rotecting the Nation's Money GIFT OF Protecting the Nation's Money A Brief Sketch Recounting how Bank-Exchange Has but Re- cently Come to Take the Place of Currency and how the Mod- ern Forger Has Improved His Opportunity Together with an Account of the Labors of American Inventors During the Past Seventy -five Years to De- velop the Present Art of Protect- ing Negotiable Instruments. By Jack W. Speare Todd Protectograph Co. (ESTABLISHED 1899) World's Largest Makers of Check-Protecting Devices Rochester, New York tdfy Accounts' In Grandfather's day they paid their bills in clinking coin of the realm; Checks were not in circulation, so there were no "check raisers" and no check-protecting devices. . c. The Business Man of Today- All Done with a Stroke of the Pen Checks have taken the place of currency; the crook who used to filch a bag of gold now "raises" or forges a check. No modern concern can well do business safely without the Todd system. 372861 Copyright 1918 TODD PROTECTOGRAPH CO. (Established 1899) World's Largest Makers of Check-Protecting Devices Rochester, New York AH U. S. and Foreign Rights Reserved Protecting the Nation's Money (Explaining why there was no "Check- Raising" in Father's and Grand- father's Day) 11 'Enclosed find check.' " The above, according to the immortal Walt Mason, are "The sweetest words "That e'er outclassed the song of birds." ODERN "Business English" knows no phrase of deeper, more vital import than that "Enclosed find check." But fifty, or even forty years ago, the word "check" meant little or nothing in the daily life of the average American business man. The idea of the bank check is as old as Egypt; but it is only within the memory of you and me that individual checks became common instru- ments of exchange and began to circulate freely from hand to hand and from one city to another. The average man in the generation that fought our Civil War had scarcely heard of a bank check as a credit instrument. There was nothing re- sembling a clearing house in this 92 per cent, of Our country until 1853. Such a thing as Business Is Now tl . j , , r 111 * ransacted with a raised or forged check was Checks almost unthought-of. The need for check-protection had not suggested itself. And now consider how our entire business system has been revolutionized within the span of an ordinary lifetime. For the check today is entered on the world's ledgers as "Cash"; and "money," except for small change, has become almost as scarce in the realms of business as the 6 PROTECTING THE NATION'S MONEY "wampum" of the Indians or the beads and tokens used in barter by savage tribes. In transacting the business of the United States today, we use yearly over six billion individual checks and drafts.* One authority stated recently that "Fully 95 per cent. of bank transactions in this country are now carried on by the use of checks ; and in the whole- Six Billion Checks sa i e trade in some sec tions at least Change Hands in ro r n i i i TT A 77 9% P er cent, of all bank deposits are LJ. o. Annually in the form of checks, f It is commonly estimated by financial experts that, of all our buying and selling in this country today, we make final settlement as follows: 90 to 95 per cent, by bank check, draft, etc. 5 to 10 per cent, only in money. By the word "money" as used here is meant only our actual currency a total circulation according to the U. S. Treasury Reports, of barely four billion dollars ($4,018,- 043,555 in 1916, to be exact) -with which to carry on a volume of business estimated at 542 billion dollars ($542,- 000,000,000) in this country annually. % Stated in another way, this means that the United States is doing business at the rate of about $5,420 yearly * The estimate of the number of individual checks and drafts circulated annually is based on the statement by Mr. Jerome Thralls that "The amount of the average check handled in the United States is $41.25." The volume of clearings reported by 113 leading cities in the "Financial and Commercial Chronicle," N. Y., for the year 1916 was $260,953,235,012. Dividing this by $41.25 gives the number of individual items that constituted the year's "clearings." Mr. Thrall's position as one of the chairmen of the Federal Reserve System, as well as secretary of the American Bankers Association Clearing House Section entitles this estimate to consideration. t "The Practical Work of a Bank," an excellent text book on modern bank practice; W. H. Kniffin, Bankers Pub. Co., N. Y., 1915. I Prof. Irving Fisher, the eminent economist, of Yale University, in his graphic diagram of "The Equation of Exchange," which is pub- lished annually in the American Economic Review. In the diagram for 1915 (Vol. VI., No. 2) Dr. Fisher estimates the volume of business PROTECTING THE NATION'S MONEY 7 for each man, woman and child in the country, on a per- capita circulation of only $39.23 in money. The secret of doing $138 worth of business with each dollar of actual currency is to be found, of course, in our wonderfully flexible system of bank exchange, which has been strength- *5***"S E " c % , 7 . . ,, , t , ,, Nimble Dollar ened within the past few years by the p - $138 organization of the present Federal O f Goods Yearly Reserve System. At the same time it is obvious that the proverbial "nimble dollar" must needs be extremely nimble indeed, when we ask each and every poor, overworked little dollar to do the work of $138 each year! This apparent trick of financial magic is really a part of a legitimate and highly scientific system, as may readily be understood by examining the records of the principal clearing houses, and comparing the volume of transactions "cleared" through the banks with the comparatively trivial amount of currency required to meet the actual balances. The New York Clearing House, during all the years of its existence since 1853, shows an average percentage of balances to clearings of only 4.64 per cent.* Knifftn, in his "Practical Work of a Bank," already referred to, mentions an instance where a certain Boston bank sent to its local clearing house items totalling $11,000,000 and had a debit balance of only about $2,800 to pay. "At another transacted in the U. S. for the year mentioned, as follows: "Circu- lation of money (outside of banks and U. S. Treasury), 1.79 billion dollars, which changed hands about 22 times in the year, effecting 39 billion dollars of exchanges. Volume of bank deposits subject to checks 9.39 billion dollars, which changed hands about 53.6 times during the year, effecting 503 billion dollars of exchanges. A total of $542,000,- 000,000, representing the total amount of goods bought and sold.'' * Cannon, "Clearing Houses," National Monetary Commission Reports, 1910. 8 PROTECTING THE NATION'S MONEY time, this bank settled a debit against it of $6,180,000 with only $167.31." So now we begin to see where the importance of the check and our modern system of clearings comes in as a vital factor in handling the swiftly-increasing business of this Twentieth Century. America has, in fact, become within the last two lSJ "Hs. CU. BOSTON, ^f''/;it.1? jy 2 fr 1:'^- to <~ {<- t or JJtartv, ^' '' ' \ ) ,''<''/' r- 7 {< "L r /. -' ^^ - '/ / Uotlars IUS TO THE CA5HIEE. WHAT MIGHT HAVE HAPPENED Daniel Webster's $750 check, as it would look when a modern "check-raiser" got through with it. The word "Fifty" is easily squeezed into the space Webster left in front of the "Seven," completely covering the line he drew in that space to prevent such a trick. The figure "5" is added in front of the "750." Thus, anyone who is at all handy with a pen could add $5,000 to the immortal Daniel's "carefully-drawn" check, with only eight strokes of the pen, and -without rubbing any- thing out. Now Comes the Golden Age of the "Check Raiser" HE forgers would have been out of employment entirely when the banks adopted the Todd idea, through the lack of material to work on, but an unexpected development favored them, showing, perhaps, that the Devil does in fact make it his business to "Find some work for idle hands to do." This new factor was the tremendous increase at about that time in the circulation of individual bank checks by all of the larger business houses, encouraged by the latter- day perfection of our clearing-house system, and the better education of the public in banking methods, which is a development strictly speaking of only the past generation. It might be possible for a clever historian to prove that checks and similar instruments were used as long ago as the days when King Solomon paid the household bills for his "seven hundred J*f 9"* re ,, i r r Baked into Bricks wives. Conant speaks ot a system ot commercial instruments including "transfer checks" as being used by the Assyrians at least seven centuries before Christ. But he admits that "Even if the check can justly lay claim to remote antiquity in origin, its extensive use is a development strictly of modern times." * The documents of those leisurely days before the Christ- ian era were like nothing that we have ever seen in our * "A History of Modern Banks of Issue," Charles A. Conant; G. P. Putnam's Sons, N. Y., 1909. 