The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1866-07-25
MERCHANTS NATIONAL BANK.
The Frauds which Ruined IL.
Tho Rocks to he Stunned.

; failure of the Merchants National BANK o
= Washington. Such has been the pres:
uuon our columns that we had not room
70 spare for It's publication, and now WI
must reduce it to a mere abstract.
The bank was organized in September
1874 with eleven stockholders, holding
+ two thousand shares each, valued al one
: hundred dollars. William Baync, brother
=. Of the l.. p. Baync of the firm OF Bayne
% / 60. Baltimore was the first president
. conurd IIuyck cashier. The capital OF
, thc bank was two hundred thousand dol.
lars. and il was made depository of the
public money, and one hundred thousand
dollars was deposited with the United
States Treasurer as security.
} At the time of the failure of the bank,
the whole amount of public money de-
posted by different officers with the bank
vas s7G5,572l0. At that time the house
of Bayne & Co., of Baltimore, was indebted
TO the bank for an amount nearly equal to
the amount of public money deposited in
the bank. This house was the prin-
cipal debtor, and had almost all the
available funds of the bank, without having
given, or been required to give, any secu-
rity whatever. This debt, according to
, Mr. Huyck, who had become the presi-
dent of the bank, originated mainly in the
transmission of Scven-thirticS to Bayne 4
I Co.. vet in the January statement of the
bank these Scvcn-thrties were represented
rs being in the possession of the bank !.
There were fraudulent entries upon the
/ books of the bank, representing Bayne X
/ Co.'s indebtedness exclusive of these
( bonds, which Mr.. Huyck justified on the
/ ground that the bank had not been advised
/ Of the sale of the bonds. The committee
+ declare that, without going into details as
! 10 the management on the bank, all the
! testimony taken by them proves its ma
! nagcmcnt ain the highest degree illegal,
improvident, reckless, and dishonest, and
that the failure of the bank was caused
hv the eXtravagant and unreasonable
credits allowed without security To Baync
X Co.. Of Baltimore, and that the failure
oi that firm necessarily involved that OF the
bank.
" II appears by the testimony that a
most pcrniciorlS system was adopted by
The president OF the bank, Mr.. lluyck, i'll
connection with Mr.. Oscar King, one OF
The directors, and Mr.. ii. G.. FAINT, by
which they undertook to procure deposits
ct public money by dishursug officers, for
which Mr.. FAINT and Mr.. King received
compensation in the nature OF interest
upon the deposits of those officers, whom
they claimed to have influenced 10 open
accounts with the bank. Mr.. King was
the special friend and bond>man for Pay
master paulding, Mr.. l.. i. Baync, OF the
house OF Baync 4 Co., being the other
surety on his bond-both OF them di-
rcctors OF the bank.
alt docs not appear by any testimony
that the officers making the deposits had
knowledge Of this payment OF interest on
their accounts, or that they derive any
benefit from it. On the contrary, the par
ties concerned expressly declare that they
concealed all knowledge of that fact from
the officers whose acts they thus made the
source Of profit 10 themselves. The fol-
lowing letter from Mr.. FAINT to Mr.. Huyck
was presented to the committee by Mr..
uuvck as evidence that this arrangement
for the payment of interest on their
accounts was carefully concealed from the
disbursing officers who made the deposits
of public money. In this respect those
officers appear to have been merely the
tools Of more designing men:
"RlcmMoNp, VA, October 26, 1865.
"Dcar Sir,-Coloncl Paulding will de.
post with YOU check have drawn on you
for sI95, 900, and he may also deposit Will
YOU $l25,0O0 additional. All this | ar
ranged when up last, and will do more
when come up. OF course this is the be-
ginning OF the arrangement made with
Won in .iugu&t last. / will increase when
come up. Do not intimate to Latham OF
any one else what is going on, or you will
Spue all. Tell Sherman not to allude to it
to any one. Why don't you answer my
letters, as well as my book-keeper'S let
ters?
"DclayS about these matters bcget a
want Of confidence.
"Yours truly, FAINT"
The amounts referred 10 in this letter
appear to the credit of Colonel Paulding' IS
account at the bank on the 30th Of October
The committee say the interest paid for
securing these deposits was illegal.
The deposit of Colonel Pauldins eX'
ceeded $500, 900, including 5000, 900 on the
DIST of April, when the bank was known
to he in trouble, directly with the view tc
aid it.
LIP. Baync writes a letter to 1luyck
then in New York, dated Baltimore, April
Is, 1866, in which Bayne discloses the
pressing nature of the demands for money
with him, and the active means rcsortcd
to to obtain it. He says To lIuyck: "k
says he can arrange it to get $50 Nj. from q
party in Washington, to be deposited ir
your bank, preceded you will Immediately
turn the same over into my hands.
ali this is done, all can say is, that a
trOm use | rW DO. X. and b. are at work
in some important matters, and think IL
the operation | can manage to save for you
ne-half of what is gotten"
This was still raising the wind through
deposits in the Merchants Bank.
1t appears from what followed tina,
"K.," who is referred to in this letter, wa'
probably Mr.. Oscar King "B." was one o
the Baynes.
On the goth of April, the bank being IL
the greatest difficulty, Mr.. Oscar King
suggested to Mr.. Iuyck that deposit
might be secured from Colonel Paulding
upon whose balance King was then receiv
ing a stipulated interest. Colonel Paul
ding agreed, provided he could obtain tho
consent of the depository from which the
funds were to be drawn-viz: the FRS
National Bank. Mr.. Huntington, thu
cashier of the bank, cautioned Colone
: Paulding against making any such deposit
! Mr.. Huntington, at his request, looked
!, into the books of the Merchants Bank ant
informed him that the assets of the banl
consisted chianv IN tho Jobf % Il ua nv RayDt