It's a Wonderful Life: Question about the Bank Run

Cafe Society
61

Okay, big overly long explanation below, but two points. There is surely not a slot on any balance sheet for “mishandled cash” and in those days I believe most businesses used a double entry system which meant that different pieces of papers had to balance out someway. I am only vaguely aware of it existing and my only experience with it was when counting the offerings at churches and afterward making the deposit. You entered monies and checks by totals and added down – and in another section added checks and monies by amounts or bill denominations and added across - and the totals had to match. (It did save many from making mistakes of oversight almost every week.)

In the movie the warrant was for the only thing they could prove – the money was missing. Once George was under arrest they could investigate why the money was missing, whatever the cause turned out to be, those charges would be added later.

As for Uncle Billy being called a fool – I was right there with you. After I was older I saw that it was a device Capra used to show how extreme the situation was. If level headed, calming influence George was this upset and this disrespectful to an elder, a family member, and business partner – then this was pretty damn important.

To this day I get so frustrated when that scene where Uncle Billy hands the money to Potter occurs!! It is so very, very foolish, wrong, inappropriate, rash, dunderheaded, iladvised, etc, etc, etc!!! But I have seen people do equally stupid things with smaller sums of money. I am sure I have done foolish things while trying to one up a rival. That is why this movie is so good in my opinion; the Bailey’s have very little opportunity to one up Potter – EVER! And having a humble Bailey boy on the front page of the hometown paper for winning a prestigious award and meeting the president is a situation “a fella doesn’t find himself in very often” right there in front of Potter. I can’t blame him for needling old Potter – but as you say, you pay attention when you are handing that kind of dough!

Here is my tortured reasoning – Uncle Billy isn’t even thinking of this as B&L money at this point. He is in the bank proper where he came to deposit the money and it is a routine task (before now- bet he never gets to handle cash ever again!) for him and he is distracted for just a second to poke his thumb in Potter’s eye and it is so natural and understandable a bumbling fool would do such a thing it is completely believable.

Overly long example to demonstrate my point:

Let’s try a hypothetical that demonstrates balancing the books. Let’s say you are the manager of a big box electronic store. You are the only one on site who can access the safe. At the beginning of the day, you have say $500 to make up your cash drawers. That is all the money on site, all credit card transactions from previous days has been batched and resolved, all checks and all cash has been deposited. Over the course of the day you make Five Thousand Two Hundred Eighty Four Dollars and nineteen cents ($5,284.19). You also have returns for ironically, Two Hundred Eighty Four Dollars and nineteen cents ($284.19) which balances out your day at the very convenient sum of Five Thousand Dollars Even ($5,000.00).
$5,284.19 Total sales
- 284.19 Total returns
________
$5,000.00 Total daily receipts after returns

Since you are selling BluRay players and LED TV’s in 1920, you do not take any form of plastic and in an unprecedented event for the time, no one paid by check. So the day is over and all customers are gone. You are alone in the office with the safe open and all the money on your desk. That is Five Thousand Five Hundred Dollars Even (the original $500 in the safe plus the $5,000 in sales after returns). You count out the correct amounts for starting the next day – 10-Twenties, 10-Tens, 20-Fives, 40-Singles and Sixty Dollars worth of coins in all the values and put that back into the safe and lock it for tomorrow’s floor manager.

You now have Five Thousand Dollars even on your desk and you still have to make a deposit slip and fill out the end of day paperwork. As long as you deposit Five Thousand Dollars you are fine – it does not matter what bills are used for the deposit. But let us assume this generic ‘you’ is something of a degenerate and spent the previous day at the dog track making two dollar wagers and you won big! In addition, after you hit the night depository you intend to hit the strip club with your buddies for a night of celebration. So you take the Two Hundred Dollars worth of Two Dollar Bills out of your wallet (100 of them) and trade them for Two Hundred Dollars worth of Singles (200 of them). You still have Five Thousand Dollars worth of cash, but different denominations of bills.

You simply fill out the end of day balancing form and the deposit slip with the adjusted numbers of bills in each denomination, file the store paperwork in the drawer, and put the cash and deposit slip into a night deposit pouch and head to the bank on your way to the bachelor party. One important detail: Even though it is 1929, your store has modern cash registers which record every transaction so the owner will know how much you sold and how much you refunded for returns. He will also have access to real time inventory levels because an unscrupulous manager could make a transaction saying he refunded Eighty-Five Dollars for a widget and just give an accomplice the money in exchange for nothing. So the boss can see if there is one extra widget or not in the store room after checking the paperwork. But the day’s sales are there for the record (in 1929 this was done by use of a “tape” – shops only had one cash register and it held a long thin roll of paper that recorded every time the cash drawer was opened so there was a record of every single transaction cash in in black, cash out in red – modern machines do the same thing only digitally).

