New-York tribune., 1874-03-21
THE FAILURE OF THE FIRST NATIONAL
BANK.

THE FAILURE OF THE FIRST NATIONAL
BANK.
REPORT or TIE SUBCOMMITTEE OF THE HOUSE
JUDICIARY CoNMnTEE-IHE MANAGEMENT or
THE BANK CONDEMNED LOANS OF LARGE
AMOUNTS To JAY COOKE d co. PROPOSED
AMENDMENTS TO THE NATIONAL CURRENCY ACT.
lBY TELEGRAPH TO THE TRIBUSE.l
WASHINGTON March 2O.-The following is in SUBJ
stance the report of the Subcommittee of the House
Judiciary Committee, appointed TO investigate the
circumstances attending the failure of the First Ma
toual Bank of this city. The report was made to
the full Committee to-day:
The report states that the principal stockholders at
the time OF the failure OF this bank we're members Of
Tie firm Of jay Co ke { Co. During its existence the
bauk has been depository of public mopeys, and
largely employed at times as financial agent Of the
Government Ii has acted such in the conversion OF
The 7 80 notes, and In funding various Government
loans IN connection with the Syndicate. As Govern
meut agents It's transactions have been Of great
magnitude, aud large proGtss have been derived
nom them, and from dealing In Government securities
Of all kinds Another large bransh OF its business has
been the conversion of mutilated currency Az the
ume of It's failure this mutiiated currency iuhu
amounted to $4,000 Of Indebtedness TO olher BANKS
The Committee ind that there was great remissness
and NEGLECT by the officers Of the bank TO establish and
carry out proper system for the management Of Its
details No adequate checks were established to insure
aud accuracy No record found Of any cash
settlement having been made I'm this department OF the
bauk II ana enter into the general cash account,
but was kept separately The books OF this account
we're simply memoranda. At the time OF the failure
the accumulation of currency not rcmitted for aud not
entered ON the general books oi the bank amounted 10
nearly $4,000 This amount has since been entered
and comes in It's proper place In the balance sheet
m,c is ference between the balance sheet repaired
by tc Cumm,ee aud the statement actually shown by
tbe books the 18Th OF September last in this mu'
uatej currency account OF t6,S9s thorough exam
aou shows that this deficit cannot be accounted for
Tus largo Indebtedness OF this bank TO the Govern
meut exceeding the amount ot securities deposited has
tycu specially inquired into aud arose as follows; Az
douac a, po,torv this hank issued its certificates IN
b,oroitbc a. T. Treasurer Tor fractional currency TO
D. forwarded to banks who made their orders through
a. lutbc natural course ~ business said certificates
vvUI mot bc large, aud the balances IN bank would be
lcpt doNn 10 proper amount by transfer orders,
matte a. as thc IMPORTS OF tho hAuk received az the
n,,sutv, coOid be- vNsNncd, On Aug as lS'Sthc bal
ta to tUy clVdU ot the ncas0rcr the books OF the
Nuk aud Imported o HIM was NSSiOS Is DOung the toi.
NvIUg Wcyk ccrNoStcs wcrc issued Oy the hank Sud
Vstvd Oy the NvasU,cr anoQnuug 10 tiS5SN rouu,og
~ b.Auccon tOc Soh ot August 10 t2Si,SS a. DuruS
y, tlloNUug wcck certificates wcU' issued 10 the
twcrut ~ stNs3I making = total W t2eaSSa a.
trawNt vt,icrs WV paid ~ the amount ~
ttSNV ltaNtng the balance on sept az NA1..
y - Fyom the Sh to the nth of september,
bvus,c. ccruacAtcs wcrc issued ~ the amount Of
tNyNN uak.nsA total ~ te2atoai and on the 18th ot
S,rtwocra transfer oricr was paid hN t,ANN learing
ANaate, on sept isci tlsf,ts ~ ot the certificates
t~u.d duuns the last weck, N2NNN wVrc fvr fractional
sor,nt, To- be shrpcd ~ Jaw COckc CN, Philadelphia
A. the time these large SUNS were forwarded On the
NNuSth NJ the certificates ~ the Frst National bens
Ns, bNuk wus already indebted 10 the United states
hvasoVr Tor stun largcr than the amount oi W scV0
hcs vu deposit With the lrcAsareh
rbc Commttce dad that the manner IN which Jay
OoAr & 60 wcrc peruitted thus 10 obtain nom the
GoNvuwcnt what might be calcd temporary loan OF q
lsfsc ewcOo, " wcncy, on the simple Endorsement of
Mc hrs' NauoOA hahN, was due TO alaXtty IN former
icseol rcsN'euOus " Witch they took advantage IN
bnaitmr' To Nvlstcr up their failing fortunes Imme.
N,v' atcr thc failure Of the bank the rrNsent sey,c.
tat, ~ tbv nvosur, took cnecbve s,eps through which
h. has been enabled o obtain uu aud Ample guarantees
MitrvutltN, ht Witch the 0evctnmeut wonla bp saved
hvm cts Nc temmit,cc have examined the charac.
Wtw We guarantee aud security. and feel confident
Wa'eW dch1ouW will he ully mot from anothrr
hUrc than jbO assets " tho hanh The Committee
ave hy scvptap credit Got hn promptpcss In this
Nsuty
" tpteAbF ~ The management And cause Of the
hNote OF th, uauk, the Committee mud that on sept
Nbcic wrfc tl,gU " pas, duo paper mostly owed
totbVh lu demand notos, makluF total ~ tibe.qll
'p''r dcmaud notes were accommodation loans uf Ions
'ao'us, Which should be called past due, somc Of them
NWg tuu iut years ~ ono share Or another The Raub
hNug some ti,Oo in real estate to sccurt
"'''''duvsi, ehlch has also been carried to
-" The Commttce further mud that during She
"'NAs existence, tum amounting to over tj0to
sbtu ohatg 10 ihc proA' aud oss account for ha
WI The statement Of thcSo fiots the Committee
"'m Sufficient 10 show that the management Of th,
%" ID" h,ru, To say the least untortuua from IA,
S"nenocmcut 10 The present time The bank seems 7,
u4o paid no attention to the law limiting loans to ono
Nh Of s capital The provision ~ the 2gth section OF
% Currency Act has been repeatedly tausgrcssod hott
~''eT and spirit and to tina the failure Of the bank
''e'} uaccabc. Technically n might be- said tnai
40 htke amount Que from JAY Cooke 70 Wa in t.s