Wilmington journal. [volume] (Wilmington, N.C.) 1844-1895, 1876-04-28
THE PLUNDERED BANK.
How the Negroes Were RObbed-A
Tale of washington Hing Rule.
Fro1 the Baltimore Gag te.
W 4SHINGTON, April

, ! Dauk S"inufH nave urquestlonab
l been reached by the select comnitte
t of the House of Representatives. IT,,
I chairman, Mr.. Douglas. has exhibit.
ed not only great industry but super
Tor capacity as an investigator. 1--WE
other memb rs 81 the committee
s Messrs. Bradford Of Alabama an6
: Stenger OF Pennsylvania, have alss
given evidence of sound iudcmeut arc
great industry III studying up the his
: tory Of he bank and have materially
assisted Mr.. Douglas in the investiga
ton.
The rapid sketch which [ gave lasl
night Of the testimony published did
nos do justice to the Developments
VII oh the committee have made. The
testimony of Mr.. Arson III. Sperry, the
general inspector of the branch banks.
shows clearly that from almost the
very beginning there was both incom-
I potency and rascallty in the manage
ment of the princi pal bank here, as well
as III the conduct OF the najorityuf the
branches in the South. Mr.. 3perry
did not become general inspector till
| 1870, but he almost immediately
found on an examination of the bank
here that. there was a 4 ference be-
tween the ledger and the general
account of some eighty thous-
and dollars, and he never was
able to have this reduced below
| $40, 600. The men who were employed
as book keeper and cashier, Boston
and Wilson, were incompetent, and.
as Subsequent appeared, dishonest.
| SPerry called attention to the discrpp-
eucies in the accounts Immediately, but
1t Was IL long time before he cou q get
| either the ectuary or the trustees to
take any ttficient measures to remedy
the deficits of the management. The
principal object of one set of the
managers seemed to be to induce the
freedmen to deposit with the bank. and
another set devo ed all their ingenuity
to profit by the use of the money
| AlvOrd VS. the president and chief
missionary Ill the South to work up
the freedmen to deposit with the
branch banks. The finance committee
was constantly devising ways and
means to absorb the dep Dsits. They
required all the money deposited with
the branches to be drawn to Washing
ton, which would have been the safest
thing for the depositors if the mana
gers here had only been honest. The
finance cotn mittee was controlled by
q.
These men could not have the swing
they wanted as long as the charter OF
the bank required all loans to be made
on United States securities. It was
part of the scheme of the Washington
ring to use the earnings o. the poor
freedmen to carry out. their magnifi
cent projects for enriching themselves
by speculatiOus lu real estate and the
Improvement thereof. TO make this
possible they had to get the ch..rter
amended so as to enable them to loan
money on real estate.
The pretext for this was that politi-
Clans i'll the Southern States wanted tC
get hold of the earnings OF the freed
men, and were holding out to them
greater inducements than the Freed
mans Bank could. as long as it was re-
strlcted to loans in United States Sc.
curities. They argued, of course, that
the freedmen would be at the mercy
of unscrupulous spectators, unless
the institution established especially
foI their benefit was enabled to take
care of them. Accordingly Congress
was induced TO amend the charter so
as to enable the bank to loan on real es-
tate The men who were immediately
selected IT, act as the appraisers OF the
rem tStdIt were hllDOuIEb aIlu l1llbl.
The next thing was to establish the
Seneca Sand Stone Con. pany, add the
money of the poor freedmen went into
this sink hole. Next came the new
District government, and the Metrop-
OILS and ether paVlug companies The
capital to start these concerns came
out Of the Freednau's Bank, and was
advanced III the stock Of those cOmpa-
MES into whose treasures not dollar ;
had been paid by the stockhold RS.
kiibourne and Latta We're the real es
tate agents uf the bank aud the trus-
tees OF the real estate pool. As the
managers of the latter they bought up
Large quantities OF land and paid but a
small portion OF the purchase money
III cash, giving notes for the balance.
These notes were largely purchased by
the Freednan's Bank upon the recon-
neudatiou OF kIlbourne and Latta.
And 80 it went. La & short time I Early
a million aud quarter of the money
had been loaned III real estate Iii the
District of Columbia, aud very fire.
quently the property was encGmbered
with prior liens, and III not a few in
stances deeds of trust We're given by
men WHO had. no sort of title to the
property they mortgaged, and ID al
most every case the real estate was not
worth the amount of the loan at
forced sale.
The finance committee was dis
honest, and so was the ac;uary. The
former used their positions to secure
loans for themselves and the friends
on inadequate securities, and the
latter used his power to III ike money
out of the com missions allowed to
brokers for negotiating loans. While
this was going on here in Washington
the managers of the branch banks
were practicing like tricks for their
own benefit. Tie inspector, Mr..
Sperry, finding out the shortcomings
Of the branch managers, reported to
the trustees at Washington, and they,
indignant that any subordinates should
steal which they alone had a right to
warded regularly to the principal bank
Cooke. w. S. Huntington and Gle
phane were conspi,iug with Hallet
KiIbuurne and John O. Evans to en-
able the Seneca Stone Company to get
$50, 600 on apparently good security,
while Il secre5 agreement provide d that
the bank shonld alone have the second
mortgage bonds of the Seneca Com
pany, IN the event of the cOmpauy's
failure to pay the loan. Subordinates
like the cashier and book keeper could
see no wong i'll doing little stealing
on their own account. Accordingly
Boston, the book keeper, forged the
checks Of poor depositor named
John Watkins, and Wilson, the cashier,
handed over the depositors money to
Boston on the forged checks. Wilson
was the fatier-in- law of Boston, and
OF course the stealing was on joint ac-
count, as Boston now insists. Col.
Eaton, who was the first actuary. was
both bypocri5e aud a knave. as was
also AIvord, the president. All the
managers were conspicuously plous
and phllanthropic.
Alvord and Eaton were trustees of
the Howard University along with
| Howard and Ru1IOck ard were like