All of that to say you leave the office with Five Thousand Dollars in cash in a pouch with a deposit slip and Two Hundred Dollars in Singles in your wallet. And now we experience two different realities (as in Sliding Doors –I am told, never saw the movie). In one reality, you see your friends before hitting the bank and they convince you to stop in and have ONE DRINK before going to the bank. In fact, they will escort you to the night depository after one drink. But they don’t; instead you all end up partying WAY too much and at some point they start borrowing money from you. After everyone is tapped out (and it is 1929 so no ATM’s) you decide to “borrow” from the deposit which you will totally pay back once you get home and hit up your secret stash hidden under the dresser. Before long the entire five grand is gone and two guys have been arrested and three more are drunk and unable to find their own home let alone pay you back. But you can still survive this – your neighbor is a loan shark, and you do have that even grand hidden under the dresser for emergencies. You get home and only then remember you took the secret stash to the track the day before and there is only twelve-fifty in the whole place. The shark turns you down and about noon the next day the police show up at your door to see if you are okay, and if you are okay they have some questions about the deposit.

Meanwhile, in the parallel reality, you have one drink with your friends then head to the bank. But on the way you remember there is a high stakes poker game you KNOW you could win but you have never been able to buy in - - - until tonight!!! You go and show them the cash, buy some chips and sit down to play. They keep bringing you drinks and the hostess is delivering them herself and whispering in your ear. She is a rare beauty and totally in to you (and you are naïve and have never heard of a honey pot hustle). Turns out, you are not ready to gamble in the big leagues and you leave there broke and frustrated. You should have quit once you were down a couple of hundred, but you were counting on the next hand to bring you back to even so you could bow out of the game humbled but intact. At least the hostess liked you – except she didn’t, she was slipping you mind dulling drugs in your drinks and she went home with the fat, old, wealthy guy running the game and they split your money. (You thought the other one with the strip clubs was going to be the bad example didn’t you?) About noon the next day the cops show up for a welfare check and if you are okay they have some questions about the deposit. After about thirty minutes of discussion you are arrested and booked for extortion, embezzlement, and malfeasance and some other monetary crimes.

But skipping back to the reality where you partied with your friends, the cops question you for about thirty minutes before your friends start showing up to repay the loans they made from your pouch the night before. Before long you have $4,987.50 back in the pouch. You remember you still have $12.50 on your dresser and you end up perfectly even but you have to write out a new deposit slip because the denominations of the bills are all wrong. The cops escort you to the bank where you make the deposit and your boss meets you there to - - -
– - ask why the hell he was not invited to the bachelor party. There is no crime because you [eventually] deposited the money. You did have to explain the delay, and now you have to socialize with your boss in the future, but for the most part – no harm no foul.

In the gambling example – there is a crime and you do get to serve time, lose your job, suffer an embarrassing scandal, and still have to repay the money over time once you are out of jail.

So the Bank Examiner is akin to your boss.
The Constable is akin to the cops. (Once the deposit was made- all was well.)

The real difference (because a foolish mistake was made in both cases although the severity of the mistake was different) between the two scenarios is that the intentions were good in the first case and your friends dutifully repaid their debts in a timely manner saving your sorry butt. In the second scenario YOU thought you could take the masters and dove into the lion’s den and gambled with money you knew not to belong to you. There was no one to bail you out of those troubles.

George was nothing but a good guy who had been paying into the karma account his entire life and when his business partner made a foolish mistake without having to ask, his friends were eager to help him out this one time. If George had spent the money on Violet Biggs or gambled it away - his wife would not have stood by him and his friends would not have given him the money.

There are no arrests because there were no underlying crimes CAUSING the shortage. In the gambling example above, if the friends had shown up and given the manager the whole $5,000 and the deposit was made, there would be no extortion or embezzlement or malfeasance charges. But the manger would lose his (or her) job, would be subject to prosecution for participating in an illegal gambling syndicate, and possibly for drug use if they took a blood sample and found the Mickey he had been slipped was a controlled substance (for which he did not have a prescription). He would also owe his friends the $5,000 he borrowed to make the deposit; in the other example they owed him the money so he was even at the end of the day.

These underlying causes are what it seems like you are asking about. There is no law against being stupid; as long as you make the deposit that is not a crime. When money is handled sloppily by a financial institution it is almost always embezzlement – no one except Uncle Billy is that incompetent with money. (And technically he DID embezzle the money and what is worse, he turned it over to the institution’s only rival. But when the shortage was made good, technically the embezzlement went away.)

62

George tells the guy who wants his $200, that if he fills out the form he will get his money in two weeks like it says in the agreement. This refers to him selling his shares not withdrawing from an account. Since there is a run at the bank those people may lose all their savings so they are trying to liquidate their investments so they have money to live on.

