The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-12-24
that the bo,d. themselves were considered security for

| tie mt Of the notes
| Q-were they held by the banki
Bri'ton-l don't recocet whosc posse ston the bonds
generally ~ the bank building
years In money and t%Eins ,ecufity do understand YOU
to say that after the sale oi tose bonds ani the discount
propcry spcssinr upon those notes held BY the BANK
oowerc c Hcfms bn%. 10 1 Gc bank ms col
lateral security in the ordinary accertaton Of the term'
bank for that purpose in the vaults OF the bank directly
discounted you have stated out o the credit Of which
Brtton~Tle bank held tho notes which have been re.
s5Sa & TO- ] ana n adop @ IT, to eS ot M J ~ ., S @ %
The English Of this is that the directors took
these bonds out Of their banks vaults at q Ger,
tain price, held them |. on their good faith "
| until they had advanced in value, sold or used
| them at the advanced price. paid back into the
bank part OF the proceeds. and pocketed the
In the course. OF years Of this kind OF hnan-
| cierlng Mr.. Roe and Mr.. Dickson died. the lat
ter insolyent. with Eads M executor OF his
| counted and rediscounted by the bank long
after their death: AGAINST, Dickson the bank
held two notes Of sG5 900 and fS3 900. By vote
| OF its directors II gave these up and took IN re-
| turn Dlckson's stock from the hands Of Eads.
MS executor 10 Then aIterSard ,p when the Sans
cancelled and his estate's obligation thus wiped
out.
Some time before the crash came Mr. Amos
| Cotting withdrew from the concern. paying up
| his liabilities in full.
| oES. GRANTS wIFE's COUSIN.
At any time during the progress OF the opera
tons that finally wrecked one OF the best banks
| In the United States, the most cursory eXamina.
| ton by competent man would have exposed
affairs
During the period OF reckless aud irregular
management. the lnspectotr, ol National Banks
for this district was one W. ID. W. Barnard a
second cousin OF Gen. Grants wife. and ap-
pointed through Grants influence. Barnard
| Is notoriously u drunkard, and Is utterly inca
pable Of auditing the accounts OF corner
grocery. 1t does not appear that he examined
did so il was with an eye blind to suipicious
facts and figures. II Is said that his name ap-
pears on paper now held among the worthless
| assets OF the insolvent institution II was only
by the connivance or the incompetence OF this
man that the TRANSACTIONS Of which specimens
have been given could have gone on Tor eight
years.
AT last. by the order Of the Comptroller OF the
Currency. Mr.. Watson. tho Bank Examiner OF
| the Chicago district came 10 ~. Louis and
looked into the affairs AT the Bunk of the State
OF Missouri He reported in March Of last year
management OF tho Institution. and pointed out
the excessive liability OF the directors. still, he
did not intimate that the bank was ruined. His
report was not acted on By the Washington
authorities
exposure OF the banks Insolvency was under
taken two months later, ~ the instance Of the
country stockholders; For some time they had
the directors room. They had seen their stock
decline in value under the Ends mrnagement
from $3.50 to less ihnn $50 Il share. There had
been no recurring election OF directors. rs the
law required The number OF directors had
been for years less than the law required. An
insane man had figured ton papcrl for about
two years us a member OF the honrd. Divide nd
after dividend bad been passed. After Wat
sons report in March. and before the investiga-
ton in May the directors bought IN Mt nm ex-
cessive price more than s500OO0 ni stock that
was worth so little that 1t might have been
thrown into the Mississippi River without the
sacrifice OF any interest. Awakened TO acti o n
by these facts, the country stockholders pro.
cured the election az directors OF three honest
men, charged with the duty Oi discovering the
actual condition of the bank.
Gen. Henderson. formerly United Stntes Sena-
tor from Missouri. mad been in the days Of tho
old State Bsns the President OF one Of its
he sod his sSres
tion Of the country stockholders he now re.
t. the Board. and conduted the Investigation
that was urgently needed. II was thorough and
THE FINAL EXPOSURE.
| The result wits aston shing 10 everybody out
side the Eads Ring. Gen. Heuderson's first es-
81 800 600 and i3O0Q0OO. wip.nc nut the capi.
tai stock entirely. he thought that ;he assets
is Hy Going in,o the hands Of a r"ce.yers6e
bank might be able 70 pay lis debts az N" snrri-
fice OF It's capital. He found thnt the iusovrni
directors were the hanks deOtn.s to the amount
Of nearly two millions Of dollars. lie rccoHl-
mended that the institution take steps 20 wind
up its affairs. and by a vote of the board the
hank went into voluntary bankruptcy. Mr..
Walter ). Johnston being appointed receiver
conjion ~ o,,rs xos syo, yorse ,n t, n n
been supposed. Gen Henderson at that time
knew nothing Of the ,iits cnyelone marked
hidden in one corner ol the safe. The balance
o. the dent 10 ~" ,Blnk oi C1mmerce WAS
s449 600 The New Workers refused to accept
in payment the worthless notes OF Eais. HriuOu
4 Co. They sued the receiver for sti9 200 aud
recovered Judgment for the full amount. The
receiver contests the claim rs Illegal. 50 lar n
the bank is concerned and has Hppenlci the
case 20 the supreme CoMr, % the United states
II the supreme Court nlilrms the dee sion % the
court below. $4,000 will be- added to the
burden thrown upon the innocent stockholders
by the Ends management
In addition TO the claim Of tho Bank Of Com.
merce. il wns found that q quantity OF the
direeiors' pnprr hgd been rediscoHpted in New
coming res sponsible rs endorser. Securities
that had been reckoned among tho assets az x
cents on the dollar proved 10 be- worth not more
than 60. All debts being taken into considera-
tion. the bank WAS about s75O,OoO worse of than
had .1sa n nrst BIZ been supposed ana tnls ndd.t'qnA
upon the stockholders.
The Bank OF the stae OF Missouri will there.
fore cease to exist. BY absorbing its entire
capital IL can pay is drpositors not more tnar
70 per cent. aud that not for Il long time Tc
square up with its creditors, the stockholders
who have stood by while Lads * Go. have ruined
their properly. will be obliged 10 part with
stock that was worth l5O ten years ago and id
addition pay an assessment Of from 35 10 90 per
cent. They are the ultimate sufferers who pay
for the music to which EGds, hrlt9n. and the
On the other side Of the account. the bank
holds notes Of its lGte directors to the amount o
81 $50 900. What IL il worth
Capt. James b. Eaas says that he cannot pay
his debts Just now. but hopes TO be able to do 50
when the Government pays him in full for his
Mr.. James II. Britton says that he is insol
vent
Mr.. Barton Bates says that he is nsolvent
Mr.. John A. Uhsdell is said 10 be insoVent
The remaining members Of the Eads Ring are
either dead or out OF the concern.
THE CRIME AND THE PENALTY
The law underwhicn the directors Of this bank
can be prosecuted and punished In the United