Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1866-06-13
THE mERoHANTs' BANK FAIL

A partial report has been made of the
examination of the exploded Merchants
National Bank in Washington, and it has
q state Of facts that should be
carefully noted by the public at large. 1t
is found that the aggregate debts Of the
bank amount to Sl,l6l,so6 rs. These
may therefore be considered as
representing the extent Of its business, OF
its operations, for very little Of it
represents legitimate business. The next
step was TO examine the assets Of the bank,
so far, at least, as they could be found IN
the bank. Under this head the Examiner
found various items, amounting, nominaRy,
to S4l,s62 70; but in this there is includ-
ed S25,347 A Of dishonored and protested
notes, and accounts for $6,ol7 20, paid
for furniture. It will be seen, therefore,
that the assets are not Of the most avail
able character. When he came to count
up the actual cash, he found $208 in
United States notes, and SS5 SO in cur
rency, stamps, etc. So that the first
prominent point the public have for con-
temptation in the affairs Of this National
bank is, that it was carrying on operations
to the extent of Sl,l6l,6o5 rs, upon a
reserve of cash amounting, all told, to
1858 90. If any one of the citizens Of
Washington had presented a package Of
1856 Of its own notes for redemption, he
would have swept ou. its entire cash
reserve, postage currency and all, and
would have broken the bank. It should
be borne in mind right here that the law
required this bank to keep on hand at all
times S45,ooo in lawful money.
But the foregoing is by no means the
mos, remarkable development. 1t appears
that the bank was so far gone on the goth
Of April that its friends held q sort Of
medical consultation in the case. Outside
of the bank officials, this consultation was
attended by Major Paulding, Of the army.
L. D. Bayne, the Baltimore Spectator,
aud the cashier Of the First National Bank
in Washington. The remedy decided
upon by these parties was "the transfer
of funds to the Merchants Bank, and by
the Bank to Bayns 4 Co.." and the
funds" be it observed, were not the
funds Of the First National Bank, but Gas
the sequel proved) Government funds, the
money Of the public. On the following
day, Major Paulding transferred" $780,
900. and various other disbursing officers
transferred" about 800, 900 more within
a few days. But as soon as Major Pauld-
ing brought his share of the money, $780,
900 Of it were Immediately transferred
to Bayne, through the direct agency Of the
FRS. National Bank. Thus we find the
FRS, National Bank of Washington tax
ing conspicuous part in the proceedings,
the object Of which was to get hold Of
several hundred thousand dollars Of the
public money and hand it over to q stock
Spectator in another city to make good
his losses in stock gambling. This affords
the public a nice notion Of the code Of
morals governing the First National Bank,
and also OF what a conscientious regard
for the law its cashier has. He knew, or
ought to have known, that no one person
or firm could lawfully borrow from the
Merchants Bank more than $40, 900, yet
he aided Bayne IN getting $4,000 in one
sum, knowing it to be public money, in
addition to nearly $500, 900 that had al
ready gone to the same concern. There
is, therefore, in this transaction not only
bad faith to the Government Of the United
States on the part Of the First National
Bank Of Washington, but a fragrant vio-
lation Of law, in which its cashier and
agent took active part.