Criminal violation of financial trust

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CRIMIML VIOLATION OF FINANCIAL TRUST

BY DOHALD M Y CRESSEY

Submitted to the Faculty of the Graduate Schoo in partial fulfillment of the requirements for the degree, Doctor of Philosophy, in the Department of Sociology Indiana University May 1950

ProQuest Number: 10295242

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uest. ProQuest 10295242 Published by ProQuest LLC (2016). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106 - 1346

Accepted by the faculty of the Graduate School of Indiana University as fulfilling the thesis requirements for the degree of Doctor of Philosophy.

Director of Thesis

Doctorate Committee: ________

Chairman

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ACKNOWLEDGMENT

The writer wishes to express his appreciation of the assistance given him by Dr. Edwin H. Sutherland, by Mr. Lloyd E. Ohlin and other members of the staff at the Illinois State Penitentiary at Joliet, and by Dave, George, Jack, and Wink.

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TABLE OF CONTENTS

Chapter I.

Page INTRODUCTION......................

1

The Sociological Context Review of the Literature II.

METHODOLOGY AND PROCEDURE..........

27

Definition of the behavior studied and identification of subjects Formulation of Hypotheses The Scope of the Generalization III.

THE ROLE OF THE NON-SHAREABLE PROBLEM IN TRUST VIOLATION...............

56

Summary and Conclusions IV.

THE "OPPORTUNITY" TO VIOLATE POSITIONS OF FINANCIAL T R U S T ...............

100

Summary and Conclusions V.

THE USE AND ACQUISITION OF RATIONALIZATIONS BY TRUST VIOLATORS

126

Independent Busine ssmen Trusted Employees Absconders Acquisition of Rationalizations Summary and Conclusions VI.

SUMMARY AND IMPLICATIONS OF THE THEORY

204

Selection of the Crime by Violators Personal Traits of Violators Social Characteristics of Violators Prevention and Recidivism Fluctuations in Trust Violation Rates Conclusion BIBLIOGRAPHY...............................

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226

CHAPTER I

INTRODUCTION The objective of this study is the isolation and definition of the processes involved in violating, in a criminal manner, positions of financial trust which have been accepted in good faith.

The reported behavior of

trust violators prior to the time of the defalcation, at the time of the defalcation, and after the defalcation is investigated in order to provide a theoretical account of such behavior.

The central problem is to account for the

differential behavior indicated by the fact that some persons in a position of trust violate that trust, whereas other persons, or even the same person at a different time, in identical or similar positions do not so violate it. The approach to this problem is largely situational or "systematic’1 rather than historical or "genetic."

A major

related problem is that of accounting for the presence in individual trust violators of the events which make up the sequence which differentiates them from non-trust violators. This problem is approached genetically, in terms of the life experience of the person.

Thus, the central problem is

that of determining whether a definable sequence of events -1 -

2

is always present when criminal trust violation is present and never present when trust violation is absent, and the correlated problem is that of explaining genetically the presence or absence of those events.

Both are problems

of causation. These two problems are closely related since the events present in the per son-situation complex at the time when trust violation occurs cannot be entirely separated from the prior life experiences of the trust violator. While a person may define a situation in such a manner that criminal behavior is the inevitable result, his past experiences will for the most part determine the ways in which he defines situations.

A specific type of reaction

to a specific situation may be necessary for trust violation and if such a reaction is present, trust violation may be explained in terms of it.

However, the

reaction itself must be explained genetically.

i

Differences in the systematic and historical (genetic)approaches have been pointed out in detail by Kurt Lewin whose psychological system has been developed with consideration for the view that scientific concepts

^For a discussion of these two types of explanation in criminology, see E. H. Sutherland, Principles of Criminology, New York, 19^7, P* 5.

3

of causation must not be of the historical kind (attri­ buting present effects to past causes) but must be concerned solely with relationships at the present moment (systematic causation).

The aim in studies of systematic causation is

"to find general laws which would be stated in terms of interrelationships among a number of facts (either observed directly or inferred) that exist at the same time.1’

In

discussing the Aristotelean and Galilean modes of thought, Lewin comments: It was typical of the Aristotelean way of thinking not to distinguish between historical and systematic questions. The result was that one took past or future facts as causes of present events. In opposition to this assumption we shall here strongly defend the thesis that neither the past nor the future influences psychological facts but only the present situation can influence present events. This thesis is a direct consequence of the principle that only what concretely exists can have effects. Since neither the past nor the future exists at ~ the present It cannot have effects at the present.^ This latter thesis is typical of the Galilean mode of thought, the perspective from which our first problem is approached. However, even Lewin does not deny that genetic influences act on the individual; his whole system might be considered as a conceptual scheme for representing the

p

R. Leeper, Lewin1s Topological and Vector Psychology, a Digest and Critique. Eugene, Oregon, 1943, p. 79• ^Kurt Lewin, A Dynamic Theory of Personality, New York, 1935, PP. 34-35*

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end results of genetic determinations.

His position simply

is that we must first develop systematic constructs before we work to establish the genetic laws.

He says in another

place, for example, that "there should be a Systematic1 explanation besides the 'historical* one, namely an explanation of how these different parts and properties can exist within one concrete whole.

As in psychology, in

sociology both the historical and the systematic question 'why* is important, and neither question is to be finally solved without the other.

Our second problem is approached

from this historical or genetic perspective. The research on these problems is conducted within the general framework of the differential association theory of criminal behavior.5 According to this theory, which is a genetic explanation, persons acquire patterns of criminal behavior in the same way they acquire patterns of lawful behavior— persons.

through learning in interaction with other The contents of the patterns presented in

association with criminal behavior differ from the contents presented in association with lawful behavior, but the process is the same in both instances.

Specifically, the

"direction of motives and drives is learned from definitions

^Kurt Lewin, "Some Social and Psychological Differences Between the United States and Germany, " Character and Personality, 4:265-293, June, 1936. ^E. H. Sutherland, op. cit., pp. 6-9*

5

of legal codes as favorable or ■unfavorable,” the learning Including both the techniques of committing the crime and "the specific direction of motives, drives, rationalizations and attitudes."

The ratio between definitions favorable to

law violation and definitions unfavorable to law violation determines whether or not a person becomes criminal. is the principle of differential association.

This

"A person

becomes delinquent because of an excess of definitions favorable to violation of law over definitions unfavorable to violation of law,” but associations may vary also in frequency, duration, priority, and intensity. Stated in the framework of this theory, our first problem involves the definition and delimitation of the social and psychological mechanisms by which an assumed "excess" of contacts with definitions favorable to violation of law are transformed into criminal violation of financial trust.

If such contacts result in the learning

of "motives, drives, rationalizations and attitudes," the specific problem becomes one of describing the process by which these and other mechanisms operate to produce trust violation.

Hypotheses as to the nature of this process were

formulated progressively, and they will be described in the next chapter. The second problem, stated in the framework of the differential association theory, involves the question of whether associations with criminal behavior patterns are

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necessary for criminal trust violation or whether the events necessary for trust violation can he present without the individual's having had associations with such patterns* As will he shown later, it is frequently, if not usually, assumed that persons criminally violate positions of financial trust, not as a result of associations with criminal behavior patterns, hut instead as a result of changes in wants or needs, or as a result of weakness in the person or the system of controls on the person. hypothesis in this connection is twofold:

Our

That the

techniques and information necessary for criminal trust violation are learned in association with criminal behavior patterns, and that the rationalizations necessary for trust violation are learned in such association. The objective is not to test the complete differential association hypothesis.

To do so, a precise formula, perhaps

in mathematical form, stating the relationship between favorable and unfavorable definitions of law violation probably would have to be stated and then the behavior of trust violators would be examined to see whether the formula applied to them.

A formula of this kihd has not been

developed and preliminary attempts have indicated that its development will be extremely difficult.

Consequently, we

are testing only certain segments of the differential association hypothesis by determining whether or not necessary elements in criminal trust violation are learned

7

in association with criminal behavior patterns. The Sociological Context As a theoretical sociological problem, the study of criminal violation of financial trust fits into two intersecting sociological contexts.

First, it involves

study of criminal causation, and as such it is related to criminological theories formulated in an endeavor to identify the cause or causes of crime.

While trends of

the work in this area will not be reviewed here, it might be mentioned parenthetically that in the United States the main academic stronghold of criminology has been in departments of sociology and that, consequently, most careful studies of crime causation have been made by sociologists.

Second, it involves study which is focused

on the learning processes involved in crime and is thereby related to the work of sociologists, social psychologists, and psychologists who have produced theories of social learning.

The orientation here is taken from Dewey, Mead,

Cooley, and Thomas and is, as such social psychological. Review of the Literature Although the criminal violation of financial trust poses serious problems for theoretical criminology, text­ book writers and others who have offered theories of criminal causation have for the most part ignored this type

8

of offense.

Similarly, the available statistics indicate

that embezzlement rates vary in approximately the same way as the rates for crimes against property in general,^

yet

embezzlement has not been sei?iously studied in the same manner and to the same extent that other crimes have been studied.

Criminologists as well as laymen continue to be

somewhat bewildered when newspapers carry stories of trust violation, especially when the violation has been per­ petrated by a person of an upper socio-economic class. Proposals for programs for rehabilitation of criminals usually have been meaningless when considered from the point of view of apprehended trust violators.

The

literature on this type of crime to a large extent merely reflects popular views, since much of the research has consisted of enumerations of the average traits of the offenders and has not been guided by a carefully formulated hypothesis. Almost all studies pertinent to the current research have been studies of "embezzlement."

Since this term has

been used to denote the behavior of all fidelity bond defaulters, the criminal behavior of all persons employed in banks, and the behavior of swindlers as well as embezzlers, it is obvious that the factual conclusions of the studies are not immediately comparable in all

^E. H. Sutherland, op. cit., p. 35*

9

respects.

The varied usage of the term is due to oversight

on the part of some investigators, but it is also due in part to the existence of a variety of legal definitions among the states and foreign countries. As is pointed out 7 elsewhere, the present study could be considered a study of embezzlement, but we have adopted the more general terminology in order to avoid the legal implications of the term and in order to define precisely the behavior under investigation.

We shall review the studies only in respect

to the explanations of embezzlement which are presented and not with special regard to the average traits which are enumerated. Four major types of explanations of embezzlement are found in the literature.

The first states that embezzle­

ment is the product of a variety of factors, any one of which or any combination of which may produce the crime. These factors are often stated in terms of the way the embezzler spends the funds which he has dishonestly obtained.

The second type states that the cause of

embezzlement lies in poor systems of accounting and lack of detailed checks on persons in positions of trust.

A

variation of this type states that embezzlement is the result of two conditions:

desire and opportunity.

A third

type states that the cause of embezzlement lies in the

^Pp. 3^“^0 infra.

10

constitutional make-up of the embezzler*

Finally, there

are the studies which seek to explain the offense in social or psychological terms. quite arbitrary.

This classification into types is

Often an author explains embezzlement by

combining two or more of these types of explanation. Multiple factor explanations. Many studies and articles whose main contribution has been statistical descriptions of embezzlers have also indicated multiple factor ideas of "causation.” will be reviewed in detail.

Only the more pertinent studies The United States Fidelity and

Guaranty Company made a statistical analysis of 963 male and 38 female "mercantile embezzlers," (persons who had defaulted on the company* s bonds) and reported that for men "gambling and/or drink" was the most frequent cause.

Hext

in importance were "living above their means, accumulation of debts, bad business managers, women, and speculation." Those six factors accounted for 83.6 per cent of the offenses by males.

The important factors in female embezzle­

ment were found to be "living above their means, accumu­ lation of debts, and dependents," those three factors Q

accounting for 73*6 per cent of the crimes.

Another casualty

company has listed gambling, extravagant living standards, unusual family expense, undesirable associates, inadequate income, losses due to outside business activities, and

&The United States Fidelity and Guaranty Company, 1001 Embezzlers3 Baltimore, 1937.

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inprovident investments, in that order.

9

A "bank examiner for the United States Department of Justice studied hank defalcations and concluded that the defalcations of hank officers can he traced to the following causes:

(1) The using of the bank's funds to promote

enterprises in which the officers are financially interested. (2) The using of the bank's funds for speculation.

(3) The

using of the funds for gambling and extravagant living. (4) The advancement of political ambitions.

(5) Negligence

of directors in allowing officers to use funds, under the guise of loans, to a criminal extent.

(6) Lack of diligence

on the part of the hank's clerical force.

(7) The want of

rigid enforcement of the criminal laws by the courts.

The

defalcations by the clerical force were said to he due to the above causes and also due to:

(1) Temptations offered

by loose methods of conducting the business and of keeping accounts. directors.

(2) Lack of proper supervision by officers and (3) The criminal use of bank funds by its

officers without detection and punishment, encouraging the clerks to do likewise.^ J. Edgar Hoover reports an analysis of the cases of bank embezzlement which had been investigated by his

^Continental Casualty Company, Crime Loss Prevention. Chicago, 19^7* P* 5* 10E. P. Moxley, "Bank Defalcations Their Causes and Cures," Annals of Amer. Acad. Pol. and Soc. Sci., 25:32-42, Jan., 1905.

546785

12

bureau In an Eastern jurisdiction (U. S. District) over a period of five years.

"Stock speculation" appeared as the

most frequent cause, but "extravagance in living" and "gambling" were listed as the cause in nearly as many instances,

in a number of cases "unusual household or

family expenses where the salary was small" was said to be the cause, and "drinking" or "fast living" was found in an almost equal number of cases.3*1 Virgil Peterson, Director of the Chicago Crime Commission, asked surety companies in every part of the United States to rank in order of their importance those factors that appear to cause employees to embezzle or steal from their employer. twenty such companies.

Replies were received from about The analysis of those replies

indicated that the factors most frequently present in embezzlement cases are gambling, extravagant living standards, unusual family expenses, undesirable associates, and inadequate income.

The author adds, however, that the

need and motive to commit crime is created by one or more of those factors as well as others, that the embezzlement is made possible through lax accounting methods and improper or inadequate supervision of employees having custody of funds, and that embezzlers have a basic weakness in their

11J. E. Hoover, "National Bank Offenses," Jour. Crim. Law and Crimlnol. 24:655-663* Sept-Oct. 1933-

13

personality make-up.

12

Numerous articles published in popular journals list similar causes.

One such article lists luxurious living,

family economic difficulties, women, and bad bookkeeping;1^ another lists low salaries and gambling as the two leading 14 causes; while a third lists playing the stock market, playing the races, fast living, personal expenses, family maintenance, and family trouble s.1^ This type of study is based on the assumption that the enumerations of the motives and traits of embezzlers will lead to conclusions about the etiology of embezzlement, and will be useful in control of embezzlement, or both. This approach in criminology has been severely criticized: Even if we knew that criminals could be differen­ tiated from non-criminals in terms of a set of definite factors, we would not know the etiology of criminal behavior. To solve the etiological problem, not only must factors be distinguished as dependent and independent variables with respect to each other. We must be able to isolate and control sub-sets of variables within the total set of variables. We must know if a given set of variables exhausts the field of relevant factors. 1S/‘. Peterson, "Why Honest People Steal," Jour. Crim. Law and Criminol., 38:94-103, July* 19^7^E. H. Smith, "Caught Short," The Sat. Eve. Post, 193:14-15, Sept. 4, 1§20; see also "The Looters/1 ibid., 193:28-32, Dec. 11, 1920. 14 J. T. Ackerman (Indianapolis Manager cf the Pinkerton Detective Agency), News story, Indianapolis Star, August 5* 1936. 1-*H. Koppel, "Other People1s Money," Colliers , 67:11-12, April 16, 1921. I6j. Michael and M. J. Adler, Crime, Law and Social Science, New York, 1933* p. 168.

14

Also, the conceptions of gambling, drink and the like In relation to embezzlement or violation of trust often seem to be attempts to indicate the immorality of the offenders rather than attempts to explain their behavior. Thus, for example, if it is said that a man who has been considered a "pillar of the community" and a "trusted and loyal employee” has actually been gambling with his own or his company* s money, or has been entertaining "loose” women at the company's expense, an indication of immorality has been made, but the behavior has not been explained.

Just

as "bad motives” are often ascribed to other types of criminals, they are frequently ascribed to trust violators, but the ascribing of such motives to behavior does not explain that behavior.

Linde smith has pointed out that

popularly ascribed "causes" of drug addiction, which are similar to some of the listed "causes” of trust violation (drinking, gambling, other women, etc.), "cause" venereal disease also, yet medical science has ceased to be concerned with them.^ Accounting procedures and embezzlement. By far the largest proportion of the work on embezzlement has been conducted by persons or agencies primarily interested in the prevention of the crime.

Bonding companies, public

^ A . R. Linde smith, "A Sociological Theory of Drug Addiction,” Amer. Jour. Soc., 43:593-613, Jan., 1938

15

accountants, cash register companies, and individual employers all have an interest in preventing embezzlement and have published articles reflecting that interest.

One general

position which is expressed is that individuals in trusted positions are allowed too much latitude in those positions, thus allowing them to violate the trust criminally.

From

this it is reasoned that laxity in accounting methods causes embezzlement. This thesis is explicitly presented in a pamphlet advertising the National Cash Register Company where it is agreed that "of all the preventable causes of embezzlement, the greatest is the failure to check on the work of the lft employee." In a recent book, numerous and detailed suggestions for prevention of fraud in the various depart­ ments of banks vexebased on the assumption that bank weak19 ness is the sine qua non of bank fraud. The following quotations will serve to illustrate similar positions by similar persons: It is an undeniable fact . . . that no theft of bonds or securities is possible without speedy p detection if the audits are properly conducted. 0 And in every case it has been the trusted employee who has defaulted. The records, year after year, of the largest bonding company in ^ A . A. Thomas, The Temptations of persons Who Handle Money, New York, 1905* ^ L . A. Pratt, Bank Frauds, Their Detection and Prevention, New York, 1947. 20r . H. Graves, "Why it is Easy to Steal Half a Million Dollars," Harper1s Weekly, 51:802, June 1, 1907*

16

America show not a single instance in which a man or woman other than a trusted employee has been a defaulter. There are others, of course, who steal like any petty thief, but the real defaulter is the trusted man. There is nothing extraordinary about this, for the more an official or employee is trusted the better is his opportunity, more than anything else, that creates the crime.21 Almost every loss resulting from dishonesty on the part of the principal on fidelity bonds brought to my attention is the result of some omission in accounting supervision which is perfectly apparent after the loss occurs. Of course, no system, however perfect, is an absolute shield against a designing defaulter. There is a weak spot somewhere, but a proper system of accounts easily makes attempts of this kind easy of detection.22 Numerous articles which are concerned more with accounting procedures used in business than they are with the question of causation in embezzlement similarly incorporate the thesis that embezzlement is the result of poor accounting procedures. Closely allied to this position is the idea that embezzlement is the result of two factors: opportunity.

desire and

Ashdown lists these as the fundamental causes

^H. Koppel, op. cit. W. Lafrentz, "Defalcations,11 Jour, of Accounting, 24:254-261, April, 1924. 2^See, for example, A. F. Dodd, "Some Suggestions as to the Discovery and Prevention of Defalcations from the Auditor1s Point of View," The Accountant, 26:723-731, May 30, 1903; E. ¥. Hunt, "Prevention and Detection of Frauds in Accounts," Accounting and Commerce, 7:258-259, 283-288, Feb. and March, 1921; George E. Bennet, Fraud: Its Control Through Accounts, New York, 1930.

17

of embezzlement and adds that the fact of low salaries plays a part as does the "inadequacy of the punishment."22* A Special Bank Accountant for the Department of Justice elaborates this position by classifying what he calls the "usual11 causes of embezzlement such as "gambling, business losses, and bad associates," as desire.

These, however,

are not the whole cause, and opportunity, which is the other part, must be present.

To prevent defalcations

entirely it would be necessary to eliminate both the desire and the opportunity.

The author adds, however,

that the cause for the desire should be attacked before the desire itself is created.

Also, "often an officer or

employee finds the desire thrust upon him owing to bad customs, such as bank tellers making good differences, shaving notes, etc., or the over-accommodation of customers such as permitting check kites and many other practices, some of which follow the acceptance of gratuities by employees.11 In contrast to this position, it is sometimes held by both businessmen and trust violators that there Is no discernable mode by which an effectual stop can be put to such offenses while it is necessary to entrust property

2lHf. Ashdown, "The Psychology of Embezzlement," Bankers1 Mag., 112:519-25, April, 1926. 2^M. K. Fowler, "The Causes and Prevention of Bank Defalcations," Bankers» Mag., 110:7-9, 197-200, 385-387* July-September, 1924.

18

or money in the hands of other men.

Similarly, Hall has

pointed out that the economic system in our modern society presupposes business transactions based on a considerable amount of trust. Weakness of offenders. The belief that embezzlement is due to some kind of constitutional or moral weakness may be illustrated by the work of Bennet who divided embezzlers into two classes

weaklings and those naturally dishonest.

The first type begins embezzling by "borrowing” against their salaries and then gets in deeper and deeper, while the second type worships money and schemes to develop a "system" through which money can be taken without detection.2*^ Judges and other law enforcement officers frequently indicate a similar line of reasoning.

J. Edgar Hoover has written

that in the absence of a strict system of checks and balances, the bank is dependent upon the strength of the pQ

moral fiber in the make-up of the employees. ° The most recent statement of this sort was made by a certified public accountant who based his generalizations upon the study of thousands of case studies of bank

2^J. Hall, Theft, Law and Society, Boston, 1935. 2?C. E. Bennet, ojjd. cit., p. 22. 2®J. E. Hoover, o£. cit.; see also JIN. Ulman, "The Trial Judge’s Dilemma,” Chapter 6, pp. 112-11^, in S. Glueck, Probation and Criminal Justice, New York, 1932.

19

embezzlement encountered In M s profession.^

Although his

main objective was the enlightenment of persons interested in the detection and prevention of bank frauds, the author comments on the causes of such fraud.

Embezzlement, he

states, is the result of faulty or illogical tMnking, since all men seek happiness and crime is not conducive to happiness, since embezzlers in many instances operate on the mistaken theory that the sum taken is merely a loan, and since embezzlers believe that they can long cover up the fraud.

However, the argument goes, whatever the faulty

reasoning w M c h leads to the crime, the crimes are accom­ panied by moral weakness on the part of the individual. "A man of strong character has a steadfastness and he abides by what he knows to be right.” The majority of embezzlements result not so much from inherent dishonesty as from weakness in resisting temptation.

It is therefore

the duty of the bank to eliminate loose methods of operation w M c h provide temptation to the weak individual.

In

summary, it is Pratt's position that it is illogical t M n k ­ ing, weakness on the part of the individual, and weak bank resistance that allows officers and employees to defraud their banks.

2^L. A. Pratt, op. cit., pp. 7-10; see also M s 111 Catch Bank Embezzlers/1 Colliers, 122:51-81} Hov. 20, 19^8, and W. Price, ”How to Rob a Bank,” Sat. Eve. Post, 219:12, March 2, 19^6.

20

Sociological studies.

In spite of the fact that

most of the theoretically guided research in criminology is conducted “by sociologists, only three sociologists have published detailed accounts of research on embezzlement We will merely report the research and hypotheses in regard to causation here, and shall comment on the studies in later sections. Redden's study had as its objective the discovery of economic and personal factors which play a role in embezzlement, and the determination of the extent to which these factors could be used to predict this kind of criminal behavior.

2,454 embezzlers were compared with

7,756 non-embezzlers in respect to 22 items on the form used in applying to the U. S. Fidelity and Guaranty Company for a bond.

Correlation coefficients were computed

to determine the relative importance of the 22 factors, and 20 of them, with coefficients ranging from .104 to .691, were considered significant.

Analysis of the 20 factors,

however, showed that no one factor was of marked significance to the violation or- non-violation of a fidelity bond, so a "cumulative scores method” of combining information from

^ E . Redden, Embezzlement, A Study of One Kind of Criminal Behavior, With Prediction Tables Based on Fidelity Insurance Records. Ph.D. Dissertation, University of Chicago, 1939j Svend Riemer, "Embezzlement: Pathological Basis,” Jour. Grim. Law and Criminol., 32: 411-423, Rov.-Dec., 1941; &. Lot tier, Tension Theory of Criminal Behavior,” Amer. Soc. Rev., 7:840-848, Dec., 1942.

21

several categories into prognostic scores was then used to make prediction tables.

These tables were then tested

on 500 embezzlers and 500 non-embezzlers, and were shown to be effective prediction instruments. The 22 factors used were amount of bond, occupation, employer's business, city, age, sex, marital status, color, parents living, parent's residence, dependents, salary basis, monthly salary from bonded positions, monthly other income, source of other income, value of property, debts, previous bankruptcy, previous default on a bond, number of times bonded previously, length of time in previous job, and length of time in second previous job. Embezzlers on the average had higher debts, lower property value, lower monthly incomes, were bonded for less, and were more mobile in their previous jobs than non-embezzlers. nOut side” employees had nearly double their quota of embezzlers, and employers working on commission also had more than double their quota.

Males had considerable more

than their quota of embezzlers, as did married persons, Negroes, and foreign born.

The average age of embezzlers

was 32.1 as compared with 35*5 for non-embezzlers.

The

aberage amount embezzled was $1,745,and more than four-fifths of the group embezzled amounts under $5*000. Although it was not in any way Checked by the research, Redden also formulated a hypothesis in regard to the social psychology of embezzlement.

