New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-20
THE DFFAIuTERs BANKERS.

THE DFFAULTER'S BANKERS
gRREsT OF T. r. Observation-Disclosures IN THE CASE
From the hour when the defacaton OF
Charles H. Phelps cashier In the State Treasury Depart
ment became known, suspicion pointed to the conquer
" Of Frank Sherwin OF the banking firm OF f. X nher
win Co. of No. rs Broadway, The arrest OF sherWh
was effected Saturday by Deputy Sheriff Judson Jar
viz by virtue of order issued by Judge Fancher IN
suit begun in the Supreme Court by tho Attorney
General on behalf Of the people against Frank X sher
win for "corrupty and Intentionally contrving Win
Phelps 70 TO his own use certain securities OF inc
state 20 the value Of $55cOO" Mr. sherwin was visited
in his Office by Deputy Sheriff about o'clock IN the
afternoon, aud when informed of the object OF the can
affected indifference and declared that he expected such
proceeding on the part of the Attorney General TX
Gov Solomon. Mr. sherwins counsel, was summoned,
and made every effort find bail IN $4,000 ~ fixed BY
the Court but he id not succeed and Mr. sherwln at
late hour was lodged in the Ludlowst JAN The order
Of arrest based upon the atdays IN The acuOh OF
State Treasurer Thomas Rnes, Deputy State Treasurer
Fulton Paul and Attorney General Francis c. Barlow
Mr. Raines states in his affidavit that on or about the
l2in day of september last the STATE OF New-fork Wts
the owner OF a certain daft for $1,000 drawn py tle
FIRST National Bank OF Buffalo To me order OF ~ foIeI
Lee, teller the Fourth National Bank OF New YORK
Endorsed by r. Porter Lee, teller to the CoDlroerO
the State nduTsed by y. h hopIdns COhlIo.Itl ~
Thomas Ralnos, Treasurer, ana by Fulton Faui, as
Deputy Treasurer to Charles Hudson, cashier ihat
10 the state, fraudulenty transferred sald oat TO
Hudson.
firm OF sherwin Co., presented the same for
payment, apd appropriated the proceeds THEREOF
10 the of Sherwin Co.. who knew that Phelps was
wrongfuy in possession thereof that Paul had 10 a'
thOry TO indOrse sdd draft to any person or institution
mated as repositories OF the funds OF the Srate or TO the
Manhattan Company in the City of YORK; the hscd
agents Of the state for aging the interest on ls iuue1
debt; that Phelps, sherwin, ana hndson were eSSD
eognzant OF ne Iact tha thG do0rSeIeHr oI @
fraudulent; that Oh or about Aug 70 DRAFT belonging
the STATE drawn lay the Merchants national Bank OF
Dana fof ne
C0muonweal tn in the City of New-Yor indorsed pay
ale TO state Treasurer Rlnes was by Phelps fraudu
lently ndOrsed PAYABLE Charles Hudson CASHIER and
S8eryTin q Co with Ike corrupt knowledge of sand
sherwin about the l1th Of September last the
State owned draft No. 79,429 for s20QN drawn ~ inc
the Merchants National Bank Of NewYork TO the order
OF the Controller by the Controller ind0rsed, payable
10 the order of depOnenJ R4ue state Treasurer, and
bY Deputy Treasurer Fulton Paul Endorsed a. payable
to Charles Hudson, cashier, Ind Phelps appropriated
this and transmitted II To Hudson who collected 1T and
applied benefit OF Sherwu CO.. said Sherwln
intending aud cOntrivng thereby with SAID fneps "a
wrOngfuy appropriate the property OF the SAID State OF
New-York Deputy Treasurer Pdus affidavit states
that he affixed his signature TO the Two Bdno uIdlls
when presented 10 HIM with others by Phelps, who pre-
pared the Endorsements that deponent supposed he
was ndorsing them in favor OF one of the Albany
and prevented from NOTICING that the
1Qmper oi drafts winch were brough, IoI Us sE T
at one time by Phelps who was cashier III the 1reasu-
res office and IN charge Of the state ana panR
accounts that the Oafts were passed 10 hudson Nltn
out the knowledge OF assent OF opponent Attorney
General BaTow's ntndavit states that on tDe IHh Oh
October inst. he cOnyersed WIN FfdnA H. eheIWIh ID
The City Of New York, who stated 10 him that on Or
about the oath OF July last Phelps opened an account
with & Co. the name OF Charles IL. Inelps,
cashier He deposited that day $500 and Thereafter such
$1,000 $500, $1,000 $500 5000 aud S4l"Oli
that this last amount which was hs last deposit Ias on
the l3th OF sepember, and as appeared by the deposit
ticket contained two items OF s2ooW esch,
winch were drafts indorsed by the Deputy state
Treasurer that Of the drafts bore the signature
of C. IL. Phelps cashier The affidavit charges Inat de-
PENDANT sherwn knew these transfers were not regular
authOrzed that the account embraced some ten or
twelve items OF deposit amounting TO about sl6lN5Oi
that the whole substantially the whole OF said sum
has withdrawn from Sberwiu Co. by Phelps, by
before the 27th OF September last One item with
drawn by certificate Of deposit IN the Bank OF
North America for $4,000 There among the checks,
of September SIS OoC sept g. $4,000 sept 90
$4,000 ana Sept. n, $1,000 Al these checks were
signed by Phelps as cashier. There other small
checks signed Charles II. Phelps, without the addition
OF cashier" That Phelps stated to Sherwin that he
made good TO the State the Withdrawn by him for
private account by repayment frOm his own monty.
"REMINISCENCES OF PHELPS.
Phelps, it has been ascertained, was engaged
in the railroad and telegraph business i'll Florida and
Georgia 1871 and for time previously. He was
ticket agent for the Atlantic and Great Western Rail
road and subsequently, the agency proving to DO
Improbable, ne came TO NowYork and opened an
advertising agency. About October 1871. went into
the commission business under the name OF CHARLES
II. Phelps Il Co.." he opened two stores.
one OF No. Gs Front-st., and the other at No.
80 Peckslp, and made every possible outward
show of preparations for doing large grain commission
business. That the appearances untrustworthy
city commercial agencies ascertaned, and they
therefore responded any queries merchants as to
the standing OF Phelps & Co.. Use great caution; On a
goods sold them for SALE cash down should be
had before delivery" The extensive grain commits
sion agency lasted only months and s eptaph is
thus written records OF the agency of
McKnlop sprague d Coz August, 1871 store and
Offices well filled up but stock October, swlndling