Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1832-10-23

I
inand Tor stock had not originally been such "a al
the subscription atpdr yet by these devices it made
1911 it sold 1856 for shares OF 800! 1t acrw ards
declined so thatin January, 1872 it $40 Aer
the Report OF the Committee, il fell TO SS Here
iiucu"on OF siryeigM Fer cent in the price property
/ by the gambling speculaOns OF this national bank!
lew extracts from that part of the testimony taken by
the Committee oflsl9 which relates TO buyinc and sell
ing oil The stock, VIII exhibit, in strong light the charac-
ter of this institution, and the TO which it is made
subsrrtien
Jonathan Smith, the Cashier, stated that
Gle has purchased and sold good deal of stock al
different times He was at time, gamer, perhaps of
SooOoo but he has purchased stock higher than
ne ever sold, aud upon the whole, he believes he has
peen 'oser-"ln November, 1916, he made contract
with A. Smith, for the sale of 1000 shares deliverable
IN January, 1918. lie gave credit at the same time
for twenty dollars advance on each share; he does not
recoect whether the stock was actually transferred or
whether he paid the difference, but thinks the latter was
we case; stock had risen 10 at least $780,
mus we see, that this National Bank perhaps more
properly called Gamblers Bank, enabled OF lis Off
GERS 10 make FIFTY THOUSAND DOLLARS, which,
an unfortunate turn OF The die, he again lost In
Gie contract, between Director of the Bank and the
Tor one thousand shares one party makes $4,000
ana the other S3O0OO in consequence of the increase in
the price OF STOCKS brought about by their manage
mentl
10 see how many Of these spccuatons were managed
| read the following
Thomas M. Eoen, among other things stated that
"a contract was originally made by Dennis A. Smith
Bank going into operation. 1t made in the name of
Mr.. hooeuet, guaranteed by Mr. Girard by which he
10 ~ a. Smith 1000 shares
10 inc second hstameni; the first iustament had been
paid by Mi Girarl: ID. a. Smith applied to Mr. Even
Hae aud DAWSON TO complete the purchase; they obtain
ed loan OF 900 the same stock by which thev
pdd FOR the Stock and The second the third
mstalnent was completed in the same tcdy By loan of
me Bank oil $4,000, together making SlO00OO after
the third insalmcn Q5th June fslS) it was transferred
| TO Smith and Buchanan
Upon these 1000 shares il is obvious that the first install
mcnt OF $l2O,OOO paid in by Mr. Grard, was drawn out
by Smiths agents TO buy the stock with and the ID and
Oh Instruments, OF $4,000 oach wholly paid BY
STOCK notes so that there was not dollar in Bank
count oil these 1000 shares Yet they held in this
way, without the payment of dollar, except the inte-
resi- ON me stock notes, until they might have been sold
~ more ,han oI per cent advance, yielding prof, to
One other extract must suffice.
James w. NC CtL0ch stated, that ga purchase of 1000
SHARES was made by d. A. smith, George Williams and
smith, and Buchanan, receivable of VIM. W Smith n
oroker ana The Commercial Bank Phadelnhia il was
the intention OF those gentlemen, the stock rose TO pre-
som ueh 10 lIam Jones' without whose knowledge the
purchase had been made Mr.. d. A. Smith contrary 10
he purpose oil the gentlemen who concerned with
nun, anu as they thought prematurey after the stock had
risen few dollars, mentioned the transaction TO MIR
Jones' who accepted the purchase, and considered the
stock as his own; he thinks that Mr. Jones received The
assignment OF the contract aud sold without having the
STOCK transferred TO him; he sold profit of about
$4,000, as Mr.. McCulloch recollects."
