Cleveland morning leader. [volume] (Cleveland [Ohio]) 1854-1865, 1859-01-05

the Canal Bank of Cleveland, and the Seneca
County Bank. They will be read with very
general interest:
CANAL BANK OF CLEVELAND.
Since my last report it has been discovered
that there is an over-issue by this Bank of some
Sl8,5OO. As there was a surplus in my hands
after redeeming what was legally outstanding,
continued to redeem these notes, till the last
dollar was exhausted. There remains, still un-
redeemed, and for which have granted certif-
Gates, SI2,S69.
When this oyer-issue was discovered, J. NJ.
Armstrong, the Receiver, visited Mr.. Breslin in
Canada to learn, if possible, the history of this
transaction Mr. Breslin's version of the mat
ter, as 1 learn from Mr.. Armstrong, is this
A few months previous to the failure of the
Bank, a Mr. McAIiIlen, of Akron, who was
largely interested in the Bank, came into the
Treasury, and inquired if he (Breslin) had re-
ceived $4,000 OF Ohio State Stocks on account
of the Canal Bank of Cleveland, and on being
informed that no such stocks had arrived, mani
tested considerable surprise, Iemarking at the
same time, that they had bought that amount of
stocks of Messrs Atwood & Co., and had order
ed them transferred, and forwarded to this of
fee, Immediately, as they were in great want of
circulation He requested Mr.. Breslin to have
that amount of notes signed, and registered, so
as to be ready for delivery Immediately on re-
| ceipt of the bonds. Mr.. Breslin ordered the
Register to prepare the notes The next day
Mr. McMillen called again, and inquired if the
bonds had arrived, and being answered in the
negative, requested Mr.. Breslin to let him take
the amount of notes which had been numbered
and registered, SIS, 500, that the bonds would
certainly arrive that day; that Messrs. Atwood
d Co. had probably sent the bonds to the Bank
| aL UIeVelanu, instead Oh UIrecT 10 the treasury
as requested, and that the Bank would send
them Immediately on arrival Relying on this
statement, he gave him the circulation, but the
bonds never came.
The Receiver thinks the books of the Bank
corroborate in part this statement About this
] time, the cashier, Mr.. Severance, credited HIM
self as depositor to this amount, SIS, ,500-
/ Had he charged circulation account as he
/ should have done, it would have shown dis
crepancy between his circulation and stock ac
count. Had he put in circulation, without
| crediting himself or some one else, his cash
account would have been over that amount t
! To avoid these difficulties, like a very shrewd
book keeper, desirous of covering up very
dirty transaction, he credited this amount to
himself He afterwards charged himself and
credited the same to Mr. Hewitt, the President
After the failure of the Bank, Mr.. Hewitt
/
against his bills payable, and it was allowed
him by the Receiver; no suspicion OF this trans
action having existed at the time. Suit has
been commenced against the President to recov-
| er back this amount Should it be recovered, it
will be ample to meet the over-issue, and leave
a balance for the general creditors.
SENECA COUNTY BANK.
This bank went to protest on the 1Ith day
| OF hova redaaunad IF s-iro11la
ton SIO0,s79, being more, by Ss79, than should
have been outstanding. There is left 81, l2l
still in my hands, belonging to the Bank. On
protest / Immediately appointed Hon. W. B.
| Thrall as Receiver, who took possession of the
books and papers of the Bank. Soon after,
Judge ThraI was appointed Comptroller of the
| Treasury, and thereupon resigned his position
as Receiver. / thereupon appointed J. t.
| ClaYpoole to fill the vacancy, who at once gave
| bonds, and entered upon the duties of the post.
| No assets of any value were found 1t will be
seen by the annexed history of the Bank, care
| fully compiled from its books by the Receiver,
that on the 25th day of April, 1857, the stock
holders met and divided ali the assets among
themselves, leaving the circulation to be pro-
vided for by the stocks deposited with the State
| Treasurer. Although this transaction was
wholly illegal, yet having provided for the
! geucIal CIcNlSOI5s uO WIOuS nO1iu nave SEOWA
out of it had there not been an over-ssue of cir
culation still unProvided for and unknown, ex-
eept TO the parties concerned in the fraud
/ What the amount.o of this fraud is / am unable
to say but the probabilities are that it is $685.
| 600, or SIS, ,Ss7 The Receiver has given no.
/ tice to the bill holders to return the circula-
ton to him, giving receipts for the same, and
will commence suit against the stockholders to
recover back the amount by them divided
There is no doubt of their liability for every dol
lar ofthis over issue
! But, while these suits are pending, the bill
holders must wait for their money. The opin-
ion seems to very general that the State, in
good faith, is not only bound TO take up the
oVer-issue of this Bank, but also the over-issue
of the Canal Bank of Cleveland. This opinion
is undoubtedly founded on the rule of law, that
principal is bound by the acts OF his agent, so
far as he has authority to act for him. These
frauds could not have existed, except by the acts
of an agent of the State. 1t is also equally
true that the law positively forbids the Treasu-
Ier from issuing more circulating notes than
there were stocks deposited. But having con-
Sented TO become kind of stake holder between
the bill holders and the Banks, it is at least a
debatable question whether the State is not NOR
ally bound to assume the responsibility of the
acts of its agent. This question should be set
tied by the Legislature, that the people may
know what to depend upon in this class of
cases.
The report of Mr.. ClaypOOle is too long for
our columns to-day. 1t cites various items gath
cred by him from an investigation of the Bank
books He comes to the following conclusion:
'From the facts that have related, it is i'm
possible to resist the conclusion that the officers,
| - 1o,s ,,orffor of Tho cfnoIybnl1a-o in
cluding Mr. Gibson, were well aware of the
over-issue, and also that the closing of the bank
at the time and in the manner in which it was
done, was, to say the least of it, illegal, and
that my claim as receiver, upon the stockhold-
ers for the amount of stock paid back to them,
and upon the assets transferred, is undoubted.
Under advice, have already commenced efforts