This hypothesis

22

is "based on Mead1s distinction between the nl1f and the "me.” In his rehearsal of consequences in the process of taking the role of another he (the embezzler) fails to integrate himself with the organized pattern of approved social "behavior. He fails or refuses to try to devise a plan by reflective thinking which will increase his value to the organization and call forth recognition in terms of increased income. Thwarted in his attempt or impatient of the duration of time necessary to fulfill the wish on the socially desirable level, his mental activity is centered on a plan of borrowing, converting his employers goods or money to his own use, to fulfill the wish for a margin above the equilibrium of income and cost of living to satisfy some latent desire in a minimum of time. He completes the act hypothetically, taking the role of another but contrary to the common organized pattern of social behavior in business relationships and in the social group. His hypothetical solution may be a new technique or method which if discovered by the employer would mean dismissal from his employ and community dis­ approval. His mental activity is in opposition to the organized sets of attitudes of the social group. The two aspects of the self of the embezzler are in conflict, the social or impersonal self integrates the hypothetical act with the organized social behavior of the group by naming the act resulting from the proposed plan borrowing, with intent to replace or repay; the other aspect of self, the personal or a-social views his proposed plan as opposed to organized social behavior, independent of the group and unknown to the group. Having arrived at a hypothetical solution, such as a clever bookkeeping device, or manipulating accounts, or pocketing the whole or part of certain collections, a new self or new object or new act arises out of the reflective conduct in the problem solving process and an increment is added to his personality by this experience. There are emotions centered around the obstacles to the outcome of the act, similar to those which the non-embezzler experiences, fear, anxiety, confidence, assurance, not in terms of gaining approval and recognition by the employer by increased income, but in terms of detection by the employer and social disapproval. He incfeases his efforts to avoid detection and to get an "air-tight” method of borrowing. He experiences emotions in regard to the hypothetical outcome in terms of his increased efforts. Consumation

23

or completion of the act comes when the plan works and the wish is fulfilled. Emotions at the end of the act are Similar to those which the non-embezzler experiences, satisfaction and dissatisfaction. He recalls the procedure followed and lives again mentally the experience and begins immediately to plan another act. The New Self resulting from the completion of a delayed act by behavior not identified with the conduct norms of the group, and in opposition to the socially approved organized pattern of social behavior in the broader social process, is a disorganized personality, a criminal. The mental activity of the embezzler is centered on finding a method of satisfying his wish for money, that is, a margin above the equilibrium of income and cost of living, by borrowing. He fails to recognize or he disregards the difference between borrowing and embezzling. In both instances the doer of the act needs the money to satisfy some desire; in both cases, the doer intends to pay back the money borrowed; in borrowing money the lendor has knowledge of the loan; in embezzlement, the employer has no knowledge of the "loan."31

The second study is based on material collected on 100 cases of embezzlement at the Langholmen prison clinic in Stockholm.

Only cases in which insanity has been pleaded

by either the defense, judge or district attorney are transferred to that clinic.

"Embezzlement” as used in

Swedish law covers some cases which American law would classify as larceny by bailee, counterfeiting, or obtaining money or property under false pretenses.

Riemer concentrates

on the conflict situation in which the criminal act originates, and locates three different aspects of that situation: social pull (the opportunity), the social push (the

310£. Clt., pp. 27-29.

The

24

emergency situation), and the psycho-pathological conditions involved.

The latter mitigate or emphasize the other two.

Opportunities exist "because "the individual member of the group must to some extent be trusted to adhere to certain folkways concerning money transactions," and they form a temptation if trusted persons develop anti-social attitudes that make possible abandonment of these folkways.

The

"social push" leading to embezzlement might consist of a variety of environmental conditions and should not be looked upon as "factors causing crime,” but as constellations which produce attitudes that make embezzlement possible.

In

only 12 cases was immediate economic strain lacking, and in the majority of cases there was either extreme poverty or a declining career which was looked upon as an emergency due to the habitual standard of living or an unstable and insecure career which called the individuals attention to the embezzlement.

Frequently there was a coordination of

family conflict and economic emergency.

Pathological

conditions operate to produce "distortions” in the definitions of these environmental situations. Riemer then differentiates six different "sociogenetic types of embezzlement," each "characterized by extraordinary uniformity in the process of causation.” These are embezzlement in civil service and in adminis­ trative functions, embezzlement of the entrepreneur in his struggle for economic independence, embezzlement for

25

preservation of status, embezzlement as a professional routine (confidence men), petty embezzlement due to temptation and pressing needs, and embezzlement for the sake of amusement and luxurious consumption.

An integration of psychoanalytic and sociological theories of crime -was attempted by Lottier in explaining the behavior of 50 embezzlers examined in the Psychopathic t

Clinic of the Detroit Recorder*s Court.

His theory is

that the individual embezzler (as compared to the group embezzler) as a member of a competitive society commits embezzlement as a consequence of ten sion-producing conflicts in the organic, psychic, inter-personal, and cultural con­ ditions of his adjustment.

The four conditions are not

separate, and the theory emphasizes their unity:

"Conflicts

in any one or all of them give rise to a condition of general tension.”

These tensions are either internalized or

externalized, the latter effecting changes in behavior routines, so that "if embezzlement is a change in routine behavior the theory holds that it must be preceded by a state of generally increased tension.”

It is made

explicit, hovever, that a condition of general tension need not cause embezzlement because it may be "discharged -with satisfaction or may be internalized,” the latter effecting changes in physiological or psychological routines.

But if

the tension is not internalized and no alternative change

26

in routine seems subjectively available, embezzlement is initiated to relieve the tension.

Thus, "the decisive

elements in the etiological process are the lack of subjectively available alternative to embezzlement and the relative amount of tension present in the crisis situation, or in other words, the relation between the intensity of the desire for the goal or goals directly or indirectly achieved through embezzlement, and the degree of satisfaction appearing subjectively available to the individual before the possible embezzlement may occur.” It was found that in every case a critical tension situation invariably preceded the embezzlement.

CHAPTER I I

METHODOLOGY AND PROCEDURE The important methodological assumption on which the present research was based is that a scientist must seek to formulate generalizations which include all of the cases of the phenomena with which he is concerned. The perfect form of scientific knowledge is assumed to be universal generalizations which permit the discernment of exceptions, thus making possible the perfecting or refinement of the generalizations.

Negative cases,

therefore, are assumed to be the growing point of science, exceptional instances forcing us either to reject or revise the generalization.1

On the negative side, this assumption

indicates a dissatisfaction with the statistical com­ parisons which have been used as "explanations” in social science and particularly in criminology.

Comparisons of

"average" traits and characteristics provide descriptions of the manner in which phenomena vary in space and time

1G. H. Mead, "Scientific Method and the Individual Thinker," in John Dewey, Creative Intelligence, New York, 1917 > A. D. Ritchie, Scientific Method; An Inquiry into the Character and Validity of Natural Laws, New York, 1923, pp. 53-83; H. Blumer, "Introduction,"to A. R. Lindesmith, Opiate Addiction, Bloomington, Indiana, 1947, PP* vii-ix;A. R. Lindesmith, ibid., pp. 12-14; R. H. Turner, "Statistical Logic in Social Research," Sociol. and Soc. Research, 32:697-704, Jan.-Feb., 1948. -

27

-

28

as well as indicating degrees of association between the phenomena and other conditions.

Such comparisons

consequently Indicate many useful clues to universal generalizations.

But statistical comparison Itself seldom

provides explanatory theories, and it is axiomatic that statistical correlation is not indicative of causal relationship. The present study Is a study of cause.

An

enumeration of causal Influences which hold true 11on the average” would he a flat contradiction, for if something is a cause it must always have, by Its own definition, the p same effect, otherwise it is not a cause at all. "The discovery of causal relationships requires the careful examination and analysis of all available evidence, including the results of statistical studies, but in particular it requires intensive, exhaustive probing of individual cases and a comparison of certain crucial types of cases. The methodological assumption thus becomes, in a sense, a statement of a design for research, a method of inquiry.

As a method It has its roots in J. S. Mill's

"method of difference," was elaborated as the method of

I. Thomas and P. Znaniecki, The Polish Peasant in Europe and America, Chicago, 1918, Vol7 I, p. 39* ^A. R. Lindesmith, o£. cit., p. 13.

29

"analytic induction'1 by Znaniecki and as the "Galilean mode of thought" by Levin, and was referred to as the "principle of limited inquiry" by Lindesmith. statement of Mill's method is:

The full

"If an instance in which

the phenomena under investigation occurs, and an instance in which it does not occur, have every circumstance in common save one, that one occurring in the former; the circumstance in which alone the two instances differ is the effect, or the cause, or an indispensable part of the cause, of the phenomenon." negatively as follows:

li

This canon may be stated

Nothing can be the cause of a

phenomenon if the phenomenon does not take place when the supposed cause does.5 Znaniecki points out that "enumerative induction" will not produce generalizations of the type "all S are P" or "if P then Q" and that whenever such generalizations can be formulated the use of the statistical method Is precluded.

Biological and physical scientists use the

method of "analytic induction" in formulating laws that are applicable to all living members of a species or to all processes of a certain kind.

When contradictory cases

appear they are granted as exceptions which raise problems and are thus stimulating to research.

Further research

System of Logic, London, 1875, Vol. I, p. 452. % . R. Cohen and E. Nagel, An Introduction to Logic and the Scientific Method, New York, 1934, p. 259-

30

may Invalidate the former generalization or It may show that the exception was only apparent. Levin shows that according to the old adage that "the exception proves the rule" we need not take exceptions as counter arguments as long as their frequency is not too great, hut that it is no longer possible to take such exceptions lightly.

"They do not in any way 1prove the

rule1 but, on the contrary are completely valid disproofs, even though they are rare; indeed, so long as one single 7 exception is demonstrable." Lindesmith lists three advantages of the method. First, it makes it possible to disprove theories and to test one against the other.

Second, it provides the

possibility of cumulative growth as old theories are re­ vised to take into account new negative evidence, and third, "it makes for a close articulation of theory and fact, for whatever a temporary hypothesis may be it must be changed to conform to the evidence which contradicts it."^ The method also implies a rigorous definition of the phenomenon which is being studied.

Without such

definition the generalization derived from the data could

Znaniecki, The Method of Sociology, New York, 1934, pp. 232-233. 7

K. Lewin, A Dynamic Theory of Personality, op. cit., pp. 18-24. ^A. R. Lindesmith, o£, cit., p. 19.

31

not in any sense be considered as universal.

The complete

procedure has "been outlined as having essentially the following steps:

(1) A rough definition of the phenomenon

to be explained is foimulated.

(2) An hypothetical

explanation of that phenomenon is formulated.

(3) One case

is studied in the light of the hypothesis with the object of determining whether the hypothesis fits the facts in that case.

(4) If the hypothesis does not fit the facts,

either the hypothesis is re-formulated or the phenomenon to be explained is re-defined, so that the case is excluded.

(5) Practical certainty may be attained after a

small number of cases has been examined, but the discovery by the investigator or any other investigator of a single negative case disproves the explanation and requires a reformulation.

(6) This procedure of examining cases, re­

defining the phenomenon and re-formulating the hypothesis is continued until a universal relationship is established, each negative case calling for a re-definition or a refo rmulati on.^ It should be pointed out at the outset that the use of this method does not completely eliminate the possibility of including in the generalization a construct which was not derived from the data.

Thus, the use of the method is

not in itself a guarantee of validity, the latter being

H. Sutherland, op. cit., p. 65.

32

almost completely absent if the concepts or events used in the generalization are not drawn from observation of the phenomenon under study but from extra-systematic sources. A theory stating that criminality is the result of "tensions”"**® or a hidden defect in the criminal is a case in point.

Such theories would fail to identify the cause

of trust violation for the following reasons.

First, they

do not tell us why some men with "tensions" violate trust while others steal, commit suicide or change jobs.

Tensions

do not differentiate between criminal and non-criminal behavior.

Second, they explain the behavior by means of a

mechanism which cannot be observed.

Generalizations based

on such hidden variables are not verifiable.

Third,

tensions and hidden defect concepts are not derived from interviews with trust violators or from other data about trust violators, but from preconceived notions in regard to a system of human motivation.

Ascribing trust violation

to tensions is like ascribing it to "weak will power" since in both instances the explanation is in terms of a hidden variable which can be exonerated even without first observing the behavior being explained.

Even to say that when tensions

are present trust violation is always present and that when tensions are not present trust violation is never present would not satisfy the criteria for scientific generalization

^ T h e first statement in Lottier*s theory, described earlier on page 15 in illustrative of this point.

33

unless other investigators -were able to verify this observation by empirical means. We have attempted to state our generalizations in such form that they may be checked by other investigators, and formulation of hypotheses was guided entirely by the search for negative cases. Summarizing, this method is used in the study of criminal violation of financial trust (1) because the negative case is assumed to be the growing point of science, (2) because the logic of the method is related to the concept of cause, which is basic in criminology, (3) because the method permits the statement of generalizations in testable form. Definition of the behavior studied and identification of subjects Using this methodological approach, all subjects need not be completely alike in all respects.

The require­

ment is that they be homogeneous with respect to the cause of the phenomenon in question,1’1' and they need not be identical in respect to such factors as age and sex.

The homogeneity

of a group under investigation is, in a strict sense, dependent upon the investigation itself.

The present method allows

homogeneity to be induced by redefinition of the bounds of the universe being studied or by reformulation of the hypothesis, as previously indicated.

For example, in a

■^T. C. McCormick, Elementary Social Statistics, New York, 1941, p. 223 ff.

34

study of the effectiveness of appeals to buy wap bonds it was found that not all appeals were equally effective on i

all persons, so the subjects were divided into four categories according to their “predispositions" at the time the appeal was made.

Within the categories there was more

uniformity in the effectiveness of particular appeals than 12 within the entire group of subjects, and it is apparent that this uniformity was in part induced by the investigator. The behavior to be studied here was at first defined as nembezzlement” and a legal definition of that crime was used.^

Upon contact with cases, however, it

was almost immediately discovered that the term is not used in a consistent manner in the jurisdiction where the research was conducted and that many persons whose behavior was adequately described by the legal definition had actually been sentenced to the penitentiary on some other charge.

Similarly, the terra is used in different ways in

different jurisdictions.

The legal definition was con­

sequently abandoned and in its place two criteria for inclusion of any particular case in the study were 12r. k , Merton, Mass Persuasion, New York, 1946, pp. 109-138. i^ ^"The fraudulent appropriation to his own use or benefit property or money entrusted to him by another, on the part of a clerk, agent, trustee, public officer or other person acting in a fiduciary capacity." Black1s Law Dictionary, St. Paul, 1933, p. 653.

35

established.

First, the person must have accepted a

position of financial trust in good faith.

This is similar

to the implication of the legal definition that the "felonious intent" in embezzlement must be formulated after the time of taking possession. in agreement in this respect. violated that trust.

All legal definitions are Second, the person must have

These criteria permit the inclusion

of almost all persons convicted for embezzlement and in addition a proportion of those convicted for larceny by bailee, confidence game, and forgery. While a legal definition of embezzlement could either be explicitly modified or construed so that it adequately covered all of the behavior meeting the two criteria, it seems preferable to use the general phrase, "criminal violation of financial trust," so that there will be no question of the adequacy of the legal meaning.

If a

person criminally violates financial trust which he has accepted in good faith and is sentenced to the penitentiary for confidence game, even if he has conducted himself in the same manner as one who criminally violates a trust and is sentenced to the penitentiary for embezzlement, the term "embezzlement" could be used to denote his behavior.

However,

this term is a legal and not a sociological one and such use would result in numerous legalistic complications.

The

subjects Interviewed had been sentenced to a state peni­ tentiary for one or more of four offenses, all of which

36

involve a violation of financial trust. Although the State of Illinois,where the research was conducted, uses 11obtaining money "by means of confidence game” to cover a multitude of offenses, only those offenses in which a position of trust was accepted in good faith are included in this study.

The behavior most frequently

resulting in a commitment to the Illinois penitentiary for confidence game is the issuing of a fraudulent check, and the second most common type of behavior to which this phrase is applied is obtaining money or property by some other trick in which advantage is taken of the confidence which the victim reposes in the offender.

The third type

of behavior is that which we are studying, that in which a person accepts money or property in good faith and then at a later time converts it to his own use.

This is funda­

mentally different from the situation in which the man "sells air” or issues a check on a non-existent account, yet the courts use the same legal designation for all three.

The third situation is obviously much closer to

embezzlement than it is to classical confidence game. It is recognized, however, that it is frequently difficult for a defendant to prove that "criminal intent" was lacking at the time the money or property was accepted and that instead it was present only after the property had come into his legal possession.

Often the defendant is not

interested in producing such proof.

37

In the same way, forgery seems to have little relation to embezzlement until we recognize that forgery is frequently used as a part of the embezzlement procedure.

The behavior

of a bank teller who, for example, forges a customer's name on a withdrawal slip made out in the amount of $100 and then pockets the money is logically identical to the behavior of a teller who simply indicates that a $100 withdrawal has been made when in fact it has not been made.

Two different

crimes, forgery and embezzlement, have been committed, but in each case there has been a violation of trust which was accepted in good faith.

In many instances, one forges as

a part of his embezzlement, so that the prosecuting attorney has, in effect, the choice of prosecuting him for either or both crimes. Larceny by bailee and embezzlement are legally dis­ tinguishable in some states, but the legal distinction is not relevant to our purposes.

The legal differentiation

hinges on the nature of the trust relationship, i. e., whether of trustor-trustee or of bailor-bailee, but for our purposes the only essential requirement is that the position be accepted in good faith since an element of trust is present in both crimes.

Again, the matter of

legal proof presents perplexing problems since it is difficult to prove in court, for example, whether one who rented an automobile and absconded with it actually intended to abscond with it at the time he rented it (confidence game)

38

or whether he rented it in good faith and then later decided to abscond with it (larceny by bailee).

In Illinois the

latter probably would be presumed* otherwise the state would more frequently indict for confidence game in such cases.

The courts probably take the course which will

produce the most effective result;

it probably is easier

to prove that criminal intent was present at the time of conversion than it is to prove that it was present at the time of taking possession. Citation of our cases will demonstrate our position. In Case 72 a lawyer in legal possession of a client’s money* which he was

to use to pay for a mortgage for the client*

converted the money to embezzlement.

his own use and was convicted for

In Case 69 a lawyer in legal possession of

a client's money, which he was to use to purchase real estate in tax forclosure proceedings* converted the money to his own use and was convicted for confidence game.

A

real estate broker (Case 66) converted to his own use deposits which had been made with him for the purchase of real estate and was convicted for confidence game* while another real estate broker (Case 52) converted similar deposits andwas convicted (Case 5) set

for embezzlement. An accountant

up a bank account in his employer's name and

deposited checks and cash entrusted to him in It as a means of Illegally obtaining them and was convicted for confidence game; a shop superintendant of a factory (Case 6) set up

39

dummy accounts and had checks sent to it as a means of illegally obtaining them and was convicted for embezzlement. In Case 25 a porter who took the money he was to deliver to the bank was convicted for larceny by bailee and in Case 20 a porter who did exactly the same thing was convicted for embezzlement.

Neither legal nor behavioristic differences

appear to be present in these cases, yet Hie conviction was for different offenses. In contrast to this, obvious legal differences are present in some eases, though the behavior is logically identical.

Thus, In Case 1 an accountant made checks to

an existing company and then took them to a confederate who endorsed them, cashed them at his place of business, and received a portion of the money.

The subject endorsed

none of the checks himself and was convicted for embezzlement. In Case 17 a bookkeeper made checks to an existing company, endorsed them himself and paid a confederate a percentage on each check for cashing them at his place of business. He was, of course, convicted for forgery. The importance of proving intent at different times is Illustrated by Case 38 in which a man was convicted for embezzlement after selling a truck load of merchandise belonging to his employer.

He confessed to the interviewer

that this was about the eighth time that he had obtained a ficticious driver's license and applied for a truck driving job with the intention of absconding with the

40

merchandise.

Had the state been able to prove this it

could have prosecuted him for confidence game.

The case

was used in the study in another connection since the person failed to meet, in this instance, the criterion of having accepted the position of trust in good faith.

The main source of direct information on trust violation was interview material obtained from prisoners at the Illinois State Penitentiaries at Joliet, Illinois. The following steps were taken in the selection and inter­ viewing of prisoners.

First, the behavior to be studied

was tentatively defined as embezzlement, as Indicated above, and all embezzlers whose names were in the "active" file of the prison were Included.

Second, It was observed

that the illegal behavior of persons in prison on charges other than embezzlement was practically identical to that of persons confined for embezzlement, so the legal definition was abandoned and the other two criteria were substituted.

It was anticipated that the criteria would

permit inclusion of some of the persons confined for embezzlement,larceny by bailee, confidence game, forgery, uttering ficticious checks and conspiracy, and a list of the persons currently confined for any of those offenses was compiled.

The following is a tabulation of the number of

persons confined for each offense;

41

Confidence Game Forgery Embezzlement Larceny by Bailee Ficticious Checks Conspiracy

- 124 - 104 - 22 - 17 - 12 2 m

Third, the personal file of each of the 281 prisoners was examined with the aim of screening out those cases which obviously did not meet the criteria.

The document in each

file which was most heavily relied upon for this purpose was the "State1s Attorney1s Report" (the official statement of the facts in each case), but other documents, such as reports of the Chicago Crime Commission, letters from former employers and from relatives, newspaper clippings, and the prisoners statement upon admission to the institution were also consulted.

These documents revealed that some cases

obviously did not meet especially the first criterion-acceptance of a position of financial trust in good faith-and those cases were eliminated from the compilation.

A

"classical" confidence man, or a professional forger, for example, does not accept his position of trust in good faith even when, from the point of view of his victim, he is trusted.

In/henever there was any doubt, however, the

individual was kept in the list of possible cases and later interviewed.

Of the 124 cases of confidence game, only 22

were kept in the file for interviews.

Of the 104 men

sentenced for forgery, only 6 were not eliminated.

Hone

of those convicted for embezzlement or larceny by bailee

42

“ were eliminated in this step, “but all of those convicted for uttering ficticious checks and for conspiracy were so treated. Fourth, the State's Attorney's Reports and Federal Bureau of Investigation Reports in the personal files of the 28& persons were searched for previous records of sentences for embezzlement, larceny "by bailee, and forgery, and the same screening operation was performed on them. cases, all for embezzlement, were located.

Only 5

However, by

means of prisoner, staff and personal contacts with persons confined for other than one of the six offenses, 7 additional persons who had previous records of embezzlement were located. Fifth, all 79 persons whose eases were not eliminated by this screening process were interviewed briefly with a view to (a) determining whether they met the criteria established, (b) acquainting them with the Investigator and assuring them that he was In no way connected with a law-enforcment agency or with the security of the prison, and (c) obtaining general impressions of the prisoners and of their offenses.

These Interviews lasted from one half

hour to one and one half hours, depending entirely upon the subject's willingness to talk without being questioned and with a minimum of encouragement and prompting. In order to establish whether or not the first criterion was met, each subject's history in the position of trust was reviewed in regard to the circumstances under which the position was accepted, the term of incumbency

43

before violation* and the circumstances of the violation* Thus* if one answers a ”hlind" newspaper advertisement for an employee and through it obtains a position* or if he more or less "falls" into a position* it usually may be presumed that he accepted the position of trust in good faith.

On the other hand* if he accepts a position of

trust under an assumed name there is reason to be suspicious of his intentions.

Similarly* one who worked honestly as

an accountant for a firm for ten years before he embezzled usually can be presumed to have accepted the position in good faith, and one who absconds with the available funds on the first day of his employment usually can be presumed not to have accepted the position in good faith.

Finally*

one who severs the relationship with his trustor by "selling air" to him probably did not accept the position in good faith* while there is a high probability that one who turns himself in to the state’s attorney did accept the position in good faith.

Statements concerning the circum­

stances surrounding the trust violation could ordinarily be found in the State's Attorney's Reports* and the subject could be interviewed in respect to the other two aspects of his history without much direct reference to his offense. In the interviews the subjects were never asked the question* "Did you accept your position of trust in good faith?" but instead the interviewer waited for the subject to give the information spontaneously.

Ordinarily* evidence

44

of* acceptance in good faith came out in the first interview in the form of statements such as the following.

"I had no

idea I was going to do this until the day it happened." "For two years I've "been trying to understand why I did this after being honest all my life."

nI never at any

time had any intentions of beating that man."

"He wouldn't

give me what he'd promised so I just decided to pay myself." Evidence of acceptance in bad faith was presented as follows;

"I'm the biggest Con Man in Chicago."

"I thought

this looked like a pretty good score so I took It."

"My

case wasn't like embezzlement because I knew when I took their money that I was going to use it for myself." The differentiation was most difficult to make in real estate and other cases where the person converted "deposits."

In those instances the case was used if the

subject had been conducting a business with no trust violation and then later began to convert deposits.

In

no case was this kind of trust violation followed by clear confidence game activities Involving, for example, the outright sale of a building which the seller did not possess.

However, the initial conversion of deposits

frequently was followed by acceptance of deposits knowing that they were going to be misapplied or converted. Usually the latter behavior was described as "taking from Peter to pay Paul,1* and from the person's point of view it was barely different from the behavior in which he

45

converted deposits which were already in his possession. Certainly the acceptance of a deposit knowing that it will be converted cannot be considered as acceptance in good faith, yet it cannot accurately be described as confidence game either if the intention is not to bilk the victim but actually to deliver the item for which the deposit was made. But for our purposes it was not necessary to make this differentiation for the reason that those who accepted such deposits had always been trusted persons at a prior time and had always previously converted funds which were on hand. Of the 79 men interviewed in the preliminary or "get acquainted” interviews, 14 were eliminated from further interviewing for the following reasons:

4 did not meet the

first criterion, 1 did not meet the second criterion, 6 claimed a ”bum rap" or indicated a definite unwillingness to participate in the research project, and 3 were so located in the institutional system that it seemed inadvisable to try to interview them in detail and at length.