Here Is the President of the Bank concrrinq in all the
measures 10 raise the price of the stock and making FIF
TEEN THOUSAND DOLLARS by single purchase
and sale, made in other natnes
However, the career of this band of snecua,ors did M,
last long In two years they brought the Bank TO the We
y Drink oil bankruptcy and ruin. They the precpice
to which they Fastening, and i'm juy 1878 ordered
rapid curtailmens OF their business The pubc oo tb
alarm; an investigation ordered by Congress: the mi
9es OF The Institution were partially developed; the
President and several of his associates resigned new
Board was formed; and in March, 1919 Langdon Cbeves
ESQ., entered upon his duties President of the Bank
The business OF the Bank had been curtalcd sc $50 $50
upwards oil TWO millions OF ito funded debt had been Sold
the $I3ll75O OF specie which had been impored were
gonei and on the 18th April 1872 the principal Bank had
In its vaults only $71 ,522 H. when it owed the Civ
Banks OF Philadelphia balance of &C. besides lis
dePvi,US AID notes liz circuiation-The Philadeohia
Banks could have stopped it in day. From This periIous
suaon the Bank relieved hy The arrival Of sss6o
600 in specie from Ohio and Kentucky.
The Government had favored the Bank much as pos
Olc The public deposes 81, 273 $50 45 no calls were
made upon them, which could be avoide and vet was
Tor some time matter of doubt whether the hole nonev
ana power OF The Government could preserve from
suspension oil specie payment. BY the careful ma
nagcment, by the aid OF the Treasury and by procuring
loan OF $4,000 coo in Europe, Mr.. Cheves Succeeded in
saving the Bank, and retrieving its affairs. 1t was not
effected, however, whOMtheavy losses to the Government
as well as the other stockholders. From july 1919 To-
January 1921, inclusive dividends were declared In
july 1871 tc dividend was but l2 per cent; in Janua-
ry 1922, il was per cent; and in July of that wear ID
During all that PERIOD the Government was paving The
Bank per cent on the millions of stock which
Hu SUBSCRIBED as part OF the capital The amount thus
paid, exceeded the receipts OF the government from tho
Bank during the same period, $S22,5OO. Deduct from
THIS, $l92,OOO nett profit which the Government had re.
ceyed prior to July lSl9 ana will show in July 1922
deGd loss TO ne G95e'nmelt on account Of This Bank
FIVE HUNDRED DOLLARS! This sum was ocfJ,'
ally paid out of the Treasury, 10 sustain Bank which
u Is pretended, Is necessary to sustain the TTeaSurU
The losses OF the Bank, through the stock obbine Di
recofs, ana other officers and their friends prior 10 March
1872 exceeded $500 600, when the entire profits of ali
Its banking operations, excluding the interest nm
the public debt held by it, were but So O6I Az OF or
this loss the of l67i 22l 81 was at the Baltimore
Branch The following is a short account which Mr.
Cheves gave of tina; affair, in 1922:
"ln the Office at Baltimore, of which James A. BucIa-
nan was President, and j. W McCuoch was Cashier
there where three millions OF dollars discounted or
appropriated, without any authority and without the
knowledge Of the Board OF the Office or that of tho ma
rent Bank s. Smith and Buchanan, of which firm I
A. Buchanan was a member, James W. McCuIlocb and
George Williams, (he latter member of the parent
board by the appointment Of the government had obtain
ed the parent Bank discounts, in the regular and accus
toned manner, to the amount of 957 700 ON nedge =,
49, 2oO shares stock OF the bank. These men, without the
knowledge OF either Board aud contrary TO the resolves
and orders OF The parent bank took of the Office at Bal
umore under The Petence OF securing it by pledsng the
surplus value oil The stock, already pledged al the parent
bank for its par value and more and other like
over which the bank had CONTROL the sum Of $40 600
this formed part Of the before stated 10 have dis
counted by The President and Cashier OF the Office with
out authority" ~
BY applying all the profits Of The Bank 10 That object Cor
two years about SO 200 900 Of these losses were made I'm.
but there deficiency in the capital of the RAM
nus actually paid, premium four millions Of per cent
stocks actually paid, and cost of banking houses which
PTonaoiy not entirely repaid 10 this day!
lhee details are important 10 enable the peope 10 nm
IersIahd what uses made Of this Bank which bears
her name, and is pretended to be essential 10 their in.
tercsis ana The due administration Of their government fl
val be found important in another particular There are
striking ahaogics between the and condition
OF the Bank prior to March 1919 and at more recent ne
Rod, which we shall endcavor to point out.