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44TH

CONGRESSf

1,t Sssion,.

J HOUSE OF

j

REPRtESBNTATIVES.

RfEPORW
No. 502..

FREEDMAN'S BANK.
MAY

the Select Committee
19,1876.-Recommitted toordered
to be printed.

on

the Freedman's Bank and

Mr. DOUGLAS, from the Select Commiittee on the Freedman's
unanimous consent subinitted the following

Bank, by

REPORT:
IN TIlE IIOIUSE

OF

REPIIESENTATIVES,

January 5, 1876.
Mr. Douglas submitted the following, which was agreed to :
Whereas the failure of the Freedman's Savings and Trust (Colmpany, cllartered by act
of Congress approved March 3, 1865, has resulted in gre'(t loss and injury to large
numbers of freedmen, depositors therein; and whereas thecauses of and responsibility
for said failure have never been filly inquired into or ascertained by any committee or
by any order of Congress; and whereas said failure is alleged to have been caused by
gross ulismanagemolent of the officers and agents of said compl)any, and by unauthorized
and illegal emoploymnent and use of the funds of the corporation:
Be it resolved by the House of Representative8, That a committtee of nine members be
by the Speaker to investigate the affairs of said Savings and Trust Company
appointed
and its several branches, to ascertain and report t9 the House all matters relating to
the management of the same, the cause or causes of failure, the parties responsible
therefor, and the nature, character, and value of all collaterals and other securities
held by said company and its branches for loans or investments of the funds of the
same. That said committee also ascertain and report the nannies and residence of all
debtors of said Savings and Trust Company, with the amounts, respectively, due by
them, the time when the debts were severally contracted, and the kind, description,
and valu6 of the securities given by said' debtors, respectively, with such other faots
tbereto as the committee may deem important and necessary to a full underrelating
standing and elucidation of the subject-matter of investigation.
Be it further resolved, That said committee and any subcommittee thereof shall have
power to send for persons and papers, to summon witnesses, and to administer oaths,
aund may at any time report progress in their investigation, and shall have leave to
a clerk and such other exports as may be required to aid therein.
employ
Attest:
GEO. M. ADAMS, Clerk.
Your committee have had under consideration the matters referred
to it by the preamble and resolutions prefixed hereto, and have taken a
large amount of evidence, which, together with this report, is respectfully

submitted to the House of Representatives.
Asa befitting introduction to their report your committee offer the
following brief account of the origin, structure, and early history of the
institution commonly known as the Freedman's Bank, from which it is
believed that if not originally conceived in fraud it will be easy to discern how naturally it degenerated into a. monstrous swindle and justifies
a suspicion that it was, almost from the start, merely a scheme of selfish.
ness under the guise of philanthropy, and to its confiding victims un.
incorporate body of false pretenses. While the civil war was still in
progress it had occurred to some of the generals of the Federal armies
that depositories for receiving and keeping the pay and bounties of the
colored Union soldiers would be a convenient and necessary provision.

II

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

for their benefit, and accordingly military savings banks were established
at Norfolk, Va., and at Beaufort, S. C. They seeil to have been well.
timed and suitable to the object ill view, as the colored soldiers eagerly
availed themselves for (depositing therein such portions of their )ay and
bounties as they did not. need for their own immediate use,and large sums
were found to have accumulated in them when active hostilities ceased.
From some cause or other, but doubtless by the death of many,
the dispersion of the survivors, and the prevailing ignorance of
the class of depositors, this money remained uncalled for, and
(allowing for some peculation) for the most part a l)rofitless incumbrantce
to the stakeholders. To utilize this fund and to collect and turn to
profit the large sums still due and to be paid by the Governilentseemed
to have 1,ed to the conception of the idea of a Free
d1man's Savings and
Trust Company, ostensibly for tile benefit of " persons lately held iu
slavery," but, as the sequel proves, for their spoliation and robbery. The
Freedmen's Bureau, so redolent of evil under specious guise, and au
public moneys, readily
adept in the ways and means of squandering
the personal agencies requisite for tile undertaking. Of these
supplied
the chief and the real founder of the so-called Freedman's Bank was one
John W. Alvord, atu attach of the bureau, and superintendent of its
educational department. This man, who lhad been anything but a success, abounding il pious pllatitudes about the good of mankind in general, but with a keen eye to the main chance at the same time, having
a failure in both lay and clerical pursuits in other sections, now
proved his
benevolent regards to the confiding and ignorant black eleturned
ment of the South. He got up the charter for the bank, a charter so
singular in its array of high andl eminent names for corporators, for
its business organization, whereby nine out of fifty trustees were con.
stituted a quorum, and so utterly and entirely without safeguards or
protection for those who were to become its patrons and depositors that
it is hard to believe that its author, whatever might have been his other
deficiencies, did not thoroughly understand how to organize cunning
against simplicity and make it pay for the pleasure of being cheated.
As no intentional injustice is designed by your committee in their search
for and exposure of the men who are responsible for the outrages perpetrated upon the colored people by the bank, we desire to say right
here that many of the distinguished and eminently worthy gentlemen
who figure in the charter never gave the use of their names and never
accepted or undertook to execute the trust it created. They were thrust
in for appearance' sake and to make the (delusion attractive and cornplete. Some who really believed in the good professions of the proof the scheme and its adaptability to promote the welfare of
jectors
those for whose benefit it was apparently intended, and who at first
took seats at the board of trustees, quickly vacated them in disgust,
and the whole management soon devolved, as was manifestly the intention that it should do, upon a cabal in Washington, consisting of a small
trustees. Still further to protect the innocent
minority of theforacting
an
even
relroacll
from
apparent connection with the institution, we
sliall as we proceed point out those who really deserve reprobation and
for the shameful mismanagement of its affairs. If not a
punishment
task
it is one called for by the order of the House and depleasant
manded by justice to that class of citizens who have been so grossly
by this new confidence-game called "The Freedbetrayed and fleeced
man's Savings and Trust Company.1"
The charter of the company was obtained from Congress by an act
approved March 3, 1865. The objects of the corporation, as set forth

III
FREEDMAN'S SAVINGS AND TRUST COMPANY.
in the fifth section, were to receive on deposit for safe-keeping and investment for their benefit, all sums that might be offered by "1 persons
lately held in slavery" flrom one dollar upl. Tile money so r'cceived was
to be invested or loaned upon Uniited States Goverll ellt bonds and(
stocks alone, except that a sumt1 not exceeding one-tlird of all the dewas to be kept as an "l available fund, at interest or otherwise,
posits"
to meet current payments." The idea of a general banking concern
with affiliated branches extending to all parts of the country is nowhere
upon the charter, anld if it had been, would( have exposed it
impressedconstitutional
to grave
objections. Nevertheless, tile company speedily
with
office at first in New York, where at least
its
principal
organized,
some regard was paid to the requirements and to the limitations of
the charter, andl where it would have been well for the depositors
if it had remained. It was not until Alvord became president
and the bank in fact brought to Washington, where it was subto all manner of malign influences, political and speculative,
jected
sole and corporate, that the ; irregularities" of which the management

guilty, became so frequent and( portentous as to attract attention,
an( call forth the alinla(dversions of' such newspapers as were not
subsidized to conceal or palliate the abuses. But located here, with no
bars to its vaults which thieves might not break through and steal, and
no penalties for embezzlement or misuse of its funds which, substituting
fear for integrity, might have afforded some security, the deposits
were squandered and wasted without regard to the sacred nature
of the trust on which they weer held, and in cruel mockery of
the hopes and expectations of the deluded freedmen. Theoretically,
the design and the structure of the bank were admirable. The pecuniary benefit of the freedmen, and the moral and social advantages which
attend upon material prosperity, were the avowed objects. The various
duties of this beneficent scheme were so divided and allotted out to
boards and committees as seemingly to insure efficiency and fidelity in
the officers and agents, and proper guarantees to depositors. But the
human instrumentalities on which the system depended for its successfill operation were Ilaientably defective. As before said, the law
lent no.efficacy to the moral obligations assumed by the trustees,
officers, and agents, and the whole concern inevitably became as a
whited sepulcher," "fair on the outside, )but within, full of dead
men's bones," rottenness, and corruption. Tle inspections provided
the by-laws were of little or no value, either through the connivance
by
and ignorance of the inspectors or the indifference of the trustees
to their reports, the latter clearly appearing from the testimony of
A. M. Sperry, the principal inspector, who says he labored long and
in vain to bring about a correction of abuses-never succeeding entirely
in doing so-and had sought for two years to have such an investigation as your committee were ordered by this Congress to make of the
affairs of the institution. The committee of examination, composed
of G. W. Balloch and others, were -still more careless and ineffiwhile the board of trustees, as a supervising and adinilistracielnt,
tive body, intrusted with the fullest power of general control over
the management, proved utterly faithless to the trust reposed in them.
was left to the actuary and the finance committee. Such
Everything
was the practical working of the machine. Still, amid much irregularity,
as evidenced by the books, so long as the loans and investments were
based on Government securities, and the available fund kept in a really
available form, there were no heavy losses to depositors, and no positive
proof of corrupt and collusive misapplication of the ftnds. Had the
was

IV

FREEDMAN'S SAVINGS AND TRUST COMPANY.

policy first inaugurated been adhere( to, there can be no room to doubt

that losses would have l)een chiefly such as were inevitable fioml tile
vast number and the dispersion of the depositors and the very small
sums deposited by many, and even this, while entailing some loss upon
individuals, would have been a practical strengthening of the bank as a
financial institution and a safe depository of the money intrusted to it.
The time came, however, when there was fatal del)artllre from this 1)olicy,theand theofruin which followed is ill no small degree directly imluitable
to
act Congress apl)proved Maly 6, 1870, whereby the charter was
so amended as to allow onle-lllf of tlie deposits not held as an available
fund to be invested in loans secured on real estate.
The law1 ili question provided, it is true, that the security take!. should
be, in double the value of the loan granted, but, as in the original charter, no means were prescribed for colml)elling its observance or punishilg its violation. This act, it is shown, was obtained through the active
agency of William S. luntington, then cashier of H. 1). Cooke's bank,
imiember of the finance committee of the Freedman's B-ank, mixed up
with all kinds of jobbery, anid bound by business ties or close personal
intimacies with atll or nearly all of the wild and questionable speculat.
ing rings of the District of Columbia. It is evidenIt, however that he
did not act in the matter upon his own responsibility or una(lvisedly,
and it is proved that the amendment was the work of the managers of
the bank, without the knowledge or assenlt of the depositors. But they,
the dlepositors, were of small account now compared with the personal
interests of the political jobbers, real-estate pools, and( facy-stock sl)eculators, wllo were organizing a raid upon tle free(lmen's money and
resorted to this amendment of the charter to facilitate their operations. Tlhe District government, too, came in to hasten annd profit
by the work of spoliation thus inaugurated. Its treasury was wholly
unequal to the task of sustaining the magnificent expenditures of
the board of public works, presided over by H. 1. Cooke, and
controlled by Mr. A. IR. Shepherd. Some exchequer must be found
to advance upon the ldepreciated bonds and worthless aulitor's certificates of the I)istrict, or the contracts must fail, and the s)eculations of the pool and of Shepherd and his friends in out-of-the-way
and uniml)roved town ,lots come to grief. This mass of putridity, the
District government, now abhorred of all men, and abandoned and repudiated even by the political authors of its being, was represented( in the
bank by no less thanr five of its high officers, viz, 1). Oooke, George
W. Balloch, Win. S. Hullntingtton, a1). . E.aton, and Z. B. Richards, all
of whom were in one way or other concerned in speculations more or
less dependent for a successful issue on sustaiinng tlle contractors under
the board of public works, and a free use of the funds of tle FreedB13ank. They were high in power, too, with tile dominant ininans
fluences ill Congress, as the legislation they asked or sanctioned and
obtained, fully demonstrates. Thus it was that without consulting the
wishes or regarding the interests of those most concerned-tle depositors-tlhe vaults of thle bank were literally thrown opeu to unscrupulous greed and rapacity. The toilsome savings of the poor negroes,
boarded land laid by for a rainy day, through the carelessness and dishotlest colnnivance of their self-constituted guardians, melted away-van-r
ished into thin air in the form of millions of so-called assets, on which
by no possible contingency can fifty cents on the dollar be ever realized
to the unfortunate victims of heartless duplicity and misplaced confidence. Tle wolves literally became the pastors of tle flock, and, without compunction or remorse, devoured tle younglings committed to
.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

v

their c 're. In the foregoinlg narrative your co lmliittee hIave necessarily,
though somewhat incidentally, toucIhed upon llan(l pointed out thelprim'ie,
but remote a.nd ind(lirect, causes of tlie failure of the Freedmalll Bankwhich was t;he utter and complete omission to provide ill the law of its
organization any safeguards for the protection of the (depositors, who
were encouraged and invited to trust their millions to its keeping.
Iln no age anld uinlder nlo dislpensation, political or otherwise. li1s it been
foundthal t a corporation, " without a body to be kicked or a soul to be
damiedl," colild be safely trusted with the unlimited control of other people's property or money. The same, with very rare exceptions, holds good
as to individuals. In any such case tlie law which fails to provide adequate guarantees of hollnesty and
f1laird(lealing, and )punishment ior gross'
and b)reachl of trust in tie use and emnlloyiment of trustnegligence
funds anlid property, is itself the temptation to evil-doing, and justly
exposed to tihe severest replrobatioi. That the law, original andl uaendatory, under lwhichl tle Freedlman's Savings and Trust Olllm)paily was organlized alld started uilpon its career was fatally defective in tlie essential points il(licated is too apparent upon its face to admit of cavil or
disl)ute. Tihe second cause of the failure viz,great negligence and ftlithof trustees, ofHcers, and agents, was the legitimate offspring
lessuiess
of tihe first. On this point your committee canliot turnuish better illustration or proof than is afforded in tihe subjoined extract from tile testimony of Mr. A. M. Sperry. Ile says:
Hadl there been scrupulous conformlity to law in every particular, anld carefulness in
selectingto investments, suchI asdo men filly conscious of tilm sacred nature of their trusts
not think that tho bank would lavo failed, for the
ought
hav exercised,
reason that its franchises woro most valuable.
And further on, in allusiol to what he styles partisan attacks upon the
bank, the same witness says:
lIadl tlie bank been as iimmaculato as it ought to have blion, and had sulfsreCd those
same attacks, it could havo resisted thoml witiolut loss. I would have gone to our devee believed.
positors llland simply said, "1'These things are not so;" landl I Wouldl havo
By Mr. RnIDuE.:
Q. But you could not say tlht ?-A. No, sir; I had to make so much of a clean breast
of it that I spoiled all tihat I said. I lavo been waiting two years, Mr. Chairman, to
this. I can prove to you that for two years I havo been working to get a congressay
sional investigation.
Such is the evidence of a; m;ant who has been closely connected wvitthhe
institution from its earliest active existence. It leaves no room to doubt
the entire truthfulness andl justice of the charge of infidelity to trusts, negand carelessness (Rlad hints strongly at dishonesty) of theimeni
ligeince,
who had the control and mnaiigetnnm t of the affairs of the bank, and that
its downfall was due to their delinquency. As corroborative of Sperry,
whose testimony, however, is not contradicted, your committee call attention to the books of tihe bank. Their condition indicates a settled purpose, running through a series of years, to muddle and confuse accounts
so as tothem
make
unintelligible. But whether through design or not,
such is tile result. If nothing more than an occasional mistake or slight
"irregularity "occurred, it might be set (down, perhaps, to the inexperience
of the b0ook-keepers or the want of clerical force to write ul) the books
properly without imputing very great harm to any one. But it is far
otherwise. Tile books are mutilated andl defaced--leaves cut out in
some0 places and firmly pasted together in others-without proper indoxes to guide and direct the searcher into their hidden mysteriesabounding in false entries and forced balances, altogether exhibiting
a labyrinth of winding and never-ending perplexity and contradic-

VI

FREEI)MAN'S SAVINGS AND TRUST COMPANY.

tions that defy the scrutiny of the sharpest experts. (See report of Dyer
and Watkins, experts employed by your committee, and submitted as a
part of this report.) That such things could have occurred and been
permitted to continue without a l)urpose inconsistent with the idea of
official integrity, fidelity to trust, or correct business practices is incredible. Charity herself averts her face il sorrow and refuses to cover
such evidences of iniquity with her mantle.
But we need not dwell upon the tangled web spread over the books
of the concern as evidence, suggestive though perhaps not conclusive, of improper conduct on the part of the officers and agents of the
Freedman's Bank. The actual proof, abundant and indisputable, is at
hand, and readily to be found in the printed testimony accompanying
this report. The Waslhington cabal before' mentioned, and consisting
of the president of the bank, D. L. Eaton, the actuary, HI. 1). Cooke,
chairman finance committee, William S. Huntington, henclhmanl of
Cooke, and of the same committee, 0. O. Howard, honorary trustee, (an
office and position unknown to the charter,) and Lewis Clephane, of the
finance committee, and a few more, enough to constitute a quorum
and a majority of that (five,) held high carnival over tle t'reed(nine)
lmen's hard-earned and sweat-stained savings, whicli in an evil hour they
had been cajoled into trusting them with for safe-keeping and I)rofitable
investment.
It is in proof that the law requiring loans and investments to be made
exclusively on Government securities was violated. The provision' of
thle amended charter allowing tile acceptance of real-estate securities in
double the amount " obtained from the bank was a mere delusion and a
cheat. It opened the door to the innumerable rascalities which quickly
followed its adoption, by which the fieedmen were swindled out of their
money for the benefit of strangers, while the casting hypocrites \wl had
deceived them under specious professions of regard for their race, and
who have undoubtedly, directly or indirectly, shared in tlle l)lulnIder, go
unwhipped of justice. Hardly had it I)assed and been approved before
the office of tile bank was besieged by real-estate agents and brokers
eager to serve their clients by getting the largest accomlmo(lation
upon the very smallest possible security having the semblance of conformity with law. Klilbourn & Latta, the trustees of the realestate pool, were there, and were actually appointed appraisers for the
bank, whereby the uusecmly spectacle is l)resented of an attempt to
serve two nmasters-a- thing discountenanced by the laws, deemed
incompatible with strict business integrity, an(ld I)ronounced i possible
in Scripture. They and othe rs representing like them both borrower
and lender, were practically given the keys of the vaults, whose guardians, themselves stockholders or partllners ill tlhe companies, societies,
and speculating rings outside, winked at tile thinly-disguisel d peculations
and complacently pocketed their share of tle plunder as though they had
not sinned against tile prohibition of any officer, trustee, or agent borrowing
tile money of the bank. Of course they were not very l)articular
as to tl e value of the securities offered alnd accel)ted.; and these, as
might have been expected, sellom met tile full requirements of the
law ; and from defective title, prior incumbrance, or false valuation,
were often valueless, or only partially available to the institution.
Among the most notable examples of tlie reckless and ilmprovident
management that now crept into tile blank are loans to Howard UniverMen's Christian Associationi, the Seneca, Sadstone
sity, tile Young
all
Company-in of which there was a personal identity, to a controlling extent, between tile parties obtaining and those who granted

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

VII

the accommodation. Another class of loans, designated as miscellaneous,
and granted to individuals, (displayed, if possible, a still more reprehensible disregFrd of theinterestsof tlhedepositors and a wide departure from
all recognized rules of safe and prudent business transactions. Some of
them, according to tle evidence, bear the impress of corrupt and fraudulent combination against the bank, in which some of its officers,
most influential as well as trusted positions, participated.
holding the
In many instances money was loaned without collaterals or security of
any kind, and to very large amounts, while tile practice of adding loan
to loan to the same person, though already it arrears both for principal
and interest of previous advances, and then after almost indefinite mnull
tiplication, consolidating the whole into one and allowing the debt still to
run on, is.so bewildering a process in banking that your committee is constrained to suspect collusion even where there is an absence of positive
of the fact. Certain it is that no such proceedings can be tolerproof
ated or excused in persons charged with and undertaking to execute a
great anid a sacred trust like that of the Freedman's Savings and Trust
presence argues the want of that conscientious
Company, and their
of duty and obligation which should characterize the officers,
perception
agents, and managers of such an institution. But proof of actual fraud
and dishonesty is not wanting, as the following instances condensed
from and clearly developed in the testimony will show.
J. V. XV. Vandenburg was a pet of the District government-a sort
of p'ot6j6 and favorite contractor for the grand public improvements
planned and put in execution by the board of public works. His underwere upon a scale of expenditure far beyond the ready means
takings
of the District authorities. They required money, though, for their
prosecution, and to get it this enterprising contractor had nothing to
do but to go to the auditor of tle District government, get his certifi.
cates for work (one and allowed for, and then to the Freedmalll s Bank.
These certificates were generally worthless, without responsible indorse.
ments, and, being difficult of transfer, were not worth four cents a bushel
as salable securities or as evidences of debt, (page 127, Vandenburghs
for freedthey were good enough tobuttake in exchange
evidence,) yet, and1
that not in hundreds
hundreds of thousands of
men'ls money
dollars. Why? Because tle pcrsonntl of the bank management and
that of the District government were the same, and there was a larger
and more direct interest to be advanced by fostering and supporting
the gover'nmellt works tlhal by an honest and faiithful dischargee of duty
to tile depositors.
Tie actuary of the bank himself, then DI.L. aton, was persuaded to
accept as a gratuity from Vandenburg a half interest in a $8100,000 contract for sewel-pipe. Eaton )lut in no money of his own, incurred no
risks or responsibility, and had no trouble about it except to sign receipts
for his share of tlhe profits. But he used the influence of his position to
pass Vandenburg'ls )Ipaler at tile bank counter, andt the money thus obtained was used to carry out the contract in which lie was interested as
a beneficiary, you are to believe, if you can, of a purely disinterested and
noble generosity. This may not be a steal, but as Vandlerburg still
owes $144,104.83 to the bank, according to tle' exhibit made by the
books of that concern, which, however, he disputes oil the ground that
some forty to fifty thousand dollars of his securities have been disposed
of and no credit given him, (the rest being hardly wortl a co(ontest about,)
the Freedmen depositors have tile consolation of knowing that they
lhave been fleeced byaln '" irregularity," to use tie polite and exculpator y plirae emnployel by the present commissioners when compelled to

VIII

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

allude to the rascalities of their predecessors in thle management and
control of the affairs of tile bank.
But the Vandenburg. Ilatonl Ireglularity is small in actual criminality
(by tle terms and within the scot', of the penal code) compared with
the Seneca sandstone swindle. This bubble was a f'lincy-stock gamble
got ull) bly H. ). Cooke, John IJ, Kidwelll, and 1I. 11. Dodge, and this is
the way they did it: T'elle bought of one Peters a tract of land in Mont.
golerly County, Maryland, with a red.sandstone quarry oni it, located
on111) Seneca Creek ; another D)odge alll one A nderson were then associated with tlheml, andl a charter of iIlcorpIoration obtained' from the
courts under the name of the Maryland Freestone Mitinig iandMlanufic.
turning Complany. Thle purc)lhasers thlls sold to tlle companyl their
quarry and 1ii'mi with its al)plurte:nacfles, stock, teams, )1ills, machinery,
ftr $500,000(, in stock di videdl in to 5,000 shares of $100 each, 3,000
&c.,
shares of' which were divided among themselves ant 2,000() reserved for
sale at $50 per share.
The game was to palace these reserve shares where they would (do the
most goodin aid( of the scheme by getting 4"select" Ilarties andmen1 of
"' position and illfluence" to take them. They succeed( in getting off
a large umlber oil such men as General Grant, W. H. Sewlarl, General
General Dent, Surg. Gen,. Barnes, Caleb Cush.
lBrice,andGeneral Townsend,
station and rlepute. The conplanly now proceeded
ing,issue others of' high
to
$100,000 of bonds, secured by a first mortgage on all tlle pro.
perty, and these were( nearly all absorbed by tile originators of tile
who bought tlem with the proceeds of the sale of stock men.
scheme,
tioned. Having thus bomb.proofed themselves against contingent danigera and losses by a first lien!, the collp)any, rendered eminently reslpectable ill the eyes of the public
by the distilnguishe ndt select character
of its stockholders, was ready to begin in earnest to exploitate upon nlwary outsiders, But they were not a success, either in making a corner
in building.stone or in selling the shares. They then, after some six
years of existence and struggle, went through the farce of declaring a
dividend of 00 per cent., which was paid by watering thle stock and
dividing 3,000 shares more among themselves, thius malkintg tle stock
nominally
$800,000. At tle same time they issued another $100,000 of
bonds secured by a second mortgage.
General
These secon(lmnortgage bonds were absolutely worthless.
(
as
to
"
referred
tile proceedings
hald become
3Brice, testif.inlg
to, says:
convinced that tlhe stock was unavailable. It wats paying no dividends,
and could not be sold in the market-so I did not (care what they (lid
'with it." Notwithstanding this state of fits and( the additional fact
that tle first sale of' stock, Whenl the company was or ought to have
been free from debt, brought only 50 ctnts on the dollar, H11,). Cooke and
his confederates, William S. Iuntington and James C. Kennedy, (lid
not scruple to put it ol' onl any one whom they could cajole att 70 cents,
them that it was worth 80, atnd was a good and safe stock to
assuring
invest in, (see Bryanls testimony,) Cooke and Huntington being of the
finance committee of the lbiank, aided by Olpliane, also of tile inanlce
committee, Kennedy, (see commissioners' report, p. 8,) Hallet Kil0. Evans, and D. L. Eaton, got off $95,000 of the secondbourn, Johnbonds
on that institution, drawing out $62,000 of the freedmortgage
men's good money for the same. The jugglery by which this was
accomplished is fully explained in the commissioners' report of the 14th
day of December, 1874, (pages 50 and 57,)land is the recital of so gross a
fraud and conspiracy to (deifaud, that, in the opinion of your committee
every one of the survivors il the transaction, viz, Hlenry D. Cooke,

FREEDMAN'S SAVINGS AND TRUST COMPANY.
IX
Lewis Olelhane, Hallebt Kilbourn, and John 0. Elvans, should be
indicted, tried, and punished to the extent of the law; while those who
are pecuniarily responsible should be sued for the recovery of the
money, or good securities, consisting in part of $20,000 first-mortgage
bonds of the Maryland Freestone Mining and Manitufacturing Company,
of which the bank was robbed by the conspirators.
Your committee exculpate Le Roy Tuttle from actual criminality,
although his name appears to the secret agreement which was the coin.
of fraud with Kilbourn and Evans, because he appears to have
pact
been only a weak and unsusl)icious tool of his associates on the finance
committee of tihe batik. But the evidence is all in the possesIsion of the
House, and we fortbarla to better further into particulars except to call
atteiitioni briefly to few instances of I)er'sotnal mliscorindu tin tihe
t. Go.W. Stiicktney, tile assistant actuIry, and, after Eaton,
management
actuiry of the bank, is showvi to have been not only privy to tile crooked
transactiolls referred to in the preceding pages of this report, but til
actor in others, of which a fraudulel t conver'sion of the funds
plrilcipal
to lis own private use is one, and for which le merits and should receive
punishment. He, it appears was actually turned loose upon the funds
and assets of the )atnk without even, being boided, though l)rhlap
devoted institution was
much
off

that
not
for that, seeing
the worse
that in nearly all cnsos where the trustees had taken bonds of their
officers and agents they proved either to be informal, subject to some
technical objection, or otherwise worthless when the time caine, as it did
come in several instances, to put them in 'suit on accoul-t of the deof their makers.
linquencies
In the case of the Andrew 0. Bradley transaction, too, he and, the
president, Jno. W. Alvord, were parties to an attempted transfer of
held by the batlk as security for ta debt of $10,000 and some
property
few hundreds of accrued interest, whereby the batnk was treated to a lot
of iotes given l)y Bradley, and payable one, two three, four, and
five years after date, while the ven(lee, (or rather his principal, for he
was merely agent,) A. 1. Sllpherd, entered at once into the enjoyment
of ;ii annual income of $4,200 from the rent of the property to the
Post-Office Department. What is ,till more singular, the contract of
lease was made between Bradley andl tle Department t ten (lays before
he obtained a transfer of tihe property from tile aforementioned officers
of the ballk, and tile whole was (doti for the special benefit , (ldlectation,
ndl behoot of Shelpherd, who, nevertheless, is not seen ill te trallsaction. Not until the processes of a court of justice we re
sorted to by
tihe origiml owner, one M rs. Lou isa McGhan, to set aside the whole proceleding for fraud, anld permission given h1er to redeem the property
by paying the )bank, did tile flacts herein detailed come to tlhe surface,
n1ad to the light of day. For stuh a ilnequitable, unjlust, anid to the
bank ilnjurilous disposition of its assets, it is hard to believe there was
ino consideration given ; but, allowing Alvord and Stickney the full betiefit of tle presumption of law in favor of innocence, it shows them to be
wholly un worthy of the Iigh trusts they Iheld, a11d is a striking
t
example of
the ac(tings and doings whereby the credit of the baik was destroyed,
and its depositors plunidei'ed anld ruiled(l
In tihe Juan Boyle business, too, tile same Mr. Stickney and Mr. Leione of the present commissioners, actedapart, the reasons. for
pold,
which are best understood by themselves, but one resulting iln a total
loss both to the bl)k and its debtor, Boyle; though the evidence establishes
the fact that Boyle was offered a credit of $21,000 on his liabilities,
I
(Leipold to take the property, consisting of certain houses onl sMtreet,

x

FREEDMANIS

SAYINGS AND TRUST COMPANY.

and that subsequent sales even under pre.
city of Washington,)
and
shrinkage in values proved that they were worth
depression
vailing
under such unfavorable conditions nearly the wiole amount for which
they were encumbered. Very soon after this negotiation failed tlle prop.
erty was sold under a deed of trust which Stickney had given upon it,
while holding from Boyle for the benefit of tle bank, and hel, Stickney,
bought it in for himself at the price of $14,000, there being no one pres.
ent to protect the bank and little or no competition among the bidders.
(See Boyle's testimony, given in the presence of Stickney and Leipold,
and not contradicted in any material point of fact as above recited.)
There were also a great many small peculattions by which tile bank
was drained of its funds, the aggregate of which, as far as can yet he ascertained, amounts to the sum of $203,221.62. This sum is in part repre.
scented by checks and drafts, without collateral ot any kind, in part by
nothing but the empty coffers of the bank, and are neither more nor less
than a steal perpetrated on the bank by the officers or others through
their connivance. Add to these forgery, as in tie case of Boston, teller
of tie Washington l)ranch, and tile way thle freedmeln's imonely went is
not difficult of comprehension. And now taking a retrospective glance
over the events of the last ten years, in which this Freedman's Bank
looms pl) conspicuously, we are led to believe that no race or kindred
among all tile generations of men have so thoroughly sounded the
depths of tile philosophy exl)ressed inin the prayer, save me from my
as those 'pIersons lately 1leol
friends,
slavery" at the South, a people
over whom more crocodile tears have been shed, O) whom more impo.
sition l)racticed, and for 'whom less real sympathy felt by their pro.
fessed friends, than any other kIown to lhistory'-a p)eopl almost literstabbed under the fliftl rilb witl a lhug iand the salutation " How is
ally
it with thee to-day, my brother r" In regard to this bank, tile grossest
deception was l)racticed( 11pon them. They were told it was a Govern.
ment institutioll, and( its solvenCIy Iand safety guaranteed by the United
States. Missionaries, of whom tlie chioe was Alvord, )perambulated the
South mixing religion, politics, education, and teaching the blacks how
'to toil and to save," and tlhe trust tleir hlardq-arned savings to Al.
vortd aInd his associates to invest for them, n0ot until, however, they had
levied toll for their .services in bestowing such inestimable benefits, and
for their disinte rested labors and sacrifices.
Full of' gratitude to tlie Government for his emancipation, the
negro was easily approached by, and gave unheeding credence to,
i)rof'eanSed a desire to
any a(ventultrer whlo declared himself his friend ad
aid lhis moral, intellectual, and soeia.l elevation, Iprovided lie belonged
to the party of thie administration. He believed andl wans deceived,
trusted and was betrayed. Taught, to his ruin and that of the
whites among whom ho lives and
aeand
moves
has his being, 1and be.
tween whom and himself there must be mutual trust and confidence
before prosperity can be restored to his section, to hate and d(is
trust the, " old master classes," le is now derided by his old friends for
his. credulity, (see Sanders Howells statement about a conversation
with Leipoll,) and told that those who dragged himi out of slavery
have by that one act canceled every obligation to deal with him on
of common honesty. Upon no one of tile originators and
principles
trustees of tie bank did( so great a responsibility rest as upon John W.
Alvord, but yet lie permitted 1ll thle Imisdoinigs described in this report
to go on from year to year without any vigorous protest or effort to correct them, and so far from giving warnings to those who had so trusted
the concern through hispersuasion, lie helped to keep up tlio delusionin the

FREEDMAN^S SAVINGS AND TRUST COMPANY.

XI

by praising
it, enlarging upon its benefits, giving assurance of its
and
stability,
soliciting increase of depositors and deposits.
When the ruin of the institution was already past remedy, nn amend.
ment to the charter was obtained in 1874, with provisions limiting the
amount to be loaned to any one person, and making any embezzlement or
misuse of the funds by officers or agents a criminal offense. This should
have been done at the beginning. Now it was like locking the stable.
door after the horse was stolen ; it neither saved the property nor caught
the thief; it was a thin veil to the plunge into actual bankruptcy, and
the handing the defunct remains of the once prosperous Freedman's
Savings and Trust Company to tloe undertaker-the commissioners to
close up its affairs--speelily followed the enactment. Having incident.
tally pointed to the parties chiefly responsible for the final catastrophe,
while describing thle causes which led to it, your committee have, as
far as practicable, and for the present, discharged the duty assigned to
them, and respectfully submit the result to the consideration of the
House without further recommendation than that already embodied in
the pending bill to amend tlle legislation of 1874 in regard to the commissioners. Whether it will be necessary to submit any report upon
the condition and management of the bank since it went into liquidation is reserved for future consideration.
B. B. DOUGLAS,
chairman.
TAUL BRA1)FORD.
W. S. STE1NGER.l
H. Y. RtIDD)LE.
O(JAS. E. HOOKER.
J. IH. RAINEY.

RlEPOltT 01 EXPElITS.

WASIING'rON, 1). C., March 7,1876.
Sil: In compliance with tlio resolution adopted at tleo noting of your comlnittoo
on tloe 4th instant, making to be furnished by this d(lte witli a complete aind consolidated report of our investitigton up to this timeo, fwe would respectfully submit
thle allowing:
As mentioned in our report of tlh 4th ultimo, wo found loves cut out front tile
nal ledger,loves without number pasted togeotfer, balances not brought forward,origiand
of which, at this d(ato, no traco has boon found and those omissions ocour in every
book HO far examined. or instance, in deposit-lodger "A" tlhe balances foot iup with
amounts due depositors of, in thle aggregate, $40,000. Whether these havo boon transforred or finally settled we c(annot;dottrmno,
their e being no indexes in the ledger.
In several irnstances the original entries do not conform to tlei meaning of tio trans.
action when carried to the ledger. Also, we find on tloe lodger (duplt)li(cto accounts
under tloe same heading, and inll man1y inst ances an original ontry which wan aideIbit to
an account Ihas been posted as at credit, and vice versa as (1olbit. Tim colnumnsIin the
lelger which are designed to sllow the robrolnce to the folio of tlhe original transaction
fiil to give tih connection.
Tlhe absonce'of laxiliary book also las impeded(, anld we might say stultifltild, to a
great extent, our investigations. The status of thel New York or principal ollloo as
hon by tralsril)t balace-1sheet, (iheretofore
was doeicient fully 20 per
cent, betweentts available assets land recognizedtransmittedd)
tleo dato of its transfer
liabilities,
atf
to Washington, which appears to be April 30, 1867.
The branch oflleo at Beautfort shows on July 1, 1867, as per lodger, a difference on
that date of $10,276.04 between thie actual balance
and the balance that ought to havo
been if the entries had been proi)erly posted. Tlhe special-dleosit
account has a balanoo
against it which amolllts to $249 78.72. Tile creditors to this account, no far as we
can see, do not appear on tlhe books, thi account being abruptly closed on the ledger.
We have also lately examined tilo cash-account of tilo principal oflice and lind a balance of $28,331.04 on tle 10th of October, 1868, to the debit
of that account; aloo that

XII

FREEDMAN'S SAVINGS AND TRUST COMPANY.

the Washington branch office had not brought forward on the credit side on March 30,
6, besides several amounts not carried out in the lodger.
1868, $64,470.
Wo have also examine d partially an account under tlie heading of 0. W. Sticknoy,
whioh is perfectly nmlintelligible to us, there being a balacnco to the credit side of this
account not carriedforwardd to where thlo account in continued, of $68,387.60.
In conclusion, we would say that our duties have been laborious. We do not make
it being our purpose to state facts. We have presented figures from wlich
comments,
your honoral)lo committee can drawN conclusions; it Hi our privilege as well as our
duty, however, to state that a moro perverted arrangomnoent could scarcely hlavo boon
devised by ihman ingeniity if the design lhad been specially directed to obscmur tlh
transactions of tho institution, Incolmpetency at the beginning may bo itlomade an excuse
for palpable errors and omissions, but when eminiet b)IakOrs directtiestments
v
and
indicate the business of tho institution this apology fatll.
W cannollt suppose tlhor was at lackl of common
sllOl S) on tlh part of 1tho Inatigers
of the concern, but certainly thero
ta notable (leiloionoy In all the well-iruderstood prin1s
Ciplos of nocounts, for which experience should have provided a remedy, oven for tho
most ignorant and unskilled, much more for compoeteut financiers and professed acAll of which is respootfully submitted.
S
SAMUI:IL WATKINS.
JOIN F. D)YER.
IIon, 1. 3. . DourAs,

'8 Bank.
Chafirmal Comamittee of InlWvcs8llgao of I¥cedman's

VIEWS OF THE MINORITY.
The testimony taken

by the committee discloses

the following

facts,

About fifty-six millions of dollars were received on deposit by the
Freedman's Savings and Trust Company, of which about fifty-three mi1lion dollars were paid back with interest, leaving about three million
dollars still due to about seventy thousand depositors; it is expected
tlhat dividends to the amount of forty to fifty per cent. will be paid upon
tlie latter amount.
If the managers of this bank had invested the funds in accordance
with the provisions of tihe charter, it would have proved a most boeeflcelt
institution for the freedmenl; but, unfortunately, those who invested tl,)
funds loaned them in many instantces where they would inure to tliuir
own profit, without Imuch regard t6 the security held for said loans.
'llis abuse of their trust is reprehensible in the highest degree. One
of the clerks in the office was proved guilty of forging the name of a
and drawing his money. Some of the agents of the branch
depositor
banks are proved "to have been dishonest. All those should be punislied to tlie extent of the law.
I agree to the main facts as stated in the nmjority report, but dissent
from some of its conclusions and language.
RUFUS S. FROST.

TE STIMONY
TAKEN BEFORE

THE SELECT COMMITTEE OF INVESTIGATION OF TII E FREEDMAN'S SAVINGS AND TRUST COMPANY.
Authorized by resoluttion of the HIouse of Representatives January 5, 1876.
MARCHl 9, 1876.-Roported and ordered to be printed.

S!:LECT COMMITTER

FREEDMAN'S BANK,
IFashington, D). C.
Tlhe committee mot this 17th day of January, 1876, at 104 o'clock a. m,,in tile room of
the Territorial )olegates, and upon call of tile roll the following members answered
names: eovorly B1. Douglas, Taul Bradford, William S. Stenger, Hlaywood Y, totlleir
Riddle,
Charles 1. Hooker, Charles 13. Farwell, Rufus S. Frost, Joseph H. Rainey; absent, Archibald M. Bliss.
The chairman asked for a copy of the report of the trustees of the Freedman's Savings and
Trust Company, required to be made, under section 8 of an act amending the charter of the
Freedman's Savings and 'Trust Company approved June 20, 1874, to the Secretary of the
Treasury,theif made. of the
Upon subpcona
Speaker, the Sergoant-at-Arms brought AMessrs. John A, J. Oreswell, Robert Purvis, and Robert II, T. Leipold, the commissioners of tlhe bank, before the
committee, in company with eleven books called for by the chairman on the 16th instant.
Mr. Oreswoll stated that on the 4th of July, 1874, the commissioners wore appointed, and
that no such report as asked for above, from the trustees, was ever made, to his knowledge;
and Mr. Loipold stated the same to be a fact.
ON TIHE

The CHlAIRMAN then interrogated Mr. ORESWEL L as follows:
Question. You are the head, Mr. Creswell of the commissioners appointed under the act of
June 20, 1874, to close the affairs of tih freedman's Savings and
Trust Company t-Answer. I was named first, and, by courtesy, presume I am; I have, however, no
moro authority
than the other gentlemen.
at what time you entered upon the discharge of your duties as one of said
Q. Please state
and state, as well as you can, In a general way, what your subsequent Incommlrsioners,have.shown
to be the condition of the corporation at that tmoe.-A. Tlhe comvestigatlons
missionors qualified early in July, 1874, by giving ajofnt bond In the sum of $100,000 penalty, which was approved by the Secretary of the Treasury, and filed in the Treasury Derepartlment and they proceeded Immediately to the discharge of their duties,
of appointment. We found that at that time, throughupon
a subsecelving a proper certificate
quent
investigation, the amount of the bank's indebtedness to depositors was somewhat
over $3,000,000 down to tlhe present time. The bank was largely insolvent.
On December
14, 1874, we made a report which gave all the information in our possession at that time, and
the liabilities, as they appeared
were $,879,031.78. We then found the
as per
ledger balances $2,693,095.20. then,
There was a deficiency, you will observe, assets,
of $185,936.
This defcielecy has reference to all the offices, and not tlhe principal one.
amount
assets about $2,000,000, at present time, after all collections to January 1, Apparent
1876.
ascertained the actual
Q. Has the board of commissioners, of which you are a
value of the assets appearing to be held by the corporation t member,
If so, please state, if you can
the aggregate amount so ascertained, the proportion of the same held in the bonds and
other securities of the United
States, and in notes and bonds secured upon real estate, according to the provisions of the act of Congress approved May 6, 1870.-A.
We have not
ascertained the exact amount of those assets, and cannot until the concern is wound up,
A large amount of these personal securities appear to be worthless. Mr. Lelpold is more
hopeful than I am. I feared that we would not be able to realize more than 40 per cent.
from the entire assets, but Mr. Leipold expects it to reach 60 per cent.
I think, however,

2

FREEDMANq ~

SAVINGS AND TRUST COMPANY.

they may bo between these figures. I also may say that Mr. Purvis was a little more hope.
fiul than myself. Very much will depend upon what we realize from our real estate. When
we
took possession we found but a very small amount of United States bonds belonging to the institution, but speaking from memory I cannot pretend to be accurate. heree could not have
been many thousands held as collaterals, but our report, to be made in a few days, will
show. I prefer not to give answers from memory, and think it safe to say that there were but
a few thousand dollars in United States bonds. Then the amount of notes, apparently secured
when we took possession, was $1,208,857.15, on which interest had accrued to
by real estate,
tlhe sum of $93,470.10, and upon which charges for advortisuig, insurance, &c., lhad accrue
to $9,911.77, making, in the aggregate, $1 ,31'2,239.02, prinipal office. Then camo wllat tiey
fund loans," which are secured by personally securities, such ias instyled tihe "available
and other collaterals fund on pages Nos. 32, 33, 34, 35, 36, 37, 38, 39, 40,
dorsements,
of tho printed report of the commissioners. On those thoro were duo at tile time of our
taking possession, $312,968.53, accrued interest to amount of $40,561.32, and charges
amounting to $'2.25, lmakiing aggregate amount duo $353,532.10,
Upon motion of M11. Farwoll, the committee adjourned.
CO1MM11ITT1'['E

ON

TIIE FRitEEl)MAN'S BANK,
11'ushiniton, January 22, 1876.

Tlei committee met at 10 o'clock a. nm.
Present: Messrs. Douglas, Bradford, *.tenger, Riddle, Ilookor, Farwoll, and Ralney.
ANSON M. SI'I'IIY, inspector. of tile Freednman's Bank, being present, was sworn and ox.
aminod.
By tihe CHlAIIRMAN:
you were an inspector of tho Freedman's Savings
Question. State, It' you please, whether
and 'L'rust Compamny.-Answer. Yes, sir ; I was from October, 1871, up to the time of tlhe
closltng of tile bank, Thlo bank went into liquidation In July, 1874. it Is proper for me to
stato that I was an omploy6 of tlhe company as an agent for the colored Tweouty-fifth Army
until 181(7, and after tliat ias ia cashier of tloe company until I was made inspector,
Corps
Q. Statl what tile character of your duties was in each of these several capaclties.-A.
As anl agent of tle company with tlo colored troops, to receive money olthor for deposit in
tle comlpanly, or to send to their friends for thom, it they could bo reached. I remained with
tile trool)luntIl they were all mustered out in 1867. Having lost my health In the South, I
was relieved in 1870. On those conclusion of my service with tlhe troops, in 1867, I was made
cashier at tle Mlemphis branch. In tile fall of 1870 I was assigned to tills duty as Inspector.
duties embrace tlhe inspection of the chief ofnlco ?-A. No, sir not at all.
Q. D)id your
were your duties directly l-A. They related to tile several branches. 1 was
Q. Whateither
by myself or deputy, to examine all tleo accounts. As a matter of fict the
supposed,
business was so eijrmous that It could not be adeu(l ately done by tio force' we felt able to
We were required to inspect all the branches twice in every year. Some of their
employ.
were never inspected, and could not be. However, in June, 1873, we got a resolution
through the board authorizing ne to employ details of cashiers by interchange of force, and
we should have been able to make a pretty vigorous examination had we gone on.
Q. I understand you to say that at many branches It was impossible to comply with the
instructions given to you as Inspector. State, if you please, at what branches this happened.-A, I have a list of the branches iere with which to refresh my memory. I never
was able to get at the luntsvillo (Ala.) branch, Louisville, Lexington, or Little Rock.
Macon, I think, was examined by deputy. Now York was not in my jurisdiction. It was
in charge of a manager. I never felt called upon to go there. Philadelphia, Savannaht
Shreveport, Vicksburgh, I think, woru not examined, other by me or my deputy; neither
was Charleston.
Inspections wore made, wore the entries In tho draft and deQ. At tlose branches where
with the ledger and pass books 1-A. At some of them they were,
compared
posit
journals
and others not. Many of our men were new to the business of book-keeping, some of them
uneducated. At most, of the branches, however, a reasonable amount of care was exercised.
In all of tlem, I tlink, the accounts wore o kept that by tlhe advice and direction of the in.
spectors they were able to fetch up the work which was left behind. In other words, there
were not radical omissions.
Q. From the report here there seems to have been some very radical omissions.-A. There
was one radical difficulty in tho accounts which, if you asked me whether the ledger balances were properly taken off, I should tell you something different. They made tile proper
entries upon the checks, but did not apply them to tih books,
Q. Did you, upon your inspections, cause the accounts to be checked with the ledgers, and
were thle records sent to the principal office, showing the errors and omissions Y-A. So far as
I sent them.
possible
Inspections were mado ?-A. Yes, so far as It
Q. Were tlieso duties omitted anywhere where
was possible. It was not possible literally to comply with these instructions, because I had

FREEDMAN^S SAVINGS AND TRUST COMPANY.