30 PROTECTING THE NATION'S MONEY times, outside of museums. The "transfer checks," for instance, which Conant mentions, were "Inscribed not on paper but on small clay tablets about the size of a piece of toilet soap" and baked into bricks for preservation. It is common to speak of the Italian bankers as having "invented" the check, but such instruments as the famous Florentine bankers, the Dutch, and the goldsmiths of early London used, were probably of a nature quite different from our flexible little "Pay to the Order of." The first authentic mention of a "cheque" is found in English records about the year 1781, when English bankers began to issue what we now refer to No "Clearings" as "cheques," bound in books, but i r n T t ^ s C" ntr y they were more commonly called Unul 1853 ,, dr y afts From the year 1800 on, the word "cheque" gradually became synonymous with "draft" as meaning a written order on a banker. Ultimately, it acquired its present meaning and has a statutory definition of its own "A bill of exchange drawn on a banker on demand." Banking did not come into its own, either in England or America, until the middle of the Nineteenth Century. The first organized system for clearing "country" checks was established in London in 1858. Up to that year there was no recognized method of handling these "country checks" except directly from the issuer to his creditor and from the latter to the particular bank on which it was drawn. In New York, up to 1853, it was the custom of the messengers and clerks from several banks to meet daily at a certain corner in Wall street to exchange notes and other items. Out of this grew the wonderful New York Clearing House of today. It was organized in November of that year, at a meeting attended by the representatives of 52 local banks. Boston followed by organizing its own GOLDEN AGE OF THE "CHECK RAISER 1 ' 31 clearing office in 1856; Philadelphia in 1858, and Chicago came into line in 1865 so that at last there was an organ- ized system for the exchange of credits between city and city without the shipment of actual currency, except in settlement of balances. Gradually the exchange of bank checks was built up, but it is only within a very few years that a merchant in Iowa or Tennessee felt free to make remittance to his creditor in New York or Chicago by personal check. Along in 1904, or thereabouts, the underworld again sat up and rubbed its eyes, and took note of the new condition. Soon a brand-new school of crime to take advantage of the opportunity was being developed in Eastern cities beginning with New Enter the Modern __ f Check Raiser" York. Ihis cult was made up at the start of students and "disciples" of the old-time "draft raisers." Among them were "Doctor" Doyle, previously mentioned, and one "Rough-Ocean" Bill Ford. Turning their undivided attention now to checks, these up-to-date penmen discovered that a much wider and more profitable field than ever before had been opened before their eyes. The checks of substantial business houses were as common and circulating almost as freely as dollar bills. The mail of every wholesale and manufacturing concern in New York was loaded down with checks. It was actu- ally no trick at all to secure the checks of responsible con- cerns in any one of a dozen ways and to "raise" them was so easy that it was almost beneath the dignity of a "pro- fessional." First, these gangs operated by sending their members out to secure checks by various tricks. For example, they purchased articles of varying styles, to be taken home "for selection," then returned the ones not approved and re- ceived a check for the purchase price. Sometimes they mailed a small sum of money to a reputable concern, ap- 32 PROTECTING THE NATION'S MONEY parently in payment of a bill, then wrote that a mistake had been made and requested the return of the money invariably receiving the firm's check in payment. Or they worked a game like the following: A stranger called upon a coal merchant and ordered coal, saying he was about to move into a certain house in the neighborhood and wished the coal delivered the following week. He thoughtfully made partial payment in advance, since he would not be at the new address for several days. A couple of days later, before the time set for the delivery, the coal merchant received a letter saying the customer's Hundreds of Ways business had called him to another le e c3/oT city and he would be unable to occupy Crooked Purposes the house he had arranged for so would the coal man please return the deposit? Naturally, the coal merchant sent his check for the amount, and thought nothing of the matter until a month or so later when his bank account turned out to be overdrawn. Endless other games of a similar nature were devised by these up-to-date crooks, and some of them were extremely ingenious in the schemes devised to obtain a genuine check without arousing the suspicion of the victim. These meth- ods were too slow, however, to satisfy the high-class gangs, and they finally adopted the plan of stealing checks from the mails in wholesale quantities a scheme that they have used with unvarying success from that day to this. Briefly, the method of the mail-box gangs is based on the fact that mail in many city buildings is left unguarded for various periods of time every business day in the year. The length of the period matters not to the thieves. It takes only a minute, for they have practiced the trick so long that it is almost second nature to them. The heaviest mail in the large cities is received in the first morning delivery. It is an axiom with the check GOLDEN AGE OF THE "CHECK RAISER 1 ' 33 thieves that the average city concern receives large numbers of remittance checks from its out-of-town customers every morning between the fifth and the tenth of each month. Now, the Postoffice Department has a rule that postmen are not required to deliver mail above the ground floor in loft buildings or apartment houses that have no passenger elevators. Therefore, the tenants on all the upper floors in these buildings provide themselves with private mail boxes. Looking into the lower hallway of any old-fashioned city building, one may see these rows of mail boxes from two to thirty, according to the number of tenants, each bearing the name of its owner. Here is where the forger came gloriously into his own and graduated from the ranks of petty thievery into the realms of "big business." The post- man on his early morning round, steps r & . , . .. Depositors by Mail into the hallway, deposits his little bundle of letters in each box, then blows his whistle to summon the tenants upstairs, and goes on his way. The boxes are usually made of tin, the flimsiest affairs imagin- able. Even if they were fairly strong, it would make little difference. The crook carries a "jimmy" which will wrench the stoutest lock from its fastenings. Failing that, in British cities, where the boxes are of ponderous construc- tion, he gets his booty just the same with a little "bird- lime" on a string. So, the postman leaves a bundle of letters in the box and goes his way. The confederates of the "check raiser" have been watching this box for weeks, perhaps, and have noted that most of the firm's remittances from customers arrive about the tenth of the month. In sneaks the thief with his "jimmy," breaks open the cover of the box, and before any of the tenants are half-way downstairs in response to the postman's whistle, he is off and away with a handful of letters containing genuine checks from the 34 PROTECTING THE NATION'S MONEY WHERE DO YOUR