The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-11-29
President King, of the National Bank at that
Place, Loans Large Sums of Money to
B. D. Brown Without Security.
And in Defiance of the Orders Of the
Comptroller and Directors.
Brown Fails to Meet His Engagements, and
Suspension FOllows-Brown's Operations
in Indianapolis and Elsewhere.
THE BANK FAILURE.
The MiddletOwn National Suspends Because
1t Loaned Too Much Money to One Man.

The MiddletOwn National Suspends Because
1t Loaned Too Much Money to One Man.
MIDDLETowN N Y, Nov 28.-The Middle
town National Bank has failed. Its doors closed
this morning The failure was caused by Pres
ident Thomas King, who accepted large drafts
from Benjamin D. Brown, grain dealer of In
dianapolis and Burlington, without secur-
ity. Brown has made an assignment.
The banks capital is 5000, 900; surplus,
$4,000. The extent of the loss is not known
yet definitely The depositors will lose nothing.
President King takes all the blame on himself.
His recent advances were made without the
knowledge of other officers and directors The
bank examiner is on his way from Washing ton.
A slight run was made on the Savings Bank
here, but the latter is in no way involved and
will stand run easily.
Bank Examiner Geo. F. May, of Washington,
is now in possession of the Middetown National
Bank. In July last the directors notified King
that Browns credit must not he extended, but
reduced. King disObeyed the instructions
and broke the bank. The records of
acceptances of Browns drafts on
the bank were kept by King in
a book in his possession and concealed from the
other officers So far as known, more than
100000 of such acceptances are out 1t is the
opinion Of the best informed that the entire cap
ital and surplus will be wiped out
The run on the savings bank here drew 500, 900
today The bank is solvent and ready for any
emergency
Houston & Conklin, and c. @. V. Ketcham, grain
dealers of this village who are indorsers for
considerable amounts on Browns paper, have
made assignments to protect creditors.
President King is at home, very ILL., 1t is not
thought here that he has pro6ted by crooked
transactions, but he was infatuated with Browns
operations, which were very heavy. AS much
as half million of Browns paper was handled
by the bank in single week
A Jersey City telegram says of the failure:
To-day is veritable black Friday for Middle
town. There were ugly rumors on the streets
yesterday Nothing could be learned, but it was
evident big failure was at hand. The bank
had capital stock of 5000, ,000 and a surplus
fund of $l150o0, The president, Thomas King,
was considered one of the ablest fnanciers of
the country, and the bank was looked upon as
one of the solidest in the State No statement
has yet been published. The entire capital and
surplus will be wiped out President King will
make no statement, except that all blame should
fall on him.
The run on the savings bank quieted down
when depositors found all the money forthcom-
ing and the directors announced that all de-
mands would be met The American Loan and
Trust Company sent up $4,000 in currency,
and the First National about the same. All the
banks in the county have slight balances on
collections, the highest being the Highland
Bank, of Newburg, S., 000 and all these will be
paid.
The Comptroller learned that Brown had
been borrowing largely from the bank, and noti-
fed the directors that Browns Indebtedness
must be reduced at once to a point which
should comply with the laws, and this
the directors did. AT the same time President
King was notified that further credit must not
be given Brown. This it was supposed, was
DONE But it seems that King has given him
credit privately. as follows: Brown drew time
drafts on different parties with whom he was do
ing business at various points East; accompany
ing them were bills of ladlng. These were sent
to the Middetown Bank with instructions that
the bills were not to be delivered until the drafts
we're paid King was In the habit of allowing
Brown to take the bills of lading to collect He
did not turn over the money collected, and when
the drafts became due the bank had to provide
for them. King kept private memorandum
Of Browns account and not till ruin was staring
him IN the face did he confess to the directors.
This was on Thursday of last week. Brown was
summoned. and promised to secure the bank, but
failed. Every effort was made to tide over, but
without avail. Browns Indebtedness is not posi-.
lively known. The directors say oil depositors
and creditors, except stockholders, will be paid
in full,
Brown is a native of Orange county, and was
formerly miller at Burnside. While here he
engaged in wholesale grain operations. He then
went TO Indianapolis and built elevator and
he also built an elevator at Burlington, Ia.
Brown was on the 'long" side of the market,
and the recent decline swamped him.
The board of directors of the MiGdletown Ma
tional Bank have unanimously petitioned the
Comptroller of the Currency to appoint Moses D.
Stivers receiver. Mr.. Stivers is the senior ed
itor of the Press, and for fourteen years was
collector of internal revenue for the Eleventh
district
A dispatch from Newburg, N Y says; 1.-THE
news of the Middletown bank failure has caused
excitement in the eastern part of Orange county.
The Newburg banks are not much affected by
the failure. The Middletown institution owed
one of them So 900, which will probably be paid.
Among the directors of the suspended bank are
United States Senator Charles H. Van Wyck, of