3

come into the business three or four years behind time, and to carry out literally the instructions was almost an impossibility. I caused tile ledger balances to be taken off, and it was
to this point that I referred just now. In many cases, finding the ledger widely different from
the original entries as returned to the principal office, I made improvements. To illustrate,
take the case of the Washington branch, where in 1870 I found a difference between the
the general account of some $80,000, and by our best endeavors. and the employledgers and
ment of additional expert force, we were never able to reduce this difference below, say,

I speak from memory.
$40,000.
Who were the officers

oftho Washington branch during the time those discrepancies
''he cashier was William J. Wilson; but there was a change made
about tils time, I will not say exactly when, though in 1870 the cashier was the one just
named.
?-A. No responsible managers 'in the
Q. What other managers or agents were there
S. Boston, There were, perhaps, one or two
branch except the book.keporihoe
, w wasThomas
clerks, occupying subordinate positions, whose names I have forgotten.
Q. Iow long after the period referred to ini tile foregoing answer did Mr. Wi lson andt Mr.
Boston continue in their respective offices ?-A. I cannot say from memory just when the
offce of cashier ws discontinued we found It necessary to make a change, and it was
deemed best to put the affairs of tile branch directly under the control of the principal office.
I think that was in 1871, but I ought to be allowed to refresh my memory ; I might find it
necessary to correct the dates.
Q. What time was this examination made, and what time did this change occur --A. I
recommenlnlded( changes immlndit~tely iupoln manki ng tle oexalminatioln alluded to. Those chllanges
were not carried into effect until, I should say, late in 1871. I have no data in my memory
to fix the date.
by which
Q. Just state as nearly as you can from recollection. Was it in cold or warm weather,
or spring ?-A. I an unable to state because of tle long discussion and agitation of the
subject. I made repeated reports, but witl tile minute-book before im I presume I might
be able to turn to tile date.
Q. Whero was tills discussion ?-A. I made reports which were referred to committees.
Thie matter was brougilt before the board of trustees,
Q. You reported upon your discovering those discrepancies ?-A, Yes, sir; to the actuary.
Q. There was no action taken upon your recomnlendationls uitil late in 1871 1-A. It
miglt have been in 1872.
D)id you immediately upon discovering the discrepancies in the accounts of tile Wash.
ington branch report to the board of trustees, through the proper channel, the existence of
the fact, and make any recommendation in relation tlihereto If o, state what that reconmendation Vwas and through whom it was transmitted to the board of trustees.-A. I retile facts to the actuary, and recommended a more thorough organization of the office.
portedWho
was tie actuary to whom you communicated tile facts in relation to the WashQ.
branchI-A. Mr. D1. L. Eaton, since deceased.
ington
Q. Do I understand you to say that at a subsequent period you again called the attention
of tha board to the discrepancy in the accounts of tlie Washington
branch, and recommended
that it be discontinued and its business transferred to the principal office 1-A. 'The discrepancy was too well known. But the business thereafter was not conducted satisfactorily to
the management in tile principal office, and it was for that reason that tile change was made.
in your evidence that you had more than twice called the
Q. I want it distinctly to
altontion of the trustees to appear
these discrepancies before action was taken.-A. It would be
fair to the managers to say that. From the time the discrepancy was discovered the
hardly
matter of tle conduct of the affairs of the branch was under continual discussion, and no
effectual romle(dy was reached until we did break up tih organization of the branch, putting
tile work in charge of tellers responsible directly to the actuary, who was then succeeded by
Mr. G. W. Stickney.
Q. When was this reform effected ?-A. Under Col. G. W. Stickney. Colonel Eaton was
never able to accomplish it.
Q, Are Mr. William J. Wilson and Thomas S. Boston still
1-A. Yes, sir; Mr.
Wilson is in the Sixth Auditor's Office of the Treasury Department,living
and Mir. Boston is somewhere in the city.
know anything of the pecuniary responsibility of William T. Wilson and
Q. Did
Thomnas S.you
Boston whilo discharging thoir
respective duties as officers of the Washington
branch of tile Freedman's Bank 7-A. No, sir
I did not know
of their pecuniary
circumlstanceo. I suppose they were dependent on their salaries.anything
Q. Did they give any bond for the faithful discharge of their duties ?-A. I think they
did. I have
seen Mr. Boston's bond. I am not sure of Mr. Wilson's,
Q, State in what amounts, and with what security, and wllether the same were, in your
good for their face at the time of their oxecution.-A. I do
judgment,
know about Mr.
Wilson's bond; Mr. Boston gave a bond of $5,000, I think, signed by not
Gen. 0. 0. Howard,,
Q. Do you know of any proceeding instituted by the actuary or any officer or officers of
the 'recdman's
Savings and Trust Company to recover from Wilson and Boston the defiQ.

were discovered ?-A.

,

ciency appearing upon their accounts as managers of the Washington branch ?-A.

No,sir,

4

FREEDMAN

S·

SAYING3 AND TRUST COMPANY.

Q. Didand
you, as an inspector, require the cashlersof the several branches to balance daily the
disbursements according to instructions ? If so, were they.
with ?receipts
A. es, these instructions were complied with, and later in the history ofcomplied
the bank, that is
as soon as it was possible to organize the system, copies of the day's work followed it to
the principal office.
Q. You instructed the cashiers and the cashiers complied with your Instructions --A, Yes,
sir ; the instructions were sent out from the principal office. I was to see that those instruc.
tons were carried out. They were, however, first sent out from the principal office by the
actuary. In other words, the actuary was the medium of communication between the
branices and tho home office, for I was away often for months and of course could not keep
up communications.
to the cashiers of the branices in regard to balancing their
Q. If tile instructions
and disbursements separately were faithfully carried out, how does it happendaily
that
receipts
there shouldhave been any discrepancies in their accounts as shown by their books, and reported by tlhe commissioners in their report to Congress, dated )ecombor 14, 1874 ?-A. The
errors so discovered and reported arose before this system was inaugurated. They were old
errors almost wholly, errors which came into thle book-keeping before any general harmonious
system of accounts had been adopted, as I stated in the case of the Washington branch,
where the large error was thi result of the early system.
Q. Do you mean to say that all the discrepancies which appear upon the books of the
branches were tlhe result of irregular, careless, or incompetent book-keepers, who kept the
accounts prior to your inspection, and that since then they have all been regularly and well
and properly balanced i--A. The principal errors, tilose of any Hspeial moment, arose
kept
in tlhe early. history of tile branch, before any general and harmonious system of accounts
lhad been adopted Since the adoption of tills system of daily reports, it was practically
errors of any magnitude should creep in.
impossible that
Q,. When was the system of daily reports first adopted ?-A. I am unable to state, sir,
from memory. IL was, I presume, not until 1872, A reference to the books will show.
l'le book-keeper at the principal office was, charged with tllse matters rather thlan myself,
I simply helped to develop the system.
or regulation requiring the cashiers of branches to balance and to
Q. Was there any rule
office the condition of their deposits and disbursing accounts prior to
report to the principal
tlhe dlte referred to in your last answer -A. There was; but it was not adequate to prevent errors creeping in. There wore not sufficient checks upon their own figures, and many
of tlie men were quite inexperienced. Several branches, notably at Savantlah, had never
any errors. At Savannah the cashier settled his nine years' business with a difference of a
lIe was a competent man, The same may be said of Chltrleston, except
very few dollars.under
the first year,
tile charge of' a green book-keeper, when there was a deiclency of
were obliged to carry to profit and loss.
$3,300,Didwhich
they
the officers and managers of tlhe principal office ever institute any proceedings for
Q.
a proper settlement land accounting by these incompetent officers, through whose neglect,
or something else, the bank has sustained losses ?-A. No, sir; not against those regarded
as incompetent, simply. Wo lhad some defalcations. Proceedings were comnonced against
a manager at Beaufort.
By Mr. BRADFOnRD
Do you know anything not already stated by you tending to show fraud or irregularity
Q.
or want of conformity to law or prudent commercial usage on tle part of one or more of
the officers or employs of tih Freedman's Savings and Trust Company., acting themselves
or through the agency of others' If so, state fully and circumstantially all you know on
this subject,
Pend ng the answer to the question the committee adjourned, at 12 o'clock m., to meet
again on Tuesday, at 10 o'clock a, in.
SELECT COMMITTEEI ON TIIE FREEDMAN'S BANK,
Washington, January 25, 1876.
Tho committee met at 10 o'clock a. m.-present, Messrs. Douglas, Riddle, Bradford, Farwell, Rainey, and Frost-when the testimony of Anson M. Sperry was continued.
The ClAIIMlAN. Are you prepared now to answer the question asked by Mr. Bradford at
the close of your examination on Saturday last I
The WITNESS. Yes.
The Chairman here reread to him the
of which I have knowledge, tlie first is that of the
The WITNESS. As to the cases of fraudquestion.
cashier of the Atlanta branch, Philip D. Cory, who was removed in February, 1873, and who
confessed to a defalcation which was afterward proved to involve some $8,000. le was
arrested as a defaulter, and suit brought against his bondsman. Hlo had given a bond for
$6,000. lie was arrested on information given by the bank, and was prosecuted in Fulton

FREEDMAN'S SAVINGS AND TRUST COMPANY.

5

Georgia, and was sentenced to four years in the penitentiary. The case was carCounty,and
is not completed yet. In December, 1872, we discovered a serious discrepancy
ried up
in tile accounts of the Beaufort branch. An investigation showed that Nelson R. Scovel,
the cashier, had been tampering with tie accounts to an extent which we could not find out
for a long timo. Ho was removed and suit brought against him under his bond, to recover
some $0i,000 of which lie appeared short. No cimininal suit was commenced in that case.
At Mobile the cashier, C. A. Woodward, appropriated to his own use $3,375, which he claimed
;,s additional compensation due to him on account of his services rendered to the Freodmen's
Bureau, independent of his salary as officer of the bank.
Q. What had the bank to do with payment for services to the Freedmen's Bureau --A.
That is what we wanted to know, anld what we do not know yet. We have not got tho money,
lie was removed immediately, and suit brought against him under his bond for
though. T'hi
suit is still ponding. At Newbornoe, N. C., I found tile cashier, 0. A. Nelson,
L10,000.
to be short in his cash some $1,250 and to have made on his own authority, loans involving
some $1,000 or $1,600, which loans he was carrying as.cash. Ho was removed; his accounts
examined and suit brought against him under his bond, on which judgment has been obtained, tile amount of which ram not aware of. At Wilmington, N. 0., I found the cashier,
Van D. Macumber, short in his account. I found him carrying an overdraft of between
was removed, and his successor put inlcharge. Ie had carried the
$',000 and $3,000. ieo
amount in overdrafts as a means of concealing his short cash. There was a fraud involving
between $'2,000 and $3,000. These figures in the commissioner's report, $'2,410, show the balance of his account, which we cannot got out of him. What the $2d,000 means, I do not
now recall,
TlhoolleAltMAN. I know what it is exactly. It is money stolen, and not to be found.
That is a very plain proposition.
Tl'eo WVITNHsS. I understand what being "short" moans;- Those were overdrafts allowing customers of the bank to overdraw their accounts. Ills trust-funds to
be overdrawn,
The COIIAIM.AN. I do not think that when a nian allows
lie is a very correct business man,
The WIvTNss. Those overdrafts were not allowed by tle company.
Q. Are there any other cases of fraud --A. At Natchez, Miss., (I do not find any report
on Natches in that examiner's report, ) the cashier, Fred Jordon, was, by a deputy of mine,
found to bo short in hlls cash some $1,1'25, wilch lie had covered up by charging his interestaccount. Iie was removed, and an attempt was made to recover tie money, but his bond
was good for nothing. No criminal action was taken in his case. These are all the incidents
actual frauds among tlhe cashiers of tile company that I am att present aware
involving
of.
By Mr. RIDDLmmI.:

Q. Did you inspect tile Nashville bank 1--A. No, sir; it was itlspected by a deputy, Mr.
IIuut, HIo inspected it on two or three occasions. I never weas there except to stop and see
the cashier as I passed through. My assistant inspector found a difference of $1,000 between the accounts and the statement. Mr, (ary. the cashier, always hold tliat it was my
assistant's mistake. Mr. Cary is a very honest, straight-forward man, and as careful an
accountant as a man of' his education can be. Thero are soine differences in tih ledger
but Mr. Cary is an honest man, if there is any man honest. Now, as to the want
balances,
of conformity to law, or to the violation of prudent commercial usage, I confess that I
know what to say. There is no branch whore loans were made, that I am aware of,
hardly
where those principles wero not violated more or less. At Jacksonville, Fla., where I cannot charge fraud, I am sure that I never knew a grosser or moro ingenious violation of prudent commercial usage, But I moan by fraud, a case of a man stealing or sharing in the
to be fraudulent, but
There is a $1,000 itqm at Jacksonville, which I cannot
profits.
the books. '1his case ilhswhich looks wonderfully like a steal, and is carefully covered into prove
trates the difficulty of bank inspection. It is tle work of months to check off the accounts,
In that case (where I suspect
fraud, but am niot able to prove it) the day's work had boon
from
extended, $1,000 short. 'hlio thint was very simple, but very Ingenious. For instance:
and I larry, say that $3,300 had been received during the day, and extended on
Tom,
l)ick,
to the margin, which went into the "ash-book, and then Into the ledger ; but, Instend of
it as 83,300, It was exte'hld $2,300. That enabled $1,000 cash to be disposed of
oxtonding
and no questions asked ; and it was mnpossiblo to discover it, except by going over the
orlgiuil
toolnlgs, which involved a work of months. We struck it accidentally. In that case
I always supposed fraud. The cashier was responsible under his bonds, but they were good
for nothing. Then, ngqin, loans in defianc of tlio authority of the principal office were
made to wholly irresponsible
W. L. Cona, was particularly reckless.
cashier,
parties. Theagent,
Tlhe latest report from the conmlmssloner's
Mr. Lockwood, is,. that at Jacksonville the
will probably lose $100,000 out of tho $lb0,000 or $160,000 that was put out there.
company
was removed, and that was all that could be done; his bonds were good for nothing.
CoanI
At Beaufort, in addition to the frauds above mentioned, for which Mr. Scovel was prosecuted,
lie had Imdoe loans to a large extent-most of them without tio knowledge of the principal
office, and lie had made false statements with reference thereto. The amount of the loans, I

6

FREEDMAN S SAVINGS AND TRUST COMPANY.

bo sot down is lost,
think, was between $135,000 and $145,000, of which $100,000 may
At Memphis tile cashier, acting on lls own responsibility, made loanssafely
soime St)0,00,
involving
His8 doing so did not involve any fiaud/,for it does not appear that he was to profit personally
it certainly cannot be called much in accordance witl prudent comniorcial
by themnor; but
usage, do I think it was in conformity with law.
By the CHAIRMNAN I
Will thoro bo any losses there ?-A. It is difllcult to say. I think theor will be. The
Q.
loans at ,Jacksonvillo have all something to show for them. They havo nevor been charged
to profit and loss, or to suspense account. The commissioners simply report Vwhat they fid
on the books i and they do not know what the loss is until it is made up.
By Mr. FAIWEII.:l,
Q. That will be shown when tie assets are realized upon ?-A. Irocisely.
Q. You say that the loss will be $100,000 at that point, but that toroeareassets for the
wlolo amount?-A. Certainly. VWhbn I say that there is $100,000 to be lost at Beaufort
and Jacksonvillo coach, I moan this, that it is undoubtedly so. At Vicksbuirgh, sHomo $11,000
or $12,000 was loaned by the cashier, B. A. Lee. I aml sorry to believe (because the poor
man is dead) that there were reasons why lie loaned the money. Most of these loans were
mado without the knowledge of tieho m office.
Q. As I understand, tlhe branches had no authority to invest or loan funds of the1 bank ?A. ''lhy hlad not with two exceptions which I will state, In regard to Vicksburgh, I should
like to rofor to this last report of the commissioners and to
it in niy statement to
shllow tho names of tle parties to whom the loans wore madeincorporate
to tho amount of $11,000. They
will bo found on pages 60 and 51 of tile commissioners' report. Thlise loans certainly did
not exhibit either conformity to law or prudent commercial usage.
is their condition ?-A. About as bad as can be.
Q, What
Q. Do you regard them as total losses ?-A. I would not say " total" because something
may be realized from them. If enough is got to pay tihe lawyers, that is all that can be expected.'hen it is a clear loss to the bank ?-A.
Yes, in my opinion, It is substantially a clear
Q.
loss, because toe parties to whom thoso loans were made are irresponsible. Mr. Loo himself
made tills admission to nme
Q. Do yol know anything about tile losesat Richmond 1-A. There was not a cent lost
tioroe. Richlmond is as straight as a string. No better man treads tlhe earth than tho cashier
at Richmond. Hlo was a trained accountant, and a nman who had courage to remain poor
and to do his duty. There is an admirable report from Rlichmond.
By Mr. R1ID .I::
Is
Q. there a report from Nashville ?-A. Yes ; on page 64 ; and the comments are rather
I found the cashier sliort in his cashI some $900, if I remember
curious, too.IToAtadmitted
Lynchburgh
that he had used the money, but pleaded poverty as his excuse,
correctly,
IIls name is F. W. Bronaughl. Ie had, further, made loans, mostly to his relatives, involving
some hundreds of dollars more, I have not tioe figures before mno. The branch had been
closed, and no action was taken in his case. Recurring to tils list of
already ordered
I find that I havo not mentioned the case at Loxington, Ky., which is wholly
branches,
within the knowledge of the commissioners. It has como up lately. 'Mr. J. G IHamilton,
the former cashier at Lexington, was found to have taken funds to the amount of about
which tho commissioners have all tlio facts. Those, so far as I have
$5,000, concerning
been able to recollect within tile last two days, involve all the eases where either fraud at tlio
branches has been perpetrated, or where loans have been mado violating prudent comimorcial usage.o,
Iave you spoken of all tloe branches ?-A. I have spoken of all tlo branches whoro
Q, were
loans
made, with tlh exception of the branch at Montgomery, Al,, whlore tlhe casliler,
Mr, Edward Beecher, had mdeo loans without tiho advice, and contrary to tlio wis1, of the
office of tlh company, nnd on which it was apparent tlhere would be a heavy loss,
principal
]iut as the company desired to get rid of this branch, it was transferred to Colonel Beecher,
who has since paid off all the depositors. Hlo owes the company, in account, soino $18,000,
which will doubtless bo paid. ]But his primiitivo action was a plain violation of law and of
commercial usage. ColonelBleehlior is entirely responsible Theor is ai good bond
prudent
of $00,000 behind It, and the commissioners are collecting oil it. The depositors there have
all been paid iand the matter is settled. Thlore is no loss to then.
Q. Iow could you-A,ipy tlhe depositors thero without all tlle depositors ofoftlhi company
'l'hat was before the comlpnyy closed, We got rid tllat branch
bloing
paid pro ratl
and got all tlie pass.books in. 1 hlave brought with me a statement made up by tlie book.
keeper for tlio use of the colnmissioners, giving the excess or deficiency, on ledger balances
tlat is, showing the amount of profit anld loss apparent at each branch. The statement is
made up by tlhe mania who wVns tihe commlissioIer.s' bookkeeper at tlio time, It is a statement, ill short, of the condition of tlhe company on 1 Itl July, lb74, as to its branches.
Q. State tle genernllresult as exhibited by tlhem.-A. The general result is, that tie ledger
b)alalles in tIhe branllhes nlppear tiobe il excess of tle statements heretofore furnishled the

FREEDMAN^8 SAVINGS AN) TRUST COMPANY.

7

company, itn the sum of $98,172 10, while other branches wore deficient in the sum of
$1,607.02.
mean to say that the losses, as represented by those balances, were some
Q, I)o you than
to be ?-A. Yes, sir.
moro
they had boon supposed
$)8,00()Give
In round numbers, the balance would be $963,600.
Q. Whichusisthea net balatce.-A.
deficit, to be added to tlh commissioners' report i-A. No; to the lodger
Q,
balances. The company had boon reporting $96,600 loss thlan the ledgers of thp company's
branches appeared( to call for, and showed that they wore chargeable with tlat amount, on
the presumption tliat tllo ledgers are correct. But, that the lodgers are not to be relied upon
is lshlwn by the fact tthlt at Baltlmoro, where tore appeared to be an excess of $4,300,
thero have becon since found, in the process of examining, credits to tlhe branch it tlhe sum of
Louisville, where tlh lodger seemed to be short $62, if tlh proper correc$',700.woreAtmade
in the interest-accoulnt; thloro is really something in favor of the branch,
tions
$500 or $600. I bring this in, because on Saturday last timo quHestion was raised as
perhaps
to the amount of tile OXCess. Now at Washington, for instance, hero is forty-odd thousand

dollars-T'lhe OClAIItnAN. That you have not been able to account for,
Thi WITrNIs. No; I never havo boen able to account for it. This matter at tlio different branches I havo given you from my own personal knowledge; but I really know little
or nothing as to what. was done in Washington. I have tlio same opinion about the Seneca
stone matter as you have, perhaps,
Q. I want to know whether you know of any instance at any of those branches, of any
fraudulent, unlawful, or unfortunate transaction, not consistent with commercial law?-A.
This is tle sum of my testimony as to the branches
Q, Do you know anything of this deficit or fraud of $40,000 in tloe Washington branch?
-A. That there is fraud in it I do not know. The thing simply cannot b1 explained. There
have been so many blunders Ill the necounlts; so many duplications of balances; so many
wrong
postings In tlio lodgers that the books are utterly and wholly unreliable. If that be
fraud then it is fraud. When you find tle book-keeping so bad that tile debits and the
credits are not always distinguished, and that, when tile account Is carried forward, tile reference marks are left off, and so a number of duplications have crept in, what are you going
to do about it ? It nmy be fraud, and If tlhe man was smarter, I should say It was fraud, but
I think that heo was too dull for fraud. Still, when you come to a plain statement, I am
unable to explain it, and I do not know anybody who is able. I never liavo had any reason
to believe that tliore was stealing in tih Washington branch office, I am the only man, too,
who has ever preferred charges against the officers of tlhe branch, but it was in confidence,
Q. Thoulig you were a Government bank-inspector, you never discovered anything wrong
in tlhe Washington branch amounting to criminality 1-A. No,unless negligence, or rather
is criminal, 'I'The records of tlio company would show tliat I tried to make a
incompetency
change in tlh officers and could not do it,
Q. Havo you any further response to make to hMrB1radford's question ?-A. No, sir I unless I should be questioned on the loans and investments in Washtington. I liave distinctly
stated that I have never had any personal contiection with them. Most of what I know I
have got, as to tile material facts, from tile investigations made since the bank closed. Washwas not in my department I that was theo amount of it.
ingtonWas
there any relationship between Wilson, the cashier, and Bobton, tho toller or clerk,
Q.
in the Washington branch
i-A. Boston was tile son-in-law of Wilson. It is but due to the
officers of thl company to say that we tried repeatedly to make changes thero and could not,
'lho race and color question prejudice interfered; )but that is a matter which I do not want
to touch upon ; but It kept incompetent men In those places,
to some of tile branchios, you have spoken of dealings or the
Q. Wl;n testifying in
evidences of them, boing regard
confused and covered u1. D)o you know of any case occurring, at
to c over up the real
tlho principal offico horo in Washington where tlioro was an
nature of a previous transaction for tlhe purpose of concealingattempt
it ?-A. Tlhe Seneca
Stone
was undoubtedly such a case.
Company
Q. Give us a history of tlhe transaction.-A. I never know anything about it until after
thle bank was closed.
It was a concealed transaction.
Q. I see your name signed hs witness to tlie transaction.-A. No, sir; my name Is simply
attesting tile original papers ; simply for tloe commilssioners.
Q. I took It for ranted that you knew something about til t ransaction.-A. Never, in
tho least. Those papers were merely
copies of' papers sent to my houso, and wero attested
by me as true copies only,
Q. What state of tacts do those papers disclose ?-A. They disclose this, that a loan of
$)5,000 was made to ballet Kilbourn
and John 0. Evans, at a certain time, with certain
collaterals attached, (which are described in the agreeomont,)
and that a secret agreement
was drawn up between the actuary, the finance committee, and these
; that, in
case tile note was not paid at maturity, the note and all the securities, gentlemen
the
bonds of
except
tho Maryland Mining and
should
be surrendered to the makers of
Company,
the note, and that the bonds i1n questionn (that is tile Boneca Stone
bonds) should
be taken iln tull payment of tile note.
.

Manufacturing

Company

8

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q. Was not that agreement, between Kllbourn & Evans on tle 'one hand, and the
officers of the bank on the other, (with a secret article stipulating that on certain contin& Evans were to have their note returned and all the other securities,
genciestheKilbourn
Seneca Stone bonds,) an expedient to cover up a transaction between the actuary
except
and the Seneca Stone Company, of a date prior to that agreement i-A. No; I think it was
than that. It was an effort to pay an old loan by a new loan which was
somethingIn better
other words, there had been on the books of the company a previous loan for
larger.
some $35,000 to the parties representing the Seneca Stone Company. This loan was ordered
so far as the books of the company show, it was paid.
paid, and
Q. Ordered by whom ?-A. By the board of trustees. Mr. Edgar Ketchum, of Now York,
who is an honest and faithful trustee, told me that he stuck to that until he got that loan
paid.
Q. What loan ?-A. The first loan to the Seneca Stone Company, $35,000. You will
find it in the minute-book ordered paid, and that it was paid, so far as the books showed.
About that time a loan of $50,000 was made to Kilbourn & Evans, the gentlemen referred
to before. Among the collaterals was $75,000 of tie Seneca Stone bonds, but there were
other collaterals to make it pecuniarily a good loan.
Q. What was the worth of the other collaterals, with the stipulation that all the collaterals,
the Seneca Stone bonds, should be surrendered ?-A. There were enough other colexcept
laterals with the loan to make it a good one, besides the names of the parties. The note
did not mature, say for a year. When it did. mature, and was not paid, the then actuary
demanded payment; and the parties stuck at him this secret agreement. He refused to
and was threatened with suits, and there was some wrangling about it;
give up the papers,
and, finally, the note and the other papers were given up, and the Seneca Stone bonds retained.
By Mr. FARWELL:
Who was the actuary who made this agreement ?-A. Colonel Eaton. This thing
Q.
did not come to light of course, because the agreement was in the nature of a secret agreement, till the maturity of the loan; when the actuary then in charge, Mr. Stickney, informed
them that they had to pay the note or sacrifice their collaterals, and then they camn forward
with that secret agreement.
By the CHAIIIMAN:
Q. Do I understand you to say that the return of the note of Kilbourn & Evans, and of
the securities (other than the Seneca Stone bonds deposited by them) was not made till twelve
months after the transaction ?-A. It was not made until after tile note matured, and until
was demanded.
payment
Q. Did you not say that that was twelve months afterward ?-A. I think so. It was after
the maturity of the note.
Q. That is what you mean to say ?--A. It was not till the maturity of tle note, whatever
time that may have been, and until payment had been repeatedly demanded.
Q. And you think that that was twelve months after the date of the secret agreement ?A. Yes; I think so, or whatever may have been the term of the note. I say twelve months,
because a year is the usual time.
Q. Do you now say that the transaction with Kilbourn & Evans had no relation whatever
to the old transaction with the Seneca Stone Company, but that it was a new and good loan,
as of the date when it was made ?-A. So far as appearances went, it was; in other words,
so far as the books of the company showed; and until tie secret agreement was brought to
light, tliere was no reason to suppose otherwise. In my opinion it was an attempt to foist
the Seneca Stone bonds on the company.
Q. I read from the report of the commissioners of December 11, 1874, the following:

"Received, Washington, D. C., November 15, 1873, of the actuary of the Freedman's
Savings and Trust Company, the within-mentioned securities with tl exception of the $75,000
bonds of the Maryland Freestone Manufacturing and Mining Company, with the understanding that our note for $50,000 is to be returned to us on or before the 18th instant.
Then"Received note

"' TALLET KILBOURN.
'JOHN 0. EVANS."

as

agreed upon.

"J1NO. O. EVANS."
That receipt is immediately below a paper purporting to be the secret agreement to which
have reference, and which is dated " Washington, D. C., December 30, 1873." How do
you account
for the recipt of the securities and the note antedating the transaction to which
you
it refers ?-A. In tie first place you will observe,that I do not certify this copy.
The ClHAIMAN. I did not ask you whether you certified it or not.
The WITNESS. I would make The suggestion that 1873 is a misprint for 1872, and that
accords with my recollection of the circumstance. I recollect the time at which these securi-

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

9

ties were surrendered, and the secret agreement must, of necessity, have been in existence
that time.
long before
Q. You say that the secret agreement and the arrangement with Hallet Kilbourn and
John 0. Evans had no reference to the loan previously made by the actuary of the Freedman's Savings and Trust Company to the Seneca Stone Company. '1ow do you reconcile
that statement with this report signed "' G. W. Stickney," and attested " A. M. Sperry, agent,"
and which, after giving a detailed statement of the loans to the Seneca Company, goes on to
date, November 6, 1873, according to the books of this company, a transacsay that at thatthis
whole matter was had with Messrs. Kilbourn & E1vans, whereby their
tion covering
note wna given for $50,000, payable six months after date, secured as follows, to wit: [Then
follow all the securities deposited by them, including the $75,000 of Seneca Stone bonds. ]
I ask you, how do you reconcile one statement with the other ? I asked you before, if this
contract with Kilbourn & Evans, and the secret agreement entered into with them, was not
to cover up and conceal a prior transaction with the Seneca Stone Company, and
designed
you said " no." Now I ask you how you reconcile this statement, attested by you and signed
by Stickney, with that statement Y-A. Did I say "no ?" I say that there existed previous
notes. That is not my statement.
Q. If this transaction with Kilbourn & Evans had no reference to the loan previously
made, how do you reconcile the statement furnished to Mr. J. M. Langstoii by George W.
November 6,1873, and embraced in the commissioners' report of December 14,
Sticklney,
1874 t-A. I do not know that I can reconcile it, or that I am obliged to reconcile the two
statements. I now state to you that I had no knowledge of the transaction, and had no
more to do with the loan-books of the company than you have to-day. What I have gathered of the matter, I have gathered because of ny connection wilh the company, and on account of the deep interest that I have taken in it.
By Mr. BRADFORD:
I
Q. understood you to say, a while ago, that the Seneca Stone loan was paid by the new
Kilbourn &, Evans loan.-A. That wat my impression.
that the original loan was some $35,000.-A. Something in that vicinity.
Q. And
Q. And that the subsequent loan to Kilbourn & Evans was $50,000 ?-A. Yes.
Q. With which money they paid the $36,000 ?-A. That I have learned since. That was
not my original information; but that has come out since. Let me state it again. I think I
can put the matter before the committee very plainly. As I have always understood it, this
loan of $35,000, in various sums, was by the board, in good faith, ordered paid, I supposed
that it was paid. I think that the books of the company show that it was paid. About the
same time a loan of $50,000 was made to Kilbourn & Evans. Among the collaterals were
of Seneca Stone bonds. There was enough stuff put in to cover the loan and to make
$75,000
it appear to be a good one, so far as payment was concerned. But, afterward, a secret agreement turns up, and the real nature of the transaction is found (ut. It was the payment of
the old loan by the new one, and a secret sale of the bonds of the Seneca Stone Company to
the Freedman's Bank.
By Mr. RIDDLE:
are these bonds worth ?- A. They are not worth anything, and never were.
What
Q.
By Mr. FARWELL,:
Q. Was that secret agreement made by the actuary or by the finance committee ?-A. It
was made by the finance committee; three members of the finance committee were a
quorum, and the agreement has three names on it. It was signed by Clephane, Tuttle, and

Huntington.
Tlio further examination of this witness was

suspended till Thursday next.

WASHIINGTON, D. C., January 25, 1876.
VWILLIA KILGOUR was then called, sworn, and examined.
By the CIIAIRMAN:
Question. State your profcssion.-Answer. I am a member of the bar, residing in Alexandria, Va.
Q. Have your professional engagements at any time led you to examine the managementof the Washington branch of the Freedman's Savings and Trust Company ? If so, state
you may know touching the manner in which' the losses to the depositors in that
anything
bank occurred.-A. I practice law also in the city of Washington, and have an office here.
I have had, as a client for the last two or three years, a colored man named John Watkins,
a very hardworking, industrious man.. I have been attending to his business during that
period. About three weeks ago he came and, for the first time, informed me that his money
had been drawn out of the Freedman's Bank on fraudulent checks, and that it had been
drawn out by T. S. Boston, who was the recciving-tell/r of the bank. Watkins is a very

FREEDMAN'd SAVI\GS

10

AND TRUST COMPANY

ordinary man, with very little education, and not at all accustomed to transact business. I
asked hiin for the checks and also for his pass-book, neither of which hie had. lie informed
me that Mr. Boston retained the pass-book, although he had repeatedly called upon him for
it, and that he had even gone so far as to send a detective officer before the bank closed. I
then, at his request, went to the bank and called for a settlement. I called for the original
pass-book and also for the cheeks. I examined those checks which I have with me, (produc-

them,) and I found that T. S. Boston had forged them to the amount of between ten
ing
and eleven hundred dollars. I proceeded at once to see Mr. Boston in relation to the
checks, and he admitted that lie had drawn the money. I asked him by what authority,
and lie said that he was the agent of Watkins. 1 thon requested his letters of agency.
IIe told me that he had none; that it was a kind of implied agency. I then asked
what he had done with tile money. eH told me that lie liad invested it in various
ways. I asked him if lie had made any return of it, and lie said that lie had not,
lie said he had converted the most of it to his own private use. I asked him who was the
cashier of the bank, and he told me that Mr. William J. Wilson was, and that Mr. Wilson
was his father-in-law. Watkins had gone up to tlie bank just before it closed and wanted
to draw out the money, but Wilson, the cashier, told lim not to think of such a thing, and
alluded to the Treasury of the United States, and said there was just as much liklihood of the
Treasury
breaking as there was of the Freedman's Trust Company breaking. At that time.
as these checks will show, there was but 40 cents in the bank to the credit of Watkins, Boston said that he had invested this money in some publishing company-the N1ttional Era, I
think-and in various other things. I called for the stock, but he could not present it, and
lie finally broke dovn, and just acknowledged that he had drawn the money without any
authority, and that his father-in-law, the cashier, had paid it over. I then went to Wilson,
and told him that, as a good citizen, it was my duty to have Boston arrested, but that this
client of mine, John Watkins, was a poor man, paying $15 a month rent, and that almost
would do him more good than to have Boston sent to the
anything paid to him on account
that, therefore, it was not exactly within my control, but that if he would
penitentiary;
Watkins some two or three hundred dollars and secure the balance I would have nothpay
ing more to do with the matter-- I should state that some $250 was a legitimate loan made
by Watkins to Boston, for which Boston had executed notes and Wilson had indorsed
them. That was a legitimate transaction, and Boston has since paid the interest accruing
on those notes. Here (producing a number of checks) is a check on which he loaned to
Mr. Bregazzi $400. 'And here are five notes for $100 each, forged by Boston and drawn on
the 14th June, 1874, a few days before the bank closed. Mr. Wilson, however, denies that
the endorsement on these notes isis s handwriting. This man Boston says that Wilson received a good deal of satisfaction from them, as they were living together and were living
in a fine house.
extravagantly
Q. A brown-stone house ?-A. It was a very handsome building, but it has been sold
since then, and Wilson and Boston have separated. Boston was tile receiving-teller of the
bank. My client, Watkins, went there with perfect confidence in those people, not supposing
that anything wrong had been done. Mr. Bregazzi learned that Watkins had several hundred
dollars in the bank, and he borrowed $400 from him. Here is the check for it. Watkins
took a deed of trust for the amount, which has been since paid by Bregazzi. This man
Boston then went down to him, and asked him i hIn could, not borrow $t50 from him, saying that he had bought a house and wanted to complete the payment on it, and that lie
would pay him in a short time. Watkins went to the bank and made his mark on the
check, and Boston witnessed it, and drew the $250. The rest of the checks are signed
" John Watkins, attested by Thomas Boston," but when I went to see him he told ne that
he had drawn all this money as T. S. Boston, agent, and that the $500; which lie drew
in five separate checks, a few days before the bank closed, lie had deposited in the MetroBank to his credit as agent of John Watkins. I went there and found there was no
politan
such entry.
Q. Where is this Boston now ?-A. In Washington.
Q. Is there any reason why ho should not be arrested?-A. That I leave to the commissioners to have done. Hl will be arrested. My object was, after I leave here to-day,
to demand full payment of the money from the Commissioners on the legal ground that
these forged chocks were no payment at all, and that, at tlhe time Watkins
demanded his
there was no money to his credit while it should all have been there ; therefore we
money,
are not going to take the 20 per cent, dividend, but we will demand the whole amount.
Q. Are you in possession of any further facts that would illustrate the subject of our intluiry ?-A. No, sir; I think it would be well for the committee to hear Watkins's statement,
and also to hear Wilson, who is in room No. 20, Sixth Auditor's Office. Watkins lives at
Bregazzi's hotel in the city. Bregazzi borrowed $400 from him, and gave him a deed of
trust which has been settled up and paid. When he went up to draw the $400 for Bregazzi, he made Boston witness his mark. Boston saw that lie was loaning this money out,
and thought he would call on him for $250, which he did. The balance of the money Boston drew
checks
most of it was
in
forged

for;

done

1674.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

11

SEI.,ECI CnOMI'ITrEE ON T'r1E FREI)MAN'S BANK,
11Washington, JInutry 27, 1876.
Committee met at 10 o'clock a. in. Present Messrs. Douglas, Bradford, Riddle, Stenger,
The examination of Anson M. Srerry c)ntinuod.
ANSON M. SPE1RRY recalled."
By Mr. BnADFnoRD:
Question. How many bonded officers or employs of the Freedman's Bank and of its
branches were there; who were they, what was the amount of their respective bonds, which
of said bonds were worth their penalties respectively, and which were not ?-Answer. T'he
first part of that question will be answered by counting when we get through. I have not
counted them.
Q. Who wore they ?-A. At tlhe principal office in Washington, John W. Alvord was the
president; his bond is dated '27th July, 1872, and is in the sumn of 950,000. His sureties are
James R. Alvord and Charles Alvord.
Q. What relation are they to the principal ?-A. I think they are brothers; that is my
recollection, although it may be an error. IPhave no reason to doubt tlat this bond is good.
I find no bond for the late president, Fred. Douglass. lIe accepted tle position and acted
till the closing of the bank in July. The book-keeper at the principal office was Emory A.
Wheeler. His bond is dated 1I1th September, 187:3, and is in the sum of $6,000. His sureties
are George A. Bassett and G. P. IHopkins. I do not know those sureties. 'These are all
the bonds I find at the principal office of the company.
By the CIAIRMIAN:
Q. Was not the actuary bonded ?-A. The old actuary, Eaton, I feel quite certain,
was bonded, though I do not find his bond. In conversation with Mr. Leipold about
It yesterday, lie said that it was his recollection that the late actuary, Stickney, told him that
Eaton's bond had been returned. It is certainly not in the office. Mr. Leipold is one of the
commissioners. The actuary, G. W. Stickney, was not bonded at the time the bank closed.
The first inspector, Mr. Sam. Harris, was not bonded. I had no bonds as an inspector. As
a cashier I did give a bond. It is fair, however, to the board of trustees, that I should
add that I was, late in 1874, directed to give a bond, but owing to the complications under
which the bank was then running I gave none. The end was so apparent that I did not
think it worth while. Those are all the bonds that are at the parent office. At the Washoffice I found the bond of William J. Wilson, as cashier of the branch, for
ington branch
dated 18th October, 1870. The sureties are David Fisher and John A. Gray. I
$10,000,
have doubts as to the responsibility of the sureties; I do not know positively about it. T
find the bond of Thomas S. Boston as assistant cashier of the Washington branch. It is
dated 8th October, 1870, and is in the sum of $2,500. The sureties are A. '. Augusta and
Walker Lewis. I believe the sureties to be good. I find the bond of Christian A. Fleetwood, teller; it is dated 2d August, 1873, and is in the sum of $10,000. The sureties are
Fred. A. Boswell, Wm. E. Masters, George William .Goodall, W. J. Murtagh, and R. W.
Tompkins. The sureties are good, I think. That is all the bonds that I find for the Washington branch. At Atlanta, where the defalcation occurred, of which I spoke in my last testimony-The CHAIRMAN. Was that one of the banks authorized to grant loans ?
The WIrNESS. No, sir; this is a clean steal, not an error of judgment. It is the case where
tlhe cashier was convicted of embezzlement. There we have the bond of P. and D. Coroy in
the sum of $6,000. Corey as principal, E. A. Ware as surety in the sum of $2,000, and C. W.
Frances as surety in the sum of $1,000. 'he bond is dated February 14, 1870. There is
another bond in the sum of $3,000, Corey as principal and Thomas Seabury as surety,
of which I have not the date. Both of those bonds are in the hands of the counsel of the
bank for prosecution.
The ClHAIRMAN. Is Lexington the point where this pious young man, this missionary from
Oberlin, acted as cashier ?
The WITNESS. Yes; that is a good description, I think. His name is Hamilton; he
and became an Indian agent. It is a singular coincidence that the man who
graduated,
robbed us at Atlanta begged off that lie might accept an Indian agency, whereby lie could
us the sooner, and tllat Mr. Hamilton went off from the bank and took an Indian agency.
pay
He is an Indian agent now. The bond of N. R. Scovel, cashier at Beaufort, is for $10,000,
and the surety is Samuel Harris. Judgment on this bond has been obtained in a sum exceed.
I have no idea that we shall recover anything. While Mr. Harris may he
ing $10,000, Ibut
believe that lie sets up a legal and technical defense. Mr. J. G. Hamilton
responsible,
at Lexington, Ky., who has been referred to as short in his accounts, (that is a euphemism
for stealing,) gave bond in the sum of $5,000, with E. M. Crevitll as surety. This bond, I
is good. As to the deficit rethink, is in the hands of the commissioners. I think the
ferred to at Lexington, the entries on the books were so surety
managed as to have
successfully
defied detection by any ordinary inspection. It would only have been by good fortune, in
striking the particular pass-books, that any differences would have been discovered. To

Frost, and Rainey.

12

FREEDMAN'S SAVINGS AND TRUST COMPANY.

illustrate: the ledger showed that we owed a man $200, but when we got hold of his passbook, we found that we owed him $1,600. Hamilton picked his men, the men who would
not come near the bank for a year perhaps. The man at Atlanta did better than that, for he
ran duplicate pass-books. I should be very loath to reflect upon the clergy, and certainly not
upon
religion, but I must say that Mr. Corey, at Atlanta,-was also a Congregational minister.
I mentioned in my last statement tile defalcations of Fred. Jordan, the cashier at Natclhez.
He gave bond in the sum of $10,000 ; the bond is dated the tli of April, 1873. The sureties
are E. A. Castello, in the sum of $2,000; S. M. Preston, in the sumn of $2,000; George V.
in the sum of $3,000; and t1. . Gastrell, in tlhe sum of $3,000. While the sure.
Raymond,
ties are'good, I doubt if the bond can be enforced because of informality. I think that tile
minutes of the board would show that these bonds were accepted, but I do not think they
were ever examined. At Mobile, Mr. C. A. Woodward, to whose default I made reference in
last statement, gave a bond in the sum of $10,000. The sureties are F .A. romberg and
my
E. A. Buck. This bond is in the bands of counsel at Mobile, and is in suit. I do not know
whether anything will be realized under it or not; it ought to be good. The cashier at
N. C., Van D. Macomber, to whose deficiency in accounts I referred in my
Wilmington,
last statement, gave a bond in the sum of $5,000 as acting cashier, under date of 25th July,
1871. His sureties are E. R. Brink and William Larkins. While the sureties are good, the
bond is informal, and I am credibly informed that it cannot be enforced. That is the reason
why it was never sued on. At Jacksonville, Fla.,I where the bad loans referred to in my
testimony the other day were made, the only bond find is that of J. W. Swayne, as cashier.
It is dated 17th November, 1873. T'he sureties are J. I. Crowell, J. J. Holland, John Swayne,
and Jacob Brock. I believe the bond to be good, but no charges have ever been preferred
Mr. Swayne, who succeeded the cashier that was responsible for the bad notes. lie
against
was simply the successor of tile man who is responsible.
Q. What about his bond ?-A. I find no bond for W. L. Coan, the cashier, who was the
real man responsible for that rascality there, but I have seen a copy of one for $1t,000. To
the best of my knowledge and belief, if the bond could be found, it would be worthless.. Ie
was the fellow who pulled tile chestnuts out for the ring ; lie was a tool, and very weak mnan.
Ho was not a thief, but lie was worse than a thief, because lie let others use him. I do not
tliink lie ever made a cent himself.
By tile CHAIRMAN:
Do you know who composed tle ring ?-A. No; it is difficult tosay; but not so diffiQ.
cult either. It Would be difficult to prove it, I suppose,'in court. The assistant cashier,
Frank E. Little, was undoubtedly the really responsible man for those robberies. Hle wai
then assistant cashier. T'lie fact of who composed the ring might be gathered from the men
whose names are on the list of loans made there.
Q. Will not that really apply to tile branch office at Washington, too i-A. I should not
wonder. I cannot find the bond of N. D. Smith, tie cashier at Memphis, who milde tlh
loans as shown by tile commissioners' report, to which I referred in my testimony the day
before yesterday. I am perfectly confident, however, that there was one; the bond is missing.
No especial charges have ever been preferred against Mr. Smith, except for gross negligence
in making loans and for lack of discretion.
By Mr. BRADFORD:
Q. Do you know anything of the sufficiency of his bond ?-A. No, sir; the bond was
signed by parties in Cincinnati. It went back and forth three or four times for correction.
I remember tliat distinctly, because hMr. Smith succeeded me as cashier there, and I know
that there was delay in my getting away while he was perfecting his bond. I searched for
it repeatedly, under the orders of the commissioners, in order to furnish it to the counsel,
but I could not find it. I have the bond of Edwin Beocher, the cashier of the branch at
Montgomery, Ala., to whom we sold out that branch in February, 1874, under a contract
which is now in the hands of the commissioners. This bond is for $B0,000; it is dated 17th
March, 1873; the surety is C. A. Beecher. I believe it to be perfectly good. In addition
to which, covering the amount which Mr, Beeclier owes the company, is a bond for $60,000
now in the lands of the commissioners.
Q. How is that secured ?-A. By the same surety, C. A. Beecher. I have taken considerable pains to inform myself, and I am convinced that the bond is a good one. 'l'he bond
of C. Nelson, the cashier at Newberne, N. C., to whose default I referred the other day, is in
the sum of $10,000, and is dated July 14, 1873. The sureties are Israel P. Nelson, D. W.
Ami R. Dennison. The judgment referred to by me was
Kilbourne, Orlando Hobbs, and
obtained on this bond, but I fear we shall have difficulty in realizing anything under it.
Here is a mass of other bonds covering all the branches, and at which there was no particularly serious default or loss.
By Mr. FROST:
Q. How did you get possession of those papers?-A. I got them froin the commissioners
this morning.
Mr. BRADFORD. We do not, on reflection, desire you to give tile bonds at tile other
branches where there were no serious defaults.

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

13

The WITNESS. I had nothing to do with the bonds of the company until Jnno, 187.3, when
the president, J. W. Alvord, called me into conference with him as to a revision of them.
By Mr. BRADFORD:
have
Q. Do you see any indorsement of approval on any of the bonds to which youcannot
referred in your previous answers ?-A. No, sir; there are none on the bonds, and I
they were formally approved or not; the minutes of the board can alone detersay whether
mine that fact, I was stating that I had no knowledge of these bonds before Juno, 1873,
when, in conference with President Alvord, he wished me, in making my next rounds, to
see to a revision of the bonds. At such points as I was able to reach after that, I did endeavor to get from the cashiers a renewal of their bonds, and you will find that numbers of
those bonds herewith are drawn by myself.
Q. Of what officers was it the duty originally to approve of these bonds ?-A. Referring
to the by-laws of the company, I find in section 6, under the head of " powers and duties of
officers," " The actuary and all other officers, agents, clerks, or servants of the company shall
such duties as may be required of them respectively from time to time by the board
perform
of trustees or the president or acting president, and shall give such security for the faithful
of their duties as the board or the finance committee may from time to tine reperformance
By implication, then it would be the duty of the board or of the finance committee
quire."
to approve of these bonds, and I think that so far as there has been any custom, that has
been the custom of the company.
By the CHAIRMAN:
Q. Theoretically, were not the bonds submitted to the actuary ?-A. Theoretically they
were; practically, they were sometimes and sometimes not.
Q. Theoretically these bonds ought to have passed from the hands of the actuary into the
hands of the finance committee ?-A. Yes.
Q. And then, if necessary, into the hands of the board of trustees ?-A. Yes.
Q. Whether they did or did not so pass, you are not able to say ?-A. Whether they did
so pass in all cases or not, I am not able to say. I may add, at that time, June, 1873, all
old or doubtful bonds were to be renewed, and in most cases the amount of the bonds must
be increased, as I find by the minutes which I made at the time.
By Mr. RIDDLE :
Q. In all cases where you considered the bonds doubtful, they were renewed ?-A. Yes.
Q. Were they all renewed I-A. No, sir. On my next round 1 tried, as far as practicable,
at the points I reached, to have them renewed, but in November we were in the midst of the
and after that we were in the life and death struggle.
panic,Were
there any cases in which you requested renewals, where the parties refused to
Q.
make them ?-A. No, sir.
By Mr. RAINEY:
Q. In exacting a new bond from these respective cashiers, what method did you adopt to
find out whether or not the sureties were solvent ?-A. So far as I was concerned, from personal knowledge, or from the personal knowledge of some person in whom I had confidence. There was no other method which could be adopted, because these men had necesfriends, scattered all over the
country.
sarily to go to their went
to a strange place, did you require bondsmen to verify t-A. 0,
Q. Suppose you
yes; they all qualified before the proper officers.
Q. Then these bonds ought to be good for something, ought they not ?-A. They ought
to be.
By Mr. FIIOST:
?-A. I do not know whether most of
Q. Are they not, most of them, good for ofsomething
them are, but many of them are. Many the recent bonds I think are good. In those
cases I have just given the names of all the persons to whom this committee will ever have
to pay its respects, and I have made such statements concerning these bonds as I was able
to make.

By Mr. RAINEY:

Q. Had the board any especial rule by which it could find out the solvency of parties 1A. No, sir; there was no special method; in fact, the board had very little to do with the
bonds. I think that every case was taken on its merits, and I have no doubt that in getting a bond the board endeavored to get a good one; there was no reason why it should
not.