CHECKS GO? Photograph of typical hallway in a city business building, showing letter boxes of different tenants, in which their mail is deposited by postmen. This is where Boland and other "professional" swindlers secure the genuine checks of good business men. Mail stays in these little tin boxes for hours at a time, at the mercy of the first "crook" who happens along with a screw driver and the yearning for "easy money." GOLDEN AGE OF THE "CHECK RAISER 1 ' 35 reputable merchants of Worcester, Oskaloosa and Chatta- nooga. This, briefly, is the Twentieth-Century method of "easy graft" invented and developed to perfection by such of the old-timers as outlived Pinkerton and Byrnes. The actual stealing of the letters is carried on consistently by youths hired for the purpose and never brought into con- tact with any of the permanent members of the gang. When one of these young rascals is caught red-handed, as sometimes happens, it is seldom that he can give any information as to the Stealing Whole whereabouts or identity of his princi- Trunk M s f <** , -ill i uine Lnecks in a pals, bomewhere in the background, Single Day working alone in an apartment reek- ing with opium and chemicals, is the master, the "Scratchier," as the forger is called in underworld slang. Whole arm- fuls, trunkfuls, of letters are brought to his headquarters. He sorts them out for remittances, burning the letters, and keeping only the checks that suit his purpose. His pro- cedure is always the same: First, he selects only checks bearing the printed forms of concerns having the earmarks of substance and good credit. Common "counter checks" not bearing the signer's printed form are contemptuously tossed aside, as well as those protected with the Protectograph. The leaders of these gangs seldom make a mistake. Certainly, they have access to the rating books of Dun or Bradstreet, and they display excellent judgment in refusing to bother with documents stamped with the Todd machine. Many voluntary testimonials have been received from convicted forgers, testifying to this, and some of them relating cases where they had destroyed checks in attempt- ing to remove the "shredded" Protectograph line. Having accumulated a large supply of checks that answer his purpose, the "Scratcher" proceeds to wash them off with acid, removing the date, number, name of payee and amount. When he has finished his "wash," nothing S S >> Jr. _!, C =! T3 >> ^Sg^as QJ gj ~J "TJ O t. C *^ ? <-!-< j_) ^ rw rt frt r- 1 T2 t"~^ ' . ^ O iJlal^lu GOLDEN AGE OF THE "CHECK RAISER" 37 is left of the original checks except the printed forms and the genuine signatures. In other words, by using ink eradicator, the forger provides himself at will with a whole- sale supply of genuine checks "Signed in blank" and the signers selected to represent the highest credit. (Imagine a good business man signing a check in blank and handing it to a "crook" with instructions to fill it out to suit himself! Yet that is what every business man un- consciously does, in effect, when he issues a check bearing his signature and without the protection of the Protecto- graph.) Now, the "Scratcher" takes these blank checks, and proceeds very methodically to fill in the blanks to suit himself. He stamps in a new number usually about one or two hundred giving Checks , u .i ,, . . , ~ Signed in Blank numbers higher than the old one. On tQ ft otor i ous the line "Pay to the Order of" he fills Swindlers in "Cash" or "Bearer." On the amount line he writes a large amount, usually about "Three Hundred and Eighty Dollars" which seems to be for some reason a "lucky" amount with many profes- sionals. Thus, he has a check that is apparently perfectly genuine, payable to himself or to "Cash," for a sum that will amply repay his efforts and risk. You notice he leaves the date line blank. That comes later. Now, having accumulated dozens or hundreds of these checks, the gang is ready to "cash in." For this function an entirely different set of confederates is chosen; and, again, these men are kept in ignorance of the identity of the rest of the gang. These new men are known as "pre- senters," and they might be called travelling collectors. A "presenter" is given a route, covering several different cities in the South, Northwest, New England, or the South- west, as the case may be. For each city on his route he has one or more checks payable at banks in that particular city. For example, a check of the Jones Cigar Co., Grand Rapids, is stolen from the mails of the Blank Envelope Co., 38 PROTECTING THE NATION'S MONEY Wholesale ^ CVlOnQlllM ^Dresses* and Coats 207 WEST MAIN STREET nd Sklrti Oklahoma City, Okla.. October 12, 1917. Todd Protectograph Company. Rochester, N.Y. Dear Sirs:- We hope our experience with that $29. 57 check raised to $380. will serve as a warning to other merchants and show them that a bank's guarantee against a loss on a raised check is not valid, even in writing, because there is no way to prove whether a check has been raised or not. You remember we were ready to order a Pro- tectograph from your salesman along in 1906. but our banker said it was a waste of money, as we had never had a check raised, and if such an "Improbable" thing should happen the bank would have to stand it. So that is why we didn't have a Protectograph when we drew this check in September, 1907, to Alfred L. Simon & Co.. wholesale feathers. New York. The check was stolen from Simon & Co . ' s mail and on Oct. 7 it was presented right at our bank in Knoxville, Tenn., by some strange person. Simon & Co. 's name had been taken out and changed to "Bearer." The amount had been altered from $29.57 to $380. The date was changed to that very day. The "Strange Person" got the money and has never been seen since. Nov. 1, our balance was over $300. short, and I showed this $380. check to the President of our bank. I said, "Mr. , you know I never drew a check to bearer in my life, and I guess you'll have to make good on that check raising agreement sooner than you expected. " Did my banker turn to the ledger and credit me with $380.? He did not. He said that my signature was genuine and I would have to stand the loss. Then I transferred my account from his bank and entered suit, and after a hard fought case the Tennessee courts decided in favor of the bank and we lost. We are out the whole $380., as we had to send another check to Simon & Co., and since that time we have never signed a check until it was protected with a Todd Machine. T. TOBIAS & SON Per Letter from a successful merchant rated at over $100,000 in Dun's, who sued his bank to fulfil an alleged agreement to the effect that the bank would be responsible in case of a "raised" check. (The check, with an account of the interesting circumstances, appears on page 36). GOLDEN AGE OF THE "CHECK RAISER 11 39 New York City. It has been changed from "Blank Envel- ope Co." to "Cash" and the amount "raised" from $14.22 to $380.00. So the "presenter" is going to stop at Grand Rapids on this trip, and he will call at the State Bank in that city, because that is the bank on which this check is drawn, and the signature of Jones Cigar Co. is known and has a value in Grand Rapids "as good as gold." In the course of time, Mr. Presenter reaches Grand Rapids. It is Feb. 24, 1916. The check was originally dated Dec. 3, 1915, perhaps, but the date line is now blank. Mr. Presenter takes a rubber-stamp outfit from his grip and stamps in Feb. 24, 1916. He now has a check that to all intents and appearances was issued by the Jones Cigar Co. an hour or so ago, payable to "Cash" for $380. He rushes into the State Bank in his shirt sleeves and without a hat. ^ow the Crooks TT . ,,. , , , Put the Bank Teller He flings this check down on the ^ a fj i e counter and breathlessly explains that he is a clerk at the Jones office, that Mr. Jones just re- ceived a telegram calling him to Minneapolis on a matter of life and death, that Mr. Jones has just three minutes in which to catch the only train for Minneapolis, and that ' he is waiting at the station for the clerk to bring the pro- ceeds of the check so that he may take the train and keep the appointment. The bank teller hurriedly scans the check. It looks all right, except that the Jones people have never been known to draw checks to strangers since they were in business. He looks at the supposed clerk, and fails to