Litchfield enquirer., 1853-06-09

The Broken Banks.
We have before us the continuation of
the Report of the Bank Commissioners, on
the Eastern and Woodbury. Banks, from
which it appears that it was prepared a,
The same time with the annual report, but
held back, lest il should Illustrate the i'm
poriant negotiations going on between the
Receivers and VIM. e. Chittenden, con.
iempla,ing full indemnify to the bill holders
of the Banks. We see no cause for blaming
the Commissioners for this delay, for they
acted according 10 the best Of their judg-
ment. Things could he no worse by any
delay, for they are as bad as they can I've
now. While there was the slightest prob
ability that VIM. E Ch,tenden would ACT
the part Of an honc~t man, and disgorge
some Of his immense spois, il did no harm
to wait.
The facts in these failures are these In
the Eastern Bank, out Of the 1000 shares of
its capital, only 965 or $lS,25O were SUBJ
scribed 10 good faith. The res, $50, $50
was controlled by Chil,enden, though sIo n.
dug in other names. He paid the iDstal!-
menis and received the dividends. But
" not dollar was ever actually paid in to
remain as permanent capital Of The bank.
1t was paid in with one hand and taken on,
with the other" The whole csfa bshment
was regular shaving mill, belonging to
VIM. E. ChiiteDden. The Directors were
men Of straw. One of the nominal Direc-
tors declares that he never knew Of his
until he was officially informed
that the bank had failed, and that he never
owned a dollar Of the stock. The amount |
of capital paid in was ordered, BY record. |
ed vote, TO be deposited in the Wo0Gb bury |
Bank. But no record Of such deposit ap.
pears on the books of that bank.
As soon as the Eastern Bank went into |
operation, it was under the entire control of |
this Napoleon of fHanciers, VIM. f.. Chit
ienden. He was the Agent of the bank to
collect its paper in N. York. Most OF the |
entries on the books of the bank were made |
by him. The President was his near reIa-
tive the Cashier was his father in law. A |
private book was kept in Chiienden's and
the Cashiers handwriting, containing an
account Of the bills Of the bank, taken OF,
without security, which never was recorded
on the regular bucks. Ia the reports of the
Of the Bank, these entries are
never mentioned. A false dividend was
declared on the LIST Of January last. In
heir October returns, false statements were
made to conceal The deficiencies. The bills
n circulation were returned $69, OS3, when
hey should have been $lO5. O66,. What
was due from brokers and agents was
charged $2S ,O62, when it should have been
b69,ll5. These are some Of the specimens
Df dishonest practices.
On The 29th Of January the Commission
crs visited the Bank Cor the first time thew
found Chi,,enden Director and exercising
an improper control in the Bank. His |
balance Of Indebtedness, then, was $l4,SSl. |
This account exceeding the limit allowed |
by statute To d Director. was ordered 10 be |
cut down, but to avoid this result Chtten..
den resigned his Office. Som after. the |
Commissioners made second visit; they |
found, ON the secret book, Chit,enden's in.
deb,edDess to be $50, 1888, which added TO
the sum mentioned above, made $G7,6l9
due from him, TO say nothing Of the other
property Of the Bank in his hands. On the |
18th Of March the Commissioners ordered
the Bank closed, and on the 18th an in
junction was placed upon its proceedings
by Judge Waite.
The whole amount Of VIM. E. Chit,en.
den's Indebtedness to the Bank, as gathered
from bn'h the regular and secret books is
$2OO, 1861 The notes and bills placed in his
hands for collection, amounting TO $69, 225,
had either been pledged by him as cola,>
erals, or employed in his own private use.
Out Of this sum the Receivers have obtain.
ed only $3.50.
The affairs Of the Woodbury. Bank were
connected with those Of the Eastern, being
equally under Chl,enden's CONTROL IL
November last, Chiltenden's Indebtedness
was 500, 6S3, to which The Commissioners
objected, but nh attention was paid to The
objection. Al the time Of it's failure, his
Indebtedness was $l74.506, for which
the Bank held cnllaterals, good, bad and
indifferent, to the amount Of $74 .265, ieav>
ing his Indebtedness SlOl ,24I. or this
amount, about $sS, 900 consisted of the
bills of the Bank, which he had redeemed
with the funds furnished hia by the Bank,
out which he had appropriated 10 his own
use. he also held for collection notes 10
the amount Of $2S, 022, belonging 10 the
banS, WHICH have gone with the rest.
Such.is the accoau, given by the Com.
inlss'oners Of this enormous swindle. II
TO these aac.s we add The sum Of @5S, 600
due to 'he Liichfield County Bank at New
MILFORD, we shall find a very pretty sum
'oia! which William E. Chitienden, broker
oi New York City, has cheated Connects
cut Bsnks out Of How Ear this 10 fraud
upon the Banks. we cannot say. They
seem 10 have acted with their eyes open,
and not 10 have had much individuality
beyORd M. Chilienden. But il is an i'm.
mense, outrageous fraud upon the public.
and richly deserves the State Prison. The
bills Of lhesetwO banks thus scattered eve.
TyWhere 10 such sums have been taken in