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August 17, 2012

Historical Echoes: Famous Storyteller a Victim of Bank Mismanagement

Amy Farber, New York Fed Research Library

O. Henry (William Sydney Porter), one of America’s most beloved short story writers, is famous for ending his stories with a twist. As it turns out, his career began with a twist; he became a serious writer while in prison for embezzling funds from The First National Bank of Austin, Texas, where he had been a teller. The facts of his criminal record and imprisonment were suppressed until a few years after his death, as described in a 1916 article from the New York Times.

For people today with an interest in bank supervision, the most interesting part of this article may be the description of the management of the bank in question:

On January 21, 1891, O. Henry, or as he was then called, William Sydney Porter, became paying and receiving teller of the First National Bank of Austin, Texas. He had written anecdotes and jokes for the papers, but was not at that time known as an author. It appears that the bank was carelessly managed. The patrons used to enter, go behind the counter, take out one hundred or two hundred dollars and say a week later, “Porter, I took out $200 last week. See if I left a memorandum of it. I meant to.” The affairs of the bank were managed so loosely that Porter’s predecessor was driven to retirement and his successor to attempted suicide.’s article about O. Henry indicates that mismanagement of that bank, rather than actual criminal behavior, was the real cause of the case brought against him. O. Henry Biography, written soon after the writer’s death, demonstrates through interviews with the jurors that O. Henry was innocent of embezzlement but guilty of fleeing arrest. John Miller’s 2010 Wall Street Journal article, “His Writers’ Workshop? A Prison Cell,” suggests that O. Henry may never have become famous if not for the mishap with the law and his time in prison. The article is very good synopsis of his life and reputation.

Did banking or bank crime themes ever find their way into his short stories? Yes. In addition to the story “A Retrieved Reformation,” which features a bank safe cracker, “A Call Loan” is a story about a bank examiner and a bank manager. An excerpt:

“The bank checks up all right, Mr. Longley,” said Todd; “and I find your loans in very good shape with one exception. You are carrying one very bad bit of paper—one that is so bad that I have been thinking that you surely do not realize the serious position it places you in. I refer to a call loan of $10,000 made to Thomas Merwin. Not only is the amount in excess of the maximum sum the bank can loan any individual legally, but it is absolutely without endorsement or security. Thus you have doubly violated the national banking laws, and have laid yourself open to criminal prosecution by the Government. A report of the matter to the Comptroller of the Currency which I am bound to make would, I am sure, result in the matter being turned over to the Department of Justice for action. You see what a serious thing it is.”

It is not remarkable that someone famous for something having nothing to do with finance could have at one time worked as a bank teller, for there is quite a list of such people:

Scott Adams (“Dilbert” comic creator)
Pat Benatar (singer)
Sally Benson (novelist and screenwriter)
Jim Corbett (boxer)
Paula Deen (southern chef)
Will Ferrell (actor, writer, comedian)
Whoopi Goldberg (actress, comedienne, talk show host)
Wallace Hartley (band leader on the Titanic)
Raymond Romano (actor, writer, comedian)
Walter Slezak (character actor–recall “Lifeboat”)

The number of famous people who did time in prison is doubtless a great deal longer.

The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.

Amy Farber is a research librarian in the Research Services Function of the New York Fed’s Research and Statistics Group.

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