The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1843-08-11
The Phenix Bank Trials.

funds OF the Phenlx Bank, ut Charestown Mass before
the Mddlesex Common Pleas now sitting at Concord:-
On the meeting Of the court Tuesday morning,
Judge Allen in reference to the pending motion, requr-
ing prosecution to elect the count upon which was
intended to proceed said that he thought not advisable
to decide until the trial had reached more advanced
stage
cepon of the third and fourth counts which we're no1
prosd the preceding day. because they were not accom-
panied like the others against W. and B., wi charges
against skinner as accessory.
In opening the case for the prosecution Mr.. Hunting
ton said under the OF inancering It had become
regular business even with men OF high IN .ns
the bar the whole propertythe entire capital oil the
Phenx Bank hae been rauduenty appropriated by the
defendants, through the of conrummate conri-
and long continued and sngulary adrot deception
The bank chartered in 1882. with capital OF $780,
co., with Wyman cashier In 1886 the capital was IN
creased to $500 0CO and Wyman made presidenwth
salary OF $4,000 per annum, which, in 1885, was raAed
$4,000 in Of loud ca which ne mao re-
ted to this increase with the express understanding that
should devote his time and talents to the interests and
concerns OF the bank They supposed they were dealing
with honest and they placed that confidence in
him which the business OF life requires that man should
place in his fellow man. In the was Brown
trusted and confded in-frs teller and subsequently
cashier, office which he held up to the moment OF
the explosion of the bank about the LIST OF October Ire
had been kept that the most skul accountants
unable to detect the embezzlements as they were
committed from time to time. Upto the month Of Octc.
Encouragement. But the defendant did not at that
time nor at any one time 80 into the vaults Of the bank
and take the S3UUOO0 WymaD DPBanDy small sums
perhaps $4,000, end thus the entire absorption
was a work of time and degrees. Such small sums
could be covered up by Mr.. Wyman-even $4,000 could
be- so great were his resources and high his credit but
when the defalcation amounted to $3oOOO0 he broke
down under it, Yet he proposed with nothing but trash
in the bank pay dividend OF three per from the
earnings of the bank for the preceding six months and
no suspicion was enter ,aned OF him. But Mr. Hurd adi
rector intimated purpose Of examining fsome OF the
directors had not been allowed to borrow upon too little
security and MIR. Hunnewell followed up the suggestion
by ing that the examination would be very thorough
one. Wyman staggered under the announcement and
at last driven TO exclaim-" The truth must come
out The bank is ruined The capital Of the bank is all
gone"
An Investigation commenced Immediately, and Mr.
Wyman produced the unpaid notes. unaccepted checks
and overdrawn drafts Of Messrs Stanley, Reed Co.. TO
the amount OF 1866 00O only 1000 OF which were Sc
cured Some OF this paper had been regularly discount
ed at the board, by the mmendaon and advice OF
Wyman who represented the firm TO be SAFE sound and
responsible hey question. Another portion OF the
loans to 81 Co had not received the approval OF the
directors and had never recorded on the books OF the
bank They were generally demand notes or checks on
banks in which s., r. Co. had not dollar on deposte,
and Wyman knew there were no funds 10 meet them
Hence he never presented them for men and this he
fully unrrservedly confessed to Messs Eunnewel and
Ilurd Here wcs the great outlet through which the
pvnK was ae,rauaed no prepare ,Gr tne hnal c,S MI
evidence Mr. Huntington thought, would demonstrate
this fabrication beyond doubt. That he had exhibited
to the directors one statement, containing special
entry Of treasury notes. while he handed them another
afterwards for signature IN which the amount OF rea-
sury notes especially indicated. In other
words he had boldly and adroity substituted one state.
ment for another, and imposed the unsuspecting d.
rectOrs, who signed the fabricated statement This was
the April statement i'll 1912 They now knew that disco
very was impending over them and they made grab,
which scraped the vaults of the bank bare Between
April and October they took 100000; between
these periods the demand of Stanley. Reed Co.