63

A much shorter example.

When I was a fast food manager, during training, we heard a story (possibly apocryphal) of a manager who was taking money to the bank. In order to prevent it from being obvious what they were doing and have the potential of being robbed, they would put the money into a takeout bag, and then go through the drive thru and have it handed out the window.

One day, the manager pulled up to get the money, and got a bag of food instead. When they pointed this out the person in the window, they suddenly realized that the money had gone out to the car in front of them.

I’m sure that they were not too upset about not getting what they ordered.

64

I appreciate the long reply, but I still don’t understand. Let’s start here first: Uncle Billy did not embezzle that money. He did nothing criminal with that money. He was simply an idiot who lost the money. Are you asserting that what Uncle Billy did was a crime?

65

Boy oh boy, Mr. Potter and his driver never miss a trick do they?!?

Now-a-days most drive thru’s have video images of the drive thru which makes a point of catching the license plate (from behind because some states only require rear plates) so a remedy might be attempted. If law enforcement went to the address of the registered owner of the vehicle and found two guys passed out with tons of recently purchased booze and lottery tickets that may be a clue.

On the other hand if a car pulls into the drive-thru with cardboard taped or bolted over their license plate it might be a good idea to treat them with suspicion. But perhaps they didn’t have the cameras when you worked there.

On a side note, knowing how proud Central Ohio is of a local boy done good, did you work for a hamburger place named for the founder’s daughter? (Or perhaps a chili place out of Cinnci? Although there not as many of those.)

66

That’s what happened, because we the audience have the omnipresent view.

To someone living in the reaity of BF, the only thing we can say is that Uncle Bily left with the money, and now he “claims” it’s “missing”. Would you believe him when it says it just “disappeared”? The equivaent of over $100K in today’s money?

It would be easy to get a conviction. In this case, it would be wrong to convict him of embezzlement, because we know what happened. But he was beyond the infinity of stupidity. I hope George “retired” him from the B&L.

But we know he won’t. Because George is a doormat. A very kindhearted doormat, but still.

67

How it should have ended

68

I don’t think that they had any intent in the matter. Ordered a single, and got a few thousand.

Nope. And this story would have taken place even before that. This was before we took credit cards, so there was a bunch more cash involved. Now CC’s make up 70+% of sales, far less cash. They also switched to armored car pickup.

Yep, that’s the one. Though my first day as a manager was the day that that founder died. Started going downhill pretty fast after that. Musta been an omen.

I spent a little time slopping chili. I still think that it’s perfectly normal to put chili on spaghetti, though apparently some don’t share that opinion.

69

Sorry, I would be the worst teacher ever! I over explain the insignificant details and gloss over the important principles.

Yes, it is a crime – until it is not a crime.
As officers of the Building and Loan, George, and Uncle Billy, and likely Ma Bailey (perhaps Mary Bailey too) but for sure George Bailey and William Bailey (Uncle Billy presumably) have a fiduciary responsibility. They are entrusted with great leverage over the money of other people (and over the B&L which is as puddleglum points out a collective so it has a stake itself but let’s avoid ‘are corporations people?’ questions here please). As the fiduciary, Uncle Billy mishandled a large sum of money and that is a crime. He needs only the money – or a bank deposit receipt, but he has neither – he has strings tied around his fingers as reminders.

Without doing anything immoral, corrupt, or criminal – Uncle Billy did mishandle a large sum of money. That is the only criminal offense committed and surely the only one that could have been proven at the time. George went to Tru - oops, I mean Potter for a loan, and Potter started speculating why he was short in his accounts. Wine, women, and gambling are always the very first suspects, no one ever suspects a trusted soul embezzled money in order to donate it to the Red Cross or Salvation Army.

In his fiduciary role, Uncle Billy was guilty of “mismanaging” funds, specifically Eight Thousand American Dollars in cash. They proved it in short order because there was neither cash, nor cash equivalent (bond, bank deposit, T-bill, savings bond, etc.) and the ledger clearly stated the money was there two hours ago. He mismanaged it by being snotty to Potter and forgetting the most important thing, not as others (besides Potter who KNOWS! how he lost it) suspect.

It might be that the constable had the authority to issue the warrant, but he surely had the power to exercise the warrant. There was a crime committed, Eight Thousand Dollars of other people’s money was missing – that is a crime. I got caught up in how they were hoping to find some underlying cause to add to the charges, but the warrant was for being short the money only.

So once the money was back safe and sound – the charges were dropped. Law enforcement has the discretion to do that on their own, and yes the paperwork would have to be addressed with the court later – but it would not require an appearance by the formerly accused. There is some element of story telling in the guy tearing up the summons center screen, but it does match reality to a large degree. (He wouldn’t tear it in half – but he would put it back in his pocket and tell George he would fix it with the judge after the holiday.

