agencies, among them those for the sale of coal and porter. In 1840, it seemed, from the statements of his counsel, he began to lose money in his business, and was then, to put it in the mild form chosen at his trial, "induced to abstract some of the funds of the bank to meet his pressing difficulties." Once on the downward road, he never turned back; it was impossible to manage it. It was the old story, told with plainness by his own advocate. He took the money, with the full intention of repaying it on an early date; difficulties gathered fast around him, and still the man went on, foolishly trusting to some turn of fortune's wheel to replace him in his old position. He tried speculation, but he lost still more irretrievably; his lucky day never arrived: and at length the weight of anxiety under which the man must have laboured for twenty-five years brought him down, and with the lack of his usual vigilance came detection and exposure.

This detection was effected by a Mr. Abrams, the clerk of the bank, and it is from his evidence at the trial of his superior officer that we learn the actuary's mode of operation. All the cases of fraud, it seems, were identical in character, and were effected by means of claims for withdrawals only. Every deposit reaching the bank was properly received and properly accounted for. Like Haworth at Rochdale, the Canterbury actuary carefully noted those who were generally putting money into the bank, and seldom taking any out. In the case of many of these depositors he had provided himself with forged pass-books, with the deposit column always correct, but the withdrawal side manipulated according as he himself wanted money. Suppose any of the depositors came to the bank, to deposit or withdraw a sum of money; they presented themselves to the actuary, who entered in their proper bock the proper sum, but immediately substituted a forged pass-book for the purposes of the bank. The ledger clerk received a book from the actuary to copy into the ledger, and in this way the books of the bank came to tally with the forged depositors' books. All that was necessary to carry on the frauds was that the actuary should keep a strict eye on the real pass-books of the depositors, for the discrepancies would be patent, as it eventually transpired, the moment the true books were seen. Sometimes the money was obtained with less trouble. Greaves would occasionally give himself notice that a depositor wished to withdraw a certain sum of money (and this occurred several times in connexion with a person who had deposited considerably, but never withdrawn any sum), and represented that the money was entrusted to him "to keep." After the quasi notice had been acted upon, he would draw a cheque for the money, and the amount would be entered in a false pass-book and copied into the ledger; the luckless depositor, with her book safely by her, being in entire ignorance of the whole transaction. The utter absence of any control on the part of the managers and trustees, as exemplified in such a mode of procedure, especially considering that it came after the case of Bilston, the agitation of the last few years, and the passing of the Act of 1863, reflected the greatest discredit upon the honorary officials of the bank, though their conduct subsequently went far to atone for their past neglect.

The case is described as having excited the most painful interest in the city of Canterbury. The actuary, an old man of seventy, was tried at the city quarter sessions in October, 1865; the trustees of the bank prosecuting him on the charge of felony. The transactions were again described, but only in brief, inasmuch as the prisoner pleaded guilty. A strong memorial was presented, signed by many clergymen and tradesmen, which, instead of asking for a mitigation of sentence solely on account of his age and infirmity, put forward the following extraordinary motive for interference: "The memorialists wish so far to relieve his character from any undue opprobrium that may attach to it, by declaring that the various business transactions they individually have had with him, have always been conducted in an honourable and satisfactory manner." At any rate, this questionable memorial may at least serve to show the estimation in which he was held by his fellow-townsmen. The prisoner was sentenced to six years' penal servitude,--six years for each of the two indictments; but, on account of his age, the years to run concurrently together.

The entire deficiency, when at length the whole of the accounts of the bank were made up, was found to be 9,300l. Happily the depositors, whom, so far as he knew, the actuary was mercilessly robbing, were ultimately secured against loss. The surplus fund of the bank, amounting to 3,500l., was applied to meet the case; the actuary gave up property to the value of 1,700l.; a gentleman who was his surety for 400l. was called upon to pay that sum, and the remainder, about 3,000l., was subscribed by the trustees and their friends. The bank was of course stopped on the defalcations coming to light, the books were called in, and the trustees sought the advice of the Government officials, as to transferring the business to the Post Office. The stipulation in this case was, we believe, that the trustees should make good the deficiency, and that then the business of the bank, which was a large one, the deposits amounting to 150,000l., should be handed over to the new establishment. Every effort was made by the Post Office, in the way we have shown in the Bilston case, to stem the tide of improvidence which generally sets in at such a time, and in this case with great success.