recognize him as anyone he has ever seen before. He takes the check to his card-index file. Yes, the signature is undoubtedly genuine, and the check is drawn on the genuine Jones Cigar Co. printed form. He asks the "clerk" to be identi- fied, but the latter is jumping from one foot to the other with his watch in his hand, and reminding the teller that he has only two minutes in which to reach the depot, and that if Mr. Jones loses his train it will be as much as his 40 PROTECTING THE NATION'S MONEY job is worth. The teller can see, also, that if Mr. Jones loses his train through failure of the bank to honor his check it may mean a lawsuit with the Jones people which will cost his bank many times $380. He mentally offers up a prayer that it is alright, hands over the money, and "Mr. Presenter" flies out of the door, never to be seen again. It may be a month later that the Jones passbook is balanced, and immediately comes a claim from the concern that their balance is three-hundred-and-sixty-something short. Later, they learn from the Blank Envelope people that the check mailed to them never arrived so their loss is $380. They always assume that the $380 "Cash" check is the one mailed to the envelope concern, but they cannot prove it, because the forger has done his work so well that no traces whatever of the original writing remain. _ It is of no use to call attention to the Month's Leeway difference in hand-writing between the body of the check and the signature, because the man who signs the checks in the average concern very seldom fills out the amount. The difference in ink means nothing, because a dozen different kinds of ink may be used in one office. The crook has fortified himself at every point. Unless he is caught red-handed at the bank window his chances of "getting away with it" are almost 100 per cent. ; and no teller has ever had the nerve to turn down a genuine signature when presented in this way with a plausible life-and-death story to explain the circumstances. (See page 36). There have been cases where the mail-box gangs operated in one section of New York and Boston for months at a time, stealing literally thousands of checks monthly, and none of the principals were ever caught "with the goods." One of the first arrests ever made in connection with the work of the mail-box gangs was that of William Boland, a mere slip of a boy, in 1905. A detective set to watch for mail robbers caught Boland in the act of rifling a mail box GOLDEN AGE OF THE "CHECK RAISER" 41 in the wholesale garment section of lower New York. It was suspected that Boland was employed by "Rough- Ocean" Ford, but the police could not secure any evidence to substantiate this belief, and Boland alone went to a reformatory for a few months. When he was released, he immediately set to work to organize a gang of his own. That was over a dozen years ago, and he has been at it constantly ever since. His confederates, both letter thieves and "presenters," have been caught several times, but usually they have been discharged for lack of evidence, and only once has the law been able to trace the crime to Boland 's door. That once was in Boston, in 1909, when a little fellow caught pilfering letters from a box near the Common broke Boland Master , jitt r u j Scratcher of the down and led the way to a furnished p resen t Day apartment in Yarmouth street, where they found Boland, living under the name of Gordon, sur- rounded by stacks and stacks of rifled letters and carefully "raised" checks, together with the inevitable opium lay- out and mechanical paraphernalia of the "professional." The Boston police say that they recovered enough checks and letters from this apartment to fill several large trunks. They were scattered all over the apartment and stuffed in bales inside the fireplace. A partial list furnished by the Boston police shows that the checks already "raised" and ready for the "presenters" to make their collecting trips came from points as widely scattered as Shawmut, R. I.; Charleston, S. C.; Minneapo- lis, Minn., and Atchison, Kan. This is mentioned merely to show that you cannot tell what may happen to the checks you issue to "strictly responsible people." They sent Boland over the road again, of course, for this wholesale enterprise, but it was only a few years before he was at large, having earned a short sentence by good behavior and since his release in 1911 he has been constantly at work floating his spurious checks in large quantities, without spending another day behind the bars. 42 PROTECTING THE NATION'S MONEY The police in New York say they keep Boland's address on file and can take him at any time the courts will accept their evidence against him, but it seems there are unfortu- nate technicalities in our laws which make it almost im- possible to establish satisfactory evidence of the connection between the "Scratcher" on the one hand and the two dif- ferent sets of confederates who serve him on the other. As an example of this, one of the mail-box gangs, prob- ably Boland's, took a notion a few years ago to operate against the big theatrical producers on Broadway. They took pains to learn that the theatrical folk had a habit of n* ^ T. P a y m g bills for sundry supplies at a George M. Cohans . . . , t_ Vu Check Goes Wrong certam time ln the month ' The y then watched the mail box of a small printer in Chambers street, who was known to have many custom- erg among the leading theatrical concerns. One day, when the grist of letters deposited in this printer's mail box looked inviting, the thieves broke it open and secured two or three dozen checks bearing names that are household words all over America. They "raised" these little checks to the familiar $380 each, and flooded the neighborhood of Forty-second street with them. Among the victims were our own George M. Cohan, the Broadway Theatre, and many others. One of the presenters in this gang was caught, right at the teller's window, counting out the proceeds of one of these checks. He dragged in two or three of his fellow pre- senters, and a long trial followed, as the authorities were determined to make an example. Famous hand-writing experts were employed, every effort was made to secure a conviction, but the whole case finally failed, because they couldn't connect the presenters with the other ends of the gang. The case of Boland is dealt with here at length only because his work is typical of that of many other "pro- fessionals" of the present day, all extremely active, and all using about the same methods. It is said that whenever GOLDEN AGE OF THE "CHECK RAISER" 43 one of these master forgers is "sent away," he invariably leaves "pupils" to carry on his work and supply funds for high-priced lawyers to defeat the ends of justice. By the end of 1909, the universal circulation of checks had grown to such an extent that nearly every business house of any size was using checks in payment of bills, and the "check-raising" fraternity had multiplied until check frauds were as common as shoplifting. Long before all the banks had supplied themselves with the "Not Over" Protectograph, the demand from larger manufacturers and jobbers for Todd machines began to make itself felt. Then, as fast as the larger concerns supplied themselves with Todd protection, the crooks were p rom driven to operate on smaller and smaller ones, until even the minor retail establishments, corner groceries and butcher shops, were forced to protect themselves against this amazing form of fraud. In 1908 there were 57,375 Todd machines in use. In 1913 the number had grown to 223,110, and was increasing at the rate of 75,000 machines yearly. By this time people had stopped thinking of check protection as a "fad," and began to realize that, in a country where most of the busi- ness is done by check, you can't ignore a condition which makes the average check as uncertain and unreliable as a balmy day in spring. The public no longer considered any old protection "good enough"; it demanded the best and most scientific form of security that could be provided. Another most interesting development that tended to make business men uneasy about their checks was the advent of the "amateur" operator, and the remarkable growth of check frauds committed from the "inside" by clerks, bookkeepers, salesmen and other trusted em- ployees. While the number of "professional" jobs