Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1883-08-24
THE ST. ALBANs FAILURES, ONCE MORE

THE ST. Adams FAILURES, ONCE MORE |
In our recent comments upon the course
of the State Inspector of Finance and the
National Bank Examiner in relation to.the
st. Adams Trust company and the Vermont
National bank we did not assume to pass
judgment upon Mr.. Hendec and Mr. Dewey,
but we simply asked a few questions which
everybody recognized as pertinent and an
swers to which we're due to the unfortunate
depositors in the wrecked Institutions and to
the general public. Neither of the gentle
men referred to has us yet seen fit to furnish
any answers to these questions, but some
friendly newspapers have undertaken to do
so in their behalf, and as matter of justice to
them we will present their side of the case.
In behalf of Mr.. Hendee, National Bank
Examiner, it is said that he reported to the
comptroller of the currency the large and IL
legal loan made to Mr.. Barlow by the Yer
mont National bank the comptroller did
not sec fit to call the bank to account and
until he did Mr.. Iendec had no authority in
the premises. Whether this is true or not
we have no means Of knowing If 1t is trne
it simply shifts the responsibility from Mr.
Hendee to his official superior. This, we
imagine, will not prove much of consola-
ton to the unlucky people who had $3.50, 900
deposited with the broken bank. But the
fact remains that Mr.. Hendee, if he made
thorough examinations of the bank, must
have known for a long time, it would seem,
that the bank was practically insolvent, as
well as that its officers were making illegal
loans. We should be glad to have him ex-
plain his course in the matter.
As to Mr.. Dewey's action in reference to
the Trust company the following explana-
ton is given:
When Mr.. Dewey examined the condition
of the Trust compony on the 18Th OF July,
and discovered that about $500, 900 of its
assets had been loaned to the Norwood
lumber company, he expostulated with MIR.
Burgess, the treasurer, aud insisted upon a
reduction of the amount. lie was assured
that at least 800, 900, and probably 100000
of the paper would be taken up within three
months, or by the middle of October, or the
first of November, at the farthests lie was
shown that it had been customary Tor the
bank TO hold a similar amount OF the COM
pany's paper during the Summer, which
had been taken up in the Fall, after tic
company had shipped its lumber. He Wa:
also shown that the Norwood company
was perfectly sound financially that il
had cleared 500, 200 last year, and $3.50, OOC
during the last three years. lie stu insisted
thvt the loans were improper MIR. Dewey
counseled with competent gentlemen, and
determined that the best course was to make
no public exposure of affairs; but TO dc
everything in his power TO have the loans
taken UP, and that being done, 10 forbid sucl
things 10 the future. Mr. Dewey discovered
that, owing to the defects in the Revised
Laws, he had no legal power to do more
than TO throw the company into insolvency,
if be had that and it would certainly bt
mpolitic to take any course which woulc
precipitatc run. At that time DR. Brain
crj was believed to be worth S5OO,OOO, and
MIR. Dewey had no idea that he was endorsei
for Mr. Barlow for any considerable amount
In reference to this, it is enough to say
that if the above is all the Inspector of Fin
ance can do, the State may well abandon
any attempt at supervision to trust compan
les. As in the case of most insolvent cor
poralions, the officers Of the Trust company
strenuously maintained that it "would be al
right in the Fall when the logs came down,
and the Inspector allowed 1t to go on, taking
deposits and increasing the circle of its vic
Tins every day. And by the way,-we ask
simply for information-was this examina
ton of July 18th the first examination thu
INSPECTOR made of the Trust company
affairs?
Trust company, we may..add, in conclusion
is an extremely unsatisfactory document. A
citizen of st. Adams writes us concerning it
at tends only to render the darkness more
visible" He goes on to say;
"True it bids depositors hope, and init
mates that all will be well IN the end. The
public, however, do not look with favor upoI
the statement and would like to see some
thing more in detail. This is promised
when receiver is appointed and has madt
, an examination So that those interested tC
know where their money has gone, W III per
haps learn how much money has been loanet
to the Norwood Lumber company, and upor
: what security it was loaned how mucl
, Mr.. Brainerd, the president of the Trus
company is liable for as cndorscr for Barlow
, what the demand paper to the amount o
S35, 000," is that was deposited with thu
Vermont National bank and also what thu
$50, 900 is deposited in the same institution
In short detailed statement will doubles
be made for the benefit of those interested
The statement in the Messenger says thi
; twill more properly come from the receiv
err" but why is far from clear. Deposition:
think it should come from those who ough
to know most about the Trust company
affairs and standing, viz the officers OF tina
, institution.
The fact appears to be that the people hav
been robbed and swindlcd by wholesale, AM
so far as can be learned the National Banl
Examiner. and the State Inspector Of Financ
did not take single vigorous and detcrmin
ed step to prevent it. That, at least is th