Middlebury register. (Middlebury, Vt.) 1886-1937, 1900-03-30
A BANK IN TROUBLE.
MERCHANTS NATIONAL Or RUTLAND
CLOSES ITS DOORS.

Cau>e-Shortag" to the Amount OF = IT,
OOO Discovered-Cashier Mussev Explains
How lie Deceived officials.
The Merchants National Bank of Rut-
land did not open its doors for business
on Monday morning last. An examlna-
ton was Instituted on Saturday after
noon by a committee of four of the d.
rectors, consisting of President John a.
Mead, +. G futile, II. l.. Clark and w.
Il. Page. This examination continued
through the greater part of Saturday
night and Sunday, says the Rutland News.
Some transactions Of the cashier,
Charles w. Mussey. have recently been
questioned by the directors. As a re-
suit of these suspicious the committee
named entered the bank on Saturday
afternoon and announced to Mr.. Mussey
that they were there to make complete
examination Of the securities snd every
thing connected with the bank and asked
him to produce them.
The cashier laid before the committee
all the papers and accounts of the insH-
tufion am soon thereafter left. He
went to ALBANY for a conference with
relatives, but on the advice of friends
speedily returned. IIe was placed under
arrest when he arrived in the city Mon
day morning at O'Clock He is now IA
private room ia the house of correction.
being unable to secure the Sl0O,O 600 bail
required.
The Investigating committee had mean
while in looking over his books found
In Iu
They have discovered misrepresentation
OF funds to the amount of about SLID
600. A. a result ID. -. Muir was APP
pointed temporary receiver of the bank.
MIR. Muir was formerly banker at
Lincoln, Ncb.
out of town directors were called to
the bank sunday and everything was
done TO clear up all of the mysteries.
The incorporation Of funds systema-
ticallv practsed by Cashier Mussey was
adroltly concealed. Indeed. it is shown
/ that the system adopted by the cashier
was so skillful "a to deceive not only the
committee OF directors which periodically
went over the accounts, but three
different bank examiners. all of them
experts. who have examined the bank
within a year The last examination
was made by Examiner Whitehead on
March :.
Depositors in the Merchants Bank feel
confident that the outcome will be favor
able as far as they are concerned. The
resources of the bank are ample to meet
in time all demands upon it. Depostors
in national banks are protected first.
Stockholders are liable to an amount
equal to the amount of stock held by
them to protect depositors.
The Rutland Herald gives the follow
ing in explanation of the troubles OF the
bank: When Charles w. Mussey reach
ed this city in company with Frank
Winship of Albany. he was met at the
depot by Charles II. West and conducted
to the Merchants National bank, where
most of the directors were assembled. \
long list of questions had been prepared
for him to answer, and he stated to the
board that for several years he had
Systematically dOctored the bank books
IN "A way to deceive them. He stated
that some years ago NJ 4. Mcclure had
applied to the bank 10 discount his note
for $500 and that the directors had
declined to do so. subsequently, Mr..
Mussey on his own responsibility dis
counted Mr.. McClure's note for "A sum
not stated and took as collateral certain
installment notes held by Mcclure which
were given to him by his customers who
had bought pianos. McClure's note.
backed by II o. Edison, was renewed
from time to time, increasing in amount,
and the cashier concealed the fact from
the directors. 1t was stated by an officer
of the bank last night that the aggregate
of these noes was - lj.3JO. The
Mcclure installment notes deposited as
collateral are about SIS 600, on which last
week there were no Endorsements. Mr..
Mcclure was sent for by the directors
and by the aid of his books last Saturday
Endorsements to the amount of about 30
per cent of the SIS GOO were written on
the backs of these notes.
In answer to questions Mr.. Mussey
told the directors that he was discount
ing the Mcclure notes by a system of i'm
proper entries. He said that he pre-
pared each month on different sheets of
paper lists of bills payable and at the
head of each sheet he had noted in
shorthand invented by him the amount
that he was short and after the directors
had checked of the various notes he
managed by referring to his shorthand
notes to change the figures so that when
the directors few minutes later began
the process of adding the columns the
footings included his shortage.
When asked how it was that he could
deceive the bank examiners, Mr.. Mussey
said that that was easy. His practice was
10 make out "A list of fictitious notes prop
erly signed by prominent business firms
and indorsed by the forged names OF
men of financial responsibility and
properly stamped. These were inserted
among the proper assets Of the bank for
the inspection of the examiners and
were afterwards taken out and destroyed.