The man whose case did not meet the second criterion

had been an automobile mechanic who had an automobile in his shop for repairs at a time when police were searching for him in order to arrest him for burglary and robbery. He did not dare return the car to its owner because he knew that the owner was being watched by the police, and he did not want toldrive the car off because he thought

46

that it would mean a larceny of a motor vehicle count, in addition to his burglary and robbery counts, when he was caught.

He therefore abandoned the automobile on the

street and it was recovered by its owner within a few days. However, a larceny by bailee count was included in his indictment.

Two men refused to participate, on the ground

that they were ashamed of their past behavior and did not want to punish themselves further by recalling the deeds. One of these men was serving a prison term for manslaughter but had early in his life embezzled $40,000 which his father had repaid, with the result that there was no prosecution.

The other had as a jewelry salesman sold

part of his samples and carried on some classical confidence game activities.

Three men claimed that the goods or money

whieh they were accused of converting had actually been stolen or lost, and one claimed that his was a case of mistaken identity.

One man convicted for embezzlement was

in the hospital during the entire research period, another was a hospital nurse and could not readily be called for interviews, and one man convicted for larceny by bailee was inaccessible for the reason that the head of the institutional professional staff ruled that he not be interviewed further. Sixth, over a period of five months each of the 65 remaining men was interviewed frequently and at length. Hot all were seen the same number of times, and in general

47

the interviews with those seen a small number of times were longer than those with the men interviewed more frequently. Most of the interviews were conducted in a special prison interviewing room, but a few of them were conducted at the place of the prisoner's employment in the institutional system.

In the second interview we started to take notes

in order to test the subjects1 reactions to the recording of their reports, and in subsequent interviews we adjusted our note-taking procedure to the individual subjects. We found that in some cases we were able to write verbatim notes without disturbing the subject, but in other cases it seemed appropriate to make only outline notes, and in some cases no notes could be taken at all.

In the last two

instances the content of the interview was written down in the subject's own words as soon as he left the room. The length and frequency of interviews with individual subjects depended to a large extent upon the subject himself. Those who seemed reluctant to talk were seen more frequently than those with whom a friendly and confidential relationship was established early in the process, but those who could not present details of their cases and backgrounds, even if they so desired, were not interviewed as frequently as those who were able to do so.

That is to day, "good" subjects

were interviewed more often and more extensively than were "poor" subjects

those whose intelligence, educational

background and vocabulary restricted the communication of

48

their experiences.

Those who described their behavior

fluently became crucial cases, their testimony causing the abandonment of the hypothesis which had guided the research up to the time they were encountered.

The new hypotheses

were then checked against the less fluent cases. Formulation of Hypotheses Hypotheses in regard to the problem of systematic causation were formulated progressively in much the same way that the behavior being studied was re-defined to include more than is denoted by the legal teim "embezzlement.” When an hypothesis was formulated a search for negative cases was conducted, and when such cases were found the hypothesis was re-formulated in light of them.

The initial

hypothesis, which was abandoned almost immediately, was that positions of financial trust are violated when the incumbent has learned in connection with the business or profession in which he is employed that some forms of trust violation are merely technical violations and are not really "illegal" or "wrong," and, on the negative side, that they are not violated if this kind of definition of the behavior has not been learned.

Many trust violators

expressed the idea that they knew the behavior to be illegal and wrong at all times and that they merely "kidded themselves" into thinking that it was not illegal. Others reported that they knew of no one in their business or profession who was carrying on practices similar to

49

theirs and some of them thought of their offense in terms of theft, rather than trust violation. In view of these negative cases, a second hypothesis, which included some of the "multiple factor" ideas of gambling and family emergencies, as well as the potential trust violators' attitudes toward them, was formulated. This hypothesis was in part derived from Riemer' s statement that the "opportunities" inherent in trust positions form "temptations" if the incumbents develop anti-social attitudes which make possible an abandonment of the folkways of 12; business behavior. The formulation was that positions of trust are violated when the incumbent structures a real or supposed need for extra funds or extended use of property as an "emergency" which cannot be met by legal means, and that if such an emergency does not take place trust violation will not occur.

This hypothesis proved fruitful,

but like the first one it had to be revised when persons were found who claimed that while an emergency had been present at the time they violated the trust, other perhaps even more extreme emergencies had been present in earlier periods when they did not violate the trust position. Others reported that there had been no financial emergency in their cases, and a few "explained" their behavior in terms of antagonistic attitudes toward the employer, feelings of being abused, underpaid, or discriminated l40p. cit., p. 413.

50

against in some other way. The next revision shifted the emphasis from emergency to psychological isolation, stating that persons become trust violators when they conceive of themselves as having incurred financial obligations which are considered as non-socially sanctionable and which, consequently, must be satisfied by a private or secret means.

On the negative

side, if such non-shareable obligations are not present, trust violation will not occur.

This hypothesis was

suggested initially by LaPiere and Farnsworth who cite Sutherland as having shown that in cases of white collar crime the person is frequently confronted ”with the alternative of committing a crime or losing something he values above his integrity,”1^ ^ but it was brought into sharp focus by a prisoner who stated that he believed that no embezzlement would ever occur if the trusted person always told his wife and family about his financial problems, no matter what the consequences.

However, when the cases

were re-examined in light of this hypothesis it was found that in a few cases there was nothing which could be considered as financial obligation^ that is, as a debt which had been incurred in the past and for which the person at the present time felt responsible.

Also, in

some cases there had been non-sanctionable, and hence

■^R. t . La Piere. and P. R. Farnsworth, Social Psychology, Hew York, 1949, P. 344.

51

non-shareable, obligations at a prior time, and these obligations had not been alleviated by means of trust violation.

It became increasingly apparent at this point

that the origin of trust violation could not be attributed to a single event, but that its explanation could be made only in terms of a series of events, a process. Again the hypothesis was re-formulated, emphasizing this time not financial obligations which were considered as non-socially-sanctionable, and hence as non-shareable, but non-shareable problems of that nature.

This hypothesis

also pointed up the idea that not only was a non-shareable problem necessary, but that the person had to possess (a) knowledge or awareness of the fact that the problem could to some extent be solved by means of trust violation and (b) the technical skill necessary for such violation. Negative cases appeared, however, in instances where men reported that what they considered a non-shareable problem had been present for some period of time and that they had known for some time before the trust violation took place that the problem could be solved by violating their position of trust by using a particular skill.

They stated

that they did not violate the trust at the earlier period because the situation was not In sharp enough focus to "break down their ideas of right and wrong." revision took the following form:

The final

Trusted persons become

trust violators when they conceive of themselves as having

52

a financial problem or problems which are non-shareable, have the knowledge or awareness that this problem can be secretly resolved by violation of the position of financial trust, and are able to apply to their own conduct in that situation what is for them an adequate rationalization. This hypothesis proved to be far superior to the others, and no negative evidence necessitating its rejection has been found as yet.

In all of the cases interviewed the

process was found to be present, and when cases were examined with a view to answering the question:

"Why did

these men not violate their trust at an earlier period?" it was seen that in earlier periods one or more of the events in the process had not been present.

A search of cases

reported in the literature also showed no negative cases, though it should be pointed out that in many of the reports crucial information which would either contradict or affirm the hypothesis was not given.

A similar search of about

200 cases collected by E. H. Sutherland in the 1930*s, before he had formulated the differential association theory, likewise showed no negative cases. Bone of the interviewees were informed of the central hypothesis, and when an approximation of the final hypothesis was formed not even the members of the professional staff at the prison, with one exception, were informed of it. The events present in the process shall be considered in great detail in subsequent chapters.

It need only be

53

pointed out here that the presence of a non-shareable financial problem will not in itself guarantee that the behavior in question will follow, nor will the presence of a non-shareable problem and knowledge that it can be resolved by trust violation. must be present.

The entire sequence of events

"While most socialized individuals have

problems which they consider non-shareable, private, and personal, not all of those persons violate positions of financial trust which they might hold.

A prospective

embezzler, for example, who feels that the investment which resulted in his insolvency was so stupid that he must keep it a secret in order to avoid ridicule and disgrace could conceivably commit suicide, become a philosopher of the sort that renounces all worldly things, or use one of countless means to conceal or relieve his distress.1^

He would not

necessarily violate a position of trust in which he was incumbent.

One in somewhat the same position could

conceivably be sharply aware of the fact that his disgrace could be avoided if he violated his trust position, yet he would not necessarily violate that position.

He must first

be able to apply to the situation a rationalization which he considers an adequate justification for trust violation. The final hypothesis in its complete form made it possible to account for some features of trust violation

Cf. J. Hall, Principles of Criminal Law, Indianapolis, 1947, p. 4C>3.

54

and for some individual cases of that behavior which could not be accounted for by other hypotheses.

However, the

fact that it was revised several times probably means that future revision will be necessary if negative cases are found.

The location by another investigator of persons who

have violated positions of trust which were accepted in good faith, but in whose behavior the sequence was not present, will call for either a new revision of the hypo­ thesis or a re-definition of the behavior included in the scope of the present hypothesis. The Scope of the Generalization The theoretical account of the behavior of trust violators which is presented in the following pages refers only to persons who have accepted positions of financial trust in good faith and then have violated that trust in a criminal manner.

No explanation of, or analogy to, the

violation of trust of a non-financial nature, such as the traitor in time of war, the political grafter, of the acceptor of a bribe is intended.

There must have been a

conversion of money or goods entrusted.

Similarly, the

explanation does not refer to violation of financial trust in a non-criminal manner, such as that, for example, of a banker who carelessly handles a trust fund with the result that the depositors lose their money.

We have already given

examples of behavior in which the position of trust was not

55

accepted in good faith; the explanation presupposes genuine positions of trust and attempts to account for differential reactions of persons in such positions.

CHAPTER I I I

THE ROLE OF THE NOR-SHAREABLE PROBLEM IN TRUST VIOLATION If our final hypothesis on the level of systematic causation is correct, ideally we would expect to find among trust violators t&ree types of eases which would demon­ strate that the absence of one of the events in the sequence will preclude the criminal violation of financial trust and that, conversely, when the entire process takes place trust violation results.

The first of these types is sometimes

discussed when an "emergency" Is said to be the "cause** of embezzlement:

those cases in which the non-shareable

financial problem is not present at an earlier time but is present, together with other events, prior to the violation of trust.

In the second type of case the subject

would admit and demonstrate that at some time prior to the trust violation he had the same non-shareable problem which he had at the time of violation, but that in the earlier period he did not "know,1* for any of a number of reasons, that his problem could be solved by violating the trust.

He would then Indicate that this awareness was

present, with the other events, when the trust violation occurred.

A third kind of subject would demonstrate the

presence of awareness that trust violation was a possible

-

56

-

57

solution to a specific non-shareable problem, but that at an earlier time he was -unable to apply to his conduct what he considered an adequate rationalization or motivation. The application of such a rationalization frequently explains why the violation took place at the time it did, even to the day in cases where the form of violation was absconding with the funds at hand. When the trust violators interviewed were in fact asked to explain why they refrained from violation of other positions of trust which they might have held at a previous time, or why they had not violated the present position at an earlier time, those who had an opinion responded according to the expectations.

They expressed the equivalent

of one or more of the following quotations:

(a) "There was

no need for it like there was this time," or (b) "The idea never entered my head," or (c) "I thought that it was dishonest then, but this time it didn't seem dishonest at first."

The first of these expressions was found in further

interviewing to indicate the absence of a non-shareable problem, the second to in part indicate the lack of information or knowledge about the crime, and the third to indicate the absence of a rationalization.

It should be

observed, however, that the ideas inherent in these three types of expressions are not discrete and that the theory which we are presenting is in reference to a process the result of which is trust violation.

Taken together, the

58

three expressions will be shown to indicate that the connection between a trusted person* s structuring a financial problem as non-shareable and his subsequent violation of trust lies in his ability to "perceive" that the violation of the position will produce the results desired

a private solution to the problem.

In this

chapter we shall be concerned with cases which demonstrate the significance of the non-shareable problem in the process, and in subsequent chapters we shall consider the other two events and the relationships between them. In all cases of trust violation encountered the violator considered a financial problem which confronted him as one which he could not share with persons who, from a more objective point of view, probably could have aided in the solution of the problem.

In almost all instances

this meant that he thought he could share the problem with no one, but in a few cases it meant that he could share it with very few persons, ordinarily persons who subsequently became confederates in the crime.

Criteria

of an objective nature in regard to the degree of ftshareabillty" which specific types of problems oT situations have In our culture were not set up, but instead the subject's definition of the situation was used as data.

Thus a man could lose

considerable sums of money at the race track daily but the loss, even if it constituted a problem for the individual, might not constitute a non-shareable problem for him.

59

Another man may define the problem as one which must be kept secret and private, that is, as one which is nonshareable.

A failing bank, likewise, might be considered

by one banker as presenting a problem which must be shared with his business associates and with the members of the community, while another banker might conceive of his bank’s imminent failure as a problem which cannot be shared with his associates or depositors.

Our observation is that it

is the second phase, the defining a problem as non-shareable, which makes it a significant event in the process of trust violation* Some problems, even when considered to be nonshareable, however, are such that it is inconceivable, or at least highly improbable, that a trusted person could consider violation of his position of trust as providing a solution to them.

Non-shareable problems of a non-financial

nature, such as a problem regarding the question of whether or not to secure a divorce, for example, are not ordinarily considered to be solvable by the securing of additional funds either legitimately or by means of trust violation. However, some problems of this nature readily become problems which could be solved by securing funds through violation of trust.

The person contemplating divorce may

need funds for lawyer* s fees, to leave the vicinity, to remarry.

Also, a problem of a non-financial nature such

as how to get revenge for "unfair” acts by an employer

6o

hypothetically could be structured in such a way that it could be solved by absconding with the employer's funds. Hence, not all trusted persons who have non-shareable problems become trust violators, but according to the theory here all trust violators have had non-shareable problems. & list which would exhaust all of the possible problems or situations which could be considered nonshareable and which consequently might play a significant part in the etiology of trust violation is not conceivable, since almost any situation can be so considered by the individual.

However, analysis of cases has indicated that

problems or obligations arising from certain kinds of situations quite frequently are defined as non-shareable by trusted persons, and some of these will be discussed in order to demonstrate the significance of such definition. All of the situations that produce problems which the individual considers to be non-shareable are concerned with status-seeking or status-maintaining activities of the individual, but this kind of behavior in no way differen­ tiates trust violators from non-violators.1

Jameson has indicated that such behavior is universal. S. H. Jameson, "Principles of Social Interaction," Amer. Sojj. Rev., 10:6-12, Feb., 1945* For a discussion of problems of status which confront many Individuals In our culture see E. C. Hughes, "Dilemmas and Contradictions of Status," Amer. Jour. Soc., 50:353-359, March, 1945.

61

One type of problem which is frequently defined as non-shareable by persons who subsequently violate their positions of trust is that which the trusted person considers to have resulted from prior behavior which actually violated the trust reposed in him, though not in a criminal or even a financial manner.

Financial obligations incurred through

non-financial violations of positions of trust often are considered as non-shareable by trusted persons since they represent a threat to the status which holding the position of trust entails.

Most individuals in positions of

financial trust, and most employers of such individuals, consider that incumbency in such a position necessarily implies that, in addition to being honest, they should behave in certain ways and should refrain from participa­ tion in some other kinds of behavior.

Just as individuals

in trusted positions have obligations not to violate the trust by taking the funds, they often also have obligations, for example, to refrain from what may be loosely described as riotous living, and to maintain an enviable position in the community.

We have used the term "ascribed obligations”

to refer to those obligations of a non-financial nature which are expected of parties in consequence of their incumbency p in positions of financial trust. p In law, this type of obligation is called an 11obediential obligation” since it is a consequence of a situation or a relationship, not of a contract. Black1s Law Dictionary3 op. cit^., p. 1274. Hughes, ojd. cit., points

62

Ascribed obligations m a y not be as rigidly enforced as the legal obligation to be honest in the trust position, but they do exist*

The following cases indicate that

rather formal rules are sometimes formulated in regard to the behavior of trusted persons. Case 118. (A bank teller convicted for embezzle­ ment}^ The employee sees customers come into the bank and deposit checks for $10,000, $50,000 or $25,000 that they have made playing the market or in some other gamble and soon learns that money is made in that way, not by hard work and saving as we used to hear. Our directors did the same thing that the customers did and they made big money. But then they have a rule that their little employees can not do that which tEey are doing. Of course, the rule is a farce anH

out that in addition to the specifically determining traits, a complex of "auxiliary traits" are expected of the incum­ bents of certain statuses. Conflicting roles on a larger scale have been shown by Lynd to be a characteristic of American life. R. S. Lynd, Knowledge for What?,, Princeton, 1939* P. 103. The situation also could be described in terms of conflict between groups: "Every person is identified with a number of social groups, each meeting some biologically conditioned or socially created need. Each of these groups is normative in the sense that within it grow up norms of conduct applicable to situations created by that group1s specific activities. As a member of a given group, a person is not only supposed to conform to the rules which it shares with other groups, but also to those which are peculiarly its own. . . . The more complex a culture becomes, the more likely it is that the number of normative groups which affect a person will be large, and the greater is the chance that the norms of these groups will fail to agree, no matter how much they overlap as a result of a common acceptance of certain norms. A conflict of norms is said to exist when more or less divergent rules of conduct govern the specific life situation in which a person may find himself. The conduct norm of one group of which he is a part ma^r permit one response to this situation, the norm of another group may permit perhaps the very opposite result." T. Sellin, Culture Conflict and Crime, Social Science Research Council Bulletin No. 41, New York, 1938* p. 31.

63

everyone knows that the rule Is violated more than the prohibition law is, hut they keep up the farce for some reason. Case 122. (Taken from the files of a Federal Probation Office.) It was reported that as early as a year prior to his apprehension an assistant cashier and other employees of the bank knew that the subject (also an assistant cashier) was betting on the races, and one employee stated that she had overheard the bank president warning "him 'to quit betting on tiie race s. Ca.se 109* (From the files of a fidelity bond company) This man had a bond of $25,000 while he was a bookkeeper and cashier for a Chicago firm at a previous time, but this bond was excelled on inf ormation that "he was patronizing saloons and gambling houses'.3 Organizations which do not have such explicitly stated rules conceivably operate on the informal expectation that trusted persons will behave in certain ways, even while 4 off duty. That this kind of obligation is present in our culture and that It Is frequently violated may be inferred from the many popular anecdotes and cartoons about the impropriety of a banker or other trusted person frequenting a race track or a book-making establishment.

However,

such inferences need not be made, and it need not even be

^Cases numbered 1 to 99 were collected by the writer, cases numbered 100 to 199 were collected by E. H. Sutherland in the early 1930*s, and cases numbered 200-299 were collected by other investigators. ^The Continental Casualty Company states that the following are “danger signals" when considering men for employment: a history of dishonesty or a criminal record, debts and extravagant living, gambling and dissipation, a refusal to give an application on incomplete, false, or vague answers In the application. Continental Casualty Company, ojd. cit., p. 13.

64

true that such obligations exist in fact.

The important

and essential point is that trusted persons frequently operate on the theory that there are such obligations incumbent in their positions of trust.

For reasons which

need not concern us here these persons frequently violate these ascribed duties and obligations (probably more frequently than they criminally violate the positions of financial trust) and consider the resulting problems to be non-shareable at least with the members of the group which they feel ascribed the obligations in the first place. When persons incur debts or in some other way become financially obligated as a result of violation of the obligations ascribed to the role of a trusted person the situation becomes particularly pertinent.

They

frequently consider that these debts must be kept secret, and the meeting of them becomes a non-shareable financial problem.

In many instances the incurrence of such debts

is also considered as incompatible with the duties and obligations of other roles which the person might be enacting, such as those of a husband or father.

It is,

for example, sometimes considered improper for a middle class husband to become indebted to a mistress or for support of a mistress, and it is also considered improper for a bank teller, corporation officer or accountant to do so.

We are concerned with such debts only in regard to

the conflict with the person's role as a trusted person.

The concept of ascribed obligations and duties helps to make understandable the reported high incidence of "wine, women and gambling," in the behavior of embezzlers.

If an

individual who believes, for example, that he is "not supposed to" gamble at a race track loses his personal funds in such an endeavor the resulting problems could easily be considered by him as non-shareable.

Admission of the loss

would amount to an admission of unworthiness.

The question

of why persons do not wface the music" when such problems occur rather than structuring them as non-shareable is not within the scope of the present research.

The fact is

that when such problems are structured as non-shareable by persons in trusted positions they often make up a significant part in a process which results in trust violation.

5

A man who had been convicted for embezzlement on two different occasions blamed both of his crimes on gambling.

In one of the interviews he was asked why a

gambler doesn't borrow from either his gambling friends or from others when he runs out of money, rather than embezzling.

He responded as follows:

^Von Hentig reports a "wave" of paymasters' embezzle­ ments during the Civil War. He explains this by pointing out that Washington had many gambling establishments In that time and that among the paymasters "there was first the temptation to get rich quick by gambling. When they lost, they embezzled some money; to hush up the deficit they gambled again and usually had to commit new embezzlements." Hans Won Hentig, Crime: Causes and Conditions, Hew York, 19^7, pp. 225*226.

66

Case 3. Well, that's simple. You can't get It from the boss because you can't tell him that you lost your ass gambling. You just can't go in there and tell him that. And you can't borrow it from your gambling friends because it is probably too big. Where are you going to find someone to give you $1500 or $2000? I've seen a lot of times where a man will give a loser $100 for a couple of weeks and not allow him to gamble in his place for the two weeks, until he gets it back, but that is about all. In another case, an accountant who had "borrowed” fimds

from his employer was asked to give his views on how

he became involved in the crime.

He had been interviewed

previously and hence had been thinking about his crime, but he had no hints as to the nature of the hypothesis. His case demonstrates well the significance of the nonshareable problem in trust violation. Case 10. I look at the embezzlement as symptomatic of other things that preceded it it seems to me that I can start back as far back as I can remember and see undesireable habits and things in my life that just lead right into behavior of that kind. Maybe my reasoning is false, but it seems to lead right to it. When I was a kid, for example, I developed a very unhealthy fear of my father; he used to punish me severely and it got to where I'd do damn near anything to keep from getting into an unpleasant situation with him. Lying. And there were times when I was unjustly punished because he didn't investigate the whole thing. It seems to me that embezzlement would start wlbh such behavior lying and so on---be~cause that I s a violation of faith and trust. is *ramber of things of increasing seriousness thab-lead up to a "thing like embezzlements The things become such-a fixed habit "for him that pretty soon he is going the limit. I_ just can't see a man that»s had a good family relationship, and with others, just starting out on an

67

embezzlement. Even in my case, with all of these things, it was pretty hard for me to think about the embezzlement, so I don't see how a person without these things could do it at all it would be just too big for them. Habit enters in there .just like in other phases of our life if you are adept at deception on a small scale it is so much easier on a large scale. (Later) The more I think about it, the more I'm inclined to think paat before a person does a thing like thatHEelnust have done something previously that the community wouldn11 approve of. If he's in an environment and isn11 leading a double life and doesn't have anything to hide, I can't conceive of him starting with an embezzlement. He has to do something previously. Take this bank teller at Oak Park (A Federal case recently in the newspaper headlines); he appeared to be a respectable citizen, but I don't think this embezzlement was the first thing he felt shame for. Ho matter how little it is* he has to do something first that makes him feel shame or unwortKiness; I_ can11 conceive cf him^Iumping right into embezzlement right off the~lpat. I can think of a number of things that created such a feeling which me things I didn't want my folks to know about, people I associated with. Such as frequenting gambling houses and things of that nature. I got Into a couple of minor gambling scrapes things that weren't of a serious nature, but if a person doesn't have a number of those things in his past and has every reason to believe he is well respected and has to choose between that and starting an embezzlement, it would be too unreasonable for him to start the embezzlement. Another thing, I started drinking at an early age 15 or 16-and running around with older fellows and doing things like that that I knew darned well wouldn't meet with approval. Over a period of years it becomes easier to do things that are bad things. There were times when it was a wonder that it didn't get to the attention of my folks because it was a small community. I'd get stiff and be in public and then would feel sheepish to walk down the street the next day. Of course, it's all in ray head they don't really have any reason to think any less of me. You say, M0h well, what the hell, I did this so I might as well do that." The first time is a little rough, but the second one is a little easier.

68

The other night I heard Paul Gibson (a local radio announcer "who makes a kind of "philosophy of life" talk each evening) and heard him mention that Dr. Thorndyke has said that of the five things most important in happiness the most important was having the approval of the community. I got to thinking about this in connection with my case, and just came to the conclusion that I hadn't had the approval, even before my embezzlement. I got to thinking about it and thought it was closely related to my case. I just can't conceive of a man starting off with embezzlement. . It should be pointed out, however, that the reported high incidence of such "immoral1’ behavior among trust /T

violators0 might be more apparent than real.

At least

the high incidence may be accounted for in alternative ways. First, gambling, riotous living and other such behavior may actually be more frequently present in the history of trust violators than it is in the history of non-violators.^ There is little evidence on this point since control groups consisting of non-violators have not been used.

If It is

true that there actually is a higher Incidence of such behavior among trust violators, It could be accounted for by the first portion of our hypothesis.

Trusted persons

who behave In such an "immoral" manner have a higher probability for violating trust than do persons who do not behave In this manner for the reason that the resulting

^See discussion in Chapter I. *^In 8 per cent of the cases interviewed such behavior was present. This is lower than the percentages reported by other investigators since we did not count cases in which the person who had violated his trust had gambled in order to try to recoup the monies converted.