The frauds above described have, of course, formed the principal cases,--cases which from their flagrancy and extent have either been made the subject of parliamentary investigation, or have so occupied the attention of the press as to have become grave subjects of public discussion. Besides those leading cases, there have been, as we have before hinted, a certain number that have been concealed from the public from motives which, though they may have been open to question, we cannot characterise as wholly bad or unwise. From two Returns issued at different times on motions made in the House of Commons, we are enabled to compile a complete list of those frauds that have been officially reported to the National Debt Office. The first Return embraces the period between 1844 and 1852, and the second, 1852 to 1857. The numerous frauds of which we have already spoken, or to which we have referred, occurring before 1844, and the important ones perpetrated since 1857, are not included in the following list. The gross amount of loss would have been considerably swelled had a perfect list been possible. As it is, the following table gives the name of the Bank, the amount of the Fraud, and the amount of the Loss to depositors, so far as it can be correctly ascertained:--

+----------------------+--------------+----------------+------------+ | Name of Bank. | Total | Defaulters. | Depositors | | | Defalcations.| | Loss. | +----------------------+--------------+----------------+------------+ | England. | £ | | £ | |Bradford, Wilts | 400 | Actuary | -- | |Bromley | 932 | Actuary | -- | |Dunmow | 16 | -- | -- | |Highgate | 700 | Secretary | -- | |Newport, Isle of Wight| 8,156 | Secretary | 7,850 | |Leicester | 689 |{Clerk employed}| -- | | | |{ by Secretary.}| | |Mitcham | 10,000 | Actuary | -- | |Newtown | 180 | -- | 180 | |Ongar | 497 | Actuary | -- | |Poole | 6,221 | Secretary | 5,663 | |Reeth | 230 | -- | 147 | |Rochdale | 71,715 | Actuary | 37,433 | |Rugby | 1,438 | Secretary | -- | |Runcorn | 98 | Actuary | -- | |St. Helen's | 12,932 | Secretary | 6,680 | |Southport | 200 | Actuary | -- | |Spilsby | 3,213 | Actuary | 2,436 | |Upper Albany Street | 250 | -- | -- | |West London | 1,106 | Actuary | -- | |Yoxall and Barton | 200 | Secretary | -- | | | | | | | Scotland. | | | | |Auchterarder | 1,400 | Actuary | 430 | |Monquhitter | 336 | -- | -- | | | | | | | Ireland. | | | | |Kilkeel | 976 | Actuary | 976 | |Tralee | 36,000 | Actuary | 36,000 | |Killarney | 20,370 | Actuary | 19,105 | |Nenagh | 832 | -- | 832 | |Mallow | No returns. | |Castle Townsend | No returns. | +----------------------+--------------------------------------------+

The frauds at Hertford, Brighton, Reading, Cuffe Street, Bilston, and Canterbury, where the amounts of the defalcations are known, are left out of consideration. Thus the total amount of the frauds enumerated in the Returns, extending over thirteen years, was 179,280l.; or if we include the Cuffe Street bank fraud, to make up for those Irish banks which sent no returns, and errors of computation, and spread the total over all the thirteen years, the average amount of defalcation was at the rate of 17,600l. a year; or, taking the banks mentioned in the Returns, upwards of 7,900l. for each involved. Doing the same with the total loss to depositors, or 117,732l., we find the average loss for each bank to be nearly 5,000l.

The reader who may have followed us through this chapter, and remembers the classes to which the cheated depositors generally belonged, will have some idea how much pain and suffering the amount of money so treacherously wrested out of their hands really represents. "But the evil," Mr. Gladstone well said several years ago when speaking on this very point, "that is done, is, unfortunately, not to be measured by the actual amount of money loss; there is an amount of evil such as figures can convey no idea of; and it is impossible that the public confidence in these institutions can be that which it ought to be, while these losses are liable to occur at all." This was a deficiency which Mr. Gladstone set himself to remedy immediately afterwards, and, though unable to do so at the time through the opposition of Savings Bank managers, it was not long before another system was provided which struck for ever at the root of this grievance; and for all practical purposes, and so far as it was now possible, repaired the injury which the industrious classes had suffered through the action of defective legislation, and the moral obliquity of those who had been trusted with their earnings. After entering still more fully in the next chapter into the defects of the Savings Bank institution, considered purely as a system, and the attempts made from time to time to remedy its deficiencies, it will be time to describe how the above beneficial result was brought about.

"In the case of a fraudulent actuary, especially if the bank is carried on at the man's own house, there is no limit to the fraud which he may commit."--Evidence of Mr. Tidd Pratt before the Committee of 1848.

That Lynch, was no ordinary man there is abundant evidence. The following address to the inhabitants of Tralee--which from anybody else would be considered well meant and well expressed advice, simply completes the burlesque in his case:--

1. "Money, as the means of procuring the necessaries and comforts of life, is a blessing; and to be careful of it is a duty incumbent on all."

