New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-11-01

Tn the trade the liabilities of the firm arc reported
as high as $500 900, but no definite information Is
accessible The firm generally carried an insurance
of 5000. 900 It is composed of Christopher Nugent
and James Nugent. They succeeded Nugent, heliy
g. Co. in January, 1872, Mr.. G. Nugent purchasing
the interests of James Kelly, Thomas Hughes anu
b. Moran.
THE NEWS IN WALL STREET.
The news of the banks suspension was IeceI u"
Wall Street early in the day, and it spread WIN mar
vellous rapidity. But the truth was 50 StupenuouS
that even the most credulOus doubted the accuracy
of the reports in regard to the amount OF the epeN
element and it was not long before 1T was asserteu
and currently believed that the sum was SZoo'ooo
instead of 81, 100000. few OF the more cautious
bank officers said that it must DC
bad failure and that the amount hi'''
exceed the smaller snm. but they based their opin
ions only the supposed condition OF inc OahN "l
the known wealth of its directors 1t was not until
late in the afternoon that it began TO be genefay
believed that the first reports had been correct Inc
astonishment was great and the utmost anxiety
was manifested to know what had become OF the
funds of the institution, and how the deficit hau
been concealed from its own directors and from tho
Bank Examiner The event was admitted to be the
most startling that had occurred in many years
especially because the magnitude OF the dehclt was
likely 70 shake public confidence in other banking
institutions.
Rumors were ouickly in circulation in the street
that the Mechanics National Bank and the Chem-
cal National Bank of ihis city, large losers py
the failure So great at time was the uhcef-
taintv in Wall Street that the suggestion hatt was
the Mechanics National Bank of this city that had
failed passed unchallcrgcd. The names OF one OF
two Stock Exchange firms were mentioned also ~
large losers aud the results OF the sus-
pensen, it was feared, would be "ide anu
disas rous Later reports, which did not IAN 10 con-
firm the amount Of the deficit served to allay aPpre
hensiOn. II was found that generally the losses
would fall on persons able to sustain them, ana that
the New-York banks and firms would not he huIt Oy
their losses The greatest injury that would result
to Ncw-York would be, it was admitted, the shocK
10 financial confidence and business credit. lhaJ n
national bank could be carried on after ts caPi'a'
surnus and large part Of its deposits had been ab-
sorbcd and that large business house that had en-
loved good credit, and according TO commercial
opnion. had been making money for several years,
was absolutely bankrupt, were facts that tended TO
shake the confidence Of the business world The
stock market felt the force of the blow and sensl-
tive to all rumors, il was lcycrsh and dropping all
day
THE NEWARK BANKS CORRESPONDENT HERE.
The Mechanics National Bank of this city, Of
which BENJAMIN b. Sherman is president, has been
the New-York correspondent of the Newark bank
for more than forty years. At times the Newark
bank has had large sums TO its credit IN the New
York bank. and, at other timcs II has borrowed
Of il large sums for which II gave collateral secur-
ify No question OF the solycucy OF th" NeW-JtI'ey
bank or the honesty Of its cashier ever rose TO mar
the business relations OF the banks. Some ot the
methods of the Newark bank not fully ap-
rroyrd but they v"re explained by the peculiar
po.ion Of the Institu ion in having the accounts Of
large Insurance and mercantile companies lhc
cashier Of tie bank, Mr.. Baldwin, occasionally y
pI4iucd the necessity Of borrowing largo sums fr"n
the Ncw-York corrcsl londcut this ground.
lie represented that the heavy customers Of
the bank had been forced 10 make large pay
mcnts in the c.urc Of their business, and had re-
duccd. Therefore. their deposits. All these oXplaua-
tons which agreed with the known facts were
plausihlv made and accepted uuhe,itatingly. No
little OF the confidence felt IN the bank was owing
to the high character and acknowlcdgcd wealth Oh
its directors.
Shortly after the last statement Of the Newark
bank was published. a popularity in II attracted
the attention of the officers of the Mechanics
National Bank Of TIN, city. II had been observed
nj orc. by officer, o. other banks at Newark who
wondered at tie statement, but could not prove
it false Tins peculiar feature was the large
amount due from reserve agents, nearly ~ l,JooOOO
The officers of tho CORE ponilent bank IN New
York to which the Newark hank was then indebted
about $500 900, sought al explanation oil tins Item
from its cashier Mr. BaIwiu's explanation was
that the money belonged 20 tho Mutual Bcucht Llc
Insurance Company, OF Newark that the bank was
paving small rate of interest on it, and was loan
u IL. a. II rttitl IL
| higher rate Tic transaction. according 10 Mr..
Baldwin. was productive OF a handsome profit
to his corporation, which therefore Interested
i'm not disturbing the loans. There was nothing IN
this 70 arouse suspicion; but when the cashier, IN
reply 10 the natural question. asked 10 Dc excused
| from naming the Now-YOrl banks TO which he had
| lent he money the officers Of the Ncw-lurk bank
| became somewhat alarmed and determined to as
| certain tho correctness OF Mr. Baldwins state
| mcnts They were not quick enough, however and
the failure Of the Newark bank came before they
had lee ned that the representations OF ITS cashier
were false
| CULNyAuoN or TIW CtsWERs DIFFICULTIES.
Mr. Badwin's difficulties eliminated on Saturday.
In preparing for mn examination of his bank ho
made last effort 10 deceive the National Bank
Examiner. No. called at the Mechanics National
Bank in this city which held $i1lOOO IN paper as
collateral security for a loan of over T3OU,OoO Inc
absence Of large amount OF It's bills receivable
would BE- fatal to his passing tho examination, espc-
cially when he was forced to represent still larger
sum as being due from It's Ncw-Yort correspondent
Stepping into the New-York bank he sug lesied that
he would like to exchange the collateral securities
which that bank held He wished, he remarked 10
make some comparisons Of tho paper with his books
He was informed that none of the notes would ma
turc for ut least thirty days, and some OF them not
for two or three months. llo was reminded also
that the books of his bank must show PLAINLY
record of the notes of which ho had full list But
Mr. Baldwin is understoodto hayr been still anxious
to mike the exchange, and to have urged it on