69

financial obligations frequently are structured as nonshareable (a significant event in trust violation), not because such behavior is the "cause" of trust violation. A U. S. District Attorney had the following to say about a case in which three bank tellers were convicted for embezzling $479*000.

For him, "gambling" seems to be an

adequate explanation in itself, but in view of our dis­ cussion of obligations ascribed to bankers, it is possible that the problems arising from the original gambling losses were non-shareable and in that way played a part in the embezzlement. Case 135* The gist of this case seems to be the attraction of betting, which started on a small scale, evidently with the private funds of these men. The necessity of additional money to recoup losses caused them to "borrow" the bank's funds. They kept getting in deeper and deeper until these "borrowings" reached nearly half a million. At one time X alone made $100,000 in winning, which was shortly eaten up by losses. The lure of the game is perhaps a sufficient explanation. (Each of the men operated independently, though they became aware of each other* s peculations. They did not share the proceeds of their crimes.) Second, gambling, excessive drinking and so forth frequently accompany but do not precede trust violation. Frequently persons who claim that they seldom drank or bet on a horse prior to their defalcations started drinking or betting when they realized that their peculations had grown too large, that they were "in too deep" and probably would soon be detected.

Third, gambling and similar behavior

is often cited to law enforcement officials as the activity

70

on "which the converted funds were spent when the money was actually hidden away.

Since money spent at a track* with a

bookie or at numerous night clubs cannot be easily traced* trust violators sometimes report those agencies as the recipients of the converted funds in order to keep the police from detecting the true whereabouts of the money. Fourth* in the same way* gambling and similar behavior is often reported to law enforcement officials as the activity on which the funds were spent when they actually were spent on other things.

Many subjects

reported that in Chicago the State's Attorney and the Chicago Crime Commission members questioned them in great detail about the "other woman'1 or about gambling.

o

Three

of them reported that they finally told such persons that they had gambled the money away when they had actually spent it for other things.

A man who embezzles $10,000 over a

period of 20 years might conceivably take it in small amounts* spending those small amounts on quite "ordinary" things.

When this is reported to the police or state's

attorney in response to questioning it is frequently rejected as an adequate answer.

For one thing* the law-

enforcement agencies are interested in determining whether other persons were also involved in the crime* and such an

&when viewed in the light of the publications of the Chairman of the Chicago Crime Commission, this sort of practice is readily understandable. See V. W. Peterson* op. cit.

71

answer reveals nothing in regard to this.

Also, the law-

enforcement agencies, trustors and bonding companies must account for the loss of considerable sums at the present time, and the fact that the money was taken in small amounts over a period of time is frequently overlooked.

One who

truthfully asserts that he does not know where he spent most of a large sum of money is often presumed to be lying. Finally, the police and state's attorney are interested in showing that trusted persons are "immoral,” that they really were not the fine, "decent” persons which the employer or trustor thought them to be. obtaining convictions.

This helps in

Consequently, an ordinary explanation

of the way the funds were spent is often rejected and the criminal is pressed for a "better” answer.

After repeated

questioning, in order to get the proceedings closed, the offender sometimes says, ”1 gambled the money away," or "I spent the money in night c l u b s . T h e following case is illustrative; Case 118* I have played the races for the last 10 years but until I got into a jam I was moderate about it. When I got into a jam I got reckless and began to live way beyond my means and to bet big money on the races. Even so, I think I came out on the winning side of the racing proposition. The Bureau of Investi­ gation men ask you to account for the money

% n additional explanation could be stated from the viewpoint of differential arresting practices. Gambling by a trusted employee might tip off officials of the company who then audit his books, while the non-gambling trusted person continued to violate his trust without being apprehended.

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embezzled. Well, you have to say something, and so I said it went into bets on the races. But as a matter of fact it went into the same funds as my salary did and no one could possibly say whether money I bet on the races was my salary or embezzled money. (The news­ paper heading in this case was; ”$22,500 is Lost in Race Bets by Bank Employee.”) Another kind of problem which is often defined as non-shareable by persons in trusted positions is that which the individual feels he produced through his own, personal, fault.

While some pressing financial problems may be

thought of as having resulted from "economic conditions," "fate,” or some other impersonal force or agency, others are considered to have been created by the misguided or poorly planned activities of the individual trusted person. Because he fears loss of status, the individual is afraid to admit to anyone who could alleviate the situation the fact that he has a problem which is a consequence of his "own bad judgment,” "own fault,” or "own stupidity.”

This

kind of non-shareable problem is closely related to that type resulting from the individual's having violated the obligations and duties ascribed to his role as a trusted person, since in the latter instance the individual also sometimes feels personally at fault for having created the problem.

However, there are instances where the person feels

that he is at fault for having produced a problem when he has not violated what he considers the obligations and duties ascribed to his position of trust.

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The non-shareability of this second type of problem is, in a sense, not unlike the non-shareability of the fact of having lost a large sum of money in a confidence game. Confidence men usually operate on the assumption that even if their victim later realizes that he has been bilked he will not report this fact to the police in part because he will be ashamed to admit that he has fallen for the scheme.^ In the present instance, trusted persons frequently do not report the failure of their past endeavors to persons who could help them for the reason that they are similarly ashamed of that failure.

An interesting situation appears

when a confidence man swindles a trusted person: Case 133. I do not think that there is much chance of preventing embezzlement by auditing and examinations. The big defalcations are made by old and trusted employees who suddenly go wrong. . . . There are so many thousand ways of beating a bank that no auditing system will do. One of the difficulties is the con man. He is always coming into banks when he gets short, trying to make a little amount, a thousand dollars or so, to get started again. He beats a teller or cashier on some game or other. The officer can go to the president and explain and get fired, wEicIT~he is ashamed to do for no oneT"likes to appear as a sucker, or Ee can make it up some way out of the bank funds and cover it up. A usual and frequently reported non-shareable problem of this kind results when a trusted person conceives of his prior financial behavior as having been carried out

10D. W. Maurer, The Big Con, Indianapolis, 1940.

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against the wishes of intimate associates.

At a later date,

when it is determined that the financial endeavor has turned out unfavorably, he feels that he cannot tell those associates that he has lost his or their money.

For example in Case J2

a well-to-do lawyer represented certain businessmen on a retainer basis.

Partly because he was to be in competition

with them, and partly because he was afraid that they would advise him that the step which he was to take would be unsound, he did not consult them in regard to going into a ” side" business for himself.

He secretly invested all of

his money in this business and subsequently lost it.

He

stated to the interviewer that his businessmen clients probably would have helped him to get on his feet again had he told them the situation, but that he just couldn!t bring himself to do so.

It was impossible for him to tell his wife

of the situation for the same reason.

Embezzlement provided

a secret means of obtaining replacement for a portion of the lost money, and he was able to carry out this violation of his trust without at first defining himself as a criminal.

A third kind of problem frequently structured as non-shareable by persons in trusted positions is that resulting from a legitimate business reversal.

The

situation, as such, is almost opposite that just related, since the reversal is frequently considered to be due to rather ’’external" agencies such as war or economic

75

depression.

However, the consequences of such reversals

are similar to reversals produced by the individual's "own fault" in that they are frequently structured as problems which cannot be shared with even family associates, let alone business associates.

During the last economic

depression many bankers embezzled funds from trust accounts rather than revealing the shaky financial structure of the bank to the community.

The following case is related

by Gillin.11 Case 203. At the time of his commitment this man was forty-two and had been the president of his bank. He was sentenced for violating the law in connection with operations cal­ culated to keep his bank open during the depression. . . . He became the cashier of a bank in another state and advanced rapidly, but he was called back to Wisoncsin to manage a bank which needed to be extricated from financial difficulties. He says, however, that he did not know how serious the difficulties were. . . . He succeeded in putting the bank on a better paying basis temporarily, but the depression again placed it in jeopardy. To keep the bank open he falsified the statements, hoping that time would dispel its difficulties. Matters went from bad to worse, however, until it was necessary to close the bank. Why did this man who had been brought up in a good home, who had made money and was highly respected, and who had been trained in banking methods, finally engage in legal embezzlement, while his brother, also a bank manager, brought his institution through the same severe crisis successfully? Two or three aspects of this man's history may furnish a clue. 1. As the oldest child in the family he had been thrown 1*| J. L. Gillin, The Wisconsin Prisoner,, Madison, 19^6, pp. 1 8 6 -1 8 8 *

76

upon his own resources early and had gradually learned to trust his own judgment. His younger brother frequently pleaded with him during the difficulties to cut down on his scale of living* resign from an impossible situation* and allow the bank to close. His pride doubtless prevented his accepting this advice* for to do so would have been to admit poor judgment in accepting the presidency of the bank without a more tho~rough "ihve sti gat ion, but" also" the failure of his efforts to solve Tts difficulties* and' loss of prestige' In the "community. ^ ! . His previous success had engendered a pride in his ability to handle difficult situations which his resignation would have hurt, Like many a banker* he took chances during the depression and finally lost. He seems to have made no personal profit from any of the illegalities. He had no intention of cheating anyone* but only a strong desire to save the bank and with it ndt only his own investment but that of his stockholders and depositors. One essential difference between this man and his brother, who is cited as a "control" case* lies in the fact that the latter had no occasion to define his banking problems as non-shareable: The history of the brother differs at some points. He was an extrovert* whereas the prisoner was an introvert. His reputation in the community was based on sound business practices and modest social activities which intrenched him in the esteem of the Inhabitants; the prisoner moved about and had to rebuild his reputation anew in each town he lived in. The brother sought help in his banking deals both from his board of directors and from other bankers; the prisoneFliad learned to play a lone hand and 'did so in the management of the Wisoncsin bank. The brother had been careTuI never to be involved In the disputes of the community* with whose social and business life he was so intimately familiar. The prisoner had been thrust into a bitter feud between social and business groups of the community and had become the punching bag of both factions. The brother’s bank was examined regularly by the State Banking Commission; the prisoner was encouraged to adopt shady methods by a ‘hands off policy of the examiners, who hoped

77

he might succeed in putting the hank through. The brother was governed to some extent in his personal life by the standards of his depositors; he and his wife always lived simply, particularly during the depression. The prisoner, on the other hand, though he kept within his income, always lived on a higher scale than his country depositors. He invited criticism by keeping polo ponies, building a pretentious home, and sending his wife to Europe several times. In a similar manner, during 19^4 and 19^5 real estate men and building contractors frequently considered as nonshareable the fact that the financial structure of their businesses became quite precarious because of the shortage 1o

of building materials. c

Some of those interviewed

complained that in order to maintain their business or social position they "had to keep up a good front,” or 11had to take risks” (including conversion of ’’deposits") which they otherwise would not have taken.

It follows that it is not

the financial difficulty, as such, which is important in trust violation but the structuring of the situation by the person as one that cannot be shared.

Admission of defeat

The land boom and crash in the 19^0*s is somewhat comparable. In 1932 a real estate dealer was sentenced to a penitentiary for misusing mortgages after his sub-division business had failed. The prison sociologist commented as follows on his case; (Case 105) "His fault was not to see the impending financial disaster, and to build up greater obligations from which he could not retrieve himself." Similarly, his physician made the following significant comments in his letter to the prison officials: ”He is a man of excellent personal habits and unusually indulgent and devoted to his family. I have always felt that he had no criminal intent and that his irregularities were due to carelesjfiness of detail, excessive optimism and a desire to keep from his wife the knowledge of impending financial catastrophe.h

78

or loss Is impractical for some persons and. impossible for others.^

the first instance the feeling is that

admission of large losses would "show" the business position to clients or other businessmen, with the result that status would be lost and, possibly, the business would become worse.

In the second instance, values in regard to

success and profit-making are such that the individuals frequently cannot even think of revealing a shaky business condition to anyone.

This is especially the case when the

loss is considered as due to a combination of impersonal agencies and of "foolish" investments on the part of the individual. This last kind of problem was present in the case

of a businessman whose business was ruined when the war cut off his supply of merchandise.

He took money held as

deposits and gambled with it to try to recoup his losses. He was asked if his wife knew of his business difficulties. Case 53. Ho. She only knew about it when I got about $3.,000 short. I gave her the impression right along that I'm going great guns. Why should I tell her and worry her about it? It wasn't that bad at the time, why should I worry her about it? Even if I explained it to her

13 The drastic effects of the individual's viewing himself as a failure following continued unemployment for which he was not entirely responsible has been described by R. C. Angell, The Family Encounters the Depression, New York, 1936, p. 20T. He also reports a case (number 4) in which an independent business man violated a position of trust at least in part because he wanted to keep the fact of his precarious financial condition from his family. Ibid., pp. 70-85*

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she never could have knomthe conditions. I couldn11 have told her she'd think I was completely nuts. I had spent a lot cf money fixing up the house and what did I do that for? On account of my sister-in-law and mother-in-law too; you can't tell them about that because It would be a kind of four-flusher. They were all so enthused about how well I was doing* and If I told them they'd think they couldn't believe me or trust me. They would think I was nuts for spending money on the house. I didn't want them to get impressions like that of me, after all these years. I didn't think I had to let them know I needed the money. Then after I gambled I couldn't possibly go and tell them I was $10,000 out. A fourth kind of non-shareable problem which is frequently found among trust violators is that which arises from the fact that the trusted person in question is physically isolated from persons to whom he can turn for help in solving pressing financial problems.

Often the

individual has taken steps of a non-financial nature which are not approved by.ihis associates, with the result that he is isolated from them, or he has been separated in some other way from those persons to whom he formerly turned for help in meeting what he considered cogent obligations and needs.

Some of the trust violators explicitly stated

the significance of such Isolation In their own cases: Case 60. Before my wife died she was trying to save and help. If you've got the right kind of woman that will help, it will make a lot of difference. If I had a bill I might want to let it go, but she would insist that I pay it and would make me give her money for the rent that was going to be due and things like that. Then when she passed away I got a little lonesome living in hotels and travelling around. It was expensive doing that too, and with the bills it was pretty

80

hard to make it. I had never "been in debt; if I didn’t have money to buy something I would let it go. When I got in debt this time I didn't know how to act people knocking on the door and trying to garnishee my wages and all. The only thing I can say is that I just went nuts, that's the only way I can figure it. Wow, I was fighting it all by myself and there was no one that I could talk to or tell about it. I was old enough, I should have had sense enough to have whipped it myself. If I had been a young kid without any sense it would have been different, but . I'm old enough and smart enough to know betterI1 Closely related to this kind of situation is one in which an individual's known non-flnancial behavior is not approved by persons who could help him financially, so that he is in effect isolated from them in regard to matters concerning finances,

in this instance, as in the previous

one, the importance lies not so much in the individual's being afraid or ashamed to share the problem as it does in his not having persons with whom he can share it.

Thus,

in Case 30 a young man who earlier had been ordered from his father's household because of antagonisms and liiisunderstandings became concerned about his exceptionally poor financial condition and felt that he had no one to whom he could turn for help since he had no intimate associates in the community where he moved.

1 ii

It Is interesting to observe that trust violators whose non-shareable problems resulted from this type of situation usually abscond with whatever funds are available; only Infrequently do they take relatively small amounts of money over a period of time. We shall return to this point in a later section.

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In Case 17 a man aged 3^* married a divorcee with 3 children and 2 dependent parents, much against the wishes and advice of his family.

The incident took place during

the middle of the last economic depression* and the attitude of the family was that he would not he ahle to adequately support so many dependents on his salary as a bookkeeper.

A short time later his salary was cut

drastically, and about the same time the members of his new family became ill and in need of expensive medical treatment.

He felt that he could not share with those

persons who had advised him not to get married the fact that he was having difficulties of exactly the kind they predicted.

The financial problems arising in connection

with the marriage became non-shareable.

This case may be

compared with the case of a man whose financial problems of a related order apparently where shareable.

One of the

higher officers of a large Insurance adjusting firm stated in an interview that there are personal differences in employees and that these differences are related to embezzlement.

He then went on to says

Take my own case for instance. Very foolishly I got married when I was making $35 a week. My wife was pregnant, got sick, and had to have a very serious abdominal operation. I had to have two nurses, each of whom cost me $50 a week, a hundred dollars a week just for nurses alone, and I was only making $35 a week and did not have a cent in the bank. I needed money badly, and there were many opportunities in my work with the company to embezzle money, but I did not do so. I borrowed money, paid

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the bills, and when I was able I repaid the money. There are numerous other situations which are structured as non-shareable by persons who eventually become trust violators, but they do not appear to occur with the same frequency as the above listed situations.

In some instances

the non-shareable problem is more closely related to statusgaining, than to status-maintaining, as in the above cases. The individual here in a sense creates an obligation to live at a certain level and then considers this obligation, which is essentially a financial one, to be non-shareable when it becomes apparent to him that he is "travelling with a fast crowd,” "living beyond his means," or "spending his money foolishly."

Popular or semi-popular reports which

have listed "living beyond his means" or "expensive tastes" as "causes" of embezzlement have emphasized this sort of situation, but they have not shown the significance of that kind of behavior to trust violation.

According to our

theory, what makes such behavior a significant event in the process which results in trust violation is the fact of its becoming non-shareable.

The structuring of status

ambitions as non-shareable is not uncommon in our culture, and again it must be emphasized that the structuring of a situation as non-shareable is not the cause of trust violation. In this type of case the situation becomes a problem for the individual when he realizes that he does not have financial or other means necessary for continued association

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with persons on a desired status levels and this problem becomes non-shareable when he feels that he can neither renounce associations with the desired group nor obtain prestige symbols necessary to continued association with it. Case 18 is a good example.

Over a period of time a clerk

in a hospital came to identify himself with the M.D.'s and professional persons rather than with the other clerical workers employed at the hospital.

He was invited to

parties by the professional staff, and in return he gave lavish parties in their honor.

Although his income was

substantial, he felt that he could not share with his wife the fact that he was spending large sums of money in this way, and at the same time he thought it was necessary for him to continue the behavior.

On one occasion he felt

obligated to hold a party for higher status employees, but he was out of money and thought he could not ask his wife or friends for it because he "didn't want an argument with her, and I just didn't want my friends to know my history. I'd get a lecture from them

'What the hell did you do

this for, and what the hell did you do that for?' want any lecture."

I didn't

He "borrowed" the money from his

employers and continued to embezzle for two years before he was apprehended. The following statements by an ex-bank president and an ex-bank teller also indicate non-shareable problems of this kind.

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Case 142, I had been reared in a home above average, my father being _________ .

I had been

accustomed to good clothes, good food, a good home, a good car, and similar expensive articles. I was married in 1921 to a young woman I met in X. She was from a middle class home and was much more careful in her expenditures than I was, and she often objected to my purchases on the ground that we could not afford them. But I did not feel that I could drop below the standard of living to which I had been accustomed. My parents owned the home in which we lived and I had no rent to pay on that. My parents and my wife's parents helped us in other ways, also. It needs to be remembered that the cost of living in Y is extremely high, since practically everything is shipped in. Then, also, a person who works in a bank is generally regarded as wealthy,, no matter how smalT his salary. He is expected to subscribe to everything, and I_ do not think l~~ever~Tailed to pay my share on every such subscription affair that came around. Also3 a person who works in a bank must, because of this expectation, live on a fairly high"standard. He has to "live up to~Eis position. Probably many others may have Had an income no larger than mine and cost of living as~high andHEave not embezzled, but the important tHing was my individual tastes. In that sense a good home contributed to my downfall. I was not trying to live cheap because I had not been reared that way. Then, also, everyone else was spending money lavishly and we felt we ought to keep up. It was in the air. Boom times were on.

Case l4l. (He earned $125 a month as salary from the bank, but for a year and a half he earned twice that much singing in a quartet in the evenings.) The bank does not pay its employees enough. I worked for the bank for ten years and at the end of that time I was getting $125 a month. During several years of that time I was making more money outside the bank by incidental work in the evenings than I made all day working in the bank. The bank hushed up my case because they did not want any advertisement of the small salary I was getting. For that small salary I had an immense responsibility. . . .Also, the bank employee has to dress well and live respectably in order that the bank may not be ashamed of him. He has to make subscriptions to everything. I '11 tell you the way they handled it in the community fund drives in my town. The

85

Community Chest appointed a president each year and paid him a salary of $10,000. The president made an appearance three or four times a year in the chest offices. This job was passed around among the big banks. Consequently when the drive was on the employees of the bank all had to go out on the drive. It was practically an order, and they got in the money, but had to put up a good deal of money themselves. The. difficult thing is to have one1s scale of living reduced. X had been accustomed, when X was making money on the outside. to a pretty good standard of living. I had a good car, a good home, and could spend money without much thought of my bank balance. But I was forced to give up my outside work and then it was either a case of giving up the car, giving up our good home. getting out of clubs arid in general going on to a lower scale of living or else get some money somewhere else. So I got it from the bank which paid me a mere pittance for my work and would not let me do the outside work. I was sore about the situation but even then I did not plan to keep the money permanently. I merely took it to help keep us where we were accustomed to be, and fully intended to put it back, though I never thought much about just how I was going to get it back. . . . Though there is a great deal of dishonesty among bankers and the management, I don’t think it Is much of a factor In causing employees to embezzle, first because this dishonesty of the management is inside stuff that few employees find out about, or at best learn only indirectly by hearsay, and so they have a very vague idea about it. Second, the person who embezzles generally intends to put it back. He is just taking It for use for a while and is not think­ ing of himself as dishonest. . . . One more kind of situation will be listed.

Here,

the problems which are structured by trusted persons as non-shareable are those resulting when an employed person resents his status position within the organization for which he works.

This may take the form of feeling under­

paid, over-worked, or unfairly treated in some other way

86

involving finances.

It is not the fact of being maltreated

which is important, if such a fact can be established, but rather it is the fact that the individual feels that he Is maltreated while at the same time he for some reason feels that he must continue In the service of the organization. This type of problem becomes non-shareable, at least with those who can do anything to alleviate the situation, when the individual feels that to make any suggestion in that regard will threaten his status in the organization. Frequently this type of non-shareable problem is combined with one of those already listed since, for example, the Individual's associates both outside the organization where he is employed and within that organization would to a large extent determine whether he felt underpaid. Consequently, this kind of problem might often be nonshareable in reference to both the employer and the individual's associates off the job.

When an accountant

was asked to explain his trust violation he reported, among other things, the following: Case 3 . I think an Important factor is the lack of a whole-hearted relationship between the employee and employer. You wouldn't steal from your own parents if you felt toward them the' way you "should. The same thing applies to the employer. The individual who is the head of the company where I worked is extremely repulsive. He is arrogant, filthy rich, old school type of master and servant, and everything that went with it. The rebelliousness in me just cropped up and asserted itself without any prompting of anykind. As far as my expenses go, six months would have turned the tide 1 could have made it In six

87

months of* saving. I wasn’t underpaid, hut he always let me know it. I was probably the only one in the organization that was on an equitable basis, and that was because I had taken the bull by the horns and asked for It when I got the job. . . . For embezzlement there has to be a need and if the economic situation were such that the employee’s needs were taken care of then there would be no embezzlement. You can compare the employer-employee relationship, in this connection, to the relationship between husband and wife. If there is something wrong between a husband and wife one of them will start cheating on the other one, and there is nothing that the other one can do to stop It. But you can't say that the one that is cheating Is entirely at fault. And it is the same way with employers if someone treats you wrongly, you can take it .just so long~~and then you will start doing something to get even in one way or another. A situation in which the individual felt that a problem which he had in regard to his employment was nonshareable with the employers, while at the same time it was non-shareable with other persons because of physical Isolation from such persons, may be seen in Case 31.

An elderly night

clerk in a hotel resented very much the interference with his work on the part of the hotel manager's husband.

The

subject and this man, who was not employed at the hotel, were in many quarrels.

In addition, the relationship

between the subject and the woman manager became strained after he called the hotel owner to check on her authority to use the cash drawer while he was on duty and supposedly in full charge. Case 31. I thought of quitting, but I had the idea that it would pay me to stay there because the owner had three hotels and might make me a manager. But I had this fancy

88

grievance against the company and the owner was not straightening it out fast enough to suit me. This fancy grievance just stuck in my craw, and I thought I wasn't treated right. The opportunity to take the money was there when I got there, hut I never gave it a thoughtand never would have if"I hadn't got in trouble with that man. In other hotels X had been trusted with much more money than this one, and X could have taken that if X wanted. But X vas very conscientious about it. But this time there was a reason beside the money those people weren't treating me right. You might say it was the spirit of retaliation. X figured it was a good way out of a bad situation that X didn't like. ■While, as pointed out earlier, this list by no means exhausts all of the situations which may produce non-shareable problems, it does serve to demonstrate that for the individuals studied involvement in certain sorts of situations frequently produced such problems.

In all cases there was a distinct

feeling of having lost the approval of some group important to the individual because of activities carried out prior to the defalcation, or a distinct feeling that present group approval would be lost if that activity were revealed to it.

Trust violators, whose cases indicate that nonshareable problems were present prior to the defalcations, may also be used as a "control” group since each of them at a prior time had been a non-violator.

