The sun., 1879-06-22

counted notes were bad 80 or per cent at least could
could have met every dollar q is a6pes and sun 99d
ascapa me n,en 3he mon y, M s , ,s % 1an ~ be
bank were intrusted took them out There is no other
explanation.
In January, 1872, Mr. Davis sent to the de-
positors and stockholders n circular in which
the assets and liabilities Of the bank were stated
thus:
N.g,.-I N9sg,.'l -Irss rs's I.f!-st,i oi; T., r,'. y,
BilI, discounted. .....".... eits7. g ese,oc1 90
Rosssssi Rss s.,s,. ... lss73 S e ,sS1 S5 80 80
Furniture and n1tufes.... S asS32 % i9Go %
Cash in Z ). Treasury. ss4oes 90 sst oes 90
Cash IN hbank......''....''' z@'f's ~ @&'t'V ~
Total....... .......... .s2,5s54s2 - N,se7eai 81
amount due depottors - 81 2sos2s 20
mated value. over liabilities os73i9 o2 =, -o,, =,
According to his own figures the assets ought
TO have realized, after deducting ali expenses
and receivers fees. nj east f500QO0. But they
have not. according to Mr.. Davis's accounting.
The stockholders instead OF receiving n divl-
dend OF fity per cent. on capital Of 81 OOO. .OO0
have been assessed forty per cent. They have
not only received no dividend. but have had TO
What has become Of the $500 900 which. ac-
cording 70 Mr.. Davis,s estimated value. the as
cess OF its liabilities Among the assets OF the
baBk were the following:
Bonds Of the Lake superior and Portage Lake
Bends OF The Decatur. sullivan and Mat,oon
Railroad Company par value ............s, 25eOoo
Bonds Of the Chicago and Illinois Southern Rail
1855 SS@ asls. q sSos: Se ssS. Illinois valued 1909
Aorsnse upon the property Of NE ir9ndale -r r,
Coal and Iron Company Of West NirginiA.... $4,000
TotAl........ 81 2e6 90
The mortgage on the Irondale Coal and Iron
Company's property rcaized. according to Mr..
Davis's report. only about $40 900. and the 500
acres OF choice Illinois lands were sold for
$1,000 or the other above mentioned securi-
the bOnle Of the / "a a Snparior nj portutsa
Lake Canal Company. and sl56, 900 of the bonds
Of the Decatur. Sullivan and Mattoon Railroad
Illinois southern Railroad Company-the par
value OF which was 1924. 4.000-secured loans TO
bank had purchased siOO. 900 OF the bonds OF
the Decatur, sullivan and Mattoon Raj lroad
Company; For the s256.0o0 Of these bonds
Davis refused. shortly after he became
cever. thirty cents on the dollar. In Decem-
ber. 1871. he testified before United States Com
States agt. Charles Calender that the Dcca-
tur. sullivan and MAttoon Railroad bonds would
bring forty cents on the dollar. il sold immed-
ately. / would not sell them for that. for hope
eventually to realize from sixty 10 seventy-Ave
cents on the dollar for them. and about the same
ern Rallroad Company" For tho Chicago and
Illinois Southern Railroad bonds he refused
about the same time twenty-five cents on the
dollar. At the second trial Of Charles Calender.
Bank Examiner. March "a. 1874 John VI.
Cronse Cashier OF the Shoe and Leather Bank
testified that Davis offered them thirty cents on
the dollar for Lake Superior and Portage Lake
Canal Company bonds. which they refused. b -
cause they believed he WAS on the make" In
1874. Mr.. Davis. in n pamphlet addressed 10 the
stockholders and dep, stOrs OF the bank AYERS
that the securities pledged for the loan OF
f56l 900 10 the Portage Lake and Lake Superior
Snip Canal Com pany will realize the full amount
Of that loan. This would require the securities
to bring about slxty-one cents on the dollar.
XVI.
The way Davis has manipulated these secu-
rites. and for whose profit. is shown by the
affidavit Of Charles L. Frost. who was asso-
elaled stn @ with him ~ the ira4Esactons in which
soon after the failure OF the Ocean National
Bank be proposed to Mr.. Davis TO purchase the
$3.50 900 Of bonds Of the Decatur. sullivan aud
MHttoon Railroad at thirty cents on the dollar
which offer was declined. Subsequently he
saw Davis again about these bonds. and then
Of his bds1u bobdsman . Thomays Mason T0mpSseg n
York. George l.. lngersoll OF Cleveland, Ohio
James 9. Aver 4 Co.., of Lowell. Muss and
Frost, should be formed To purchase the bonds
and said that II Frost would agree To this he
would obtain IN order TO sell them NJ auction ;
same bonds could, by representing, them ns
| worthless and then causing some of them to
be sold. 80 depress their value rs 10 enable
| the syndicate 10 buy those belonging TO the
hank ~ very low neure. This Frost agreed TO
do. and March Is, 1873. the articles Of agree
ment between Frost. Mason, lngersoll. and
Aver Co. were drawn " with the knowledge
and approval OF DAVIS. Frost did represent the
bonds TO be worthless. ana by Arrangement
sold at the exchange saesrOOm of Adrian H.
| Muller. 7. r. wilkins Il Co., 7 Pine street April
20, 1873, $4,000 OF them at 10 cent, on the dol
| lar he, OF course, being tue buyer Then, on
| April %. 1873, AT the same l.Nchange saicsroom
Pine street. Davis caused TO Ire sold tlO7 900 Of
the bonds and Frost. as per agreement bought
them Tor the syndicate nj prices ranging from
81 10 lOtl cents on the dollar At the
same time Thomas f. Mason. for the account OF
the sl5GOO0 bonds sold by Davis on tnnt oc-
caslon. Subsequently the SiOuUuO Of Decatur,
| sullivan and MHttOOn hOuds winch the bank
| had bought were sold AT Pine street by Duvis's
order, and bought Tor the syndicate 10y Mason
a, an average OF lQ's cents on the dollar On or
about tht 18Th of May. 1873. with the knowledge
and approval OF Davis, the same syndicatr-
Mason. iugersoll. Aver * Co.. nnd Frust-by tho
same sort OF manipulation, became the pur-
chasers OF the t92, ,OOG bonds OF the Chicago and
Southern Illinois Railroad for three cents on the
dollar. These bonds had but short time pre-
BroAlwHy at twrnty-elght cents ON the dollar
and Frost himself had, DotOre the syndicate ar
rangement WIS made. at the suggestion ~
DAVIS. offered TO tnkeirom him the S92uO at %
cents on the dollar
In pursuance OF tho agreement Of March ls.
1873. the syndicate proceeded to have the mort
gage upon the Decatur, sullivan and Mattoun
Railroad foreclosed and the property sold the
iZed the company under the name Of the Drcn-
tur, Mnttoon and southern Railroad COmpuny
and issued t35O,OOO of nrst mortgage bonds and
t3oOOOO OF capital stock, and prCtted largely
thereby, The mortgage on the Chicago AMI IL
linols southern RHllroad was also ioraclosed
and sold, the syndicate realizing ON th,7 trans
action proht Of sG3.sG on each bond held by IT,
XVII
The following letters. written by Davis to
Frost and lngersOll show how closely he WAS
connected with all this rascaity and how deep
ly he was Interested in the success OF the syn
alcate wnieh haq been ofsHplzed Al MS sugges-
OF the Ocean National Bank. They currobor-
ate in many important particulars, the sworn
statements Of MIR. Frost. which are summarized
above:
RKcEIyER or rnE OCEAN NATIONAL BAEE rHE
CITY OF NEW YORK, 10 NASSAU