By the CHAIRMAN:

Q. Was it not the duty of the examining board, at stated periods, to look into the condition of the securities, and to report thereon to the trustees ?-A. Yes ; but that does not seem
to have applied to the bonds of officers.
Q. What was the examining board for ?-A. To examine the securities held by the com-

14

FREEDMAN'S SAVINGS

AND

TRUST COMPANY.

was carried out literally. Indeed, I know that no formal and
pany, and I thinkintothatthethat.
bonds held by the company from its officers was made until Juno,
regular After
inquiry
we had had two or three serious defalcations, it began to look as if it was
1873.
that the bonds of the cashiers, as well as their character, should be looked into.
necessary
My notes here show that in 1873 I did, in conjunction with the president, and at his request, go over the list of bonds, revised them, and took note as to wliat should be done in
each case.
By Mr. RAINEr :
of these branches ?-A. Yes,
Q. You were sent out as an inspector
?-A. No, I was not, until after
Q. You were requested to see that good bonds were taken
of my duty; but not until then had either my attention
June, 1873. It was then made a part
or the attention of anybody else been called especially to the bonds. Whenever I had occasion to select a new cashier, I made it part of my business to see that he had good bonds.
Q. You had been appointed for the purpose of seeing that these bonds were good; I
cannot understand how it is that you cannot say now whether they are good or not, and
that you cannot state the method by which you come to that conclusion.-A. I must explain
that this was only incident to my principal duties, that I was to inquire into the standing
of the sureties, and where the bond was too old, in any sense, to have it renewed. This was
the first time that any systematic effort was made to revise those bonds or to see to their
character. In going to any branch, of course I had to depend on what information I could
character of the sureties offering on
get as to the character of the sureties, and also as to the
the new bond. And that, in fact, was what we did. I rejected the bond of the cashier at
Augusta, for the reason that I knew tothat the sureties were not good.
Q. Ard yet you are not prepared say whether tlihee bonds that you have certified to

are good or not now ?-A. I have made such statement with
was able to make.

regard to each individual as

I

By the CHAIRMAN:
Q. Have you any record of your reports, as inspector, made to the officers of the bank
before and after its close; and have you any book of record containing your correspondence
with the different agencies of the main office ?-A. The reports made to the actuary are in
carried a letter-prcss-copying
manuscript, and are on the files in the bank. I sometimes
book, and sometimes did not, (traveling
very light,) but my correspondence is all on file in
the principal office, and can.bo had. I have no other records.
['The chairman directed the witness to produce those papers on his next appearance before
the committee.]
The WIrNESS. I omitted, in my testimony the day before yesterday, (forgetting it at the
to state that the branches at Beaufort and Jacksonville were authorized to make loans,
time,)
Those were the only two branches that were so authorized, and it was under that general
commission that these bad debts were foisted on the company. If any loans were made at
other branches, it was in contravention of tle standing orders of the board. Those branches
at Bgaufort and Jacksonville were to do anything that was necessary to meet the requirements of the communities in which they were placed, tiere being no other responsible

banks there.
By Mr. BRADFORD:
Q. Is there any evidence that has come to your knowledge as to where and to whom
these bonds were delivered I--A. No, sir; I do not know.
Q. A bond is not a bond until it is delivered.-A. I am aware. The bonds are on file at
the principal office. That is all I know about the subject. Perhaps it was as proper for me
to bring this matter to your attention as anybody else, because I had been over those bonds
in conjunction with the president.
By the CHAIRMAN:
the personal responsibility of J. W. Alvord and
Q. Do you know anything in relation tohave
no positive knowledge. It is my impression
his sureties?--A. No, sir; I do not. I
that they are responsible. I simply know by the style in which Mr. Alvord lives. Hie lives
in comfortable style.
By Mr. STENGOIR:
Q. Is ho responsible for the full amount of his bond ?-A. I should say so, but that is only
an impression, of course.
By the CHAIRMAN:
the commissioners, if any ?-A. SimQ. What relations do you now bear istoastheanbank and
of
the
commissioners.
an
as
my
agent
appointment
employ;
plyQ. You have been, then, in some
or other, connected with the bank and its
capacity
branches for how long --A. For ten years-since the bank went practically into operation.
Q. State whether, in relation to salaries, allowances, and expense of administration in various ways, the results of your labors, as inspector or otherwise, show the management
of the bank to have been economical or the reverse.-A. As a general statement, the man-

FREEDMAN'S SAVINGS AND TRUST COMPANY.

15

agement was economical. There

are important exceptions. The thing which practically
helpedofto kill theandbank was the erection of its banking-house in Washington, which was a
piece illegal unjustifiable extravagance.

By Mr. RIDDLE:

Q. I-ow much did it cost ?-A. Not any more than it is worth, but more than the bank
could afford; some $2f00,UtO, I believe. I have never failed to characterize it in proper language.
By the CIHAIRMAN:
Q. What was that language ?-A. That it was an illegal and unjustifiable extravagance.
In Other words. I damned it from its foundation-stone upj I have nothing to say of the
motives of the men who built it. I date from that the decadence of the bank. The outlay
in the way of books and some current expenses was greater than it ought to have been. I
have always regarded the office of the president (and I state this with the utmost reluctance)
as a sinecure.
Q. What salary did he got?-A. IIe was paid at first $1,000 a year. In 1872, or there.
about, he was required to give his whole time and services to the company, and lie was

paid a salary ot $4,000, with an

allowance of

curred.

$1,000 for expenses if they were actually in-

By Mr. FnosT:
Q. How long did he have that salary I-A. Afterward both the salary of the president
and of the actuary was reduced $500.
Q. You say that from 1865 to 1872 the president's salary was $1,000?-A. Yes.
Q. And from 1872 it was $4,000, with $1,000 additional, if necessary, for contingent ex.
1873. 'The

minutes will
that continue ?-A. Until some time in
Q. Probably a year and a half or two years 1-A. Something like a year or a year and a
half. Then there was a reduction of $500.
Q. Then it would have been $3,500 from 1873 up to what time ?-A. It seems to me until
the spring of 1874, when the subject of retrenchment was under discussion between the
and myself. I pledged a reduction of $10,000 in the contingent expenses on ceractuary
tain conditions, and I threw off $500 from my own salary, and the actuary and the president did the same. Exactly what date that was I cannot say.
after the president ?--A. The actuary.
Q. Who was next officerAtin order
(it had been running
Q. Who was he ?-A. first, when the bank came to Washington,
first in New York,) it was Col. D. L. Eaton. My impression is that his salary at first was

How long did
penses.
show the dates.

$3,000.
Q. That would be from 1867 up to what date ?-A. I cannot tell up to what date. It
was first$3,000, and was subsequently raised to $4,500; then thereduction of which I have
to $4,000, at which it remained.
spokenHow
brought itdiddown
lie continue actuary ?-A. Colonel Eaton died, but his successor had
Q.
long
the same salary.
was next officer of the bank, of importance ?-A. At that time, myself.
Q. Who
Q. What was your" office styled ?-A. At first it was styled "general inspector," but I
could not stand the general."
Q. You were there at the formation of the bank in 1867 ?-A. No, sir; I was appointed
in 1870 as inspector.
Q. Can you tell us how much the inspector had in 1865 ?-A. Yes; my predecessor had
$2,000 a year and expenses.
Q. What kind of expenses 1-A. Traveling expenses, hotel-bills, and the like. I expect
that they were good for $2,000 more.
the inspector had $;,000 a year and expenses from 1865 to.1870 1-A. Yes.
Q. Then
In 1870 you took tie inspectorshliip; what salary did you get?-A. I ought to state
Q.
that my salary had been $1,500, and that I paid my own expenses. I was entitled to my
I came out at the end of three
traveling expenses and board, but I did not take it, and
When I took the inspectorship I got
years with a broken constitution and $400 behind.
$2,500, and paid my own expenses
excepting my actual railroad fares.
Q. That was from 1870 up to what date --A. My salary was afterward reduced to $2,000,
but I cannot now

give you the date.

By the CHAIRMAN:
before you were appointed general
Q. I understand you that the inspectors of the bank,
received how much --A. Two thousand dollars and traveling expenses, includinspector,
ing board.
Q. You wore appointed general inspector in what year ?-A. In 1870. Then I had a salary of $2,600, and I paid my own expenses, except actual transportation. My hotel bills,
&c., I paid myself.
Q. Was the increase spoken of that of which a minute was made in the proceedings of the
board of January 11, 1872, to this effect: " The salary of A. M. Sperry increased to $2,500?"

16

EREEDMAN'S SAVINGS AND TRUST COMPANY.

-A. That was the time I made a big fight for my pay. I had been traveling for $'2,000 a
year, paying my own board and hotel bills, and I could not stand it, as my incidental ex-

penses were necessarily high.
By Mr. FROST:

Q. Who was the cashier here; didn't you have a man here who stood in the position of
cashier ?-A. There was a cashier at the branch office, but none in the principal office. The
person who occupied such a position in the principal office was styled the actuary.
Q. What was the name of the last actuary ?-A. G. W. Stickney.
By the CHAIRMIAN:
Q. I understood you to say thai, prior to January 11, 1872, when your salary was raised
to $2,500, you had been traveling as agent of the company on a salary of $2,000, and pay.
ing your own expenses ?-A. Yes; except my actual railroad-fares.
Q. What does the entry mean on the minutes of the board of November 11, 1870, "
of Mr. Sperry increased to $1,800 ?"-A. My old salary as cashier when I came upSalary
from
Memphis was $1,500. My salary after I came up here was raised to $1,800. It seems I had
forgotten whether it was $1,800 or $2,000, but I thinkstill, in spite of the minutes, that I got
$2,000. I guess you will find that it was afterward raised to $2,000.
Q. Can you state with any approximation to accuracy what the annual charges, direct and
incidental, of the administration of the Freedman's Bank amounted to ?-A. For the last
to $89,000; in round numbers, $90,000. That was for the
year I think the salaries amounted
offices, branches, and all. That included some $5,000 for the Whole cost of inspec.
principal
tion, details of traveling expenses, &.c.; in addition to which the expense-account was some
$6i,000 more, for office-rent stationery, and all the incidental expenses.
Q. Aggregating how much ?-A. fMaking about $155,000, as near as I can recollect.
By Mr. FROST:
Q. What salary did the tellers have ?-A. One hundred dollars a month.
Q. What were the names of the tellers ?-A. The tellers at the Washington branch were
Boston and Fleetwood.
Q. And each of them had $100 a month ?-A. Yes; there was, besides, a book-keeper at
the same pay; but you will understand that the salaries of cashiers varied at the various
branches of the company. I made out a table of salaries for the commissioners when they
came in.
By the CHAIRMAN:
Q. Did the salary of $4,500, paidhisto the actuary, cover all the charges of that officer against
the bank ?-A. 0, yes; whatever salary was it covered all his claims upon the company.
It varied from $4,500 at different times; there were no perquisites.
Q. Please explain, then, this entry made on the minutes of the board'January 21, 1869:
of actuary from May, 1867, to December31, 1868, $6,713.08."--A. I do not know
"Expensesabout
it: 1 never saw that item before.
anything
You know nothing about it, and cannot explain it?-A. Not the slightest, except that
Q.
I conjecture that it must refer to the current expenses of the company. I see it now for the
first time.
Q. Was there not a paper established by the order of the board and run in the interests of
the bank by the actuary ?-A. Yes.
Q. And was not that paper in existence during tile years 1867-'68 ?-A. I think it was not.
It could not have been started earlier than 1868. I think it ran about three years, and was
then discontinued in the beginning of 1871, It might have been in existence in 1868, 1869,
and 1870. That paper did not cost more than $1,800 or $2,000 a year. It was established
in the view, of advertising, as it was thought cheaper for tle bank to advertise itself than to
pay newspapers,
although it did pay heavily to newspapers.
You say that that paper was run at an annual expense of $1,800 or $2,000 ?-A.
Q.
Yes.
Q. What was its name --A, It was a little paper entitled "The National Savings Bank."
Q. Can you point to any authority for the establishment of such a paper ?-A. There is
in the minutes of the board.
authority
I mean any authority under the charter of the bank.-A. No, sir; it was done by the
Q.
action of the board. (After examining the minutes of the board of 21st January, 1869, in
regardof to the item of $6,713.08.) It appears, by reference to the original record, that this
sum $6,713.08 was approved by the board on account of current expenses from May 2,
1867, to December 31,1868. That refers to the current expenses of the office.
Q. Was it usual for the actuary to allow so much time, as between May, 1867, and December, 1868, to elapse before reporting to the board his account of current expenses ?--A I
didn't know that current expenses were ever reported to the board. There was a resolution
could incur bills greater than
adopted that neither the actuary nor the finance committee
of the board. I am not aware, inother
$1,000, in anytheone item, without the direct
approval
words, that current expenses had to be audited by the board. (The witness was directed
to find out, before the next meeting, all about the item of $6,713 08.)

FREEDMAN'S SAVINGS AND TRUST COMPANY.

17

Q. State in a general way all the causes, proximate or remote, which appear to have been
the most prominent in bringing about the failure of the bank, as far as you have been able
to form an opinion from such examination as you have given to its affairs.-A. Had there
been scrupulous conformity to law in every particular, and carefulness in selecting investments, such as men fully conscious of the sacred nature of their trusts ought to have exercised, I do not think the company would have failed, for the reason that its franchises were
most valuable. It had, as it were, carte blanche in reaching four millions of persons who were
and ever-increasing economical depositors, so that whatever the exprudent, industrious,
been. in originating the company, its increase in depositors would have
pensesinmight have
been greater ratio than its expenses, and ought, before the time the company failed, to
have brought it into a condition of solvency, even supposing that the current rate of exincurred had been kept up. I regard tile' first fatal departure from sound
penses actually
to have been the erection of the banking-house in Washington. For whatever may
policy
investments in real estates are as good
be said of the amendment of the charter,
securities as such a savings-bank need to judicious
have in part. There got to be around the princioffice of the company an unwholesome savor of connection with what is popularly known
pal
as the Washington "ring," of the existence of which ring I have no knowledge. At any
rate, the management was first opened to criticism by the politicians. In addition to that,
there were violent and unjustifiable partisan attacks on the bank. The immediate causes
of the failure of the institution were undoubtedly the panic of 1873, and the ostensible,
not the real, connection of the bank with the house of Jay Cooke & Co. This led to
though
such a reduction of the balances held by depositors that, even if nothing further had transthe institution would have been closed by its expense-account.
pired,
Q. Was the unwholesome savor which hung around the skirts of the bank a cause of the
partisan attacks upon it of which you have spoken, or were the attacks the result of the
knowledge that such savor existed t-A. It was the immediate cause. I believe that had
the bank been as immaculate as it ought to have been, it would have suffered these same
attacks.
The CHAIRMAN. That is a mere assumption.
The WITNESS. Then I will say that had the bank been as immaculate as it ought to have
been, and had suffered these same attacks, it could have resisted them without loss. I could
have gone to our depositors, and simply said, "These things are not so," and I would have
been believed.
Mr. RIDDLE. But you could not say that.
The WITNESS. No, sir; I had to make so much of a clean breast of it that I spoiled all
that I said. I have been waiting two years, Mr. Chairman, to say this. I can prove to you
that for two years I have been working to get a congressional investigation.
By the (ICHAIMAN:
Q. Referring again to the attacks on the bank, are you apprised of any instance in which
the actuary consulted counsel as to the propriety of instituting proceedings for libel against
the persons making those attacks ?-A. No, sir.
Q. And that, after free consultations with his counsel, he concluded it most prudent to
abandon the idea ?-A. No, sir; I am not.

SELECT COMMITTEE ON

Committee met at 10 o'clock a. m.

F1'IEEDMA.N'S BANK,

Washington, January 29, 1876.
Present, Messrs. Douglas, Bradford, Stenger, Riddle,

Hooker, and Rainey.
Anson M. Sperry recalled, and his examination concluded.
The WITNESS. I have refreshed my memory since I was last before the committee, and
recollect another defalcation at Mobile branch early in the history of that branch. It was
during the temporary absence of the cashier. I had entirely forgotten it.
By the CHAIRMAN:
Give us the name of whoever is responsible for it.-A. I have here a transcript
Question.
of the record in the suit of the Freedm an's Savings and Trust Company against Frank H.
who was temporarily cashier at the Mobile branch in the absence of Mr. Woodward.
Towle,
On this suit judgment
was ever realized
was rendered in the sum of $1,706.02, but
from it, or ever will be. The bond was not good for anything; it nothing
was informal.j
By Mr. BRADFORD:
Q. Give all the instances that have come to your knowledge of insolvent loans that were
made by the bank to one or more of its officers or
or to any person or persons
connected by personal or business ties with any oneemploys,
of its officers or employ6s.-A. The
only instance that I have in own mind, (and it is a very small one,) is the small amount
of $350 standing in the namemy
of Charles D. Thomas, which was really a loan to George D.

18

FREEDMAN 'S SAVINGS AND TRUST COMPANY.

Johnson, who was at that time book-keeper of the company, and which loan has not been
To the best of my knowledge and belief the rule was always strictly applied as to
paid.
the employs of the company. I never knew of any employs of the bank borrowing
money
from it unless it were an advance of salary, not to exceed the amount of the current month's
and these wore all paid. Under the last clause of your question, '" cr to any person
pay,
or persons connected by personal or business-ties," &c., I would mention the loans to Hunt.
ington and Gassaway, who were connected by personal and business ties with men who
were officers of the company. Huntington and Gassavway were officers of the First National
Bank, and the chairman of the finance committee of the Freedman i Bank was the presi.
dent of the First National Bank. Mr. Huntington, the cashier of Il First National Bank,
was also a member of the finance committee. To be more explicit, these loans were got
Mr. Huntington. I am not able to.give you the amounts. I think that Gassaway's
through
is on that seal-lock security in the sum of $3,000. Gassaway was an employ of the First
National Bank, of which Mr. Huntington was cashier, Mr. Huntington being, at that time,
as I have stated, member of the finance committee of the Freedman's Savings and Trust
There aro quite a number more of these things.
Company.
Q. State all that has come to your own knowledge.-A. Some of these objectionable
loans were undoubtedly got in the same way, through personal ties.
Q. Give every instance of any such loan that has come to your knowledge.-A. I think
that the loan to young Latham, who was an employ of the First National Bank, has not
yet been paid; I cannot tell the amount. Mr. Huntington, who was himself cashier of the
First National Bank, got a loan froln the Freedman's Bank, he being at the time a member
of the finance committee. I cannot tell the amount of the loan, the whole thing is so complicated and so thoroughly mixed up.
By Mr. STENGICRn:
that loan been paid ?-A. It has not been paid; it has been sued for, but I do
Has
Q.
not suppose that anything will ever be got out of it, although I may be in error. I find
here (in the commissioners' report) two loans to Mr. Gassaway of $8,500 each, on twenty
shares of the New York Seal Lock Company, and on twenty shares of the Capital Publishing
of it secured a
and

Company, $'2,500
by real-estate note. The loans do not seem to have
paid.
By Mr. BRADFORD:
Q. What was the relationship of Gassaway to the company ?--A. Gassaway was an nmploy6 of the First National Bank, of which Huntington was cashier, while Huntington
was member of the finance committee. I do not suppose that the shares of the Seal Lock
is that company that
Company have any value at all. The Capital Publishing
publishes the " Capital" newspaper, of this city. I have noCompany
of the value of its
knowledge
nor do I know anything of the value -of this so-called real-estate note. Here (on
shares,
page 35 of the commissioners' report) is a loan to W. S.
on February 21, 1872,
of $3,600. There is no collateral. That loan has not beenHuntington,
paid. j
By Mr. STENGER:
Do
Q. you know in what manner, and from whom, those loans were obtained where there
was no collateral security given ?-A. No. I suppose that they must have been got by Mr.
Huntington's
request, and probably were.
Q. Made to whom--I mean Mr. Huntington's own loan ?-A. He probably went to the
the money. That is undoubtedly so, although I have no positive
actuary andonborrowed
the
been

knowledge
subject.
Mr.
BRADFORD:
By
Q. Have you given all of these insolvent loans ?-A, All that I have any knowledge of;
but there are undoubtedly others.
Q. State any suspicious relationship between the bank and its officers and employs and
who got loans from it.-A. I never could reconcile the loans made to Mr. 'Fleming
anybody
with prudence. Fleming was the architect who put up the bank-building. The bank
made
losses on his loans. I find on page 35 of this report a loan of $3,000 to R. I.
very heavythis
is one of a great number of loans made to himn; it has no collateral. Flemrn
Fleming;
was a man whom the bank presumed to be good for anything that he would borrow;
ing
but the loans to him cannot be reconciled with prudence. Whether there was any undue
influence brought to get the money I do not know.
Q. Was it not known to the bank that he was not good for these loans ?-A. I do not
think it was at the time. I-o was a successful builder here,
and lie certainly was a successful borrower; but he swamped himself here. I forget wllat his loans
aggregated ; they are
very heavy. Iie is since insolvent.
By the CIAIRM1AN:
Q. The loans were imado to lilmn without security ?-A. Some of them wcvrz secured and
came, pcerlalps, within the rule.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

19

By Mr. STENGER:
State the particular mode in which thfse loans were obtained.-A. You must get the
Q. man
before you in order to obtain that information: because I do not know.
right
the
By CHAI.IRMAN:
where loans were obtained through the agency of broany instance
Q. Do youif knowwasof there
kers; and, so,
any bonus or premium paid to any one for obtaining the loan 7
-A. I do not know of my own knowledge any instance; but I see in the minutes of the
board a resolution that was introduced forbidding transactions through brokers, which creates
the presumption that loans were got in that .way; and 1 know that when the bank first
to make its loans under the act of May 6, 1870, brokers used to frequent the office to
began
such an extent that I was made anxious about' it myself, and protested against it.
Q. Do you know of any premiums being paid to those brokers ?-A. I have not the slightest knowledge on that subject, and have no means of knowing.
Q. Were any of these brokers acting in the double capacity of appraisers of real estate
for the bank, and officers of the bank itself, while they were engaged in negotiating these
loans ?-A. No, I think not. Kilbourn & Latta were appraisers for the bank at one time,
but they were not officers of the institution. They were brokers, engaged in getting loans
from the bank, and were at the same time appraisers of real estate which was taken as security. That was the common talk of the office. I do not know either of those gentlemen personally.
Q. Do I understand you to say that Kilbourn & Latta were engaged in the real-estate
business, were the appraisers for the bank, and were engaged in negotiating loans for it
for their customers ?-A. I so understood.

By Mr. STENGER:

Hallet Kilbourn obtained a loan or loans as
Q. I see in the commissioners' -report that
As president of what company Y-A. I cannot tell you; it was probably one of
president.
those numerous companies that were started heie. My impression is that it was one of the

paving companies.
By the CHAIRMANIs:
Q. I see in the commissioners' report, page 16, a loan to E. H. Nichols, treasurer, for
what was he treasurer of I-A. Of the central branch of the Kansas Pacific Rail
$175,000;
way, I think. That may not be the correct title of the road, but it was always styled in the
office the Kansas Pacific Railway loan. That loan has been since reduced to something
less than $10,000, I think. I opposed that loan, as I happened to have knowledge of it,
because it was not the thing for the bank to do.
By Mr. STENGER:
a loan made to C. W. Hayden, presiQ. I find on page 35 of the commissioners' report
dent, of $1,500, with no collateral; what was he president of?-A. That was the Seneca
Stone Company, I think. He was afterward treasurer of that company.
By the CHAIRMAN:

Q. Do you know who were the officers of the Seneca Stone Company, as it is called ?-A.
I do not know who they were at the time of these transactions with the bank, except that
Hayden was treasurer; subsequently Mr. Alvord was elected president, after he retired from

the presidency of the Freedman's Bank,..
Q. Had he had any connection with the Seneca Stone Company whilst he was president
of the Freedman's Bank -A. 1 think not.
Q. Either as stockholder or otherwise 1-A. Hie may have been a stockholder; I cannot
say positively.
Q, Do you know where the books of that concern are ?-A. They were in his charge. I
do not know whether or not lie is still president of tile company.
Q. Please state anything that has come to your knowledge through your connection with
the bank, aRl by conversation with its officers, slowing (if such is the fact) any collusion
between anrofficers or agents of the bank and outside parties in granting loais without any,
or on insufficient, collaterals.-A. The only thing which, in my judgment, looks like collusion is this matter of the so-called Seneca Stone Company. I cannot reconcile the conduct
of the actuary in that matter with his general character, or with the confidence which I alregard to other loans which justly deserve
ways reposed in liln as an honorable man. In undue
brought to bear upon these
censure, I would not charge collusion, but rather thatinfluence
either the former actuary, Colonel
men, and I would like to say that I do not believe
or the later
Mr. Stickney, were what should be styled dishonest men; both
Eaton,
were overwhelmed actuary,
with business, and the affairs of the bank were very loosely managed.
It was perhaps the result of bureaucracy rather than of personal responsibility. In other
words, the bank was run too much by its committees, without direct and immediate response
to anybody.
bility What
do you mean by undue influence brought to bear on officers of the bank to obQ.
tain loans improperly'? A. By'"undue influence" I mnean personal application at inter-

20

FREEDMAN'S SAVINGS AND TRUST COMPANY.

views, where the borrower would sit down with the actuary and talk the matter over with
him, and where the loan would virtually be made without due reflection or proper revision.
In other words, the loans should have been made on formal application, going before the
board to be passed upon on their merits, without the borrower having seen or talked
proper
with anybody. I believe that, as human nature goes, any man charged with tihe loaning of

such funds would find himself unconsciously influenced in favor of applicants, if those applicants happened to be men whom he personally liked.
Q. Do you know that there existed at any time any relations of a business character between the officers and agents of the bank and the officers and agents of any of the stock
companies, whose securities were accepted as collaterals for the large amounts appearing to
have been loaned on them I-A. No, sir; I do not, excepting, of course, my suspicions in
this Seneca Stone business, to which I have already referred.
Q. Do you know whether or not any of the officers or agents of the Freedman's Bank
were officers or stockholders in any of said companies ?--A. I do not, with the exception
of the Seneca Stone Company. I happened to know that Colonel Eaton held some of that
stock while he was actuary of the bank; I think $4,000.
Q. If you know any of the officers or prominent stockholders of the company, generally
known as the Seneca Stone Company, please give us their names.-A. I do not know,
exas I have just stated; and I think in this instance 1 got my impression from Colonel
cept
Eaton himself, that he held stock of the Seneca Stone Company. At that time the company
was supposed to be good.
By Mr. STENGrER:
those loans for which no collateral security was given laid before, and approved
Q.theWere
by, board --A. I cannot say; very probably they were.
By Mr. BRADFOnD:
Q. Do you know of any officer of the United States Government holding any stock of
the Seneca Stone Company ?-A. I have no means of knowing.
Q. What is your best information on that subject, no matter from what source you derived it ?-A. Categorically, I accidentally saw a list which purported to be a list of the
stockholders of the Seneca Stone Conlpany; the date I do not know. On that list'were the
names of some prominent officers of tie United States Government.
Q. State who they were.-A. I think I recollect the names of U. S. Grant and General
Dent.
By Mr. RAINEY:
Q. You do not recollect anything about the date of that ?-A. No, sir; it came to me incidentally. I do not know even about the authenticity of the paper.
By Mr. BRADFORD:
Q. What was the amount of the stock owned respectively by President Grant and General
Dent ?-A. That cannot tell, my information is so vague and indirect.
Q. Give us all the information you have, tending to show that the President of the United
States or General Dent had stock, and to what amount, of the Seneca Stone Company ?--A.
I have already stated that I saw what purported to be a list of the stockholders of the
Seneca Stone Company, among which were the names of the President and General Dent.
I cannot say whether that list was authentic.
Q. Have you derived information on that subject from any officer of the bank, or of the
United States Government?-A. No, sir; this information came to me incidentally, as it
were, by accident, and it is only under the obligation that 1 feel to the committee that I
make this statement, because I do not like to state what may prove to be incorrect. The
list was among papers relating to the bank which were given to me by Mr. Alvord at one
time for examination, and it appeared to have got there inadvertently. Of course I read the
list.
Q. You say that it was among papers belonging to the bank ?-A. Yes; but it appeared
to have got there inadvertently.
Q. Why' -A. Because there was no reason why Mr. Alvord would have turned over te
me papers relating to the Seneca Stone Company, while I was seeking information in regard
to the bank. It was among papers which related to our affairs at Jacksonville, Fla., which
Mr. Alvord, as president of the bank, had in special charge. I returned the paper to him,
but, of course, out of curiosity I read it through.
Q. Was it a formal paper ?-A. No, I think it was a pencil memorandum; it seemed
to have been drawn up for the information of somebody.
Q. You say that it had crept in there, inadvertently ? That is a matter of opinion on
part, based on your presumption that Mr. Alvord's inclination would have been to keep
your
such a paper from you--A. No, sir; but because it was not where it belonged, and it had
no business there.
By Mr. STENGER:
Q. Would it not be a matter of interest to the officers of the bank to know who were the
{

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

21

stockholders of the company to which the bank was loaning money ?-A. The last loan was
made without the knowledge of the bank.
By the CHAIRMAN:
Are
Q.
you prepared to say on what substantial basis, if any, the bonds of the Seneca
Stone Company rested ?-A. On the property of the company in Montgomery County, Maryland, which consists, I am informed, of six hundred acres of laud and a stone-quarry and
thereupon, which, I am also informed, cost some $200,000.
improvements
Q. You are speaking from hearsay ?-A. Of course. I have no authentic information on
the subject; the bonds themselves state that.
Q.TheHave
you any of those bonds ?-A. They can be obtained from the bank.
CIHAIRMAN. Please bring one of those bonds when you next come before the committee.
By Mr. RAINEY:
inform us whether o not Mr. Alvord was a stockholder of the Seneca Stone
Q. Can youthat
time I-A. No, sir; I cannot.
Company t
Did you not see his name on that list -A. [ have stated the only two names that I
Q.
remember.
Q, You could not have read the list carofully.-A. I only read it as a matter of curiosity.
It was a paper that came incidentally into my possession. I understand that he is a stockholder, but I do not know.
Q. You cannot give us any information with regard to the date of that list, when it was
made out, or anything about it ?-A. No, sir; I opened the paper to see what it was, and,
seeing what it was, of course 1 glanced
through it, and the distinguished position occupied
by two of the gentlemen named in it attracted my attention. I do not recollect about Mr.
Alvord, although I understand lie was a stockholder.
Q, Can you intorni us by-what authority Mr. Stickney'has control of about $25,000 or
$30,000 worth of the property belonging to the Freedmen's Bank ?-A. I do not know that
he has.
Q. I refer to these deeds of trust which he holds on the M-street houses.-A. I do not
know that lie has any. I think he holds those houses in fee. There is a law-suit about
them. The suit is against Boyd and Barnum to recover some $28,000 which they owe the
bank.
Q. You are satisfied that Mr. Stickney is not trying to get a percentage for the execution
of papers in reference to that property ?-A. O, no: that matter was arranged between him
and the commissioners. The merits of the case I cannot state.
Q. Can you inform us whether or not any of the officers of the bank received any moneys
from the bank, apart from their salaries, by loan or otherwise --A. The only instance I
know lof is a loan that stands in the name of Mrs. Eaton for $1,000. That loan is supposed
to he good. Mrs. Eaton is the widow of the late actuary. It stands on the books now, and
the commissioners regard the security as good for it. I do not think the loaning of money
to its officers was one of the sitns which the institution was guilty of. Of course I exclude
the temporary advances made on salaries that were afterward taken up by services. Many
times a man was allowed to draw against his current month's pay.
Q Have you any information in regard to the Vandenburgh loan ?-A. No.
Q. lie borrowed largely from the bank ?-A. Yes.
slender security ?-A. He used to come in and get about what he
Q. And got it toon the
veryactual
facts of the case, I know nothing.
wanted, but, as
whether he was in collusion with any of the bank officers in rqQ. You really cannot
say
?-A. 1 cannot.
gard toCanthose loans
tell us whether they were very intimate or had any business associations 1Q.
you
A, Not that I know of. I do not know that they were in business together. I-I seemed to
easily; but I never suspected collusion.
get loans veryknow
Q. So you
nothing about those loans ?-A. No, sir.
Q. Can you Inform the committee from whom we would be likely to get information
bearing on that question '-A. The best man to ask is Mr. G. W. Sticklcy. What he does
not know about the Vandenburgh loans, nobody knows.
By the CHAIRMAN:
Was
he the man who granted the loans to Vaudenburghl ?-A. Ile knows all alout theme
Q.
'lhe papers and everything else in the matter went through his hands.
By Mr. RAINEY:
Can you inform the committee whether or not Mr. Alvord, while he was president of
Q.
that bank, borrowed.any money from it, directly or indirectly ?-A. 1 do not think he did.
Q. You made an observation the other day in regard to extravagance in the purchase of
books; I suppose you alluded to ledgers ?-A. Yes.
Q. Who made those purchases generally; who was the agent appointed to make them ?A. Bills of more than $1,000
had to be approved by the board. We made a standing arrUngemnent with Mr. Mann, in Philadelphia, by which we got books at wholesale rates.

22

FREEDMAN S8 SAVINGS AND TRUST COMPANY.

They were ordered sometimes by myself. I was the only person, part of the time, who had
to order books, but afterward when I got so overwhelmed with work, the matter
authority
was left to the general book-keeper. But I referred rather to the unnecessarily expensive
books.
style ofDidthese
not you make most of those purchases of books yourself ?-A. No, sir; part of
Q.
the time I ordered them, but afterward, when I got overwhelmed with work, the business
was turned over to the actuary, who turned it over to the general book-keeper.
Q. Did you not state in the orders that you gave for.thie books what kind of books you
wanted 1--A. Yes; but the system had been formed before I took charge, and, on my
taking charge, I threw out a good many of the books that I deemed unnecessary; for in;
stance the auxiliary books which had at one time been made specially for the bank; I cut
them down, and had the bank supplied with ordinary books from the shelves of the stationers, at much less cost. We gradually learned to dispense with such books as are ordinarily
used by banks, and used a much less expensive kind.
Q. Then, I am to understand from your answer that you ordered the books whenever
books as had been ordered prior to your taking charge of that
they were needed, and such
of the bank ?-A. Just the same, except that I threw out all tile auxiliary books
department
that I deemed unnecessary, or such as could be supplied by a cheaper style, with one exception, in which a lot of fifty journals were bought for the bank, without myofknowledge and
against my wishes. That is important, because that is about the only piece extravagance
that I know of.
Q. Did you record your protest, or whom did you inform that you disapproved of the
-A, I talked to the actuary and to the book-keeper about it.
purchase?
Q. Can you inform the committee whether any of the members of the finance board were
connected with the Seal-Lock Company ?-A. I cannot. I do not think they were.

By the CHAIRMAN;
Q. Do you know whether any officers of the bank were connected with the Columbia
Railway Company ?-A. 1 do not know anything about the stockholders of that company

either.

By Mr. HOOKER:

Q. State whether the books of the various branches are now in the possession of the
mother-bank.-A. Yes; the books of all the branches are.
Q. What became of all the deposits, which came from the respective branches, when they
were

transmitted to the parent bank f-A. Such sums as were not needed to make immediate payment were transferred from the branches to the principal office-when they were
first put in the depository, and were afterward invested, in the manner which you have seen,
in stocks and bonds, and afterward in loans. Then, as funds were needed, it was the business of the parent bank to return to the branches the money that they called for. In prac;
tice it was done by exchange. They bought and sold by exchange, as the case seemed to
demand.
Q. I understood you to say the other day that you were frequently at Vicksburgh during
the existence of the branch there.-A. Yes; several times.
Q. Who were tlhe officers of that branch ?-A. Benj. A. Lee was the cashier, all the time
I was there, until he became too ill to attend to his duties. Henry Williams was the bookkeeper, and Mr. Grovenor was the assistant cashier. Lee is dead, Williams is dead, and
I do not know where Grovenor is. When Lee became too ill to attend to his duties, Grovenor
was really in charge of the branch, though he never was made cashier.
Q. Do you know whether at Vicksburgh, or at any other branch, the inducement was held
out to depositors to deposit in that bank because it was a Government institution ?-A. I
think it was,
Q. That inducement was made to induce persons to deposit-that it was a Government
institution, and that the Government was bound to the depositors?--A. Yes; I cannot say
at Vicksburgh, though I think that that foolish policy was adopted there.
specially
Did they not represent that the deposits made by individuals would be guaranteed by
Q.
the Government of the United States ?-A. I think they did, but I will qualify my answer
by saying that I am not certain as to Vicksburgh; though I think so. But of this I am certain, that you will find on many of the pass-books of the New York branch these words, in
English, French, 'and German : "'Tlie Government of the United States has made this bank
safe."
perfectly
You say that that will be found on many of the pass-books ?-A. Yes. I wanted to raise
Q.
this question before the committee because it is important, and it relates to the history of
the institution. I do not think our more judicious cashiers ever adopted that phrase.
Q. Are you aware that the funds of the institution were used at Vicksburgh, or at any
other branch, for the purpose of speculating in the paper of the State, or county, or city ?-A.
Mr. Lee, latterly in his career, certainly did use some few thousands in speculation in city,
and probably in State paper.
Q. To what extent ?-A. Not to exceed $11,000, which is due in that branch, and I suppose
not to the extent of more than half of it, as part of it was used for other purposes.
Q. Do you know whether this was done at any other branches ?-A. I think not, except at

FREEDMAN'S SAVINGS AND TRUST COMPANY.

23

tile branches at Beaufort and Jacksonville, whore they speculated in nearly
everything.
I ought to say that Captain Lee was authorized to take bonds enough of the city to enable
him to pay his tax by the coupons, as an investment, but he exceeded his instructions, and
we had contemplated to remove hill.
Q. Were the funds which Lee used for that purpose the funds of the bank-depositors ?A. Yes; certainly.
By ML. RAINEY:
on the pass-books at New York
Q. Can you Inform us whether or not the superscription
was placed there by the authority of the parent bank, or whether it was done by the authority
of the cashier alone ?-A. It was done by the authority of the manager at Now York. I
protested
against it, and I had it removed wherever I went.
Was Tt done with the knowledge of the parent bank 1-A. Certainly, they knew it, and
Q.
I solicited the actuary, Colonel Eaton, to stop it, because i;' was a nuisance, and it was not
true. T''is is what I substituted therefor, (I read from a pass-book of the Washington
times for the inspection of such
branch;) " The bank is obliged to keep its books open at allThe
bank cannot loan money, nor
committees as Congress may, from time to time, appoint.
to invest it in the bonds of the United States, or in real estate or
use it in
any way except

securities worth double the amount so invested." I was often asked, " What makes your
bank safer than any other bank ?" and my answer was the honest one, "It is not any .safer
unless it is better managed." I would not have had the Government's guarantee on it if I
could.
By the CHAIRMANi :
Q. Do you know the amount of bonds issued by the Seneca Stone Company I-A, Two
hundred thousand dollars ; one hundred thousand on a first mortgage, and one hundred
thousand on a second mortgage. 'The amount of stock issued by the company no man knows,
I expect.
Q. Do know anything about the Metropolis Pavement Company, and how much bonds it
put out ?-A. I have not the slightest knowledge on the subject.
By Mr. HOOKER:
Q. I understood you to remark a while ago that Mr. Lee, cashier of the Vicksburgh branch,
would have been removed if he had not been ill. I)o you know whether lie ever was removed or not ?-A No. But lie had not been exercising his functions for a long time.
Q. Why --A. On account of his ill-health.
Do you know whether, in point of fact, he was removed ?-A. No; he was not, in point
Q.
of fact, removed. We had, however, made arrangements to remove him.
Q. At what time did Mr. Lee die ?-A. Not until after tile bank closed, which was in 1874.
He had dropped out of my sight. I did not see him for some time previous to the closing of
the bank.
Q. Was there not a change made, in 1868, by which Mr. Lee was removed and another
man put in charge of tle Vicksburgh branch ?-A. No. There were charges preferred
against Lee whilee
was disbursing-officer ot the Freedmen's Bureau. Pending those
charges he was suspended, and Mr. Harris, who was then inspector, took charge. Afterward Lee was re-instated,
Q. What were those charges ?-A. I do not know.
Q. Was not one a charge that, by the failure of the national bank, lie had lost $3,200?A. I do not know.
Q. What time was 2Mr. Harris ordered to take charge of the Vicksburgh branchi-A. I
cannot give you the date, I simply know the fact.
Q. He was ordered to take charge, and Lee was removed ?-A. Lee was suspended during
and was afterwarA re-instated.
the'investigation of his accounts,
Q. Was he not re-instated with an increase of salary 1-A. Very likely; but the increase
of salary carried with it, I think, his paying his own clerks. He did that for a long time.
Q. He was re-instated, and his salary increased, after this charge was made against him tA. Yes: but I think it was also provided
that he should also employ Ills own clerks.
Q. What were these charges againstlini --A. I do not know. I suppose that it was
some matter in reference to bounties. Captain Lee was also agent of the Freedmcn's Bureau,
as

disbursing-officor.

Q.

By Mr. BR.ADORD:
Are there any other matters

in your knowledge which, as a good citizen and
lost money by this bank, you, testifying under oath,
a friend to the freedmen who haveresting
think it your duty to communicate to this committee ?-A. I cannot at this instant recall any
other matters; but, as a good citizen, and as a matter of conscience, I would ask that I may
be recalled if at any time matters occur to me of importance for the committee to know,
and of which I will 3duly apprise the committee.
answer to the inq,(iry, you may be able to
Q. Do you think that, by withholding
recall other things ?-A. Yes; I know my your
own mental habit.
Mr. IBRADPOIRDI. Then you may withhold your answer till some future occasion.

24

FREEDIMAN'S

SAVINGS AND TRUST COMPANY.

. 'lle WITNESS. If, on reflecting on this subject, any matters occur to me which i$ would
be important for thle committee to know, I will apprise the committee. I ought to say, as a
good citizen and as a matter of conscience, that the early management of tile bank was all
that any honorable and right-minded man, being a friend to the freedmen, could ask. It is
due to tlhe trustees who managed its affairs in Now York to say that they acted with good
conscience, I believe; and that if the trustees since then have not done their duty altogether,
it is rather perhaps through their negligence than their fault.
By IMr. RAINEY:
told the committee the other day that you examined the books some time ago and
Q. You
found a discrepancy of $40,000 odd in the Washington branch ?-A. Yes.
Q. Did you ever complete that examination ?-A. No, sir; it was impossible.
Q. Then you do not know whether this $40,000 was more than $40,000 or less ?-A. No,
sir; nor do I know whether it is a loss to the company or an error in book-keeping, but I
think it is an error in bookkeeping.
Q. You have not finished the examination ?-A. No, sir: it would take two years to do so.

SELECT(r CO1MMITTE' E*IN FREEDMAN'S I3ANK,

The committee met at 10 o'clock a. m.

ford, Rainey, and Farwell.

IfWashinoton, February 3, 187(0.
Present, Messrs. Douglas, Riddle, Stenger, Brad.

HENRY II. DODGE sworn and examined.
By the CIHAIRMAN:
Question. State whether you have had any means of knowing how, or on what basis, the
company known as the Maryland Freestone Mining and Manufacturing Company was organized, and state all tlat you know in connection witl the subjeet.--Answer. It was organized
under the general corporation laws of Maryland; it was based on land in Montgomery Coun.
ty, in the State of Maryland, and on money paid in.
Q. What was tile value of the property in Monigomery County at the time of its purchase
at what figure was it put into the common stock ?-A. It cost the comby the company,in and
pany $450,000 the common stock of the company, and there was $50,000 of money also
in. The property was owned by Mr. Peters. Mr. Henry D. Cooke, Dr. J. L. Kidwell,
put
and myself purchased it fiom him. We afterwards worked it for six or seven months, built a
mill and other works on tie property, and then formed a company.
Q. I want to know whether you had anything to do with the purchase of the real estate
in Maryland, in Montgomery County; and if so, who co-operated with you in making the
purchase, and what you gave for the property, which was afterwards put into the common
stock of the Maryland Freestone Mining and Manufacturing Company ?-A. The property
was purchased from Mr. Thomas Peters, of Montgomery County, Maryland. Tlie amounts I
cannot tell without examining tile papers.
Q. Did any one co-operate with you in making the purchase; and if so, who ?-A. Yes;
Ir. Henry D. Cooke and Dr. John L. Kidwell, of Washington.
Q. Tell us, as nearly as you can recollect, what was the amount agreed to be paid to Mr.
Peters for that property ?-A. I think it was in the neighborhood of $70,000 cash.
Q. By whom, and in whose name, was the charter of the company obtained ?-A. I can
tell you four of the names in the charter; I have forgotten the fifth. The four were: Henry
D. Cooke, John L. Kidwell, James Heath Dodge, of Maryland, and myself.
Q. Was that charter obtained before or after the purchase of the property from Peters?A. Nearly a year after. We had spent a large sum of money on the property before the company was formed, in erecting mills and derricks, boats, dwelling-houses, and other works
connected with the opening of a work of that sort..
Q. What was the purpose or object of said corporation ?-A. It is a mining and manufaicand was formed, if I recollect correctly, under the mining and manufacturing clause
company,
ot the general corporation law of Maryland.
turing
Q. I want to know what tle company was to mine and manufacture -A. Mining stone
and sawing it, and putting it into shape through our mills. We built mills for that purpose.
It is a very hard stone and requires machinery to put it into shape.
Q. It appears from the charter which I hold in ny hand that your capital stock was nominally $500,000. Now, how rauch of that was paid in the property bought from Peters, and
how much in money actually paid in on shares ?-A. I really cannot answer that question
further than to say that the expenditure, in the purchase and improvements, was something
about $120,000, and was taken and put into the company for something about four hundred
or four hundred and fifty thousand dollars. I really cannot tell any closer than that without
looking into the papers.
Q. Who has the custody of tile stock-book of that company 1?-A. I do not know. I have
not been in the company since 1839 as a stockholder.

FREEDMANd

SAVINGS AND TRUST COMPANY.

25

Q. Who is the present president of tile company ?-A. The last one I knew of was a man
namiod Alvord, who was formerly in the Freedman's Bank.
Q. Give us the full name of all tile presidents of the company.-A. I do not know Alvord's
full naine. I was president of the company about one year; that was in 1868. Afltrwards Dr.
Kidwell was president; then C. W. Hayden, and then, I think, Alvord. Who i, now president I cannot tell you, but I think that Alvord is.
Q. Did the original corporators, who are mentioned in the charter as Henry D. Cooke,
H. I.f Dodge, John L. Kidwell, 'homas Anderson, and James H. Dodge, got their shares-of
the stock on the basis of the property purchased from Peters I-A. I cannot recollect about
the transaction, I think we "put in the lands and the money which weo ad expended and
formed the company upon it. What amount of stock we each got I cannot recollect.
Q. How much money was expended In the improvement of the property after its purchase
from Peters, and before the organization of the company ?-A. I cannot state with any certainty without refreshing my recollection. I think, as I said before, that tle purchasemnoney
and the money that we spent in improvements was in the neighborhood of $1'5,000, but I ain
not positive,
Q. Assuming that the real estate bought by you of Peters, and your expenses in improving
it, amounted to$125o,0t0, who received the shares representing $376,000, the remainder of the
stock, and how much was paid per share ?-A. It was not divided into 375,000 shares to my
recollection. We owned the property and formed tile company upon it.
Q. Assuming that we have got $1'25,000 as a substantial basis for tile stock of $125,000,
what was the basis of the balance, $375,000 I-A. I am not familiar enough with the circumstances to answer the question. I never had anything to do with forming a company
before, nor have I had much to do with it since. My recollection is that we owned this land
and had spent so much money upon it,
Q. What I want to get at is whetlier there Iwas anything
put In except tlat land and the exof the money ?-A. Nothing that know of.
penditure
Q, Nothing was added to make up the $500,000 except the land and the expenditures
npon it :-A. 'That is all.
Q. You have said something about quarrying stone. Is that the stone which Is pointed
out to me here as constituting the material out of which the National Republican building,
the Young Mhen's Christian Association building. the Freedman's Bank building, are constructed, and known as Seneca sandstone ?-A. In part, I think. Tlie front of the Freedman's Bank building is, I think, entirely of it. The front of the National Republican btildis partly of Ohio stone, and partly of'Seneca stone. Tie Young Men's Christian Associing
atiti building I think is partly Connecticut stone, and partly Seneca sandstone.
Q. This stone was quarried on the property bought by yourself and others of Thomas
Peters, of Montgomery County, Maryland, was it not ?-A. Yes. It is the same quarry and
the same stone of which tile S'mithsonian Institute building was erected twenty-odd years
ago.
Miinig and Manfacturilng
Q. Was that quarrying carried on by the Maryland IFreestone
think by tile Maryland Freestono
Company,andor by other parties,Company.
corporate Iordosolenot?-A.
know of any other parties. There may
Miling
Manufacturing
have been a portion of the Young Men's Christian Association building started (and I think
it was) before the company was formed. The first stone put into the foundation was when
we worked the quarry as individuals, but nothing but the foundation, I think. That is the
first building that was p.tt up in W\ashington of that stone.*
Q. Does thle Maryland Freestone Mining and Manuflacturing Colmpany still own the propfrom which the stone for these buildings and for other structures, including the foundaerty
tions of the new State Department building, was quarried; if so, by whom were the contracts made? and, if you can inform us, tell us how the company was paid for tile material,- A. I cannot tellyou anything about it. As I said before I have not been in the coinas a stockholder since 16G9. I was president of the company the first year, but depany
clined a re-election, and also declined to be a director. I cannot tell anything about it since
then. 'The State Department building was not commenced when I was in the company.
The Freedman's Bank building was not commenced, and the National Republican building
was not commenced. My recollection is that tie Young Men's Christian Association buildwas about the only one that was commenced during my connection with the company.
ing
In fact, I am not positive about that.
Q. Are you still a stockholder in the company ?-A. No, sir; I am not.
Q, When did you cease to be, and how, and on what terms ?-A. I think I ceased in
1869, wheu I sold my stock to H. J. I). Cooke.
Q. What did he give you for it?-A. He gave me bonds at par in part, and money
tit
part. I sold the stock out at 50 cents on the dollar and took part in money, a lot in Washingand
bonds
tlhe
at
of
ton,
company par.
Q. What bonds?-A. The first-mortgage bonds of the company.
partly
Q. You sold your stock at 50 cents on the dollar, receiving pay partly in money,
in a lot in Washington,
and partly in first-mortgage bonds of the company at par I-A . Yes,
"
ir. Dodge means after his association with the company.

