The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1873-07-22
Heavy Defalcation I'm BrOoklyn-A
Dead Defaulter-SaOO.0O Advanced
ON Doubtful Securities.
from the New York fribure.l


from the New York fribune.]
Another defalcation is added to the long
list that has occurred within few years
past. The culprit in this instance is the late
Ethelbert S. Mills, who was drowned on
Tuesday while bathing at Coney island, and
whose funeral took place yesterday from the
Second Unitarian church, in Brooklyn. 1t
has long been known that Mr.. Mills was a
very large operator in real estate, and it was
also known that several of his large ventures
had not turned out well. Since his death
these rumors have been more actively circu.
lated, and it was even stated that his account
in the Brooklyn Trust Company, of which
he was president, had been uperdrawn to a
considerable extent in his eBdeayor to
"carry" his speculative ventures, and that
his general administration of the affairs OF
the company was of the ioosest description,
the collaterals accepted by him on loans of
very large amounts being of anything but a
safe and certain character.
Wishing to ascertain how much truth there
was in these rumors, a reporter of the I}i-
bune called on Daniel Chauncey, president
of the Mechanics Bank, and who is also one
of the board of directors of the Trust Com
pany. and, since the death of Mr.. Mills, the
president pro tenn of the Trust Company
Mr.. Chauncey was in the directors room of
the Trust Company's building, at Court and
Joralemon streets, with several of the direc-
tors, engaged in examining books and papers
connected with the institution, and endea-
voring to straighteu up the accounts and
obtain clear understanding Of the exact
status Of the concern. lie knew little
of MIR. Mills's private affairs, and un-
til the present investigation was begun,
knowing very little of the affairs Of the
Trust Company. The directors had the ut
most confidence in Mr. Mills's integrity, and
as he (Mr. Chauncey) was the head Of an
other financial institution however,
was in no way rival concern. the Trust
Company not being bank of discount
still he felt more delicate than be otherwise
would have felt in making any extended in
qury into the management of the institu-
ton and the character Of its loans. Indi-
vidually he was in favor of letting their
depesitorS and the public know just how the
concern stood, and he believed the remain
der of his colleagues in the board Of direc-
tors would agree with him. The other gen.
tlemen present here signitied their assent.
Dir. Chauncey, resuming his statement,
said that on Tuesday last, on learning OF the
death of Mr.. Mills, Il meeting of tho Board
of Trustees was held, and he was chosen
president pro tenn. 1t was deemed advisable
to have thorough examination made of the
books of the institution, although there was
no intimation that anything was wrong, Dir.
Mills bore the reputation Of being wealthy
man. and certainly none OF his associates
dreamed of bis being defaulter, OF that he
had by his course impaired the capital of the
company. r s,stt. .GItI
A brief examination quickly brought to
light Irregularities, and it was ascertained
that the collaterals on which large advances
had been made were worth far less than
when the loan was made on them, and il
sold would not begin to reimburse the COM
pany to the amount of the loan. Since
Tuesday the examining committee have
worked each day. except during banking
hours, when the books are in use, and until
midnight each night. The exhibit is an un-
pleasant one, but not so badas the coRmlttee
feared after it had obtained some insight into
the condition Of affairs. .#s,. .
OF the loans and collaferals there are two
large items which go far toward making up
the discovered impairment OF the capital
The first is a loan of $3.50, 600 on $2O0,000 OF
bonds of the State of Georgia issued i'll aid
of railroads in that State,' and which are
better known as the Bullocl-bonds, having
been issued by Governor Bullock. 1t is
claimed that these bonds were Illegally
issued, and the State authorities OF Georgia
refuse to pay interest on them, and none has
been paid for the last two years. These may,
and probably will, be redeemed by the State,
but at present they could only be sold at a
very heavy discount. =,
There are overdrafts Of Mr.. MiIls's to the
amount of about 800, 600. What he has done
with this large amount does not appear. 1t is
well known that he has been for several years
q larpe operator i'm real estate, and it is con-
iectnred that he used the funds of the COM
any to carry along his speculative ventures.
when the last dividend was declared the sur.
nlus Of the company was set down IN round
numbers at Sl5O.OO0 This, OF course, has
zone. The impairment of the capital may
reach so per cent. This, however, was tak,
ing the worst possible view of the case, ana
throwing aside altogether the, depreciateat
and worthless collaterais. IL was I ne sentl-
ment Of The trustees that the imfalfmen.t
should be at once made good, and the insa-
tu,ion 20 on as before. He thought Tins
would undoubtedly be done. II the depo,
sitors will act for their own interest,", anu
not precipitate matters by 4 sudden rusn on
the concern, everyone. will be aDle 10; oD-
tain his money, and without being inconve-
nienced. as the institution can go right on
and transact business. Seyeral'of the large
depositors had expressed their Willingness
to do this, and he thought there ~ was nor
much doubt that an amicabl understanding
would be arrived saf. 4 4. ,.ls5