New-York tribune., 1878-05-25
4 BANKS BOND CONTRACTS.
THE CHANGE IN THE FIRST NATIONAL

THE CHANGE IN THE FIRST NATIONAL. s.
CHARGES MADE AGAINST SECRETARY sHEhMAS-
THEY ARE DENIED BY PRESIDENT BAKER.
When the Chase National Bank was started
recently by the president and vcepresdent Of the First
National Bank rumors as to the case OF
the sudden departure of the two gentleman from the bank
with which they had been connected from its foundation
Nothing definite was learned however as both sides
maintained strict reserve. The story comes from
Washington that just before theiXLVth Congress met
1t was found by Samuel C. and John Thompson
the president and vice-presdent Of the First Ma
tiOnal, that the bank subscriber TO about
$4,000 of the per cent Oan and that the first
payment had been made. When inquiry was made OF
H. c. FahnestOck, Of the directors he declared that
by an understanding with Secretary Sherman in case OF
an advance in gold decline in the securities the
bank would be called upon for gold s the Secretary
world accent other bonds release the bank entirely
from the subscription The story asserts that for this
reason the Messrs Thompson sold out their stock IN the
bank to Mr. Fabnestock Mr. Baker, the cashier and
withdrew 1t also adds that by this alleged arrange
ment Mr. Fahnestock. Mr. Baker aud those connected
with them in case advance in the securities would
have realized several hundred thousand dollars while
they were protected from all loss by the favor Of the
Secretary.
MR.. THOMPSON BELIEVES THE STORY.
C. THOMPSON president of the Chase National Bank,
in conversation the subject yesterday said: q" 1t Is
impossible for to cOrrOborate In detail this story
lmt believe It TO be substantially true The reason for
our leaving tine First National tins Fahnestock,
Baker aud others estaD shed the Syndicate department
IN the bank and By getting the control OF votes among
the directors managed to carry business without re-
turning any account TO the bank. We could nnd out
nothing ABOUT what they were doing, ana concluded
that the best thing to do was To get out, which we did
The 4 per cent subscription, like all other Syndicate
matters was not revealed 10 us. The FIRST NATIONAL
Rank shortly the alure Of Jay Cooke Co.. re-
crIyei an order for 100000 to send to London III pay
meut coupons OF the Atlantic, mississippi ahI ONO
Railroad, in Virginia. Inc order was gwen Dy we
cashier Mr. Baker TO Jay Cooke CO.. TO purchase tue
exchange on commission. lhfOugn MessLs; iauile,
stock French ana others interested IN Ine od hr' o
Jay Cooke & CO., bills ON well known houses were
bought and held TO the banks order. Mhen the une
came tor remittance MI Fahncstock or Mr. frehcn per
sadcd Mr. Baker to take bills OI Jay Cooke Coz drawn
the London branch Ot the liin, III pace Oi Ic pms m
tnat lad been bought. The latter were lOr"aidcd 0y
Law Cooke S Co. for their own credit, anu tlelr Dlls
were given 20 Mr.. Baker The firm OF Jay Cooke q Co.
failed two days after the steamer sailed Tue bank
bought suit against the firm, but mcahWhhe Mr fabhe
sfocK entered into negotiations for the purchase Of
stock III bank IL the trying time OF the panic
bank as well to gain the S24O,OOO involved without
legal proceeding. entered iuO negotiations with nlm
lie hypothecated in Boston the stock that had been
hon gIt ana about years afterward redeemed 1t.
Mr. F6ursork then gained control OF the directors and
set up the syndicate department, Wllcu caused our
withdrawal"
PRESIDENT BAKER CALLS THE CHARGES ABSURD.
President Baker, OF the First National Bank, said yes
terday that supposed the charges against the secre-
tary of the Treasury absurd to be entertained
by any one who had read the Of tine Syndicate con-
tract This contract gave To tue syndicate, OF which tins
member absolute COullOl Ol tue CENTS
from s date TO It's termination in January, 1873. Dur
ing this time but the syndicate not even the Sec
rrtary himself, could sell bond All tue sales OF per
cents made by bank in that period, except bonds
rpurchased in the market, made on the syndicate
account and all paid for under the Syndicate con-
tract These sales aggregated S3O,JOO,UOO out OF
thc SO 100000 sold in this country. The S3O0OOOOO
of per cents taken for the account and risk OF
tne bank they sold 10 actual subscribers for
the syndicate. The bank never held above one million
of per cents on its own account. The resignation OF
samuel c. Thompson had nothing to do with the syndi-
cate business His resignation was requested by nine
euths OF the stockholders and by all the directors, ex-
cept ms father, in April lS77-twO months before the
SYNDICATE was formed. Action was delayed IN the
matter until August 20, when Mr. Thompson
was informed that his successor would
i'm his resignation Mr.. Baker added that
no objection ever made TO the examination OF the
books Dy Mr. Thompson, though lie may not have under
stood them. -,
H. C. Fahnestock declared yesterday that he did not
wish to say anything in reference 10 the matter MI
baker mad made what lie considered ample reply. IT,
ne added there doubt as to the popcty or the
change in the OF the bank its present con
oltion would serve the best answer TO II.