26

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. Was the stock bought of you by Henry D. Cooke purchased for himself individually,
or for the company ?-A. It was for himself, I always understood. He made me an offer to
me out, and I sold out. I am pretty certain it was for himself. I never understood
buy
otherwise.
of bonds of the first mortgage series, and what amount of the secondQ. What amount
were issued by the company ?-A. I can only tell you about the first mortmortgageTheseries,
was $100,000. I was not in the company when the second
gage. wasamount ofandthatI know
nothing about it except from hearsay.
mortgage issued,ceased
to be an officer of the company, and in 1869 disposed of
Q. Although you know whether
early
or not it is a fact that the company continued to own the
your stock, do you

quarry from which the stone known as Seneca sandstone was taken for the various buildand structures in the city of Washington ?-A. I think so; undoubtedly it was so. I
ings
never heard of the property being sold by the company. I think that last year tlhecompany
leased the property to Mr. Hayden.
Q. I want to know whether this Seneca sandstone was the property of the company
when it was quarried for the 'purpose for which it was used ?--A. Yes; it is commonly
known as the Seneca sandstone.
Q. Is not the Maryland Freestone Mining and Manufacturing Company identical with
the company known in popular phrase as the Seneca Sandstone Company I-A. Certainly.
Q. Be good enough to state to whom, besides the original corporators, shares of that
stock were issued, and the amounts as far as you recollect.-A. That I cannot tell; I can
tell some of the persons to whom it was issued.
Q. To whom were shares of that stock issued, and in what amount 7--A. I cannot toll
the amount. I can tell you some of the first parties interested in it. They were Caleb
Cushing, Wm. H. Seward, General Barnes, (Surgeon-General of the Army,) General U. 8,
Grant, General Robert Williams, William S. Ifuntington, J. C. Kennedy, I think, and
General Fred. Dent (brother-in-law of the President). I don't call to mind any others;
Q. Can you state what number of shares was issued to each of the parties named, and
whether any money was paid by them for tile same; and if so, how much ?-A. Some of
them subscribed for 200 shares of stock, and some for 100 shares. As far as my knowledge
goes, every one of them paid for his stock. I think General Dent gave a note and security
for
his stock on some land near Saint Louis. lHe is the only one I know of whose stock
was not paid for in money.
Q. Did any of them pay the full value of $100 a share for the stock issued to them fA. They paid fifty cents on the dollar.
Q. Are you positive that any of the parties whom you have named, except General Dent,
paid anything for their stock' ?-A. I am sure all of them did. I am not positive about any
of the rest of them paying anything but money, but my impression is that they all paid in;
General Dent.
moneyAtexcept
Q. what time was that issue of stock made;I was it while you were an officer of the
company or afterward ?-A. I think it was while was an officer of the company.
Q. Who was the treasurer of the company at that time ?-A. C. W. Hayden, I think, was
secretary, treasurer, and general manager.
Q. Do you know whether any dividends were ever declared on the stock; if so, how many,
at what times, and to what amount ?-A. I do not know. I heard, after I left the company,
that the company had paid a stock dividend. From hearsay I think that the company increased the capital stock to $300,000, sometime in 1870. That I do not know positively
about; I only know it from the common rumor around town. During my administration we
were making improvements, and there was no dividend paid on the stock ; whether dividends
have been paid since or not I really cannot tell.
Q. Do you know whether, when the new issue of stock was made in 1870, there had
been any addition to the property of the company ?-A. I do not know.
actually
Q. You have alluded to rumors; tell us some of the parties from whom you got your information.-A. I do not recollect that, but I think that Mr. John A. Wills, of Washington,
told me that the company had issued a stock dividend.
Q. Do you know of any other parties besides Henry D. Cooke and William S. Huntington, who were stockholders and corporators in the Maryland Freestone Mining and Manufacturing Company, who were also trustees, officers, or agents of the Frcedman's Savings
Bank ?-A. I do not.
Q. Do you know of any parties who had any official connection with the Freedman's Sav-of
and i'rust Company, who were also members or officers of the joint-stock company
ings
the Young Men's
Christian Association, and corporators or stockholders of the Maryland
Freestone Mining and Manufacturing Company --A. I do not. I do not know whether
Governor Cooke was a member or officer of the Young Men's Christian Association.
Q. Did Thomas Peters take any of the stock of the company; and, if so, in what way
was it paid for?-A. He did not; he was paid for his property in cash with the exception
of a note for $12,000. I think the purchase from him was for cash, though I have some
recollection of a note for $12,000 at sixty days being given, which note was paid before 1l
was due.
Q. Do you know what the assessed value of that property was before it was purchased
by you and your associates 'fronm him ?-A. I have no idea.

FREEDMANW

SAVINGS AND TRUST COMPANY.

27

as contractors in getting the
Q. Do yon know any of the parties who were
Seneca sandstone from the company, by whom was engaged
the stone paid for, and how were the
funds obtained with which payment was made ?-A. I really cannot tell you.
Q. Who were the contractors-who bought the Seneca sandstone --A. I do not know,
When I was president of the company, I was simply its nominal president. The management was in the hands of Mr. Hayden, and the books were kept by him. He was made
general manager and superintendent, and also secretary. I never collected a dollar for the
company, to my recollection, nor paid out a dollar.
Q. Why did the company, with a nominal stock of $500,000, and with a
capital
consisting of. real estate and improvements amounting to $125,000, issue paid-up
first-mortgage
bonds to the amount of $100,000 ?-A. For building mills, opening quarries, constructing
boats, building houses, derricks, &c,
Q. Then the actual paid-in capital, so far as represented by the
for the improvement of the property bought of Peters was, in fact, a debt ofexpenditure
the- company, was it
Dot ? In other words, you were in debt for your improvements.-A. Not at all.
Q. Did you not issue bonds for them ?-A. When we issued these bonds we built other
mills and increased our improvements right straight along. You asked me what the cost of
the property was and what amount of money had been expended before the company was
formed, and I said that it was in the neighborhood of $120,000. If the land cost $70,000,
there would have been spent forty or fifty thousand dollars
in improvements before the coIrn
pany was formed,
Q, Then, if I understand you, the $100,000 was raised by the issue of first-mortgage bonds
for extending and improving the property
on which the company was first organized ?~A.
Yes, we went on improving. We sold the bonds and got
the
for them as the im.went on. I have heard that the new mills, after the money
provements
was formed, cost
company
about $80,000, The inprovement3 are very extensive.
Q. For what were these bonds issued, and for what were they sold in the market .-A.
were sold at par. Dr. Kidwell, Mr. Cookeo and myself took quite a number of them.
They
Mr. Huntington sold quite a number for the company, for
which the company received par.I never heard of any of them selling under par until latterly, when the
company has been
so mismanaged that they have gone down. I do not suppose you could sell them now at 60
cents on the dollar. The company, as far as I am aware, received dollar for dollar for them.
I understand, then, that the first issue of bonds, amounting to $100,000, was secured
Q.a first
by
mortgage on the property of theofcompany, and was taken up mainly by the original corporators?-A. A large
them were taken by Mr. Cooke, Mr. Kidwell,
and myself; for-which we paidproportion
the money to the company; but I know of three or four other
parties who took some of those bofids. I know of one sale which Mr. Huntington reported/
of $10,000 to a Mr. Risley. I think he lives in New York. I think his name is J. E. Risley.
I think Mr. Huntington sold $10,000 worth of bonds to him. I think that $8,000 were
sold
to a man named Handy, a clerk in the Treasury Department, since dead; I am quite confident that Mr. Caleb Cushing took $4,000 of them. Mr. Wills took $10,000 of them. That is
all that I can call to mind
now. I never heard of any of them being sold at less than par.
Q. At what time, as nearly as you can say, were
these bonds issued ?-A. I think they
were issued sometime in the latter part of 1868 or 1809, but I cannot recollect.
Q. Do you know anything about the company, or any officer of the company having obtained a loan from the Freedman's Savings
and Trust Company ?-A. Nothing except what'
I have seen in the published reports of some investigation
a year or two ago, and in the report
of the commissioners,
Q. Was a man, named R. J.
ever a stockholder, or a possessor of the bonds
of your company; and, if so, howFlanagan,
did he acquire the same?-A. I have no recollection of
any.such name.
Q. Were Hallet Kilbourn and John 0. Evans, or either of them,lstockholders in the company ?-A. Not to my recollection.
Q. At what time did you cease to be a member of the company ?-A. I think in July, 1869,
I know nothing of the affairs
of the company after that time.
Did I understand you to say that
Q.
the original stock, to the amount of $450, 000, based
on the property bought of Peters, and the improvements
thereon, was issued to the five original corporators ?-A. No; I think not. I think that $200,000
of it was issued to these
gentlemen whom I have named, Caleb Cushing, General Williams, General Dent, General
Grant, and Mr. Seward.
Q. You did say, however, that $450,000, of the stock was based upon that property ?-A.
I did not say that
it was exactly that amount.
Q. I understood you to say that you put the property in at $450,000 ?~A. Something in
that neighborhood. Under the mining clause of the general corporation act of Maryland,
lands are allowed to be put into companies,
as well as money.
By Mr. BIRADFORD:
Q. Is not that Seneca sandstone difficult
and saw ?-A. It is a little hard, and
that is the reason that we built mills to put toit quarry
in shape. It is a little hard to ' tool-dress,"
as the stone-cutters express it, after it is seasoned; but when it is first quarried it is not so,
hard to saw or to tool-dress as it is afterward.

28

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. Are they working that concern now ?-A. I understood that the company had leased
the quarry to Haydon last year.
Q. Isn't it in operation now ?-A. It was, last year, but whether by the company or by
Mr. Hayden, I cannot say. It is in a very confused state,
Q. How could it compete, on fair and equal terms, with othr stone in tlat State ?-A.
Remarkably well, I think. It ought to be cheaply quarried. It is within twenty miles of
WVashington, directly on the Chesapeake and Ohio Canal, and so located that it can be got
out cheaply. The property has been very badly managed, and tlat has been the cause of
the failure of the company. They have had no man there familiar with quarries since the
latter part of 1869 or 1870, when they discharged the only man I know who knew how to
manage it.
By the CHAIRMAN:

Q. Do you khow that efforts were made by persons connected with the company to induce
the Government to use that stone in the erection of the new State Department building and
tho other buildings now in progress of erection?-A. I do not. I think that the State Dewas commenced after the time that I had anything to do with the cornpartmentI building
pany. have no knowledge of such efforts being made. I know that the company did
furnish stone for the foundation of that building.
Q. Have you not heard from other persons connected with thle company, or from officers
of the Government, that such efforts had been made, but tlat the proposition was declined ?A. I have no recollection of it at all.
Q. Do you know any of the parties who were members of the Young Men's Christian

Association, or of tlhe stock company, known as the joint-stock association or company of
the Young Men's Christian Association
?-A. I do not know them as members of the association, unless Governor Cooke was one, I know that le had a good deal to do with the
Men's Christian Association building.
Q. Was not General 0. O. Howard a member of one or both of these associations ?-A. I
do not know,
Q. Do you-know whether General C. W\. Balloch was ?-A. I do not.
Q. Do you know under what influences, and for what purpose, Dr. Kidwell was made
president of the Maryland Freestone Mining and Manufacturing Company, and wliy he
was afterward superseded ?-A. I do not know. I was elected president the first year and
declined to be re-elected, and, if I recollect aright, Dr. Kidwell was elected. I do not think
there was any particular influence about it.
Q. What was the extent of the property purchased from Thomas Peters?-A. I think
about 600 acres.
Q. Did the Maryland Freestone Mining and Manufacturing Company keep a stock-book
and other records of its proceedings ?-A. It did while I was in the company; what was
done since 1 do not know.
Q. Do you know what was done with the $100,000 raised by the issue of the first-mortgage bonds ?-A. It was expended in the improvement of the company's property.
By Mr. FARVELL :
Q. State whether anything was put in to represent the stock except the land and improve.
ments.-A. Nothing else.
Q. Nothing was realized to the company by the sale of stock ?-A. Nothing, if I recollect

'Young

.aright.

By tile CIAIRMAN:
Was
tile debt of $100,000, which was represented by the issue of the first-mortgage
Q.
bonds, ever paid by the company ?-A. No, sir; the bonds have never been paid, and there
has been no interest paid on them for a long time.
By Mr'. RAINEY :
Q. I understood you to say that stock was issued to some eight or ten persons, whom you
have named, and you also say that no money was paid in to thle company for stock ?-A. I
not recollect whether the stock was all issued to us, who formed the company, and
whether we sold a portion of it or not.
to
Q. By what right did you recognize them as stockholders ?-A. Ve sold our
the company, which issued stock tor it, and we had a right to sell the stock to property
whom we

_do

pleased.
By Mr. FARWEILI,;

Q. General Grant and these outside parties whom you have named were simply pur'chasers of stock from you, as individuals ?-A. Yes.
By tile CHAItRMAN:
Did
the purchasers of the stock, by virtue thereof, become members of the company ?Q.
A. I suppose that when a man is a stockholder he is a member of the company.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

29

Q. Was C. W. Cavanaugh ever a stockholder or holder of bonds of the company ?-A.
I do not know. I have given you all the names that I can recollect.
Q. Do you know Hallet Kilbourn, of this city ?-A. Yes, slightly.
Q. I see in the report of the commissioners of the Freedman's Savings and Trust Company
a loan to him as president; do you know of what he was president ?-A. 1 do not. I have
no knowledge ill any way of the transactions of the Freedman's Bank except as I havO seen
them

published.

SELECT COMMITTEII1

N T E
ON

FREI:IDMAN'S BANK,

1Washington, Fibruary 5, 1.7(;.
at 10 o'clock. Present, Messrs. Douglas, Bradford, Stenger, Riddle,

The committee met
and Rainey.
JollN WATKINS sworn and examined.
By the CHAIRAMAN:
State whether you were a depositor in the Washington Branch of the FreelQuestion.
man's Savings and Trust Company ?-Answer. I deposited in the Freedman's Bank,
Q. Make your own statement in.your own words.-A. I got Mr. Kllgour to go up and
look over the books. In the first place, I had deposited this money. I had got, I reckon,
about ten or twelve hundred dollars in the bank. My boss, Mr. Bregazzi, had borrowed
$400 of it, and I went up and got it for him. I could not read, but made my mark.
He gave me 10 per cent. a year for the use of it, and when the time was up he paid mo.
Boston had borrowed $250 from me-$100 at one time and $150 at another time. He said
that he was buying a house, and that lie would give me security on the house. Where the
house was I do not know. Boston was cashier of the bank, and I thought he was all right.
I loaned him this $250, but I have never heard of it since. Just when the bank closed I was
up to Georgetown one day to look about a house, and as I passed the bank I went in
going
and saw Boston. I said to him, " Is there any possibility of my getting any money out of
the bank ? " He said, '' Watkins, I was on my way to tell you that the bank is closed." I
said, " What am I to do? I have a family to support, and house-rent to pay, and you have
all my money shut up here." He said, " I cannot tell you. The bank is closed." I said,
" I want $5OU." He said, " We are not paying anything now." Said I, " I did not come
but I just dropped in to see you." He said, '( I will try to get $200 for
today toI get money,
but the
said, "Is that all i" lie said, "Yes."' I went on up to Georgetown,
you."
man from whom I expected to get a house would not rent it, neither would he sell it. I did
not see Boston for two or three days afterward, when he came to my house and brought me $200.
Mr. Kilgour found by my book that Boston had drawn out four or five hundred dollars on it
that day. About a week after the bank closed I carried my pass-book up there, and also ny
little boy's. My little boy had $56 in the bank, I think, and I had nine hundred odd.
I wanted to find out how I stood, I saw Boston fifteen or sixteen times after the bank closed,
and I waited and waited and waited, till at last I went to the bank to see about my book.
I could not find Boston in, but I said to the clerk there, "Do you know how Watklns's account is " lie looked at the book and said, " Yes ; you have 40 cents." I said, " Forty
hells." IHe said, " Yes." Said I, " What will I do?" Said he, " I don't know." I said
I never had the money, and asked him to tell me where I would find Boston. He told me
where to find Boston,'somewhere on E street, below the Patent-Office, and there I found him.
I wont in and commenced pulling off my coat to fight him right away. I said, " Boston,
what is the meaning of this that I have only
40 cents in the bank ?" His face got white, and
said he, ''Mr. Watkins, I drew it out." " Hell," said I, "you drew it out and told me nothing
of it?" "Well," said he, "I will fix that allright." 'lhe bank was to pay a dividend in
two or three weeks' time, and he said, "I will pay you a dividend on the 15th of next month."
Said I, " Jesus Christ, I do not know what to do with you." The clerk at the bank showed
me the checks on which the money wai drawn, but of course, I did not know one check from
the other. I waited for two months, but I could not get anything out of Boston, so that I
went to Mr. Kilgour and told himn, and Mr. Kilgour said he would not charge me a cent for
his services.
Q. Did you have any conversation with Wilson, the cashier, in reference to your account
at any time ?-A. One day I went up there and spoke to him. I said, "Mr. Wilson, I
don't want to got closed up in this concern. A man in this town, unless lie has'money, is not
worth more than a dog. I have worked hard, night and day, for this money, and so has
my wife, and it should not be closed up in this way." 'Ho said, "1 You see that Treasury over
there, don't you ?" I said, "Yes." "Well," said he, "there is no more chance of this bank
or bursting than there is of that Treasury." I said, "If that is so, it is all right."
closing
lie said, "It is just prejudice that white people have got against us." I then made myself
contented. My heart went down and I went to work. There the matter stood, and only 40
cents on my pass-book to my credit. They did not rob my boy's book. When I was loanto Boston I supposed that it was all right as he was cashier of the bank. I suping money
posed that he owned it all himself. I did not know.

30

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q. What was the whole amount that you put into tile bank ?-A. As nearly as I can
make out, it was twenty-four or twenty-five hundred dollars.
Q. Some of that you drew out, and some you loaned to your boss, and some to Boston,
and tile balance you left on deposit ?-A. Yes. The figures will tell for themselves,
Q. Do you know of any other person, colored or white, who was a depositor, who lost his
similar circumstances ?-A, No, sir, I don't. I went to work at 7 o'clock in the
money under
and worked until 12 or I at night. I have been working at Brogazzi's for ten
morningI cannot
read nor write.
years.
By Mr. RIDDLE:
k Q. You never authorized Boston to check out your money ?-A. Noo, sir.
Q. I understood you to say that this money was the joint earnings of yourself and wife.A. Yes; she took in washing, and worked day and night, and I worked day and night,
every day for the whole year. I have never been to a picnic or ball since I have been in
town.

WASHINGTON, D. C., Ftbruary 5, 1876.
Witness again appeared before the committee and made the following statement:
I forgot to state the other day that, at the'instance of Boston, I called on tle late cashier, Robert Wilson, to see if he would make any arrangement by which this man could be
paid. Boston had stated to me that Wilson was as deep in the mud as he was in the mire,
and that the cause of it was Wilson's extravagance at his house. In my conversation with
Wilson I told him that he had indorsed two of these notes, which Wilson denied, These
notes I have, and I am prepared to show that the endorsement is in Wilson's handwriting,
Wilson manifested a good deal of anxiety about the matter, and stated that he would have an
interview with Boston. Boston, since that time, has been to see me a good many times, and
proposed toonmake
weekly or monthly payments, which I have refused to accept, except as
the legitimate notes and legitimate loans. On close examination of the books,
payments
I tound that the amount deposited by Watkins was nearly $1,800. Out of that amount the
forged notes aggregate $1,050, on which the interest of course has been accruing.
WASHINCTON, D. C., February 5, 1876.
J. W. AI.vonU sworn and examined.

By Mr. BRADFORD:
What official connection have you had with the Freedman's Savings and Trust
Question.T-Answer.
I was corresponding secretary of the company, then vice.president, and
Company
then president.
Q. When were you first appointed corresponding secretary --A. At the organization of
the company.
Q. When did you become vice-president --A, Two or three years after that; I cannot
date.
give the
of the company ?-A. About the time that it came to
Q. When did you become president
The headquarters had been at Now York, and when it came to Washington I
Washington.
was made president. That was March 12, 1868.
Q. Then you have held successively the offices of corresponding secretary, vice-president,
and president of the company ?-A. Yes.
Q. What period of tnie was covered by your incumbency of these three offices ?-A. The
whole period from the organization of tih company up to tie time when Mr. Douglass was
elected president, in March, 1874.
Q, Then you were officially connected with this concern from the time of its organization
until
Yes.
March, 18741-A.

Q Were you one of the

original trustees ?-A.

Yes.

Q. Iave you been otherwise connected with the institution except as corresponding secret.
and president ?-A, I suppose I will have to say that I was its origitary, vice-president,
nator. I do not want to take too much credit to myself, but I suppose that is true.
Q. Have you ever had any connection with the corporation known as the Maryland Freestone Mining and Manufacturing Companyy-A. Yes.
Q. What connection did you have withitt?--A. Nominally I am presidentlof that company.or
you had any connection with that company as officer, stockholder,
Q. How?-A.
long have
Since I left the Freedman's Bank.
otherwise
Q. When was that?-A. In March, 1874.
Q. Down to that period you had no connection whatever with this Maryland Freestone
Mining and Manufacturing Company ?-A. No, sir; except as president of the bank which
had loaned money to the company.
Q. You were not a stockholder in tile company and did not hold any office in it ?-A. N9,

FREEDMAN'S SAVINGS AND TRUST COMPANY.

31

sir. They made me a stockholder sufficiently to get me in as president. That was after I
went out of the bank.
By the CHAIRMiAN:
Q. What do you mean by being made a stockholder ?-A. We waited to collect the debt
due to the bank, and by an arrangement made between the two companies, it was thought
that if I would take hold of the quarry, as an executive officer, and make money for the
it should go to the payment of the debt to the Freedman's Bank.
company,
do you mean by being made a stockholder i-A. They put into my hands ten
Q. What
shares of stock, and that made me eligible, nominally, to the office of president, which I
took, on election.
Q. They
gave you ton shares of stock ?-A. If you please to say so.
You had been president of the bank during tlhe whole time that the bank had made
Q.
loans to tlhe Seneca Sandstone Company, and, after you rcsigned the presidency of the bank,
they gave you ten shares of stock In tleo Seneca Stone Company in order that you might
become president of the company ?-A. Yes ; that is what I have stated. I should like to
have it understood that this was an arrangement by which I, as acting for tlie bank, (verso to do,) could get payment of the debt out of the company.
bally Itdirected
was hoped that by your becoming president of tlhe Seneca Sandstone Company the
Q. of the
debt
company to the bank, which might be regarded as a very bad one, would be
Yes,
paid ?-A.
stock i-A. No, sir.
Q. You did not buythethatstock
as a consideration -fnr your consenting to become the protiQ, ofT'lley gave you
dent tile compliny ?-A. Yes I suppose so, They assured me that I could make money
for tile company if I would work the quarry,
Q. Do you still continue to be a trustee of tile bank ?-A. Yes.
Q. And also to be president of the Seneca Sandstone Company ?-A. Yes.
Q. State whether, during any part of this period, and during your connection with the
bank, you have been connected, officially or otherwise, as stockholder or corporator in any
other corporate institution about tile city of Washington.-A. I am, trustee of the Orphan
for Soldiers' and Sailors' Children. I think of no other.
Asylum
Q. Are you, or have you been, a member or officer of the Young Men's Christian Association, or of the joint-stock company of the Young Men's Christian Association ?-A. I was a
metnber for some of the first years, but as age advanced I dropped out.
Q. What year ?-A. I was a member from about the close of the war along for a year or
two; not since.
Q. Have you, during the salne timno, llad any connection with the Freedmen's Bureau 1A, I was inspector of schools and finances, at least I think that was the title. After that I
was general superintendent of schools, making my reports semi-annually to the Commissioner
or to the Secretary.
By Mr. RIDDLE:
Q. In this District?-A. Yes.
Q. Have you anything further to add ?-A. That is all the connection that I had with the
Freedmen's Bureau.
time the loan was made
Q. Had you any connection with the Freedmen's Bureauof at theHoward
the Freedman's Bank for the erection of the buildings the
University ?-A. I
by
was a trustee of the bank.
Q. Were you officially connected with the Freedmen's Bureau at the time this loan was
granted; and, if so on whose application was the loan granted i-A. I do not know what the
date of the loan was.
By Mr. BRADFORD:
Q. Do you recollect whether any of the funds of the bank were ever used by the Freedmen's Bureau in building the university or any other structure 7-A. Not that I know of. The
Bureau used Government money. It never mado any loan of the bank to my knowledge,
AIy
memory now brings up another corporation with which I was connected. I was trustee
of tile Howard University. Probably you allude to the loan of the Freedman's Bank to the

university.

By the CHIAImMAN:
Q. Well, tell us all about tllat.-A. There was a loan which tle university got from the
bank.
By Mr. BRADFORD:

Q. You say that a loan was made by the Freedman's Bank to the university ?-A. Yes;
in which I was also a trustee.
Q. Do you recollect the amount of the loan 1-A. $75,000.
Q. When was it effected --A. It was at the time when I was a trustee of both institutions,
if that is a sufficient answer,
Mr. STrENlGER. (Referring to the commissioners' report,) The loan to the Howard Uni-

32

FREEDIMAN'S

SAVINGS AND TRUST COMPANY.

made on the 22d of October, 1872, for $75,000, on which $600 was paid. The
versity was
reservation, Washington, D. C."
security was property knownall as " college
Thie CAIRMAN. Tell.us you know about that loan.-A. It was made by the finance
committee to the trustees of the university on security, as correctly specified in the com.
missioners' report, a large amount of real estate belonging to the university, and wliclh was
supposed to be worth double or treble what the loan amounted to, at a valuation which was

supposed to be very low -it the time.
By Mr. S'Nrl;sR:

Q. WXas tie property uniucumbered ?...--A. It was unineumbered.
By Mr. BRADIORDI:
Q. Wly was the loan never collected ?-A. My impression is that it has been collected,
By Mr. RIDDLEE:
Q. Is the property good for the loan yet ?-A, I think the property Is good for the whole
loan. That loan has been paid, or so arranged that it is in process of payment. I am
certain that that is so. I know that we, as trustees, consider it as off our hands, I
quite
think that the bank accepted notes of a party to whom we sold other property and yielded
up our notes.
Q. Tlhe bank surrendered the notes which you had got on this property, and took other
notes ?-A. Yes; a large balance in cash being paid.
Mr. SrlEc;tEn R (Reading from the report of tlhe commissioners of January 18, 1876.)
"The amount of the loan to Howard University wa, $75,000. 'The amount paid to the
commissioners is $37,491.73, and tile amount still due is $37,508.27, interest bchig paid to
October 22, 1875."
By the CIAIRMAN:
Q. For the balance of that debt I understand you that other notes were taken and your

notes surrendered--A. I so understand it. I am not on the executive committee that
manages these things,
By Mr. RIDDiE:
Are these other notes secured by real estate ?-A. I think they are. They are notes
Q.
of a very fine firm, which is making payment, I believe, according to tlhe arrangement.
Mr STENuElIt. The commissioners, in this report, make no entry as to any other security
having been given.

By the CHAIRMnNAN:
to some firm whose notes were taken and substituted for thle notes of the
Q. Youo' alluded
trustees the university. State what firm that was and give us the full names of its members.-A. It was the firm of Barber & Langdon, owners of the Le Droit Park enterprise,
which is a large domain below tile university, in that part of tlhe city. Mr. Barber's name
is Amzi, I think, I do not know Mr. Langdon's name,
Q. Through Mr. Barber, the trustees of tlhe Howard University are rid of this loan ?A.' We consider the loan as substantially settled. The university, as I understand, still
holds all the original security.
Q. Was Mr. Barber an officer of the university ?-A. He had been.
Q. Was lhe an officer of the university at the time the loan was obtained ?-A. At the time
the arrangement, the shift, was made lie was a man of business, and no longer an officer of
the university.
Q. Who constituted the board of trustees of the Howard University by whom the loan
from the Freedman's Bank was negotiated I-A. I cannot recall the names. Myself was
certainly among the number; others were Senator 8. C. Pomeroy, Bishop Talbot, Bishop
Brown, Mr. Fred. Douglass, Francis H. Smith, I think, and G. W. Balloch. I cannot, with
certainty, recall all the names.
Q. Was General 0. O. Howard one of the trustees of the university ?-A. He had been, but

I do not know when his connection with it ceased. I think he must have been a trustee at
that time.
Q. For what purpose was that loan obtained, and how was it expended by tle trustees of
the university i-A. It was obtained to meet the liabilities of the university, debts, &e., and
was expended, I suppose, in their liquidation.
The CHAIRMAN. You were a trustee ot the university, and certainly ought to know something about how its affairs were managed.
The WITNESS. I was not on theexecutive bcard.
The ChAIRM1AN. But you were a trustee, and it was your duty to know what the executive board did, whether you were a member of it or not. The executive board was only
and the trustees are responsible for its acts. I ask you for what
acting forthisthe trustees,
was obtained and how it was expended ?-A. I cannot give you a better
money
purpose
answer than I have given.
Q. To whom was it paid over; into whose hands did it go i-A. Into the hands of the

treasurer.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

33

Q. Who was tihe treasurer at that time ?-A. I cannot tell, there hftav been so many
changes.
Q. Who is tile present treasurer of the Howard University?-A. Mr. J. B. Jolnson, I
think, is secretary and treasurer.At
tlhe university.
does le live ?-A.
Q. Where
Q. Do you know anything about the affairs of tlhe Metropolitan Paving Comlpany ?-A.
No, sir.
tho Abbott Paving'0
Conmpany ?-A. No, sir.
Q. Or ofof the
National Seal- Lock Conm pany ?-A. No, sir.
Q.(. Or
Or of the Columbia Railroad Company ?-A. No, sir,
Q. You say yot know nothing about any of those com panies;- yet the record before ull
shows that whilo you were president of the Freedman's Bank, aind one of its trustees, very
lurge loans, amounting in one single instance to $180,000, were made on tile security of tho
stocks of those companies. Do you know of any parties who were stockholders in any of
them, whlo had any connection witli their bank itself or any business relations with any of its
officers?--A. I do not know positively who were stockholders in any of them. I always
understood that Mr. Lewis Clephano lad something to do with the Abbott Paving CormQ 'Are not tlio Metropolitan Paving Company and the Abbott Paving Comlany tlhe
same ?-A, I believe so. I don't know of aiy othCer person who is connected both with tie
bank and with either of tllese companies.
Q. Do you know of any parties who ol)tained loans on the stock of any of those comnpanies wlho had any business connection with any trustee or officer o tlhe Freedman's Bank -A. No, sir; I do not.
Q. What. has been Mr. Cloplane's general business sinco you have known llim ?-A. HIo
was city postmaster when I first knew hlilm. Ilo afterwards became trustee of the Freedman's Bankl, and tlen went into business of various kinds.
Q. We want some of tlose variatlois, if you can give them to uts.-A. I cannot give
them to you; I did not follow them very closely.
Q. Stath whether Mr. Clophane had any business relations with Mr J. V. WV. Vandenburgh I-A. I understand that they were connected in tlio pavement company.
Q. Vandenburgh was contractor for paving-work ?-A. I think so.
Q. And youl understood that Clephlane was connected with Vandenburgh in tioe paving
business, Vandenburgh being contractor for paving streets ?-A. I understood so.
Q. Do you know of any connection of a business character between Joln 0. Evans and
Hallet Kilbourn, or either of them, with Vandenburgh ?-A. No, sir. Mr. Clopelane was a
member of tleo tr-istee board of the Freedmana's Bank.
Q. I understood you to say'that you know of no business relations between Kilbourn and
Evans and Vandenburgh f?-A. No, sir.
Q. Do you know of any business connection between Mr. Clepllane and the real-estate
firm of Kilbonrn & Latta ?-A. No, sir; I do not.
Q. Do you know of any business connection between Kilbourn & Latta, or either of them,
and Vandenburgh ?-A. No, sir.
Q. You have mentioned the Ie Droit Park enterprise; what is that ?-A. It is a plot of land
cut up into building-lots and sold by the parties owning it; built up usually and sold as improved.A
?--A. It would be called that, I suppose, in common palrlance.
Q, Were
speculation
either of those parties mentioned as tile fi r of Barber & Langdon connected
Q.
inany way with tile Freedman's Banlk ?-A. No, sir. They did business with tie bank at
tlo counter, but had no official connection with it.
Q. Do you know anything about a loan made to General G. W. Balloch, and, if so, tell
whether at the time ie was not one of tie trustees or officers of te Frooeedman's Bank, and
one of the trustees or officers of tlie Howard University, and also connected officially with
the Freedmann's Bureau ?-A. I am not aware tlat lie ever got a loan.
Q. The books show that $<,,4,10 was loaned to " G. W,. Bial loch, treasurer." Do you know
of what he was treasurer?-A. I only know of his being treasurer first of the Bureau, and
then, for a time, of the IIoward University.
a loan to Balloch individually, or to Howard UniverQ. You do not know thattlmt was
--A. I do not. The term " treasurer" would show that it was at loan made to him
sity
officially.
would it iot have
Q. If it was a loan made to him as treasurer of tile Howard
been charged to the University, and not to Balloch ?-A. ItUniversity
or it might not. It
mIight,
might have gone in as in account with the treasurer; that is the most usual form in which
accounts of corporations are

kept.

Q. Do you know General Howard and General Balloch personally ?-A. Yes.
Do you know whether either of them own
real estate in the neighborhood of HowQ.
ard University ?-A. General Ballocli lives in a any
house there which lie built.
Q. Where ?-A. On Seventh street road, beyond the boundary, near the university.
Q. On whose
was it?-A. He bought a lot or lots there from the university.
?-A. I cannot tell.
Q. lIow did lheproperty
for that
3

pay

F B

property

34

FREEDMAN'I

SAVINGS AND TRUST COMPANY.

Q. Did he ever pay for it ?-A. I cannot tell ; I suppose he did.
Q. Do you know that he did ?-A. I never heard anything to the contrary.
Q. Do you know of his borrowing any money
tle bank to pay for it ?-A. No, sir.
Q. Did General Howard build a house out there?--A. Yes; lie built a house also on
ground which was the original farm.
Q. What is tho full expense of those two residences, Balloch's and Howard's ?-A, I
think that General Howard told me that his house cost him $'29,000. I never knew what
General Balloe.h's house did cost. I should say it must ihave cost him twelve or fifteen
thousand dollars,
Q. Both of them lived on property which originally belonged to Howard University ?-A.
Yes.
Q. Do they still own these houses ?-A. General Howard does not own his. He sold it
when ho loft Washington.
Q. When were tloso houses built ?-A. About eight years ago.
Q. At the time when you were connected with the Freedmen's Bank, was it ?-A. Yes.
Q. Do you recollect 0. Howard and Henry D. Cooko borrowing.$83,000 from the
was some such loan; I do not recollect the amount.
bank ?-1A. I think thereO.
Q. I believe the books show that loan has not been paid ? -A. I believe so.
Q. Do you know on what security tile money was loaned ?-A. The books will show, I

from

presume.

By Mr. S'rlNlGErI:
Q. That loan was entered as being made to 0.O. Howard and IT. D. Cooke, and in both
of the commissioners' reports it is put (own to the Young cMen's Christian Association ; how
I never did know.
was that change nade 1--A. I do not

know;
By Mr. BRADFORD:
Q. Cannot you explain the facts ?-A. No,, sir; I cannot.
Q. What is the truth ? Who got the
money originally ?-A. The applicants, I suppose.
Who were the applicants -A. I have no recollection about it. The record says 0.
Q.Howard
and I-. ). Cooke. If the record be true, they are tlhe persons who* were tho
0.
applicants.
/
Have you no recollection about IHoward and Cooke getting the money ? Iave you
Q.talked
not
to them about it ?-A. Never.
any fact or circumstance tending to show that Howard and Cooke did
Q. Do youl know
this money ?-A. I know that there was a loan charged up to then for a time, and then
get
it seemed to be changed to the Young Men's Christian Association.
Q. That was just a shift, and nothing else, was it not?-A. I suppose so.
The commissioners in their last reports say that that matter is in suit now.
Mr.
WITNESS. Yes, it has gone to suit, and the court will liave to answer that question.
''he S'rEN(;Ri.

By the CHAIRMAN:
What security did 0. 00. Howard anl II. D. Cooke give for this loan-what collaterals?
(.
-A. I don't know, but I suppose that it was an interest in the l)roperty now known as tho
Christian Association Building.
time ago tile question whether anybody connected with tlhat associaQ. I asked you some
tile Frcedman's Bank, and you could not tell me.
connection
had
official
any
tioI My answer is, some interestalsoin with
the property now known as the Christian Association
-A.
was the security probably given.
Building,
not General 0. 0. Howard and T1. D. Cooke stockholders in the joint-stock comQ. Were
Association t-A. I do not know.
pany of the Young Meni's Christian
then, did they have in it --A. I do not know. If you ask me for rumor
Q. What interest,I will
of their connection.
and popular talk,
say that they were, but I ave knowledge
no
By Mr. RAINEY :

Q. 1)o you own a house and lot at Howard University --A. Yes.
whom did you purchase that lot ?-A. Flroin tie trustees of the university.
(i.Q. Froen
Did they liold tile property in fec at the time when they sold youl tlat lot ?--A. Yes.
Q. Iid General Ioward, General Balloch, and yourself buy lots at tile same time --A.
About tlhe same time.
Q. All from the university ?--A. Yes ; w took up lots, and commenced payments, with a
bond for a deed when the payment should bo completed,
Q. Can you inform 'us whether or not thoe toward University has been paid for those
lots ?-A, To my certain knowledge I raid the full price of my lot as on the plat offered to
all purcilasers, 9 cents per foot. 1 hat was what my lot was put into the market for.
Q. I want to know if you can inform the committee whether or not, in the purchase of
this property, the loan which the IHoward University made from tile Freedman's uBank was
not for tie purpose of making tlhat specific purchase ?-A. I do not know.

By Mr. BRAFonnRD:
This $75,000 did go to 'pay tie indebtedres; of
Q.
this property was situated ?-A. I could not tell

the university

fcr that land on which

35

FREEDMAN'S SAVINGS AND TRUST COMPANY.

is your best recollection about it ?-A. I have no recollection about it.
Q. What
it not your best recollection that it did i-A. I cannot swear to recollections which I
Q.notIshave.
do
have some glimmering recollection about it ?-.A. No, sir.
Q. You
the Iloward University have owed so much, unless it was a debt tor tile
Q. Howofcould
purchase this property ?-A. That would seem so, but there wore other large liabilities,
I suppose.
whom lid the trustees buy tils property ?-A. From one John Smith.
Q. Fromlhow
much ?-A. One hilundred and fifty thousand dollars.
Q. 1or
how was that $150,000 paid ?-A. I cannot tell. These matters were in the hands of
,Q.
General Howard and his treasurer, and they managed it without my knowledge at all.
Q. Was there not an understanding among you that tils $75,000 was to liquidate that
debt 1-A. 'There never was any such understanding with me.
back on tle transaction and refreshing your recollection about it, what do
Q. Looking
now was done with that $76,000 ?-A. I do not know.
you say
Q, What is tie most probable thing that was done with it ?-A. IThe most probable thing
is that itient to tle liquidation of debts and liabilities of the university, of various sorts.
Q. Was not that the chief liability which the university liad incurred
--A. I cannot tell.
By Mr. STENO(EI :
this loan ot
Q. Do you know what the unpaid balance on that real estate was at tile time
I hald somethinlg
$75,000 was effected ?-A. No, sir. I had nothing to do with tileofaccounts.
schools. School-houses
to do with the building of tin, school-house, as superintendent
could be built with Government money on property given or purchased for that purpose. I
had nothing to do with tle money. T'he treasurer liad the whole matter in charge, and lhe and
General Ioward managed it.
Q. They did not keep it a secret from you, did they ?-A. Not particularly.
You could liav looked into it and ascertained the state ot things ?-A. I could.
Q. Did
Q. you never have any conversation with those gentlemen on that subject --A. No,
sir.
Q. Was it not understood by you all the time that that debt was extinguished so that you
could get a good title to your lot before you paid the last of your purchase-money ?-A. No,
sir, I made no inquiry. I paid, and paid, and when I got to the last payment they gave nme
the deed; at least Mrs. Alvord got the deed.
Q. Hlas that land ever been paid for, the whole tract, out of which yours was carved; lias
the original purchase-nioney been paid to John Smith ?-A. It is all paid, I believe; I supso.
posed Out
of what funds was it paid ?-A. I do not know.
Q.
was passed to Mrs. Alvord, to see
Q, Did the
you not makewasinquiry, atortile timoandtheto deed
see that you ihad a fair', u11incu lInbered
not,
pail
whether
t'or
property
title?-A. No, sir; I did not. I took it in good faith, and just gradually paid it off in the
course of three or four years.

By tho CIAIIIMAN:
lot l--A. Yes, sir.
Q. Did you build a house on your
$9,000.
Q. What did that house cost --A. Between $S,000I and
Q, What (id(General Howard's houeo cost ?--A. heard General Ioward say that his
house, barn, &c., cost him $'29,000.
cost ?-A. Between $12,000 and $15,000, I think
Q. What (lid General Balloch's house were
built on property purchased of the trustees of'
And all these houses, at that cost,
Q.
the Htoward University, without your taking the trouble, any of you, to ascertain whether
or not you had a good title. Do you mean to say that --A. I mean to say'tihat in regard to
myself. I took it for granted that General Howard and his treasurer hlid ia good title whoe
they put up the university buildings, and that so my title was also good.,
By Mr. STENGEAR:
In what way was the purchase-money for these lots paid ?--A. Mine was paid in cash
Q.
in small payments, just as I could save them from my earnings from time to time.
By Mr. RIAINEY:
examined by some
Q. In purchasing real estate, is it not customary to have isthe records
so as to see that the title of tile property
good -A. Yes.
competent
attorney,
Q. How came you to depart from that custom, especially when your own interest was involved ?-A. I knew that tie deed from John Smith was a good deed.
Q. Did you have any personal acquaintance with Joln Smith ?-A. No, sir.
Q. Did you know whether le was solvent or insolvent ?-A. No, sir.
Q. Did you know whether lie was selling somebody else's property or his own property ?A. No, sir.
Q.' Were not the lots purchased and paid for, and the houses built and paid for, directly or
indirectly, out of tile $75,000 loaned by the Freedman's Bank to tihe trustees of the uni?-A. Mine was
versity
house or

my land.

not. This is tile first intimation that

anybody else paid

for

my

36

FREEDMAN'S SAVINGS AND TRUST

COMPANY.

Q. Did you not know that General O. O. HIoward and General Balloch were both regarded as men of rather limited pecuniary means ?-A. They were not rich men, but men

of moderate means.
By Mr. BRADFORD:
Q.. Do you recollect the loan to 0. 0. Howard individually of $,, 137 --A I believe there
was such a loan.
been paid ?-A. I do not know.
Q. It never has
Q. Was not that loan obtained before he built his house ?-A. I cannot recollect.
Q. There was such a loan, and you do not know whether it was obtained before le built
the house or during the process of building the house ?--A. I do not say there was such a
loan, unless I have the record before me. I tak9 it for granted, if you have a list of loans,
and say that such a one was among them, that there was a loan of tliat sort. My impression would he that there could not have been such a loan with his indi vidual name, because
we were very particular not to let trustees borrow our funds.
Mr. BRADFORDo. This loan is put down to 00. H. oward individually.
The WITNES.c Ht was a trustee at that time.
borrowed this money as a trustee. Was such a loan as this
Q. But lie may not have
ever made to 0. O. Howard individually ?-A. I do not know ; I cannot tell. It mnay
$5,137
have been made to him individually or as trustee for some other individual for whom he

borrowed it, or as an attorney.
Q. You stated a while ago thAt the $33,000 loan to Howard and Cooke I d been shifted
to tlhe Young Men's Cliistini Association. Who did the shifting; what officers of the bank ?
-A. I do not know. Probably the actuary, who had all these things in his hands. ''The
finance committee and the actuary had everything to do with tle funds. I sat as president
of the board of trustees. I wish the committee to understand that my relations to the money
matters of the bank were very distant, to say tle least.
'i'lie CHAIRMAN. The iecorlds show tlat you were a trustee and president of the Freedman's
Bank, and one of the examining committee. Do you mean to have the committee understand
that, with all these close, intimate official connections with the Freedman's Bank, you exercised no supervision or control over tile administration of its funds ?-A. Yes; scarcely any,
and I will tell tle committee why : I was voted out of jurisdiction of the finances, and I will
refer the committee to the record of that fact. By the charter, the president was made custodian
of the corporate seal, and of all tile property, funds, and securities of the company, subject
to the control and jurisdiction of tile finance committee, and was also made a member, ex
of the standing committees. The finance committee was to exercise control over all
nficio,
the funds, securities, and property of the company, to direct as to the investments, &c. No
securities of the company could be sold or transferred but by vote of the finance committee,
recorded, in which three members of tihe committee should concur. lBut the finance
duly
committee decided that the president had no right to vote, his membership on the committee
not being by election but only nominal. 'lhe trustees acquiesced in the decision, and such
became tie practice through all my presidency. I dissented from it, but sat upon the coin
mittee, having neither a vote myself nor a veto.
Thle CHAIRMAN. But you had intimate knowledge of the transactions of tile committee ?A. Yes. On January 9,188iS, tile actuary was empowered, under tile sanction of the finance
committee, to perform all legal acts in the purchase, sale, exchange, or transfer of any bonds,
securities, or other property of tlhe company.
By Mr. STEINGc;ER:
conrmn ittee when they voted you out and authorized the actuQ. Who composed that finance
ary to do this !-A. Henry D. Cooke was chairman, I think. On May 14, 1868, the custody of the securities was given to the actuary. I had been out in tioe field stimltlating
branches, and encouraging plepple to work and save their money and to deposit it. When
I came back from the field, I vas requested to devote my whole time and strenlgthl to the
company. At the next meeting, Novemiber 7, 1870, a resolution passed tlhe finance committee as follows: IResolved, That in the opinion of the finance committee tile financial
of the company should continue to be intrusted to tile actuary and finance comoperations
mittee." Tlhat was after I carlte back and tool my position as president.
of
irfiance committee in 1868; I want
Q. You have given tile nme te irthie
to know the members who composed it when that resolution was passed in 186S, and also
when the resolution was passed in 1870, and also who tile actuary was.-A. I cannot tell
you who composed the finance committee. I know that Henry D. Cooke was chairman,
when it was decided tliat I had no right to vote. That tmunt have been in 1868. By the
next vote, which was in 1868, the custody of the securities was given to the actuary. D. L.
Eaton was then the actuary.
By tile CHAIRMAN :
Q. Was there an assistant actuary at tlit time ?-A. Yes; G. W. Stickney.
Q. Was there any relationship between him and Eaton ?-A. I think that lle was Eaton's
imephiew. On tlhe 9th of' January, 1 8G, the actuary was empowered to perform all legal acts,
"

FREEDMAN'S SAVINGS AND TRUST COMPANY.

37

and in tile same year tile custody of the securities was given to hiin. When I came back
from the field, the finance committee wanted me to look after things very specially, and
voted that I should take my position ; but on taking it, the finance committee at onceresolution, which was g ot through the board, that the custody of the securities,
brought in a should
still continue to be in the hands of the actuary and of the finance comfunds, &c.,
mittee, This action had, and was designed to have, the practical effect of sending the

officer again to field-work.
presiding
By Mr. STIE:SEIt:

the same assistant actuary then in office ?-A. Yes.
Q. Was the same actuary and committee
the finane(
then '-A. I should say that Mr. Cooke was st'll
Q. Who composed
chairman ; tle other members were William S. Huntington, Lewis Clephane, Mr. i'utile,
assistant treasurer of Howard University,) and Mr. G. .. Balloch.
(the former
on tile finance committee I-A. I was anIl e,-b.Oicio member of it, and on
Q. Were you
decided that I had no right to vote or to veto; and
inquiry asI to what that meant,thatit was
decision, still the board seemed to fall in with that interagainst
protested
although and
I had to aclquiesce.
pretation,
(. How many gentlemen composed tihe finance committee 1-A. Five.
Q. These five gentlemen wllo composed tile finance committee in 1e70, are they the same
who composed the finance. committee inl I w;S,when that first action was taken in regard to
yourself ?--A. I think so ; we iad occasionall changes of one or two, but substantially it was

the same committee.
By Mr. BJ 1) 'oIrt )
Are there any evidences in those books [referring to'Tour memoranduil'-books wliicl
Q.
witness liad been consulting] of frauds or irregularities in the bank ?-A. These four little
books are what I wrote out as thle history ot this institution from tle beginning, for my
children, if you please, or for somebody else. All tlat is written in them is true, from first
to last, and if you want tlhe history of this institution from first to last, and put me under
oath, I will read the whole of these books, if you have patience. It was mainly during this
time-of these alterations and putting me into a tight place-that questionable loans were
made.
Q. How many loans, to your knowledge, were what you would call questionable loans ?A. I cannot tell you how many. Some loans, for instance, were made on personal chattels,
city scrip, &c., and loans were made by cashiers without the knowledge of the trustees. To
these irregularities may be added the liberty given by tile actuary to do general bankingbusiness at some branches, also the acceptance of insufficient securities, giving credit to
unworthy parties, and tile Seneca-stone arrangement.
By the CHAIRMANI, :
Q. Do you know of any other instance than tiat which you have mentioned in which
there was a shifting of loans from one description of securities to another ?-A. No, sir; I
do not. Being, as you say, thrown out, and being absent, sometimes in New Orleans for
weeks and months, and up the Mississippi, the finance committee had control of the whole
machinery, and even when I came back and took my position as president I was thrown
outside of the committee.
practically
of which you have
Q. If I understand you, there were questionable loans, the character
described. Were they made prior to tile amendment of the charter of the bank on May 6,
1870 ?-A. There were certainly some things which I did not like previous to the'alteration
of the charter. I always wanted to have a simple savings-bank, kept closely and carefully for tile custody of those for whom I originated it.
Q. Was not the design originally, when these scattered, illiterate, and poor depositors
were invited to put their funds in the bank, simply to have it a savings-institution, in which
their funds were to be deposited, invested by their friends for their benefit, and that they
were to receive the dividends 1-A. Yes, sir.
Q. A general banking-business was not contemplated ?-A. No, sir; I can swear to that
I know what I meant when I got it up, and I know how I struggled to
very strongly.
keep it so.
Q. Who applied for the'amendment of the charter, and on whose suggestion was tihe ap

was talked of tt long time, until at length it was reto ask for liberty to loan money on borrowed security, where more interest would
accrue and larger dividends be paid. I do not know who first suggested it.
Q. Prior to that time, had the investments and loans of the bank been made on United
States securities exactly as the original charter required ?-A. Pretty nearly so; mainly so;
so at first. If some things crept in toward the last, they were irregularities.
alwaysWho
amendment of the charter before the House committee ?-A. I
Q.
championed the came
know that IMr.
to tle Capitol and saw
prominent influential gonIuntington
told them that was just the thing
tlheine on the Commiittee on the District of Columbia, andloading
to he done.
Q. Is it or is it not true that the suggestion of this amendment to the charter came from
the officers of tile bank without previous
conference or knowledge oni tile part of the depositors ?-A. Yes: I should think that that was true.

made to Congress--A. It
plication
solved

38

FREEI)MAN'S

SAVINGS AND TRJST COMPANY.