One little detail I HAVE to address. The thing about “the books”, is that all the entries are verifiable. It is a page of sums with the name of the people on the mortgage for example. Each of those people have a receipt (and that generation NEVER THREW OUT A RECEIPT EVER!! EVER!!). You take in money and give a receipt, you send out and have a cancelled check as proof. You pay someone else they give you a receipt. The ledgers just make it easy to review what happened that day or week or month. To some degree that is kinda what taxes are – a ledger of income received – and taxes (or deductions) paid out. You cannot receive paychecks for $80,000 and claim you only made $45,000 for example. You cannot claim you paid $7,000 in property tax if you only paid $3,800 in property tax.

In a non personal tax situation, you cannot bring in receipts of say One Million Dollars then spend out Eight Hundred Thousand Dollars and call it even (Unless you have Two Hundred Thousand in cash sitting somewhere). So if you write down that you used that last Two Hundred Thousand Dollars on throwing a swanky party – you better have some receipts from or checks to caterers and table rental places that adds up to the correct sum.

Let’s say Uncle Billy DID want to embezzle funds. He would receive a bill from the builder for $3,450.00 and write the guy a check for $4,000 and ask the guy for a new bill for that amount. The contractor would write out the larger bill, cash the check at the bank and pay his employees, then give Uncle Billy Two Hundred Seventy-Five Dollars keeping the same amount plus his profit. The books would balance that way, $4,000 in – $4,000 out, but they split the excess they cheated their fellow members out of. That is how most people cheat on their taxes I am told, by increasing their deductions (falsely) and as much as possible decreasing their income (falsely through cash payments for side jobs etc.)

If the books don’t balance that is a crime also. But once you make them balance, if it says $8,000 deposited on December 23 – you better have a receipt for an Eight Thousand Dollar deposit dated the 23rd!

Still too long! Any more clear? (Believe me, it is easier to do than to explain.)

70

We have gotten a bit off topic here, but it is nice to talk to someone from the (adopted) hometown.

I figured, but I wanted to suggest that somehow Mr. Potter and the guy who pushed his wheel chair around were responsible.

I almost mentioned armored car pick up but that would have led to a paragraph or two about Groundhog Day and Phil’s “heist” because it was set in PA also. Back before credit card readers when stores issued their own cards – I always said a shoe store would have been a MUCH better place to rob than a liquor store because they had a huge cash business and almost no security. When I worked in retail a thousand and a half years ago the big look outs were 1) bad checks (co-worker took one signed “U. R. Stuck”) and 2) grifters either passing bad bills or making money on a making change hustle with a befuddled clerk – or both. One time I must have given this beautiful, sweet young woman $40 dollars in change for a ten dollar bill that was legal tender, but the same day someone else took a counterfeit twenty. Boss was not thrilled that day and we both got to stay after the shop closed for a lesson on running the register!

It is still my favorite national chain! A sad day for all, to this day I consider him a national hero. And I like their chili as much as the more famous one from down south.

Did you go hear The Danger Brothers before games? A couple of times while I lived there I would visit the science museum there then visit the original Wendy’s downtown. We lived in Reyondsburg off of Taylor Road and the now ex-wife worked for one of the limited companies. She graduated from Arizona State (and I grew up less than a mile from the main campus so the Rose Bowl the last year we lived there was really quite an event (either 99 or 2000). I am sitting here in shorts and a tee shirt and missing Ohio. Thanks for the memories (as Bob Hope would say).

71

This is just a much better reply than my own. To the point.
George is the most kindhearted guy ever and that is why he is my hero. I am sure he kept Uncle Billy on, but he was never allowed to touch cash again. Or make ledger entries. Or wait on customers. I presume Uncle Billy was locked in his office and assigned the task of writing the history of the Building and Loan.

72

While I do think it’s somewhat odd, I don’t think it’s much odder than having a full-sized gym in a tiny school, which I’ve seen at least two of, one as a student in a place with 15 or fewer classrooms. Now, when you get to be that large, it makes sense because while the gym still takes up around 1/3 of your space if not more, you’ll still be needing most of it to double as your cafeteria.

What was really odd, though, was the full-sized gym at another school I was only at once, for reasons I don’t quite remember. It only had around 5 classrooms and the gym was over half the school. The back half of the school was just the gym and the front half was two stories, with the lower half being the entrance and the kitchen, the upper half being the classrooms. It probably still made sense, but it still felt weird since it was out of proportion.

73

The filmmakers did try to sort of explain the pool by having the principal tell George, “Putting a pool under this floor was a great idea. Saved us another building.”

Which, now that I think about it, could mean the pool under the gym was George’s idea in the first place.