has been increasing, the element of "amateur" operations has Sil \O cj en ,Q T-I -t- 1 8 53 & *3*l 3 i w w o "lj GOLDEN AGE OF THE "CHECK RAISER" 45 served even more to multiply the number of "raised" checks enormously. The press of the United States, Canada, Great Britain, Australia, and all the Latin-American countries, carries daily accounts of amazing frauds based on "raised" checks. Such headlines as "Bookkeeper Swindles Employer out of Thousands"; "Another Clerk Gone Wrong"; "Salesman Passes Bogus Checks," etc., are all too common, and the "raised" check is usually somewhere at the bottom of these cases. Many cases have been reported recently where honest business men were robbed consistently for periods covering weeks and months at a time, before the extravagant habits of some trusted 5j* m ! re jfe f . ij ' * + j u Checks Raised" employee led to investigation and the . Qne Employee discovery that large numbers of the employer's checks had been altered. The subtlety of this form of fraud, when committed from the "inside," is shown by the fact that many employees caught almost red-handed in their operations can still escape conviction. This is due to the cunning of the culprit in destroying the stubs and the altered checks themselves as fast as they come back from the bank, thus removing everything in the way of documentary evidence. In a recent case, a small concern in Chicago made an audit of its books to find out where its profits had gone, and discovered that hundreds of its checks had probably been "raised" during the year 1916, causing a loss of about $5,000. The resulting investigation led to a woman in the office as the thief. Nearly all the checks had been destroyed, however, and the stubs could not be found. There would have been no evidence whatever but for the fact that this woman had carelessly forgotten to destroy two or three of the checks. One of them is reproduced on page 44. The amazing facts in this case are recorded in a letter to the Todd Company from Chas. F. Preston, the 46 PROTECTING THE NATION'S MONEY man who lost $5,000 in a year by the dishonesty of this employee. This Preston case is typical of hundreds and thousands of others in which unsuspecting business men have safe- guarded themselves against fire, burglary, and other even- tualities, but forgot to lock the one wide-open door that leads to the bank account. A very common source of loss is the salary or expense check mailed to the salesman "on the road." Even sup- posing the salesman himself to be able to resist temptation at a time when he is far from home and short of funds, there still remain the hotelmen, saloonkeepers and others who often cash checks as an accomodation, and who some- times prove willing to "take a chance." Payroll checks are particularly susceptible to Jraud, because they pass from hand to hand almost like currency, and it is often impossible to determine which one of several indorsers on such a check is the guilty 1 he 1 rick , . . , , T . Endorsement one ' The employer who says I give checks only to responsible people," should step into the average small business establishment on a pay day and see where the busy proprietor throws the pay checks as he cashes them. Generally speaking, it is no trick at all to secure genuine checks from the average concern, entirely apart from the methods of the "professional" and the mail-box thieves. Again, the man who is determined to secure money dis- honestly in this way and finds any difficulty in passing a "raised" check, usually finds it possible to secure the signer's indorsement on the back of his own check. This game has been worked throughout the West and Canada with great success to such an extent, in fact, that many business men will no longer endorse checks, even for de- posit, until they have protected them. Wm. J. Burns, the noted detective, in some of his ad- dresses to the Bankers Association, has outlined dozens of GOLDEN AGE OF THE "CHECK RAISER" 47 schemes employed in securing genuine checks for purpose of alteration some of which would cause almost any business man to scratch his head and wonder how his checks have ever managed to escape the clutches of the swindlers. One of the latest developments in the activities of the ' 'check-raisers" seeking constantly for "raw material," is found in the countless cases in which the victims were farmers. It has grown to be quite common for swindlers of a certain class to pretend that they are experienced farm hands, and to travel through agri- cultural sections hiring out for tern- Farmers and Small porary employment during busy sea- Concerns Who J -, J J . . , .. Issue the Fewest sons. The unlucky farmer usually Checks Carry the discovers in a day or two that his Biggest Risk ' 'experienced " hands are not worth their salt. He makes short work of paying them off, usually with a check, which is exactly what the hands hired out for in the first place. A check for $5 or $6 representing two days' labor is better to them than a month's steady employment, because they multiply the face of the checks by ten, cashing them for $50 or $60 each at the village stores or banks, and thus secure several large sums every month. This means a big income for an active swindler, and with very little risk, as he is usually far away before the farmer goes into town to have his bank book balanced and discovers his loss. There was a time when the risk of loss through altered paper fell mainly upon the banks. Then the banks adopted the Protectograph, and thereby transferred the risk to the larger business houses. Years ago, the larger business firms in every line adopted Todd protection so that today the concern or individual of any prominence in a community who is not using the Todd system is a rare exception and a shining mark for the "check raisers." There are over 600,000 Todd machines in use, which takes care of the great majority of the concerns rated in 48 PROTECTING THE NATION'S MONEY five figures or over in other words, the concerns that issue the majority of the checks. Those smaller concerns, issuing a comparatively few checks, and not using adequate protection, are carrying all the risk. "Check-raising" frauds have increased a thousand fold in the past few years and yet there are fewer concerns to carry that risk, be- cause all of it falls upon the comparative few who are not protected. Every time a man's neighbor installs a Todd machine, that man's risk goes up a hundred per cent., unless he, too, follows his neighbor's example. What is the answer? There are, say, something over six billion checks issued in this country yearly. Probably the great majority of these are issued A Risk that No b the la firms Todd-protected, Insurance Com- , , , . - . pany Would Even because the bl S firms d not take Consider chances on "check raising" or any other common form of fraud, and they do not issue checks under any circumstances without protection. And yet, of the minority that go out without protection every year, thousands are "raised." So the man issuing unprotected checks now stands in a small circle that is growing smaller every time a Todd machine is sold. It finally narrows down to a point where a few unprogressive, or careless, business and professional men and farmers are carrying the whole weight of the world's "check-raising" activities on their own shoulders and no insurance company would accept them as a risk under any conditions. The Conception of the Protectograph N THE year 1899, when the old-time "draft raisers" were at the height of their success, the Todd brothers in Rochester, N. Y., were working out their idea of a new mechanical device that would afford thorough protection for the amounts of bank drafts and other bills of exchange. The Todds were familiar with the banking field and knew that bankers were losing considerable revenue through their fear of selling drafts to the public. Also, the tremen- dous growth of the country's interstate trade just at that period was making it most essential to develop some uni- versal system of credit exchange that could be depended upon to defy fraud and errors in amounts of credit instru- ments. Moreover, with all their care, the banks still stood to lose large sums on every draft they issued, and the "draft-raising" gangs were active everywhere. It was the fundamental Todd idea that protection should consist of words (instead of figures) representing the amount and that the words should be forced or macerated into the paper in some way, under pressure. It was realized that the old method of "perforating" or "punching" something out of the paper would not answer. The " professionals" had proved conclusively that anything taken out of the paper could be restored that anything added to it could be erased. So it was proposed that ink be forced into the paper, under pressure, making it a part of the fibre of the document. This, roughly, was the Todd idea, on which has been built a business that covers the world and is known as Rl STATE TEWTENTI AIT WARDENS OFFICE.