TO the astounding amount of S25O Yet after the
he on pay the dividend GU, Of his pocket
rather than there should be any disappointment in
BY this proposition he designed to beray the directors
into committing themselves by cooperating In an act OF
consummate deception Could he have involved the d.
the final act of this deep drama Of fraud he
would have shifted the responsibility of the ultimate
ploson from his shoulders to theirs. But they were
honest and promptly rejected the invidious advice
and resolved 10 stop at once.
Mr.. Huntington now admitted that Wyman had proba.
bly, neither committed perjury or forgery and that he
abaned from issuing statements of the condition Of the
bank after 1889 But to Brown he signed and sworn
to the returns of the bank the Office Of the Secretary of
the Commonw wealth, when he must have known the ma
ure ofthe securities held by the bank They in bis
custody and keeping and ali the end contr
vances in relation to them could have been carried
into effect without his knowledge and Uniform assis
lance.
Tho first witness called was John Bolles Esq, Sc.
cretary Of the Commonwealth to testify to the returns
made to his office from the Phnnix Bank.
M pu1 ~ aG hs ,or $3.50 !" y, iSos
the returns. In Sept 1871, Brown signed and swoTe
to return that contained entry that the "debts due
the bank unpaid and considered doubtful, amounted
S767 Is cts"
rhe account of Stanley, Reed Co. at the Bunker Hill
Bank from April lst ls4l to Oct Ist lSl2 during which
period their checks in the Phenix Bank 10 the
amount of $4,000 on the Bunker Hill Bank, when they
had no funds therein.
Their account with the shawmut Bank, from April,
ls4l, TO June Al, showing balances while they had
deposited checks that bank in the Phenx to the amount
Of $4,000.
In the afternoon Mr.. Huntington put in the records of
the bank commencing with the first meeting held under
the charter 1885, and covering the period embraced in
the Indictment, and proving the election of wyman
cashier and as director and presidents and OF Brown as
teller, and afterwards cashier.
In OF the votes Of the directors recorded in 1882
provided tha no credit shall be given to delinquent,
whether as apromisor or endorser.n
Also that committee Of the board should examine the
condition Of the bank once in six months, and make
written report thereon
Also, the cashier during any recess of the board,
might grant discount, by and with the advice and con-
Also the cashier was directed to report all unpaid notes.
checks &c. within three days after they became due 10
the board;
Also, to enter book all applications for discount
Also on every discount day to frnish list of all dis
counts made by the bank, whether due or not, paid or
nof over due or not.
At tho time these votes were passed Wyman was
cashier.
Mr. Hunnewe testified to some details to compense
ton paid at different times to President Fisk and to Mr.
Wymtn whose salary finally fixed as $4,000 per an
in 1885, and continued to the explosion last Oc
tober Mr. Hunnswel testified that he had been chosen
acting president the Monday following the failure and
had passed all the of the bank to the
ceivers appointed by the Supreme Court. Witness had
owne "a shares in the bank The day before the
poon he deposited $4,000 in the Hamilton Bank to the
credit OF the Phpnix BANK Az the time OF the blow
had in depose SI7oO. Was not present at the meeting Of
the board when dividend declared based upon the
supposed sound condition Of the bank. Mr. Wyman
asked me why did not attend the meeting and told me
they had declared dividend Of three per cent and that
the earnings were something over $4,000 He asked me
IL did not think that doing well, end said 1t
He told me that had been appointed a committee to
make the semi annual examination of the bank. pro-
posed to be left off The list Of directors, had not been
able 10 pay proper attention to the duties Of the office He
said | had better not
On the afternoon of the 30th Of September met Mr..
Hurd on the Committee. Mr. Wyman produced the usual
trunk ofpopcrs and exhibited the list marked "H" IIs
a schedule in Wymans hand writing Of mere figures. 1t
was brought orwsrdby Wyman to assist us in examining
the notes, &c in the trunk, which had been regularly
discounted at the pank. said that probably the
last examination should be concerned in and was dis
posed to make more thorough than had made
before. wanted 10 know what the directors owed and
the securities Of their debts including my own; aud also
the securities OF other debts asked ruled paper
IL.