Q. Is it not a fact that prior to the commencement of this system of loans on a broader
basis, as you call it, the loans and investments in United States securities were entirely
safe, and readily converted into money ?-A. Yes, sir.
Q. How has it been since ?-A. We used up all our stock in the panic.
Q. If you had not swamped so much of your money beforehand on real estate, and if
States securities, state whether the
your investments had continued to be made in United the
bank would have had any difficulty in coming through
panic.-A. No, sir.
Q. Then the panic did not occasion the exhaustion of your stock, but the exhaustion of
your stock originated in the fact that you had invested too much in bad securities ?-A. We
have stopped the thing with $800,000 in United States stocks, if we had not
probably could directions.
spreadIfintheother
United States securities were unquestionably good, and if you collected your
Q.
interest and paid dividends to your depositors, what was tile necessity for wanting to extend the basis of your loans 1 There was no difficulty in paying dividends on United
States securities ?-A. A number of things came up in the course of the discussion, among
them the question in Congress of funding the national debt at lower rates of interest. ff
that was done, and if our investments were in United States securities, we could not pay
the 5 per cent. to depositors that we had been accustomed to pay, or could not have paid a
dividend which could have compared with tle dividends of other savings-banks. That was
one reason. Then, pretty generally in the South, men could loan their money at a higher
rate than they could get from us, and they begged that we would give them a larger interest, which we could not do, witl investments in United States securities at 6 per cent. and
with a prospect of those securities being reduced to 4 per cent.; hence one motive of the
change was tlhe hope of being able to pay our depositors a 6 per cent. dividend, if possible,
which they clamored for.
Q. In what way and through what channels did the depositors ever clamor for 6 per cent.
In correspondence. They said tlat they could get 6, 7, 8, and 9per cent.
dividend'l-A. and
that they would take their funds out of the bank if we would not make
by loaning it,
tle dividend larger. That was the popular-I ought not to say clamor, perhaps, but demand

through the South at one time.
By Mr. RAINEY':
Q. Did any petition come up directly from depositors as depositors in any section of the
asking the board to increase their dividend, and setting forth the facts which you
country
have specified ?-A. I do not recollect any formal petitions. Individuals who were in a sort
of small brokerage business wanted to make more out of their money than they could by
putting it in our bank.
By the CIIAIIRMAN:
Q. Do you know of any speculators or brokers of incorporated companies of any sortofwho
interested themselves in having a law passed authorizing an investment of the funds the
Freedman's Bankl on real-estate security I-A. No, sir; I do not. I know that Mr. H-un.
came up to the Capitol very anxious to get the thing through, and he went to menmtiugton
bers and urged it with all his eloquence.
Q. Mr. Huntington was the cashier of the First National Bank, of whicll Ienry D. Cooke
was president ?-A. Yes, sir.
D. Cooke
Q. Dooryou know ofD.any operations in real estate being carried on by Henry connected
by Henry Cooke and W\illiam S. Huntington, or any other person
singly,
with the First National Bank ?-A. I do not knowv of any operations being carried on by
them in real estate in this region, unless you call tile investments in the Northern Pacific
Railroad Company speculations in real estate.
The CIAIAMAN. My understanding of your evidence now is (and you will correct me if I
am mistaken) that up to within a short time of the amendment of the charter in 1870, and
up to tlle time that you were voted out by tlhe finance committee, the affairs of the bank had
been mainly conducted on the basis originally provided in the charter, and have been conducted safely and beneficially to tile depositors, but that very soon after tlhe time when you
were voted out the funds commenced to l)e used in loans or investments made on questionable securities, and that, lhad not this been done, but had tile funds been employed as they
should have been, and invested as the charter originally directed and required, the bank
would have been able, in your opinion, to have stood the panic of 1873, and to have redeemed
its obligations to its depositors. That is the import of what I understand to be your testimony.
-all

Tlie WITNES . Yes, sir; substantially I should say that that would be my statement. I
would not like to have you say that I was voted out.
The CHAIRMAN. I understood you to say distinctly that you were voted out.
The WITNESS. 'Then let it go so. It was a sort of voting out.
The CHAIRMAN. What would you call it-deposed ?
The WI'TNESS. Perhaps so .
Mr. RAINE'¥. Deposed from the exercise of your legitimate official functions 1
Tle WIT'rNEss. Yes, fsil; I suppose in commonly parlance I should use those terms. ''hey

FREEDMAN'

SAVINGS AND TRUST COMPANY.

39

destroyed
my power to stop these bad things and to prevent them, and the committee at that
time had meetings at which apparently they did not want me to be present,
By the CHAIRMAN:
Be good enough to enumerate scriatim the securities on which loans and investments
Q. made
which you designated as questionable.-A. I cannot designate them in any
were
shorter terms than as I have done; for instance, personal chattels, &c.
By Mr. BRADFOnD:
How many loans were mad.'.e on that sort of security?-A. Not very many. 'There
Q.
was a loan made to the Arlington Hotel Company on a chattel-mortgage on furniture.
Mr. STENGERt. And also to the Saint James Hotel ?
The WITNESS. Yes. Another class was city scrip.
By Mr. BRADFORD:
were loans made on city scrip ?-A. I cannot exactly say. Tlley did
Q. Toandwhom
and
recorded
commissioners have the record.
them,
things
Mr. BRADFORD. Go

on.

tie

. The WITNESS. Then there was a practice of cashing drafts at branches.
Q. Is that what you call chattel security ?-A. No, sir; when a man wants a draft cashed
le comes to the bank and gets it cashed.
Q. Whether he has deposited in the bank or not ?-A. lie probably would be a depositor,
but often that draft would be beyond tile amount of his deposit. l-e would get it as a matter of accommodation, so that the bank became an accommodating institution. I do not
mean tq say that this was a general thing, but there were cases of that sort which alarmed
me. Then there were loans by cashiers of the branches made without the knowledge of the
trustees, they staying that they had permission from tile actuary to make loans.
By the CHAIRIAN:
that include the Washington branch also ?-A. No, sir; the loaning at
Q. Does not
Washington was always done in tile principal office.
Q. Was the cashing of drafts carried on as a practice in the Washington branch --A. No,
sir. I do not think it was to any great extent. It was done so more at some of the southern branches, especially at Jacksonville, Fla., where we got in pretty deeply. There was
no general practice of that sort at the parent bank in Washington ; there may have been
over-drafts. In fact, we found that there were, and we struggled to collect them inmme'liately
on finding them out.
Mr. BAIDFORD. Pass on to tlhe next series.
The WITNESS. I would mention the liberty. given by tile actuary to do a sort of banking
business at some of the branches. This cashing of drafts would have been a banking business, and perhaps I should not have made two heads of it. Then another thing was, merchants putting in money and drawing it out, which gave us a good deal of clerical expense
with but little profit. There were things of that sort
were not quite legitimate, as I always thought, in the case of a pure savings-bank. It was irregular, and a thing not designed

tiwhich

by the charter.
Q. Then insufficient securities were accepted; what did you regard as insufficient ?-A. I
do not think that we had enough of city script (even if we could have taken it) on some
loans, to have them properly secured. I generally endeavored to see that the real estate on
which we made loans was double the value of the oanan. I frequently went myself, although
it was not my business, and looked at estates, but the actuary generally took it upon himself
to see them. Sometimes real-estate brokers were consulted. \Wo had no permanent appraiser.

But as the loans here were made on property in the District, those of us who had lived here
some time knew pretty well what property was worth in various localities about tile city,
and generally some of us went to see the property, and, on our best judgment, the property
vwas generally worth at that time double the amount of the loan asked for. J never myself
tile least sanction to any loan that was not on property which I conscientiously thought
gave
was worth double the money.
Q. Then, of course, these were not the securities which you regarded as insufficient ?-A.
No, sir.
Q. Yolu 1hve spoken of questionable securities ; please to inform us what those were;
describe the classes of theom.-A. I have given you the classes of those securities. I would
say that the Vandenburgh loans were on insufficient security. I do not think ther6 was
enough of it to cover the loans. I will not be positive as to anything else.
C
these indiQ. You spoke of tie Seneca Stone and such like securities.-A. will specify
vidual loans afterward. I think Mr. Gassaway got some money wi hout security. 1 think

Mr, Huntington got some.

By Mr. STrENGER :
Q. Who was Mr. Gassaway ?-A. I-e was a clerk in the First National Eunk, of which
HIenry D. Cooke was president. Money was loaned to Mr. Huntington on a house which I
afterward saw, and which I thought was not sufficient, as not being worth double the
amount of

the loan.

40

FREEDMANS8 SAVINGS AND TRUST COMPANY.

By the CHAIRMAAN:
What
do you think of tle loans to Juan Boyle & Co. ?-A. I do not know anything
Q.
about them, or the loans to S. P. Brown & Co.; I did not know anything about them.
By Mr. STENGER:
Q. Do you know who S. P. Brown is ?-A. Yes.
is his business ?-A. When I knew him he was in the coal and lumber business;
Q. What
lumber from Maine and coal from Pennsylvania.
shipping
Q. Had lie any business connections with any of the trustees or officers of the Freedman's Bank ?-A. No, sir.
,
Q. I see that there isina difficulty about the property which e gave as serity-tat the
title to tlhe property is dispute. Who is the attorney who was authorized, at the time these
loans were made, to examine the title to the property 1 Who was tho attorney that \was acttile bank --A. The solicitor of the bank was Mr. J. J. Stuart for a number of
ing for John
M. Langston was solicitor for a sort time, though I do not know that he ever
years.
considered himself as solicitor. We always required an abstract of title from the leading
gentlemen who were in tlhe real-estate business here. We selected two or three or four houses
that are known to be reliable in that business, and abstracts of title were always required.
By Mr. RAINEY :
Was
John M. Langston a aany time a member of the finance committee ?-\. Yes,
Q.
sir.
Q. Was he a member of the finance committee while lie was acting as solicitor of the
banK ?-A. I cannot tell that. lie professes never to have acted as solicitor.
By Mr. ST'rIN;ER:
know Jolin W. Hunter ?--A. No, sir.
Do
Q. you
a loan of $14l,10 made to ,John W.
Q. I see
Hlltnter ct rl. Do you know to wliomil that
was given ?-A. No, sir. I see that the title to the securities given for that loan is
money
also in dispute.
By the CHAIRMAN:
Q. There was a loan of $175,000 made to E. T1. Nichols, treasurer, on which there is a
balance still dueof $18,379. State of what Nichols was treasurer, and on what collaterals that
loan was obtained.-A. Nichols was treasurer of a certain corporation which had to do with
Indian land-titles in Kansas.
Kickapoo
of the scrip or stock of tlhat corporation --A. Payable
Q. And the security he gave was
scrip of that corporation. It was in some respects guaranteed by Mr. A. S. Barnes, of New
York, a wealthy individual.
Q. What was the style of that corporation ?-A. I cannot give it to you.
Q. All you know is, that it was a corporation which had something to do with Kickapoo
Indians and land-speculations in Kansas ?-A. Yes ; Mr. Edgar Ketchum, a lawyer in New
York, searched the whole thing through and through, and reported that it would be a good
of the kind. It proved to be a good loan, and has been paid promptly right along.
security
I see a loan of $30,718 to James G. Berret, president. Of what was he president, and
Q.
on wllat security was tlhe loan obtained '?-A. I do not know. I have no recollection of
loan.
any such
Q. I see a loan here of $1,556.51 to A. T. White, treasurer. Of what was lie treasurer,
and on what security was the loan ?'-A. I do not know. I did not have anything to do
with it.
Q. I see a loan of $2,830 to C. B. Bailey, treasurer. Do you know of what he was treasurer ?
-A. No, sir.
Q. I see here a loan to Hallot Kilbourn, president, of $3,885.16, witl no collaterals. What
was lie president of ?-A. I do not know lhat lie was president of. I know Ilallet Kilbourn
of tile firm of Kilbourn & Latta.
very well,
Q. Was he not also a trustee of tlie Freedman's Bank ?-A. No, sir.
Q. Had lie not some connection witli tle banlt ?-A. No official connection.
Q. Was no( tlhe firm of Kilbourn & Latta often called upon by the bank to appraise real
estate on which loans were made ?-A. Yes. They were sometimes called upon in a case of
we wanted advice, but they were not permanently employed.
difficulty, wherenot
Q..Did they in their firm character, or as individuals, carry on a general brokerage
business, negotiating loans for tleir customers at the Freedman's Bank on real estate
securities ?-A. That was their business, as I understood.
By Mr. BRADFORD:
Were
Q.
they not elected appraisers, and paid accordingly ?-A. No, sir. I have no
recollection of their being elected. They occasionally did appraise property on which loans
have been made.
(Mr. Bradford read from thle minute-book of the board, in the proceedings of June 9, 1870,
a minute showing that Kilbourn & Latta were employed as appraisers, who were to be consulted in cases where the actuary was not aware of tile value of thle property, or in cases

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

41

where tilere was doubt or question as to its value, and that the fees for appraisement should
tile amount of the loan and on the value of the property on which the loan.
The WITNESS. I have no doubt that that is correct.
Q. You were present at the meeting ?-A. Yes, sir.
Q. And that is a correct copy of the minutes of its proceedings I-A. I suppose so, if it
is signed by the secretary.
Mr. BRADFORD. It is signed by D. L. Eaton, actuary.
The CHAIRMAN. Tlie point to which your evidence tends is, as I understand you, that.
Kilbourn & Latta were recognized by the bank as its agents to appraise real estate on
which loans were asked, and were allowed to negotiate such loans for their customers, and
their fees and compensation were regulated by the amount of the loan, and by the value of
the security, according to their own report. Do I understand you correctly ?-A. I have no
of their negotiating loans, but I presume lhat they did.
knowledge
Q. I want you to say whether they occupied this double relation to the borrower and to
the lender, and that by the authority of' the officers of the bank -A. 1 mean to say tlat
the record is undoubtedly correct. I want however to add here, that there was a time at
which it was. forbidden that any broker should negotiate loans from the bank. Some of us
objected to it; we saw evils in it. lThere is somewhere a vote of the trustees that this was
not to be done by any broker, (I got it through,) but that applicants slall come directly to
the office. Q. I see C. W. Hayden mentioned as a borrower of the bank, and lie is designated as
president also ; of what was lie president I-A. Tile Maryland Freestone Mining and Man
ufacturing Company.
Q. Was that loan made to h'im in lis official character, or as an individual.?-A. As an
individual, I suppose.
Q. Who was tle Rev. E. P. Smith. and what connection had lie with the Freedman's
Bankl-A. He was the Commissioner of Indian Affairs until recently. He was trustee otf
the bank for a short time. I ought to say that lie resigned his trusteeship before le became
Commissioner of Indian Affairs.
Q. ofHe is described here in some of these reports as missionary ?-A. He was the field-secrethe American Missionary Association, visiting the freedmeu and schools, and carrying
tary
forward a large number of schools which they patronized. He was influential among tle
colored people, and was chosen a trustee of the bank for the sake of securing his interest
in the great southern field.
(Q. le operated generally in the South ?-A. Yes.
Q. The South was generally the field of the Freedman's Bank ?-A. Yes, sir. I think lie
resigned before lie was appointed Commissioner of Indian Affairs.
Q. Can you inform the committee what E. P. Smith knows about the affairs of the Frcedmau's Bank which should have rendered it desirable to have his room rather than his comin this city, as .1 amn informed that you have stated that I gave him leave of absence
pany
to go to Africa ?-A. I will answer the first part of the question. I do not know that he
knows anything particularly about the affairs of the Freedman's Bank except as a trustee,
when lie occasionally met with us. iHe was generally absent from the city, but he met
with us occasionally. 1 do not know that he knows anything about the internal workings of
the Freedman's Bank. As to the last part of the statement, as to his getting leave of absence to go to Africa, I heard him say that he had the consent of the Indian Committee to
to New York to make arrangements, on the condition that lie should come back to Washgollgton
by the next, train, if telegraphed for. I certainly heard him say tlat he had an interview with that committee, and had that permission, that lie could go to New York and make
arrangements for a voyage for his wife and daughter.
By Mr. BRADFORfD:
Q. Is lie going to Africa ?-A, No, sir.
Q. What did you mean by that expression ?-A. The committee that wanted him to t(s
was tlie Committee on Indian Affairs, and lie is now, I understand, before tlat coniiiiit
tify
tee. le has.been back and forth from New York.
By the CHAIRMAN :
Q. Did you not tell George W. Alexander that you had a conversation with E. P. Smith,
and that you had been told by him, or stated it on your own authority, (I forget which, ) that
I had given him permission to leave thle city !-A. No. I never knew who the chairman of
either of these committees
was. Mr. Smith told me that lie had been up before the committee, and that lie had been told that he was not wanted at present, and that lie would be telegraphed for if needed, when he would return to Washinlgton by the next train.
Q. You never did say, then, to
one that the chairman of this committee had had any
interview with Mr. Sinithl, or had any
given him leave of absence ?-A. No, sir. Mr. Alexander
wanted to know why Mr. Smith had gone away. I said that he told me that tlhe committee
had given him leave to to New York, and to come back if telegraphed for. The committee
to which I ret'erred was go
the committee before which Mr. Smith had been
viz, the
Committee on Indian Affitirs. I did not know of this committee at thatsummoned,
time.

be graduated on
was sought.)

42

FREEDMAN S SAVINGS AND TRUST COMPANY.

Was there or' was there not a purpose on your part to convey the idea to Mr. Alexander,
him to the public, that this committee, or its chairman, had permitted an imthrough
witness to leave the city ?-A. No, sir. I simply wanted to say to Alexander that
portanthad
not run
but that the committee had
him leave to
Ho asked
Smith

Q,

and

me if
off,
given
go.
Mr. Douglas was on that committee. I said that I didn't know whether he was or not, but
that if Mr. Douglas was the chairman of the Indian Committee, it must have been he who had
Mr. Smith leave to go to New York.
given
The CHAIRMAN. I want it entered here, in vindication of myself and of the committee,
4hat Mr. E. P. Smith has never been summoned before this committee, and is, I presume,
not known to any member of it even by sight.
Mr. RAINEY. With the exception of myself. I saw him frequently in the Committee on
Indian Affairs as Commissioner.
The WITNESS. Mr. Smith was speaking, and I was repeating his statement, as to another
committee entirely. I was vindicating him for not running off.
By the CHAIRMAN:
Q. The subpoena under which you came here directs you to bring tile stock-book of the
Maryland Freestone Mining and Manufacturing Company; you have not done so: why ?A. 1 have not that book. If there ever was such a book, I never saw it myself.
Q. Are there any reports of the treasurer of that company in your possession ?-A. No,
sir; there are not.
Q. Do you mean to say thatof the Maryland Freestone Mining and Manufacturing Company, with a nominal
capital $500,000, kept no stock-book, and that tlhe treasurer of the
company kept no accounts ?-A. I presume that the company has a stock-book, but it is not
in

my custody.

Q. In whose custody is it ?-A. It may be in the custody of the treasurer or of the former
president.
Q. Who are they ?-A. Mr. C. HI. Risley is the present treasurer. The books are not
under my control. They have always remailled in the old sate. I have never taken them
out of that safe, and never have had any occasion for them.

By Mr. BRADFORD;

Q. Your office as president invests you with the custody or control of them.

The WITNESS. I suppose so.
The CHAIRMAN. Then we require you to bring them before the committee.
The WITNESS. There is a list of stockholders in this record, (handing a book to the chair.
11man.)
Q. Did you have any conversation witl A . . Sperry in reference to the stockholders of
the Maryland Freestone Mining and Manufacturing Company ?-A. I probably have had
conversation witl himn; I presume I have. He was chiefclerk in thle Freedman's Bank, and
an old friend of mine. Mr. C. W. Hayden was president and treasurer of the Maryland
Freestone Mining and Manufacturing Company at one time.
Q. And is at present lessee of its property /-A. He was, up to the 1st of January, 1876,
lessee.
By Mr. STENGER:
You
Q.
said, in tle course of your examination, that there were certain meetings of this
finance committee at which you did not think they cared much about having you present,
and you were going on to say tlat you tried hard to get to several meetings. How did it
happen tlat you could not get there ?-A. They were to have met every Monday at 12
o'clock. I was always on tle ground, but the members of the committee were not. Some
out-door business, as it was said, would prevent Mr. Cooke coming, and I would go home,
and come to tile bank on tile next Monday; but it was only occasionally that I succeeded in
actual session of tile finance committee.
getting.)idinto an find
that tile committee lhad met, and held a session in your absenlce?-A.
Q;
you
I could not say that they did. I do not know. There were, undoubtedly, sometimes a majority of the committee that acted, if you please, on the street.

SEI,ECT COMMITTEE O(N FREEIMAN'S BANK,
I'ashington. February 8, 1876.
The committee met at 10A o'clock. Present, Messrs. Douglas, Bradford, Riddle, Farvell

Rltiney, and Frost.

J. W. ALVORD recalled.
By Mr. BRAD(ORD:)
Question. You were speaking in your former examination of meetings of the finance board

being held while you were not present.

How frequently were such

meetings held, at which

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

43

you were not present ?-Answer. Not frequently. I was usually present when I could possibly be. [A portion of the testimony of last Saturday having been read to the witness.] I
will add that such occasional absence was only during a short period in the commencement of
things. The thing got into some regular shape afterward, and when I was in towi I always
attended the meetings of the board. They were held, after we had completed our building, in
the directors' room, and I was always there when in town. This thing was only for a short
period during the starting of operations here in Washington, after my return from the
field.
Q. Did that period cover the time when these improper loans were granted ?-A. No; I
do not think that that period did. In the course of a few months, I succeeded in getting
things
straightened, and I took my place in the committee as ex-offiio member, though never
to vote. If I did vote it was informal. The ruling of the committee was that I was but a
nominal member, not a voting member. A quorum was made by three without me.

Q. Am 1 to understand from that answer that you participated in granting those loans
which were improperly secured ?-A. Will you please refer me to any particular loan ?
The CHAIRMAN. I mean the loans represented in this commissioners' report as not having
been properly secured, for instance that $33,000 loan granted to the Young Men's Christian
Association, and loans of that character.
A. I do not recollect; I think I was not present when that was acted upon. We usually
at each meeting of the board, loans to the amount of twenty, thirty, forty, or fifty
granted,
thousand dollars, in sums of from one to two, five, ten, or fifteen thousand dollars, and it
would be impossible for me to state definitely whether I was present at the granting of any
some remarkable case. I should like to say something of tle
particular loan, except inthat
loan has been shifted now, since Barber & Langdon are to
university loan, although
it, Still tle bank retains all the collateral securities, trusts-deeds on real estate that
pay
were given when the loan was first obtained. The bank is secured, not only by Barber &
Langdon's
pledge to pay, but by all the original securities which still stand.
Q. Who were the parties who originally obtained that loan of ,$75,000 -A. The trustees
of the university.
Q. You say that tlat loan was shifted ?-A. I said it was shifted, or so arranged, as that
Barber & Langdon wcre to pay it in lieu of a certain indebtedness to the university, but
the bank retained not only the securities which Barber & Langdon gave, but the original
securities which made the first loan safe,
Q. How could you bind the second parties to pay the debt without any consideration in
the premises f-A. These parties bought land from the university, the whole plot on wichl
Le Droit Park now stands, and they undertook to pay the bank for their indebtedness, instead
of paying the

university.

By the CHAIRMAN:
Q. Then, if I understand you, Barber & Langdon, when they assumed the debt to the
Freedman's Bank, assumed it only to the amount that they were indebted to thle university for
the purchase of this property ?-A. My impression is that they assumed the whole debt.
'llere was not much difference
between the two indebtednesses, theirs to tlhe university and
the
to the bank.
were somewhere near tlhe same amount.

university

They

By Mr. BRADFORD :
Q. Has not the university been discharged from that debt?--A. Only as Barber &
Lanlgdon pay it.
By the CHAIRnIAN:
Q. What I was coming at is this: You account for the shifting of tlie debt from tile
by saying that Barber & Langdon bought part of tlhe
universityofto Barber & Langdon,
property thle university, and you said the other day that you took as. security a deed of
trust on Le Droit Park -A. No; I did not say that.
Q. What did you say ? I asked you what security they gave for the debt of the univerwhen they assumed it, and I understood you to
that they gave as security the Lo
sity
Droit Park enterprise, as you call it.-A. They gavesay
as security property in this park.
under lien to the Freedman's Bank l-A. No, sir; not
Q. Was not that
bought
thle roperty in the property
but these people had built and sold houses in the park and
itself;
park
taken obligations which were secured by deeds of trust and mortgages.
Q. On the same property ?-A. On tie same property.
Q. Was not this property a part of tlhe original property of the university which was
bound for this debt to the bank ?-A. No, sir.
Q. When you say that Barber & Laugdon bought it of lus, whom do you mean by us ?A. I mean the
trustees of the university.
Q. Were you one of the trustees ?-A. Yes.
Q. Had you any authority under tile charter of tlhe university to borrow money ?-A. I
think the charter
gives power to buy and to sell, to sue and to be suld, with tile ordinary
of a charter.
terminology
Q. I find tile name of GeneralO. 0. Toward mentioned as an honorary trustee of tie
Freedman's Bank. What does that mean: and what were his functions fi such honorary

44

FREEDMAN S SAVINGS AND TRUST COMPANY.

trustee I-A. We had a few such men, prominent men of the country, who were admitted
to our councils, and to the discussion ot questions, but not to vote.
Q. Can you point out any provision in the charter of the Frcedman's Bank which recog.
nizes any class of officials known as honorary members ?-A. I do not think I call; it was a

mere

compliment.

Q. They were admitted to your meetings as a mere compliment, and they participated in
your discussions to the extent, I suppose, of exercising some influence on your action, did
they not --A. I cannot tell you. I only know that Gen'eal How"ard was with us occasionally.
Q. They were invited there; they were given an honorary position at the board ; were

they there merely as an ornament, or did the board of trustees listen to and heed their counsel and advice "-A. Tile board listened respectfully to what they said.
Q. Did not these honorary gentlemen exert a great influence over the board ?-A. I cannot tell you. I myself listened to everything and put the motion. 1 did not vote even in
tie board; what influence they may have hlad I cannot swear to ; it was not frequently that
General Howard was witil us; occasionally lie would come in, sit and listen, and occasionally make a remark. lie took no extended part in the discussions.
By Mr. FARVnWIE. :
Did
the discussions relate to loans '-A. Never. (Mr. Alvord changes this to) "Yes,
Q.
inll part. "
Q. What were these meetings at which Geneial Howard was present ?-A. He was an

honorary trustee.

Q. What was the usual subject of discussion at the meetings ?-A. Matters pertaining to
the interest of the bank, agencies, &c.
Q. Were loans discussed there I-A. Tle report made by the actuary and the finance committee was read and acted upon.
Q. I understood you to say that tile board of trustees never made loans, but that they
were left to tie finance committee ?-A. Yes.
Q. Of which committee General Howvard was not a member ?-A. IIe was not.
By the ClAIRMANs:
to Mr. Farewell, and from what I should have inferred from the
From
Q. of that response General
Howard and the other proiinent gentlemen to whom you
your
reading
by-laws,
refer were honorary members of the board of' trustees of the Freedman's Bank, the duty of
which board was to receive and consider all the reports from the business committees of the
institution; am I right ?-A. Yes.
Q. Then that board, at which General Howard and these other gentlemen sat, had the
authority to exercise and was supposed to exercise a general supervision over its affairs,
and had knowledge of what transpired in .its management ? Is not that so ?-A. Yes.
By Mr. BRADFORD:
You say that General 0. 0. Howard was simply an honorary trustee ?-A. We elected
Q.
him trustee once, but lie declined that, and I think we then elected him an honorary member.
Q. Let me call your attention to an extract fiom the minutes of March 10, 1870. (Extract
read showing that Genaral 0. O. Howard was elected a trustee at the annual election; J. W.
Alvord, president; 0. O. Howard, first vice-president; and Rev. D. W. Anderson, D. D.,
second vice-president. Adjourned to meet at Jay Cooke & Co.'s.) Is that a correct extract
from the minutes of that day's proceedings I-A. I presume it is.
Q. Your recollection being refreshed by this extract, you would say that General Howard
was an actual trustee and acted as vice-president i-A. My recollection is that lie was so
elected, but that lie very soon informed us that lie could not accept such a posi tion properly;
that lie was in a condition not to accept it, and lie refused it.
have acted a short time --A. I do not think he ever acted as trustee. My
Q. lHe must
is that lie never acted as vice-president or trustee.
impression
Q. Were you in the habit of meeting at Jay Cooke & Co.'s bank ?-A. Not after our bankbuilding was erected. .Previous meetings to which I alluded were in Jay Cooke & Co.'s
bank. I mean the first meetings previous to tlhe erection of our bank-building. It was
there that there were some irregularities in our finance-committee meetings. I repeat that
because I want to have the committee understand perfectly that this was only for a short
when we were in an out-door condition of things, nCeeting whert wve could, usually
period,
in the bank of Mr. Cooke.
Q. You certainly liad a place of nleeting of your own prior to March 10, 1870, without
the banking-house of Jay Cooke ?-A. Yes; we had an office on Seventh street, bat
using
it was very small.
Q. Was not IIenry D. Cooke a mnlember of thle firin of Jay Cooke & Co. i-A. Yes; I
suppose so.

By tile CHAIRMANl.:
Q. Who else composed tle members of the firm of Jay Cooke

& Co. ?-A.

Jay Cookw,

FREEDMAN S SAVINGS AND TRUST COMPANY.

45

Henry D. Cooke, Mr. Fahnestock, and a number of other junior partners, if I am rightly
kAow who composed the board of trustees of Howard University ?-A. The
Q. Do you named
in the charter were the first trustees. They perpetuated themselves, I
incorporators
think. The charter gave them a self-perpetuating power, which they'exercised.
Q. And they afterward made you one?-A. Yes.
Q. And you were one at the time of the negotiation of this loan ?-A. I think I was.
(. And you were also president of the Freedman's Bank ?-A. Yes.

informed.

By Mr. RAINEY:
to the committee what, to the best of your knowledge, the loan of $75,000 to
State
Q.
the 1-oward University was made for.-A. I have inquired of the treasurer, and he told
me that it was for the payment of construction-hills for professors' houses and for the building erected for the normal department, which cost about $10,000, and for the payment of
other bills which had accumulated in the foundation-work. T1le expenses of tile university
having carried us into debt, we got out of debt in that way; that is, out of individual debts.
The money was expended, as I am told, wholly in furnishing the university with buildings
and in paying its debts which had accumulated. It is as I supposed it was. I find tiat
the money was expended for tlhe wants, liabilities, and debts of tile university.
By Mr. BRADFORD:
what source the university derived the money with which it paid
Q. Do you know from the
land .on which your residence is ?-A. No, sir; I cannot tell
for the land. comprising
now where it got it.
Q. What is your best recollection ?-A. I have no recollection. I was lnot in the board at
that time.
Q. What was the amount of the purchase-money ?-A. I understood $150.000.
Q. And you cannot tell from what source the university derived the means for paying it ?A. No, sir ; I was not in the board at that time.
Q. Do you not know that it was derived in some way, directly or indirectly from tile
Frcedinan's Bank ?-A. I do not think it was. Tl e Freedman's Batik lad not ituch money
at that time.
Q. But subsequently ?-A. Tile university never got any money from tile bank that I
know of except this one loan.
Q. Were lots on that property sold to an!y other persons than those connected, directly or
with tile Freedmen's Bureau, HI-oward UIniversity, or the Freedman's Bank ?-A.
indirectly,
Yes; they were put in the market through a land-broker, and they were sold to all who would
buy them. I suppose there were a score of gentlemen who purchased lots. Very few who
belonged to the university purchased any; only two or three of us, who took lots and paid
for them and started the thing, as such things are usually started, by a good example.
By tile CHAIRMAN:
Q. What became of the money paid for the purchase of these lots ?-A. I do not know.
The treasurer of the university catn answer that.
Q. Was any part of it used to re-imburse the bank --A. I do not know. I think I had
my lots paid for at the time of the loan.
Q. Had you bought and paid for your lot before the trustees of the university had paid for
and obtained title to the property which they sold you ?-A. Yes; I think I had.
By Mr. BRADFORD:
Q. Front what source did tile university derive its principal revenues ?-A. The Governmeolt placed at the disposition of tle1ncommissioners of the Frcedmen's Bureau money with
which to build school-honses.
Q. Was the money sufficient to accomplish tlat object?-A. It accomplished a great
deal. We built a great itany school-houses
all over the country.
Q. I understood from what you said this mln'iinlg that tile $75,000 borrowed from the
Frcedinan's Bank went to pay construction-bills. I suppose that that fund was used to
supplement the Government fund in paying for the construction of buildings '-A. I suppose so,
not have
Q. Therefore it must have been needed to supplement that fund, or else it would
been so employed ?-A. I inquired what buildings
it was for ; tlhe answer was, " Professors'
houses," ot which two were built, and a normal-department building, which was subsebuilt.
quently
Q. Then tho Government appropriation must have been exhausted before the use of the
$75,000 of borrowed money ?-A. Very likely.
Q. From what source is it
that the university acquired the money to pay the
I cannot answer that question.
$150,000 for its real estate ?-A.probable
By the CHAIRMAN:
Q. I understood you to say on Saturday that agents were employed by the Freedman's
Bauk to appraise real estate on wlich the bank took security for loans granted, and that the

46

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

same agents were authorized to negotiate, and did negotiate, loans with the bank for their
clients.-A. I said a part of that, not the whole.
Q. And that their compensation was by the board of trustees regulated in such a way as
to be predicated on the amount of the loans granted and the valua of the security taken ?-A,
I said a part of that.
reason to suspect that larger loans were negotiated or granted, and very
Q. Have you any taken
therefor, by an arrangement between these outside agents and
security
inadequate
;ome officials or agents of the bank, in which the latter were to share in the gains t-A. I
have no reason to suspect that. The thing was done only very rarely. We appraised prop.
erty ourselves, but in case of difficulty we were allowed to go to certain parties and secure
their judgment as professional men. But that, to my knowledge, was done very rarelyvery and
rarely. I emphasize that, although they were designated as men whom wo could consult, at times did consult.
By Mr. BRADFORD:
That
sort of investigation was casual and unofficial ?-A. It was casual; it was official
Q.
when we resorted to it. We were allowed to consult them. but in nine cases out of ten, at
least, we did not consult them, but we went to look at the property ourselves. The actuary
usually went; I went occasionally as I was here at home and could have time to go.
By the CHAIRMAN:
not a real-estate broker in this city, named Warner, who was sometimes
Q. Wasbythere
employed the bank, or permitted by the bank, to negotiate loans with the bank and to
fix the value of the assets which were given as security t-A. There was a man named B.
H. Warner, who, with others, sometimes did attempt to negotiate loans, and did, I suppose,
them, until we found that it was fruitful of evil. It seemed to take money from
negotiate
the applicants which they need not give away, and we passed a resolution saying that all
applicants for loans should come directly to the actuary or to the board, and that there should
be no middlemen.
Q. Why was that resolution adopted, and what wore the difficulties or evils intended to
be remedied by it ?-A. Tlle evil intended to be remedied was in regard to ignorant men
who did not understand real-estate business, and who thought, I suppose, that brokers
could help them. We saw that they were paying fees to brokers which they might just as
well retain in their own hands by coming directly to the company for what they wanted,
and we stopped this thing by resolution. I could give you the date of it if I had the record
to look over.
Q. If a loan was applied for and sufficient security given for it, was it not part of your
business to see what the borrower did with his money 1-A. No, sir; I do not think it was,
that this practice, as between client and borrower, which
Q. How didto you ascertain
had grown into life and existence ?-A. Brokers seek such customremedy,
you
proposed
ers to get their living from them in the form of commissions. They get certain percentages
for negotiating loans.
that practice of the brokers only developed after they came to be agents and atQ. Was
to negotiate loans with the Freedman's Bank, or is it something inherent il their
torneys
nature ?-A. It is always thie case with real-estate brokers, so far as I know.
Q. It that was thle fact, why did you ever admit them into your office to negotiate loans,
and why did you trust them in any case to appraise tle property which was to be pledged
as security for the loans ?-A. You ask why I did it. I did not do it. The actuary did it
and tile finance committee, because business men are accustomed to deal with corporations
as well as witli principals. A party comes in with a man, an attorney, or a broker, and deon his aid, and this at first probably seemed a thing in the ordinary course of brokpendingbusiness.
I think that is the universal practice. Certainly it is true to a large exerage
tent for borrowers employ them, and the men who loan money employ them.,
Q. Your answer does not meet the question. You have stated that after admitting brokers
to negotiate loans for their clientts, and after you found that such a practice was productive
of evil, you adopted a resolution prohibiting it. Now you say that what they did is the mniversal practice of brokers, and I ask you, then, why did you ever admit them to negotiate
loans and to fix the value of the securities ?-A. As far as I was concerned, I agreed to that
resolution because I think the practice is a bad one. The person with whom the particular
interview would occur would always be the actuary, who would take up the telling and
promise to present it to the finance committee. The finance committee would hear what was
said as to the loan and tile property on which it was to be secured, and would consider
whether it was best to make it. It came along in that historic way. It crept in, and we
found it to be injurious to tle applicant, and that we could save him to that exsubsequently
tent, and, therefore, we did so by prohibiting applications by second-bhand. In other words, it
was a simple desire to do the best thing possible for those who borrowed the money, they
our- depositors, We did it mainly to secure a small class of
usually, orborrowers
very largely, being
the freedmen. lThey were the men most usually obliged to pay
ignorant
among
these commissions.
Q. Was there not a real-estate broker of this city named C. W. Havenner, who also prac-

FREEDMAN'S SAVINGS AND TRUST COMPANY.

47

ticed in this bank as a negotiator of loans and an appraiser of real-estate securities for it?A. I do not knowy that Mr. Havenner ever did.
Q. You have been for many years president of the Freedman's Bank, and continued to
be one of its trustees; do you know that Havenner has, within that time, negotiated numerous loans with the bank ?-A. I do not. I cannot say positively that he negotiated a
single loan. I do not think I should.know him if I saw him to-day. I know of him, but
have no personal acquaintance with him.
Q. Have you seen and examined the report of the commissioners to close the affairs of the
bank ?-A. Yes, sir.
Q. Did you not see there a number of loans charged to C. W. Havenner ?-A. Yes, sir
I see them charged to him, but I do not know anything further about them. I do not
know whlin or how they were obtained. I was out of town a great part of these years,
abroad through the country instructing the freedmen how to toil and how to save.
Q. And how to save was to invest in the Freedman's Bank, I supposo?-A. Yes; I told
them that always, and I told them that I would do all I could to keep tlieir money safe for
them. When I was voted back to fill tile presidential clair, I was still practically kept out
of doors. They did not give me a vote or a veto, but practically I still went out, and was
here only whenever out-door business among the branches permitted me to come back.
By Mr. RAINSY:
whether or not Mr. Stickney, while acting as trustee,
Q. Can you inform the committee loans
to which reference lias been made; did he not
instituted or executed any of these
have the power to do so ?-A. He had no power to do so.
Q. But do you not know that he did make a great many of those loans on real estate
without aly conference with the board or any member thereof ?-A. I do not know that he
made any on real estate.

Q. Was lie not appointed by the board of trustees to execute loans onl real estate of which
he himself has become thle executor ?-A. Never. HIe was never authorized by tlle trustees
to do that.
Q. Does lie not hold a claim against the bank to-day f6o certain percentages for such
work ?-A. I do not know what le claims ; he is trustee on a great many loans.
Q, Does ho not hold these loans in his own personal right, awaiting an adjustment of the
bank for services rendered by him in connection will those loans ?-A. I think not. I really
do not know what has been going on there within the last two years. I have no knowledge
of his being in that relation to the loans. The parties selected mutually, I suppose, the actbe trustees. In this District, trustees are selected
uary and assistant actuary of the banktheto borrower
and the lender. It was consented to, as
the mutual consent of the parties,
by
I understood, that the actuary and assistant actuary should be trustees; at any rate, they did
become trustees without any objection on the part of either party, and their nanles were inserted in a large number of trusts.
By Mr. BRADF'ORD:
Q. You mean trustees in deeds of trust ?-A. Yes. Tleir names appeared very commonly.
I cannot tell you just how that thing came to be at first. Perhaps the actuary assumed the
and it was not objected to by the board that the actuary should act for us, for
responsibility,
he was our man ; the other party consenting, the thing got into practice.
Q. Do you know of Mr. Stickney, during his incumbency as actuary, over having charged
for that sort of service i-A. I do not know that lie was ever paid.
Q. Did lie ever charge for it ?-A. I never saw him charge. I have understood, as Mr.
Rainey now suggests, that he does make a claim.
By Mr. RIDDLE :
Do
Q; you know, or have you reason to believe, that any officer (f the bank, while refrom tihe balnk, negotiated loans to private individuals, and claimed the
ceiving a salaryfrom
the bank for said negotiation, and also claimed in addition a percentage
colpenpsation
from the parties for whose benefit the loans were made ?-A. I do not know thlt Mr. Stickney ever asked any other pay than tile legal commission for trusteeship. I think tlat Colonel Eaton claimed sucll a commission, and I know that Mr. Stickney claims the usual percentage for such trusteeship which tile law seems to allow. 'Thiat is live pe' cent. lo the loan.
By Mr. FARtWELL:
Q. Alnd his duty as trustee is simply to execute a release when the money is paid ?-A.
He becomes personally
responsible for the validity of tlle transaction.
Did lie claim thl five per cent. when the loan was paid by process of law, or did lie
Q.
claim it when tie party came in and paid the debt, and where the actuary simply executed
a common release ?-A. I cannot
Colonel Eaton did claim it in the latter case. I
say that
have heard him say, and I have heard
Mr. Stickney say, that it was proper that lie should
claim such a percentage from the bank, but I took tile ground that they should not claim it
while in office.
Q. Was it paid ?-A. No, sir; it was not paid to my knowledge. I have heard it said
that Colonel Eaton
did once claim and obtain a fee in one case.

48

FREEDMAN S SAVINGS AND TRUST COMPANY.

By Mr. RAINEY:
Can
Q.
you inform us whether or not Mr. Stickney has ever claimed and obtained a fee ?A. I do not know.
By Mr. FARWELL:
Q. State whether this five per cent. was claimed and received (and if not received,
the simple execution of a release on the payment of a loan, or only where the
claimed) on which
the loan was executed was advertised and sold under the deed of trust.by
property
A. Only in that case where the trustee had to discharge the duties of trusteeship in the
sale and conveyance of the property. Where the loan was paid in the ordinary way, there
was no fee allowed to him. I do not suppose that there were ever more than forty or fifiy
deeds of trust ever pushed through the law, and it was only for such that fees cold be
claimed. He never claimed that the simple execution of-the ordinary trusteeship brought
ainy fee, but that when he took tile responsibility of sale and conveyance, and the personal
liability for inaccurate conveyance, he should have the regular fee. If the conveyance is
i-t right, the purchaser falls back on the trustee, and I think that Mr. Stickney got into
one or two law-suits in that way, I think I have heard him say tlat in one or two cases he
was sued for having conveyed the thing so that by some slip of somebody (perlhals his own)
it was done illegally. Suits were brought against him which cost him two or three
hundred dollars.
By Mr. RAINEY:
Q. In cases where Mr. Stickney was the trustee of persons who had borrowed money from
tlhe bank under deeds executed by him to secure the loans, did lie, in aly one instance, to
your knowledge, give bond and security for the faithful execution of those trusts ?-A. Not
to

lly knowledge.
By Mr. BRADnFORD:
?-A. Yes.
Q. Do you know J. V.himW. Vandenblrgh
to the bank and secured him
Who introduced

its confidence ?-A. I think lie inQ.
troduced himself. I fonnd himi inside doing business the first time that I knew of his doiug
business there.
Q. Inside of what?-A. Inside of the bank, in the actuary's room.
Q. Did Mr. Alexander R. Shepherd ever have anything to do with securing Vandenburgh's
influence at tile bank ?-A. I do not know tlat he did.
Q. Did you ever see Mr. Shepherd at the bank in company with Vandenburgh ?-A. No,
sir, I did not.
Q. Do you know anything tending to show that Shepherd had anything to do with the
of these heavy loans for Yandenburgh
getting
--A. No, sir; I have no personal knowledge
of it.
Q. How did it happen that Vandenburgh got tlese immense loans ?-A. HEe got them in
some of us.
spite of
Q. Tell us what was wrong about it, what you know or have reason to-suspect wrong
about it.-A. I cannot tell; he kept getting tlese loans. The thing was done, and I said,
"Stop it." I kept saying, " Stop it."
By the CHAIRIMAN:
To
Q. whom did you say " Stop it," and what was to be stopped ?-A. I said to everybody to stop loaning that man so much money.

By Mr.

BRADFOIID:

Q. Give ius the history of the thing.-A. IIe did not seem to be a main wlio should borrow
so much-I had known him from a boy aliost-but in some way, which I cannot exl)lain,
lie was permitted to borrow on security which I never thought was sufficient.
Q. Tell us what appeared to be wrong in that transaction.-A. Whether oie was connected
with

anybody who helped him or not I cannot say;

By Mr. RAINEY:
To
Q. whom used he to

lie used to come to the bank alone.

bank
speak when he came to the me.

tions ?-A. Always to the actuary; lie never came to

By

in reference to these negotia-

Mr. FARWELL:

Q. Which actuary, Eaton or Sticknoy ?-A. To Mr. Eaton while lie was actuary, and
after his death to Mr. Stickney. Sometimes he would go to tile cashier, and get an overdraft.
Q. To whom did you say " stop these loans ? "-A. I told the cashier one day not to cash
his draft, unless tlere was a balance to his credit equal to the draft.
Q. Who was the cashier ?-A. Mr, Wilson. I told him not to do that thing for anybody. I felt determined to stop all that thing, and I gave such orders, and so far as I had

authority, I tried to exercise it in the stoppage of loans to that loss of borrowers.

FREEDMAN'S

SAVINGS AND'TRUST COMPANY.

