Clearfield Republican. [volume] (Clearfield, Pa.) 1851-1937, 1874-04-01
Cookies Swindling Bank.

. Currency, acting under resolution I
,lho House of Representatives, hav
I Just concluded an investigation int
0 tho affairs Of tho First National Ban
3 lat Washington, which was chief
'lowncd by Jay. Cooke 4 Co, and close
Z its doors on the 18Th Of last Septcm
-lber, when that concern led of in th
.lpanic which so seriously disturbc
. lconfdence and credit. 49,. ~
II The capital Of this bank was $500
1000, and Henry D. Cooke, q membe
1|of.the house OF Jay Cook o & Co., wa
slits President. The bank and the firm
4 which were substantially one, occu
| pied the Same building in Washing
fton, directly in front Of tho Treasnr,
4 Department. Tho First National wa
q depository ofpubIic moneys, finan
cial agent Of the Treasury IN the con
version of portion Of its bonds, ant
the agent of large number of natona
banks for the exchange OF mutilatct
currency, to which it was Indebted
| s75O,0OO on the day of the collapse.
! These various relations and the in
| fuences arising out of them were util
ized, in nagrant defiance of law, Treas
ury regulations, and good faith to dc
positors and other creditors, solely fol
tho benefit of Jay Cooke Il Co., and tc
prop up their tottering fortunes when
the crash came, In fact the bank
was q contrivancc to attract public
and private deposits, and conduit
pipe to carry them into the firm oil
Jay Cooke K Co. It's President took
the money out of the vaults of ono
and put it into those Of the other, and
then, after making this fraudulent
transfer, drew out about one.balf of il
for himself.
According to tho twenty-ninth sec
tion Of the National Currency act, the
total liabilities of any person, com.
pany, corporation, or firm to any ma.
tional bank for money borrowed, should
at no time exceed one. tenth part of
the amount of tho capital stock actu.
ally paid in. Consequently, il the
Cookies had owned the whole stock
of this bank they could have borrowed
but $4,000. In presence of this ex-
press and emphatic restriction, the
committee say that from the begin.
ming OF its business, and throughout
the whole career of this bank, no at
tention was ever paid to the Limitation.
The report shows that Jay Cooke 4
Co. not only drew ont the entire capi.
tai, but nearly as much moro. The
figures are worth studying. On the
18th of September Jay Cooke & Co.
were indebted TO tho bank in tho sum
Of 74S,9G0.G9 in current account
They also owed 100000 as endorser
of the Northern Pacific Railroad for a
loan moro than two years old. And
Henry d. Cooke, tho President, was
indebted s40,97s.42 on note which
dated back to January, 1868. The
total of these various items is $685..
939.1l, due by the Cookies to the bank
at the time of shutting up the shop.
But this does not tell the whole story
by any means, for the fraudulent mis-.
application of this money is traced
down to tho very eve OF the failure,
when tho vaults were cleaned out to
aid the overloaded and bankrupt firm.
Between the 1st of August and the
18th OF September, the current ac-
count Of Jay Cooke e. Go. was in
creased from s23S,6S2 to sT4S, $50,
without dime Of security. That is
TO say, they carried Off bodily over
bali a million OF the public and private
deposits In six weeks in addition to
tho quarter of amllion which they
owed before. Nearly 100000 of this
aggregate was takon after tho 1st ofI
September, and $4,000 on the 18th
and 10th OF September, two days before
the explosion. To bo more accurate,
10000 went from the bank up stairs
to Jay Cooke & Co. down stairs in six |
teen days
1t is impossible that this pilIage
could have been carried on without
The collusion of the Treasury officials
The act Of March 3, 1869, requires
hat tho national banks shall make
ivc reports annually to the Comptrol.
or Of tho Currency, and that be may
call for special reports from any asso.
,ia.ion whenever in his judgment the
'amc shall bo necessary to full and
complete knowledge Of its condition.
[n addition, ho is authorized to ap-
point examiners 10 inquire into tho af.
airs of every association, with power
% put tho agents and officers thereof
lnder oath, who shall mako full and
lotailed report to the Comptroller.
In view of these mandatory statutes
he Comptroller of the Currency must
lave known that tho First National
lad not only violated the limitation
lct, but that the capital, tho surplus,
nd the deposits were corruptly and
appropriated to tho use ofI
ay Cooke 4 Co. through the manipu-
alton of the President of tho bank
10 stands in tho light of having tao
tly conspired to defraud the creditors
nd to defy the law.
Lot us now turn to tho connection
I this bank with tho Treasury De- 4
artment, in order to discover how ,
ho public money was treated and ,
That the head of that department did
favor.a conspiracy to abuse its un- |
uthorized trust. As a public deposi h
Dry the bank issued its certificates to a
no Treasurer Of tho United States \
,r fractional currency, to bo forward 9
to the banks which made their or c
crs Tor this currency through tho [
irst National. Ordinarily these cor. 9
iicates would be limited in amount, n
nd the balances in bank would bo r
cpt down by transfer orders, made D
soon as tho reports Of tho bank h
'uld bc examined so that in tho n
'ursc OF regular business thcrc was Il
,eclt upon excess. Na h,
On tho 23d Of August, 1873, about o
'rcc wocks before tho fall, the bal q
,cc TO tho credit of tho Treasurer in h
lis bank was S133, 10S. As. During b
70 following week certificates were 3,
sucd by tho bank and cashcd by the
reasurer TO tho amount nj e11S 7ho