^ December Seventh, 1912;. HENRY ANDRAE, WARDEN PORTER GILVIN, DEPUTY WARDEN A P GRIMSHAW, CHIEF CLERK A H MYERDICK, PHYSICIAN H E EVENS, ASS'T CHIEF CLERK J H LIVINGSTON, SUP'T BERTILION DEPT. TO WHOM IT MAY CONCERN :- The subject of check fraud has im- pressed itself very forcibly upon us in the last few years. We now have confined in the State Penitentiary 231 convicts serving time from this cause; this being about 10$ of total number of male convicts enrolled. The American Bankers Association, also the banks individually are advising the public to use, all possible care and precaution in preventing this crime. The only hope to eliminate this danger is by the co-operation of the public, who should do all in their power, to protect and secure their signa- ture on negotiable papers before it leaves their hands. This institution is using the PROTECTOGRAPH, which we consider the most effectual protection to be had. Yours very truly, Remove the "Opportunity that Makes the Thief." Letters similar to the above have been received from many penal and correc- tional institutions. WARDEN. THE CONCEPTION OF THE PROTECTOGRAPH 51 standard wherever checks, drafts or other bills-of-exchange are issued. It was in June, 1899, that they succeeded in designing a model which pleased them, and the first machine was ready for the market in the fall of that year. It was, naturally, a rather crude affair at first, but it represented the highest development of the art of check protection at that day just as the successive Todd models have done ever since. They did not call it the "Todd Check Protector," or by any other phrase suggesting the family name, but they coined the word "Protectograph," which from that day to this has been the Todd trade mark, and no machine without the Todd nameplate can be Trademark called by the name "Protectograph," or by any imitation of the same. Others, following the trail blazed by the Todds, have of course tried to use names intended to sound "just as good" as the world- famous Protectograph, but the courts have upheld the Todd ownership in the name. This early vintage Protectograph was equipped with copper type and a rubber platen, which embossed the approximate amount of a draft into the paper, using black ink, in the form of a "Not Over" or limiting line like this NOT OVER THIRTY DOLLARS S30$ This was the nearest approach to thorough protection that had been offered to the banking world up to that time. The "Not Over" line was only approximate, of course. For example, a draft written for $900 had to be stamped "Not Over $1,000," but experience proved that a margin of only one or two hundred dollars in a thousand was no temptation to a crook, because a dishonest person spending hundreds of dollars in good money for a draft would never 52 PROTECTING THE NATION'S MONEY take the risk of spoiling it and losing his entire investment unless he could multiply that investment many times over by his alteration. So, as far as the "Not Over" idea went, it proved and is still proving satisfactory on millions and millions of drafts and checks. Now, the banks were a trifle sceptical of any new ideas in check-protecting machines at first; but when the U. S. Treasury placed its O. K. on the Todd idea by installing Protectographs for the protection of Five per cent, of Government warrants, the leading the Banks Now banks prompt i y followed its lead. Carry 100 per cent, , ,, . A , of the Risk of Then the smaller Clt y and country "Raised" Drafts banks came into line, until shortly there was no "raw material" left for the "draft raisers" to work upon, and it is a matter of record that very few bank drafts have been reported "raised" in this country since 1903 or '04; and since at least 90 or 95 per cent, of all the commercial banks now use the Protec- tograph, the entire risk of altered drafts is shouldered by the few institutions which do not enjoy the protection of Todd machines. After a few years of the "rubber platen," the Todd principle was brought to its present state of perfection by the Todd invention of the famous "Steel Platen." This construction consists, essentially, of a steel platen, corru- gated into little teeth running about thirty-four teeth to the inch. The type characters bear similar corrugations, or teeth, which mesh to the thousandth fraction of an inch with the teeth in the platen. This "shredding" patent is the foundation of the modern check-protection art, and its status as an original and fun- damental Todd invention has been upheld. (A list of patent dates and trade-mark registrations is given on page 1-V.) The arrangement of the "Steel Platen" in relation to the type characters is shown in the accompanying illustra- THE CONCEPTION OF THE PROTECTOGRAPH 53 tion. The revolvable typewheel carries the grooved limiting lines upon its rim. This typewheel is brought to position for the desired line, as indicated by the dial. A slight pressure brings the platen up against the type with a re- ciprocating motion, and the paper is caught between the DF TYPE WHEEL vw^^^ SECTION DF STEEL PLATEN two sets of teeth, thus cutting the characters in "shreds" through the document and at the same time driving in- delible ink through and into these shreds under a pressure of something like a ton to the square inch all this with a slight pressure on the operating lever. Could anything be more simple? And yet it took years to think of it, and more years to perfect it. The imprint of the Steel-Platen Protectograph looks like this: NOT OVER THIRTY DOLLARS $30$ The steel-platen Protectograph reigned supreme from 1904 to 1913. Most of the leading banks had adopted it by the year 1905 or 1906, and by that time the Protecto- graph idea had also gained great headway in England, Canada and other countries. During this time the Todd experimental department had been working constantly on improvements and refine- ments of the "shredding" principle. Among these was the Check Writer, to "shred" the entire amount in words rep- resenting Dollars and Cents, instead of the simple "Not Over" line. In 1913 a test indicated that the public 54 PROTECTING THE NATION'S MONEY was ready for a radical step in methods of protection, and the Protectograph Check Writer was placed upon the market. This beautiful machine, built with the precision of a scientific instrument, "shreds" the full amount of any document checks, drafts, stock certificates, trade accept- ances, bills-of-lading, letters-of-credit, etc. in the body of the document, in words, in two colors, like this FIFTY ONE SIX (Amount Words Red Denominations Black) The Protectograph Check Writer protects as it writes, a full word to each stroke of the handle. There is never any question as to the amount for which the document was drawn. The two-color "shredded" line is the most legible, most unalterable, thing imaginable. Drop a check thus written into the boiling caustic bleach of a steam laundry and the printing ink and writing ink may disappear; the paper itself may fall apart but the vivid two-color imprint of the Protectograph Check Writer, with its indelibly "shredded" characters, remains as a tribute to the highest development of the art of pro- tecting negotiable instruments that man has been able to devise up to the present time. A complete description of the Protectograph Check Writer will be found on other pages. Its "shredded" characters have been translated into the principal monetary systems of the world, and there is not a country where credits are exchanged that does not know the Todd Svstem. THE CONCEPTION OF THE PROTECTOGRAPH 55 On the traveller's letter-of-credit, on the berry picker's pay ticket; on the Chinese merchant's foreign-exchange draft for "Ten Taels," or the Dutch , * -11 < i 1- r T-T A Protectograpn growers bill-of-ladmg for Fijftig for Every LanS and Guldens" wherever men buy and Every Language sell and transfer credits, the world over, you will find machines with the words "Todd" and "Protectograph" on the nameplate as a guarantee of excellence, thorough protection and lasting satisfaction to the owner. Rotary "Shredding" and Printing Mechanism As Applied in Protectograph Check Writer. Type and Platen Mesh to the Thousandth of an Inch, and both revolve. times actual size) Sheffield-Fisher Co. Rochester, N. Y. HOW THE PROTECTOGRAPH GREW 1899 1918 WOODSHED WHERE THE FIRST MODEL WAS FILEI AND FITTED TOGETHER IN 1899 "PROTECTOGRAPH" IS A TRADEMARK NAME, ORIGINATED AND REGISTERED IN U.S. PATENT OFFICE BY THE TODD COMPANY. NO DEVICE IS A "PROTECTOGRAPH" UNLESS IT BEARS THE NAME "TODD" ON THE NAME PLATE- GIVING PROTECTION AND LASTING SATISFAC- TION TO THE USER. COPYRIGHT 1918 TODD PROTECTOGRAPH Co (ESTABLISHED 1899) WORLD'S LARGEST MAKERS OF CHECK-PROTECTING DEVICES ROCHESTER, NEW YORK ? T t H/f. ,PR ' Stamping Brass, Steel and Copper Parts Stock Room Along- side Loading Platform on N. Y. Central Private Switch $100,000 worth of Raw Material Con- stantly on Hand Grinding and Polishing Castings CTOGRAPH GREW 'Almost Human" Automatic and Semi-Automatic Screw Machines Turning Out Extremely Accurate Small Parts Drill Press Department HOW THE PROTECTQGtRAXH' Mounting the Enduring Bronze Type, which is Cast Specially for each individual Proteetograph Check Writer by a Famous Jewelry Studio Cutting the" in Bronze Type /'Ai :&irj.*faiJ PK&TECTOGRAPH GREW Spraying En- amel, Four Coats Baked and Rubbed "Finished Like a Piano" Enamelling Ovens, where the Suc- cessive Coats are Baked to an Endurin Satiny Finisl HOW THE Grinding and Compounding the Famous Indelible Protectograph Ink Ink Room Impregnating Ink Rolls with the Indelible Protectograph Ink TECTOGRAPH GREW Finished Stock Room Loading Parts for the Assemblers 01 TraveUi BeW Assembling Parts Placed on Belt Travel Slowly Past the Assembler and Come off the Lower End of Belt in the Form of Finished Machines Perform HOW THE PROTECTO&RA'tfH Battery of Automatic Presses in i Bureau of Printing PRO! Stockroom Bureau of Printing, De- voted Solely t< Production of Registered PROTOD Checks t Largest vidual and Draft Business Country TECTOGRAPH GREW Lithographic Engraving Room Artists Drawing PROTOD Check Designs on Stone Type Casting Machine The Beautiful Printing on PROTOD Checks Is Partly Due to the Use of New Type Produced for Each Individual Check Design; Used but Once, then Thrown into the Melting Pot 756-5-17-12-SFCo. Designed and Printed by A Move Toward Complete Check Insurance O business man would think of sending Bank Notes to the extent of four or five hundred dol- lars thru the mail. He is conscious of "taking a chance" when he sends even a dollar or five dollars thru the mail, and he most distinctly will not take the chance when it comes to big money. His instinct warns him that in spite of all precautions of the Postorfice, mail is stolen and stolen for the very purpose of extracting its valuable contents. The check with its amount protected by the Protecto- graph Check Writer is on a par with a Bank Note so far as safety is concerned. But for the very same reason that it is not safe to send Bank Notes of large denominations thru the mail, it is equally unwise to send checks of large denominations not because they would be raised, but because they could be cashed for their face value. "How would a crook go about cashing a check for $500 that was drawn to some well known firm?" He could not endorse the payee's name on the back of the check and present it for payment, because it is standard practice thruout the United States that firm endorsements are for deposit and collection only, and not made for the purpose of securing cash over the counter. Both Banks and business men know this so well that any attempt on the part of a crook to endorse the name of John Wanamaker or Marshall Field & Co. on the back of a check would result in complete failure. Furthermore, an examination of the collection of manipulated checks in the archives of the Todd Protectograph Company, showed that in almost every instance the change of the payee's name was the key to the successful cashing of a raised check. 2-x PROTECTING THE NATION'S MONEY The deduction from these facts was inescapable: that it was equally essential to protect the name of the original payee. Having put the finger on the sore spot, the problem was to overcome it. While the invention of the ' 'exact amount" Protecto- graph Check Writer was still in the experimental stage, the thoughts of the Todd brothers turned with increasing emphasis to certain further extensions in their field. By virtue of the close study they had given to Bank checks and check protection, they had already seen the great need for protection of points of "Safe as a Bank wea kness on the check other than Note Is not Very , , . . , . , . , g a fe the amount ; and this foresight, in the light of recent developments, was almost prophetic. Take, for instance, an ordinary white paper check into which has been shredded and inked the exact amount for which it is drawn, by the Protectograph Check Writer; this check can travel anywhere with safety so far as the amount goes, yet the amount protection, although it had brought the individual check up to a plane of safety equal to a United States Bank Note, did not take the check further. After experiments of all kinds, it was found that the need was not for a "Safety paper" but for a further develop- ment beyond "Safety" paper, and PROTOD Chemical Fibre paper was introduced for this purpose. "Safety" papers had been on the market for years and had been used under the mistaken impression that they protected the amount for which a check was written. A few pen strokes covering any of the numerous "pen changes," such as have been frequently illustrated, completely destroy the idea that "Safety" paper is a factor in amount protection. But it turned out that "Safety" paper (with improve- ments), is a factor in payee name protection, and that is where it has a field. COMPLETE CHECK INSURANCE 3-x An examination of the different "Safety" papers on the market showed that they were merely ordinary bond papers, treated on the surface with sensitive colors. There were three classes of "Safety" paper: the first known as "Pantograph," where the sentitive colors were applied in the form of a repeated design or trade-mark; the second were solid-color papers without attempt at design; and the third were the commonly known "Safety" papers which had a pattern of some form of wavy lines. A very few tests showed that all of these "safety" tints could be removed from a check, leaving it pure white, and that the genuine signature could be retained while this process was going on; then by the use of a tint block Checks and Drafts (which is nothing more than a photo- graphic reproduction of the original design) the "safety" tints could be reapplied to the white paper and the check could be rewritten in the payee and date lines. It was clear that the Todd Company could not adopt "Safety" paper in any of its forms and maintain its standing as a leader-, it would merely be copying that which had been in use for years without success. After considerable search and experimenting, it was found that the fibre of paper could be impregnated with certain chemicals that, when brought in contact with chemical ink erasers, would produce a combustion that would burn and destroy the fibre of the paper, leaving a charred framework that would barely hold the check to- gether, weakening it beyond repair and, at the same time, producing a permanent and noticeable burned appearance that could not be retinted or covered up. This paper was called "PROTOD." Still it seemed as if the field of complete check protec- tion was not entirely covered. Investigation showed, with increasing clearness, the tremendous danger of forgery and counterfeiting. Everybody is familiar with the precautions that the 4-x PROTECTING THE NATION'S MONEY United States Treasury takes to keep the silk-thread Bank Note paper, which is used to make Government money, away from crooks. Yet for over one hundred years, counterfeiters, in gangs and singly, have pushed their trade of imitating money. About three years ago a