49

By Mr. BRADFORD:Did
Q.
you not know, or have good reason to believe, when Vandenburgh was getting
these loans, that it was a fraudulent contrivance by which he was doing it ?-A. No, sir; I
did not know it.
Q. Did you have any reason to believe it ?-A. No, I thought it was an over-go of his
ambition in business, and that he desired to get rich on borrowed money.
Q. Did you not then have an apprehension (before he had borrowed half of the loans)
that this money would be lost to the bank ?-A. I was afraid it would.
Q. What influence was brought to bear in his favor that enabled him to precure these
loans?-A. The actuary would always say, when we questioned him in the trustee meetings,
that he thought it was all right, that he had a sufficient amount of various securities, city
&c., to make him perfectly safe in doing what he did, and that Vandenburgh was going'
scrip,
to come to time very soon, and that we need not worry about it.
Q. You have said that he made over-drafts; did he have deposits there at all ?-A. Yes,
his whole business deposits were with us. His business at one time was very large.
By Mr. RIDDLE :
You
stated that you did not think these loans were procured through any fraudulent
Q.
contrivance.-A. I had no reason to think so.
Q. Then they were the result of favoritism ?-A. I would say that they were the result of
misplaced confidence.
By Mr. BRADFORD:
Do
Q. you not know that all the moneys that Vandenburgh ever deposited in the bank were
he had previously borrowed from the bank?-A. No, sir; he was in a large
moneys which
business, and had large amounts paid to him undoubtedly from contracts.
Q. Did he not borrow money and deposit it to his own account ?-A. He borrowed money
and deposited it, not drawing it at the time.
Q. Did not his deposits consist solely of money so borrowed ?-A. No, sir.
a loan he would
Q. Almost entirely ?-A. I cannot say; I know that when he made
the money and draw it out from time to time as he made ifse of it in his business.
depositAfter
he had so borrowed money and deposited it in the bank, did tile bank suffer
Q.
over-drafts?--A. The bank itself never suffered them; there were such things done.
By the CHAIRIMAN:
came to you, which induced you to forbid
Q. When a knowledge of that state of things of
a repetition of them, did you report any violation
your injunction to the board of trustees;
Wilson, the cashier, or to hold him accountaand, if so, was any step taken to removetheMr.
finance committee, the actuary, and I said that
ble?-A. I reported it to the organ of
must not be.
this-thing
Q. I ask you whether, when you, as president, or as one of the trustees of the bank, discovered that Wilson was permitting Vandenburgh to over-draw his account, and when you
cautioned him against it, and told him not to do it, you reported the fact that he still was
took occasion to hold him responsible for it.-A. I do not
doing it to theformal
proper board, and
that I made. I reported verbally that such things must not
recollect-any
report
be. I made no written report.
Q. Then you mean to be understood that after y'ou had discovered these improper dealbetween the cashier and Vandenburgh, you made it known to your coadjutors in the
ings
administration of the bank, and that although they had full knowledge of the fact, they
took no steps to remove Wilson, or to correct the evil of which you complained ?-A. They
did take steps to remove Wilson, as being somewhat loose in his cashiership, which stops
were ineffectual. We did it as carefully as we could. He was a colored man of good
a pure African, but we thought he was not quite the man for the place when he
standing,
could be persuaded to do such things, and we made efforts to put him in a different position, and did finally change him to being an out-door traveling agent, to help me il the
field among the branches; and the change was for things of the kind that I have now
stated.
Q. When was that change effected ?-A. I cannot give the date without referring to the
record.
By Mr. FRlos'r:
Q. Were you aware that there was any understanding between Stickney and Wilson to
run the bank contrary to the wishes of the trustees ?-A. No, sir; I did not intend to suggest anything of that sort. I think the actuary felt that there were defects in the adminlistration of tlhe bank, which defects we tried to correct by a change which it was very difficult to effect. The colored men seemed to think that they ought to be employed, and we
wanted to employ them so far as could be, and it became a very delicate matter when one
got in to set him aside. We had great trial on that subject.
By Mr. RAINEY :
Q. Did not Mr. Sticklney dictate very largely as to how things should be run in the bank ?4FB

FREEDMAN 'S SAVINGS AND TRUST COMPANY.

50

A. He fell very much into the practice of his uncle, who did act in that way. Mr. Eaton,
his uncle, did dictate very largely about every internal affair in the management of the
bank.
By Mr. IDDI)LE:
Q. Do ofyouthethink that he exercised undue influence on Wilson and Boston in the manbank?--A. I do not tlink he had influence enough to stp certain things.
agement
Mr.
FROST:
By
to say, by that, that Wilson and Boston were inclined to run the bank
Q. Do youofmean
so. There was a sort of feeling that
independent the actuary ?-A. itNo, sir; it was notone
can be. Each
was too independent at his own
a hank could be run easier than
desk.
By the CHAIRMAN :
I
Q. want you to tell the committee, without any evasion or concealment, whether, duryour administration as president, or your connection with the bank as trustee, tiere
ing
was to your mind and to your comprehension, a fair, faithful, and honest administration of
its funds '-A. I can answer in the language of Saturday last. Tlere was, I would not
say dishonest, but improper loaning to men who were not responsible; loaning upon
insufficient security; loaning on illegal security, such as city scrip and personal chattels;
and there was permitting employs, at the branches, to loan without the knowledge of the
trustees. The actuary gave them some such permission as that, They quoted him as the
authority for such loans. I do not think that the trustees ever stole any money. This
matter of Vandenburgh is one of the marked instances that I would range under insufficient
security.
Q. You seem to be very well acquainted with Vandenburgh from your boyhood up, Do
.whether there was any business connection in the street-paving business or
yPoukndw
other business between Vandenburgh and. Alexander R. Shepherd, at the time these loans
any
were being negotiated ?-A. I do not know that there was any business connection.
I .',rT'elllus of! anly other connection that there was between them.-A. I know that they
were acquaintances, and that Mr.- Shepherd was at the head of affairs here, while Mr. Vana larfxe contractor.
deinburghiw:ahs
Q. Contractorsrider him ?-A. Contractor of him; he contracted to do his work in the
city for pay.
.
$,!.Sy
i,- AIrr,
: Q.i Do yodi, mean-onpublic works or in building houses ?-A. I mean on public, works,
dre,'iere largeo'contracts given out at that time for pavement. They were
irnpavtttnogr:
(out byfthecity, .anthonties, and Vandenburgh or his company secured a large
number
given
of them. I am not able to say that Mr. Shepherd was personally interested in the results.
i
i j-» 6 > "ti;; 2t
'i. 0
,^h«1,tt;
ra W:her itMr.StivYk ty;therljary; does he live in this city ?-A. Yes, sir.
when he entered the service of the Freedman's
.i.j4i ;twP-',lP
I pQlPiqyr qpFpnlition
i yy appearance of any considerable amount of means.
t
~. ,,^j' a;
Q. What is his pecuniary condition now f-A. I do not know, but I presume that lie has
noqt. my Jg~.QPiutP
active, business, real-estate broker.
t.fl,jieisj.a ,wide-awake,
pQfprIap
i cannot tell.
TA,
hax.>ilgp.t
,-rgo
IIoptih;irfpiprJp
wa "olt a .li
gtI, j mvtyif yA.i4tstn this city, or has he not interest in them ·*Q.tltIb
belj
A;
imn:NfgiPd !4nMi[pieces of property ; how large that interest is,
*

"

BnklITA.rT

'

ivi

:,.

aJliteTy,
or'iiQ:.Jtjl.k
itvT:,e)ll,:i'$leqi!,
n:*iat:!..s.y,! h, , : ,,,,
e'
IIas mortgaged -A. No; I mean that
i sjfjowts
Ci,~V1$.W.,Fi
o t;,' think he is pretty largely interested
ppg-,o
hi.'.jo..t 9Mtjfl.ean.ti;91
91
,

.o.pjt,,'1f,,,tC
to something, or on which be
nriifi'
,;
ifq.a'gohP
T
.!ihfiapli
{PirtiYome
lose
may
everything, Was tle strinage
goes on, bUt I think that all these things will shrink
awvy fro:t4i hia they hay4doue from t i;re.stlofjpI
fti

At

r

By Mr. FARWELIL:
State the names of the colored officers of the bank, and the offices which they filled.Mr,- BQ<.;Qtn, j|8?,Xj-W-aw,,vS,
A,
assistant cashier. They are
office-in the principal
both colored. iBl.i i,<;rpgo
,okkl «,ia,t.iebback
pe
ws k
lXig iolr ,,yoUng m.an-~Uigtl;ly 9o19red.,
taller, Fleetwood, was colored.
Then there was a young
j;therpyipgqit.Ver,;ti!BitsQn
, tis -nXyau the pemiaymetnOfl th qtyilp}>qd,
Wpkis, also colored. All in the
nzithio.
frogt
;timq wre QolorfP,,fn(41. niupIr jnitlhihbackpffioe, (I mean in the principal
office.) A majority of the employs of .tlAe .,yhp {,;:c¢lrp wx colored. I will furnish thea
list of them to the committee. The cashiers in the branches were largely colored. Quite
number of tlese men were excellent writers and thoroughly accurate clerks, while some were
Q.

;\NW..JWjilan.:w.4 flaher;
- ¥Jokbpsf'
o~fi¢.O.;l,,
i..j
Hqtcaft a^
:wtie,~ce.iingyitlerT
.
qffi.oSatoal..

FREEDMAN S SAVINGS AND TRUST COMPANY.

51

not. We had some very fine colored cashiers at the branches, men who were perfectly conand we had also some fine fellows in the principal office.
petent,
Mr. RAINEY. I appreciate the question of Mr. Farewell, because it has been alleged that
influences were brought to bear to keep colored men in office, and it has also been said that
to some extent these colored men were incompetent. We will now be able to see whether
the losses of the bank were occasioned by their incompetency, or whether they were used as
by other men. It will have a relevancy to previous testimony which we have taken
dupes
in regard to this matter.

SEI.ECT COMMITTEE

ON

FREEDIMAN'S BANK,
D. C., IFebrluary 1I, 1876.

IOashint.(ton,

Committee met at 10 o'clock a. n. Present, Messrs. Douglas, Bradford, Riddle, Stengcr,
and Rainey.
J. W. ALVOnR recalled.
The WITNESS. In further answer to the question of Mr. Farwell in respect to the colored
officers of the bank, I desire to give the following names: In the branch or front office, here in
J.Wilson, cashier; T. S. Boston, receiving-teller; C. A. Fleetwood,
Washington,wereWilliam
D.
office; R. W. Tompkins,
Johnson, book-keeper in the principal
George
paying-teller;
W. F. Brunough, book-keeper in the branch; William E. Aubook-keeper in the branch;
gusta, book-keeper in the branch; A. F. Hill, book-keeper in the branch; C. H. Jones,
messenger. They were not, perhaps, all employed at the same moment, but they were all employed for a considerable time, and some of them are still in the employment of the commissioners. At Philadelphia were William Whipper, cashier; J. W. Purnell, book-keeper;
Joseph Carey, assistant book-keeper, and D.N. Hollinsworth, assistant book-keeper. At
Baltimore were H. H. Webb, acting cashier; W. H. Bishop, assistant cashier. At Alexandria, was Fields Cook, cashier; at Atlanta, Ga., W. G. Craig, book-keeper; at Charleston,
8. C., John HI. Butler, assistant cashier; at Natchez, J. M. Halwksworth, cashier; at Newbern, N. C., William Stewart, cashier. At New Orleans, C. J. Sauvinet, cashier; Eugene
8hawhill, book-keeper. At Raleigh, N. C., G. XV. Brodie, cashier; Hunter, book-keeper. At
Richmond, William C. Mitchell, assistant cashier. At Saint Louis, WillisAtN. Brant, cashier;
William P. Brooks, assistant cashier; S. P. Clamorgan, book-keeper.
Shreveport, Samuel Peters, cashier; at Vicksburgh, H. G. Williams, assistant cashier; at Wilmington, John
H. Smythe, cashier. There is also a colored book-keeper there, but I do not recollect his
name. At Columbia, S. C., T. Williamson, messenger. At Huntsville, L. Robinson, cashier;
H. A. Hunt, assistant cashier. At Louisville, Horace Morris, cashier; William H. Gibson,
assistant cashier. At Lynchburgli, N. H. Brunow, cashier; at Macon, Ga., T. N. t. Sellers,
cashier; at Memphis, F. Hunt, assistant cashier. At Nashville, John J. Carey, cashier;
Benjamin Shook, assistant cashier. At New York, John J. Zuille, cashier; Frank Stanley,

book-keeper; Henry Montgomery, messenger.
By Mr.

BRADFORD:

Question. Are there any other matters that can be stated by you within your knowledge, pointing out, or tending to show, corrupt, careless, fraudulent, or improvident admin-

istration of the affairs of the Freedman's Bank. -Answer. I do not recollect what I have
stated that would show that. There are matters which I suppose were improper, irregular,
and wrong. I do not like to use those strong terms, because I am not sitting in judgment
of the bank. I think that the Seneca Stone arrangement was a wrong one.
upon the officers?-A.
It was an outside affair, not known to us as it should have been, nor
Q. Wherein
did we know about it till the maturity of the loan.
Q. Is that all that you recollect on that subject ?-A. I think the drafts in Jacksonville,
which I tried to stop, ought never to have been permitted and ought to have been stopped
sooner.
were drafts of the receiver for
Q. Is that all ?-A. I will specify what they were.; They
lumber shipped to other parties,
which were paid in New York. That lumber I knew nothing
about, except that three cargoes were consigned to me, which I took care of and sold
at a good profit. But the receiver sent eight or ten cargoes to other ports, Philadelphhia,
New York, and to the West Indies, of which I knew nothing.
Q. Proceed with the list of these transactions.-A. These were the two main things.
Q. Did you see anything wrong in that Vandenburgh loan '?-A. Ionrepeat what I said.
that I think he obtained more money than he should have obtained the security given,
and the loans did not come sufficiently before the finance committee at the time they were
made.
about than you have already stated in the
Q. You know no more of the matters
levious part of your examination ?--A. inquired
I think that the overdrafts ought not to have been
iowed. I think there ought not to have been loans at any of the branches without perssio
81.

52

FREEDMAN'd SAVINGS AND

TRUST COMPANY.

Q. Was the general management of tle bank, after tile amendment of the charter, in the
interest of the depositors ?-A. We intended it to be. We meant to give the depositors
more interest for their money. It was probable that the Government securities.would b
cut down in their income and funded at a lower rate of interest, and we found that w
could not pay 5 per cent. from the income derived from those securities, when we got
from them only 3 or 4 per cent. Then other capitalists all through the South were paying
more for money, and our depositors said that they must have the ordinary interest for their
We told Congress these things, and Congress passed a bill permitting us to loan
money.
on real estate at double its value. 'There was a great clamor at that time for higher interest,

By the CIIAuI.RAN:

F Q. Were not John L. Kidwell, Henry 1). Cooke, Hallet Kilbourn, and William S. Ifunt
the principal parties in urging that amendment to the charter -A. I know of none
ington
who urged it particularly except Mr. Iuntington, who came personally to Congress, to the
lobby as you call it, and talked up the whole thing with individuals.
Q. Among the securities mentioned in the report of the commissioners, parts or subdi.
visions of the Barry farm are frequently mentioned. What was the Barry farm and where
was it located ?-A. The Barry firm is across the navy-yard bridge in Maryland. It was a
tlat 'vas purchased by parties on which to locate homeless freedlarge, wild tract ofit land
men, by dividing into acre-lots, and giving them thle option of purchasing it at what was
supposed to be a low price.
Q. Who were the purchasers of that tract; among whom were tle subdivisions into lots
made ?--A. 'Thelnal es of the men that I have seen in the ne:vspalerrs, &c.,
originally
as having purchased it, (I believe as trustees,) were General 0. O. Howard, S. C. Poieroy,
and J. L. Elvans.
Q. They made a joint-stock concern of it, and then used that stock to obtain loans from
the bank, did they not?--A. I do not think tlhy made a joint-stock concern of it. I do not
know where the money came from to pay for the tract. I know that they purchased it as
trustees for the purpose I have named.
Q. How came they to obtain money from tlhe bank on security thus held by them ns
trustees ? Was it not, and do you not know\ it to be, the fact that after the purchase they
borrowed fiom the Frcedman's Bank money in order to carry out their speculation ?-A.
I do not recollect any loan made to them.
Q. I ask you if you do not kllow that these parties bought the Barry farm ostensibly
as trustees for some benevolent object, and that they used tlat property to obtain money
from the bank ?-A. No, sir; I co not now recollect that they made any loan.
Q. Referring to page 11 of thle first report of the commissioners, I find a loan of $200 to
William Prater on that sort of property.-A. That loan, I presume, was made on the
security of the borrower's land which he purchased. That was the usual form of the
loans. The parties who had bought lots mortgaged them, or gave trust-deeds to the bank
for loans. You will find a large number of such loans from the purchasers of such lots. We
tried to help them along by little loans secured by the lots.
Q. Did these borrowers obtain their lots from the original purchasers, whom you denominate as trustees I If so, how did they pay for them ?-A. They paid for them by borrowing the money from the bank and by other methods.
Q. These borrowers-obtained tleir lots from the original purchasers?-A. Yes; paying
for them as they had the means ; and where they had not tile means, they borrowed of any
party they could, I suppose. 'They did borrow of the Freedman's Bank in a number of
cases,
Q. For what were the parties, 0. O. Howard and his coadjutors, who were the purchasers of the Barry F'arm, trustees ?-A. All that I know about it is that they were trustees for
moneys appropriated in some way for that purpose, tlhe history of which I cannot now

give. Was this
Q.
purchase by 01 0. H.oward, S. C. Pomeroy, and J. L. Elvans, and its sub.
division into lots and sale to freedmen, a mere speculation of their own ?-A. I think
sequent
not. I think that if they received more than they paid for it, such additions were expended
in making improvements ; building roads, bridges, & c. They laid out tlle whole place in
lots, opened streets through it, built bridges, &c.

By Mr. STENGER:
Q. Were not some of those lots forfeited by purchasers ?-A. I think they were. In quite
a number of cases they could nlot make payment.
Q. And the money which they had paid in was retained by the trustees, was it not ?A. I cannot tell. The trustees had a superintendent, who managed affairs there.
Q. And that superintendent was the brother of 0. O. IHoward ?-A. Yes.
By the CliAIIMANA :
Irobert I. Fleming figures very largely as a borrower, and generally withQ. I find tlatand
lie is accepted as indorser on other people's notes. Iow did he happen
out collateral;
credit at
I do not know.
·

to

acquire such

the bank ?-A.

FREEDMAN S SAViNGS AND TRUST COMPANY.

53.

Q. During the whole time that he was drawing money out of the bank without security
any sort, and was being accepted by the bank as indorser for others who gave no other
do you mean to say that, although you were president of the bank, these transacsecurity,
tions never attracted your attention nor came under' your observation ?-A. Not in detail.
I merely knew that lie was borrowing largely, and I cautioned the actuary on the subject
.as in other cases.
Q. Do you know how or through what influence R. I. Fleming was enabled to obtain so
large an amount of the funds of the bank ?-A. No, sir; I do not.
of

Q. Do you not know that he was a contractor on the Freedman's Bank build ng, and that
he purchased largely of the materials therefore from the Seneca Stone Compny ?-A. I know
that lie was a contractor, but I do not know that he purchased from the Seneca Stone Couipany. Is not the
front of that large building constructed of Seneca stone ?-A. Yes, but there
Q.
were separate contracts for the woodwork and for the stone-work of the building.
Q. Which was Fleming contractor for !-A. For the wood-work. le was i carpenter
simply.Did he
for the joiners' work ?--A. He took the contract for the
Q.
onlyandtakeforthethecontract
brick-work if I recollect, and the Seneca-stone work was concarpenter-work,
tracted for with a firm named McGowau & Co.
Q. Do you know of any connection of a business character between Robert I. Fleming
and McGowan & Co., or between McGowan & Co. and Robert I. Fleming, or either of
them, and any parties interested in the Seneca Stone Company ?-A. No, sir; I do not. McGowan & Co. bought the stone of the Seneca Stone Company. I always understood that
the contractors acted independently of each other.
Q. Do you know of their having any business connection with anybody in the Seneca
Stone Company f-A. Only ts McGowan & Co. bought the-stone of the Seneca Stone
but if you mean partnership I do not know.
Company,
Robert I. Fleming
Q. Do you know of any partnership or business connection between
and any trustee, officer, or agent of the Freedman's Bank I-A. No, sir.
Q. All that you can say is that you are unable to account for the very large loans allowed
to Fleming without security of any sort ?-A. Yes.
By Mr. BRADFORD:
were president of the Maryland Freestone Mining
Q. You stated the other day that you
and Manufacturing Company ?-A. I did.
Q, That
company is commonly known as the Seneca Stone Compal y I-A. Yes.
Q. When did your connection with this company begin ?-A. I have not the precise date,
but it is about two years ago the coming May or June.
Q. Your connection with that concern began soon after your connection with the Freedman's Bank was severed '-A. Almost immediately. The arrangement was that I should
get that money back, if it were possible to so get control of the quarry as to do so.
try to With
whom was that arrangement made --A. With both companies.
Q.
Q. Then you went into the presidency of the Seneca Stone Company on a common unbetween the Freedman's Bank and that company ?-A. Yes.
derstanding
Q. In order to enable you to become president you had to be a stockholder in that company ?-A. Yes.
Q. They then gave you so many shares of stock ?-A. They gave me ten shares. I took
the stock and put it among my papers as a mere formality.
Q. Is this the stock-book of the company ? (Handing a book to witne3s.)-A. It was
given me by the secretary as being the stock-book.
By Mr. RIDDLE:
Q. From whom did you get your shares ?-A. From the Surgeon-General.
Q. -e was a stockholder himself in the Seneca Stone Company I-A. Yes..
By Mr. BRADFORD:
Q. Did he hold any office in the company ?-A. No, sir.
Q. Was Ger oral Grant, President of the United States, a stockholder in the Seneca Stone
Company ?-A. I found his name down on the list of stockholders when I entered the company.
Q. You do not know how they acquired their stock; whether they paid for it or not ?-A.
Doctor Barnes told me that he paid cash for his.
Q. At what rate?-A. Par.
Q. You do not know how the others acquired their stock --A. I think that Mr. Wills told
me that he paid for his stock.
Q. Are you managing the affairs of the company now, and have you been since your inof president ?-A. So far as I can manage them by working the
cumbency of theto officestone
quarry, trying get
out, selling it, and if possible getting profits.
Q. Doesn't the Seneca Stone Company owe anything to anybody else besides the Freedman's Bank ?-A. Yes.
Q. How will its assets compare with iti liabilities now ?-A. It depends upon the appraisal
of its property. The company has an immense property.

5t;4

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. Put it for what it would sell for in open market now, in block ?-A. The company could
not get for it at present what would meet its liabilities, the liabilities being, I suppose, over

$300,000.

Q. Do you think that its property would sell for over $20,000, if it was put up now at
auction?-A. I think it would.
Q. What would it sell for to-day, if put up in the open market, to the highest bidder for
cash?-A. I cannot tell.
Q. Give us the best opinion that you can form about it. Supposing it was sold to-day at
a judicial sale, coerced by any of the creditors of the concern, what would it bring in cash 1
-A. I cannot tell what it would bring. I have an opinion as to what it is worth in cash.
Q. What is your opinion as to what it would bring ?-A. I do not know.
Q. Have you any opinion on that subject ?-A. No, sir; I have not.
Q. Is it your opinion that it would sell for ovcr $25,000, cash ?'-A. Yes, I think it would
sell for a good deal more than that.
Q. Thirty thousand dollars ?-A. Yes.
Q. Fifty thousand dollars ?-A. Yes.
Q. Seventy-five thousand dollars '?-A. I should think so; the bonds are now in market
at i price to indicate about that value.
Q. I am talking about the property which the company owns, not about its debts. What
isits cash market value ? Would you not say that $75,000 would be as much as it would
sell for in open market, for cash, to the highest bidder ?--A. It may be.
Q. Is not that your opinion, that that is the highest cash value of the property now ?-A.
No, sir; I do not think it is the cash value of the property. I think the property is worth
$250,000.
Q. I mean what it would sell for in market, about ?-A. It would not sell for its value.
Q. Would it sell for a cent over $75,000 ?-A. Perhaps it would not.
Q. Is it not most likely that it would not ?-A. I have nothing to judge from. I do not
know who are in the field as the purchasers of such property. I think that stone men all
over the country have their eyes upon that'valuable property.
Q. What are the second-mortgage bonds of the company worth ?-A. They have no
market value at present.
Q. Are they not the bonds which the Freedman's Bank holds as collateral for its loan ?A. Yes, sir.
Q. And you say that they have no market value?-A. They have no market value.
Q. By what right, then, can you subordinate the rights of other creditors to the claims of
the Freedman's Baik under this arrangement which you have spoken of between the bank
and the company ?-A. The arrangement gives special preference to the bank claims.
Q. Was it competent for the company to do such a thing, and do you not know that it
could not defeat the prior lien of the first mortgage by such an arrangement ?-A. I suppose
it could not. I suppose the first mortgage had the first claim, but the owners of the firstbonds fell into the arrangement, and said that if we would pay them so and so
mortgage
they would agree to it, seeming desirous to have the bank's claim satisfied.
By the CHAIRMAN:
Q. Wllen the bank directed the debt due to it from the Seneca Stone Company to be collected, atd when it was arranged by a substitution of the note of John 0. Evans and Hallet Kilbourn for $50,000, why was that note, and all the valid and good securities by
which it was sustained, surrendered to the parties, leaving nothing in the hands of the
bank but $75,000 of second-mortgage bonds of the Seneca Stone Company to insure the
payment of this claim ?-A. I could never see any reason for surrendering them, and I
opposed it with all my might for months and months.
By Mr. BRADFORD:
That
was done contrary to your advice and against your protest ?-A. Yes; not a
Q.
written protest, but a running debate, of four weeks at least, with the trustees.
By the CHAIRMAN:
and
Q. Did you, after that transaction, continue to retain your relations with the bank conwith the parties who carried out that arrangement? If so, state how you could do it
scientiously without making an exposure.-A. I left the bank just about that time. At
the end of the meeting in March, Mr. Douglass was put in and I left. When I found that
they would fall back on these second-mortgage bonds of the Seneca Stone Company, I saw
no other -way but to try to get possession of the quarry, as I did, and work at it as I did,
and failed.
Q. Did you, at any time, enter such a protest against that transaction between the officers
of the bank and Kilbourn and Evans as to enlighten the depositors as to the manner in
which their affairs were being conducted, and thus enable them to take steps for their protection?-A. I think I did.
Q. In what manner?-A. Verbally, not in writing. I did not put it on the books. I
made what I think was such a protest that it ought to have alarmed trustees and depositors.
I

FREEDMAN'S
By Mr.

SAVINGS AND TRUST COMPANY.

RIDDLE:

Q. Did you cause any written cautions to be sent to then ?-A. No, sir.

By the CHAIRMAN:
Did
Q.
you take any steps, you being one of the originators of the bank, one of its prime
motors, and especially the guardian and friend of tie freedmen who were depositors, did you
take any steps by writing or publication of any sort to warn them of the manner in which
their money was being misapplied and misused ?-A. Not in writing. I went to work to
get it back, and thought that I could get it back by an arrangement between the companies.
By Mr. RIDDLE :
through the country so as to
Q.theDid you causeonor procure information to be disseminated
their guard ?-A. Only as I stated. The crash of Jay Cooke & Co.
depositors
put
turned us wrong side up. We thought the day before that we could go right through.
Although there were hard times and there had been some slight runs upon us, yet I had
no doubt myself but that we could have carried it right through, and I still believe that we
could, had it not been for that crash, which came like a thunderbolt all over this land, and I
everybody, as I believed then, and as I still believe, that we could have gone
suppose I told
right along but for that crash. We had assets sufficient to have tided over these losses.
By Mr. STrEN.GE :
Q. Was there such a company as the Building-Block Company ?-A. Yes, sir.
Q. For what was that incorporated ?-A. For the making of artificial brick and stone in
the District of Columbia.
Q. Who were the incorporators?-A. I do not recollect the incorporators ; the stock was
owned by the two Howards, myself, Eaton, Bliss, J. Kimball, Mr. Searle, and E. Whittlesey.
I took some stock after the thing started; Mr. Bliss was superintendent and took some stock.
Q. When was it organized ?-A. About eight years ago; I should say in 1867 or 1868.
Q. Was that before the Howard University was built ?-A. Yes, just before.
Q. Was the purpose, in forming that company, to furnish material for any of the Howard
University
buildings ?-A. Yes; it was intended to furnish a cheap and good material for
that purpose.
Q. Was it a stock company f-A. Yes.
Q. What was the par value of the shares '-A. I think that some six parties put in about

$12,000.
Q. Did General Howard remain a member of that company until after the Howard Uniwas built ?-A. He remained in it some time, but he afterward sold his stock to Mr.
versity
Bliss and Mr. Kimball.
Q."Did that company furnish any of the materials for the buildings ?-A. Yes; it furnished all of the artificial stone with which the building is constructed.
Q. Was that material used for other buildings except the university ?--A. My house is
built of the same brick.
Q. I mean any of the buildings that were put up under the superintendence of the Freedmen's Bureau or of the Freedman's Bankl.-A.. There were two industrial schoolhouses iu
Washington built of that material.
Q. Who made the contracts between the Howard University and this Building-Block
for furnishing the material ?-A. They were made, I suppose, by tile commisCompany
sioners of the bureau, General Howard, and the company ; 1 know they were.
Q. Were you not one of the trustees of the university at that time ?-A. I think I was
not at that time; I am not quite certain.
Q.. Were you president of the Freedman's Bank at that time ?-A. I was president or
vice-president.
Q. Was Mr. Eaton the actuary of the bank at that time ?-A. Yes, sir.
Q. Had lie any connection with the university il an official capacity ?-A. He became a
trustee of the university. He was not one of the original trustees, but he was a trustee for
a while. He seldom met with us,
Q. What became of that Building-Block Company--A. It is still in existence.

Q. Solvent or insolvent ?-A. Insolvent.
By the CHAIRMAN:
Who
were the contractors for the building of the Howard University and the other
Q.
buildings there-the buildings that were put up with the public funds and with the
public
lunds borrowed of the bank ?-A. There was a Mr. Harvey who put up the brick-work, I
remember.
By Mr. STENGER:
Was not this man Fleming one of tile coturactors?--A. No, sir; he had not come on
Q.
the stage at that time. He was a journeyman at that time, in the employment of somebody, but he worked, I remember, an General Howard's house. He was afterward contractor for a building, built of red brick, for the university. That was built ai numl)er of
years afterward.

5*6

FREEDMAN'S SAVINGS AND TRUST COMPANY.

By the CHAIRMAN:
Were
not the relations between you and General Howard of a most intimate and confiQ.
denltial character ?-A. We were intimate as neighbors and as friends.
Q. I see that General 0. W. Balloch figures as a large debtor to the Freedmen's Bank.
Here is a loan to Davis and Balloch of $2,000, and no collaterals. Can you tell us anything
about it ?-A. I never know of such a firm. I never knew that General Balloch was in
business connection.
any such
business with somebody ?-A. He is now in the bankQ. Did he not go into the banking
business. My impression is that General Balloch never borrowed any money from the
ing
Freedman's Bank on his own account. Ile was treasurer of the Freedman's Bureau and
chief disbursing-officer.
Q. I see on pyge 34 of the commissioners' report a loan of $2,917 to Johu A. Gray, treasurer, nothing paid, and with the endorsement of R. I. Fleming. What was Gray treasurer
of --A. I only know that there was a loan secured by a building which Gray occupied as
a restaurant; whether it was owned by a company or was private property I do not know.
Q. This paper does not show that the loan was made upon any property. It was obtained
on the endorsement of R. I. Fleming ?-A. Yes, but still there may be a trust-deed besides
the indorsed note. I think there was.
Q. Of what was he treasurer ?-A. I do not know. He was a colored man, and kept a
restaurant ih the city.
Q. I see large loans to Juan Boyle and Juan Boyle & Co. Who were they, and what
kind of security did they give l-A. I know nothing about that thing. Juan Boyle I know
as a Washington man, and a former broker in this city.
Q. Was he one of these brokers wlio Were admitted to the bank to negotiate loans ?-A. I
never knew that he was; he very likely may have been.
By Mr. BRADFORD:
Q. Do you know J. M. Kidwell ?-A. Yes.
Q. Do you know whether he is solvent or not?--A. I do not know.
Did lie pledge bonds of this Maryland Freestone Mining and Manufacturing Company
Q.
as collaterals for the loans he got from the Freedman's Bank ?-A. I understood so.
Q.'And he has not paid his loans up ?-A. They were first-mortgage bonds that he gave
as collaterals. 1 think they are still in the hands of the commissioners.
Q. Do you knlow who composed the firm of S. Roessle & Son ?-A. Mr. Roessle the elder
and the younger, as I have understood.
Q. I see that their loan was secured by chattel-mortgage on the furniture of the Arlington
Hotel. What has become of that furniture ?-A. It was there the last time I went through
the house, as I do occasionally.
Q. Are they allowed to use it now ?-A. I suppose they are. The furniture is renewed
when worn, and kept up at its original value.
know why that mortgage is not foreclosed ?-A. Mr. Roessle is paying the note
Q. Do you
to the arrangement made with the commissioners. lie is paying promptly, as I
according
have been told by the commissioners.
Q. Was that loan made in accordance witl the requirements of the charter of the bank ?A. No, sir.
Q. Why did you allow it ?-A. I had no power to prevent it
Q. Who allowed it?-A. The finance committee and the board of trustees.
By the CHAIRMAN:
Have
Q.
you spoken in your testimony of General B. F. Hawkes ?-A. No, sir.
Q. Who is lie ?-A. I do not recollect any such person.
Q. I see that he obtained a loan of $1,500 from the bank and has not paid it. Do you
know what security he furnished when lie borrowed that money --A. No, sir; I do not
recollect anything of that loan.
Q. Do you know Joseph B. Stewart, who borrowed $3,250 ?-A. I think I know who lie
is, but I did not know that lie had a loan.
By Mr. RAINEY:
I
Q, see several loans made here to H. T. White, treasurer; what was he treasurer of? )o
about him ?-A. No, sir.
you know
anything
he not treasurer of the First Congregational Church here ?-A. He was.
Q. Was
Q. 1 see that lie has got several loans from the bank on the bonds of that church ?- A.
Yes, I think lie did, as treasurer of the church, at one time.
Q. What is the market-value of those bonds ?-A. I believe they are paying 6 per cent.
interest; I do not know what their market-value is.
Q. I notice that neither of the loans made to him has been paid. Are those bonds usually
sold in the market at their par value ?-A. I do not know. I think they are 'held by the
church and parties, and that interest is regularly paid on them. I know that our pastor
often speaks of the bonded debt and wants us to clear it off. That must have been the treasurer of our church, Deacon White, as we always call him.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

57,

Q. You made reference the other day to Mr. Ketchum, one of the trustees of the Freedman's Bank i-A, Yes.
Q. Was lie also an attorney for the bank ?-A. No, sir; only in one especial case.
(. Can you inform the committee for what reason lie resigned his position as trustee ?A. I do not know. I understand that it was because lie was getting old and could not attend
the meetings of the trustees, and did not want to be responsible for what occurred when he
could not be present.
Q. Do you know that he ever had a dispute with the board of trustees in reference to certain loans which they were making against his protests ?-A. Ile took strong grounds that
we should not loan money on chattel-mortgages, and on property like the Northern Pacific
Railroad Company bonds, &c. He took very strong grounds on that point.
Q. And he was overruled by the majority of the board ?-A. No, sir; he continued to
make protest-lie and others-until we stopped that tiling.
Q. You mean to say, then, that although lie protested his protet did not avail anything
with the board of trustees -?-A. It did, ultimately. He got a vote passed that the Northern
Pacific Railroad indebtedness should be paid by redeeming its bonds.
Q. Was it ever paid up ?-A. It was provided for by this Seneca Stone arrangement
which was reported to us, not as cash, but as a valuable exchange of indebtedness.
Why did Mlr. J. J. Steivart resign 'i-A. He did not like the practices of the board.
Q.
(. Did he not oppose the course of the board generally t-A. He opposed very strongly,
with others, these irregularities.
Q. Can you point to anything in the rules or regulations of the bank under which the
actuary could give authority to the branches to make loans ?-A. No, sir; the rules of tlhe
bank were that the finance committee and the actuary alone should make loans.
Q. Did the cashier at the brunclh bank in Washington make any loans!-A. I donot
think lie made any direct loans.
Q. Did he make any indirect loans, to your knowledge 1-A. I think he allowed, sometimes, over-drafts.
Q. Did your inspector, Mr. Sperry, make any loans'?-A. I do not know ; not as an inspector,Butcertainly.
Q. as an officer of the bank ?-A. lie was sometimes put in charge of branches, but
whether lie made any loans during the holding such office, I do not know. I cannot call
any to mind.'
Q. Can you give us any approximation as to the value of the safes that belong to the
Freedman's Bank at this time I-A. No, sir; I understand that there are still some on' hand.
Q. Were they generally purchased by the order of The board of trustees, or by a special
ageut ?-A. They wele purchased by the actuary, as we needed them, from time to time,
and were all in use when the bank was in full course.
Q. Did the Howard University ever pay the Building-Block Company for the material
useed in building the university?-A. Yes.
Q. The university does not owe anything for it?-A. No, sir.
BANK,
Washington, February 1 1876.
Present, Messrs. Douglas, Bradford, Frost, Riddle,

SELECT COMMITTEE ON FREEDMAN'S

The committee met at 10 o'clock a. m.

Ilooker, and Rainey.
CI.\AlES W. HAYDEN sworn and examined.
By the CHAIRMAN:
Question. Have you ever had any official connection with the Freedman's Savings and
Trust Company ?-A. Answer. None whatever.
Q. Have you at any time between May 6, 1870, and June, 1874, had any business relations or connection with any of the officers,
trustees, or agents of the Freedman's Bank 1A. I think that personally I had discount once at the Freedman's
Bank, and as treasurer
of the Maryland Freestone Mining and Manufacturing Company. There were quite a number
of transactions between the Seneca Stone Company, as it was called, and the Frcedman's.
Bank.
Q. What I mean is, was there any partnership or community of interest between you and
to t
any of the trustees, officers, or agents of the Freedmen's Bank during the time referred
-A, None whatever.
Q. Can you state at what times and in what amounts you obtained accommodation at the
bank personally
?-A. I once, I think, borrowed $1,000 of the bank on collateral, I
what. It was paid in the course of time. At another time my note was put in the forget.
bank
for $3,500, witl real-estate notes as collateral, which has also been paid. These are tile only.
transactions that I remember.

58

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q, At what time and in what amounts did you negotiateloans with the Freedman's Ba]nk
of what is commonly called the Seneca Stone Company ?-A. I will be obliged
to refer to the books of that company for those loans; they are all a matter of record. I can
state them as far as I recollect.
Q. State them as nearly as you can recollect.-A. I think they are in the report of the
commissioners of the Freedman's Bank, and also in the minutes of the Seneca Stone Com.
of $1,500 made by J. W.
page 97, a29,loan1872,
pany. I find in the Report of the Commissioners, onNovember
and due January 31,
should he C. W. Hayden,) presented
(it
Hayden,
1873-" note Seneca Stone Company." As treasurer of the company, I negotiated that loan
with the Freedman's Bank.
Q. On what collateral ?-A. I do not see any collateral mentioned; I do not think there
was any. I can state generally that previous thereto there were negotiations of loans by
the Freedman's Bank to the Seneca Stone Company, based on second-mortgage bonds as collateral security. One notervas for $10,000; another, I think, for $5,000: and another, I think,
for $12,000 or $13,000. There was also a sale of second-mortgage bonds of the Seneca Stone
Company to the Freedman's Bank, $20,000 of bonds at 10 per cent. off; all these notes or
discounts were condensed (and these $20,000 of bonds also) into a $50,000 note of the
Seneca Stone Company, with $75,000 of the second'mortgage bonds as collateral security.
'That note was dated December 30, 18711. The Freedman's Bank also, after that time, got the
note of the company for $12,000 with $20,000 ofsecond mortgage notes as collateral security,
making the debt of the company to the Freedman's Bank $62,000, for which $95,000 in
as treasurer

bonds were given as collateral. The $50,000 note was dated December 30t
second-mortgage
1871, I do not know the date of the other; I cannot tell whether it was subsequent to that
·or not.
Q. In the order of events, as appears by the entries on the book of records of the Seneca
Stone Company, the $12,000 transaction was subsequent to the $50,000 note -A. Yes; but
the precise date I do not know; it appears here on the book after the other transaction.
Q. Were the loans to which you have referred obtained from the bank by you as agent of
the Seneca Stone Company ?-A. No, sir.
Mr. William S. Huntington.
By whom ?-A. The negotiations were made through National
Bank, of which Henry D.
Q. William S. Huntington was cashier of the First
*Cooke was president, and he was also a stockholder in the Seneca Stone Company, and one
of the finance committee of the Freedman's Bank, was he not ?-A. He was cashier of the.
First National Bank and a stockholder in the Seneca Stone Company, but what relation
he had 'with the Freedman's
I do not know.

Bank,
Q. Do you not know that he had some connection with it?-A. I heard so, but I never
knew the fact.
Q. At what time and under what circumstances were the second-mortgage bonds of the
Seneca Stone Company issued ?-A. I think they must have been issued some time in 1870.
They were issued for the purpose of making money to make additional improvements on the
of the company.
property
Q. Were they put upon the market ?-A. I think'that some of them were offered on the
market. The Ireedman's Bank purchased $20,000 of them. They were put on the market
as far as I know. 1 remember that at that time efforts were made to sell them, but not successfully.
Q. You mean to say, then, that after the issue of these bonds, and when they proved unsalable in the market, William S. Huntington, for and on behalf of the Seneca Stone Com.
pany, succeeded in putting off $95,000 of them on the Freedman's Bank at 90 cents on the
dollar; do I understand you correctly ?--No, sir; I did not say so.
Q. You say that they were unsalable, and that you could not sell them.-A. I did not
say so. I said that the Freedman's Bank purchased $20,000 of them at 10 per cent. dis.count.
Q. You stated that they were on the market and that they did not sell ?-A. They did not
sell.
Q. .How did the Freedman's Bank come to purchase $20,000 of them ?-A. I do not
know.
?-A. Mr. Huntington, I think.
Q. Do you know who negotiated the sale
Then Mr. Huntington, acting for the Seneca Stone Company, raised $18.000 by a sale
Q.transfer
to the Freedmnan's Bank of $20,000 of second-mortgage bonds of the Seneca
.and
Stone Company; am I correct about that ?-A. Yes, sir.
Q. Was that loan obtained for the Seneca Stone Company or for William S. Huntington
?-A. For the company.
individually
Q. Then am I not correct in saying that of the whole amount of second-mortgage bonds
-of the Seneca Stone Company, $95,000 (they being unsalable in the general market) were
the Freedman's Bank at 90 cents on the dollar ?-A. No, sir.
put onThen
lot us hear what it is.-A. The $;0,000 of bonds sold to the Freedman's Bank
Q.
were afterward re-purchased by the Seneca Stone Company and were included in the $50,000
,note. All the notes then in the hands of the Freedmau's Bank were consolidated in the one
note for $50,000.
Q. For which the bank took $75,000 in second-mortgage bonds as security?--A. For

FREEDMAN'S SAVINGS AND TRUST COMPANY.

59

which the bank took as collateral $75.000 of second-mortgage bonds. There wvas another
note of the company in the bank for $12,000, for which the company deposited $20,000 of
these bonds as collateral.
Q. What became of the balance of the issue of the second-mortgage bonds, and wl'at was
the amount thereof ?-A. Five thousand dollars of bonds was the balance, and they were
sold.
Q. To whom, and at what price ?-A. They were sold to Ienry D. Cooke, I think, at
He took then at par for the money.
par. Was
Q.
Henry D. Cooke a stockholder in the Seneca Stone Company ?-A. Yes.
Q. Was le not also a member of the finance committee of the Freedman's Bank ?--A. I
understand that lie was.
Q. Do you know how He1nry D. Cooke paid for the $5,000 of second.mortgage bonds?A. In cash.
Q. Are you certain of that ?-A. Yes.
Q. Give us the date of that transaction -A, I cannot without the books.
Q. Was it before or after the other transaction to which you have referred ?-A. I do not
recollect.
Q. If Henry D. Cooke, with his supposed financiering ability and astuteness, was wilto pay and did pay par in cash for these second-mortgage bonds, how was it that they
ling
were unsalable in the general market, -A. I really do not know. I had nothing to do
with the sale of bonds.
Q. Have you any reason to believe or to know that, occupying the double relation which
he did to the Seneca Stone Company and the Freedman's Bank, that was a sham transaction, in order to give to the second-mortgage bonds an appearance of value which they
did not possess '--A. No, sir; it was a bona-fide transaction.
By Mr. FROST:
Q. What position did you hold in the Seneca Stone Company ? -A. I have been treasurer and secretary of the company.
By the CHAIRMAN:
Q. What disposition did Mr. Cooke afterward make of those bonds ?-A. I think they
sold them.
Q. Do you know to whom and at what price ?-A. No, sir; I do not.
Q. The loans to which you have referred as having been made by the bank to the Seneca
Stone Company were made through Mr. Huntington, if I understood you?-A. All the loans
which the company obtained from the bank were made through Mr. Huntington.
Q. I understood you to say just now that you had made two individual loans which you
mentioned, one of which was for $3,500, based upon real-estate notes and which have since
been paid; do I quote you correctly ?-A. Yes, sir.
Q. I see on page 33 of the commissioners' report this entry: "September 22, 1871, C. W.
amount of loan $3,500; amount paid $2,786.44; 'total amount due $905.84, payHayden,
able on demand; note of Palmer and Green for $1,200." Explain that transaction.-A.
The amount carried out here as due on the note is $905.84, with Palmer and Green's note for
$1,200 as collateral. In the first place there were four notes deposited. Three of them were
paid which do not appear in this report, and at this time $905.81 is supposed to be due, to
which there was still in the hands of the bank a note of Palmer and Green's for $1,200.
pay
Since that time that note of Palmer and Green's has been sold, and the profits credited to my
note, so that I am clear of all debt to the bank in any way whatever.
Q. Who were Palmer and Green, and what did their note sell for?---A. It was $1,000
note, (this report calls it $1,200, but I suppose that includes interest,) and it sold at auction
for $9, 0,
By Mr. FROST:
Q. Who sold it ?-A. The commissioners of the Freedman's Bank.
Q. And the balance of the debt you paid yourself ?-A. I paid the balance, $105. 84.
Q. Who were Palmer and Green ?--A. They were men living in Georgetown and carrya sort of liquor business.
ing onHas

the Freedman's Bank ever lost anything by the Seneca Stone Company; and,
Q.
if so, what is the amount of the loss ?-A. I do not know the amount. The property of the
is there subject to the debt.
company
Q. How much does the Seneca Stone Company now owe the Freedman's Bank ?-A. The
commissioners claim $75,000, which is not correct, however. The Seneca Stone Company
owes $50,000, with interest from the date of the note, for which the bank has $75, 000 of sec-

ond-mortgage bonds as collateral.
By the CHAIRMAN :
Q. On page 35 of the commissioners' report I find this entry: "November 29, 1872, C.
W. Hayden, president, amount of loan $1,500; no collateral-due at the date of the report,
$1,742.50." Was that an individual loan I-A. No, sir.
Q. What were you president of at that time --A. Of the Seneca Stone Company.

60

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. Is that a loan in addition to the loans negotiated by Huntington in behalf of that company ?-A. Yes, sir.
Q. That makes the loans amount to $(63,500 1-A. Yes.
Q. With whom did you negotiate or from whom did you obtain that loan ?-A. From
Mr. Eaton, I believe.
Was that subsequent to the loans made to Huntington on behalf of the same corn
Q. ?-A.
I do not know. I did not know when the original note was given. It was repany
newed several times, and I suppose that this is the date of the last renewal, November 29,
1872.
Q. What I want to know is if this debt of $1,500 was created after the debts that were
created by Huntington ?-A. I think it was.
Q. What rate of interest did the Seneca Stone Company contract to pay ?-A. Ten per
cent.

now due of principal and interest by the Seneca Stone Com.
Q. What is about the amount
to the Freedman's Bank ?-A. From their own report, the Seneca Stone Company
pany
does not owe them anything except one note of $1,500.
By Mr. HOOKER:
do you say about it ?-A. I can,only say what the books say, that these notes
What
Q.
were given, and have never to my knowledge been paid.
By the CHAIRMAN:
I want to know what is about the amount, principal and interest, now due by the Seneca
Q.
Stone Company to the Frcedman's Bank.-A. I do not know.
Q. What was the original amount of debt contracted by the Seneca Stone Company with
the Freedman's Bank through your agency and that of Huntington ?--A. One note of $50,000,
dated December 30, 1871, and another note of $12,000. the date of which I cannot state, but
which I suppose was given about the same time.
By Mr. HOOKER:
or prior to ?-A. It appears to be entered on this book of records of tile
Q. Subsequent
Seneca Stone Company after the $50,000, but without any date, so I suppose it was after.
And then there was the note for $1,500, dated November 29, 1872.
that the $1,500 which you got individually ?-A. No, sir ; the company got it.
Q. Was which
Q. But
you procured for tihe company without collateral?~A. Yes.
Q. But that is not the original date of tile transaction ?-A. I rather tlink not. I think
that that was the last note given.

