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

or the beneni OF strangers, whilst the can't
inH hypocritss, who had deceived them no.
der specious professions OF regari for their
, nSs sn1 wno nave nndeno,easy, airecty OF
whipped OF justice. Hardly had 10 passef.
and been apr owed, before the once OF the
bank was beseited by real estate agents and
brokers, eager 10 serve their clients by get
ting the largest accommodation upon the
very smallest possible security having the
sem olance OF conformity with Law. Ktleourn
were there, and were actually appointed APP
praieers Tor the bank, whereby the unSeemly
spectacle Is presented OF an attempt 20 serve
laws, deemed Incompatible with strict busi-
ness integrity, and pronounced impossible
In Scriptures. They and Others representing
practically given the keys Of the vaults,
whose guardians, themselves stoc kholders
or Partners In the companies, socie-
ed at the thirty disguised peculation,
and corplscently pocketed their share
OF ne plunder, as though they had
off1cer, trustee or agent borrowing the money
OF the bank. OF course they were not verx
particular ss TO the value OF the securities
have been expected, seldom met the full re.
Quirements OF the law, and from detective
lile, prior incumorance, or false valuation,
able 10 the Institution. Among the most nc
table examples OF the rec kless and fmproyf-
uehi msnaeemeht inst now crept into tho
ban are tie loans 10 Howard Uni verstty, the
Young Mems Christian Association, the
Seneca Sand Stone Company. In all OF which
g ere was personal identity 20 a controlling
extent between the parties obtaining anu
those who granted the accom- NOTATION
ADoiher class o noans, designated as mlscel-
lsneous aud granted 20 Individuals, dis
play ed, IL possible, still more reprehensi-
Ole disregard OF the Interests OF the deposit
tors, and wider departure from al recoe-
nized rules OF safe aud prudent business
transactions, Some OF them, according 10
the evidence, bear the impress OF c0rrupt
and fraudulent combination against t6e
hank, in which some OF its officers, holding
the most influential as well as trusted posi-
tons, participated. In many INSTANCES
money was loaned without cOllaterals or
security OF any kind, aud 10 very large
amounts, whilst the practice OF adding loan
10 loan 20 the same person, though already
In arrears for both principal and Interest of
previous advances, and then after almost
Indefinite multiplication, CONSOLIDATING the
whole into one and allowing IL still 10 run
on, is so bewildering process 10 banking
mat your committee is constrained 20 sus-
sence of positive proof of the fact. Certain
IL Is that no such proceedings can be toler-
ated or excused In persons charged wi Tn and
trust like that OF the sFreedmen's ssyinss
and Trust company" and their presence ar
CUES the want OF that conscientious percep-
ZION OF duty and OF obligation which should
Characterize the officers, agents and man
ayers of such al Institution. But proof OF
actual fraud and dishonesty is not wanting.
as the following instances, condensed from
and clearly developed Ia the testimony, will
show:
j. V. W. vandenburg was a pet OF the Dis
tr1ct government, a sort OF protege and IA
vorite contractor for the grand public Inn
provements planned ana put In execution
by the board OF public works. His under.
takings were upon scale OF expendi-
ture far beyond the ready means OF the
District authorities. They required money
though for their prosecution, and 20
get il this epterprising contractor had
nothing TO do but 10 go to the auditor OF the
District government, get his certificates for
work done and allowed for, and then TO the
Freedmen's Bank. These certificates were
generally worthless, without responsible en-
dorsement, and, being difficult of transfer,
were not worth four cents a bushel as sale
able securities or evidences OF debt, page
IL, Nandenourgs evidencei) yet they were
good enough TO take In exchange for freed
mems money, and that, not In hundreds, but
hundreds Of thousands OF dollars. Why?
ment and that OF the District government
were the same, and there was a larger and
more direct interest 10 be advanced by fos-
than by an honest and faithful discharge of
duty to the depositors. The actuary of the
bank himself then ID. l.. Eaton-was per-
burg half interest In a 100000 contract for
sewer pipe. Eaton put in no money of his
own, incurred no RISK or responsibility, and
had no trouble about it except 70 sign re-
nsed the Influence OF his position 10 pass
Vanderburg's papers al the bank counter,
and the money thus obtained was used 20
carry out the contract in which he was
Interested as beneficiary, you are 20
believe II you eau. OF purely disinterested
and noble generosity. This may not be a steal,
but as vandeDburg still owes TO the bank,
according TO the exhibit made by the books
OF that concern, sl44, 164.S3, which, how
ever, he disputes on the ground that some
forty or ffty Thousand dollars of his securi-
ties have been disposed OF and no credit given
him, (the rest being hardly worth contest
about,l the freedmen depositors have the
consolation OF knowing that they have been
feeced by an 'irregularity," 10 use the polite
and eXculpatory phrase employed by the
present commissioners when compelled 10
allude TO the rascalities OF their predecessors
in the management and control Of the affairs
OF the bank.
But the Vardeu burg Eaton irregularfty is
and within the scope OF the penal code) COM
pared with the Seneca sandstone swindle.
This bubble was fancy stock gamble got
mp by II. ID. Cooke, John l.. Kidweil and III.
III. Dodge, and this is the way they djd IL:
They bought Of one Peter a tract of land I'm
Montgomery county, Maryland, with a red
sandstone quarry on II, located upon Seneca
Creek. Another Dodge and one Anderson
were then associated with them and q char
ter OF Incorporation obtained from the court,
under the name OF the Maryland Freestone
Mining and Manufacturing company. The
purchasers then sold 10 the company their
quarry and farm, with its appurteDancee,
stock, teams, mills, machinery, &C, &C, for
$500 900 In stock, divided into 900 shares of
500 each-3, 600 shares of which were divided
among themselves and 1000 reserved for sale
n $50 per share. The game was TO place these
reserved shares where they would do most
good in aid OF the scheme by getting sse-
lect" parties and men OF position and In
fluence" 10 take them. They succeeded In
getting OFF a large number ON such men as
General Grant, W. Ii. Seward, General
Brice, General Townsend General Dent, Sur
geon General Barnes, Caleb Cushing, and
others OF high station and repute. The COM
pany now proceeded 10 issue sl00,0o0 Of
bonds, secured by a first mortgage on all the
property, and these were nearly all ao-
sorbed by the origiustors OF the scheme, who
bought them with the proceeds OF the sale
of stock mentioned. Having thus bomb.
PROCEED themselves against contingent dam
gers and losses, by FIRST lien, the company,
repdered eminently respectable Ia the eyes
OF the public by the distinguished and select
character of It's stockholders, was ready
TO begin in earnest 10 exploit upon
unwary outsiders. But they were not
a success. either in making a corner
In building stone or In selling the
shares. They then, after some six years
OF existence and struggle went through the