Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1879-02-07

A SENSATION AT TRoY-TnE BROKEN BANK.
Six weeks ago, the Merchants and Mech
anics' Bank. of Troy, n Y, was closed by
order of the Attorney General. Subsequent
developments indicate that the most fsgrant
criminal acts were enacted in reckless in
vestmcnts of the depositors' funds. Daniel
Robinson, president. and D. Thomas Vail
treasurer oil the Troy and Boston Railroad
Company, were president and vice-president
Of the bank, also executive managers of a
corporation called the Schag hticoke Woollen
Company, with a mandatory near that
city. The funds Of the bank were used to
supply money to the railroad. The Woollen
Company. with capital OF two hundred
thousand. was permitted to borrow four
hundred thousand. without any authority,
except the endorsement Of Robinson and
Vail, controlling officers OF all three con-
Germs. The Troy and Boston road borrowed
seven hundred thousand from the bank, or
two and One-half times the capital stock of
the bank. The loans wero secured by notes
signed by young men not worth dollar,
who were employed by the railroad company.
when Robinson would indorse them. and at
maturity would leave the notes in the bank :,
having them entered in the published state
ment5 of the condition of the bank and
sworn to as claims against the note makers.
By this process the railroad became in
debted to the bank three-quar,ers OF a mil
lion, and was so at the time the bank failed.
Soon after ths. the notes for the amount
were missing from the bank. The teller
AYERS that Vail or Robinson entered the
vault one day, inquired where the paper was
kept, and since then it has not been seen.
Robinson also induced the Troy Savings
Bank (fOr which he was trustee) to de-
pusit funds with the Merchants and
Mechanics Bank to an extent greatly ex-
ceeding the amount allowed By law. The
Savings Bank now loses cODsidere ole be-
cause Daniel Robinson's methods leave it
without the claim of preferred depositOrs.
Ii is. however. entirely solvent. Robinson
secured loan OF three hundred thousand
dollars IN one instance from the
defunct hank, and released him
self and indorser and gusrsntor from
the paper, and thus made the bank the
loser OF more than it's capital stock on one
batch OF paper One note of forty five
thousand dollars Robinson had discounted
at the broken bank with Adolph Pfeltfer as
indorser. The latter gentleman pronounces
the note forgery. The cashier called
Robinson's : attention to the condition Of the
bank last spring, when the latter stated
that Vail was personally responsible for the
Indebtedness, which Walls relatives would
pay if he could not. Robinson refused to
help the bank. because he claimed That he
had his little family to look alter"
The Bank Examiner from Washington
AYERS that alter the condition of the bank
was made known at Washington, and Rob
inson and Vail were notified that it would
be CLOSED, and before legal notice OF in
junction to stop its business could be served, +,
these men caused further loan of tea thou
sand to be made to the woo.len company and
drew $50 ,0G0 out, which the railroad had
there on deposit, and completely stripped
the bank of funds; hence 1t was compelled
to ignore depositors' demands and was
closed. The last day of business the rail-
road paper was di'cJunted Tor fifty thou
sand, though no discounts had been made in
two months before. Ono note for $4,000,
made by minor at the request OF Robin
son. was discounted at the dlctation of the
latter person
Mr.. Vail is under arrest for alleged Com
pIcity in the bank msnas ement, having
been indicted by the last grand jury. Ii Is
thought that RobinsOn will bs arrested very
soon if it can be done. Vail was the victim,
and committed the errors. he aihrms, at
Robinson's dictatiOn. Vail is very low from
mental pro>tration. and confined sto his
hnuse guarded hy tilclalS