The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-09-23
HOW THEY RUINED A BANK
NEW AND AsTO UNDING DISCLOSURES
MADE BY 4 RECEIKER.

The Account Books FaIsined to Conceal the
Institutions Losscs-Ths Seeming Utter
Beckiessness Of the Trustees OF the Bank.
Mr.. William J. Best began on the 18th OF
July last a. receiver Of the Supreme Court the
Investigation OF the affairs Of the irsoIveut
Mechanics and Traders Bank. He completed
MS labors yesterday, the result being the ar
raiRnment Of the officers aud trustees on
charges OF fraud and mismanagement. The
conversion by them OF the depositors moneys
TO their own use, the falsiHcation OF the ac--
counts Tor years to hide the banks losses, and
reckless speculations In worthless securities are
among tho discoveries that he has made. The
deficiency Of the bank is s3i3sie.3e in excess OF
its assets at their appraised value. This mount
viii be Increased to the extent Of tho exoenses
OF the State In having receiver appointed.
The bank hrst became embarrassed after lam
uary' 1897, when 1t held s1,40O,OOO OF United
states bonds and other easily oony yertibie se-
curlties. These were gradually sold and re-
uarv last the bank had parted with ali lie
United states bonds, and owned, Instead. fco3'-
and South Carolina, and Alabama.
Tue bank was organized In 1852, and from tho
mon. The nrst act of dishonesty was the con-
cealtnent OF deficiency or loss to the bank OF
fepoTted In Novembe & az yssrs ,ss before was
deficiency Of Sg2s12.H that existed two years
before. No reference was made to the losses.
except In tho minutes Of the trustees meetings.
and for twelve years the hooks were falsined 10
conceal the losses After that the Investments
were made that eliminated In ths banks DOWN
fall. The character Of these invest u ents 10
shown by the minutes Of the bank, as follows:
Deg 80 1857 Mr.. Ross moved that the Chairman Of
the Finance Committee Gregory anu President Conk
I'M be and are hereby 70 invest "a Tennes
sale OF Missouri six per cent. bonds"
The Missouri bonds amounted to ees 200. They
were sold, and on the folio wing day there Is an
nj nm -
$4,000 of Tennessee bonds.
May I, 1883, Mr. Ross again moved "that the
authorized To purchase Tennessee bonds with
the proceeds Of the sale of Missouri and Monroe
county bonds" -Four days later an entry In the
stock L ook shows that sl25,O1O OF Tennessee
bonds had be- been purchased.
the President (Conklin) and tha Chairman (lreg-
ory be authorized to purchase $l00VoO North
carolina state bonds to make an even sum Of
t3O,CcO." Two days after the trustees meet
IRON o, "; Joslyn, a. friend OF the President.
Dec. ~, 1858. Dir. Fem moved that "the Presi-
chase 100000 North Carolina bonds" The pur-
The State had defaulted previous To the pur-
cnase of the bonds, and no interest has ever
been collected on them. These Investments and
many othei 8, the Receiver says, were fraudulent
In January, 1887, Charles Peck was voted 500
for part services as President, and the Examin-
ing Committee OF the trustees were each al
lowed $500 n year. and the Special Examining
Committee, personally, Gregory, Conklin, and
Ross, $1,000 each for part services. In February,
1858, Examiners Gregory, Fem, and Sharat were
given 500 each additional per year for services
purporting TO have been performed four and nve
lied TO uraw $500 year us member of
salaries of the officers and clerks were increased
as follows: President and Secretary, 5000 q
yeM each Mr.. Pratt. $4,000; MIR. Bennett,
$500; Mr.. Newman, t2,00; J. L. Fem, Jr.,
ssO. Bennett Is 10 the lomoe awaiting trial on
| a charge Of embezzllng from the bank by falsi-
fylne The accounts OF the depositors. In May,
1858 six years after the nrst occupation Of the
new bank building, tho President and Secretary
were directed, on motion OF MIR. Fem.
to pay TO each Of the original Build
ing Committee $1,000, and to the Com
| mittee on Alterations and Improvements, 3,
each $500 and to charge the same to the ex psnse
account Of bank building. At the same meet
ing that authorized these extraordinary pay
ments, ths Examining Committee were allowed,
also on motion Of Mr.. Fenn, $1,000 each per an
nun, for their services from the 1st Of Janu-
| ary, 1865 During this year tue President drew
t1l2o for services. In June. 1871, one OF tho
trustees nominated himself for the position
OF teller, at 5000 year; and a few
months afterward two mere trustees asked
20 be remunerated for services rs fund
Ing ofhcers. In February, 1874, the pay OF
the Examining Committee Is reduced to sI0J
each per month, aud the teller 10 paid at the rate
OF tl,2UJ Year for examining in part his own
work. From 1873 % the suspension Of the bank
the trustees drew out $l9373T and credited TO
salary examiner and back ray accounts, be.
sides which 5000 was charged as refreshm ents.