The Sentinel. [volume] (Trenton, N.J.) 1880-1882, 1881-11-05
S Big DefaleatiOn,

The most stupendous defaleation that has
taken place IN long time is that of o. L.
BALDWIN, cashier of the Mechanics National
bank OF Newark, n. J. Baldwin's embezzle-
ments cover period of eight years, AID
amount 10 more than 81 000 900. The first
lntlmation received by the banks directors OF
It's condition was at meeting at which Bald
win confessed that the institution was hope
lessly involved through his populations The
next morning the bank SUSPENDED In his
confession Baldwin said that every dollar OF
the immense deficit had been absorbed by
I. Nugent Co., well-known manufacturers OF
leather In Newark; that twelve years ago he
had loaned money without authority to c. NJ
gent & Co., and that since then everything
had gone TO that firm; that Nugent il Co. did
not repay the first loan, but borrowed anew,
and that the loans kept increasing, the borrow
ers each time promising positively TO refund;
that sometimes when the notes came due. Nj
gent christopher Nugent, head of the firml
PAID part and then borrowed more saying
every time that the bank should lose nothing;
that when Nugent got the rope around his
lBaldwln's) neck it was squeezed tighter every
time, Nu9ent saying that TO reveal the matter
would only ruin them both; that lie held an
immense amount Of Nugent's notes without
collateral for any of them. Balwin was ar
rested and placed under bail in the sum of
s25 000. The store of Nugent & Co. was seized
By the sheriff at the instance of the bank, and
Christopher Nugent was arrested, but released
on S25, 900 bail. Cashier Baldwin was one
OF the best known and most respected
men in Newark, and, to all intents
and purposes was the bank as the president is
eighty years old and has long been feeble and
Ill; consequently the entire direction of the
banks affairs was in Baldwin's hands. To the
State commissioner Baldwin said that az
long ago as 1873 he began to make irregular
loans to the firm of C. Nusent Il Co., leather
manufacturers, and that he made these loans
without security and without the sanction of
the directors. Having once begun he felt him
self in the power OF Nugent, who compelled
him 10 make further and further loans. This
continued from month to month and year TO
year, often TO the amount of $50 600 a month
The amount ofNugent's Indebtedness to him.
and his to the bank, gradually assumed such
proportions that he could not recede without
ruin and exposure, and therefore he allowed
Augent TO further increase the loans. his con-
slant hope being that Nugent would replace
them. In fact, Nugent constantly assured him
that he had large amount of property. and
could make good what he owed Baldwin
added that Nugent was perfectly well aware
that the money used was the banks money.
rreguIarly drawn, and always promised, when
ever it was required TO turn over all his prop
erty TO secure the bank.
The loan finally grew to be over two millions.
The way the system was carried on, Baldwin
said, was by Nugent's giving drafts on different
friends in New York, which were credited to
him to meet his drafts on the bank, and from
time TO time he baldwin, would meet these
drafts with the money of the hank The books
were so falsifed as to show that Nugent's ac-
counts were all right but the losses occa-
stoned by these loans were placed in account
with the Mechanics bank, of New York. so that
while it appeared by the books of the Newark
bank that it had on deposit about two millions
III New York, the Newark bank really owes the
New York bank over $500, coo, and that account
Is wholly made up Of loans TO C. Nugent & Co.
Mr.. Baldwin was asked whether he had not
speculated and thus lost large sums of money.
He replied that he had speculated, but only to
a trifiing extent, and had made money in the
speculations in which he had engaged.
The Mechanics National bank was the largest
in Newark, and was regarded as the strongest
financial institution in the State. 1t was the
depository of the funds of city and county gov
ernments, of trust funds, and the funds OF
other financial institutions and of manufacture
ing companies some of which had declared
dividends PAYABLE this month. The imme-
diate necessity for BaldWin's sudden announce
ment of his defalcation lay in the fact that the
district bank examiner was in the city, and had
already examined several banks He had an
nounced his intention to examine the Me-
chanics' National a week previous, but was held
off by the cashier. When Baldwin saw that
he could no longer put off the examination OF
the banks books he disclosed the real con
dition of a5fairs