singular thing occurred. There was an almost abrupt cessation of counterfeiting cases, and the Secret Service Department, act- Counterfeiting ing for the Treasury, had less to do Checks L than ever before in ks experience If detectives generally did not know the crooks so well, they might have been pleased at this apparent success of their efforts, but instead they were puzzled: not being able to see the reason why crooks stopped counterfeiting. The secret has come out. All of a sudden it became clear to the crooks that there were more checks in circula- tion in the United States than there were Bank Notes, and that the checks were for larger sums; were easily nego- tiable in these large sums, and, most important that the business houses who issued checks did not have a Federal Secret Service or a Police Department to back them up. Business houses were more likely to charge off a job to "Profit and Loss" and forget it; whereas the Secret Service of the Government never forgets. There has been a wave of counterfeiting and forgery of the check forms and signatures of Banks, Corporations and Business houses during the last three years, reflected in newspaper stories all over the country. Of course, the secret of the success of the crook lies in the fact that he can secure identically the same paper from dealers and printers as is used by the business house. Suppose the New York Central Railroad used ordi- nary bond paper for their checks, and suppose that they had a lithograph design, in other words, a "private check." The crooks could go to a paper jobber and buy as much, or as little, of that bond paper blank and unprinted as COMPLETE CHECK INSURANCE 5-x they could pay for. They are skilled artists and could copy the N. Y. C. R. R. design on a lithograph stone, and from that stone, without any elaborate apparatus, could produce as many lithographed checks as they wanted. When you stop to think of the ease with which these same counterfeiters used to duplicate the cycloidal designs produced by the geometric lathe on Government Bank Notes, you can see how easy it would be for them to pro- duce any check form that could be used; and when you realize that they forged the signatures of the Treasury Department officials so perfectly that frequently a counter- feit would be in circulation for months before it was dis- covered, you can readily see that it would be no task at all for them to forge the signatures and counter signatures that might appear on the N. Y. C. check. The result has been that checks of all kinds, big rail- roads, industrial corporations, retailers, etc., have been counterfeited and forged successfully in the last three years. This was a considerably tougher proposition to overcome than the matter of preventing changes in the payee's name, but overcome it was. First, we paralleled the methods of the United States Government in the production of PROTOD. In other words, we registered the paper stock so that we were sure no one could secure a single piece of unprinted PROTOD. It was not for sale by any printer, stationer, paper jobber, or other dealer anywhere in the United States. Next, by the intro- jrl fpjj duction of the now fa- ll Ibi U^ mous PROTOD water- mark, we secured the same positive identifica- tion of the paper as the Government does by us- ing silk threads in the bank-note paper stock, 6-x PROTECTING THE NATION'S MONEY because water-marks cannot be imitated or duplicated except by the manufacturer of paper. And bond paper cannot be manufactured except in a certain limited and perfectly well known number of factories in the United States. Finally, there was to be considered the matter of can- celling samples of checks that had already been made, for this was found to have been a fruitful source of profit to crooks in the past. They would call on a printer, stating that they were going to have some 55,000 Conservative checks made and ask for samples> Banks and Business , . , * . Houses Adopt Fhe P rmter let them have hls ver y PROTOD best work, representing checks he had made for his customers, and unfor-. tunately, it did not occur to the printer to cancel these samples. In the Todd plant behind the walls of the Bureau of Printing, every sample check is thoroughly and completely cancelled by shredding the words, ' 'SAMPLE CHECK NOT VALID" by the Todd process. No uncancelled check is allowed to go out. Three years ago the Todd Company presented its Complete System of Check Protection to the public. At that time not a single PROTOD check was in use in the United States. Today, there are over 55,000 users of the complete system of check protection, including a big percentage of famous names in business in the United States. The checks are beautiful, distinctive, appealing to the natural pride of the business man in having some- thing that reflects his business; they have a splendid writ- ing surface, and they give complete protection when used in connection with the Protectograph Check Writer. Guarantees Another startling evolution in the Todd Protectograph business, adopted at the time PROTOD checks were put on the market, was the plan of guaranteeing the product. COMPLETE CHECK INSURANCE 7-X With ordinary materials and articles of commerce, the failure of a product to perform its function is at- tended with annoyance, discomfort and dissatisfaction, but _ rarely with heavy financial loss; with the Todd system of complete check protection, or with any system of check protection, a failure of the article to perform its func- tion carries with it such unpleasant possi- bilities of law suits, loss of money, time, credit standing, et cetera, that business men in considering the purchase of such a system, frequently asked, "Do you guaran- An iron-ciad Forgery tee that your system cannot be beaten?" Insurance Bond The simple word of a salesman, honor- able though he may be, cannot act as such a guarantee. The simple word of a manufacturer is not such a guar- antee. Furthermore, it is illegal for a manufacturer to give a guarantee that comes within the legal definition of the term "insurance"; such guarantees can only be given by authorized and incorporated insurance companies, sub- ject to the inspection of Insurance Departments of the various States. The General Indemnity Corpora- tion of America was organized and formed by Messrs. G. W. and L. M. Todd to comply with the laws of the State of New York re- garding guarantees, and these guarantee bonds issued by the General Indemnity Corporation, running for a period of two years in the principal sum of $1,000, were given by the Todd Company, at their own expense, to users of the Com- plete System. Up to January 1, 1917, the guarantee covered the raising of checks only. Since January 1, 1917, the guar- antee has been enlarged in its scope so that today the user of the Todd System of Complete Check Protection is supplied, free of charge, with a bond for $1,000, running for An Insurance Policy to Every Purchaser of Com- plete System 8-X PROTECTING THE NATION'S MONEY a period of two years, protecting him (1) Against raised checks. (2) Against loss thru changes of payee's name. (3) Against loss thru the failure of the system of registering PROTOD checks against forgery. The question occasionally comes up, "If your system is so perfect, why is the guarantee necessary?" The answer is obvious; namely, that the belief of the Todd Protectograph Company in the perfection of its system is evidenced by its willingness to give the guarantee; the guarantee being a legal document enforceable thru the Courts. Over 50,000 of these guarantee bonds have been issued, covering a period of three years, and so far not a single claim has ever been made, which is a substantial support of our position that the Todd System is crook- proof. (PROTOD Samples and Net Prices for any^ Desired Method of Reproduction by Print- \ ing or Lithography, will be sent on request m to Responsible Principals. J 756-5-17-12-SFCo. UNIVERSITY OF CALIFORNIA LIBRARY, BERKELEY THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW Books not returned on time are subject to a fine of 50c per volume after the third day overdue, increasing to $1.00 per volume after the sixth day. Books not in demand may be renewed if application is made before expiration of loan period. NOV v AUTO DISC CIRC AUG 12 '94 20m-H,'20 YB 18239 372863 UNIVERSITY OF CAUFORNIA LIBRARY