Evening star. [volume] (Washington, D.C.) 1854-1972, 1884-07-02
THE MIDDLETONS, RECEIVERSHIP.
The story Of the Plundered Bank.

The story Of the Plundered Bank.
THE TRUTH COMING oUr-THE SECURITIES OF MKEN
NEY, RATHBoNE AND OTHERS AFPRoPRiATED-THE
EMPTY ENvELoPEs-D. W. NIDDL4ToN's ABSURD
pESIALs-THB WHIRLPOOL "IN THE GENERAL
FoT'-BASK BOOKS UNSETTLED FOR TEN YEARS
TIE IMMENSE NEUTRALITY-SUSPICIOUS. INVOLVED,
ETC.
The secrets OF the broken banks are slowly but
surely coming TO light. The Developments In court
In the suit OF j. II. SQuier Co.'S creditors created
something OF sensation as to partnership rela-
tons, but they will not compare with the revela-
tons which promise To follow the appointment OF
receiver Of the disgraceful failure OF the Middle
tons, persistent effort has been made from the
outset to make it appear that this was sudden
failure, based On ordinary business casualties, and
that only the depositors would be the sufferers.
The charge was first presented In THE STAR that
securities lett In this bank for Safekeeping or con-
version into other bonds or stocks and which were
in 10 sense deposits, had been wrongfully hypOthe
Gated and sold. 1t was met with prompt denial
by D. W. Middleton in published card in a morn
Ing paper. Several days afterwards the charges
were reiterated more in detail In The STAR, with
facts and figures. but d. w. Middleton. In an inter-
view with a representative Of THE STAR the same
day, declared again that the statements were utter
ly unf0unded, and, to use his own words were
that he would secure letters or statements refutng
them from the persons named in the article soon
as they could be seem one Of the principal parties,
Mr.. Nckenney. clerk of the Supreme Court OF the
United States. being absent from the city. There
was such air or sincerity and innocence In these
Claims that without waiting Tor the evidence The
SrtR, resolved TO do no Intentional injustice to any
one, published or the next day an article which
stated that "Mr. d. W. Middleton makes a most ex-
phcit and emphatic denial TO the charge OF any de-
postor or o. anyone else that securities belonging
TO their customers were appropriated, or that they
disposed OF the contents OF any safe, contrary to
the instructions OF the owner OF the same"
WHAT ARE THE FACTS ID. W. MIDDLETON CONVICTED
OF MISREPRESENTATION.
The statements made in TIE STAR regarding the
misrepresentation Of securities by the Middletons
were based on very early Information which has
since been confirmed, and which will be more fully
developed in the legal proceedings which have
been commenced. On Monday, May 25th, informa-
ton was brought to this Office from most trust
worthy source-a source familiar with most OF the
details OF the bank, as the subsequent develop
meuts have proved-and i've days before the bank
Sunday an investigation which had been made
showed q startling condition Of affairs; that the
deposits had been squandered; that securities and
bonds belonging TO other people had been taken
away. aud had been either lost in speculation or
appropriated. and that as consequence the frm
had dis -olved. D. W Middleton having been forced
Uul by his New York partner, Dtchman. and his
Washington partner, $. E. Middleton. THE STAR
OF the same afternoon, In the Especial Notices."
contained the advertisement OF this dissolution.
This informant added that Mr.. S E. Middleton ap-
peared aStOunded at these developments, and pro-
tested that he had no hand In bringing about such
a condition OF things, and that he had told D. w.
Middleton that he must leave the bank or that he
Is. E. Middletonl would close IL UP. The CORE
spondence subsequently exhibited here by Mr..
Dichlnan showed that an effort had been made for
some time TO force d. W. Middleton out OF the nrm
for Incompetence and irregularities" MI. S. E.
Middleton as is we'll known, struggled along till
Saturday morning, May 3Oth when the bank was
closed, and an assignment was made by the Mid
been abandoned. The assistance which had been
promised 5. z. Middleton it now appears. failed
TO arrive the day before, but the nsi result shows
that II it had come to hand 1t would hate been
almost impossible Tor him to have stood alone with
the large Liabilities that have overwhelmed the
firm SO little was known OF the IS true inward
ness or the bank, even during the week succeed
ing the failure that some OF the largest creditors
were willing TO make most any terms In the way
OF extended notes TO permit the firm to resume.
HOW THE EXPOSE WAS MADE
Ten days passed very quietly without any devel-
opments of public character During that time
Admiral Howell and others had written to the New
York branch OF the firm inquiring If certain stocks
and securities had been purchased on their ac-
count with funds supplied to the bank here. The
replies were. that while the money had been re-
ceived, there were no orders to buy, and that the
amounts were In New York to the Middletons
credit These inquiries became SO numerous
that MI. Dlchman. OF the New York firm, came on
In day or two with bag full OF Middleton &
G9s original letters Orders etc. which confirmed
MI. Dlchlnan, when asked what, in his belief, had
become OF the missing 100000 or 800 900, said ne
stocks or had lost it On bad loans here In fact he
was very open In his expressions OF opinion as to
what had become Of some OF the deposits and the
large amount OF securities, and openly urged all
legal steps TO find where these funds were II the
NlddetonS had any defense explanations to
the creditors committee and Show If those large
sums were lost through failures In the ordinary
business channels or had been. as he openly
charged, deliberately appropriated They certainly
could be traced, in his opinion TILL the creditors
were satisfied one way or the other. At this meet
consisting OF W. B. Webb, the weli-known LAWYER.
81 e. Payne auditor OF the court and Frank MOrey
eX-memoer of Congress from Louisiana. Messrs
Weob and Payne are not creditors, but attorneys
representing creditors, while Mr. MOrey, who spec
ul ted through the MiddletOns as bis brokers' rem
resented his and the general losses MI PAYNE
mas been I'LL and not able to attend the committee.
THE COMMITTEES INVESTIGATION
The result OF this has been mainly confined to |
the assgnees footings OF the books and has proved
most unsatisfactory. the bill filed in court YES
terday shows. AS stated at the outset the books
have not been settled In ten years ana do not show
these have been carried In the head and on memo
randa. in the Ferdinand Ward STYLE and tt will re-
qire an expert to bring order out OF chaos under
the direction OF competent receiver. One feature
OF the assgneeS statement requires a great deal |
Oh explanation. That is, the "overdrafts." put
down in round figures at 1863 CO., Some OF this ia
accounted for. but large part Is not. The Ques-
ton is. who got that portion OF the overdrart? AS
10 the assets they prove to be Just what was antia
pated and on the full Investigation now ordered
VIII leave, IL Is believed, little or nothing for the
creditors The nominal assets are what are
known In the financial slang OF the street as
catS ana dogs, and are utterly worthless.
TIE PLUNpEgED BANK-rHE MISSING SECURITIES.
one OF the largest losers in the way OF securities
as well OF deposits, Is, has been stated In THE
STAR, James H. Mckinney, clerk of the C. s. Su-
preme Court He fully confirms the original state
ent that all he received in lieu OF one package OF
bonds he had there was the plundered enyelOpe
This was taken empty from the safe by Mr. Ken
ncy IL the presence or three witnesses and is now
III the owners possession. gentleman with whom
Mr.. Mckenney has advised, and VINO Is familiar
with The whole transaction, was interviewed by q
STAR reporter this morning, Mr.. Mckinney de-