The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-02-10
THE NATIONAL BANK RING.
Secret Meetings Of the House Banking
and Currency Committee.
Hon. b. R. Hulburd, Comptroller Of the Currency.
the Subject Of Investigation-A Bank Exam
iner's Report Suppressed Ten Months to Al
low Rotten National Bank to Go On

WASHINGTON, Feb. s, 1872
The House Committee ON Banking and Currency
are investigating the Official conduct OF the Hon.
ID. X. Hulburd, comptroller OF the Currency. The
members OF the committee are sworn to secrecy,
and the investigation Is being secretly conducted
that, with the exception OF one HERALD correspond
ent all the representatives OF the press IN Washing
ton are ignorant OF the matter excepting the gen.
eral well.known fact that some sort OF an inves-
tlgatl0n Is going on.
have been able, however. to examine the most
important part OF the evidence and, as l am not
to secrecy, the substance Of 1t will be found
further on; but justice to members OF the commit
tee requires me TO state that no one OF them has
furnished me even hint Of what has thus far
transpired in their secret sessions. The evidence
before the committee and here given to the public
was honestly obtained through the superior enter.
prise OF the HERALD.
Hon. II. r. HULBURD,
OF ohio. the present Comptroller OF the Currency
succeeded Hon. Freeman Clarke OF New York. who
resigned July 49, 1896. The Importance OF the Office
In question Ii not generally understood. The laws
or Congress assign to the Comptroller OF the Cur
rency the duty Of overseeing the organization Of
the one thousand eight hunared and odd national
banks in the United States and OF winding them up
and appointing receivers in cases OF violations OF
the National Currency act, besides other important
huu reSpOuSlUe IuucIlOnS SUCH uutlcS 10 DC well
performed, demand knowledge OF finance judicial
ability ana the strctest integrity. But what shall
be said Of man when not only one. but all these
great requisites for useful pubic officer are want
lng In hlmf The Comptroller Of The Currency Is TO
great extent the arbitrator between the stock
holder the depostor and the government and he
should know how to regulate their conflicting In
terests by u just use of his immense power.
THE EVIDENCE
now before the Banking or Currency Committee or
on the road Ihither, shows that IN the summer OF
1866 Mr.. John Bull, National Bank Examiner, was
ordered by the Comptroller OF the Currency to ex-
anime. among other banks, the tennessee National
Bank OF Memphis. Accordingly on the 24th OF
August he made an examination OF That bank and
forwarded full written report OF mis- examination
to the then acting Comptroller Hulburd. In that
report Mr.. Bull informed the acting Comptroller
that the records OF the bank incomplete; that
none OF the persons acting directors were legally
sucn; tlat although the authorized capital OF the
bank was 100000. but $4,000 had been
actually paid In, Notwithstanding tine fact
that the officers OF the bank had certified
the capital to have all been paid Ill., such cerInca-
lion being matter or record IN Mr.. Hulburds
bureau that stock notes ior tue balance were held
Oy the bank, most OF which had been renewed and
some OF which were then overdue and mat several
Of such nominal stockholders whose notes were
overdue assured Mr.. Bull that the notes had been
given by them at the request OF Mr. Rutter, Presl.
dent OF the bank, he promising that they should
never oe called on to pay the notes.
On the books OF the bauk. as stated by Mr.. Bull.
appeared as assets s74,o5O, Omitted states bonds
and securities on hand." lie found only part OF
these securities actually on hand and insurance
and railroad stock to the amount Of $500 In.
cluded In that item. among The assets OF the bank
was counted 81, 1856 their circulating notes.
Iet only $50 OF this sum Claimed as assets was &C
tualy On hand The balance mad been taken away by
the Presluent. MIR. Rutter then absent. The excuse
Onereu ny the cashier Tor this Irregular was that
Mr.. Rutter had taken them with ln To sign.
memorandum checks oil President Rutter. when
were IN TACT loan to HIM, amounting TO some
Also among the resources OF the bank was counted
$eIs, $50 due from the National Bank OF the Metro
polls, OF Washington NOW III the hands Of re-
ceiver which corresponds exactly with the liability
pessee OF $6lS 25O 1t was, III TACT, the money,
being part Of the school fund Of the State OF
Tennessee deposited III tennessee National Bank
of Memphis and then loaned, without proper secu-
rtv, 70 tile Bank OIL the Metropolis. This school
fund Is clearly traced IRON the state authorities. IN
whose hands 1t should have remained, through the
channel indicated In a report o. committee OF the
Tennessee Legislature which investigated the mat
friends Of certain congressman, VINO were supposed
10 have been interested.
Mr.. EXAMINER BULL RECOMMENDED
that certain prompt measures DO taken to save the
government anu the state Of Tennessee from loss;
ment deposits Dc made, and tnat revenue and
other officers In that section be instructed
tory. MIR. Rulter, President OF the bank, foliowed
Mr.. Bull 10 Washington aud succeeded in IN
0uCtng ACtlng COu1pLrOller Hulburu 10 take no
action on Examiner Bulls report, alleging that the
bad condition OF the bank was the result OF mslnan
agement by tho cashier. AT the request Of Rutter
Mr. Hupurd selected another cashier IA personal
friend); and wnen during the following spring, ten
months alter Examiner Bull made his report, Mr.
Hulburd was compelled 10 put the bank into the
hands OF u receiver, the person CHOSEN as such
receiver was the gentleman he had selected as
cashier.
Here was O full ana authentic account OF the
rotten condition of this bank placed before the
u.
ment, ana calling for a prompt winding up OF the
pigeon noled the examiners report delayed the
Appointment OF receiver anu remained silent rs TO
why were the Recommendations OF Examiner
Bull not acted uponY Could 1t have been made
ecye 20 ACTON a was necessary ia Closing the bank
IN order to prevent further lossesS Ihe greater
portion OF the Tennessee School Fund was lost to
the State through the failure Of this bank.
It Is impossible to see how this official report OF
Examiner Bull and Comptroller Hulburds delay In
actng upon 1t can be explained away or wnite
Here was a national bank onicially reported by q
regular bank examiner 10 be In the most rotten
condition possible; yet Acting Comptroller HuIburd
suppresses the report by permitting 1t to sleep ten
tne bank went down Of It's own weight OF manage.
nnent But this Tennessee bank case Is only one OF
rue RRcENr NATIONAL BANK FAILURES IN NEW
YORK.
There is large amount Of evidence in rela
fion TO the recent national bank failures III
New YORK that mas not been made public
and which win receive the attention OF the
Ranking aud Currency Committee In due season
The Calender matter has not been hall looked into
aud the evidence In felauon to, the expenses II
Washington" OF certain broken bank receivers maj
be looked for with interest.
THE BANKING AND CURRENCY COMMITTEE
have sent for persons and papers and will continue
the examination tomorrow morning. Among th'
witnesses TO be examined Is MI John Bull. las'
committee are as We. IN ignorance OF MANY OF tn
details bere given, 80 that the MERALD's reader
Important subject. 1t Is too late now TO suppress
fhe evidence. The truth ID before toe people.
BURGLAR CAUGHT IN THE ACT.
About nalf.past one O'Clock yesterday mornln
von,, uoaIv q niumber nineteen years OF age, n