All of those

encountered had earlier held other positions of trust which were not violated, or at least they had held the current position of trust for some period of time before violating it. One essential difference between the members of these "two” groups is that in the instance in which the trust

89

vas not violated non-shareable problems were not present, while in the second instance such problems were present. Although this point is implied in the presentation of each of the cases previously cited, we may cite three additional cases in which men who, from all appearances, remained honest during a large part of their adult lives and then violated their trust only after a non-shareable problem appeared: Case 108. (From the files of a fidelity bond company). This man confessed to a shortage of about $9,000 in the accounts of the lodge for which he was treasurer. Ho one, not even his wife, knew that there had been a shortage. One of his sons, 29 years of age, had been drinking a great deal, neglected his wife and children, and got into criminal activities. It cost the father $6000 to save him from prison. He first took money for this purpose, tried to recoup in the stock market and lost. Finally he determined to give himself up. He had property worth a good deal more than the amount embezzled in ordinary times, but because of the depression he could not dispose of it. He had been treasurer of the lodge for over 10 years and was trusted implicitly. Case 70. (He was asked how he accounted for his getting into this trouble with the law when none of his family members had ever been involved with the law.) Because I was in a position where I was using quite a bit of money. I came into contact with a kind of black-mailing mess in 1945. Some men were trying to get money out of me to keep from exposing an affair with another woman to my wife. That1s how I got started using other people1s money. I was very well liked and respected and didn't want it known. If I*d have taken it up with somebody,maybe the State's Attorney, maybe nothing wouldhave come of it and I never would have got into the red. I paid them about $1200 over a periodof two years. We all have a certain amount of pride where we don't want to go and ask individuals for loans, so it was easy to take it and then pay it back. That was my idea. Even my wife

90

didn't know it. If I had would have asked a lot of ahead and used money that about, that I didn't have that particular time.

explained to her she questions. Sq I_ went I didn' t have to ask to account for at

Case 137. (Prom the files of a U. S. District Attorney's Office. There was no indictment.) This man was questioned several times and confessed. His wife needed some medical attention of an unethical nature, and through a friend he got in touch with a doctor in X who specialized in this kind of medical practice. Later, this doctor came into the bank and demanded payment of $50 from him. He did not have the money and was afraid of exposure, so he wrote a check, signed his name to it, and gave it to the doctor who deposited it or cashed it at the bank where he was doing business. 'When the check came back to the bank in the early clearings he destroyed it.

While the clear conception of a problem as nonshareable does not invariably result in trust violation, it does establish in trusted persons a desire for a specific kind of solution to their problems. desired in the cases encountered were uniform:

The results the

solution or partial solution of a non-shareable problem by the use of funds which have been obtained in an independent, relatively secret, safe, and sure method in keeping with the "rationalizations" available to the person at the time.

This fact was established by observing

the language used by trust violators in personal documents. As an example we may cite the following case, which involves embezzlement and misapplication of funds by a small town banker In an effort to save the bank.

It reveals that the

subject's refusal to inform his business associates or

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depositors of the problems arising from the bank*s poor financial status put great emphasis on the necessity for obtaining funds independently and secretly on one hand and in a relatively safe maimer on the other hand. Case 123. I owned a controlling interest in two different banks. I also was city treasurer in the city where one of these banks was located and had in my care as city treasurer $30,000 worth of city bonds, issued but never sold. They were, in effect, cancelled bonds, and I kept them in a safety deposit box in my bank. Later I took these bonds to my bank in the other city and sold them to this bank. They were the property of the city and I had no right to sell them. I knew at the time I was embezzling, but it was done with my eyes open as a means of carrying the bank and keeping it going. The bonds were just as good in that bank as in the other one where I would have kept them in -the safety deposit box. They entered into the assets of the second bank and increased the credit of the bank because they were a sound loan and balanced bad loans on the farms and because the bonds could be sold for cash. I paid the interest on the note given for the bonds out of my own pocket. So the city did not suffer and no one else suffered. I was struggling to keep the bank going without calling in the loans on the farms. . . . I took a gambling chance that things were going to improve and took those bonds to bolster the bank, so it would not need to close. If the rural depression, which was already bad in that year, had ended the next year, I could have replaced the bonds and no one would have known the difference. But instead the depression kept getting worse. Finally I saw that the bank could not keep on going and I just closed it up. I knew I was caught. I knew I had committed embezzlement and that I would be convicted of embezzlement. I did not try to run away. I just sat and waited for them to come and get me. My attorney told the U. S. Marshal that whenever he wanted me, I would come. I have never felt that I was committing a crime. I was trying to protect the farmers in my part

92

of the state. Hundreds of them would have heen ruined if I had called their loans, and the "bank would have had to take on a lot of property it could not have handled any "better than the farmers had handled it. . . , The embezzlement, if it can be called that, was entirely for business reasons. . . . I did not worry about taking the bonds, for I thought it was not immoral, but I knew that it was technical embezzlement. It was the best method I could see of keeping the bank going, and to keep it going, I thought, was the best chance of helping the farmers, if I had known that It would not save the bank I could just as well have closed the banks in 1928 and let the farmers suffer as to have it come in 1930. I did it to help the farmers. But I did not worry about it or feel ashamed then, and I don’t now. It is hard to take this punishment, but I went into it with my eyes open and I won't let myself feel ashamed, there Is no sense in letting one's self feel shame or pity about it. "What I did was all right and if circumstances were the same I would do It again. . . . I don't care what the law says about me. I know I am a criminal only in a technical sense,*5 Similarly, while most trust violators Interviewed reported that they violated their position of trust rather than stealing the same amount of money from their employers or others because crime

they possessed a rationalization for one

and not for the other, a few of them also emphasized

a fact pertinent to the present discussion:

that trust

violation provided a secret means of obtaining the necessary funds.

One subject reported, for example, that he had many

objective opportunities to steal money which was in the ■^The fact that trusted persons with non-shareable problems desire solutions which are in harmony with their conceptions of themselves and the rationalizations available to them, as may be seen in this case, will be discussed later.

93

office "where he worked as an accountant * but that he refrained from doing so at least in part

becausesuch a

method would not be secret. Case 1 . In the event of a larceny there is an immediate hue and cry raised, while in embezzlement it might be at least deferred for a while. Perhaps it is a matter of calculating the risks involved 1 wouldn11 take such money because I knew that a hue and cry would be raised immediately. I am of such a nature that i would*!11 want that to happen. Instead, I would rather do what I did, and hope that the hue and cry would be raised later. Another subject, who embezzled money from a department store where he was employed as an accountant, said: Case 10. There wasn't any emergency in the sense of hospital bills or something of that sort. I can't think of a legitimate need. It started over a circumstance that would have made things damned uncomfortable for a while: I was in financial straits because I'd disposed of my own funds by gambling and drinking. Too much partying. I wasn't in debt to speak of; it was more a matter of spending my money for one thing instead of another. . . . Maybe it was the phoney reasoning that I was going to put it back, and maybe it was that I had lawful possession of the money I took. I'd go into the store at night and would never think of taking a coat or suit or anything, because I_ didn't have lawful pos se ssion of that. A man who had earlier been placed on probation for embezzler ment (his first offense) in his capacity as a driversalesman but who is now serving a sentence for robbery stated the difference between the two crimes as follows; Case 12. On the embezzlement, in my way of thinking, it really wasn't embezzlement because I was borrowing it. But on the robbery I knew I couldn't put it back and knew it would be discovered immediately. Also, in the one

94

Instance you are talcing more of a chance of getting caught in the act.

At the time when it seemed probable to the investigator that the financial "emergency11 or problem which is significant for trust violation must be a nonshareable one, most of the subjects were presented with an hypothetical situation which would amount to a severe financial problem but which would., in most cases, be construed as a shareable problem.

It was anticipated that

the sub jects would say either that the problem was at least as severe as the problem in their own cases and hence that it would be a significant event in any hypothetical violation of financial trust, or else they would indicate that such a problem would not be significant since it was shareable.

In this way, the Idea that a non-shareable

problem must always precede trust violation was partially tested.

The situation presented was as follows. Suppose that for some reason your fire in­ surance policy had lapsed. This was through no fault of your own, but your secretary or someone forgot to send in your payment and your policy lapsed on a Wednesday. Then on Thursday there was a short in the wiring, or lightning hit, or something, and your home burned down. Let's say you lost everything you owned car, money and everything else. All you had left in the world.was the clothing on your own and your family members' backs. Do you think that in a situation like that you would have been tempted to do what you aid? In a few cases this situation was seen as something

other than a situation involving shareability or

95

non-shareability (i.e., it happened suddenly, it involved the welfare of the family as well as the subject) and in some cases the subject rejected the problem because he could not see how his insurance policy could have lapsed. But in many cases the situation was immediately seen as a shareable one and the response was that no trust violation could result from it.

The responses were

classified as follows; 1. 2. 3. 4. 5. 6.

ho. This situation would be known and I would just work it out. No. My trouble came from drinking and I wouldn't be drinking under those circum­ stances. Perhaps. That would affect my family and if I couldn't get the money elsewhere I might violate the trust to'help them. Perhaps. I might have used the funds just as I did this time since there would be no intent to defraud in eithercase. Yes. I had a crooked streak in me and it probably would have come out in a case like that. ho answer. (Either the situation wasn't presented or it was rejected.)

40.3$ 9*6$ 4.8$ 8.0$ 8.0$ 29.0$

Of those persons answering the question, 56.8$ answered that this situation would be known and that, consequently, they would just "work it out somehow." of the responses were particularly to the point; Case 3. ho. I'd try to work it out. You don't go from the highest position to the lowest crime right away, suddenly like that. That would be like a man trying to hide behind his family; ttI did it for my family,n Bull shitI Case 4. ho. I ’d just work it out. My wife would know It and we could work It out together.

Some

96

Case 5 * Wo. There you take a different attitude. You can buy on credit, and you’d, he so wrought up about the disaster and so enthusiastic about the new purchases that the relationship would not be parallel. Case 10. Wo, I really don't think so. In no time in my past did I ever use any money that I got that way for anything that will ever do me a damned bit of good. Case 11. Well, I don't doubt that I would if I couldn't borrow the money or something of the sort. There are people or relatives that have money. I've never got along with them, but if it was a necessity like that I would go to them. I'd do anything to give my wife and children what they needed. (He had indicated earlier that he was too proud to go to them for help.) Case 53. Wo. I had enough relatives where I could get assistance from them because the situation is known, but I couldn't tell them about this. That is an emergency that they could see happened and you didn't have to be ashamed to tell them. If I had gone to them when I was about |3,000 behind (legitimate business reversal) I wouldn't be here, but I didn't want them to know the conditions more or less self-pride. You naturally don't want to take money if there is another way to get out of it, but after all I'm supposed to be making good money. Case 59* Well, in this case I used their money to better the business, but like in a fire it is hard to say. Usually these fellows would or wouldn't depending on how it started. If it was an act of God or something the neighbors might help him, but if he started it himself or something he might embezzle. I think if it happened to me I got all these brothers and sisters that would help me. But on this business deal I couldn't go to them and explain why I needed the money and so forth they might tell me they got the money tied up in bonds or something. The presentation of such a situation would not

provide a complete test of the idea here proposed since in

97

many cases the subject's non-shareable problem was not considered to be concerned with a financial "emergency” of any kind, while the hypothetical situation was so construed. Of 15 persons who clearly related their own defalcations to such an emergency, 11 responded that in an instance such as the one presented they would "work it out somehow,11 When asked why they hadn't "worked out" their other emergency they invariably replied that they had "too much pride" or were "ashamed11 to go to the persons that could have helped them.

The other four persons responded

either that the criminality in them probably would have come out in this hypothetical situation just as it did in the real situation (3)^ or that they would violate the trust if the situation could not be alleviated in any other way (1). Summary and Conclusions 1.

In all cases encountered a non-shareable problem

preceded the criminal violation of financial trust. Evidence of the presence of such problems was found in the language used by trust violators.

None of them, of course,

used the words "non-shareable problem," but many of them related that they were "ashamed" to tell anyone of a certain situation or that they "had too much false pride" to get help from other people.

The same kind of language

was used as evidence that the absence of a non-shareable

98

problem in the sequence would preclude the violation of financial trust. 2.

Many different situations were considered by

individual subjects as having produced problems which were structured as non-shareable.

All of these problems were

related to the status-seeking or status-maintaining behavior of the individuals.

TThe fact that a person is

playing conflicting roles was seen to become significant to the process of trust violation when the financial duties or obligations necessary to one role are considered by the person to be non-shareable with persons encountered while acting in the role of a ntrusted person.Tt 3-

Many of the persons who have studied embezzlement

have been concerned with showing that emergencies, increased needs, or a relatively high scale of living are Mcauses” of embezzlement.

¥e have shown that these conditions are

significant to trust violation only if they produce nonshareable problems for the individual.

Even when so

structured they cannot be considered as causes of trust violation since the presence of a non-shareable problem will not guarantee the occurrence of the behavior under investigation.

The structuring of a problem as non-

shareable has the effect of creating in the trusted person a desire for specific results, all of which are related to the solution of the problem and all of which can be produced by trust violation.

But before trust violation

99

occurs the position of trust must be perceived as providing an "opportunity” for obtaining those results, for ridding the trusted person of the non-shareable problem.

CHAPTER IV

THE "OPPORTUNITY" TO VIOLATE POSITIONS OP FINANCIAL TRUST Riemer and others who have written on embezzlement have used the term "opportunity" to refer to the position of trust which a person must necessarily hold before he can embezzle.

\

While it cannot in any sense be argued

that a position of trust is not necessary to embezzlement or trust violation designated by other legal terms, the definition of the behavior being explained here precludes the use of that situation as an explanation.

It will be

recalled that one criterion for inclusion of a case in the current study was that of having accepted a position of trust in good faith.

Contact with trust violators and

considerations such as those in the preceding chapter have indicated that the term "opportunity" may be used (1) to indicate the situation in which trusted persons see in their positions of trust a possibility for violation for the purpose of producing the desired results and (2) to emphasize the fact that not all persons with non-shareable problems perceive their trust positions in this manner. Many trusted persons do not see in their trust positions the opportunities which they offer for specific violation.

That is, there Is no "perception" of the

■^See Chapter I, pp. 2

3 -

100

.supra. -

101

trust position as offering a solution to the non-shareable problem.

’When a person in a position of trust does not

perceive that the property or funds entrusted to him can and may be used for the purpose of solving or partially solving the pressing problem, then he has no more oppor­ tunity for trust violation than does a person not holding a position of trust.

Many of the cases cited in the

previous chapter indicate not only the significance of the non-shareable problem in trust violation, but the significance of such an "opportunity” as veil. The use of the term in this way is in line with the thinking of those social psychologists who have pointed out that in social situations there are many more stimuli present than a person can respond to, and that consequently he must select his stimuli.

A person's behavior in any

field is activated bnly by those stimuli to which he is "sensitive," that is by those stimuli which he perceives, which are meaningful to him because of his past experiences. In the absence cf such perception of objects or events, those objects or events are not stimuli at all.

A recent

and clear statement of this position has been made by Coutu: . . . This line of thought furnishes us with a very important generalization: phenomena are not stimuli unless responded to. Noises, smells, sights, and behavior of seTf and others are not stimuli for a person just because they are in the social field. The selectivity of the personality in specific fields determines whether or not an event or object becomes a stimulus. Selective responses put order into the field, as it puts

102

order into the universe. All behavior is the result of stimuli; all stimuli are field components; if one would understand the behavior of self and others one must investigate the stimuli, whjch is to say the structure of the field.d Applied to trust violation this statement would support the position just indicated.

A non-shareable

problem becomes a stimulus to violation of a position of trust only when the position is perceived as offering a solution to this specific problem.

When a non-shareable

problem is present, this perception of the

interconnected­

ness" of the two events by a trusted person depends upon the interrelated processes of "knowing" and "rationalizing" that the problem can and may be alleviated by violation of trust.

For purposes of analysis and clarity our hypothesis

has been stated not in terms of perception or "opportunity" but in terms of the two intellectual processes which together make up the process of perception. La Piere and Farnsworth have given us a more general statement of this same process; Perhaps the clearest way to conceive of the organization of personality attributes is as the individual's definition of what is for him right, proper, expedient, or profitable under the given circumstances. This definition will involve, among other things, his interpretation of the situation and his concern for his status in some or many of the social groups in which he is a member. The organization of personality

^Walter Coutu, Emergent Human Nature, New York, 1949, P. 213.

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attributes that is achieved in any situation is not necessarily calculated--i.e., a consequence of covert symbolic trial and error— although it may he. The interpretation of the situation may he no more than a "feeling" such as the feeling of dislike that one may experience upon first encounter with some person. And the concern with status in social groupings may he more a sensitivity to than an intellectual awareness of what would happen to his reputation with others should he do so and so.3 Sutherland, in discussing the question of whether fear of punishment acts as a deterrent, also has indicated this position by stating that control lies in the group recognition and response which is secured by lawful conduct, rather than by fear of punishment.

The statement

is made in terms of events which take place in the present, at the time when the individual is in a situation in which he may either commit crime or refrain from doing so: Hot the fear of legal penalties, but the fear of loss of status in the group is the effective deterrent. But this is not really fear; what really occurs is that the person feels that doing a specified thing in violation of the group standard, which also happens to be in violation of law, would not be in harmony with his personality, would lower him. It does not occur to him to do such a thing. He would feel uncomfortable in violating such a law and would secure no satisfaction from it. This is the principal method of control whether the conduct is regulated by law or it is not. One who would not think of breaking into a jewelry store and robbing a private merchant will smuggle jewelry into his country in violation of the law, or will violate the child-labor law or tax law, or will engage in a lynching mob or in preventing a Negro from voting; his group does not regard such

^Op. c i t . , pp. 1 9 2 -1 9 3 .

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violations as beneath the dignity of its members. Regardless of the official methods of dealing with criminals, we shall retain this method of control by group pressure.^ It should be recalled that the hypothesis here is concerned only with what Lewin calls systematic causation and that it, consequently, is related only to events in the present which are connected significantly with trust violation.

On this level of explanation it is the

presence or absence of an "opportunity" of this kind which is significant.

The individual trusted person either

perceives that the position of trust offers a solution to his individual non-shareable problem or he does not. However, it also should be observed that in our second set of hypotheses, those concerned with genetic causation, we attempt to account for the presence or absence in a person of both the knowledge and the rationalizations which are necessary to the perception of the relationship between the desired results and the trust position as providing those results.

While on the level

of systematic causation it is sufficient to indicate that the individual trusted person either perceives or does not perceive that violation of trust will produce the desired results, on the level of genetic causation it is necessary to indicate why it is that the ability to do so is either present or absent in an individual trusted person.

^0p. cit., p. 374.

105

In this chapter we shall concentrate on that aspect of the perception process which involves knowledge that the position of trust can be violated in order to solve the non-shareable problem, and in doing so we will examine the hypotheses on both levels.

In the next chapter the

second aspect of the perception process, the rationaliza­ tion, will be examined on both levels.

On the first level of explanation it is almost obvious that trust violation will be precluded by the absence of knowledge (in the strict sense) to the effect that trust violation will solve or aid in the solution of the non-shareable financial problem.

It is a contra­

diction of terms to speak of a person violating his position of trust in order to accomplish certain results while at the same time contemplating that he does not know that his position can be violated for that purpose. One who does not know that his trust position can be criminally violated can not possibly do so.

Truly

"accidental" violations are not criminal. An ideal case demonstrating this point would be one in which a trusted person with a non-shareable financial problem and in possession of numerous rationalizations and justifications for violation of trust under those circumstances was absolutely ignorant of the fact that violation of the position would aid in the solution of his problem.

No such case has been

106

located, and probably none exists.

It is difficult to

even imagine a person whose intellectual processes could work in that way.

The hypothesis that such knowledge

must be present before trust violation will occur may be supported by logical analysis such as that in the previous paragraph, but it cannot be easily supported, as such, by analysis of cases.

The reason for this lies in the

relationship between such awareness and the rationalizations which are necessary for trust violation.

The application

of a rationalization itself Indicates an awareness of the fact that the trust position can be used to aid in the solution of the problem, and having the awareness to some extent involves having a rationalization. However, we were able to locate a few cases which demonstrate that such specific knowledge is necessary to trust violation, largely because in them the emphasis Is on the awareness rather than upon the co-existing rationalization.

In one such case a person with a non-

shareable problem seems to have been cognizant of adequate justifications for larceny, robbery and burglary on his part, and this would imply that he was in possession of rationlizations which could be used in trust violation. This man was employed to carry daily receipts to a bank and to do porter work for a retail firm, a position which he accepted after his doctor had pointed out that work in

107

the steel mills was too strenuous for him.

This was the

first position of trust which he had ever held.

He had

had considerable experience in crime when he accepted the position of trust, and when a non-shareable problem came up while he was in this position he merely applied to the new situation the same rationalizations which he used in theft or robbery.

In other words, when he became aware

that he could accomplish the same thing by violation of his trust that he could accomplish by one of the other crimes, he violated the trust.

At the first interview

he introduced himself by saying: Case 20. I don’t know if I can tell you anything about this charge that I ’m in for this time, but I ’ve been stealing all my life so maybe I can tell you something about that. I ’m in here for breaking a trust or something. I don't understand it to this day. I know all about stealing, but I don’t know anything about this because I was working for a good man that was known to everyone in the Loop and he did lots of things for me. In telling of his experiences on the job he indicated that he operated on the assumption that he was not completely accountable for either his prior criminal behavior or his embezzlement since criminality was "in” him. I always told myself that I had no business with this kind of job. Within me I know I'm ndtlithat kind of person. I know I'm the kind of person to make an easy dollar (steal). That in me came out. Now that I ’ve done it, I ’m not surprised that I did because I ’m not supposed to have a job like that. Nobody's ever trusted me on a scale like that, and I

108

don’t trust myself. But my intentions in front was good. I really believe in heredity and environment and believe that if a man lives around people that's crooked, that will have some effect on his life. I've lived like that, so I just didn't trust myself on this job. I had this idea of stealing, that's what I mean. Both of them (stealing and embezzlement) is to accomplish making money and if a man sees where he can commit this embezzlement and accomplish'"the same thing as by stealing, he will do it because it is_ easier. It is all stealing. You people name it embezzle­ ment, but it's just different ways of stealing money. I had good intentions of working but this was no different from other stealing I 've done. I was thinking like I always did. And the man was minus the money "just like others had been minus the money. The object was to get the money. A man that steals all his life and is brought up around people like that all his life, he don't know when something will pop up and he wiTT*'take~ the money. I had no business working around a job like that because I didn't know what I would do. Later he explained that he had a non-shareable problem in that he needed money badly to get a divorce from his wife, marry his mistress, and move out West.

He

said that his employer was very good to him but that he just couldn't tell him about this situation.

He had tried

to save money for that purpose but had been unable to do so.

When he was asked whether anything in particular took

place on the day that he absconded with the funds he told how in the morning his mistress had broken a small radio in his apartment and had telephoned the store to tell him about it.

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I just "blew up and got upset. I took It real hard and just hung up. That just started the day off wrong and it went worse. It stayed with me all day and., like I told you, I didn't like that joh in the first place because I always never did trust myself. So I just said "to hell with it." If it wouldn't have been that (radio) it would have been something else. I drank a good deal more that day than I usually do. I wasn't drunk— I don't get drunk— and I knew what I was doing all right. I just got myself to the point that l_ didn't care. That's where I ""kidded myself— that I_ didn't care. I see now that I was kidding myself that I didn't care, but then I thought I was right. (Tells how he stopped In at a bar for a drink before going to the bank, apparently a routine procedure.) I got this on my mind to have money for the divorce. That stays with me. And I don't know, the temperament I was in. I just jumped up, taken the money and went on. I'm sitting there drinking; I'm drinking mostly all day. I'm sitting there and I'm not making much headway on my plans and everything is going backward. So all of a sudden I just say "to hell with it" and went home. The first time I ever realized anything I was on my way home. If anyone would have told me that morning that I was going to do something like that I wouldn't have believed it. The emphasis here is on becoming aware that the desired results could be achieved by trust violation as well as by other forms of criminal behavior, but this awareness is not completely Independent of the rationali­ zation that crime was "in him" and that he was not completely responsible for his conduct under the circumstances.

He could not have "seen" embezzlement as

a solution to his problem in the absence of either of these events.

In the following statements the emphasis

also is on the knowledge that violation of trust will

110

produce the desired results, hut these cases similarly point up the

fact that the perception of the

trust as offering

such results involves both

positionof such knowledge

and a rationalization. Case 14. I worked for many concerns and never saw things as loose as they were there. He was too lenient. He should have checked and made sure what he was signing. Many people will take chances if they see loopholes. Of course, this is not saying that they are honest people. There are some that wouldn't take it if it was handed to them on a platter. Case 7 » Once it dawns on you that it can be done, then all of a sudden you just do it. I was sitting there at the desk and I saw it, so I said, "Well, I might try it." The first thing I thought of was "How long can I avoid being caught?" You've got to reach a place where something like that has no moral bearing for you and in order to reach that you've got to have some kind of an emotional strain. In my case, coming out of the army, getting divorced. One little step led to another one. I got the attitude of "piss on it." Maybe I sublimated it for a while, getting used to the job, and then it came out later. Case 10. I needed money very badly, and at first I didn't think of taking it from the company funds. I was in a bit of a spot. I sat up all one night drinking, and it had no more effect on me than if I'd been drinking water. In the morning I went over and got a Turkish bath and had some breakfast and went down to work and took some money ($150) out of the safe. I reasoned that I was going to pay it back in 3 or ^ days, and I did pay it back. In a matter of a few days I took some more it got easier as time went on. Prom then on it varied. There might be a period of a week or 10 days when I'd neither put in nor take out, and then there would be a period of 10 days when I'd do one or the other every day. The most I ever took at one time was about $1,000 in one 2k hour period.

Ill

"When the subject of Case 4 was asked how he happened to hit on the idea to embezzle he responded that he 11just saw a chance to make some money and 1 1d seen other people do it the same way."

He went on to say that he thought that

some of the behavior of the others was dishonest and treasonable to his employer, but that in his own case he didn't think he was behaving dishonestly.