By Mr. FROST:
all these loans at 10 per cent. '?-A. I think they were.
Were
Q.
Q. Compound interest 1-A. No, sir; 10 per cent. per annum.
By the CHAIRMAN:
Q. Has any part of that debt been paid ?-A. Not to my knowledge.
Q. What would it amount to if unpaid at this time ?-A. (After calculation of interest.),
About $88,800.
Q. Has the Freedman's Bank any security for that debt other than the $95,000 of secondbonds to which you have referred i'-A. None that I know of.
mortgage
Q. What was the whole amount of second-mortgage bonds issued by the Seneca Stone
?-A. One hundred thousand dollars of bonds were issued in 1868, I think.
Company
Q. Are those bonds still outstanding and unredeemed by the company ?-A. They are all
and unredeemed.
outstanding
Q. Was not the issue of second-mortgage bonds coincident with an increase of stock to
the amount of :300,000 ?-A. At the same time that the order to issue the bonds was made,
the stockholders increased the capital stock of the company $300,000, and ordered the additional stock to be distributed among the stockholders, which was done.
Q. When this additional stock was created, was there any additional capital paid in?-A.
None whatever.
Q. Then, if I understand you, the Seneca Stone Company was doing business on a nominal capital stock of $800,000, and on bonds to the amount of $200,000 more. On what basis
was that monstrous fabric of credit erected ?-A. On the property at Seneca.
Q. What was it worth 7-A. That is a matter of opinion.
Q. What is your opinion about it? What was its value in the market when the company
was first organized, and what was its value when tile increased issue of stock was made 1-'
A. That is a very hard question to answer.
By Mir. HOOKER:
Q.
Having been so intimately connected with the company, have yeu not some idea of
the property ?--A. The stock was sold at the rate of 50 cents on the dollar, and that would
be tile only test of the value of the property.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

61

By the CHAIRMAN:
Q. I am asking you what thle value of the property was on which the stock was based ?A. It is a very difficult question to answer.
Q. That is what I want your judgment about-the value of tile property on which that

fabric of credit was built?-A. I do not know wlat its market value was.
By Mr. BIADFORD:
do you believe it would have sold for in the market for cash ?-A. I do not know.
What
Q.
By the CHAIRMAN:
Q. It las come out incidentally from you, that some of the stock of this company was
sold for 50 cents on the dollar ; was it not by a conversion into stock of first-mortgage bonds
held by the stockholders themselves ?-A. No, the company received full value for the firstbonds in cash at par.
mortgage
Q. Do you mean to swear that tile company received par in cash, for the whole of its firstmortgage bonds '?-A. I do say so, distinctly, that the Seneca Stone Company received par
value for its first-mortgage bonds in cash.
Q. Who bought those bonds ?-A. I should think that about $60,000 of them were purchased by John L. Kidwell, Henry D. Cooke, and Henry i-. Dodge.
Q. Were
they not all stockholders and originators of the Seneca Stone Company ?-A.
were.
They As
Q. secretary and treasurer of tlhe Seneca Stone Company, did you never take any
trouble to inform yourself ot the value of the real estate which constituted the principal
foundation of that company ?-A. It was considered valuable. At tile time the second-mortbonds were issued the property and improvements were valued at from three to five
gage
hundred thousand dollars; some said $300,000, some $100,000, and some as high as $500,000. That was ill 870.
Q. Do you not know that at the first organization of the company, in 1867, the real estate
was put in by the originators of tle company at $450,000, and that tlhe iiprovemetits and perincluding mules, wagons, implements of various sorts, tools, derricks, boats, and, in
sonalty, the
fact, all property, machines, and appliances used for quarrying, were put in at $50,000
more, thus making up tlhe round sumt of $500,000, tlhe original capital stock ?-A. The
records say so.
Q, Now, I ask you, secretary and treasurer as you were of that company, lave you no
more knowledge than what you have stated of what was tile assessed value of the real estate
which was thus valued at 1450,000. I want the assessed value, iu contradistinction of the
stockholders' valte.-A. The property was assessed before the company purchased it, and
the assessment has never been increased to this day. I do not know the assessment on the
real estate, but I know that tle taxes amount to about $750 a year._
Q. Do you know or not whether that real estate was ever assessed as the property of the
Maryland Freestone Mining and Manufacturing Company ?--,A. I do not know whether it
was ever changed into their name or not.
Q. The property purchased by tile company from Thomas Peters was all the real estate
that the company owned, was it not ?-A. Yes ; the tract contained about six hundred acres
of land,
Q. Was any part of that real estate called Montevideo ?-A. I do not know.
Q. \Was any part called Conclusion ?-A. I do not know.
Q. All of the real estate owned by the company was in Montgomery County, Maryland fA. Yes, sir.
Q. Iave you never seen the public assessments of that property ?-A. No, sir.
('he chairman here put in evidence a certified extract from the records of Montgomery
County, showing that the assessed value of all the real estate, with the improvements thereon,
owned by tile Maryland Freestone Mliing and Manufacturing Company, amounted to

$43,200 in 1868.)
By Mr. BRtADFnRD:
Q. Do you know the rate of assessment on real estate in the State of Maryland ?-A. No,
sir; I do not.
Q. Did the company take a deed from Thomas Peters ?-A. Thomas Peters sold tho
property to Kidwvel, Cooke, and Dodge.
Q. Did they take a deed1?-A. Yes.
Q. What was the
I
consideration recited in that deed ?-A.

do not know.

Q. Did you never hear Kidwell, Dodge, or Cooke say what it was -A. No; but I understood that they paid front $65,000 to $70,000 for it. I never knew the exact amount.
Q. Paid in what?-A. II cash, I prestmne.
Q. Do you not know that it was paid for in stock of the company ?-A. I know it was

not. I do not know

the fact, but I am satisfied that it was paid in cash.
the
By CHAIRMAN:
Q. Was not the avowed object of issuing the first-mortgage bonds to raise tile money to
pay for improvements on the property before it was owned by the MIaryland Freestone

62

FREEDMANI S SAVINGS AND TRUST COMPANY.

Mining and Manufacturing Company 1 If so, state what those improvements were.--A. The
bonds were issued to raise money to build mills, to erect derricks, to purchase
first-mortgage tools,
and to work the quarry, and also to put up buildings-general improve.
boats, mules,
ments.
Q. Were not the second-mortgage bonds issued to raise money to supply the company with
an available working cash capital '-A. In part. The second-mortgage bonds were issued
tp raise money to procure additional facilities, additional improvements in tile way of buildings, to purchase additional boats and a variety of things, and to have a portion of it as cash
capital.
Q. What portion of it was reserved as cash capital ?-A. (Referring to the hook of records.)
Here is the exact thing. It was raised to do the following work: An addition to the new
mill, $'20,000; improvement of old mill, $5,000; two scows, and teams, $3,000; tenements for
laborers' families, $10,000; to pay a portion of the present indebtedness of the company,
$17,000; for additional work on the quarry and for a fund to use in the business, $37,000.
Q. Was not the whole of that amount thus raised for the purposes enumerated, except the
$5,000 paid by Henry D. Cooke, obtained from the Freedman's Bank ?-A. There was
$03,500 obtained from the Freedmon's Bank.
Q. Was not all the amount raised from the second mortgage obtained from the Freedman's
Bank ?-A. All that was raised on the second-mortgage bonds, with the exception of' the
$5,000 from Henry D. Cooke, was obtained from the Freedman's Bank.
Q. You leased the property of the company last year ?--A. Yes.
Q. What profit have you made on it ?-A. I do not know yet.
Q. What did you agree to pay for the lease of the property last year ?-A. One-half of the
net proceeds.
Q. And you say that, up to this time, you have not been able to ascertain what the proceeds amount to ?-A. No, sir.
Q. Is there any good investment in real estate that will not pay from 6 to 10 per cent.
rental ?-A. People generally expect to get 10 per cent, for their investments in real estate;
sometimes they do, and sometimes they do not.
Q. Would you have been willing, when you tool the lease of this property, to have stipulated to pay rental of 10 per cent. ?-A. No, sir.
Q. Would you have been willing to pay 6 per cent. --A. I would not have been willing to pay anything whatever.
Q. Was not the property leased to you because it had been found valueless 'or unprofitable
in the hands of the company ?-A. It was leased to me because the company could not
carry it on. Its credit was entirely gone. The property was placed in the hands of the
Freedman's Bapk in 1874, and through it in the hands of tile ex-president, Mr. Alvord,
who ruined the whole thing.
Q. When was Mr. Alvord made president of the Seneca Stone Company, and under what
circumstances, and for what object ?-A. lie became president in April, 187.1, for the purto secure the debt of the Freedman's Bank.
pose of endeavoring
Q. Was there not some arrangement between the original stockholders and Mr. Alvord for the purpose of getting him into the company ' If so, state what it was.
A. I do notknowv ofany.
Q. Do you not know that 10 shares of stock were given him as a donation, in order that
he might be qualified to become president I-A. I understood at the time that Ger: ral J. K.
Barnes gave him ten shares of stock to enable him to become president. The records of the
show that he transferred ten shares to Mr. Alvord.
company
. Was General J. K. Barnes connected in any way with the Freedman's Bank?-A.
Not that I am aware of.
By Mr. BRADFORD:
.Q. Who is running that concern now, the Freedman's Bank or tile company ?--A. No

one.

By the CHAIIMAN:
Q. The
original owners of all the property owned by the Seneca Stone Company were
D. Cooke, John L. Kidwell, and Henry H. Dodge ?-A. Yes.
HenryWhen
the shares of the joint stock company were distributed, how was it done, and
Q.
on what terms?-A. Here (referring to the book) is the order to issue the stock-1,663
shares to John L. Kidwell; 1,663 shares to Henry H. Dodge; 1,664 shares to Henry D.
Cooke; 5 shares to J. H. Dodge, and 5 shares to Thomas Anderson, making the whole 5,000.
Q. For what purpose were the 3,000 additional shares issued, and on what terms ?-A.
The 3,000 additional shares were issued by order of the stockholders, under date of January
6, 1870. They were issued to tlie then stockholders in proportion to the amount of stock
which they held.
Q. Who were the stockholders then ?-A. I have not got the full list of them here; but
here is a portion of them. The book containing the issue of tile stock is not here. That
would show who owned the shares at that time, and how many additional shares were
issued to each one; but at that time the stock was considerably scattered by transfers.
Q. I want to know on what terms the additional shares of stock were issued.-A. They

were issued

by order of the stockirlders themselves to themselves.

FREEDMAN'

SAVINGS AND TRUST COMPANY.

Q. Was there any transfer of stock made at any time from the original shareholders, Cooke,
Kidwell, Dodge, Dodge, and Anderson, to other parties; if so, when, by whom, to whom, and
on what terms ?-A. (Referring to the stock-book.) On the 22d of November, 1867, J. L. Kidwell, H. D. Cooke, and H. II. Dodge sold to B. B. French 200 shares. I was then the secrethe company and I kept this book.
tary ofDoes
the stub show what was paid for that stock ?-A. It does not.
Q.
Q. Why does it not ?-A. I do not know that the stubs of stock-books ever show it.
Q. Why, then, does the form on this stub have printed the word " received," and blank for
the amount --A. This stub is signed by William S. Huntington, who received the stock from
me to give to French. It is "received the above-described certificate."
Q. Why was this blank for the amount after the word "received" put on the stub if it was
not intended to indicate the amount paid for the stock I-A. I do not know. I did not get
book.
up thatDoes
not the printed stub itself show that it was intended to show what was paid for
Q.
the stock --A. I do not think it does. This book, I suppose, was got up for a company
where the stock was paid for by assessment, and where the parties subscribed for so much
stock. On issuing the stock to them, the stub would show how much money they paid, but
in this case it was a full-paid stock.
By Mr. HOOKER:
Q. That book would simply indicate the transfer of stock ?-A. It simply indicates the
transfer of stock.
(The book was exhibited, and at the foot of the stub showing the issue of stock, the following appears: "Amount paid on issuing,.$-- .")
By the CHAIRMAN:
Q. Is not the above form just like all the rest of the stubs in that'stock-book I -A. The
stock-book is the same throughout, I think.
Do you know what B. B. French paid for his stock ?-A. Only by hearsay.
Q. Who
is the next stockholder?-A. The next issue is 200 shares to U. S. Grant.
Q.
Q. Do you know what he paid for his stock ?-A. I do not, except by hearsay.
By Mr. HOOKER:
Q. What is there on that stub ?-A. The same as the other, " No. 12, 200 shares of stock
issued to U. S. Grant, 2'd November, 1i67. Received the above-described stock. W. S.

liHntington."

By Mr. RAINEY:
Did the same parties issue that stock to Mr. Grant that issued the stock to Mr.
Q.
Prench ?-A. Yes; the same parties.
Q. Who is the next?-A. F. D. Dent.
Q. The brother-in-law of the President ?-A. He is said to be; he is called the President's brother-in law.
Q. How many shares is that for, and what is the date ?-A. It is the same date and the
same amount, 200 shares.
Q. Who is the next ?-A. The next is William H. Seward; same date and same amount.
Q. Who is the next I-A. J. K. Barnes, Surgeon-General; the same amount and the same
date.
Q. Who is the next ?-A. The next is William S. Huntington; same date and same
amount.
same date and same amount; and
Q. Who is the next ?-A. The next is Caleb
the next is General Robert Williams; same dateCushing;
and same amount.
Q. Are there any others --A. On the 17th of January, 1868, there is a transfer of 200
shares to James C. Kennedy, and on the same date a transfer of 100 shares to E. B. Washburne. On the 17th of February, 1868, 200 shares to Joseph L. Savage. On the 2d of May,
Dobbins lives in Philadelphia.) On the 2d of May,
1868, 400 shares to R. J. Dobbins.
1868,200 shares to Henry G. Moore,(Mr
and on the 5th of May, 1868, 100 shares more to E. B.
Washburne.
Q. All these certificates are signed by Huntington, are they not ?-A. Not all of them.
(Q. Some are signed by Huntington and some by yourself ?-A. No, sir. There are none
signed
by me. All of the first issue were received by Huntington from me. I showed them
to him, and he gave me a receipt for them on the margin. That accounts for about the bulk
of the first issue. Then the certificates were broken up and re-issued to various parties.
Q. I understood you that these certificates of stock were issued by you, as the secretary of
the company, and receipted
of them were receipted for by Huntingfor.-A. Yes; a
ton, and a portion of them by other parties. portion
Q. Who were the other
?-A. All that were issued on that one date were receipted
for me by Huntington. parties
Q. What were Iluntington's relations to the company at that time ?-A. He owned some
of the stock.
Q. How does it happen that he receipts for other people's certificates ? Why did they not

64

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

receipt for themselves ?-A. I do not know. I think he happened to negotiate these matters,
and I suppose the fact is that most of these parties gave notes for their stock, and Hunting.
ton had negotiated the paper, I suppose, and helped them along in the finances.
By Mr. RAINEY:
Did
Q.
you ever see any of the notes that were given by these parties?- A. No, sir. I
understood that notes were given, but I do not know the fact.
By Mr. BRADFORD:
Huntington's
Q.
receipts appear for all the certificates issued to Grant, Cushing, Seward,
Washburne, Dent, French, and Williams ?-A. Yes; for al! the first of them.
By the CIIAIRMAN:
Do
Q. you know to whom any of these stock-notes were disposed of by Huntington, and
on what terms ?-A. I do not know. I never knew anything about the notes, what became
of them, or anything about them.
Q. Was not the firm of Jay Cooke & Company the transfer-agents for the stock of the
Seneca Stone Company ?-A. At one time it was.
Q. Were not Henry D. Cooke and William S. Huntington members of the firm of Jay
Cooke & Company ?--A. Huntington never was a member of it that I know of. Henry D.
Cooke was.
Q. Who constituted the firm of Jay Cooke & Company ?-A. I do not know the members
in full. Jay Cooke, Henry D. Cooke, William G. Moorhead, Mr. Fahnestock, and others. I
do not recollect them all. 'They had a good many partners from time to -ime.
Q. Were any dividends ever declared on the shares of the Seneca Stone Company ? If so,
what was the percentage thereof, and how were they paid ?-A. The stockholders declared
to themselves 600 per cent. of new stock as a dividend; so the record shows.
Q. Were there ever public means resorted to, to impress the public mind with the value
of this stock, by showing what dividends the company had declared ?-A. Not that I am
aware of.
That was on January 6. 1870.
Q. When was that dividend declared ?-A.terms
with the officers and agents, or some of
intimate personal
Q. Were you or not onBank
?-A. I was on intimate terms with Huntington aud Cooke;
them, of the Freedman's
that is all.
Q. Did you ever know Henry D. Cooke or William H. Huntington to extend a loan by
the First National Bank on any such security as the second-mortgage bonds of the Seneca
Stone Company ?-A. I do not know that they ever loaned any money on those bonds. I
was not familiar with the operations of the bank.
Q. You were time secretary and treasurer of the Seneca Stone Company. Did you ever
know that company to apply to the First National Bank for a loan on any such security ?A. I do not know of any application.
Q. With what agent or officer of the Freedman's Bank were the loans to the Seneca Stone
negotiated ?-A. I do not know.
Company
Q. Have you any reason to know or to believe that any parties connected as trustee, officer, or agent, with the Freedman's Bank, received any bonus or commission on loans made
to the Seneca Stone Company ?-A. I do not know of anything of that kind.
Q. Do you know any other fact or facts than such as you have already deposed to,
the Freedman's Bank, through its officers, made loans on grossly intending to 'show that
adequate security, or on no security at all ?-A. I do not.
By Mr. RAINEY:
You
were asked if you knew of the Seneca Stone Company attempting to make any
Q.
loan with the First National Bank, and you said that you did not. Can you toll the conm
mittee whether or not that company attempted to negotiate a loan with any bank except
the Freedmen's Bank ?-A. (After referring to the book of records.) The company borrowed,
on the 16th of November, 1872, of the German Savings Bank, $10,000, on the company's
note. There was no collateral with it, but simply the company's note, endorsed by, I think,
J. L. Kidwell, Henry ). Cooke, and James C. Kennedy. The Seneca Stone Company borrowed, also, of the First National Bank, on the 18th of November, 1872, $3,373.60.
was the security given ?-A. I do not think there was any security given, but
Q. What
the note of the company.
simplyWhat
does the book state on that subject ?-A. "Note, dated November 18, 1872,
Q.
First National Bank, $3,373.60."
Q. There'was no mention of security ?-A. No, sir; there had been a good many loans
made to the company by the First National Bank, and also by Jay Cooke & Comlpany. A
number of them were negotiated and paid in the usual course of business.
large Were
not these notes put in with good indorsers, and discounted in the usual way ?Q.
A. They were discounted in the usual way, sometimes with indorsors and sometimes without.
By Mr. HOOKER:
Q. But most generally with indorsers ?-A. Both these banks discounted the company's
notes a good many times without indorsers.

FREEDMAN'S SAVINGS AND

TRUST COMPANY.

65

By the CHAIRMAN:
Q. Did I understand you correctly to say that the Seneca Stone Company paid to the
First National Bank all the loans that it had obtained from that institution i-A. It did not.
It owes still quite a large amount.
Q. Who constituted the First National Bank ?-A. Henry D. Cooke was president and
William S. Huntington was cashier. I do not know who tile stockholders were.
Q. Was not a large majority of the stock owned by Henry D. Cooke, Jay Cooke, and
William S. Huntington ?-A. I only know from hearsay that Jay C.ooke held tile largest
amount of stock. Huntington held only a small amount; I think twenty-five shares. Iow
much Henry D. Cooke owned I never knew.
Q. I understand you to say now that the Seneca Stone Company negotiated numerous
loans with the German Savings Bank, the First National Bank, and Jay Cooke & Co.
Have these loans, as a general thing, been re-imbursed to the banks or secured to their
satisfaction ?-A. All but those of the First National Bank and Jay Cooke & Co.
Q. What amount remains unpaid to them and unsecured 1-A. I do not know exactly;
but I think that the Seneca Stolle Company owes to the First National Bank three or four
thousand dollars, and owes to Jay'Cootke & Company from three to five thousand dollars.
Q. In other words, Henry D. Cooke, stockholder to a very large amount in the Seneca
Stone Company, owes to himself, as partner and stockholder in the First National Bank,
and as partner in the firm of Jay Cooke & Co., the sums of money to which you refer. Is
that the state of the case ?-A. That is a legal proposition which I am not able to answer.
Q. Was Jay Cooke a stockholder in the Seneca Stone Company ?-A. No, sir.
Q. Were any of the other members of that firm except Henry D. Cooke stockholders in
the Seneca Stone Company ?-A. No other one except Henry D. Cooke.
SELECT COMMITTEE
Committee met at 10 o'clockla. m.

Stenger.

ON

FREEDMAN'S BANK,

IWashiiglton, D. C., F(bruary 15, 1876.
Present, Messrs. Douglas, Bradford, Riddle, and

J. W. ALVORD recalled.
By the CnIAIRMNAN:
Question. You have heretofore testified that the trustees of tle Howard University purchased the farm, on which the university is located, from one John Smith. Did the trustees at any time before or after that purchase, acquire other real estate; if so from whom
and where is tihe same located 1-Answer. The trustees acquired title to a tract called the
Miller property, which is the present Le i)roit Park, lying south of and adjacent to the Smith
farm. I cannot tell the time at which it was acquired. It was an arrangement made
General Howard on behalf of the university, by which the trustees came into possession by
of
it. The details I cannot give you.
Q. By what authority and for what consideration was the Miller farm, now known as
Le Droit Park, afterward conveyed to Barber and Langdon ?--A. They bought it, as I understood, from the trustees of t.he university. I should like to add herethat, being superintedoent of twenty-four branches and of three thousand schools at that time,
all over the
country, I wasI in the southern country a quite considerable part of all these years, and
could not be cognizant of in Washington.
many Was
thingsthe acquisition
of the Miller farm by the university before or after the time of
Q.
the loan obtained from the Freedman's Bank 1-A.
I should say it was before, if my memory
serves me.
Q. I understand from your deposition (you can correct me if I am mistaken) that you
were opposed to and expressed your disapprobation of many of the securities which were
were denied, by a resolution thereof, the
accepted by'the finance committee, and that
sent on field-work. Did not that field-work
privilege of voting in its sessions, and were you
consist of persuasive appeals, addressed to the freedmen in different parts of the country, to
their money in the bank ?-A. I want first to correct your
deposit
statement. I did
not say some of the things which you have just now expressed. opening
Q. State in what I am mistaken.-A. My exclusion from the finance committee was not
by any recorded vote; it was by a ruling
at the moment. When I inquired whether I
should vote at solne of the first meetings, they said no.
excluded after your objection to these securities ?-A. I want
Q. The point is, were
to say that it was not byyou
a recorded vote.
Q. I do not care whether it was by a recorded vote or not. I ask you whether it was after
you made opposition to these securities that you were excluded ?-A.
I should say that my
opposition to some of them was before, but to most of them was afterward.
Q. I want to know whether you were excluded from taking part in the proceedings of the
finance committee before or after you objected to some
of the securities '--A. I began to
5IF B

66

FREEDMAN'S SAVINGS AND TRUST COMPANY.

It ran along, however, for months and years after that. I
object before I was excluded.
to what was not legal in its nature. I thought we ought to keep
objection
always made
exactly to the charter.
that was not legal ?-A. Not a great amount. Occasionally, in the
Q. Did youof see much
loans, there would cono up a thing of that sort.
multiplicity
Q. Did you mean to say that after you had discovered that the managers of the Freed.
man's Bank were not proceeding legally, and were loaning out its funds on improper securities, you still endeavored to persuade the freedmen that the bank was a safe depository for
their money ?-A. My main efforts were while we were investing in Government bonds.
For years I did that. I made very strong statements then, much stronger than afterward. I
went among the branches much more during that period than I did afterward. I thought
that we could pay 100 cents on the dollar, and I have stated that we could if
up to thehadlastbeen
different in the business world, and in the management which we were
things
subjected to by the law of Congress. I do not know that I ought to find fault with that,
but I think it was a very awkward law indeed, either to go on with or to stop with; and
tlat there has been an immense sacrifice under the law necessarily, which might have been
avoided.
-not, after your exclusion from participation in the proceedings of the finance
Q. Did you
committee, still endeavor to induce the freedmen to trust their funds to the bank ?-A. I was
not excluded from tile finance committee. I could always remain, but not vote. I very
often did meet with the finance committee, perhaps always when in town, usually; certainly I sat as chairman, but I had no-vote nor veto. I sat and took the motions, and expressedDidmy views.
Q.
you not, after discovering the character of securities that were being taken, inthose offered by the Seneca Stone Company, still endeavor to persuade the freedcluding
men to put their money in the bank ?-A. I think I did, more than I would do again, as I
now know the result. So far as I did it, however, I did it in the belief that we could go
through and pay up everything with interest. I would not again speak as strongly as I then
did. with my experience of tile results.
and under what circumstances, did you become president of the Seneca Stone
Q. When,
?-A. About two years since.
Company
Q. Was it before or after the last amendment to the charter ?-A. After.
Bank ?-A.
Q. Was it before or after you had resigned tihe presidency of the
in the discussion of bad
After. The arrangement was made when I was passing away,lFreedman's
it was suggested that I would use my endeavors and my influence and time in
loans, andtlose
loans-the Florida loan and the Seneca Stone loan. The Florida loan was
collecting
an irregular loan, made by the parties at Jacksonville, by cashing drafts improperly and in
on us.
makingYoudrafts
were one of the original getters-up of the Freedman's Bank, I believe ?-A. Yes,
Q.
I suppose so.
Q. While you were making your tours in thoe southern country, persuading the freedmen
to deposit their money in tile bank known as the Freedman's Savings and 'Irust Company,
did you ever think of telling talent that their funds were being squandered by the payment
of over-drafts, by loans on bad and insufficient security, and otherwise endangered by the
illegal proceedings of its managers in Washington ?-A. I should have done it, if I had
known it; but when I was in my work of establishing branches we invested in Government
bonds only.
Q. I am not talking about the times you established the branches.-A. I went mainly
during that period. Then I spoke very strongly of the security as on Government fiith in
bonds which we had investetedn. Afterward, I went freely and spoke with confidence, because
I did not know that these things were being done. It was after I came back to remain here
more permanently that 1 found out tlat there were these irregularities. Many of them came
were enacted.
out, to my mind, long after they did
Q. You admit, then, that you do your best to inspire confidence in the Freedman's
Bank ?-A. Yes.
Q. When you found out that it was no longer worthy of confidence did you take any
means to apprise tllem of the fact ?-A. I spoke to individual depositors on tile subject, and
told them that I could not indorse any longer (especially after I had left the bank) the secu.
of their funds. As you notice, some of the bad loans-thie very bad loans-took place
rity
after I left the bank ; as, for instance, Mr. Boyle's loan was made after I had left; therefore
about it.
I knew

nothing

you directed
Q. Mention wheretile individuals resided, and who they were, whose attention
Thl e ost promito the irregularities in the management to wliich you liave refirred.-A.'ln
nent case was one of tle servants in my own family I remember that I had a conversation
with her. I cannot recollect other distinct conversations. I know that what I stated to her
that I could not
I also stated to neighbors and various porsoins whonl I met. I told
be longer responsible, but that they must look to the remaiinng officers and to the new
president.
Witness desires of his own accord, and is permitted, to make tlie following
statement In
reference to what is known us tlhe available fund of the Fr.eedman's Butnk:

them

FREEDMAN'S

67

SAVINGS AND TRUST COMPANY.

The WITNESS. The available fund was one not exceeding one-third of the deposits of the

company which could be used by being placed onadeposit, or at interest, at the discretion of
the trustees. Its design was that we might have ready available fund for emergencies. It
was simply one-third of our deposits, not a find from any particular. source. From that
fund loans were made which would not be legal under the general charter that required Government bonds or real estate. We loaned from that fund at discretion. We did not take
real estate always, (perhaps seldom.) The trustees took securities which I suppose they
thought were good, but in practice many of those loans were on securities which I think were
not as good as real estate or Government bonds. It came to- be that it was a fund from which
miscellaneous loans were mado, and the actuary kept a certain sort of account which seemed to
cover the balance on hand not loaned on real estate, which he called the available fund. It
was an arrangement of his own, and when a loan came up that could not be made on realty,
he would say, there is an available fund not yet used, (that is, there is one-third of the total
which have not yet been consumed.) If there was a balance not thus loaned from
deposits
the one-third of the deposits, he called that the available fund. It was a distinction which
he made himself.

By Mr. BRADFORD:
Q. Do I understand you to vindicate the officers of the bank by showing that as far as the
available fund was concerned they had discretion to use it ?-A. I am not vindicating anybody;ItI am
just stating the fact that the available fund was more loosely used.
Q. was loaned out indiscriminately, and very often without security at all?-A. I
would not say indiscriminately, but at times more loosely than I could have wished.
By the CHAIRMAN:
Q. I see that in 1865 you went to South Carolina, with orders from General Howard
to have bounty-moneys paid over to the bank. To whom were those orders addressed, and
I do not recollect any such orders.
by whatchairman
authority ?-A.
hero referred the witness to a report made by himself to tne committee of
(Tihe
the Freedman's Savings and Trust Agency, at New York, in which it is stated that lie
had sailed for Hilton Head, S. C., with orders from General Howard to have bounty-moneys
paid over to the Freedman's Savings and Trust Company, and to investigate all the money
frauds practiced on freedmen. )
The WITNESS. I recollect such a tour and that the report was made to the agency committee.
Q. I want to know by what authority General Howard issued any such order, and to
whom it was addressed.-A. I do not think I had any such order. I think that it is a loose
phrase which ought not to have been used. I presume I made a report of that sort, but I do

not think I had orders from General Howard in regard to bounty-money. I know I had not,
for le could not give such orders. It was when our directors met in New York that that report was made. Our first business was to take soldiers' savings. It was for tllatobject that
we first started the bank during the war. There were such immense sums taken from them
that I thought we could do them a great benefit by having a legalized institution to save
their funds. There were two or three little military banks, but they were not reliable and
were not to be permanent. My first object in originating the bank was to secure soldiers'
savings. I think that that phrase ought to be that I was advised or instructed to secure
such moneys, in the bank, as I could for those poor fellows.
By Mr. BRADIFOD:
Q. Where are the books of the Seneca Stone Compainy ?-A. I have made efforts to get
those hooks, and I got an order from the directors, in a meeting which we had tile other day,
that the books should be placed in the hands of this committee. I had supposed that Mr.
Ilayden brought them. Mr. Jones is secretary of the company.
Q. Has he charge of tile books ?-A. Ie has charge of the papers and records of the
company.
Q. lHas lie charge of the cash-book?-A. That should be in the hands of the treasurer,

Mr. Risley.

Q. Do you know where that cash-book is ?~A. No, sir;

By Mr. S'rENGER:

only as I am told-

_

.

Q. Have you made inquiry of Mr. Jones, the secretary?-A. Yes; he says the last he
knew of it, it was at Mr.
Risley's, where the committee was auditing accounts, and it was

left there with the treasurer, very naturally, as the meeting was there.
By the CIIAIRMAN:
Q. Do you mean to say that, as president of the Seneca Sandstone Company, you have no
control over or access to the books of the company 1-A. I do say that I have never seen
any books, except the record-book and the stock-book.
Q. Do you mean to say that you have no control over the books of the company ?-A. I
suppose I ought to control them, but when I have asked for these books there has been
the absence of the treasurer, so that it was impossible for him to respond. I asked him once
by mail to send me the key to his private secretary,
but it did not come. Thinking that the

68

FREEDMAN'S SAVINGS AND TRUST COMPANY.

committee might want it, I called a meeting of the directors and got a resolution passed
directing the treasurer to place in the hands of tie president of the Seneca Sandstone Company tile treasurer's report of tile company.
By Mr. STENrER:
Q. Tho directors knew when they passed that resolution that Mr. Risley was in Colo.
rado --A. No, sir; they did not know where he was. Thle last I heard of him hle was in

Chicago.
Q. They knew that lie was absent from the city ?-A. Yes.
Q. You have mentioned some cases where tlh securities deposited with the Freedman's
Bank were shifted. Explain to us how it happens that $15,000 in United States bonds obtained from the Rost l- ome Colony, in Louisiana, have disappeared, and the real-estate
notes of George Mattingly been substituted therefor.-A. I inquired of the actuary, Mr.
about it, and lie said that there was a stress one day, and that he used these bonds
Stickney,
with the intention of only temporary use.
Q. Used them for his own purposes 1-A. No; for the purpose of paying depositors. It
Vwas during the two or three weeks of a rush on the bank. I spent my time in New York
trying to negotiate United States bonds, of which we had a large sum at the time, but I
could not get rid of the bonds at the price I wanted fast enough to meet our demands, and as
he told me subsequently, lie used these $lt),000, intending it only for tire moment, I told
him I was sorry that lie had done so, and lie said that he had replaced them, or was going
to, with security which he thought would be sufficient, and that security, I suppose, is the

Mattingly real-estate notes,
By the CHAIRMNAN:
Q. Can you explain how it happened that George Mattingly came to the rescue of Mr. Stick.
hey, and
put in his notes ?-A. No, sir; I cannot.
Q. Have you any knowledge of the uses to wlicl that loan Mr. Smith has referred to were
applied,
except what Mr. Stickney told you ?-A. No, sir.
Q. When did the run on the bank commence?-A. The great run commenced on the
,morning after the failure of Jay Cooke & Co., which was in 1873, I think.
Q. Was it not a fact that at the date of Jay Cooke & Co.'s failure, and for some time prior
thereto, all the investments in United States securities had been changed or shifted ?-A.
No, sir; the first thing I did after that failure was to take $2)00,000 of bonds in my side.
and jump into a train of cars for Wall street, and I certainly left $100,000 in United
pocket
States securities behind.
Q. Iad tlero not beeo, prior to tlmt time, a shift of the United States securities for real.
estate securities, as authorized by thie amended charter of 1870 i-A. No, sir. I was the
custodian, at that time, of this particular tliing, and I know that they were always in
the saif. I counted them every fJsw days. I would go an(l look into the safe, although I
was inot tile nominal custoilian, and would know that those bonds were present. There
were probably some $700,000 worth, on the morning wheli Jay Cooke & Co. filed, in Governmient bonds, and we made the best use we could oflthe1 Cmeting
in
the run, Iin New
-York, and Mr. Stickney here.
'Q. Ias there been any time within the last five years when Government bonds were
not bearing a handsome premiuni in the market '-A. No, sir; and they bore a premium
at that time. We sold
even
tor more than we
for them at first.

them,
then,
gave
By Mr. STEING ER:
Q. In regard to these irregularities in the way of securities, I notice that the names of
tthe persons present at the meetings of the trustees are given, but on tile adoption of the loans
the vote is not recorded; that is, the yeas and nays are not given. I wish to know from you
who they were who supported these irregular loans in that board, and who voted against
them, as far as your recollection goes t-A. I should say that Mr. Albert, of Baltimore,
vwas strong against them, and so were Mr. J. J. Stewart, Mr. Ketchum, of New York, and
Mr. C. D. Purvis. I would not say that they voted uniformly against them, but the genoral tone of a certain portion of our trustees was tllat of caution. Even these men would
sometimes misjudge, because, at that time, many of the things which afterward turned
out to be very bad all of us thought to be good.
Q. There was a color-linein that business, which was perceptible ?--A. The cautious
men among us were always cautious. The reckless men (1 mean tho enterprising nmen)
were always reckless.
Q. Let us hear, on the other side, who those reckless, enterprising men were?-A. I
to say men who did'not give their close attention to the discussion of securities; who
ought
would come in and vote, as I think, without sufficient study of the loan, and would vote the
loan, if it seemed to be the general impression,
Q. Who were they ?-A. I would not say that these men were reckless. Mr. L. R. Tuttle
was one of that class, and Mr. Brodhead, the Second U. S. Comptroller, was one of that
class. Both of them were very cautious men, but they gave us but little of their time.
came in to make a quorum, as we had to have a quorum. J wish to change the phrase
They
4"reckless men " into incautious men. The incaution came inattention.
of

FREEDMAN'S SAVINGS AND TRUST COMPANY.

69,

Q. Go on and give us some more of the names of these incautious men, if there were any
more.-A. I do not mean to say that these men were incautious. I mean to say that such
men as Mr. Tuttle and Mr. Brodhead were not with us sufficiently to judge. I do not recollect any others of that class.
Q. Well, then, we will have to have a third class. Was there not another class of
trustees who always championed these irregularities and supported them earnestly and
warmly; and, if so, who were they ?-A. Mr. Huntington, Mr. Cooke, and Mr. Clephane at
times; Mr. Huntington especially. I speak now of such loans as the Northern Pacific and
the Seneca Sandstone loans. Tlhre were a number of Seneca Sandstone loans.
Q, Do you know anything about Huntington procuring money one Saturday night from
the actuary until Monday morning, on the representation of Mr. Shepherd that lie would pay
it on Monday morning ?-A. I have heard that stated. I do not know it. I was at home
on Saturday nights.
Q. Before the board of trustees acted on these loans they were submitted to the finance
committee 1-A. Always.
Q. Of which committee you were chairman ,x officio ?-A. Yes; there was now and thena loan which came directly before tie board of trustees which the finance committee had,
not acted on, but that was the general rule.
Q. That finance committee was composed of five members ?-A. Yes; and it took three
to make a quorum.
Q. Were not William S. Huntington, Henry D. Cooke, and Lewis Clephane, who were
members of that finance committee, present, as a rule ?-A. Yes ; as a rule, they were.
Q. And did not they, as a rule, vote to sustain those loans which you considered irregular -A. Yes; they voted to sustain that class of loans, some of which I thought were
They made a great many good loans, of course. The great majority of loans.
irregular.
made at that time were good loans. A noted instance was the Seneca Stone loan, which'
was managed out of doors, and was a compact signed by Clephane, Huntigton, and Tuttie, that tile securities and note should be given up at the end of six months if not paid, and'
that the bank was to fall back on the $75,000 second-mortgage bonds of the Seneca Stone
that was an out-of-door arrangement, entirely unknown at the time to the finance
Company ; and
which never went on record. 'The first time that I knew anything about it
committee,
was a rumor that there was something wrong. I think Mr. Moses Kelly intimated it to
mo. The first real intimation that I lad of it was the approach of Mr. Stanton, attorney of
Messrs. Kilbourn and Evans, demanding of me that note and securities.- I said, " You
can have it if you will pay the amount." He said, "I have an agreement in my hand
here which requires you to surrender that note to me to-day." I looked at liim with aston-ishment, and said I could not surrender it, and should not. He handed me the paper, which
I read, and saw that it was what is printed here on page 56 of tile commissioners' re
port. I read it then for tile first time. I had heard something about it, but that was tile
first time I had seen it, or that I really believed there could b)o such a paper. I said, "'This
is a conspiracy to get money under false pretenses, and I will not give it to you." Mr.
Stanton saw that I was pretty excited, and lie left. Ho continued to come every week or
two, and said, "I will take you into court if you do not, as the presiding executive officer
of tle company, give me that note and securities." I said to him, "Take me into court,
and if the court gives an order that I shall deliver them to you, then I will consider that
order." After a time the thing was brought up, by Mr. Stanton, I suppose, before the
trustees. Mr. Stanton did not appear there, but there were parties among the trustees who'
advocated that tlhe note and securities must be given up on this contract. I took part pretty
in that debate for three or four weeks, adjourning from day to day and ,week to
earnestly
week, and insisting upon it that it must have been a conspiracy, and that we were not bound
at all by an out-door meeting, and that I would not give up tile note and securities. I stuck
to it till the trustees thought I was stubborn, and I wish I had been more so. At length
there was a majority that voted to yield, and the next day, in my absence, Mr. Stanton. or
some one, came in and got tile note and securities of the actuary. I had no hand in giving
them up at last.
By tile CHAIRMAN:
Q. Did tile actuary give thedl up without an order from tile trustees ?-A. There is a
recorded order that tlhe president shall give the note and securities to the parties claimon this agreement.
ing them
Between Vwhomi wa that agreement made ?-A. Between Kilbourn and Evans and
Q.
the actuary and these three members of the finance committee, Clephane, Huntington,
and Tuttle.
was December 30, 1871 ?-A. Yes; at the time when the
Q. The date of that
$50,000Onnote was given.agreement
Q. page 57 is a report made by Mr. Stickney, as actuary, to J. M. Langston, chairman of special committee. What special committee was that ?-A. A special committee of
the trustees that was appointed on the question of demand, which I had referred to the trustees. I reported to them that I had refused the summons of Kilbourn and Evans' attorney,
and I asked for a committee to consider the question and give me advice, and the committee was appointed to gather the facts and report, which it did.

70

FREEDMAN '

SAVINGS AND TRUST COMPANY.

Q. And it got tllis statement from Mr. Stickney, as actuary, on the 6thl November, 18731A. Yes, A statement of how tlle loan came to be made.
Q. Did the trustees observe that Mr. Stickney did not mention in the statement that the
note was to be surrendered ?-A. The fact was known in a private way. I think I had
announced that there was that agreement when I asked for the committee.
Q. So far as the trustees were concerned they knew of the fact that this $50,000 note was
to be given up to Kilbourn and Evans, but they obtained the information outside of Mr.
the actuary, and not from him ?-A. I got it from Mr. Stanton. Stickney knew
Stickney,
of it, but I see it is not in the report which he made to Langston. It did not come pro forma,
Q. I want to know whether the actuary gave you full particulars of the transaction even
when a select committee was appointed to ask for it, or whether you did not get the facts
outside of your own officer 7-A. The fact had become very patent, and it was that which
brought up the whole question. I made instant complaint that there had been that sort of
a loan, and I asked for the appointment of a committee to advise what I should do in the
premises. Mr, Langston was appointed chairman of tie committee to investigate the facts.
The actuary made this report, stating how the loan came to be made and how it was arinto this $50,000 note of Kilbourn and Evans.
rangedAnd
the letter of Kilbourn and Evans disclosed the fact of the contract?-A. Yes.
Q.
You must recollect that this printed report is not the report of the trustees, but is the report
of the commissioners, and there may possibly have been papers in the matter which have not
been printed here. We were not obliged to fihd the facts from others. I made the charge, and
the actuary very frankly corroborated all my statements. He said that ho had had some in.
formation of it for some little time before I had, but that he knew nothing of it at the time
of the transaction; he having been then only assistant actuary.
By Mr. BIRADFORD:
as a member of the finance committee, when you were instructed to
Q, Were
you present,Kilbourn
and Evans?-A. That was a trustees' meeting. I was pro.
give up these papersfortofour
testing incessantly
weeks, at least, and numbers of the trustees were with lme, and I
had strong hopes of carrying my point.
By tile CHAmIRMAN:
Q. For wliat purpose were the loans to Vandenburgh made ?-A. I do not know.
Q. What had you reason to believe about it ?-A. I had reason to believe that the money
went into the concern known as the M(tropolis Paving Company, sonmetiules called the
Abbott Paving Company, although probably a considerable part of that money was tor Vandenburgh's private use in the work which hl had privately contracted to do. lie had, I
think, private contracts besides.
Q. With the paving company ?-A. I think with the city, but I will not be certain.

Tile committee met at 10
Riddle, Frost, and Rainey.

SEIECT' COMMITTEmr E ON THlE D.IFREDI)MAN'S \BANK,1b76.
I'slshington, C., February 17,
o'clock a. in. Present, Messrs. Douglas, Bradford, Stengor

GEORGEI MIATTINGLY sworn and examined.
By the CIIAIRMAN:
Question. On page 23 of thie Report of tile Commissioners of tile Freedmnll's 3Bank, dated
December 14, 1874, there appears this item: " August 9, 1672. George Mattingly, $15,000,"
and under tlhe head of ' remarks " tlese words: Lot 7, in squar 7.
lease explain to
the committee tie nature of that transaction.-Answer. 1 know of no transaction, except
a simple loan mlde lby thle bank, wlich is there yet unpaid. It is secured by a deed of
trust on one of the houses on East Capitol street, known as Grant Row-thle center house,
and the best house in tihe row. The debt is well secured.
Q. How came that loan to stand in your name?--A. Because it was made in my nalle,
and my note was given for it.
Q. Did you give a deed of trust on the house ?-A. I did.
Q. Did you havo a free, absolute, and unincumbered right to tile property ?-A. I did.
Q. Can you explain why the commissioners have not collected tlat debt ?-A. I cannot,
have sold thle property recently at a great sacrifice, and that sale will be contested and
They
set aside by tle courts, I lhavl, no doubt.
?-A. On the ground of tih inadequacy of the price paid for it.
Q. Onl wlat ground
was the purchaser of tile property at the commissioners' sale, and who is conQ. Who
testing thlesale?-A. I do not know who the purchaser was, but my not there atisthethatsale.it
was purchased by the commissioners of tile Freednmau's Bank. I wasimpression
It had been postponed, and I did not know it was to come off', so I was not there.
Q. Who is contesting the sale?-A. My trustees. They have not commenced proceed-

FREEDMAN'S SAVINGS AND TRUST COMPANY.

71

prepare the papers and
wings as yet, but my attorney told me this morning that he should
contest tile sale, and he has no doubt of his being able to set it aside.
Q. What did the property sell for ?-A. I think about $14,000.
was it appraised when you mortgaged it to tile bank ?-A. I do not know
Q. At what
whether the bank had an appraisement.
Q. What was its assessed value?-A. That I do not know; I had negotiated a sale of it,
the time of the bank troubles, for $27,500 with Colonel McKaig.
just about
Q. On what terms as to payment Y-A. A portion of it was to be cash and the balance
credit. I do not recollect whatportion of it was to be cash or what the exact terms were. The
was made by a third party, and we were to meet the next morning to consirmnegotiation
mate the sale. That night there was a failure of some bank, and Colonel McKaig got a
and went home the next morning at 6 o'clock. I never saw him since.
dispatch
page 5 of the Commissioners' Report for December 14, 1874, an exQ. I read tothat
you,thefrom
bank held a real-estate note of yours for $15,000, dated August 7,
tract showing
1871, and immediately below that a statement in regard to $15,000 deposited with the bank
as a trust-fund derived from the Destrehan plantation in Louisiana, known as the Rost HIome
Colony, tile securities for which are said to have disappeared. Is there any connection between that loan to you and the handling of that trust-fund? If so, explain what it is.--A. That

is a matter which I know nothing about. I have heard it mentioned as a matter of hearsay.
Q. Have you heard it from any officer or trustee of tile bank ?--A. No, sir; I think I
heard it from my attorney, Mr. James S. Edwards, whose office is on Louisiana avenue, I
heard that that note of mine had been taken out of the bank, or its regular place, and substituted as security for some otherfiund of the bank.
Q. Then you mean to say that, while it is true that the bank hold a note of yours of that
date, secured as described, you havo no knowledge of your own as to what disposition was
made of it ?-A. I have not.
Q. Or as to what became of the trust fund of $15,000, deposited in the name of the Rest
Home Colony, and the securities for the same ?-A. I know nothing about that. The loan
of $15,000 made to me was negotiated with the actuary of the bank. There was no commission paid; the loan is still standing and the bank still has the note. The interest has
been regularly paid up to the present time. It was payable every six months. The last
payment was made in August, 1875, and the next installment of interest is due this month.
I sold the property, and we are now negotiating to close up and pay off that note entirely.
I have negotiated for the sale of the property at $40,000, out of which this note is to be

paid. Do you know of

Q.
any facts tending to show that any of the trustees, officers, or agents
Bank liad any business connection with parties who obtained loans at the
FIreedman's
bank, or received any portion of the commissions paid thereon --A. I do not.
By Mr. STENGIaIR:
Th'r
were two notes of yours for $16,000 each ?-A. Yes. In 1871 1 borrowed $15,000,
Q.
and gave a deed of trust onl property at the corner of Ninth and ' streets. That loan still
stands unpaid, but, as I said before, I have now negotiated a sale of the property, and I
presume that within a few days that loan will be closed up. That is all thero is about that.
The second loan of $15,000 was made afterward on this property in Grant Row, the center
house, the best house in the row. The house was not completed at tile time tile loan was
made, but it was considered to be worth $30,00( when completed.
Q. Was tile security given at that time the first inctuilbrance on that property ?-A. That
was tile first and only incumbranco on it.
Q. I see by the second report of the commissioners, that tlhe sale of that property was enand that tle injunction was afterward dissolved. On what ground was tlat inljuncjoined,
tion prayed for?-A. I do not know anything about that. Mr. Albert Grant, vwho claims to
have an interest in these houses, may have instituted some such proceeding; but there was
of tie

injunction on the sale by mie.
By the C11AIRMIAN:
Q. What is your business ?-A. My business for the last twenty-six years, excepting the
last two and a half or three years, has been transportation, mail-service, stearmboating, &c.
Q. And you have generally resided in Washington ?-A. I have been here between fiftyeight and
sixty years.
Q. Iave you socially or otherwise been brought sufficiently close to J. W. Alvord, 0. 0.
Howard, G. W,were
Balloch, D. L. Eaton,or G. W. Stickney to know what their pecuniary
circumstances
on their first appearance in Washington ?-A. I have no acquaintance
with Mr. Alvord, except having met him occasionally at the bank. Of his pecuniary circumstances I know nothing. Mr. Eaton is dead, I believe. He was the former actuary of
the bank, Of hisi pecuniary circumstances I know nothing. I do not know anything of Mr.
Sticknoy's
pecuniary circumstances. Some of them I never knew. I would not know
General HIoward if le were in the room now.
Q. Do you know anything as to those parties, or any of them, building and improving
lots in or near Washington,
in an expensive style, in the last ten years ?--A. Yes. General
no

72

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Howard and Mr. Balloch both built very large and expensive houses out on the Seventi
street road, just outside of the corporation limits. Mr. Stickney, I think, builta flue house
on Sixth street.
Q. Do you know anything about the property said to have been sold to the Howard Uni.
and called the Smith farm ? If so, state what, in your judgment, was its value.-A.
versity,
I know the property very well. I know its situation and location. I knew it w-lhen it belonged
to John A. Smith; but I do not know how much of it the university bought.
Mr. STENGER. It bought 149 acres.
The WITNESS. Itwas a valuable place. I should suppose that that property was worth,
when the university bought it, $1,000 per acre, perhaps more.
Q. Do you know anything of the Miller farm, which was also sold to the Howard Univerand afterward sold by the Howard University to Barbour and Langdon, now known
sity,
as the Le Droit Park ?-A. Yes. I know that location very well. It is just outside tlhe corporation limits. I do not know much about it, but it was more valuable than the Smith
farm, because it was down on a level with the city, and very accessible anld easy to be converted into city lots.
Q. Do you know any facts that you can state showing how the failure of the Freedman's
13ank was brought about and who was responsible therefore ?--A. I cannot tell you anything about it, for I know nothing about it.

