American citizen., 1881-11-12
4 FINANCIAL CRASH.

The Mechanics' National Bank Of
Newark. N. J., Ruined by the Opera
tions of Its Cashisr-Hfs Losses by
Unsecured Loans and Speculatlons
Not Far from s2,5OO,OOO The Gull
prit Arrested-Arrest Of an Alleged
AbsttOr Of the Embez isment.
NEW YORK, October 81
The Mechanics National Bank of Newark,
n. j., closed to-day. The announcement
excited universal surprise and establishment.
The Mechanics' Bank has been the
leading financial Institution of Newark for
the past fifty years, and in all that time no
whisper to Its discredit had been heard. 1t
was the heaviest bank in the State of New
Jersey, and its transactions were of q mag
nituds andimportanee known to no other
suburban bank. The story Of the ruin, so far
as 1t can be given at present, was obtained
from one of the Directors, a gentleman
whose whole fortune is swallowed by the
catastrophe: "Sundsy morning." he said,
"Oscar l.. Baldwin, the Cashier of the bank,
sent for Stephen ii. Condict, one of the Di-
rectors, and asked him to call at the bank
| building at eleven o'clock. Mr.. Condict
called at the hour fixed, and Bald
win informed him that the bank
was ruined. 1t seems that the Bank
Examiner, <. p. Shelley. who has been
in town for the past ten days. examining
National Banks. had notified Baldwin
Thursday that the bank would be examined
Monday, and this precipitated the dis
closure. At seven o'clock last evening a
meeting Of the Directors was held at the
residence Of Joseph A. Halsey, in Park
Place, at which there was a full attendance.
Mr.. Condict told the other Directors what
Baldwin had said to him, adding that the
shortage Of the institution would probably
amount to $4,000, 900 or S2, 500, 900. When
| the astonishment rising from this startling
| announcement had subsidized, Mr.. Baldwin
was called before the Board and made a
statement of financial operations for the
past twelve years, such as perhaps has no
parallel in the history of banking. He said
| that the whole amount, say -. 800 900, had
| gone into the hands Of q single firm, Messrs.
G. Nugent & Co., morocco manufacturers,
| of Newark, and that he had never benefited
by the defalcation to the amount Of q dollar.
He had loaned money to Nugent & Co. some
| twelve years ago, without authority from
tho Board of Directors and without the
| customary collateral, and had ever since
been trying to cover his tracks. Nugent, &C.
cordng to his story, said that he owned val
liable property and would be able to take up
all his notes. provided q little time was
given him. Whenever a note became due
Nugent would pay a portion of it and then
give another note and borrow an additional
sum of money. At length Baldwin protest
ed, but Nusent quickly shut him up by say
ing: You and 1 are both in the hole. II
this thing is exposed it will ruin you as well
as me. You have been lending me money
without collateral and without the consent
lrof 81 1t,,r
about it, and will be able before long to
pull through Powerless to resist, the un-
fortunate Cashier continued to advance
money to Nugent & Co. until the amount
became appallingIy large. How Mr.. Bald
win kept knowledge Of these transactions
from the Directors 1 cannot tell you, but
presume that he used our balance at the
McchanicS' Bank Of New York for that pur
pose. We have had an average daily bal.
ance Of from 81, 500. 600 to e, ,00O, 900 at that
institution for several years, and 1t was
| very easy for our Cashier to make use
of 1t without our knowledge, since he
could keep his books in such a way as to
seemingly preserve that balance intact. Be
| sides, all of us had the most perfect conf
| dence in his integrity, and knew that he was
4 business man of rare shrewdness and abil-
| ify. My theory is that when B tldwin found
himself involved to the amount of S2O0, ,00C
or $500, 900 by his note transactions with
Nugent. he went into Wall street with more
of the banks money. in the hope of recoup-
ing himself. Bad luck or bad judgment
dragged him deeper and deeper into the
mire, and the result was his disclosure OF
last evening. He told me that every dollar
Of the missing money had gone into Nu-
gont's business; but this can not believe
| T l. h.x, tknk ~ l.
Nugent to Baldwin for the money Of the
bank were never seen or heard of by the
Directors. In fact, they knew nothing OF
| the transaction. How tho Bank Examiner
was hoodwinked can not say; but at every
annual examination our bank came out with
clean record. For myself, had such un-
limited confidence in Baldwin that never
thought of looking very closely into his &C.
| counts.
| s'After bearing Baldwin's statement
| the Director continued, 1--WE called in Fred
erick T. Frelinghuysen As counsel, and ap-
| pointed Messrs. George A. Halsey and Hen
ry Howell rs u committee to visit Washing
ton and consult with the Comptroller Of the
I Currency as TO the situation of the bank.
| We also appointed Stephen Fl. Condict and
| James +. Bond as committee to consult
John G. Emory, our counsel, as to the nd
| visibility of arresting Baldwin. The com :
| mittee reused Mr.. Emory from his bed, and
| after a short consultation were advised to
cause Baldwin's arrest. Early this morn
ing they called upon A. Q. Keasby, United
States District Attorney, and James +. Bond
made an affidavit embodying substantially
the facts above narrated"
| Balwin was arrested in bed at seven this
| morning. He showed no surprise, and was
evidently expecting arrest. He said he
would not give bail, and he was content to
pass his life in prison. 81 shall never be
| seen Broad street again. " he exclaimed
"When Baldwin was before u.s." said q
dire. tor to reporter, "he appeared to be
anxious to make a clean breast Of the mat
ter. He said he fully realized the grave na-
ought to be dealt with in the severest man
| ner the law would allow. There is no ex-
cuse for my misdeeds,' he said, 'and now
see what ought to have seen years ago.
ger, q falsifier and criminal. think. gen.
tlemen,' he said, in conclusion, that you
| ought TO send for officers and put me under
arrest for misappropriating your money and
| money belonging to other persons. 1t is
your duty to send me to jail, and only ask
| the one privilege of going home to inform
| my wife and family OF my misdeeds. They
know nothing about this affair. Inever ex-
| pect to go to the bank again. but instead
| expect to go to Jail and from there to State
| prison, and there l will have to end my
| davs. If bad not been too much of coward
/ would not have been here to tell you this
| story tonight. i should have shot myself.
Since l have chosen to live, l must suf-
fer.''
NEWARK, N. j., October 81.
Christopher Nugent, a wealthy morocco
| manufacturer OF the firm Of c. Nugent Il
| by a Deputy United States Marshal, on a
charge of aiding and abctting Cashier Bald
win in embezzling funds from the Me-
chanics' National Bank. He gave bail in