Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1858-01-11
Making the capital of the house. $4,000

Canal bonds.
In the year 1851, SeIden, Wthers & Co.,
advanced To the Chesapeake and OllO Canal
Company $l4O,O to pay their Interest,"
La the assets of Scldcn, WtheTs Is Co., there
appears 10 be Chesapeake and Ohio Canal
Company bonds on hand, amounting To
S2S3, 900 principal, With interest from July,
1852. These bonds represent So much money
vested by Selden, Withcrs Il Co., or the
partners of that house. in the bonds of the
Canal Company in 1851, and which have re-
manned in the hands of that house, unpro-
ductive, since July, 1852.
What other investments, if any, were
made in the same bonds, | am not informed.
In the year 1851, each of the four partners,
Selden, Withers, Latham, and Bayne, drew
from tue house S.. 900 as profts-in all So
600; which, added to the unavailable canal
bonds, makes sunk and Withdrawn, in one
years operation of the house, over S3OO,OOO
vn a cash capital Of $4,000.
On the 7th of June, 1852, Mr.. Selden sold
his capital in the firm to Mr.. Carlisle Whit
ing for $40 900, but continued his name as a
partner.
No notice was given of this sale or of Mr..
Selden's withdrawal from the firm until the
fall of 1854. Up to that time his uame was
kept before the public as a partner, and all
the business was transacted III the name OF
Selden, Withers 4 Co.
When Mr.. Seldcn sold to Mr.. Whiting, he
took from the partners of the house cove
nabt to indemnify hun from all loss from the
business of the firm. Messrs. Latham
Bayne and Whiting covenaurcd to indcmnl-
fy him from loss for all the transactions Of
the house. Mr.. Wthers coveuauted to IN
demuify him against loss on all transactions
after his sale ID Whiting, but made no cove
naut to indemnify him for losses before that
time.
The house of Selden, Withers & Co., had
the use of large amount Of the money OF
the United States, by means of transfer
drafts. As / understand this matter, funds
were necessary to be transferred from New
York to pay debts of the government in
Washington and the transfer was made by
giving to Messrs. Selden, Withers Is Co. q
draft on New York, so as to give them the
nse of the money, without interest, for sixty
days; and at the end Of sixty days the money
was paid, and in a day or TWO a new draft
obtained.
When Mr.. Guthrie became Secretary Of the
Treasury, the amount due. and becoming due,
from Selden, WithcrS & Co., for transfer
drafts, exceeded 100000, and this sum was
paid in instalmcnts OF $4,000 before the
meeting of Congress in December 1853.
10 the years lS52-3-4, Messrs. Withers,
Bayne, Latham, and Whiting, withdrew, in
equal portions 100000 from the firm, in the
name of profits.
This. with the $4,000 withdrawn in 1851,
made $50 900 withdrawn in the form OF pro
fit, being $1,000 more than nominal capital,
and S35, 900 more than the cash capital.
| have not ascertained exactly when the
misapplication Of the proceeds Of the bonds
of the State commenced, and how it was car
ried on.
But am satisfied it commenced in the
spring of 1859, and at least 100000 Of the
proceeds of the bonds received under the first
contract had been misapplied before the new
contract was entered into and this amount
was largely increased from the proceeds of
the bonds under the second contract.
Selden, Withers 4 Co. rendered no proper
detailed account of the disposition made Of
these bonds, and, therefore, great difficulty
exists in tracing the misapplcation. But |
think it clear that the full amount paid the
United States on the debt for the transfer
bonds, was paid either directly or indirectly
from the proceeds of the Virginia bonds
And | think it also fairly to be inferred
that the house must have failed in 1853, if
the second contract bad not been made.
As it was, the house was under great pres.
sure during the year 1853, and up to their
failure in the fall of 1854.
When the house failed, by the statement Of
the partners, it had surplus Of good assets
over liabilities, of S233, 900.
By the statement Of Mr. Redin, the
Auditor of the Court, made IN his
first report, there were debts due
by Selden, Withers x Co. of. ... S977,GJ3 II
Debts claimed to be due Seden,
Wilhers X Co................ ,"u9 -
OF these there were bad debts. or
debts not belonging to the firm. 1858 Is
Doubtful ................... J4,U53 w
And drductIng the bad debts and
halt the doubtful debts, there was
left 10 meet the liabilities OF the
NEUTRALITY-SUSPICIOUS.. 739,35I %
Making the deficit. ............ 2GS 2J2 z.
The members OF the Board Of Public
Works were in Washington at the time of
the failure of Selden, Withers & Co., and
were using exertions to secure the debt due
the Board.
But the partners Of Selden, Wthers & Co.
would render no satisfactory statement of the
disposition of the bonds of the State, or give
any security, except a tender Of the Chesa-
peake and Ohio Canal bonds.
1t was obviously the scheme Of the part.
ners to secure first their notehOlders, then their
depositors, and to give to the Board only the
residuum of their debts and the Chesapeake
and Ohio Canal bonds, and these on cOndI-
ton they should not be sold for three years.
This scheme clearly would relieve the part
ners from the pressure Of numerous debtors,
but was manitestly unjust to the State.
The debt ID the State had been created by
breach of trust, aud should have tecn made
preferred debt.
But it having become manifest the part
ners would not 50 treat it, tue Board was ad.
viSed that no alternative existed except 10
commence immediate suits against the firm,
and the several partners, and attach their
property; or to procure, IN addition to the
deed conveying the several assets, such sc.
curity from the individual partners as would
make good any deficiency of the several
assets.
Negotiations were entered into by the
board on the last basIs-if tue Individual