The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1876-03-30
THE sOL0MON's BANK FRAUD.
Report of the Joint Legislative Commit
tee-The Bank Insolvent at Its Birth

Report of the Joint Legislative Commit
tee-The Bank Insolvent at Its Birth.
The report of the joint Legislative com
mittee appointed to investigate the So
called failure of Hardy Solomon's Bank,
lately presented to the Legislature, is a
lively document. The committee was
composed of Senators Swails, White
more and Jones, and, Representatives
Gary, Barker, T. B. Johnston and Bray
ton, who are Radicals, and Senators Dun
can and Ward, and Representatives Cos
grove, who are Conservatives. The fol-
lowing is
The Report.
To the Honorable the Senate and House Of
Representatives Of the State Of South Car
olinG:
The Joint special committee appointed
at the present session of the General AS
sembly to investigate the facts relating
to the failure of the South Carolina Bank
and Trust Company, the good faith of the
board of deposit in increasing the de-
posit of State funds in said bank, and the
reported expenditures of 1881, ,O00) eighty
one thousand dollars for legislative ex-
penses, beg leave to report:
That they have attended to the duties
assigned them with as much diligence as
due regard to other duties and the un-
avoidable interruptions by adjournments
of the General Assembly, and otherwise,
have permitted. The committee have
taken the testimony of his Excellency
the Governor, the State Treasurer, Hon.
F. l.. Cardozo, and the Comptroller Cen
eral, Hon. T. c., Dunn, who composed
the board of deposit at the time Of the
increase of the State deposits irf the bank,
Mr., !, Hardy Solomon and MIR. L. N.
Zealy, the president and cashier of the
bank, Ex-Governor R. K. Scott, large
creditor of the bank, and Mr.. T. j. Min
ton, clerk of the State treasurer. These
comprised all the persons whom the com
mittee deemed proper and necessary wit
nesses, and, as no one offered to aid the
investigation by suggesting any witnesses
or developing any evidence in the matter,
they were dependent upon such sources
of information as they themselves could
discover. .... .t-. ,..--: rs. ..t:,.,.s
Assuming that the books contained a
record of the transactions that led to and
would in a great measure explain the
failure of the bank, and conscious on
their part of a want of fitness to- make a
technical and a systematic examination
thereof, the committee engaged the SER
vices of Mr.. J. II. Sawyer, cashier of the
Central National Bank of Columbia, as a
sworn expert and an impartial assistant.
The committee feel assured that an ex-
animation of their proceedings will show
their investigation to have been fair,
sincere and thorough, and to have been
conducted throughout. with single pur-
pose to faithfully perform the duties COM
mitted to their charge; and they respect.
fully submit the following expression of
their views upon the acts which their in
vestigation has brought to light. '.,
CAUSES OF THE FAILURE. =.
In seeking to discover the causes OF
the failure of the bank, the committee
were embarrassed by the absence of any
effort on the part of any persons uncon-
nected with the management of the bank
to ferret out the facts or to give informa-
ton of the special points to which their
inquiry should be directed, and so were
compelled to suspend their investigation
when the president and cashier had been
examined and the books had been scruti-
nized. When it is considered that these
witnesses were not only reluctant to
testify upon many points, but were, at
times, evasive and contradictory, and
that the books bore evident marks OF
changes, falsifcations and transposition
of entries, it will be seen that it became
we'll nigh impossible for the committee,
with what lig ghts they had before them,
to discover more than that certain un-
warrantable transactions had taken place,
leaving their causes and purposes, as
well as the parties in whose interests they
were conceived and perpetrated, a sub
iect of speculation. 1t would seem that
the bank, from its organization to its sus-
pension, has been covered with mask,
which disguised from view its true condi-
ton. On the I'd of July, 1870, immedi-
ately after its books were opened, the
bank appeared with nominal capital OF
S4O,716.7O; yet $25, 900 of this sum rep
resented a barren asset in the shape of
its charter, for which the bank paid in
its stock at par. The further sum OF
S1O,5S3 was paid for the building in
which its business was to be done, and
S2,659.23 was expended for furniture
and outfit, so that when its bust.
ness begun the actual cash on hand
was d., the .. inadequate sum of = ST.
474.47. Regarding the charter as an
asset of no appreciable value for the dis
charge of any of the liabilities of the
bank, it will be perceived that the bank
was insolvent at its birth, and it is ques-
tionable if that infrmity did not attach
to it throughout its existence. Though
the bank was duly organized by the elec-
ton of president and board of directors,
there does not seem to have been any
supervision by the directors over its man
agement, nor any regular meeting of its
stockholders, nor any dividend declared
and the only Office performed by the
directors appears to have been to uphold.
by the influence of their connection, the
credit of an unstable institution and gave
sanction by their oathes to
UNTRUE STATEMENTS OF ITS CONDITION
The committee are indebted for q
knowledge of the various transaction:
which, in large measure, occasioned
the failure of the bank to the thorough
and impartial investigation Of Mr.. Saw,
yer, whose performance of the delicate
and responsible duties entrusted to him
has been characterized by rare intelli'
gence, skill and good judg dgment. Great
satisfaction is. therefore, taken in com
mending his tabular statements and testi.
mony explanatory thereof to the conside.
ration of the General Assembly. The
initial point in Mr.. Sawyer's inquiry was
the ascertainment of the actual condition
of the bank, as disclosed by its books, or
the 9th day of January, 1875, when g
sworn statement was published. BY
.of,.ooo> to tho oppopino ctotamantc ii