The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-07
OLD MULES as ASSETS
CADWALLADERS MADE CASH OUT OF
ANY OLD THING IN THE BANK.
Pierre Gray Tears the Mask of the
Union City Bankers in His Testi-
mOny at Winchester.
Special to the indianapolis journal.

WINCHESTER, Ind, Dec. civilian K.
Smith, a director in Cadwallader's Union
City bank, Jesse Canaday, the receiver, to-
gether with r. Kirshbaum and Pierre Gray,
were the main witnesses in the Cadwallader
trial to-day. Mr.. Gray proved one of the
best witnesses for the state thus far in
troduced and his testimony was at times
almost sensational. Col. Isaac P. Gray was
director in the bank and of this fact and
the further fact that some other good men
were connected with it the defendant has
sought to make capital. Pierre Gray stated
that his father was at the bank only twice
after 1893, which was about the time he was
made director, and did not know how the
business was conducted; that he had i'm
plicit confidence in the Cadwaladers, whom
he regarded as his friends. He testified that
after the death of his father and after part
OF the stock fell to him he asked to be made
a director, but his request did not seem to
suit the purposes of the Cadwalladers at
the time. In March, 1896, however the
Cadwalladers seemed very anxious that he
should not only become director, but that
ne should become president of the bank.
At that time he received no hint of the
Reeves defalcation or the otherwise rotten
condition of the bank. although both were
him: Il want you to take charge of loans
and outside business and 1 will look after
the inside business
Mr.. Gray was made a director of the
bank April s, 1896, and his brother made
an examination of the books and the bills
receivable, beginning the next day and COM
pleting the examination April IL. Mr.. Gray
said Cadwallader then told him of the
Reeves defalcation and admitted he knew
of it in February and afterward admitted
he had known of it for five years. The wit
ness said he and his brother spent their
time with bills receivable and deposits,
while Cadwallader furnished the books as
called for After the examination Mr.. Gray
made report to Nathan Cadwallader in
the presence of his brother Bayard and of
the defendant, Charles Cadwallader
Mr.. Gray then went over this report to
the jury as made to Nathan Cadwallader
and his son, and both of them paled as the
history Of their rotten bank management
was exposed. Said the witness: Charles
Cadwallader deceived me as to the ReeVeb
defalcation and other things. The manage
ment of the bank was most negligent. NO
trial balance was kept, and Charles said
that none could be made. More loans had
been made than are shown by the books. l
found a loan had been made from the Ran
dolph County Bank and not carried in the
bills payable but in the deposit account.
Stock OF the bank was carried as bills re-
ceivable. Cadwalladers neglect Of the
business Of the bank was notorious found
no account kept of overdrafts, and 1t
seemed that every one in the bank over
drew his accounts, and many of the over
drafts We're of long standing. Loans We're
neglected and collections not promptly
made. Many notes of the bank had long
been out in the hands of attorneys for col
lection, and the receipts on file We're carried
as bills receivable. / found that Reeves for
a long time had the combination of the
safe, and no change was made even after
his defalcation was known. Much real eS-
tate belonging to the bank had been carried
longer than the statute permits. also
found two mules belonging to the bank,
valued at $3.50, carried as bills receivable.
These were on the farm working for their
board. They were carried as DlllS recelV-
able five years. found the bonds
Of Nathan Cadwallader as president,
Charles Cadwallader, as cashier, and
Reeves, as teller, had not been renewed for
years. Loans were made to favorttes and
parties already largely in debt, and so for
years. Past due bad paper had been in
dorsed to the bank and not taken up. In
terest on old loans was added into new loans.
Nathan Cadewalladers account was over
drawn and he is personally liable on $lO,UO
of notes. Charless entire Indebtedness to the
bank was about $4,000, and he is over
drawn in three accounts. Ida, sister of
Charles, owes the bank $3l9l, and Guy G.
Grouse a son-in-law, is heavily in debt to
the bank. | also find the wife of Nathan
Cadwala6er, Glenn Hardy, another son-in-
law and a number of others who were con-
nected with the family, all overdrawn."
The witness said: "A single examination
of the monthly statement from correspond
ent banks would have disclosed errors and
made manifest the carelesSneSS OF the Cad
walladers. L told them al the examination
that Charles is said TO gamble and Reeves
kept a gaming place and women. | SAID: l
consider you, Nathan Cadwallader, and
Charles both legally and morally responsible
for Reeves's defalcation.'