New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-09-18
ANOTHER BIG DEFALCATION.
THE BROOKLYN TRUST COMPANY ROBBED
OF HALF MILLION.


IN wALL-sT-$sO4.OOO OF RAILROAD BONDS
STOLEN PROM THE handsome OF THEM
TRACED INTO sPRAGUE's HANDs-THE ROBBERY
CONCEALED BY THE COMPANY FOR WEEKS
PASTA COMMITTEE STILL COUNTING UP ihS
Iossrs-rHE TOTAL UNKNOWN, But ABOVE hALS
MILLION.
On or about April IS last Daniel Chauncey read
in one of the New-York morning papers letter ao-
dressed TO the editor, ntimating in the form OF an
inouiry that Trust Company near New-fork
had made large and iDjudiciOus loans to railway
COMPANY and to secure itself had been compelled
N undertake contract to finish building the road
Mr. ChauDcey's suspicious were aroused that the
company alluded to was the Brooklyn Trust Com
pany. of which he was director, and calling upon
another director John p Rofe he stated his suspi-
eions to him. The two gentlemen, cOncurring in
their views, Immediately proceeded to the office of
the Trust Company, and in MI Mills's private room
read him the letter. and asked him if he knew any
thing about the matter. Mr. Mills promptly and
cooIly replied that he had heard of the matter
in any shape.
Nov. MIR. Mills" SAID Mr.. Chauncey has the
Trust Company any loans out on railway securi-
tesf"
None whatever" replied Mr.. Mills, with great
and characteristic nOnchalance.
"Oh, yes Mr. Mills" spoke up NJ. T. ROdman, VINO
was present there is loan of $4,000 on the bonds
of the New-Haven MiddletOwn, and Willimantic
Railroad"
"Yes, yes7 repeated Mills, Zone loan of $4,000.
forgot that
"And is that all ~ asked Chaunccy.
"Yos, yes that's all" replied Mills.
There are three loans of $4,000 each on the same
bonds" put in Rodman
Mills with amazing GOODNESS at thus being detected
in lying admitted that there were bonds to this
amount held as securities by the Company, but
added that these were ALL At the moment of speak
ing he knew that the Company held in trust SS4OOO
of bonds of which he and his confederates had
stolen at least one-half, possibly the whole; and
that the Company legally responsible for their
return.
Mr. Chauncey who had no faith in Mllss ability
as banker, and who now lost all confidence In his
veracity and honor, at once began to move IN the
Board for an examination of its affairs. AT every
meeting for some weeks subsequently he made the
motion to appoint a committee to examine the
banks affairs but was invariably defeated, chiefly
by the activity in opposition of Judge Alexander
McCue, counsel and chief stakeholder in the Com
pany. SO persistent was McCue in preventing an
examination that Mr.. Chauncey says he suspected
FOL Mills in This TRANSACT
ton. and it was not until McCue had turned upon
Rodman and began to prosecute him that his conf
dence in McCue was restored. Finally after three
months of delay, committee to examine Millss
accounts was ordered, and Mr. Chauncey was made
its chairman. The work Of examination was TO have
been begun on July Is. On that morning Nj. Mills
went and drowned himself
The examination was instantly begun, with what
result THE TRIBUNE told in part on July 19. But In
representing Mills as deiaulter to the amount OF
only $4,000 1t fell far short of the truth 1t will
probably appear that he had stolen fully S5OO,OOO,
for which the Trust Company is responsible. The
directors were unable to conceal the fact first gwen
by The TRIBUNE, but by throwing the Company
into the hands of receiver, through Dapable ylO-
latiOn of law, two three of them have succeeded
in conceaing the rest of the painful truth and have
of whom are ignorant of all facts (which are now
published, to consent to the payment of stock to
make good the impaired capital. 1t will be seen
that this capital has been wholly wiped out that
the Company has been robbed of nearly $4,000;
and that il is.hOpelessy bankrupt.
THE wIIIMANTIC BOND OPERATIONS.
IL viii be remembered that among the securities
which figured among the early accounts OF Mills's
defalcaton were the bonds of the Willimantic Rail-
road above alluded to- This Company, known as
the New-Haven Middletown and Willimantic Rail
road is in Connecticut is So miles long and has cost
nearly 100000 The amount of first mortgage
bonds was $3,OOOOOO; of second mortgage bonds,
$2,OO0OOO. The original Airline Company, as 1t
was called, was organized Is years ago. but being
unable to secure a right TO bridge the Connecticut
River, was abandoned for a long time The present
Company organized in 1863, and through the
influence Of its first President the late David
Lyman, man Of remarkable energy the first sec
tiOn Of the road was finished in about year. and
the road opened from New-Haven to Middletown.
1t was the boast of President Lyman that the first
million OF bonds had been put on the market at
cost Of less than three per cent netting the company
above 90 cents Oh the dollar Soon after the opening
of the first section Of the road President Lyman
died and from that day the Company has had a
Tes of financial disasters, eliminating in the attempt
Of those involved in the Brooklyn Trust Company
frauds to represent that part of their loss was due
10 bad loans on the bonds of this railroad. This
scandal has deprecated the securities of the rail
road company that il has been impossible to take I'D
its loans and the Company is practically bankrupt
A SINGLE track has however been completed through
TO WiIlmantic and trains run through at lin
Of sneed The MANAGEMENT has nassa1 j., +c