Evening star. [volume] (Washington, D.C.) 1854-1972, 1884-10-03
THE MIDDLETON FAILURE.
THE RECEIVER MAKES A REPORT.
Condition OF the Bank-A Total Inde BIT.
edness OfOver $500. .OOO-Over 500. ZOO
said to Have fseen Lost i'm Speculation
by the Eirm-A Confused Method OF
Keeping Books, sc.

Ill tho SdSc vi y. HUTCHINSON against
Middleton Co., Gen. Frank Morey the receiver
appointed by the Equity Court, has filed a report
He states that he received as assets Colorado cat
tie bonds, valued at 5000; 12 San Pedro cattle
bonds, $4,000; North Carolina special tax. 81 900:
Ben Holidays deed OF trust for 1000. 1880 shares
or sundry mining stock, 1917 shares OF Ivanhoe
mining stock. 50 shares United States Capital Eec-
Uric Light company stock, bond OF A. Grant 81 000:
treasury checks. S1125 tax sale certificate, about
$3.50; mutflated coin about s5 5 shares Palm Paper
Pulp company stock. share Washington Gas Light
stock, certificate auditor OF Virginia. S26; nickeS
and trade and Mexican dollars. s92 5O held as co.,
lateral for J. H. HerronS note I65 shares Palm Pa
per Pulp company stock; collateral D. V. s Smith,,
collateral n. II. Camps note. $50 United States
Doid ana watch; cash In bank OF Riggs Co.,
a7a 80; bills received pledged with Rigs Co,
4569, against 1900 draft: United States Home and
Dover certificate for So, ,11Sl5 bank fixtures.
49,. me bllls receivable make list footing up
So5, ,2229 l6 with another list headed "Very old and
worthless" OF S2.733l6.
THE METHOD OF BOOKKEEPING.
The receiver says that an examination OF the
books OF the firm developed the fact that the usual
manner OF bookkeeping prevailing In banking
houses had been widely departed from by the firm
me custom or striking yearly balances was not
followed by this firm. Their manner OF keeping
their stock accounts was such as to lead to great
CONFUSION anu almost certain loss to the bank as 1t
was impossible to tell from day TO day whether or
not the bank was protected in its advances In the
purchase or sales OF stocks for the account of its
customers careful examination Of their busi-
ness transactions with Middleton, Dichmau CO.
OF New York, with which firm all OF their stock
transactions since October last were made inc.ud-
Ing the examination In New York OF the books OF
the latter, and comparison with the accounts rem
dered shows that the returns made OF Middleton,
Dchman Co. We're correct, with the exception of
one Item In which mistake OF the price of stock
purchased occurred. The accounts OF Middleton,
Dchman & CO. with Middleton Co Were found to
have been kept in accordance with correct and
usual banking methods
THE "sTOCK SUSPENSE ACCOUNT"
On the books OF Middleton & Co. there appears
an account colled "Stock Suspense Account"
which the receiver says is unknown in banks where
proper methods of bookkeeping for stock accounts
prevail. This account shows losses 10y the bank
aggregating s227 10. This. the report say,
represents the losses by the firm in dealing in
stocks for their own account A large portion OF
the losses OF the bank under the head OF "Indebt-
edneSS On open account" consists Of amounts due
by various parties whose losses were made by
dealing IN stock or margins through the ank, and
whose accounts We're not closed when their Secu-
rity and funds Were exhauste /, but were carried
without any security whatever for long periods
involving the bank In great loss. With reference
to such accounts the bank took all the risks OF loss
In banking and Stock brokerage business could not
DC otherwise than productive OF disastrous results
GROWING WEAKER YEAR BY YEAR
The receiver concludes: "The bank has been
growing weaker, financially, year by year for
several years past, but the great confidence re-
pOSeu III the Nrm ana IN The supposed conservative
methods pursued by 1t in the conduct OF its buSi-
ness enabled it TO secure, until within brief
period prior TO its failure, continuous flow Of
money into the Golfers Of the bank to an extent
tnat enabled them TO continue business. the
deposit OF Peter being available to pay the draft
or Paul In ORDER however TO meet the continued
drain on the resources of the bank. the various
securities OF the bank and its customers We're sold
or hypothecated from time TO time to bridge over
immediate necessities, UNTIL when the bank closed
Its doors. its vaults had been emptied OF almost
everything OF value that could be sold hypothe-
Gated. Five days prior TO the suspension OF the
tirm an assignment was made by them to f.
firm OF Middleton, Dichman & Co, OF New York.
NO copy or the act OF assignment was preserved by
the nTnl, but Mr. E. Dichman has promised TO fur
niofl me copy of the act as as his attorney
returns to New York, said attorney having possess
sion OF the same"
THE TOTAL INDEBTEDNESS
The total Indebtedness Of the bank is stated at
s64S $685. The assets consist OF open accounts of
individuals, amounting to s131,15414; notes and
bills receivable, S 62 S.: 500 657 shares OF Ivanhoe
and other mining stocks, par value, S5l6. .425 and
few other small amounts. Up to this date he has
collected from ali sources 81 9a4 So and diSbursed
$3524 40. leaving balance in his hands OF So 572 o.
The following summary is given showing the prn-
$227 s9S 49,: open accounts 1150i general ledger
accounts, S23 926 As; bills receivable 962 Ivan
hoe mining stock. S27.3Sl; other mining stock,
$500, suspense account. S36.6Q: United States
Home and Dover association, 32,1lS Is: Ellis gold
mine, $9,143 96: expense account, S10,495 Profits
and loss accOunt-On house, Sd and streets,
ga 20; notes and checks of $. f. and D. W. Mid
detoG, S394439 &c. cattle bonds $1,000; bond account
$22. 1885, failed banks, 81 ,S95. o sale OF Waggeman
farm, 1882 80: due from mines. 1894 Total