"Strange as

it may seem, this wasn't dishonest, the way I looked at it."

Turning to the problem of genetic causation, it will be recalled that the first part of our hypothesis is that the information and techniques necessary for the criminal violation of financial trust are learned in association with criminal behavior patterns.

We shall

first consider the process by which trusted persons come into possession of general information about trust violation, and then we will consider the process by which they come into possession of the skill and techniques necessary for specific violation.

However, as previously indicated,

even consideration of the general possibilities which a position of trust has for violation does not remain as an abstract proposition in the thinking of trusted persons ■until such time as a non-shareable problem presents itself, but instead such awareness itself involves concern about 'tlie conditions under which trust violation is appropriate. Consideration of these conditions and circumstances by the

112

person has been referred to as rationalization, and this process will he discussed later. The general awareness that positions of trust can he violated is usually present in trusted persons even when they do not have non-shareable problems, and it often is present even in persons who are not incumbent in positions of trust.

Newspaper stories about embezzlement

and fraud are widely circulated and read, and large embezzlements are sometimes featured in newspapers and magazines years after they take place. 5

Also, it has

been reported that the most r?elegant" culprits in one sr

period of our history were absconding bank cashiers. During the last economic depression many judges commented on the low salaries paid to trusted persons who had defaulted and on other conditions under which such defaults occurred and these comments were widely circulated. These stories, like many of the semi-popular reports cited in Chapter I, acquaint the public with the fact that trust positions are frequently violated, and to some extent indoctrinate them with ideas in regard to the conditions under which such violation of trust is expected. As a result, socialized persons in our culture are not "neutral" 5a pamphlet reporting the results of a study of embezzlement was published by the United States Fidelity and Guaranty Company in 1937, and within one year at least six magazines featured articles based on it. ^A. M. Schlesinger, The Rise of the City; 1878-1898* New York, 1933, p. 113.

113

in regard to trust violation, even when they accept positions of trust in genuine good faith. The acceptance of a position of trust itself carries with it the idea of violation of that trust.

The awareness

of the possibilities which a trust position has for violation is not only a part of the logical implications of the formal requirements for persons in most trusted positions, but in some cases these possibilities are called to the new trustee's position by others in the same office or business in which he is employed.

The idea

inherent in the word "trust" itself, as well as the implications of being bonded, of having an enviable reputation, of having a known history of honesty, and the like, all carry with them the general implication that trust positions can be violated.

The implications of

being bonded, for example, are often interestingly expressed by trust violators in terms similar to those used by the subject of Case 4:

"They said I was a

trusted employee but I wasn't

I was bonded for $100,000

so they couldn't have trusted me very muchi"*^ Business associates may contribute directly to a trusted person's knowledge of the general possibilities

^The author of a popular article based on an actual case of embezzlement has expressed this idea by stating that his subject's employer was "betting" that the employee would embezzle while the bonding company was "betting" that he would not. McKelway, St. Clair, "The Annals of Crime," New Yorker 24:23-28* 34-36, Jan. 1949*

114

which a position of trust has for violation simply by pointing out such possibilities to him in an indoctrination speech

or program.

The production of such awareness in

this manner may be seen in Case

34 in which the employer

specifically pointed out to the employee the possibilities which the position had for violation.

This man was never

apprehended, although he took about $1,000 worth of his employer's equipment while employed as superintendent of a tool crib in a factory. It was my own idea of taking it, but he sort of expected it because he knew I was an ex-con. When he gave me the jobI told him that, but that was during the war and he said, "Well, I'll expect you to steal something out of there, but you can't get away with all of it," and he gave me the job. As another example, in Case 15 the subject, who had been a clerk in a retail store, reported that in his introduction to the job "the matter of trust was never brought up."

But he went on to say:

"The first day I

was there they said that we couldn't get away with anything, that their 'protection' would find out.

But

I didn't intend to do anything then, so I just didn't give it any thought.** In individual cases the observation of dishonest behavior on the part of associates would in a similar manner contribute to a general awareness of the possi­ bilities which a position of trust has for violation. Introduction to the possibilities in this manner may be

115

briefly illustrated by the following two cases.^ Case 52* When I bought the real estate business from X I told him I didn't have any money. Remember, I told you I bought it from him and he went to California? He wanted to sell it to me for $1,800 and I told him I didn't have the money. He mentioned that it didn't matter, that I could use the rent money and then close some deals and have the money anyway. So I did that. I didn't thihk that it was a good idea, but I had some deals on the fire and I justified it because I was part owner of three of the buildings where I was collecting rent. Case 5^« Probably 5% of the contractors did the same thing during the war that I did, especially small contractors. I think I learned it from the outfit I was employed with before I went into business for myself. They went out to construct a gang of studio apart­ ments, and took a year's rent as deposits. Those people that couldn't get into the apartments after they were up, they paid back with interest. I don't know of any companies that are considered as a criminal outfit for this.

The presence of knowledge that the position of trust can be used to solve a non-shareable problem would depend not only on the presence of general information that such positions can be violated or even on the awareness that a specific position has certain general possibilities for violation, but in cases where the trusted person does not have the actual cash in his possession it would also involve possession of the

®We shall consider this process in more detail in the next chapter.

116

technical skill necessary for defalcations.

Such skill

is possessed by trusted persons even before the nonshareable problem appears. The devices, skills, or techniques used by the trust violators encountered to perpetrate the defalcation, or to hide the defalcation from the trustor once it had been perpetrated, is the same skill which is necessary to carrying on the legitimate routine of the work in the position of trust.

o

The techniques which are used by

violators are either those which are known by all individuals of average intelligence or are learned by professional and business persons in the course of the training necessary to obtaining and holding a position of trust.

With one exception, the persons interviewed stated

that "anyone" holding the position of trust which was violated could have violated it with equal ease, as far

10

as techniques were concerned.

While in some cases an

Q

The techniques and skills used in trust violation are ordinarily used to conceal the defalcation, not to perpetuate it. Since in a technical sense the violation of trust consists in taking the entrusted money or goods with criminal intent, the use of a technique such as the manipulation of accounts is merely secondary. Trust violators and others, however, usually consider that the method of concealing a defalcation is a method of violating the trust. ^ I n the one case the violator claimed that he invented the system which was used for defalcation. Although we located another case in which such a claim was made, it is highly doubtful that the systems actually were independent inventions since they were the same as those used in all parts of the United States by persons in similar capacities.

117

■unskilled layman would not have been able to violate the position of trust by using a certain technique, neither would that person have been able to hold the position without possession of such skill. Many of the non-absconding violators who were inter­ viewed expressed the idea that the violation was possible because of favorable personal relations with persons who should have checked on their work and that, consequently, it was conceivable that another person, whose personal relationships were not so favorable, would not have been able to use the same system for violation of the same position. or

However, this cannot be considered as a technique

skill, and it is not so considered by the violators

interviewed.

In a sense, statements of this kind amount

to a mere reiteration of the fact that one must be in a position of trust before he can violate that trust. As to the techniques themselves, an accountant with considerable experience in public accounting and auditing expressed the views of the other violators when he claimed that no one could graduate from a course in accounting without being familiar with all of the techniques used by accountants who violate positions of trust. Case 1. I don't think you can identify the place at which a man learned to do his illegal act. It would be the same with burglary as it is with embezzlement; how would a burglar be able to tell you where he got the attitudes that he had when he went out? He might be able to say that he learned a few techniques here

113

and there, hut that is about all. In my case, I -would have to say that I learned all of it in school and in my ordinary accounting experience. In school they teach you in your advanced years how to detect embezzlements, what to check to detect them, what to do to prevent them, and you sort of absorb it. There is no way of knowing exactly where you learn any habit. The same thing applies to the question of learning to use it for illegal rather than legal means. It is just like a doctor perform­ ing abortions, in his medical training he must learn to conduct the abortion, because many abortions are necessary for the health of the mother. Maybe he will perform a few legitimate abortions, and then an Illegitimate one. He has learned to conduct the illegitimate one in his ordinary medical training, but he could not Identify the point at which he learned that, because he would have to include all of his courses In physiology, anatomy, and everything else, as well as the specific technique. In my case I did not use any techniques which any ordinary accountant in my position could not have used; they are known by all accountants, just like the abortion technique is known by all doctors. It was a matter of routine with me; I simply followed out the routine I had every day. There were opportunities to get money in various other ways, but I never even thought of them until I got in here and got to thinking about my case, trying to figure out how I got back in here. Me used to get a number of cash remittances from some of the customers, and the girl in the mail room would bring them to me with the tape and lay them on my desk so I could check up on the accounts and see whether the money should be returned to the customer. (The merchandise was scarce during this period and not all orders could be filled.) Sometimes it would stay there all day and I wouldn't have time to check on it so at night when I was leaving I would check it into the depository in the cashier's office. I never even thought of stealing that money, and I think it was because it was not a part of the normal routine that I followed, whereas the manipulations I made were a part of that routine.

119

Other persons who manipulated accounts similarly expressed the idea that the person who is trained to carry on the routine duties of a position of trust is at the same time trained in whatever skills are necessary for the violation of that trust.

The following remarks are

typical. An auditor (Case 19): By the time an accountant has done some auditing work he learns what an auditor is for it becomes common knowledge to him. Naturally * I knew I shouldn't take it, but still the fact that I was the only one making the reports, I knew I shouldn't be found out. My feeling was that I owed the company that much money. An accountant (Case 5 ): The whole thing was second nature. I knew the procedure backward, but not for bilking people. I had a reputation with the accounting firm for knowledge of things like that. (He had published in a house organ articles on how to detect and prevent defal­ cations.) It was like taking candy away from a baby, and just like buying a pair of shoes-you buy a pair of shoes to fit the feet. It was a question of circumstances. If I'd been in another position my modus operandi might have been different. If I'd been in a grocery store I might have withheld cash; if I'd have been treasurer I might have put non-existent dead-heads on the pay roll. It depends on your capacity in the organization. A lawyer (Case 69): There is no lawyer that some time or other in his practise has not been in some difficulty. It is a natural consequence of his being a lawyer. He is always looking for something new, and he has opportunities to get into such things mixes In politics, handles real estate, and everything else. Another thing, you have enough legal background to' cope with any situation which might arise. It is the same thing with real estate men if you are given legal tools to do Illegal work, the finished work will be Illegal.

120

Those violators who did. not manipulate records also believed that anyone in a position similar to theirs could have used the same system for violation: Case 4 2 . There are all kinds of things that are hocked or put up for security. So if a man takes his own watch in that is absolutely legal. Then this stuff had been In my jewelry store for so long that I just took that in. Case 1 1 . I did nothing that nobody else couldn't have done, outside of having the opportunity, perhaps. Case 15* There wasn't anything special in my case. I just took whatever I could whenever the opportunity afforded itself. Case 21.

Any damned fool could do what I did.

Case 29. You don't have to know anything to take money when you are collecting. As was indicated by the subject of Case 1 (page l&Y), the situation in trust violation is not unlike the learning of some of the techniques which are essential to other types of crime.

One who hunts or shoots a gun has the necessary

technical skill for murder; an automobile mechanic ordinarily has the technical skill and information necessary for theft of a locked automobile; almost everyone has the technical skill necessary for simple theft.

In all of

these instances, and in trust violation as well, known techniques which have been learned for legitimate purposes, and in contact with law-abiding persons and behavior patterns which are conducive to obeying the law, could be used for Illegal rather than legal purposes.

When they are so used,

it might be said that the learned technique undergoes a

121

process of "circumstantiation” so that it is used for crime. The techniques necessary for trust violation then., as for many other crimes, are not necessarily learned in association vith criminal behavior patterns.

Hence, the

hypothesis in regard to the learning of the techniques and skills necessary for trust violations vas not verified. In many instances, ■where the person learns the technique in order to detect trust violation, the techniques necessary to such violation actually are learned in association vith anti-criminal behavior patterns.

In

other Instances the techniques vhich are used for violation also are used in the routine behavior of the trusted person and are learned in association vith behavior patterns vhich are non-criminal.

At a later time the skill vhich has been

learned in such association is used for illegal purposes because the situation has changed (a non-shareable problem appears or the rationalizations available to the trusted person have changed), not because the degree of skill has changed.

As shall be shovn in the next chapter, the

important element in the learned criminal behavior necessary for trust violation is a set of values or rationalizations, not techniques. Returning to the level of systematic causation, the previous discussion had indicated that trusted persons are not "neutral” In regard to trust violation at the time

122

when a non-shareable problem appears inasmuch as they have a general awareness that trust positions can be violated and they possess the skills and techniques necessary to violation.

As such, the possession of such general infor­

mation plays no significant role either in producing trust violation or in deterring persons from it, but it is offered as the "setting" in which non-shareable problems appear.

As we saw in Case 20, it is the next step which

is significant for violation:

the application of the

general information to the specific situation and, hence, the perception of the fact that in addition to having rather general possibilities for violation, a specific position of trust may be used for the specific purpose of solving or partially solving the non-shareable problem. In this connection, it is significant that persons violating trust positions do not depart from their ordinary occupational routines in order to perpetrate the crimes. Accountants use checks which they have been trusted to dispose of,

real estate men use deposits entrusted to them,

sales clerks withhold receipts,

bank tellers withhold

deposits made with them or alter the records of seldom-used accounts, etc.

One obvious reason for this, of course,

lies in the

definition of trust violation itself.

One who

follows the

established routine of his occupation in

committing a crime commits embezzlement or some other crime involving breach of trust, whereas one who departs from

123

that routine and obtains funds elsewhere in the business organization but outside the scope of his employment is convicted for larceny or some other crime. But even within the scope of employment there are alternative ways of violating the trust, some of which are in the routine of the position and some of which are not.*^ The trust violator follows the routine procedures because he has the technical skills and general information about converting funds in this capacity, ^ and this skill and information is applied when he perceives that violation of his position of trust will solve the pressing demands of a non-shareable problem. Summary and Conclusions 1.

In addition to having a financial problem which

he feels he cannot share with persons who, from a more objective point of view, could help him, the trusted person must have a certain amount of knowledge or information about trust violation in general, and specifically he must be aware that the violation of his trust will aid in the

11

If this were not the case, Lottier's theory, which is dependent upon the trusted person's changing his routine behavior, could not have been formulated. He does not explain what constitutes a change in behavior routine. As indicated above, we found that trust violators followed the technical routine of their positions in violating them.

12See

case 1 on page 117.

124

solution of the problem.

The presence of this event is

often indicated by trust violators in their use of the verbalization "it occurred to me” or "it dawned on me” that the entrusted funds could be used for such and such purpose. This "dawning” or "insight" or "perception" that the nonshareable problem could be solved by trust violation involves both an "awareness" of this fact and a "rationalization" of the behavior.

In most cases the

rationalization aspect of this process is emphasized,, but in a few cases which we have cited the awareness aspect was emphasized. 2.

Because of the nature of "trust" it is only

in relatively rare instances that persons do not know in a general way that a position of trust can be violated and, therefore, that. an objective opportunity for trust violation exists.

Also, the technical skill necessary for

converting funds is ordinarily possessed long before the appearance of a non-shareable problem.

Consequently, the

individual's ability to link the non-shareable problem to the position of trust Involves the application of rather general information to a specific situation. 3.

General knowledge about trust violation and

techniques used In trust violation are not necessarily learned In association with criminal behavior patterns. Instead, the general information is largely a consequence of being a trusted person, and the techniques are those

125

which are used in the everyday routine of the position in which the person is employed.

The usual situation in

this respect is that of having learned a technique as a legitimate business device or skill and then later using it for illegal means.

Prom the standpoint of the technique

alone3 trust violation is not a departure from the ordinary routine of the position of trust.

CHAPTER V

THE USE AMD ACQUISITION OP RATIONALIZATIONS BY TRUST VIOLATORS On the level of systematic causation, after a person has structured a problem as non-shareable, the total significant situation consists of this problem which must be solved by an independent, secret, and relatively safe means, and certain general information about trust violation. In this situation the potential trust violator Identifies the possibilities for resolving the problem by violating his position of trust and defines the situation in terms which enable him to look upon trust violation as essentially non-criminal, as justified, or as part of general irrespon­ sibility for which he Is not completely accountable.

The

total Identifying and defining process was referred to in the last chapter as being equal to perception of the fact that the trust position offers an opportunity for solving the problem.

The term "rationalization” has been applied

to the last phase, and it is with this process that we are concerned in this chapter. We have used the term In the above manner because it has been seen that the use of certain key verbalizations enables the trusted person to "adjust” his conceptions of -

126-

127

himself as a trusted person with his conceptions of himself as a user .160 supra.

173

In summary, trust violators who take funds over a period of time by rationalizing that they are borrowing the money become criminals without intending to do so.2^ The position of trust is perceived as providing a solution to a non-shareable problem when the individual "kids himself” or uses "phoney reasoning” that he is going to repay the amounts taken.

Without this rationalization the

series of peculations would not have begun.

In prison

these trust violators who finally come to look upon their behavior as criminal express general disapproval of crime and trust violation, just as do non-prisoners.

While

incarcerated, they are able to state that they were just "kidding themselves” that they were going to repay the money, and they point out that after they "got in too deep”

2% o m e of those interviewed actually used the words "accidental violation" to refer to their behavior. We do not intend to imply that meaning in any of oar statements. The Continental Casualty Company describes the embezzlement process in which the "borrowing" rationalization is used as a vicious cycle: "The average dishonest employee is an anomaly in the field of crime. Usually he has advanced to a position of trust by above average ability, ambition to progress and willingness to accept responsibility, coupled with faithful application to duty throughout a long period of employment. His background, both business and personal, is above reproach and without indication of instability to act as a warning against possible dishonesty. Yet, due to some 'emergency1 need for money, this employee succumbs to temptation. The first misstep is usually a relatively small matter, a 'temporary loan' which he expects to pay when he receives his next pay check, but having stolen once It becomes easier to do so again and In time he is unable to extricate himself from the vicious cycle he has set in motion. Eventually the theft is discovered and rarely is it possible to effect restitution." Continental Casualty Company, o£. cit., p. 5.

174

t h e y

w e r e

f a c e

t h e

I f

p o i n t

h a n d l e

t o

s e r i o u s

m a n n e r * t h e

f o r c e d

t h e

w h e r e

i t ,

c r i m i n a l ,

h e

a b a n d o n

f a c t

t h a t

a m o u n t

o f

t h e

i f

t h e y t h e

k i n d

o f

"were

" k i d d i n g "

b e h a v i n g

p e c u l a t i o n s

i n d i v i d u a l

n e v e r

e v e n

t h i s

f e e l s

t h a t

d o e s

l o o k

u p o n

h a s

b e e n

i n c a r c e r a t e d

h e

i n

d o e s h e

h i m s e l f

a

c r i m i n a l

n o t

c a n

a s

a n d

n o

a

f o r

g e t

t o

l o n g e r

g e n u i n e h i s

b e h a v i o r .

A b s c o n d e r s ^0

T h a t t h e m

h a v e

o f

p r o b l e m

h a s t h i s

a l r e a d y g r o u p

s i t u a t i o n

p r o b l e m s

w h i c h

a r e

o f

p h y s i c a l l y

i s o l a t e d

h i s

u n m a r r i e d o r

t a h m m t

h n i e o h

r o o m i n g

t h a t

p r o b l e m s . o r

^ ° B y e i r t r u s t b d t h e n s e v e s e m p l o y m e n n w h o , f o r n e y o v e r a e y a r e " i n

b e e n

a y r t e p t

b s r i n o x a e r o o

c e g r m i

w e l l

b e

w i t h

f r o m

a s

o f

i n

p a r t

o t h e r

o n d e r s m o v i n g c o n n e l e a v i p l e , t o d o f d e e p . "

f r o m

c n a t

t h e

f o r

a s

t h e i r

w h o

d o

f o r

o t h e r s

w i t h

s p o u s e s ,

w f t g k i

e a n t h o s e p s o r g o o d s s w i t h t h e e v i c i n i t y . e l a t i v e l y s t h e n d i s a p f a c t , t h i s

t h e

a l m o s t

t h e

a n y

g r o u p

t h e

a r e

p e r s o n

w h o m

h e

a r e

l i v e

i s c a n

f r e q u e n t l y i n

h o t e l s

a s s o c i a t i o n s

e r s o e n t r t r u s W e m a l l p e a r r a r e

n s u s t t o r d o a m w h l y

w h e d b n o u e n h a

t o

t r u s t

n o n - s h a r e a b l e ,

a b s c o n d

p r i m a r y

e n t r u s t e d

o t h e r

‘W h i l e

b e c a u s e

f e w

e m u n d i o n t h e r m e , I n

a s

f u n d s

a b s c o n d e r s

p e r s o n s

I n d i v i d u a l s

h a v e

j u s t

s t r u c t u r e d

n a t u r e

t h e

i n d i c a t e d .

n o n - s h a r e a b l e

s e p a r a t e d

h o u s e s ,

a b s c o n d p r o b l e m s ,

a s

m a y

o r d i n a r i l y

s h a r e

w h o

n o n - s h a r e a b l e

v i o l a t o r s , m e m b e r

p e r s o n s

o y o n p

v i o l t o t h l e a v t i n c t s o f t h e y p e n s .

o f

a e i l

t e m n g u d e

t h i n k

175

any sort, and ovn little property.^

in addition, only one

of the absconders interviewed had held a higher status position of trust, such as accountant, business executive, or bookkeeper.

The other absconders had been employed

as oil station attendants, salesmen, hotel clerks, truck drivers, bill collectors, and the like.

While we cannot

generalize that the members of this group are always persons with few primary group contacts and persons of lower socio­ economic status, it does appear that the rationalizations which are used by absconders are more readily available to persons with such characteristics than they are to other trusted persons. Individuals who violate their trust by absconding actually deliberate for varying periods of time on the question of whether or not they should abscond.

They then

decide that their attempts to conduct their lives on an honest basis have been futile, that they don't care what happens to them, that the criminality "in" people comes out in circumstances such as those in which they find themselves.

This rationalization was used by all persons

3^33 per cent were living with a spouse at the time of the defSLcation, as compared with 72 per cent for independent businessmen and 76 per cent for employees who did not abscond. Absconders had a mean of .33 dependents (median p),while the independent businessmen had a mean of .77 (median 2) and other employees had 1.9 (median 2). Absconders reported ownership of property worth a mean value of $440 (median $0) while the other two groups reported property worth a mean value of $5,027 (median $1,250) and $4,529 (median $0) respectively.

176

who absconded with the money or property at hand.

The

absconder concludes, in other words, that the values and ideals which he formerly held in regard to honesty are no longer pertinent for him.

By rationalizing that he no

longer 11cares” what happens to him and that crime is nin him*1 he is able to look upon himself as almost completely lacking in accountability for his criminal acts. The lack of primary group relationships and the lower occupational status of trust violators of this kind not only make rather ordinary problems non-shareable, but they contribute to the ease with which the rationalization is used since they make the situation such that the person can abscond by severing a minimum of social ties.

Primary

group members both define goals for the individual and "control” him by invoking prescribed rules for the attain­ ment of those goals.

In the absence of such groups the

individual is not clearly cognizant of "appropriate1* goals 32 nor of “appropriate11 means of attaining them. For the person who has a minimum of obligations of a legitimate nature, such as support of a family or maintenance of

32Cf. p; H. Landis, Social Control, Chicago, 19399 PP- 151-166, and R. K. Merton, "Social Structure and Anomie," m e r. Soc. Rev., 3:672-682, Oct., 1938. Both of these authors point out that definite pressure upon certain persons to engage in non-conformist conduct is exerted in social structures in which either the goals, the means of attaining them, or the relationship between the goals and the means are loosely defined for the individual.

177

property interests,^ it is relatively easy to rationalize that he "doesn't careTt about his being a criminal and, consequently, to disappear with the funds. In a sense, absconders escape from the conflict situation present when they have a non-shareable problem and no honest way of solving it.

Rather than structuring

the situation in such a way that trust violation does not at first seem dishonest, as is the case in almost all instances of violation by employees of higher social status, the absconder solves his problem by structuring the situation In such a way that the values he has formerly held have no meaning for him.

Although he recognizes his behavior as

criminal from the beginning, he rationalizes that he is not entirely responsible for his behavior in that category. Later, usually after he has been apprehended and is completely removed from the situation, he again becomes cognizant of these values, and decides that prior to absconding he was .only "kidding" himself into thinking that the renounced values had no meaning for him.

He

wonders how he could have done that, cannot provide an adequate answer, and this reaffirms his original belief that crime Is "in11 him.

3^The effect of such obligations as a deterrent to running away is recognized informally by prison officials who more readily grant "trustee" status to prisoners who have property or families in the state where the prison is located than they do to prisoners who do not have such obligations,

178

The verbalizations used in the absconders' conversations with themselves prior to the violation of trust accurately indicate the nature of this state of irresponsibility or recklessness and its significance in the violation.

The absconders usually described themselves

as having had a "to hell with it" attitude, although the phrases used were sometimes either more or less colorful than that.

About 80$ of the absconders interviewed

described their behavior in these terms even before the interviewer recognized that there was uniformity in this respect.

