New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-07-19
A TRUST BETRAYED,
rHE IATE d. S. MlLLs 4 DEPAULNrR

FIL sECURTIES-TIIE IMPAIRMENT To BIZ MADE
GOOD BY TEE TRUSTEES AND STOCKHOLDERS.
Another defacation is added to the long list that
has occurred within few years past. The culprt
in this instance is the late Ethelbert s. Mills who
was drowned on Tuesday, while bathing AT Coney
Island and whose funeral took place Nesterday from
the Second Unitarian Church in Brooklyn. II has
long been known that Mr.. Mills was a very large
operator in real estate, and 1t was ALSO known that
several of bis large ventures had not turned out
we'll Since his death these rumOTs have been more
actively circulated, and it was even stated that his
account in the Brooklyn Trust Company, of which
he was President, had been Overdrawn TO con-
siderable extent in his endeavor TO carry" his
epcculative ventures and that his general admins
tration of the affairs of the Company was of the
Ioosost description the oollaterals accepted by him
on loans of very large amounts being of anything
but safe and certain character.
STATEMENT OF THE ACTING PRESIDENT.
Wishing to ascertain how much truth there was
in these rumors, a reporter of The TRIBUNE called
on Daniel Chauncey, President of the Mechanics
Bank and who is also one of the Board of Directors
Of the Trust Company and, since the death of Mr..
Mills, the President pro TEN. Of the Trust Company
Mr.. Chaunccy was in the Directors room Of the
Trust Company's building, at Court and JOralemon-
sts, with several Of the Directors, engaged in ex-
aiming books and papers connected with the IN
stitution, and endeayOrng TO stIaghten up the ac-
counts and obtain clear understanding OF the
exact status OF the concern! lie received the re-
porter oourteously, and while appearing surprised
that anything should have been learned
outside Of the Company relative TO the
unfortunate condition of the COmpanys capital
declared that he had no wish TO conceal anything
He knew little Of Mr Mllss private affairs and
until the present investigation was begun, knew
A.. e tT,e T7r,,.t ~ Mo
Directors had the utmost confidence in Mr.. Mllss
integrity. and as he Mr. Chaunceyl the head of
another financial institution-which, however, was
in no way rival concern, the Trust Company not
being q bank Of dscouut-stll he felt more delicate
than he otherwise would have felt making any
extended inquiry into the management of the instr
tuition and the character of its loans. individually,
he was in favor OF letting their depositors and the
public know just how the stood, and he be-
heved the remainder Of his colleagues in the Board
of Directors would agree with him. The other gen
tlemen present here signifed their assent.
THE COMPANY's CAPITAL SERIOUSLY IMPAIRED.
Mr.. Chauncey. resuming his statement. said that
on Tuesday last, on learning Of the death of Mr..
Mills meeting Of the Board of Trustees was held,
and he was chosen President pro teE It was
deemed advisable to have thorough examination
made Of the books of the institution, although there
was no intimation that anything was wrong. Mr..
Mills bore the reputation Of being a wealthy man,
and certainly none of his associates dreamed of his
being a defaulter or that he had By his i'm
paired the capital Of the Company.
A brief examination quickly brought to light
irregularities and it was ascertained that the col
laterals on which large advances had been made
were worth far less than when the loan made on
them and if sold would not begin to reimburse the
Company to the amount of the loan. Since Tuesday
the Examiulng Committee have worked each day,
except during banking hours, when the books are in
use, and until midnight each night The exhibit is
an unpleasant one but not so bad as the Committee
feared after it had obtained insight into the
condition of affairs. The Committee is not yet
ready TO report, for the reason that It has not
COMPLETED its examination of the books, and its
members feel confident that il viii be enabled 10
make a fun report by Monday or Tuesday al the
latest. It viii not vary much from the estimate
now made of the financial condition of the institu-
ton
OF the loans and collaterals there are two large
items which 90 far toward making up the discovered
impairment of the capital. The first is a loan Of
$4,000 on $4,000 Of bonds of the State Of Georgia,
issued in aid Of railroads in that State, aud which
are better known as the Bullock bonds having been
issued by GOV. Bullock. 1t is claimed that these
bonds were illegally issued, ard the State an.
thoritos Of Georgia refuse to pay interest Them
and none has been paid for the past two years.
These may, and probably viii, be redeemed by the
State but at present they could only be sold at a
very heavy discount
The New-Haven, MIddletown and Willimantic
Railroad was originally built to accommodate local
freight and passenger traffic. Thus far 1t is alleged
10 have proved anything but success. Arrange
nents however, are making, it is understood with
the management Of the New-York and New-Englaud
Railroad Company to lease the road, and If this is
consummated the bonds may then possess a value
far above their present price.
THE ESTIMATED EMBEzzLENENT 100000.
There are oyer-drafts Of Mr. Mills to the amount
of about $4,000. What he has done with this large
amount does not appear. 1t is well known that he
has been for several years large operator in real
estate and it is cOniectured that he has used the
funds of the company to carry along his speculative
ventures When the last dividend was declared the
surplus Of the company was set down in round num-
bers at $4,000 This, of course, has gone. The i'm
pairment Of the capital may reach 50 per cent This
however. was taking the worst possible view of the
case and throwing aside altogether the deprecated
and worthless cOaterals IL was the senti-
ment Of the Trustees that the impairment
should be at once made good, and
the institution 90 on as before. lie thought this
would undoubtedly be done. If the depositOrs will
act for their own interest and not precipitate mat
tiers by sudden run on the concern, every one will
be able TO obtain bis money, and without being in
cOnvenienced, as the institution go right on and
transact business. Several of the large depositors
had expressed their willingness TO do this, and he
thought there was not much doubt that an amcable
understanding would be arrived at
This statement of President Cbauncey gas also
acquiesced in by his companions.
CHARACTER or TIE DOt-pTprrr cpCrrprrrVc