Evening star. [volume] (Washington, D.C.) 1854-1972, 1876-05-19

losses would have been chiefly such as were
inevitable from the vast number and the
dispersion Of the depositcrs and the very
small sums deposited by many, and even
ibis whilst entailing some loss upon individ-
uals would have been q practical strength
enlng OF the bank as financial institutjol
and safe depository Of the money entrusted
10 IT. The time came, however, when there
was fatal departure from this policy, and the
ruin which followed is In no small degrt e
directly imputable 10 the act of CONGRESS,
approved May 9th, 1870, whereby the charter
was so amended as 10 allow one half OF the
DEPOSITS, not held as an available fund, 10
be invested in loans secured on real estate.
The law In question provided, IL is true,
that the security taken should be in double
the value OF the loaa granted; but. as in the
original charter, no means were prescribe
for compel ling its observance or Furnishing
us violation. This act, IL is shown, was Oh
tanned through the active agency OF VIM. >.
Huntington, then cashier OF III. ID. Cookies
bank, member of the finance committee OF
the Freeduen's Bank, mixed up with all
kids OF jobbery and bound by business ties
or close personal iutimacies with al or
nearly all OF the wild and questionable spec
ulatiDg rings of the District of Columbia.
II is evident, however. that he did not act In
the matter upon his own responsibility or
unadvisedly, and il is proved that the
amendment was the work OF managers OF the
bank, without the knowledge or assent of
The depositors. But they (the depositors)
were OF small account now compared with
the personal interests of the political lob
oers, real estate pools and fancy stock spec
nlators who were organizing a raid upon the
freedmen's money and resorted 10 this
amendment OF the charter TO facilitate their
operations. The District government, too,
came 10 hasten, and TO profit by, the work OF
spolletlon thus ipaugurated. Its treasury
was wholly unequal 10 the task of sustain
Ing the magnificent expenditures of the
board OF Public Works, presided over by II.
ID. COOKE and controlled by Mr.. A. X. Shep-
herd. Some exchequer must be found 10
advance upon the deprecated bonds and
worthless auditors certificates OF the
Dlstrlct or the contracts must fail and the
speculations OF the pool and OF Shepherd and
bis friends in out-of- the-way and unim-
proved town lots, come TO grief This mass
OF putridity, the District government, now
abhorred OF all men and abandoned and
repudiated even by the political authors of
its being, was represented in the bank oy no
iess tnan nve OF It's high officers, viz: III. ID.
Cooke. Geo. w. Ballocb, w. 8. Huntington
ID. l.. Eaton and u. b. Richards, all OF whom
were in one way or other concerned In specu-
lations more or less dependent for q success
ful issue on sustaining the contractors under
the board Of public works and a free use OF
the funds OF the Freedmen's Bank. They
were high In favor, too, with the dominant
Influences In Congress, as The legislation they
monstrates. Thus it was that, without con-
sulting the wishes or regarding the interests
OF those most concerned-the depositors-the
vaults OF the bank were literally thrown
open TO INSCRIPTIONS greed and rapacIty.
The toilsOme savings of the poor negroes
boarded and laid by for rainy day, through
the carelessness and dishonest conniyanc of
their self-constituted guardians, melted
away-vanished into thin air In the form of
millions OF so-called assets, on which, by u o
possible contingency, can fifty cents In the
dollar be ever realized to the unfortunate
victims OF heartless duplicity and displaced
confidence. The wolves literally became the
pastors OF the flock, and without compunc-
ton or remorse devouret the younglings
committed TO their care. La the foregoing
narrative your committee have necessarily,
though somewhat incidently, touched upon
and pointed out the prime, but remote and
mems Bank-which was the utter and COM
plete omission to provide in the law of its
organization any safeguards for the protec-
ton OF the depositors, who were encouraged
and invited 10 trust their millions TO its
keeping. In no age and under no dispensa-
ton. poll teal or otherwise, has IL been found
that corporation, without a body TO be
kicked or soul TO be damned,n could be
safely trusted with the ultimate control of
other peoples property or money. TIE same,
with very rare exceptions, holds good as 10
individuals. In any such case the law which
fails 10 provide adequate guarantees OF hon.
esty and fair dealing, and punishment for
gross negligence and breach of trust in the
property, is itself the temptation 10 evil
doing, and justly exposed 70 the severest
reprobation. That the law, original and
smepdatory, under which the Freedmen's
Savings and Trust company was organized
and started upon its career, was fatally de-
fective in the essential points indicated
is TOO apparent s upon n i Its face to admit OF
failure, namely, gross negligence and
faithlessness OF trustees, officers and agents.
was the legitimate offspring or the drst. On
this point your committee cannot furnish
better illustration or proof than is afforded
In the subjoined extract from the testimony
of Mr.. A. NJ. Sperry. He says: "Had there
been scrupulous conformity 10 law in every
particular, and carefulness In selecting in
vestments, such as men fully conscious OF
the sacred nature Of their trusts ought 10
have exercised, / do not think that the bank
would have failed, for the reason that its
franchises were most valuable" Aud fur.
ther on, In allusion TO what he styles parti-
san attacks on the bank, the same witness
says: "Had the bank been as Immaculate as
ii ought TO have been, and had suffered these
same attacks, IL would have resisted them
without loss. could have gone to our de-
p0sitors and simply said: These things are
not so; and would have been believed" By
Mr.. Rtddle.-But you could not say that?
Answer.-"No, sir; / had TO make so much
of a clean breast of IL that spoiled all that
l said. / have been waiting two years, Mr..
Chairman, to say this. can prove to You
that for two years have been working TO
get Congressional investigation" Sucn is
the evidence OF man who has been closely
corrected with the Institution from its
earliest active existence. IL leaves no room
TO doubt the entire truthfulness OF the charge
OF infidelhy TO trust, negligence and care
lefsness, (and hints strongly al dishonesty
II emit OF the affairs OF the bank and that Its
downfall was due 10 their delinquency. As
corToborative of Sperry, whose testimony
however is not contradicted, your commit
tee call attention TO the books of the bank.
Their condition indicates a settled purpose,
running through series OF years, to mutdle
and confuse accounts so as To make them
unintelligible. Bat whether throug ga design
or not such 10 the result II nothing more
than an occasional mistake or slight irregu-
lufify occurred 1t might be set down per-
haps TO the inexperience OF the book keepers
or the want of clerical force To write up the
books properly, without imputing very great
harm TO any one. But IL Is far otherwise.
The books are mutilated and defaced-leaves
cut out In some places and firmly pasted to.
gether In others-without proper indexes 10
guide and direct the searcher In their hidden
mysteries in false entries and
false balances, and altogether exhibiting q
labyrinth OF winding and never-ending per-
plexity and contradictions that defy the
scrutiny OF the sharpest experts. (See re-
port OF Dyer and Watkins, experts employ
ed by your committee) That such things
could have occurred and besn permitted TO
continue year after year without q purpose
Inconsistent with the idea OF official integ.
rity, fidelity TO trust or correct bushes prac-
tices In incredible. Charity herself averts
her face In sorrow and refuses TO cover such
evidences OF intqufty with her mantle.
But We need not dwell upon the tangled
web spread under the books OF the concern