The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1863-10-27
The Affairs of the Alfred Bank.

The Affairs of the Alfred Bank.
We have already given brief report of the
action of the Supreme Court, now in session
In this city, Judge Rice presiding, on the ap-
plication of the Bank Commissioners to make
perpetual an injunction which had been gram
ted against the aforementioned Bank. The
case is one of peculiar interest to the public
and therefore we deem no apology necessary
for going more into detail, and giving an inside
view of the manner in which the affairs Of this
institution have been conducted. Banks be-
ing simply creations of law for financial pur-
poses, through which the notes Of a company
become invested with advantages which at
tach to the notes of no individual, we hold
that they have no claims upon the indulgence
or confidence or goodwill even, of the public
any farther than they sacredly conform to the
laws which give them vitality; and when the
public confidence is abused by loose, reck-
less, and illegal course of action, they should
be held to rigid accountability, and this is
demanded not less by the public whose inter-
est is jeoparded by such conduct than by the
real interests of other banks whose reputation,
good name and credit are all more or less af-
fected by such reckless and illegally-managed
institutions. From the facts brought out in
the hearing referred to, when laid before the
public as we now propose to do, that public
may be able to judge what measure of conf
dence should be reposed in the institution, the
name Of which stands at the head of this arti-
Gle.
The specifications made against this Bank
by the Commissioners have already been given
In our columns, but We repeat them in this
connection. They were as follows:
lst-Because there has been a departure
from the ordinary business of Banking Insti-
tutions.
2d--Because its immediate liabilities to the
billholders and depositors are $50, 1902, and
its immediate available assets are S6,S0S,34.
3d-Because large part of the loan of the
said bank, we have reason to think, will not
be paid at matnrity-the sum OF S25, PA, 90
being already orer due and unpdid-whch
said sum is more than forty per cent. of the
entire loan of the bank.
4th-Because money has been loaned upon
memorandum checks TO parties who have no
deposit in the bank; which checks were taken
without the knowledge and consent of the
Directors.
5th-Because loans have, in certain in
stances, been made, exceeding in amount one
half the capital stock of the said bank; which
loans have not been submitted to the Board of
Directors for their consent and approval; and
said loans thus made without the knowledge
consent and approval Of the Directors, have
not been entered upon the books of the bank
where they would come to the knowledge of
the Directors, or pass under their inspection.
6th-Because the loans referred to in the
5th specification, thus candestinely made
without the knowledge, consent and approval
of the Directors, and not entered upon the
books of the bank, were brought to the atien-
ton of the officers of the bank at our first
visit to the institution this season, to wit, July
ed, 1858; and assurances were then given
that the said loans should be at once adjusted.
At our second visit to the bank, Sept. 18th,
1888, these loans not having been adjusted,
still stronger assurances were given that they
should be paid mmedately-which assurances
thus made at our first risit, and reaflirmed at
our second risit, have not been realized at a
third visit, Oct It'll, 1869, and the said loans
thus made as above described, remain in the
larger part die and unpaid.
7th-Because the said bank is insolvent.
FRANCIS K. SWAN, Commissioners.
1t appears that the Bank Commissioners in
the discharge of their. duties, visited the AL
fred Bank Jan. %, 1863 At this visit their
suspicious were excited by finding that they
made the circulation of the Bank just $4,000
larger than the Cashier made it; and TO offset
this large item note was shown the Commits
sioners for $4,000, dated July Is, 1868, on de-
mand, signed by E. C. Drew, of Boston, and
endorsed by John N. Stimson, the Cashier,
the said Mr.. Drew being one of the Cashiers
bondsmen. They also found in the item OF
foreign money receipt or memorandum for
some $500, to Offset which a note for So 800
was shown, signed by one L. o. Ackley, and a
note for $2l66.G6, signed by one John n o.
colt; these notes, together with any quantity
OF memorandum checks, made up the foreign
money. The Commissioners learned also, that
none of these transactions were known to
the Directors, or had ever been laid before
them for their approval, and that nothing ap-
peared upon the books of the Bank indicating
any of these transactions.
Tue Commissioners protested against such
proceedings, and bringing them to the knowl-
edselof the Directors, assurances were given
that such Irregularities should at once be cor
rected.
The Bank was again visited Sept. 18TH At
this second visit they found that $40 600 of
the $4,000 note had been paid, but the S. 800
item was still unprovided for; SO that, with
the $4,000 due on the note and the $500,
and goodly assortment of memorandum
checks, there was wanting some $4,000 to
make balance. The overdue paper in the
loan account was at this time some $4,000.
The Commissioners then demanded that the
President and Cashier should both resign and
let other men be placed in their room, or they
must at once apply for an injunction.
The President and Cashier retired, and Mr..
Samuel c. Adams of Newfield was elected Pres
ident, and Mr.. VIM. II. Conant of Alfred,
Cashier. The strongest assurances were then
given that all Irregularities should at once be
set right.
At the annual meeting Of the stockholders
in October, the former President ,cas placed
at the head Of the institution.
At their visit to the Bank in October find
Ing that there had been no improvement, the
Commissioners asked for an Injunction. The
injunction was granted by Judge Rice, and
the hearing was anpointed for tho o4,, hoc,ro