The following case is illustrative of the process. Case 30. (An oil station attendant who absconded with the receipts the first night he was on duty.) I just took it into my head to try it. The night got pretty lonesome and I just got disgusted and took everything I had and took off. I just got the feeling and the urge that I wanted to do this and wanted to do that and I didn't have any money, so naturally you are going to get some. I was disgusted and sleepy so I just took off. I never thought about it in advance it call came up at once. All I was interested in was getting the money and getting out of there. I really didn't have no feeling, I just ups and did it all at once. I just got tired-People were coming in and wanting this and that, and I was getting sleepy too, and I just got tired and took off. I got to thinking how bad I was treated and everything. I had to have the money and I just said, you might say, "to hell with it," and todcoff and have been going against the law ever since. (Later he was asked whether anything in particular took place on that particular night.) No, I got to thinking back on how bad I was treated and everything, and just got disgusted with everything. I went to work about 7:30, and I thought about it at about midnight and

179

I took it at about 4:00 or 4:30. I just got on a kid's bicycle that he had left there at the station and rode away. I left the lights on and the pumps unlocked and everything else. In between there (12*00 to 4:00) I got tired and got to thinking back about different things, so finally I just took it. Another thing, I thought that closer to the morning there would be more money, so that is one reason why I waited. I remember a man came in about midnight with a $20 bill and I must have made a mistake in his change because he asked me about it. I must have given him the wrong change. I had to go and get 3ome more bills, and I seen how much money was in there and got to thinking about it after the guy left. But I'd been watching them bills pretty close all night. It looked pretty good to me when the head attendant handed me that $40 change. But it didn't seem to come to my mind until it just hit me. Of course, I was getting tired and sleepy around midnight too, and that might have had something to do with it. . . . I couldn't get nothing at home my father wouldn't give me nothing. So I needed money and saw it there so I just took off. When I say I was disgusted I mean I was disgusted with everybody. "I hate everybody and I'm going to do everything I can to make myself happy." Something inside of me just told me to take off. Things come into my mind that I don't know myself what I'm doing sometimes. Just hits me all of a sudden. I didn't know what I was going to do, I just wanted to get away from that city. In all of the cases of persons who absconded, the rationalization was the same as that used in the preceding case.

Those that described this condition in mild terms

said that they "didn't care" or "got disgusted with everything in general."

Those who were more colorful but

less explicit In their terminology said that they reached the place where they said to themselves, as did the subject

180

of the case just cited, *to hell with it,* or “piss on it," or "f

It."

The feeling was frequently described as a

"pissed off attitude,"

An interesting combination of these

two modes of expression was found in one absconder (case 24) who responded as follows when asked what he thought was the general cause of the behavior: down to one reason

“You may boil it all

not especially a 'devil-may-care1

attitude, but an 'at-the-end-of-the-world 1 attitude.

We

are all dreamers and when something goes wrong we don't have

the backbone to go in

say,

'Aw, to hell

there and fight

it, but we just

with it.'“

The fact that absconders carry on an internalized conversation with themselves before absconding also is emphasized in the report of a young man who, as a chauffer, drove off with his employer's car containing a sample case full of jewelry.

He was never apprehended for this offense.

Later, he deliberately took driving jobs with the intention of selling the merchandise, and he was convicted for that. Case 38- It was a spontaneous action. I thought about it for a little while before I took off and had doubts about it, but finally I said, “f it" and took off. I was thinking about whether I'd ^et caught and that sort of thing, but then I just figured "piss on it," just like as if I was arguing with someone else. I just figured I was stealing it; I didn't realize I'd violated a trust until I'd been picked up on this other one. The lack of a conception that he was violating a trust may be seen in- the preceding case, and this was found

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to be a characteristic of other absconders as veil. Unlike the persons vho took money or goods over a period of time, those vho absconded usually at the time of their crime vere quite vague in their ovn thinking about the legal nature of the act.

This does not mean, of course,

that they did not perceive the opportunities vhich their trust positions offered for solution to their problems, but merely that vhen they absconded they did not immediately think of themselves as violating a trust.

In Case 20 cited

on page 107 the subject remarked that he considered his behavior to be the same as stealing, but in most cases of this kind the subject considered that his behavior vas stealing.

According to the popular lore, 11embezzlers11

are persons of higher socio-economic status vho take funds over a period of time because of gambling, drinking, etc., vhile Mthieves" are persons of lover status vho take vhatever funds are at hand.

Since most absconders identify

with the latter group, they look upon themselves as thieves rather than as trust violators.

Just as long-term

violators and independent businessmen do not at first consider the possibility of absconding vith the funds, absconders do not consider the possibility of taking relatively small amounts of money over a period of time. Hovever, the rationalization that values formerly held are no longer meaningful vas seen to have preceded the absconding by those fev persons vho absconded after first

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having gone through the specific sequence necessary to violating their trust In some other manner.

In the latter

cases, the renunciation of authority appears some time after the original peculation, after the individual has defined himself as a criminal.

The application of the

rationalization results in the individuals absconding, even if, at the time, he has none of the funds which he converted.

Consequently, the perception of the relation­

ship between the position of trust and a non-shareable problem from this point of view is not only a prerequisite for violation of trust by absconding, but it sometimes precedes absconding after the trust has been violated by use of some other rationalization.

As we pointed out In

the last section, violation of trust by use of the rationalization that the money Is being borrowed (or by use of some other rationalization) often becomes a nonshareable problem in itself.

This non-shareable problem

is sometimes perceived in the light of a rationalization that ordinary values have no meaning for the violator, just as other non-shareable problems are so perceived by other absconders.

3^See Case 1 on page 169 . We might add this statement: "To show you the mood I was in 1 was packing some things, rather just throwing them in a bag, so I called a cabbie up there to help me carry them down to the cab. I was throwing things into the bag, so I'd pull down a suit and ask him if he wanted it, then give him another suit and a top coat, and so on. He had a whole armload of suits and coats. . . . "

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This sort of rationalization vas present In cases vhere subjects absconded vlth automobiles as veil as in cases in vhich they absconded vlth the cash on hand.

35

The

folloving three cases Involved absconding vith an automobile vhich had been entrusted to a person for one purpose, but vhich had been used for another purpose.

All three

subjects had been convicted for larceny by bailee. Case 43* I felt vhat a dirty deal I vas getting so I said, "Well, I'm going to be out of some money If I don't vatch out, so I'll just beat him first.” That's the vhole thing about it. Just a case vhere I've been done vrong and knev it. Revenge in other vords. I vas just burned up. Something just happened. I didn't give it a thought up until then. I vas just going to do it. I didn't figure on getting by, but it is a case vhere you don't care. Case 44. It hit me that I vas lov on money. I" figured i& my head that I oved $150 or $200 on the car I'd rented so I just thought "the hell vith it." It's hard to describe the feeling nov, but then I think it vas just 11to hell vith the automobile, I'll just take off and get out of the state.” It vasn't a disgusted mood it sounds phoney to say that a guy doesn't knov any better, but it vas just that. I didn't care. It falls back to nothing had value in life for me at the time and I just didn't give a damn. If I'd have had $1,000 and the idea vould have hit me I'd have taken the car anyway. Case 47. I vas married but I vas trying to make an Impression on my ex-wife and I couldn't let It fumble. I'd say to myself, "Well, I've had it this long and he won't care about a

3^it should be pointed out, however, that many sub­ jects vho have been convicted for behavior of this sort claim that the conviction resulted from a mere misunder­ standing vlth the trustor.

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couple days more.” I don't know myself why I didn't take it back. My dad told me to take it back, my ma did too, and I said, "Why in hell should I take it back— he knows I've got it.11 I figured, "to hell with him, let him wait a while, because I've got things to do.'1 It is just as if you take someone out dancing and you dance and you wish the music wouldn't stop but you could just keep on going, going, going. I had been using the car so often, I just overstepped myself. Even in those cases where the subjects blamed their absconding and attitudes on alcoholism or excessive drinking they also indicated that prior to the absconding they had held such an inner conversation with themselves.^

in the

following case the subject sold merchandise which was entrusted to him and disappeared.

He consistently "excused"

himself from liability on the ground that when under the influence of alcohol he gets so that he "doesn't care," but it may be seen that he used the same rationalization that was used by persons not so affected. Case 26. There was a situation there. I didn't know whether to divorce my wife and marry the girl I was going with. That's how I got on this drunk. She got mad when I missed our dates for Saturday night and Sunday and I got in the frame of mind of "What the hell do I care," and got going on the drinking. I had all intentions to turn the money in in the morning, but when I woke up it was all gone. A man has to plan his crime to get away with half a million and salt some of it away. I didn't do that. I'm an alcoholic of the kind that drinks and fails *3 /C

It is not yet clear whether the rationalization in question is more readily available to alcoholics than to non-alcoholics, but possibly it is.

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to eat and then says, "To hell with it." The following case of a hotel clerk is similar: Case 21. At about mid-night I thought about taking' thi s money and leaving, and at about 4:00 o ’clock I took it and left. I just took off for Chicago, I thought. Left the hotel open and everything else. I was disgusted and discouraged and just didn’t give a damn. Everything was going to hell, and I just didn’t care. It was just damned foolishness. On this night I was drinking, it came to my mind and I just left. I was drinking so much that I didn't care what happened; I was disgusted with everything in general. Other persons the crime also stated

who had been drinking at the time of that they probably would not have

committed the offense if they had not been intoxicated, but inaddition they indicated that when they were in such a

condition they became "irresponsible.11 The usual

assumption was that criminality was "in" them and that it came out when they had been drinking.

This was

verbalized in the expression that a crooked streak came out after a few drinks, or in expression of the idea that after a few drinks the subject became "brave" or got so that he "didn't care." Unlike the independent businessmen who as prisoners explained that their violation was due to an unusual situation, the members of this group said that their crimes were due to personal defects. *

-"See, for example, Cases 20, pp.107-9; and 30, pp. 178-179 supra-

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After apprehension, absconders did not consider that the situation in which they had found themselves prior to absconding was extraordinary, and when they remembered that they had rationalized that they didn't care what happened to them in that situation, the belief that their crimes were due to a personal defect was reinforced. In both instances the criminal's explanation is seen to be related to the conception of himself which he had at the time of his violation.

After apprehension these conceptions

of the person's relationship in the situation were transf o m e d into "explanations" of the crime.

The independent

businessmen went on thinking of themselves as ordinary businessmen who had at most found it necessary to cut some corners in order to meet an unusual situation, while the absconders went on thinking of themselves as having criminality in them.

The businessman who has been

apprehended for violation of trust considers that he lost control of a situation, while the absconder considers that he lost control of himself. Acquisition of Rationalizations In the preceding pages we have shown that one step in the process which results in trust violation is the application to the person's own conduct of a verbalization which permits him to adjust two rather conflicting roles or sets of behavior patterns and hence to behave in a

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criminal manner.

Since such rationalizations are, by

definition., learned, it is therefore inconceivable that they could be present unless the individual had been in contact with persons who presented them to him or with agencies which gave him a general acquaintance with them. We turn now to the question of whether such rationalizations are necessarily learned in association with ”criminal behavior patterns.11 It already has been indicated that for our purposes a criminal behavior pattern may be considered as a definition of a situation in which crime is appropriate. Unlike the cultural conditions which exist in respect to the presentation to the individual of the techniques and general Information necessary to criminal violation of financial trust, which we have characterized as conditions which inform the individual that positions of trust can be violated, the cultural conditions which exist in regard to the presentation of situations in which positions of trust may be violated are fundamentally contradictory.

As we indicated previously, a technique

necessary to trust violation may be learned from an individual who presents it as a technique for preventing or detecting trust violation.

But it is not possible for

a verbalization justifying trust violation to be presented in this way since, by definition, such verbalizations must be and are basically and fundamentally contradictory to the Ideas Inherent In the conceptions of Htrust,"

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"trustvorthiness," "honesty,” and so forth.

It is impossible

for one person to present to another an idea that there are conditions -under vhich positions of trust may be violated criminally vithout presenting to him a criminal behavior pattern. For this reason, verification of our hypothesis on the level of systematic causation is ipso facto verification of our hypothesis on the level of genetic causation, namely that the rationalizations vhich are applied to one*s ovn conduct in the criminal violation of financial trust are learned in association vith criminal behavior patterns. It is not possible for trust violators to use rationalizations in the manner indicated vithout first having come into con­ tact vith definitions of situations vhich to a greater or lesser degr.ee sanction the criminal violation of financial trust.

The important theoretical questions remaining are

those concerned vith the specific source of the definitions of situations vhich, upon the appearance of a non-shareable problem, are applied to the trust violator1s ovn conduct as rationalizations. Conceivably, there are cases in vhich the appearance of a non-shareable problem is folloved by a trial and error mode of behavior vhich results in pure "invention” or "discovery" of a verbalization vhich sanctions a solution to the problem by illegal means, but this is highly doubtful. In the cases encountered, persons vho at first seemed to

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behave in this manner and to "hit" on trust violation as a solution to the non-shareable problem actually vent through the same process vhich ve have indicated as essential to all trust violation.

Among our subjects, the expressions

of the person in the folloving case vere the closest to indications of a trial and error mode of behavior prior to the defalcation.

It may be seen that he perceived that

his trust position provided an opportunity to solve his non-shareable problem (blackmail) secretly and independently, and that this perception involved justification of the behavior to himself. Case 70. We are all born vith ideas those thought s come into you, they are born into you. You are sitting there and you say, "I'd like to have so much money and my salary von11 handle it. Oh, if I collect such and such an account I can use so much of it." It's just like a man trying to figure out hov to cut dovn the costs in this firm, that's hov it came into my mind, the same vay. Where do ve Se^ a vision from? It is the person that's thinking— -he's thinking hov to do something. We can have good visions and ve can have bad ones. You take advantage of the opportunities and use the easiest vay. The shortest vay ve a lot of times think is the easiest vay. I figured that if you could use something and help yourself and replace It and not hurt anybody it vas all right. After thinking it over, I ^ e found out that It vas vrong vhat If something happened to me vhile I had it?... I've never stolen because that is a thing I never believed In. You have got money coming In on certain sales and you don't have it right then... We all have a certain amount of pride vere ve don't vant to go and ask individuals for loans, so it is easy to take it and then put it back. That vas my idea.

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Rather than "discovering1’ trust violation as a solution when non-shareable problems were present, the trust violators interviewed "rediscovered" culturally provided verbalizations which sanction violation and applied these verbalizations to their own conduct.

But whether the process is called

discovery or rediscovery, the existence of a culture which supplies the necessary sanctions is presupposed, as is contact with these aspects of culture by the trusted person. The source from which an individual trusted person learns the fundamental cultural contradiction inherent in the idea that non-violation of trust is the expected norm and that there are conditions under which trust may be violated is, in many cases, difficult to identify.

Our

subjects were asked in at least four different ways to oo identify this source, but a large proportion of them could not specifically do so.

The source was identified

as a direct, personal presentation of the verbalization, together with quite direct encouragement to violate the

different times in the interviews they were asked their opinions as to (1) where they got the idea to do what they did (2) how they happened to hit on the idea which eventually resulted in their incarceration, (3) why they had not violated the position of trust at an earlier time (4) whether they had observed criminal or unethical practices on the part of their trustors or other associates, or whether, in the case of independent businessmen, their own business always had been conducted on a legal and ethical basis up to the time of the initial conversion. Other questions soliciting opinions in regard to the source of the verbalizations used as rationalizations were also asked numerous times in different interviews, and in addition all voluntary remarks pertinent to these questions were recorded.

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trust, in 14.2 per cent of the cases, and as rather indirect ideological sanctions of the behavior in another 60.3 per cent.

Between these two extremes, 25.4 per cent of the

subjects reported observations of trust violations perpetrated by persons respected by them, observations of other kinds of crime perpetrated by such persons, and participation in other types of crimes, particularly business crimes, not involving violation of financial trust.39

Even

without these calculated percentages, it is apparent from our previous discussion and citation of cases that most of the trust violators, particularly long-term violators and absconders, encountered expressed the opinion that their behavior was a 11spontaneous reaction,” or that the idea for the crime was 11in" them, or that there was no contact with any source which could have influenced their thinking. There are numerous reasons for the trust violators 1 inability to designate the specific person or agency from which they learned that there are circumstances in which positions of trust may be violated.

In the first place,

trust violators, even while in prison, only seldom identify themselves with an ideal-type criminal, and their responses to questions ordinarily were made with a consideration for

^ T h e s e percentages are necessarily the result of interpretations of some statements made by violators and, to that extent, they represent the proportions of sources identified by either the investigator or the subject, or both. If a subject reported more than one kind of source, the most specific one was tabulated.

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the fact that they had had little or no contact vith idealtype criminals prior to the defalcation.

Most of the

violators did not consider the questions to ask about their having had contact vith, for example, a business or professional ideology vhich contained definitions of situations in vhich trust violation is an appropriate mode of response.

Ttfhen thpy vere specifically questioned about

this in later interviews, their responses indicated that in most cases this idea vas incomprehensible to them. An individuals failure to identify with an ideal-type criminal resulted in a conception of himself as something other than a criminal or an ideal-type violator, and questions in regard to rationalizations vere interpreted to be questions about non-criminal activities. For example, persons vho took money over a period of time but vho did not ”exceed the limits” of their ovn resources did not consider themselves to be criminals in any sense of the tern and hence they did not consider the conditions under vhich they had learned to "borrow” as being at all important in criminal activities.

Similarly,

among independent businessmen the belief that their criminal behavior vas closely related to ordinary non-criminal business practice made the situation such that the violators did not consider the circumstances in vhich these practices vere learned as having provided them vith definitions of situations in vhich trust violation vas sanctioned.

Instead,

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they considered the definitions to have been presented in much the same way that the techniques necessary to violation are presented.

In a strict sense, such business activities

as the use of funds which are "covered" by one's own securities might be criminal also, but the violator considers them to be so extensive that he feels that the situations in which they are learned have nothing to do with criminality.

As a matter of fact, such practices, or

even criminal practices in a more obvious sense, are often presented to persons just beginning employment or enterprise in a business organization, and the person's success or continued employment in such business is dependent upon their acceptance of such definitions.

The individual either

accepts the definitions which sanction criminal behavior or he is eliminated from the enterprise by competition from men who have acdepted the definition.

4O

Second, contacts with definitions of situations in which trust violation is sanctioned are not in fact necessarily made within a particular business organization or with a specific person or agency, but In many instances are obtained as a consequence of the person1s more general contacts with ideologies conducive to criminal behavior. Neither trust violators nor persons who are not even criminals can ordinarily identify the specific source of

^Sutherland relates several such ceases. E. H. Sutherland, Hhite Collar Crime. New York, 19^9^ PP. 235-239*

19k

a philosophy of life which includes such ideologies.

The

11Jean Valjean philosophy," for instance, is one which sanctions criminal behavior, and yet most people who adhere to it or say that they adhere to it can not identify its source.

Similarly, the source of the idea that it is not

criminal, or at least not "completely criminal" to cheat a large, impersonal corporation, or to take small articles or sums of money from such a corporation when one is employed by it, can not ordinarily be specifically identified. Specifically in regard to trust violation, we find the same situation.

Even before they accept positions of

trust, persons learn fundamental cultural contradictions in regard to criminal and non-criminal behavior in such positions, but they usually do not know the specific source of the patterns which have been learned and often do not even recognize that there is a contradiction inherent in the cultural ideologies.

In many instances the presentation

of a definition conducive to violation of trust is made in such a way that at the time no stigma is attached either to taking over the definition or rejecting it, and the individual is not specifically aware of the fact that the philosophy or ideology entails a question of criminality or non-criminality.

The idea that criminality is "in"

people and that they cannot help being criminal is conceivably of this nature, as is the idea that conversion or deposits is somehow justified when onefs business is

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failing*

Individuals have developed general conceptions

of what is "proper” in certain situations for persons of their status, and when those situations appear they behave in terms of those conceptions. Third, the entrance of a particular person into the aggregate of persons who have violated positions of financial trust or who say that they would do so in certain situations is unobstructed by the desires of such persons. A person does not need the permission of others in order to become a trust violator.

The process which results

in trust violation does not require direct, personal contact and communication among trust violators comparable, for example, to the communication among professional thieves. Trust violators have no tutelage systems, no special requirements for admission to practice, no special language. While a few terms such as "tapping the till" and "kiting checks" refer to practices Involving violation of trust, these terms are neither peculiar to trust violators nor used extensively by them.

Only two of the violators inter­

viewed knew of any special terms used to refer to illegal or "sharp" practices In the business in which they were associated and those terms were seen to be those used in politics or among criminals generally rather than exclusively among the members of a business or a professional group. What is prevalent among the associates of trusted persons is not an argot referring to illegal or quasi-Illegal

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practices, but definitions, in ordinary language, vhich sanction criminality and wh&B.£t,when personalized, are rationalizations.

The above points not only state some of the reasons for trust violators not being able to identify the source of their rationalizations but are also in themselves indicative of cultural contradictions in regard to the inviolability of positions of financial trust.

If a

person can criminally violate such a position while having little notion of the conditions under which he learned to do so, the implication is that there is a wide discrepancy between what the members of some groups, such as lawenforcement officials, consider as crime and what the members of other groups consider as crime.

As indicated in Chapter I, it was not our aim in this study to test the entire differential association theory, but merely to determine whether contact with what have been called criminal behavior patterns are necessary to trust violation.

We have shown that contact with such

patterns is necessary to trust violation inasmuch as conscious, learned rationalizations are necessary to the crime.

We offer, in addition, some rather casual

observations on the question of the ratio between contacts with such criminal behavior patterns and contacts with

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anti-criminal behavior patterns.

First, we have observed

that the associations of trust violators do not ordinarily change just prior to the commission of the crime.

While

this is not universally true, in the great majority of the cases encountered the associations of trusted persons did not vary in such a way that it may be said that just prior to the crime there was a presentation of an excess of definitions favorable to the criminal violation of the position of trust.

Instead, the associations with the

patterns ordinarily have taken place some time prior to the crime and involve assimilations of definitions of situations in which trust violation is sanctioned.

Hence,

when the individual perceives that the situation in his own case is included in the general category of situations in which trust violation is sanctioned, he violates the trust. Second, our discussion is consistent with the entire differential association hypothesis insofar as there was, over a long period of time, a gradual modification of the subjects* values in regard to deceit, trust, and honesty, eventuating in the criminal violation of financial trust.

For example, In some cases of trust violation by

independent businessmen the person appeared to have first learned values in regard to use of funds which were • "covered,” and then he merely extended this logic to the use of funds which were not so covered.

Also, In

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cases where the non-shareable problem is due to violation of the obligations and duties ascribed to the position of trust, as is the case among many long-term violators, it is often observable that the violation of trust is the eventuation of a rather long process of modification of values concerning the inviolability of trust.^

Similarly,

some of the absconders were observed to have undergone a process of change in regard to values concerning ideals of honesty> trustworthiness, and respectability, in some cases committing crimes other than trust violation before they perpetrated the crime in which we are interested.

In

all cases we have observed, at least, a series of incidents which have psychologically or physically isolated the person from groups which contain ideal-type honest members, and this series of incidents might be described as producing an excess of contacts with criminal behavior patterns.

We

have observed that the presence of a condition which necessitates deception of the trustor makes it relatively easy for the trusted person to deceive him further by trust violation

in other words, to adopt a rationalization

necessary to trust violation. Third, while we can reason, as above, that our subjects had had an excess of contact with behavior patterns which sanction trust violation, it is difficult to show this

^See, for example, Case 10, pp. 66-68 supra.

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empirically.

Demonstration of the fact that there are

contradictory definitions in regard to trust violation is much less difficult than demonstration of the quantity and quality of contacts with each of these kinds of definitions for the reason that the trust violator is not able to identify his contacts with either criminal behavior patterns or anti-criminal behavior patterns.

We may see that in

some instances employed persons or independent businessmen observe their associates or employers perpetrating what are considered to be "technical violations” but which are in fact crimes, and often the observers, as has been shown, similarly consider their own crimes as mere technical violations until such time as they consider that they have exceeded the "toleration limits,” even of the persons who are also “technical violators."

But to observe the .contacts

with the other half of the differential association ratio is even more difficult, and it therefore is doubtful whether it definitely can be said that at the time of the crime there was an excess of contacts with definitions favorable to trust violation.

What can be said, and this is supported

by our data, is that the differentiation between "crimes” and "technical violations," as between "crimes” and "borrowing” and so forth, is such that it amounts to a definition of a situation in which crime is expected. When an individual moves into a situation in which he can apply this definition to his own conduct, he does so, and violates his trust.

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Fourth, the fact that many trust violations are perpetrated by old employees^ might be shown to indicate that the learning of the rationalizations necessary to trust violation took place while the person was in a position of trust, and hence that an over-balancing of the ratio in favor of criminal behavior patterns must have taken place.

Again, however, such a fact does not necessarily

indicate that a balance of anti-criminal and criminal attitudes was offset in favor of the latter during the period of employment as a trusted person.

Conceivably, the

definitions of situations in which trust violation is appropriate were made prior to the acceptance of the position and simply were applied to the trusted person1s own conduct at the time of the appearance of the non-shareable problem.

However, the fact that long-term violators and

others must first rationalize in such a way that criminal behavior seems somehow justified is in itself evidence of contact with different sets of values and of not having completely assimilated criminal values while eliminating anti-criminal values. Fifth, in explaining non-violation in terms of a ratio of contacts with criminal and anti-criminal behavior

^ T h e employed absconders had been in the position of f'nist an average of 8.5 months (median 6) prior to the defalcation, the long-term violators an average of 7 years and 10 months (median 3 years). The independent businessmen had been in the type of business in which the trust was violated for an average of 9 years and 11 months (median 1 year).

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patterns one also encounters difficulties similar to those just discussed.

It has "been our observation that

contact with criminal behavior patterns is necessary to trust violation In that such contact provides the individual with verbalizations which are later applied to his own conduct as rationalizations, but we also have observed that trust violation can not be explained by rationalizations alone.

There also must be present a non-shareable problem

and an awareness of the possibilities which the trust position offers for solution to that problem.

It would

follow that a rationalization conducive to the violation of trust, i.e., "borrowing," could be present but that trust violation would not necessarily follow. Summary and Conclusions 1.

