"It is astonishing," said Gard, the bookkeeper, "how few people know anything about their own business. Take bank accounts, for instance. Many people have money in the bank which lies there inactive. There is not one man in five, having such an account, who can tell the amount of it."

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

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

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

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

"As a test of my contention," said Gard, "I am willing to pledge a box of candy to each of the ladies and cigars to the gentlemen who will set down the exact amounts of their inactive accounts in the First National bank and then prove their figures correct by application to the cashier."

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

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

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

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

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

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

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

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

But there was a feeling of unrest that haunted the young examiner. It seemed that his subconscious mind was aware of an oversight that had been made by his working faculties. He was not able to sleep well of nights, and in his sleep the various accounts of the New Beaufort bank insisted on visualizing themselves. Finally the recurring accounts eliminated themselves with the exception of one which persisted. The loans and discounts account kept thrusting itself into his consciousness.

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

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

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

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

The Compton home stood on a hill just back of the town. It was known as Stone Crest and was the most ambitious establishment thereabouts, being always pointed out with pride to visitors. The banker was a widower, but given to entertainment and to charity. The members of the board of aldermen often met at Stone Crest to discuss those matters that had to do with the well-being of the town. Teas were given there whenever its charitable women were inaugurating some new venture. The party to-night was a semipublic affair, for it was in commemoration of a centennial anniversary of that occasion when the first settlers had fought off attacking Indians from their stockade through a day and night.

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

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

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

McCord, the plain-clothes man, had vacillated between his hotel, the railway station, and those streets that gave views of the alleys leading past the back ends of establishments that might contain safes worth raffling. Occasionally his eye fell upon the lights in the house of the banker on the hill, and wandered to the chief financial establishment of the town. Yet all was so serene in this eddy of the world that the hour of solitude that followed eleven o'clock seemed such an age that it drove him to bed.

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

Gard, the special agent of the Department of Justice, was one of the few men in the town who was awake except those who had been guests of the banker and who had lingered to an hour which was almost unprecedented in New Beaufort. They would have gone home at eleven, but the banker insisted that they remain for further entertainment on the part of his New York musicians. One song called forth another and the quality of the music proved so much more pleasing than that of their customary local talent that they forgot the passing of time. The special agent sat on a hill near the Compton home and smoked a pipe.

It was twelve o'clock before the party finally broke up. Those of the townspeople who had come in their automobiles were being tucked into the tonneaus, and those who had walked up the gray macadam drive were just setting out on foot when the clatter as of a bunch of giant fire crackers called their attention to the village below. From the bank building was seen suddenly to burst a cloud of smoke while, a moment later, a skylight was broken and a tongue of flame leaped forth.

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

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

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

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

Here he evidently had business. Standing in the middle of the floor he looked about. Thrown carelessly into a window seat he saw two heavy books of the appearance of ledgers. These he secured and placed on a table in the middle of the room without even examining them. Next he began further exploration. When he found the banker's bedroom he seemed satisfied. On the back of a chair was a coat, evidently that which Compton had worn until he dressed for the evening. Gard thrust his hand into the inside pocket of his coat and pulled out a batch of letters through which he ran rapidly. He selected two or three, thrust them into his pocket, returned for the ledgers, tucked these under his arm and left the house.

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

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

Gard.

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

At the boarding house Gard learned that Lorance lived modestly in a cottage with his wife and babies, had not been seen to make any display of money, was of sturdy farmer stock. On the other hand the investigator immediately picked up the facts that the cashier, Compton, maintained an expensive establishment, entertained lavishly, was often absent from town, was nervous, highstrung, in bad health.

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

It was to get a better line on the business of the community, and particularly upon the accounts of Compton, that the special agent secured a position of bookkeeper in Joy's grocery store. Here he found, in the first place, that the buying of the Compton home was profligate and evidently wasteful. He found, further, that the bills were always paid without question and by check. Knowing of an old trick that has brought many a cashier to ruin, Gard sought a way to test these personal checks to determine whether or not they actually found their way to the personal account of the cashier.

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

In various ways the special agent found opportunities, even without seeing the books of the bank, of demonstrating to his satisfaction that the accounts were being juggled. This was particularly true of new deposits. When a cashier is particularly hard pressed he may resort to a manipulation of the accounts of current depositors. The system is the simplest in the world. When a depositor hands in his money, the cashier enters the amount in the pass book of that individual as a receipt. Then, instead of entering the money to the depositor's credit, the cashier puts it into his pocket. Thus there is nothing to show for the transaction but the entry in the pass book, and that may not be presented for a long time. The cashier chooses for spoliation the accounts about which inquiries are least likely to be made. As far as the books of the bank are concerned they are as though the deposit had never been made, and the bank examiner, therefore, has no way of discovering the shortage.

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

In this way the special agent was able from the outside to get very good leads into the condition of the bank and to determine the manner of its looting when the facts might not have been obtainable by an expert working from the inside.

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

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

When from the hillside Gard that night saw the silent car stop back of the bank and the flames subsequently break out, he knew what had happened. These were accomplices of the cashier who had probably looted the bank of any remaining funds and, according to agreement, had set it on fire that the incriminating records of the cashier might be destroyed. The wily cashier, however, had made sure that the books that showed his guilt would not be found, in case the plan was not an entire success. He had removed them himself, but had not as yet destroyed them for he saw no probability of coming under immediate suspicion. Likewise had he neglected to destroy certain correspondence that later connected him with the parties found to have committed the arson.

The books taken from the banker's house were found to be the personal ledger wherein should have been entered deposits, and the loans and discounts ledger in which account Compton had entered the amounts representing all his personal checks. This latter was the account that had dwelt in the mind of Newton, the bank examiner. The letters that Gard had found in the banker's pockets, though unsigned and mysteriously phrased, were later traced to the Dutch Shroder gang. They proved a great aid to McCord, the plain-clothes man, who had slept peacefully through all the clamor incident to the burning of the bank, but who, through them, was able to trace the burglars.

Compton went to pieces when confronted with the proof that his derelictions had been found out. When his townspeople came to know the facts on the following day, they stormed the jail and threatened to lynch him. So determined was their onslaught that the sheriff spirited the prisoner away. In desperation he confessed his crimes and exonerated Lorance, the assistant cashier, who in playing the market had only executed the orders of his superior. Compton lived but six months after his conviction and sentence to ten years in the penitentiary at Atlanta.