2. "To lay by in the time of youth, and whilst we enjoy good health, a portion of the fruits of industry in store for future wants, is a mark of wisdom; and considering that all are liable to infirmities, a provision to alleviate them is of the greatest importance."

3. "Some men by hard labour, and others by superior skill, earn high wages; yet for want of proper management they have nothing to reserve. Many might be disposed to save a part of their earnings if they knew how to set about it, or where to place it with safety; whilst others who have occasionally practiced saving, have lost what they had laid up, by trusting it in unsafe hands."

4. "The promoters of this institution are aware that several of their neighbours, from various causes, are unable to procure many of the comforts, if not the necessaries of life; they are, nevertheless, fully persuaded that many others who have the advantage of constant employment, and are favoured with the enjoyment of health and strength, might, by practising laudable economy, reserve a portion of their earnings to meet the demands which a future pressure of bad times, sickness, old age, or an increase of family, may bring upon them, and thereby avoid the calamities under which so many of them suffer."

5. "It is a great mistake to suppose that small sums are not worth saving. By the habit of saving in little matters, riches are acquired; farthings saved would soon accumulate to shillings, and those to pounds," &c. &c. &c.

A Mr. Fitzgerald was the manager who generally attended and did the current work of his office. His statement after the frauds had come to light was, that he made the best inspection he could of the ledgers of the bank. When asked why he never compared the ledgers with the daily cash books, he confessed he never thought of it, "there was the omission," "that was where the link of investigation broke," "that was the omission which concealed the fraud so long," and other similarly shiftless remarks.

Report of the Select Committee of 1848.

Ibid. (Qu. 674).

Mr. Pratt's idea was to make the trustees liable in a great measure for the deficiency, as guilty of wilful neglect or default. The advice given as to Lynch's property was of very questionable propriety, and very questionable, as it afterwards appeared, in law. The money, however, was lost to the depositors completely, and went to Lynch's relations.

As usual, many persons had been allowed to deposit illegal sums on which they had no claim. One man was shown to have taken out 420l. from the Provincial Bank of Ireland, and to deposit it all in the Killarney bank in one day.

Vide Select Committee on Savings Banks, 1858. Evidence of Mr. Jameson, actuary of the Perth Bank. (Qu. 2,906.)

An estimable sect of Christians, they are not better known for the zeal with which they contrive to amass and keep in their immediate circle vast stores of wealth, than for the uprightness and conscientiousness they generally display in the conduct of their business. The transactions of Haworth, and another of their black sheep who about the same time committed, or attempted to commit murder, whilst assuming their character, is described to us as having spread consternation and dismay through their ranks. The way in which the Society of Friends has, as a body, taken up the management of Savings Banks is most commendable.

A great part of our information relative to the Rochdale bank fraud is gathered from the evidence of Mr. Edward Taylor, a worthy and intelligent tradesman of Rochdale, who was examined before the Committee of 1858 in reference to the transactions in question; and no one is better able to speak of them.

So prevalent was this impression, that for several weeks 17s. 6d. in the pound was freely offered for Savings Bank books in Rochdale.

Evidence of Mr. Hatton, actuary of the Brighton Savings Bank.

It almost passes the bounds of credibility, and yet it cannot be denied, that in two separate banks, where the accounts were thus overhauled, items of money to a large amount were repeatedly found entered in the books with nothing but a pencil!

Times, January 17, 1862.

Midland Counties Express, March 16, 1862.

Report of the depositors' meeting, Birmingham Daily Post, January 16, 1862.

Or, as it was far better illustrated at the time, "It is not enough to bring a man who has been tossed about in an unseaworthy bark within sight of terra firma. We must heave him a rope, or, if possible, run out a plank between the quay and his crazy ship's side, on which he may safely walk across."

No attempt is here made to catalogue and describe frauds not occurring in Savings Banks proper: a chapter itself might be written on banks for the people established and carried on under a system of complete deception and villany. Nor have we entered into the case of frauds in Penny Banks, such as the unfortunate case at Birmingham.

Of the Rochdale depositors, for example, 1,245 were women, 722 unmarried factory operatives, 292 married, and 231 young girls; there were besides, 953 miners, 539 labourers, and 191 members of sick clubs.

Since the above pages were in type, a deficiency has been made public in the accounts of the Worcester Savings Bank, the cashier, Benjamin B. Wilkins, having committed frauds to the extent of between 4,000l. and 5,000l. On the frauds coming to light last August the cashier decamped, and, as it now appears, found his way to America. The trustees, having heard of him through some channel, put the matter into the hands of the police, who have succeeded in apprehending him, and bringing him back to this country, and he will shortly be brought to justice.