The rationalizations which are used by trust

violators are necessary and essential to their violation of trust.

They are not merely ex post facto justifications

for conduct which already has been enacted, but are pertinent and real nreasons" which the person has for acting. "When the relationship between a personal non-shareable problem and the position of trust is perceived according to the bias induced by the presence of a rationalization which makes trust violation in some way justified, trust violation results. 2.

Rationalizations used In trust violation are

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linked with the manner in which the trust is violated and to some extent with the social and economic position of the offender.

A large majority of the independent businessmen

and trusted employees who take funds over a period of time apply to a situation in which a non-shareable problem is present the rationalization that they are merely borrowing the funds.

The application of this rationalization has

obvious implications for the behavior of the person using it, since he considers that he is playing the role of the borrower rather than of the trust violator.

When other

rationalizations are used, the person behaves accordingly. Frequently it is necessary for an individual to abandon the rationalization which he has been using, and when this occurs he looks upon himself as a criminal.

Trusted persons

who abscond with the funds or property entrusted to them have previously perceived the relationship between the position of trust and a non-shareable problem according to the rationalization that cultural ideals in regard to honesty and "responsibility" have no meaning for them. This rationalization is of such a nature that the individual looks upon his role as that of a criminal, and he thinks of himself as a "thief" rather than as a "borrower,” "embezzler," or "trust violator." 3.

Each trusted person does not have to invent

a new rationalization for his violation of trust, but instead he simply applies to his own situation a

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verbalization which has been made available to him by virtue of his having come into contact with a culture in which such verbalizations are present.

Cultural ideologies

which sanction trust violation are in basic contradiction with ideologies which hold non-violation as the norm* and the individual trusted person must have come into contact with the former before he can use the rationalizations necessary for trust violation.

CHAPTER VI SUMMARY AND IMPLICATION OF THE THEORY

The preceding analysis has indicated that trust violation takes place when the position of trust is viewed by the trusted person according to culturally provided knowledge about and rationalizations for using a position of trust to solve a non-shareable problem, and that the absence of any of these events will preclude violation.

Non-shareable problems are significant in

this sequence because they create in the trusted person a desire for achievement of very specific results by a limited number of means.

Awareness or knowledge that the

position can be violated for this purpose is significant in that it allows the trusted person to see that trust violation is one of these means for achieving the desired results.

Finally, the application to his own conduct of

a culturally provided verbalization which allows the trusted person to "adjust" two rather conflicting sets of values enables him to see that trust violation may be used as the means for obtaining the desired results. Together, the last two events in the process amount to a perception of the opportunity which the trust position offers for producing the desired results. -

204

-

205

This process is a conscious one and is in fact quite different from "unconscious” activity in a psycho­ analytic sense.

The results which can and may he obtained

by trust violation are, at the time of the violation, known to the trusted person.

The fact that they are consciously

known is what makes them significant in trust violation. Although the results which are desired by trusted persons are uniform

the solution of a non-shareable problem in

a specified manner

, it is the application of a "significant

symbol" to the relationship between the trust position and the desired results which produces trust violation.

Such

symbols cannot, by definition, be applied unconsciously. Those violators interviewed indicated that when the urgency of the consciously desired results is pitted not against conceptions of trust as they are held in the absence of a non-shareable problem, but as they are held when the relationship between the desired results and the trust position has been perceived, trust violation results.1

The

This sequence may be likened to the process which Linde smith observed among drug users who recognize with­ drawal symptoms as such but attempt to refrain from using opiates to relieve them. He points out that the persistence and intensity of withdrawal distress may wear down the firmest resolution and that the "temptation to use the drug to seek relief is strengthened by its availability and the individual’s failure to see that any moral issue is involved. He persuades himself that it is logical to take a shot, that there is no danger, that he is not being trapped thereby." A. K. Lindesmith, The nature of Drug Addiction,' unpublished Ph.D. Dissertation, University of Chicago” !938* p. 112. Just as the drug user rationalizes

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language categories in terms of 'which such perception is made are necessarily socially derived. Selection of the Crime by Violators We have observed that the trust violator, unlike the confidence man or the professional thief, Violates his own code of values.

As a member of society and particularly as

a trusted person he accepts certain standards of behavior, including an ideal of honesty, which later come into conflict with the practical observation that his trust position can be violated.

Not all trust violators refuse,

at the time of the initia.1 defalcation, to define them­ selves as criminals, but all of those encountered refused c to give up their ideal of honesty. Analysis of trust violators* rationalizations thus becomes extremely important Since it helps to make understandable the seemingly unexplainable fact that although most violators have had as many objective opportunities to steal, rob, or burglarize as they have had to violate a position of trust, they have not done so.

his further use of the drug, the potential trust violator convinces himself that he will merely borrow the money, that it is really his anyway, that it is only logical to do so even if it is illegal, and so on. cited:

2Cf. the title of Peterson*s article previously "TOy Honest People Steal.”

207

The accountants, business executives, and independent businessmen interviewed, for example, reported that they at no time considered the possibility of stealing or robbing to obtain the needed funds.

Even a man who had been

convicted for fraud or embezzlement as many as three times expressed the idea that crime of any other sort is repulsive to him.

Many other persons convicted for trust

violation expressed this same idea by saying, "Well, at least I didn!t hurt anybody," or nl could never steal under any circumstances, it is against my nature," just as confidence men consider their behavior to be less repre­ hensible than that of a thief and express this by saying, "Well, at least I gave them a chance to say 'no.1"

Three

of our subjects spontaneously stated that "it never occurred" to them to deliberately "steal" from their victims, although they "had many opportunities" to do so.

Most of

the company officers and independent businessmen interviewed gave similar reports, saying that if they had really wanted to "beat" their victims they could have obtained many times the amount of money converted.

This was not done, they

said, because it was not their intention to bilk the victim out of his money but only to use his money temporarily.3

^In a casual remark one ex-businessman expressed in a very naive way, our own observations in this respect; "The embezzler is underpaid or not getting enough to meet his obligations but he doesn't have stealing in his heart so he gets the money with the intent to pay it back."

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In the same way, trust violators usually consider the conditions under which they violated their own positions of trust as the only ”justifiable11 ones, just as they consider their own trust violation to be more justified than a crime such as robbery or burglary.

The individual

who embezzles by ’’borrowing because he needed the money11 looks with some contempt upon an embezzler who he thinks embezzled "in order to try to make a killing” or ”in order to keep some woman” just as he looks with some contempt upon burglars.

There is genuine confusion in the minds of

trust violators as to what constitutes a criminal violation of trust, even after they have been apprehended and convicted.

The attitude often Is that any intent other

than to deprive the trustor permanently of his money or property and with a minimum of effort to cover up the defalcation is not criminal intent.

While, as pointed out

earlier, those men who claimed that they were entirely innocent of the crime for which they were convicted were eliminated from the study, many men admitted converting the funds in question, but denied their guilt on the ground that no criminal intent was present.

The assumption of

many trust violators, even when they are in prison, is that only those persons who are not ’’merely borrowing” or who are "spending the money foolishly" are real criminals. Similarly, when the trust violators were asked to comment on the general cause or causes of trust violation

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they ordinarily responded with popular explanations and then disagreed with these explanations by saying that their own case was an exception to the general rule.

Practically

every theory of criminal behavior which has been advanced in the literature, ranging from a theory that crime is due to innate depravity or some form of mental abnormality, to the theory that crime is due to association with criminal behavior patterns, was held by some trust violators. Certain details of popular notions about trust violation were disputed on the basis of personal experiences, but, rather than considering that the popular notions could be incorrect, the trust violators considered their cases to be mere exceptions to the general rule.

This is under­

standable in view of the fact that the rationalizations which are applied are of such a nature that the subject does not look upon himself as a trust violator, or at least not as a trust violator as such persons are ordinarily portrayed. < ■

We see, therefore, that this type of crime is selected by the trusted person on the basis of the rationalizations which are available to him.

Just as the

absence of rationalization for theft or robbery will preclude the perception of those crimes as offering a solution to a non-shareable problem, the absence of other rationalizations will preclude the perception of trust violation as offering such a solution.

The situations

210

vhich for trust violators are appropriate for the commission of crime are not extensive*

Instead, the object of their

criminal behavior is specific, and it must he obtained in a specific manner by a specific form of crime. Personal Traits of Violators The theory presented implies that the personal traits of trusted persons are significant in trust violation only insofar as they affect the processes described, and it is therefore in disagreement with theories which explain crime by means of personal traits.

Minor personality deviations

and emotional disturbances could affect the individual's structuring of a problem as non-shareable since persons with certain emotional defects conceivably structure as non-shareable certain problems which other persons do not so structure.

A rather "withdrawn" or "introvertive"

person probably might not be willing to share with his associates problems which persons not possessing those traits would share.

A non-academic person who had had

contact with a wide variety of trust violators described them as follows: The employee who embezzles money is generally the quiet type. He does not like to talk with other people much. I mean to sit down and talk over events of the day. He does not joke and kid around with other fellows. He is likely to be a good boy, a good man, and have an excellent reputation. He is generally the person who will be least likely to be suspected of any one in the bank.

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A trust violator used similar language when describing the differences between himself and an hypothetical person, who "stole” the amount of money the violator converted: When you first come in here you wonder if you are like the other people in here and you ask yourself if there is any difference. l Tve come to the conclusion that I am more of an opportunist whereas they plan their crimes. Also, I have tastes above my pocketbook, and my I.Q. is higher. I had an opportunity to see people who lived way above their means, and I knew how they were getting the money to do it. The two kinds of criminals have entirely different kinds of personalities. The difference is between an introvert like myself and an extrovert like a robber. They are more or less aggressive and inadequate. Even if this kind of observation is accurate, however, there is always the question of whether such seclusion precedes or follows the initial defalcation. A person having "guilt feelings” about certain aspects of his experience would probably structure that area of his behavior as not being shareable with hisassociates, so that such feelings would also contribute to the presence of non-shareable problems.

Persons who

may be described psychologically as being frustrated, having tensions or in a state of emotional conflict because of certain occurrences might behave similarly. Such personal traits of trusted persons therefore also could be relevant to trust violation in that they would affect the structuring of certain problems as non-shareable. They could not be considered as "causes” of trust violation, however, since the perception of the relationship between

212

the non-shareable problem and the position of trust does not depend upon the possession of certain personality character­ istics*

We do not deny that personality differences between

trust -violators exist, but we maintain that our generali­ zation refers to aspects of the behavior of trusted persons which do not vary from individual to individual. A trusted person who has a problem which he feels must be met while he at the same time considers the problem as one which cannot be shared, may be described in psychological terms as being in a state of frustration, of conflict, of tension.^

Also, persons who construe their

problems as being especially impinging could be described as more frustrated, more tense, or in a state of more severe conflict than persons who do not so construe their problems.

The non-shareable problem concept, however, has

certain advantages over these.

(1) It is verifiable by

the simple expedient of observing the languaged used by trust violators.

(2) It was suggested by the trust

violators themselves and was therefore derived from data rather than being "imposed” on it.

(3) It emphasizes

the fact that the attitudes and values of persons other than trust violators are of significance in trust violation.

^Lottier's theory, expressed in part by use of the psychoanalytic construct "tension'1 could easily be restated In terms of non-shareable problems. The one case which he reports in detail, at least, verifies rather than refutes the validity of our construct.

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Persons with severe personality and behavior disorders do not qualify for inclusion in our generalizations since many psychotic persons are not considered to have criminally violated their positions of trust even if they have taken their trustor’s funds.

Persons who are not socialized or

who are legally psychotic do not possess the '’responsibility'1 necessary for crime, hence their behavior does not fall into the category being explained.

Even if we ignore the

legal definitions of responsibility* however, many psychotics could not become trust violators in the sense which we have been using the term.

The ability to hold a position of

trust as well as to violate it presupposes the ability to assume the attitude of the generalized other.

This

ability, in turn, presupposes to ability to control language symbols, and such ability is lacking in psycho tics and very young children.

5

Mental abnormality could not,

therefore, be used as an explanation of trust violation. Our theory also implies a complete disagreement with those authors cited in Chapter I who characterize trust violators as deficient in logical thought or in will power.

The trusted person does not become illogical

or irrational to the extent of losing his powers of choice, but instead he chooses a course which is defined for him

The ability to control language symbols seem to be co-extensive with the criminal lawyer1s conception of 11responsibility,” i.e., young people and insane persons do not commit crimes.

214

by groups other than those which such authors have in mind when they write that he behaves illogieally.

The desire

to clear up a non-shareable problem by violation of trust is no more irrational or illogical than is the desire for business success (sometimes the two are the same), and the means selected for meeting the desire is equally logical to means which are selected for improving one's business. The trust violators' thought processes are no different from those of other persons. Social Characteristics of Violators "Social traits" of trusted persons, such as age, sex, race, religion, nationality, and socio-economic status also are significant in trust violation only as they affect the process described.

Social factors such as average age

ahd social status are higher among trust violators than among other types of criminals because of the nature of the requirements for obtaining positions of trust, not because such traits, as such, have significance for trust violation. Similarly, a person's race or nationality in some instances determines not only whether he obtains a position of trust, but the kind of position he obtains. Such traits, however, may affect the structuring of a problem as non-shareable or may affect the other events in the sequence just as they affect the person's chances of obtaining a position of trust.

For example, a

215

trusted person of low socio-economic status, such as an oil station attendant, probably would not structure as non-shareable a financial problem arising from obligations to a mistress as readily as would a person of higher status, such as a teller in a bank, since such obligations might not be severely condemned by the former's groups.

We

already have indicated how characteristics such as marriage state and socio-economic position have an affect on the rationalization which the trusted person applies to his own conduct and therefore on the form which the violation of trust takes.

Also, in Chapter III we indicated that the

ascribed obligations for some trust positions, generally those occupied by persons of higher status, are different from those for other positions.

As a result, the problems

structured as non-shareable by persons in these positions are not the same. The theoretical explanation of trust violation which we have proposed does not neglect or eliminate any of the 11factors" which have been enumerated by those persons attributing embezzlement to a number of ’'causes'1 such as gambling, extravagant living, extraordinary family expenses, and the like.

Instead, the factors have

been organized, and the observation has been made that persons who violate trust, whether or not one or more of these factors are present, have in common the experience with the process which we have described.

Thus, one who

216

lives extravagantly will not necessarily violate a position of trust which he might hold, hut a person who lives extravagantly might construe a problsmin this respect as non-shareable, so that it becomes a part of the process which is necessary to trust violation.

The theory,

therefore, accounts for some of the 11immoral" or "unusual** behavior of trust violators although these modes of behavior are not used as explanatory principles.

In fact,

it appears that when they are used as explanations of trust violation they merely indicate lack of understanding of the problem, so that when the behavior in question is more closely scrutinized these modes of behavior have an entirely different significance than they do when trust violation is treated casually. Trust violation, as a class of crimes, cannot be considered as "white collar crime."

Sutherland has defined

that type of crime as violation of law by persons of respectability and high social status in the course of their occupations.

He does not intend the concept to be

definitive, but uses it merely to call attention to crimes /C We do not mean to imply that statistical studies of personal and social traits as selective factors in trust violation have no place. A study, for example, showing a relationship between the presence of certain personal and social traits and the structuring of a financial problem as non-shareable would be extremely valuable. What we wish to imply is that such studies of selective factors, even if properly carried out, do not solve the problem of etiology. Cf. A. R. Lindesmith, Opiate Addiction, op. cit., pp. 157-158.

217

which are not ordinarily included within the scope of criminology.

7

The significant characteristic about this

type of crime is that it is not associated with poverty or with social or personal pathologies which accompany poverty. While the crimes of trust violators are committed in the course of their occupations, many of the violators encountered cannot he considered as persons of high social status or as respected persons of the community.

While,

with a few exceptions, the persons interviewed were in no sense poverty stricken, holding positions which at least provided them with a regular income, neither can they he considered as persons of high social status in the sense that Sutherland uses the phrase.

Most of the crimes of

independent businessmen and of trusted employees who took money over a period of time could he considered as white collar crime, hut hardly any of the crimes committed by absconders could he so considered.

The category of behavior

which we have studied includes both white collar crime and crime as it is ordinarily conceived. Prevention and Recidivism The theory which we have presented has few implications of a practical nature either for prevention and detection of trust violation or for treatment of

?E. H. Sutherland, White Collar Crime, op. cit., p. 9 .

218

apprehended o f f e n d e r s O n a theoretical level, the crime could he prevented by the elimination of non-shareable problems among trusted persons, by elimination of any information about the fact that positions of trust can be used for solving non-shareable problems, or by the elimination of ideologies which hold that positions of trust may be violated "under certain conditions.

Since the

verbalizations which the trust violator applies to his own conduct are necessarily dependent on contacts with persons who define some situations as appropriate for crime, trust violation cauld be eliminated, on the last level, by eliminating the persons sharing verbalizations of this kind, by eliminating the verbalizations themselves, or by isolating trusted persons from the individuals sharing the verbalizations.

It is not conceivable that any of these

measures could be taken without completely revising the economic and political institutions of the culture. Recidivism, or the lack of it, may be considered from two points of view;

the availability of trust

^Since the criminal violation of financial trust has been seen to be incidental rather than essential to the violator's general life organization, trust violators may be classified generally as "episodic offenders,'1 using Ploscowe's terminology. He puts into this classification persons who are generally law-abiding but who under stress of a specific set of circumstances or "temptation” commit a criminal act. The circumstances may never arise again. He specifically includes in this category the "trusted clerk, cashier, or secretary, who after many years of faithful service succumbs to the temptation of taking his employer's money." M. Ploscowe, Crime and Criminal Law, New York, 1939, P* 8 .

219

positions (and hence of objective opportunities to violate trust) to the known violator* and the change or modification of values* if any* which legal definition and treatment as a trust violator entails.

Since our theory assumes a

position of trust* it has no implications in respect to the availability of such positions to violators.

We

might indicate* however* that although it is often assumed that persons with a criminal record are unable to secure positions of trust because bonding companies will not insure them* our subjects indicated that this is not necessarily the case.

In the first place* only 18.4 per cent of the

violators interviewed were bonded* indicating that there o are many positions of trust in which no bond is needed. Second* of those violators who were bonded, only three were under personal bond.

The large proportion of those

bonded were under “position1* or “blanket" bonds and as a result their personal histories had not been investigated before the bond was issued. The theory would imply* however* that official treatment as a criminal* whether by incarceration* probation* or merely arrest* would be important in preventing further trust violation only in those cases in which the violator has not at the time of apprehension readopted the values

935.2 per cent of the long-term violators were bonded* as compared to 19.2 ,per cent of the absconders and 4.5 per cent of the independent businessmen.

220

of those groups with which he identified before he came to conceive of himself as a criminal.

Most violators who

conceive of themselves as criminals after they get 11in too deep'1 are "reformed11 even before they are apprehended.

As

we saw in cases of long-term violators and absconders, however, a conception of self as a criminal in some cases results in the adoption of the values of a criminal group rather than in readoption of the essentially anti-criminal values of the groups with which the person identified before he came to think of himself as a criminal.

If the

former occurs, or if at the time of apprehension there is no conception of self as criminal or of the behavior as crime, official treatment as a criminal has variable results.

It might (1 ) influence the violator toward

readoption of the attitudes of his pre-violation groups, and hence toward abandoning his rationalizations, (2) influence the violator toward becoming a "hardened criminal," one who uncritically accepts the rationalizations and justifications of the criminal world and applies them to his own conduct in or out of positions of trust, or (3 ) have no effect. If, for example, in prison or anywhere else a person who had rationalized that he was "borrowing" comes to recognize that in using that verbalization he justified a criminal act to himself, he probably will "reform" to the extent that he will not be able to use that rationalization

221

for additional trust violations.

However, the violator

may find that in prison his associates do not censure his behavior in the manner that his former associates did, and he may then adopt the values of those persons rather than those of his former groups.

Finally, he may he so

firmly convinced that his behavior was not dishonest or was justified that he will neither give up the rationali­ zation nor accept from either legal authorities or criminals a definition of himself or his behavior as criminal. It would also follow from our theory that after having been officially treated as a criminal, concealment of that fact from a trustor in securing a new position of trust would in some instances make trust violators "bad risks," for the reason that a non-shareable financial problem might be present from the beginning.

¥11116 this

would not in itself produce trust violation, we have seen that it may be considered as a "first step" In a process which does produce that crime.^

It also would appear

that for a person who at the time of his release from

100ne of our cases (Case 19) was of this kind. It involved an accountant who, while on probation for embezzle­ ment, embezzled funds from his second position of trust In order to make restitution payments to the first victim. Prior to the embezzlement for which he was given probation he had had an exemplary record. In both instances he used the rationalization that he was merely borrowing the money. He explained that he would not have been able to obtain the second position if the new employer had known of his criminal record. When he could not meet the payments of restitution, a condition of his probation, he "borrowed" from the second employer.

222

prison has never looked at his behavior as criminal, the

*

perception of the position of trust as providing a solution to a non-shareable problem would be easier than it would be fore a novice.

Finally, abandonment of the original

rationalizations does not necessarily mean that an ex­ convict will not commit new trust violations since he may, after release, use different rationalizations in such a way that he does not look upon new criminal behavior as criminal and does not, consequently, fear imprisonment or other punishment. Fluctuations in Trust Violation Rates Because of fehe relationship between the non-absconding trust violator and his victim, it is extremely difficult to estimate the amount of trust violation existing at any given time.

The victim often does not know that he is being

defrauded and there seems to be little doubt that the violations which are treated officially represent a relatively small proportion of the total number of violations which are taking place.^

Lie detector tests of the employees of certain Chicago banks showed that twenty per cent of them had taken money or property, and in almost all cases these tests were supported by subsequent confessions. Similarly, lie detector tests of a cross section sample of the employees of a chain store indicate that about seventy-five per cent had taken money or merchandise from the store, F. P. McEvoy, "The Lie Detector Goes Into Business,n Readers1 Digest, 38:69* Feb., 19^1* cited by E. H. Sutherland, White Collar

223

Official reports, however, indicate fluctuations in crime rates for embezzlement, and specifically they indicate a rise in the rates during the last economic depression.^ If we could ascertain that there was in fact a rise in embezzlement or trust violation rates during this period, rather than a rise In the arrest rates, then this fact also would be at least partially understandable in the light of our theory.

While for the most part that theory is stated

from the point of view of the Individual trusted person rather than from the point of view of social organization, it does have some implications for explaining rate variations. We may speculate, for example, that a high incidence of trust violation during economic depression follows financial failures or reversals which produce a high incidence of financial problems which individuals structure

Crime, op. cit., p. 11. Cf. F. E. Inbau, "Scientific Investigation in Criminal Cases," Jour. Crim. Law and Criminol., 2 4 : l 4 o - l 4 8 , March, April, 193^ Also, the ComptroXer of Currency reported that about three-fourths of the national banks examined in one period were violating the national banking laws and that dishonesty was found in 50.5 per cent of the national bank failures in the years 18§5-1899, and 61.4 per cent in the years 1900-1919* E. H. Sutherland, Principles of Criminology, op. cit., p. 37. Similarly, the Incidence of trust violation among the employees of clients of surety companies is undoubtedly higher than the incidence known to the police. 12rphe number of convictions under the national bank law for embezzlement and related offenses increased from 42 in 1915 to 51 in 1922, to 86 in 1923, to 107 in 1930, and to 241 in 1931. Ibid., p. 36. In the years 1925-1929, 43 men were committed to the Illinois State Penitentiary for embezzlement; in 1930-1934, 78; in 1935-1939, 43; in 1940-1944, 32; in 1945-1948, 31.

22k

as non-shareable, thus setting into motion the process necessary for trust violation.

We also may speculate that

in the boom period preceding economic depressions many persons who would not have otherwise done so come into contact with definitions of situations in which trust violation is sanctioned, since many of them are able to observe that persons are accorded high status on the basis of having made large sums of money, even if that money was obtained by illegal means. Our generalization is not, at least, in conflict with those theories which indicate that crime in general is due to social disorganization and culture conflict.^ Instead, it organizes the relative facts in a social psychological framework rather than in a cultural sociology framework.

The fact that a person may apply to his own

conduct verbalizations which allow him to violate his position of trust while at the same time maintaining a position which severely condemns other kinds of criminal behavior is itself indicative of the fact that his culture is not homogeneous in regard to violation of the criminal law.

■^These concepts are ordinarily used by sociologists to identify the situation in which a society is so organized that different groups in it hold variant values in respect to desired goals and in respect to appropriate means for attaining those goals. Criminologists use them to indicate the situation in which these groups hold variant values specifically in regard to consistent law-abiding behavior.

225

Conclusion Trusted persons confronted with non-shareable problems act in terms of information and rationalizations which are present in their culture.

In their experiences

in that culture they have learned that trust positions have inherent possibilities for illegally obtaining funds and have become acquainted with a variety of verbalizations necessary to such violations.

In the situation containing

a non-shareable problem those trusted persons who violate their trust apply these cultural symbols to themselves while those who do not violate are not able to do so. The following essential steps, then, are necessary to the criminal violation of financial trust by persons who have accepted such positions in good faith: 1.

The structuring of a financial problem as one

which Is non-shareable and which, consequently, must be solved by secret, private, and relatively safe means. 2.

The perception of the trust position as

providing a solution to this problem, as capable of producing the desired results.

Thisrequires (a) knowledge

that the position can be violated to achieve such results and (b) the application of socially provided language symbols termed rationalizations to the situation. The movement of a trusted person through these steps results in the criminal violation of his position of financial trust and without passage through these steps trust violation does not occur.

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226

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