The Evansville journal. [volume] (Evansville, Ind.) 1866-1870, 1869-12-03
Official Statement OF the Board OF
Directors OF the Second Rational
Rank Of Cleveland,

Official Statement OF the Board Ol
Directors OF the Second National
Bank or Cleveland.
CLEVELAND. Dec. 2-The Board
of Directors Of the Second National
Bank completed the examinations Of
its books and accounts. and thise even
ing made a public official statement
of the extTaordinory defalcation ot
j. G. Buell., the late cashier, concern
ing which there has been great ex-
citement In the community and fnan-
ciaI circles throughout the country.
They say: During Mr.. Buell's long
connection with this bank as teller
aud cashier, he had the full con-
fidence of the Directors and custom
ers of the bank. but COW we find that
this confidence has been systematical-
" betrayed. The present am mount
and condition of his defalcation and
distractions we're stated in a memo
randum prepared by him just previous
to his death. and left for the informa-
ton of the Directors, which we be-
lieve, after careful investigation, to
be correct.
This shows that he had distracted
from the reserve fund, which was in
his personal charge, of three per
cents 100000, and of legal tenders
$50, ,000 He had made and used New
York drafts, not shown on our books,
for S120,000; drafts on the New York
correspondent $25, 600; covered under
false entry of a loan To tho city of
Cleveland, 100000; drafts On New
York. with which u. S. bonds were
purchased, but which have Dos yet
been found, aud be probably alb
stracted SIC, 1000 in 8. 20s. The prop
erty of the bank distracted was Sc, 900.
He had also abstracted, from the
securities held as collaterals and on
deposit with the bank, and u. s.
bonds to the amount of $3l ,00o, aud
adding the premium on the Govern
ment bonds. say So 600, gives the ag-
gregate of his defalcation, S477, 600
He had also discounted one class
of paper, amounting to $4,000 more
than was known or authorized by the
Directors, and in which, since his
death. it appears he was interested.
These discounts were concealed from
the Board by his taking the paper
himself from the bills offered for dis
count, which pass daily before the
Board, aud placing them Immediately
ia the bundle of bills discounted, thus
preve ntipg them from coming before
the Board or going on TO
the register. which is reviewed
weekly. On this paper, we
expect an ultimate loss, but
the directors believe that it will be
largely met from parties 10 the paper
and from assets known TO belong to
the estate of Buell. The career of
Buell. was brought to termination
by the fact that the examining com
mittee of the Boatd. appointed wlien
the last dividend ives made, had
agreed that on Monday, the day of
his death, they would commence their
regular examination. The false en-
tries, as far as we can ascertain (ss he
himself staIes). were all made on
plausible q unds, and he being con-
fidential ofneer Of the bank, the book
keepers were deceived by him.
Most of the losses were made in
unsuccessful speculations In the New
York stock market, carried on
through a firm of brokers of that
city, and entirely unknown to the
Directors Of the bank. That so ex-
tepsive speculations could have been
carried out without being known to
the Directors and other officers of the
bank, with whom he was daily asso-
ciated. seems, it must be confessed, !,
almost beyond belief He had also
speculated somewhat In grain, but In
connection witt. and in the name of
reputable prodUce dealers, and thus
successfully concealed those ventures
from the kHcNledg3 of the Directors.
The Directors knew that the sur
plus actually accumulated was $539,
S43 63, from which deduct defalca-
ton of SAT .000. leaving to cover the
possible losses on bills discounted,
above referred to, $62, ,S43 63, and
continue. The Directors believe that
this exhibit of the condition of the
bank will satisfy you that its stock is
worth at least par, and business worth
preserving, to restore a portion OF the
loss. and thus enable the bank to
retain lis business position. The Di-
rectors, after a careful consideration
of the subject, have deemed it expe-
dent to call in under the authority
conferred upon them by the stock
holders. In addition to the capital
stock, 100000. II. Garrettson,
President of the Cleveland Banking
Company. has been appointed Cashier.
GSigned1 Jos PERKINS,
A. STONE. JR.,
j.. Fl. WADE,
GEO. B. ELY,
Directors.
The capital of the bank is 100000,
and the increase proposed will make
it $800,000. Public confidence in the
bank is not impaired.