WASHINGTON, D. C., February 17, 1876.
J. W. ALVORnD recalled.
Question. Have you brought us the treasurer's book of the Seneca Stone Company ?Answer. No, sir.
Q. State why not.-A. The day before yesterday I went directly from the committeeroom, as I promised, to the house of the treasurer, and asked his daughter to let me have
the book, as I had been ordered toobtain it. She could not find it at that time-or, rather,
it was in the room where a very-sick lady was-and shle told me to come the next day,
yesterday, and that she would give it to me, if she could get it. She would go in
and hunt all around. I went yesterday, and found that she had left a note for me
to the effect that the secretary of the company had sent an order for it by Mr. Hayden,
and that she had given it, or what books she could find, to Mr. Hayden. I went imto the office of Mr. Jones, who said that he had given such an order, and
mediately
that he supposed that Mr. Hayden had the book. I started very early this morning
and went to Georgetown to Mr. Hayden's, but he had gone to Richmond. I inquired
of Mrs. Hayden, and she said she did not know anything about it. I wont again to
Mr. Jones's office, thinking that Mr. Hayden might have left the book there before lie went
to Richmond, but he told me lie had not, and lie gave me an order on Mrs. IHayden to hunt
for tile book and to get it if possible. I went there, and she said she could not find it, but
that she supposed it was locked up in a desk of her husbands, who had gone to Richmond to
be absent two or three days. I regret very much that I am obliged to report back to the
committee without the book. Here is Miss Risley's note.* I found it at the house, on my
second call, when she had promised to deliver the book to mI. Miss Risley is tlhe daughter
of the treasurer.
By Mr. S'rENGER:
I
Q. understood you that Mr. Risley told you that Mr. THayden brought tlhe note.-A.
The servant said that Mr. Hayden came with Mr. Jones's order and got trle book.
OF FREEDMAN'S BANK,
utshditnton, February 19, 1876.
Present, Messrs. Douglas, Stenger, Bradford, and

SELECT COMMITTEE

Committee met at 10 o'clock a. m.
Riddle.
THIOMAS B. BRYAN sworn and examined.
, By the CIAI{MAIN:
Question. State whether you have ever had any transaction with any one, and, if so,,with
whom, through which you became apprised of the value of Seneca Stone stock; and, in
*

Iere Is the note referred to:

WEDNESDAY, Februtary 15.

General Ar.voRrD-81R: T thli morning received an (rler from Fred. W. Jones, esq., secretary, &c., for
the book of the Marylanud F. S., &c., Co., which whete left here by my father. I delivered them to Mr..
Joue».

Very respectfully,

OLIVE RISLEY SEWARD.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

73

connection therewith, state the whole transaction.-Answer. I purchased stock of the
Maryland Freestone Mining and Manufacturing Company, commonly called tile Senecae
Stone Company. I took it in the first place from Mr. James C. Kennedy, in part payment
for a residence adjoining my own on Massachusetts avenue. I was applied to by an agent
of Mr. Kennedy's for the price and conditions of sale of that property, and I had an interview with Mr. Kennedy at the instance of that agent. Mr. Kennedy, on my appealing to
him as a stranger, (1 being utterly ignorant of the stock and never having heard ot its
existence before that morning,) assured me that, as between brothers, the stock was worth
in cash 80 cents on the dollar; in fact, that it was worth par,-but that it would probably not
command over 80 cents in cash in the market. On introducing the subject to Mr. Kennedy,
I mentioned that I had called on my brother-in-law to ascertain whether he, Mr. Kennedy,
could be relied upon in estimating his ovwn property, and that I was informed that such was

probably
tile case. I mentioned this to Mr. Kennedy, and made a special appeal to his honor.
Thie mention of the value of the stock " as between brothers " ad reference to that special
appeal.It meant then that he told
honor ?-A.
so undersir; it was
Q.

you upon

Yes,

clearly

stood both by himself and myself and by the agent vho was present at the negotiation.
After some further mention by him of tlle condition of the company, and of the fact that
he was about to secure me a good neighbor in the person of some Senator, (whose name he
did not give,) I accepted the proposition, receiving some $;'2,500 of tile Seneca Stone Company at an estimate of 80 cents on the dollar, and the difference (between $5,000 and $6,000)
in secured paper for the property. Th'lat is the substance of the interview. This occurred
about six years ago, as my memory serves me, (I think in the month of February, 1870.)
Mr. Kennedy referred me to Governor Cooke as a proper person to give me an estimate of
the Seneca Stone Company.
Q. Did lie give you any other reference at the same fime?-A. I think not. On leaving
Mr. Kennedy, I went to tlle agents in whose hands the property had been placed for sale,
and withdrew it, mentioning my having effected the sale of it. On being interrogated as to
what I had received, I stated the facts. These agents were Messrs. Fitch & Fox, very reliable gentlemen. They expressed great surprise that tile stock had been palmed upon me
at that price, and still greater when I mentioned the circumstances attending the negotiations,
that they had offered the same stock but a day or so before to this same gentleman,.
saying
Mr. Kennedy, at 40 cents, and that he had rejected it. Repeated inquiries confirmed me in
the conviction of my having been overreached under circumstances of peculiar aggravation,
and in 1874, (I think it was,) on obtaining written evidenceof the duplicity of Kennedy, I
instituted legal proceedings, which, at his instance, were changed to an arbitration, lie employing E. L. Stanton as his arbitrator, and I, John Selden, as mine. The case was managed
for him by Richard T. Merrick, his attorney, no one being employed in my behalf. I managed my own case. It resulted, after a tedious arbitration, in an award of over $10,000 to
be paid by Mr. Kennedy in cash, in addition to the costs of arbitration. Subsequently to
the closing of tile contract with Mr. Kennedy, (probably after the lapse of some days,) I
to Mr. Henry D. Cooke as to the value of the stock, and was informed by him that
applied
it was worth about what I paid for it. I-e declined, however, to accept the offer of the stock
at a lower percentage than I paid. 1 was then not aware of the fact tlat Mr. Cooke was
interested in the stock which I had purchased, he having been joint owner with
personally
Mr. Kennedy in the stock itself, as appeared in the testimony of Mr. Kennedy in the progress
of the arbitration.
Q. Do you moan in that particular stock which was sold to you ?-A. That particular
stock.
Q. Did you, at any time, and not long after the contract with Kennedy, offer it to him at
fifty cents on the dollar Y-A. I did, certainly ; within a very few days.excuse on
the ground
Q. With what result ?-A. With an equivocal declinature, and an
of his owning largely ofit at that time, and having further use for his available means.
Q. D)oyou know of any other connection between Kennedy and Cooke, excepting tlhe
joint ownership of tile stock to which you have referred?-.A. I do not, except as testified to
by Kennedy, that they were operating somewhat jointly in the disposition of this Seneca.
stock. I have no personal knowledge beyond his testimony. He said so.
Q. Was that statement of his under oath ?-A. All his statements were under oath. Mr.
is now dead.
Kennedy
Q. Hlow long was it after the transaction to which you have referred that the arrangement
with Mr. Kennedy under the arbitration took place ; and what were tile terms of that arrangement ?-A. I had employed Mr. Walter S. Davidge as my attorney, to institute the proceedin court, but, at Mr. Kennedy's request, I changed it to arbitration, and, at his request,
ing
also consented to dispense with Mr. Davidge's services because of some personal hostility
existing between them. The terms were embodied in tihe paper of submission, drawn by
myself, involving the double issue of the question of honor connected with the transaction,
and also of the consideration paid by Mr. Kennedy.
so far as fixing the value of
Q. Was or'was not the award in the nature of a
the Seneca stock was concerned ? And, if so, state compromise
at what figures that stock was put to you
in that arrangement.--A. The award itself was couched in terse terms, and I could only

74

FREEDMAN'S SAVINGS AND TRUST COMPANY.

surmise that the arbitrators based their decision on estimating the stock at forty cents, butI
am not positive as to that. The stock, however, was not worth forty cents at that time.
Q. Did you hold at any time any of the stock of the Seneca Stone Company except that
which you obtained from Kennedy Y-A. I did; having taken it in the same way, but without the objectionable features attending the acceptance of that stock.
Q. State how many shares of Seneca Stone Company's stock you held at different times;
from whom they were obtained, and for what prices.-A. My impression is that at that
time I should have regarded 39 to 40 cents as the full cash value of the stock, although I
was more ignorant of it then than I am now, of course. I never received a cent of dividend
in my life from it. It has been dead stock. I have now $36,000 in the nominal par value of
that same stock in my hands. I presume thatit is worthless. During this arbitration, Mr.
Kennedy produced witnesses as to the then value of the stock; and, on their placing on it
a much higher estimate than I supposed it should legitimately bear, I tendered my own
stock to the witnesses themselves at '25 cents on the dollar, and it was declined.
Q. Give us the names of those witnesses who testified as to the value of it.-A. One of
them was Dr. John L. Kidwell. There were others, but they wore men whose names I cannot mention. I think they were some brokers in the city; but this offer of miue was in the
of the arbitrators and of the witnesses.
presence
Q. Did Kennedy in his conversation with you, with a view of bulling the stock, refer you
to the character and position of men who were interested in it ?-A. I have no recollection
of his mentioning any other name at that interview but that of Henry D. Cooke. lie may
have done so, but I do not think he did.
By Mr. STENGERn:
Q. That name was considered potent enough then to carry anything ?-A. Yes, sir.

C. B. Punvis sworn and examined.
By Mr. S'rENGaR:
Question. State your residence and

WASHINGTON, D. C., February 19, 1876.

profession.-Answer.

I reside at 1118 Thirteenth

street, Washington City. I am a physician, and am a professor at the medical school of the
Howard University.
Q. State what connection you had, if any, with the Freedman's Savings and Trust ComI have been trustee of that bank since March, 1868. Just before it closed I was
pany.-A.
its first vice-president and a member of the finance committee. I was for one week, I believe, a member of the finance committee. I was put in on the day of the resignation of
Cooke, Huntington, and Broadhead, and I resigned at the next meeting of the committee, I
believe.
Q. State whether or not, during your connection with that bank in the different capacities that you have named, you observed any irregularities in relation to the conduct of the
business of the bank ?-A. It was some time before we had any regular meetings of the

trustees. At that time I was connected with the Army as contract-surgeon, and I did not
give much attention to the bank. The first thing that I remember anything about was when
Mr, Edgar Ketchlum called the attention of the trustees to the Seneca Stone loan, and to the
investments in the Northern Pacific bonds. le introduced a resolution at that time directing the actuary, D. L. Eaton, to call in those loans. The minutes of the trustees show that
this resolution was laid on the table; but my memory is that it was passed.
Q. When was that? -A. In 1871. Mr. Ketchum made an animated speech, and I always
that that Seneca loan was called in.
supposed
Q. That loan was to the Maryland Freestolle Miining and Manufacturi)ng Company ?-A.
Yes; and the bonds of that company wore taken as collateral. I do not recollect the amount
of the loan, but it seems to me that it was as much as $'20,000.
Q. And at that time there had been an investment in the bonds of the Northern Pacific
Railroad Company to the extent of $50,000 --A. Yes. Jay Cooke & Co. wanted the Freedman's Bank to take an agency to sell some of these bonds, and they also had borrowed
$50,000 from the bank and had given some of these bonds as collateral security, giving us
their guarantee to take them back on five days' notice. Both these cases came up at the
same meeting of the trustees, and that was my first knowledge of irregularities in the bank.
D. Cooke was a member of the firm ot Jay Cooke and Company, and was chairman
IIenry
of the finance committee of tile Freedman's Bank, and was permitted at that time to exercise
unlimited control of its finances. This resolution of Mr. Ketchum's was afterward referred,
the
.on the motion of Mr. Huntington, to the finance committee, of which he and Cooke weretwo
chief members. After hearing Mr. Kctchum's speech, I was impressed with these
things as being
irregular, and the board of trustees always supposed that the Seneca Stone
loanlhad been called in. As to the Northern Pacific bonds, we had very hard
Company's
work in getting Jay Cooke & Company to take them back. In 1872 we again adopted an..

FREEDMAN'S SAVINGS AND TRUST COMPANY.

75

other resolution requiring these bonds to be taken back, and it was done, down to within
$200, which we found unpaid when the bank went out of existence. These are the only two
things that I can think otf 'The irregularities in tile bank in the way of loaning monoy I
have discovered more about since I have been out of the board of trustees than I know when
I was in the board.
bonds of the Maryland Freestone Mining and Manufacturing
Q. The second-mortgage
were given to the bank as collateral security for certain loans'l-A. Yes. The
Company
first loan to the Seneca Stone Company was give on first-mortgage bonds as collateral
That was a comparatively small loan, and it was afterward increased from $20,000 to
$50,000; and how the securities were converted from first-mortgage into second-mortgage
bonds, I never found the mortal being who knew anything'about. The trustees always
that that loan wa3 called in until after the bank closed, and we did not know
supposed
what had become of the first-mortgage bonds until Kilbourn and Evans sent their attorney,
Mr. E. L. Stanton, to us to prosecute us for certain securities which they had given us. Then,
Mr. Sticknoy, the actuary, or Mr. Alvord, the president, laid before tie trustees the nature
of thi d'lemand, which was that we return to Kilbourn and Evans their note and securities.
Noie of the trustees had ever heard of the circumstances before, unless it may have been
the members of the finance committee; and they never let on that they know it; they all
denied emphatically tlat they knew it, at least those of them who were present. Messrs.
Cooke, Huntington, and Broadhead were out of the finance committee at that time. Kilbourn and Evans demanded timo return of their securities, and tlat our guarantee to them
be carried out.; which was that if the Seneca Stone Company did not pay the loan within a
certain time, (I think ninety days,) we would remit, as security for it, $95,000 of secondmortgage bonds, (which bonds were already in tlle possession of the bank.) Tlat was the
first I ever heard of tle Seneca Stone Company loan not having been paid; and it came up
in that form. We were a good many months considering that matter.
Q(. Did the board authorize this to be done ?-A. We allowed them to take back the note
and securities. The securities were worthless things. They were tile stock of the Metropolis Paving Company, I think. There was a good deal of dispute in the board about the matter, but it was carried by a majority vote.
Q. Was there any paper or any order signed by any person authorizing the exchange of
bonds to second-mortgage bonds ?-A. Never. Mr. 'Tuttle says that Mr.
first-mortgage
Cooke had a hand in getting them exchanged; that he came to him one day when le was
busy signing bonds and said, "I wish you would sign this paper il reference to the Seneca
Stone Company." Cooke said that it was carrying out the wish of the board of trustees.
Tuttle didn't know what it was, and lie said, "' Mr. Cooke, I have not time to read it. I am
busy now signing bonds." Cooke asked him whether he would not believe wlat lie said.
-. "Well," said Tuttle, "you have been the financial agent of the Government and have had a
great many millions pass through your hands. I have no doubt of what yousay, and I will
take your word; " so lie just signed his name to tlhe paper, and Cooke went away with it.
And that is tile way Tuttie says that the first-mortgage bonds were exchanged for socondmortgagl bonds. I met Mr. T'uttle on the street yesterday, and he told me this story, and
says that Cooke will not deny it.
Q. Then it was done by tlhe order of Tuttle, on the representations of Cooke ?-A. Yes.
When the actuary laid before us the demand of Mr. Stanton, we learned that this agreement
had been signed d hidden away by Mr. Eaton, the actuary, and by the finance committee, Cooke, Htuntington, Cleplhane, Tuttle, and Broadhead. It seems they had all signed it,
but had never reported it to tile board of trustees. The only reason why we returned the
note to Kilbourn and Evans was tlat there was a considerable run on the bank at that time,
and we did not want it to go out to the public tlat the bank had been sued. Mr. Langston
was appointed to investigate the matter, and he unearthed the facts after a long investigation'of some weeks ; and yet, thle members of the finance committee who were present when
the thing was first
denied emphatically having ever signed that agreement, or
having had anythingreported,
to do with it.
Q. Do you know anything of a transaction between Mr. Stickney and a man named
After .Jay Cooke &
failed we had in our bank $(650,000, of currency
Boyle?'-A.
sixes and other bonds, amountingCompany
altogether to over $800,000. To meet tile run made upon
us, we had to sell our bonds. The trustees mnet every two or three days and authorized the
executive officers of the bank, the president with his actuary, to sell bonds, $100,000 or so at
a time. The president vent to New York to sell some of the bonds, and it seems that (without any
whatever) Mr. Sticknoy sent Mr. Boyle to Baltimore to sell some of the
bonds. authority
This I have only got from our inspector, Mr. Sperry. It was hard to sell tlese
bonds, because they were of a thousand dollars denomination ; it they had been $100 bonds,
we could have sold them readily. Afterward my father asked me in regard to a loan to
Boyle, and I told him that we
such loan. On inquiring into it, I found
had never made
that Mr. Sticknoy, even when we were in suchany
a state in tile bank that we had sold every
bond except $500, simply on the pretext that Boyle had done the bank good service, loaned
we ltad no security. 01O tle strength of tlat, I called the trustees tohiin $'21,000 on which
getber for tie purpose of asking them
to remove Mr. Stickney from the trusteeship which he
had acquired under tile law of June, 1870. I there mentioned the matter,
aud Mr. Leipold

76

FREEDMAN'S SAVING8 AND TRUST COMPANY.

contradicted my statement that Stickney had loaned tile money in the way I have mentioned.
but he made this extraordinary statement: that iMr. Boyle had sold bonds for the bank at
different timlies, and that every tilie lio had retained some of tho money, so that in the aggreate lie owed the bank the amQunit of $'1 ,000, and that then, to cover up tile transaction,
took this note front lbin, but put it in the shape of a loan. Boyle has never renStickney
dered aly account to the bank of tile amount of bonds that were put into his hands by Stick.
ney. Of that transaction, however, none of the bank officers proper, except Stickney, had

any knowledge.
Q. 'This note of Boyle's, according to Mr. Leipold's statement, was given by Boyle to the
bank ?-A. Yes.
lot ?-A. I believe lie afterward got
Q. And Stickney took security for it oni a house andhouses
were encumbered by various
security on a whole row of unfinished houses, whichsince
and purchased by Mr. Stickney.
kinds of liens, and which houses have been sold
Tile bank never realized a dollar out of that $21,000 loan, and never will. Stickney was
assistant actuary during the life-time of his uncle, Mr. Eaton, Who was actuary up to
his death. Stickney is a young man in whom the bank ollicers had implicit confidence. It was the custom of the actuary to give a bond to the bank, which bond
was [renewed every year. Prior to the last election, in March, 1874, we had determined
to get rid of an element wlhicli was believed to be the cause of all our disasters, anud
we colored men put into the bank Mr. Douglass. We looked upon Mr. Alvord ns
old and incompetent; but be had strong friends who stuck to him. l'le strength which
he had in the institution for electing himself as president, was, that lie had been, in a great
measure, tile originator of tile bank, and then lie had his Church connections there. All the
colored trustees, I may say, discussed tie matter ihd determined to change tlio president;
and, if thle new president did not find bis actuary all that he wanted, after he had been there
a little while, the actuary was to be changed. As the thing was, we, trustees--meeting but
once a month, and then only hearing statements-could really know nothing about the
affairs of time bank. Dr. Augusta and myself and others of us werd in rather bad odor and were

tabooed. I had been instrumental in defeating tie re-election of Senator Patterson of New
I have never got over that since. I lave been called a pimp and a blickIamlpshiire, and
&c., by the Star and other papers. Ve found that we were losing our control among the
leg,
colored people,' and we hiad hopes to get it back again, and to control the bank as well. We
therefore elected Mr. Douglass as president, and then we discovered that Mr. Stickhey, the
actuary, had not given his bond for tile past year, and that tie president and finance corlmnittee had been derelict in not exacting it from him,. T'ie actuary explained it, saying that
lie had forgotten it; that, on account of the three or four runs on tlle bank, lie had been ovorwholeined with business, and had not been able to attend to it. The trustees ordered him to
file his bond, and ordered the president to see that it was filed. Subsequently the trustees
sent for him, and Air. Langston said that, as tile trustees were going to hand tile bank over
to the commissioners, they wanted him to bring in his bond and deliver it. Then .Stickney
commenced to cry. That was pretty good evidenceof his guilt, for we were not in a prye rleeting. I knew that there was something wrong, and that shook my faith in him right
off. Tl'hen I commenced to make these inquiries, and I discovered this loan of Boyle's. Iaving discovered it, I called the trustees together, and I found that we had never authorized
such a loan. All tile loans that had been Imade to Fleming had nveer been authorized by
tile trustees, and I doubt if the finance committee had ever authorized them. I think that
the actuary made the whole of them. Solne of Fleming's loans were good loans-for instance,
one on his house on Twelfth street; that was a good loan.
Q. Do you know anything of a loan made to Huntington ?-A. I only knew tliat since
his death. That loan was made by Mr. Eaton, tile actuary. T'lie due-bill was found, showhad borrowed $3,000 or $3,500 from Mr. Eaton. I think that Eaton
ing that Huntington
it in this way before lie died: lie told some of tile trustees that hMr. -Huntington
explained
ran into the office one afternoon and said, " I am short to-day, in tile First National Bank,
about $3,0(0. Let me have it till to-morrow." That was a small matter for such an institution as the First National Bank, and Mr. Eaton let him have tile money, but Huntington
never paid it.
Q. Was there not another loan made on the representations of Mr. Alexander R. Shepherd I
-A. It appears in the report of the commissioners that Mr. Vandonburgh owes a large
amount. These loans never caine directly before tie board of trustees, or, at least, a -ery few of
them did. Thie nctuary, in reading his report to the board, would say, '"City securities, (naming
the class,) so much invested." Soine members of the finance committee, including Moses
Kelly, the sinking-fund commissioner, were very earnest in the defense of these securities, and
MHr. Kelly invested largely in that kind of security for his own bank, (the National Bank of tho
I was very much opposed to it, as I was opposed to everything connected with
Metropolis.)
the board of public works. Stickney staid at my house, and, talking with me one day, lie said
that he had never done a wrong thing in tile bank except letting Vandenburgh have a large
sum of money one night. I asked hin how much. I think lie said $30,000. That perfectly
astonished nme, so I " vent into " him, and questioned him very closely thinking that I would
have occasion to recollect it and use it. lie said that Vandenburgh came to hint wanting some
money to pay off his hands that night, and that Shepherd said, " Vandenbui gh's accounts are

FREEDMAN'S SAVINGS AND TRUST COMPANY.

77

approved, but look--wlt a crowd. (irhis was on Saturday night.) I will pay you on Monif you let him have the money.' Stickney said that lie would let him have tlle money,
day, he
did lot him have it. Afterward he wont day after day to see Mr. Shepherd and
and
could not see him. When lie did see him, Shepherd was more forcible than polite, and told
hlim that he was in a damned hurry to get that money. Subsequently Shepherd said to
him, " If you do business in that kind of a loose way, you are a damned fool;" and that time
he told the truth. 'Tlhis is what Mr. Stickney says about the matter, and I presume he is
to be believed on that point.
reler to Mr. J. V. W. Vandenburgh and Alexander R. Shepherd; were VandenQ. You
and Shepherd connected in business ?-A. Vandenburgh was a contractor under Shepburgh
herd.
Q. Had you a conversation with Mr. Leipold, in presence of the other two commissioners,
in reference to the employment of a Mr. Cook i-A. Yes. Mr. Leipold was recommended
to us as a trustee by Mr. Ela, the Fifth Auditor, and by some others, as being a very fine accountant, and we elected him on that recommendation. He was then a clerk in the Treasury,
getting just as much salary as he gets as commissioner of the bank; that is, $3,000. The
other two commissioners were Mr. (reswoll, who was elected because. he had been a cabinet
officer, &e., and my father. Just before the bank wont into liquidation, Mhr. Cook, a young
colored lawyer, a young man of marked ability, was employed by us as our solicitor, and
when we went into liquidation he still wanted to retain the position. I told him that if he
would write a letter i would take it to the commissioners, and would tell them all about
him. Ile wrote the application, and I went in with it and.with an application from another
man who wanted to be an auctioneer for the bank. The commissioners read Mr.
young
Cook's application, and I instantly saw Leipold get angry, I went on and gavo my reasons
that he should get the appointment. I said that this was a bank for the colored
why I thought
and that as they would have had a large number ofdee'ls of release executed, and as this
people, nman
was a notary public, it would be well to let him have the appointment. Leipold
young
got up and said, " We will not do it." His manner was very oftfnsive. He said, 1 I came
here, not for this paltry $3,000 a year, but for my reputation. I intended to do all this legal
work myself; to go into the court and to make a reputation as a lawyer. I want to get out
of this Government employment, and I want to receive the fees in these cases myself. I do
not see any reason why I should not take these deeds of trust and release, and make them
out myself, at home, and receive the extra fee for the business." To which I replied, in a very
" If I had known for one minute that you came here to make this a
way, which
straightforwardout
make money, I would not have voted for you." Some
you could
stepping-stone ofbetween
us, and I retired. Some time in 1872, I think in March, Mr.
compliments
passed
Alvord came to my house and said that there was something which he thought le ought to
tell me, that the finance committee had very ingeniously succeeded in taking from him the cusof the funds and in making him a kind of general agent, and lie said lie had the imprestody
sion that Cooke & Company were about ruiinig the institution. I abused him a good deal
for not telling us before. He spoke of the actuary being about to sell sanio property which
liad been taken by the bank as security. The law allows trustees in deeds of trust 5 per
cent. upon the stle of property, unless a smaller percentage is specified in the deed ; and our
actuary, Mr. Eaton, had been in the habit, without consulting anybody, of putting himself
in as trustee in all the deeds of trust, (of which we had some '2,000,) and his nephew, Mr.
Stickney, as the second trustee. Mr. Alvord spoke to nie about this, and I said I would
drnw a resolution on the subject; so I had a resolution drawn by J. J. Stuart, declaring
that in all sales on behalf of the bank, our actuary was our paid officer and merely
the institution, in purchases arising from such sales. That resolution did
represented
not pass, but we left it on the table, because the actuary got up and said that he know
lie had tile legal right to the fees, but that, properly and equitably they belonged to the bank
and should go to the bank. He said that he had never taken a dollar of these fees and never
would, and so the resolution was left on the table and not passed. As soon as the bank went
into liquidation, I found that Mr. Stickney was going to claim these fees, and I appeared before the commissioners and urged that lie be removed, because a man who would not give
the bond required of him as actuary, and who would act as he had done in the matter of Mr.
Boyle, could not be trusted. However, I never could gain Mr. Leipold's ear. He did not
treat is politely, but would go on writing when we were speaking to him. My father went
to Philadelphia and wrote a letter to the commissioners. It seems that several men had paid
Sticknoy
money, liquidating their indebtedness to the bank, and that he kept it. Mr. Willex-member from Indiana, was one who did so, and other people also paid him money.
iams,
The commissioners can tell you who they are. Not only has Mr. Sticl:aey done that, but I
understand, through my father, that he has kept back money from these sales of trust-property, and that to-day he owes the commissioners some $1,200, and wit4 all my father's protests
and insisting and demanding th
ththlis fellow be removed, he is still retained. I found that
he had been guilty of another irregularity, in the matter of $15,000 of bonds belonging to
thie lost Home colony. I was informed by a young man, George II. Johnson, who
used to be our chief clerk, about this matter. Said he, "There is one thing going
with the bank." I asked him what it was. He said that it was that Rest
wrong
Home

colony matter.

I said I had never heard of such

a

thing-and

I never had

FREEDMAN'S

78

SAVINGS AND TRUST COMPANY,

hoard until ho told me. It seems that there was a man named Rost, who was a large
slaveholder in Louisiana, and who ranMsway from his plantation during the war. General
Howard took possession of the plantation and worked it, and paid tho hands, and formed a
school-houses, &c. After paying the hands and all expenses, there was a
colony,loftwith
profit of $15,000, which was invested in currency sixes, and put in tile bank for tle
benefit of the colony. President Jolinson returned the farm to tlie owner, and the bonds were
deposited in the Now Orleans branch, and were transferred for safe-keeping to tile principal
bank here. General Howard could have taken these bonds and used them for educational
purposes or for the Bureau, but he evidently forgot it, and there they lay. After the Freedman's Bank closed, the People's Bank was organized, with Mr. Stickney as president, and
this young Johnson was employed in it as clerk, He told me that the interest for a realestate note credited to that colony was being paid into that batik, but that the interest was
being credited to tile colony, which was an imaginary institution. I told this to my father,
and ih made a note of it. He went to the Freedman's Bank and called up Stickney, and
asked him about it. Stickney was very much embarrassed. His explanation was this: That
the bank was so hard pressed that he took these $15,000 currency-bonds and sold
them, and put to the credit of the colony a $15,000 real-estate note, amply secured. That, however, was not true, as the note was $1,800 short of the $15,000. He
had that note put away in a small box, and lie turned it over to the commissioners.
Thel commissioners had been in existence some two months or more, and we had turned
over to them everything belonging to the bank, but Mr. Stickney had not turned over
this note until it was discovered in this way. T'he affairs of the Freedman's Bank ought
to have been wonnd up long before, because it was a very unwieldy and unmanageable institution, and I had been trying for a year or two to have it wound up. Tlhe cashiers at
most of the branches were a set of scoundrels and tlieves-I mean particularly those at
Benaufort, Jacksonville, Fla., Mobile, and Vicksburgh. These fellows were all thieves and
scoundrels, and made no bones about it. Tle cashier at Jacksonville took $6,000 from the
bank and loaned it to his son-in-law, without security, in order to make up a deficit which
the son-in-law had in his account as tax-collector in one of the counties. They were all
thieves and scoundrels, but they were all pious men, and some of them were ministers. Tle
cashier at Jacksonville is a minister, and to-day has a large Sunday-school; almost all
of them are ministers. I think that Mr. Beecher,elethe cashier at Montgonery, acted dishonestly. I-e may pay every dollar of it back, but lie took tlle money of thu bank without

authority.

By the CHAIIMAN:
anaedd?-A. Honestly.
Q. HIow was tile branch at Richimond In
Q. And at Charleston ?-A. Honestly.
Q. And at Now Orleans and Savanniah 1-A. They wore all managed honestly. More
than half of these branches were losing institutions alnd never paid within 50 per cent. of
tile expenses. 'The faiilure of the Freedmuan's tlllk was owing, in a great measure, to the
rui. The bank had been ilado a subject of political influence continually. The election
in North Carolina and of Grant ill 1872 cost us :3()00,000, because there was a rumor that
thle Ioney of the bank was being used for tile election of General Grant, andl that caused
a run upon us which cost us $300,000.
By Mr. RIDDLE;
Q. Do you know anythiiing about the Memphis branch ?-A. I do not. We paid out
within eighteen months, in tile first runs, $1,800,I000. Before there were any runs, we had
at one time over $5,000,000 in tie bank, and then we made only just money enough to
meet expenses. Tlhe bank was subject to political influence. Every colored politician
down South was the enemy of tlie bank. I presume that they wanted to get their hands
into it. Thle opposition from that source was very strong, but the failure of Jay Cooke &
Co. killed tile bank. We lIad, as I said, about $700,000 in bonds at that time, and we
of our real-estate notes, so that we paid out about $800,000 on tlat run.
hypotlicated some
of the chapter, giving us the right to appoint commissioners, (but all deposThle after
amendmelent
a certain date, to be slccial deposits,) while it was a providential tling, capped
its,
climax. 1 believe tlat, if the bank had gone on to this time, there would not hInav
tile
been a dollar lh1. We never
knew tliat tile cashier at Vicksburghiwas a thiefluntil latterly.
I do not know how
how
il lie stole. ''lhel tlie bonds of all these cashiers were not worth tile
paper they were written on, although they were all sworn to before judges down ticere.
By tile CmAIIlmtmA :
Was it not the !business of tile inspector to go around and examine the conditi-n oftlie
Q.
banks antd keep the board of trustees advised I-A. Yes; but it was pretty hard upon hinl,
for it was a put-tup job upon himi right along.
By Mr. STEN:(l:s:
Q. Who is tihe solicitor of tlhe commissioners ?-A. Mr. Enoch Totten. Although Mr.
Leipold'sillname
appears on tlhe docket as associated with him in these bank cases, lie never
courts in these suits.
appearsThen tile
lie and T'otten are associated professionally ?-A, Yes, sir.
Q.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

79

Q. Did not Mr. Totten make a collection for tile bank, and offer to Mr. Leipold half of
his fee ?-A. I can only answer that in this way. Mr. Sperry came and told me that Mr.
Leipold came to him and said: " Totten has offered me so much money, (I think $700, or
halt of what he received ;) had I better take it?" " No,"isaid Sperry, *" you must not take
it." Leipold came to him subsequently, and said that he did not take it; but, after that, his
name appears with Totten's. Sperry can swear to these facts. The only hesitation I have
in making this statement is that Mr. Leipold is rather a vindictive man, and as Mhr. Sperry
is a very poor man, Leipold might remove him. In fact, he has been wanting to remove him
ever since he told him about this offer.
Q. Do you know whotlher Mr. Cleplane, who was a member of the finance committee,
was also a stockholder in the Metropolis Paving Company ?-A. Yes; he appears as stockholder in it, and, if I am not mistaken, he was also a stockholder in the Seal-Lock Company,
whatever that may be.
Q. What were the official positions of G. W. Balloch at that time ?-A. Mr. Ballochl was
a member of the finance committee; but he came in after all these bad loans were made.
He was also treasurer of the Freedmen's Bureau; he was also superintendent of streets
under the board of public works during the time that Cooke and Huntington wero in the
full vigor of their missionary work. Cooke was governor of the District, and Eaton a member of the council, (the council being named by tile governor,) and Clephane was a large
contractor under the board of public works, and was a stockholder in the Washington ClubHouse.
Q. Was Z. Riclards a trustee of tho Treedman's Bank ?-A. Yes; and he was either
auditor or comptroller of tile board of public works. Huntington was also in all the jobs
here, and was interested in the Metropolis Paving Compan)y.
SEILEC' COmlnMIllTEE

ON

F'lREEI)mIAN'S BANK,

1Washinigton, D. C., Felbruary 24, 1876.
Tlie committee met at 10 o'clock a. In. Present, Messrs. Douglas. Bradford, Stenger, and

Riddle.
IIAITIr K1.CI1,OURN sworn and examined.
By the CHAIRMAN:
Question. State your residence and occupation.-Answer. I reside in Washington City.
I am a real-estate broker.
Q. State whether or not you have ever had any official or business connection with the
Freedman's Savings and Trust Company.-A. I have transacted business with it. I never
had any official relations with it. Our firm was originally selected to appraise property for
the bank, on which it made loans.
Q. Iad you also any authority from tie bank to negotiate loans for outside parties ?A. No, sir; we had no authority to negotiate for outside parties, except the same as other
brokers.
Q. How was tile compensation allowed you by the agents of .tho bank assessed and
paid ?-A. The bank never allowed us anything and never paid us anything.
Q. I see from thle minutes of the board of trustees, of the 9th June, 1870, that it was resolved to employ Messrs. Kilbourn & Latta as appraisers, and that it was also resolved, as
the view of the board, tlat the fees for appraisemerit should be graduated on tihe amount of
tlle loan, not on the value of the property on which the loan was secured. Please to explain
what that means.-A. The board of real-estate brokers hero had a rule by which so much
was charged as a fee for appraising property, I think $5 for appraising property valued at
$10,000,
graduating the fee according to tihe value of the property. This fee was paid by
the parties whose property was appraised, but the rates I cannot recollect exactly. It was
a rate adopted by the board of real-estate brokers; a small matter.
Q. Was not tle effect of that resolution of the board of trustees to make your compensation depend rather on the amount of money obtained from the bank than on the value of
the security which the bank took for its payment ?-A. We had nothing to do with the
amount of ithe loan. I cannot put any construction on the resolution of the board of trustees.
I can only tell you tlle simple facts.
Q. Did I understand you correctly to say that the usual practice of real-estate brokers ot
this city is to charge a fee graduated on the value of the property appraised --A. There is
a rule among tile brokers that whole the appraisal of property simply is made, so much is
charged
per thousand dollars on the value of tlie property ; but what the rate is I do not now
recollect.
Q. I simply ask if it is not tile business rule of real-estate brokers to graduate their fees
of the property ?-A. It is, in the matter of appraisement, entirely.
by til I value
Q. ask you then, again, to tell, if you know, what motive actuated the board of trus.
tees, or what object the trustees had in reversing that rule, and graduating the fees to be

80

FREEDMAN'S SAVINGS AND? TRUST COMPANY.

on the amount of money that you might succeed in obtaining from the bank by your
negotiation.-A. That I do not know anyth ing about. Wllro we negotiated a loan ourselves, we charged tile parties for whom we got the money from tile bank a commission on
the amount of the loan. That resolution sees to refer to cases where parties went to negotiate with the bank directly, and whore the bank sent for us to appraise the value of the
property. therefore , in the one instance, (where we negotiated the loan ourselves for the
we would got a commission from the borrower for negotiating that loan; and, in
parties,)
other case, (whore the bank made a loan directly to parties on real estate, and sent to
tlho
us to appraise the property on which tlhe loan was made,) the fee or fees vere graduated
to tleo valuation of the property.
according
Where you acted in the double capacity of negotiator for the borrower and appraiser
Q.
for the lender, and your compensation was graduated on the amount of the loan obtained,
and not on the value of the security, was it not the obvious tendency of such an arrange.
ment to induce you to obtain the largest amount of money on the smallest value pledged ?-

paid

A. I cannot say what the obvious tendency might be. I refer to the records of the Freednan's Bank for all the loans negotiated through us, and I will stand by them.
Q. While acting in tile double capacity referred to, did you charge both a commission on
the amount obtained for your client and the fee or commission on the property appraised 1A. We only charged a commission on the loan negotiated, not for the appraising of the

property.
made ?-A. By examination of the property and by givQ. How were your appraisements
upon it, we being familiar with the real estate of the city-thle same as we
ing our judgment
appraise for people all over the country who come here or write to us. We give them the
best of our judgment, and that is all there is of it.
Q. Did you go any further into the matter than indicated in your last answer ?-A. No;
we did not examine tlle title to the property or anything of tlat kind.
Q. Then I understand you to say tlat, as authorized appraisers of the bank, of property
to it as security for loans, you never went into any examination of tlle title to ascerpledged
tain whether the property was or was not unencumbered i-A. We wero authorized simply
to appraise the value of the property. The bank had its own attorney to examine the title.
We were not called upon to examine titles. It is not a branch of our business.
Q. Do you mean to say ta t you ascertained and reported values without any effort on
your
part to discover whether the property might not all b)o encumbered to its full estimated
value --A. We were only called upon to appraise the value of property, without regard to
tle condition of its encumbrances.
Q. Did you receive, for your services as agent of tile hank, any compensation from the
bank ?-A. I do not think we ever received a dollar. It is possible we may have appraised
for the bank in some negotiation, and charged our fee, but I do not recollect. It is not unlikely tlat we did. We would charge the bank as we would anybody else. They used to
send to us to appraise property; and I think when tile business was closed up through tile
bank they would reserve our fee from the borrowers and pay uts; but I am not positive
about that. It would amount to' but very little.
Q. In what form of security was real estate, when taken, pledged for loans ?-A. Tile general form here is a deed of trust on the property. 'Ille property is conveyed to trustees to
hold tioe title in trust for tile parties in interest-the lender and tile owner of the propertywitl absolute power to sell or convey when in default.
Q. Did you have anything to do with tile drawing of these deeds ?-A. I am not positive,

but I presume that tlmo deeds of trust were drawn in our office for the loans made through
office .T'hat is our custom.
Q. Who ewas generally Inamed as trusteein tlese deeds for tleo benefit of the bank ?-A.
There are generally two trustees-one to represent the bank and one to represent tilo borrower. ''hat is the general custom. Whlo tile trustees were of course would vary in cash
loan. We have got no record as to wlio were trustees, but tie deeds of trust themselves will
show.
Q. Do you not recollect ?-A. No; we have not made a loan with the Freedman's Bank
for five or six years, I should think. I do not suppose that wo negotiated one loan with that
bank where other brokers negotiated ton. In fact, they got through with us in a little while.
When the bank first commenced loaning money on real estate it selected us to appraise the
value of the real estate, which wo did, witl tleso instructions: that at all times we should
look out for the interest of the bank. I remember that specifically. We appraised property,
and our appraisal was seldom, if ever, to tlhe satisfaction of the people who wanted to borrow the money. I do not think wo acted as appraisers more than six months, because parties applying for loans could not get as much as they wanted on our appraisal, and they
went to the bank directly; and so, front some reason, (I do not know why,) the bank officers
commenced from that to appraise property for themselves, or through some other source besides us. I think that tile records ot the Freedman's Bank will show that every loan made
on property which Kilbourn & Latta appraised has been paid, principal and interest, without any trouble at all.
Q. Was not D. L. Eaton, the actuary of the bank, generally one of the trustees named In
the deeds of trust ?-A. I think he generally was.
our

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

81

Q. Can you, after reflection, name any other party who was associated with him as such
trustee ?-A. I cannot. It would vary undoubtedly with each loan. Sometimes one of our
own firm would be a trustee for the borrower. rhat is the custom now when we make
loans. We generally put in one of ourselves in connection with some one else.
Q. Is it not a fact, that, leaving out of consideration the shrinkage in values consequent
of 1873, much of the real-estate security taken by the F'reedman's Bank proved
upon the panic
valueless, more or less, by reason of defective title, previous incumbrance, and other questions leading to litigation 7-A. That is something which I do not know anything about. I
do not know anything of the loans of the Freedman's Bank except such as went through
our office, and those I will stand by.
Q. Do you know anything of a loan of $15,000 to Alexander R. Shepherd, on lots 5 and
6, in square 452 ?-A. I do not recollect anything about that special loan, yet I may have
transacted the business.
Q. Are
you acquainted with the property in that square ?-A. I cannot call it to mind.
Q. When were you first called upon to appraise real estate, taken as security for loans, for
the Freedman's Bank ?-A. I cannot specify the year. I think it was when the bank was
in business on Seventh street, right opposite the Post-Office. We had our office at the corner
of Seventh and F streets.
Q. Do you know of any loans made on real estate by the Freedman's Bank prior to May
is that loans were made prior to that date on real estate.
6, 187( ?-A. My impression
Q. Had you any agency in affecting the amendment of the charter of the bank, which was
made in May, 1870 ?-A. I was up before the Committee for the District of Columib'a one
when Mr. Eaton came up there to have the charter amended so that the bank co.ild
day,
loan money on real estate in the District. As I khew quite a number of tihe committee,
Mr. Eaton asked me to aid him, and I expressed myself there to the committee on tile suble made an application for leave to loan, I think, one-third or one-fourth of the pro.
ject.
ceeds of the bank on real estate in the District. I forget what was passed afterwards. I'That
was all I have had to do with it, and that was the way it occurred. I happened to meet him
in the committee-room while I was there on other business.
Q. Had you ever liad, prior to that time, any conference with Mr. Eaton or with William
S. Huntington, or with any of the other trustees or officers of tle bank in relation to the proamendment to the chartor?-A. I don't recollect that I ever did. My impression is,
posed
as I have stated, that this is the first thing I know about it. Tho bank then was close to
us, and we knew a good many of their people and were quite familiar with them; and it
may have been talked over before, but I do not recollect.
Q. Can you recollect at this time any of the parties for whom you negotiated loans
with tire Freedman's Bank upon real estate?-A. 1 cannot call them to mind now. Of
course, I can refresh my memory by referring to papers or books in our office. We made
numerous loans.
Q. Did you negotiate any loans for other persons, sole or corporate, on other securities
than real estateY-A. I do not recollect. That is just the same as the transaction on realestate security. 1 can recollect none of them.
Q. lIad you any connection as stockholder, or otherwise, with tle Metropolis Paving
?-A. Yes; I was a stockholder.
Company
Q. Name some of the other stockholders.-A. I think Dr. John L. Kidwell was a stoclholder. I know that Lewis Clephane was, and Moses Kelly was, I think. I cannot undertake to recollect all the names, because I was only a stockholder of the company, not an

officer.
Q. Wore any of the trustees or officers of the Freedman's Bank stockholders in the
Paving Company ?-A. I do not know who the trustees of tire Freedman's Bank
Metropolis
were, I know some of them, and unless some of those I have just mentioned wore trustees,
I do iiot know. A list of the stockholders of the Metropolis Paving Company has been
published, which I can furnish to the committee, but I cannot give their names from memory.
Q. For what purpose and with what actual paid-up capital was tie Metropolis Paving
That I cannot pretend to give time particulars of. I think that
organized ?-A. made
Company the
a statement before one of the investigating committees, in
Cloplhne,
president,
which it will all appear, and I will endeavor to furnish the committee with a copy of it. I
do not pretend to remember anything about the details.
Q. Did tliat company take contracts under the board of public works of the District for
work ?-A. I think only three or four.
any paving
Q. Had J. V. W. Vandenburgh any connection with that pavin company ?-A. I do not
recollect.
Q. Do you recollect negotiating any loan at any timn for him --A. I do not.
Q. Do you know of any business connection between Lewis Cleplhne and J. 'V. W.
?-A. I do not; they may have had a hundred without my knowledge.
Vandenburgli
Q. In negotiating loans with tlhe Freedman's Bank, to whom did you apply Y-A. To the
actuary,
Q. Were tle loans usually effected with him without reference to the finance coinnirtee Y-.A. My recollection is that in the majority of instances they were referred to the

GFB'I

82

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

finance committee; but I am under tho impression that le passed some without reference to
the finance committee,
Q. Was G. W. Stickney, the assistant aefuary, usually in the office with D. L. Eaton,
aiding and assisting in the business of the bank 1 -A. His duties, I think, were in the same
room with Mr. Eaton. One or the other of them was out a good deal, and I have often been
there when I could not find either of them. When he was appointed assistant actuary I do
not klow, but I think he was clerk some time before I heard that lie was appointed
assistant actuary.
Q. Did Mr. Eaton usually charge a commission on the sales of the real-estate securities
which were sold under deeds of trust in which ile was trustee ?-A. That I do not know
anything about.
Q. Do you know of any instance in whicll he, or any other officer or agent of the bank,
received a bonus or consideration of any sort for loans granted t-A. I do not.
Q. Have you had any business connection with Lewis Cleplaneo?-A. I have been
interested in business transactions with him in this Metropolis Paving Company, and in
some other work with Clephane & Evans.
Q. State thle nature of those transactions.-A. They have been in connection with paving.
contracts. Clephane & Evans and I were interested together in some works of paving, and
then I was connected, as a stockholder, with Mr. Clepiane in tlh Metropolis Paving Com.

pany.

commissioners of the Freedman's
Q. I see mentioned now and then in tile report of the
as the Metropolis Paving Company?Bank, tile AbbottPaving Company; was that the same
A. No, sir; I do not know anything about that. I know as a general fiet that there was
I never had

a paving company, but who comprised it I do not know.
anything to do
with it.
A. That I do not. know.
Q. Was it an incorporated company ?-connection
with William S. Iuntington or D. L.
DIid you ever have any business
Q.
Eaton ?-A. I never had any business connection with William S. Huntington and D. L.
Eaton. 1 have lhad business with Mr. Hlntington.
Q. Of walat character?-A. General business; no business of a public character at all,
Q. I understand you to say that you had business connection with William S. Huntington. I desire to know what was the business you were prosecuting together ?-A. He was also
a stockholder, I think, in tle Metropolis Paving Company. I think that is about the only
business relation I ever lad with him, except borrowing money at his baik. He was with
us, to some extent, in the Metropolis Paving Company, but never outside of that, I think,
I do not recollect anything else just now.
or William S. Huntington, or
Q. Was there ever anything said to you by D. L. Eaton
one connected officially with tile Freedmlan's Batnk, as to why they desired to amend
any
its charter in 17() ?-A. I do not recollect that there ever was anything said to me. I do
not know that I ever passed a word with Mr. Huntington in my life about it. I know that
I talked withlMr. Eaton about it tle day that I was up here before tile District committee,
and I may have talked with him about it before that, but I do not recollect. I have no
doubt that I did afterward. I thought it a good tling for the city to have the charter so

such

amended.
have any consultation with J. W. Alvord or IH. D. Cooke or William 8.
Q. Did you ever
on the subject of the bank charter before Congress was applied to ?-A. 1 do not
Huntington
recollect ever having any such conversation, yet I may have had; I only happen to romember this distinct meeting of Mr. Eaton up at the rooml of the District committee. I may have
had a thousand talks with him on tile subject, but I renmenber nothing about it.
or otherwise, with the Maryland Freestone
Q. Had you any connection, as a stockholder
?-A. I never had.
Company
MiningDoand Manutacturing
Q.
you know what became of the first-mortgage bonds of tile Maryland Freestone
Mining and Manufacturing Company that were once held by tlle Freedman's Bank ?-A. I
do not know anything about it.
Q. Did you and John 0. Evans ever execute a joint note for the sum of $50,000 to the
Freedman'stBank, with a secret understanding between you and Lewis Clephane, William
S. I-untington, and L. I. 'Tuttle, that that note with thle securities which you deposited as collateral (except $75,000of second-mnortgage bondsof thleMalryland F1reestolne Miningland Manufacturing
Company) should be returned to youl If so, state for what purpose that note was
given and the arrangement entered into.-A. 1 never had anty secret understanding with anybody in regard to tilat note. Mr. lEaton, tile actuary, came to ne and stated that the bank
lad nade a loan to tihe Seneca Stone CQimpany, and that thel plaprs were denouncing the
Seneca Sandstone Company, and trying to place it in bad odor, and lie wished to
know if I would not, with Mr. Evanls, come in and temporarily put in some additional
securities, and( make tihe loan in our name. I think he came, plerlaps, twice to see aboutI
it, and possibly three times. I spoke to Mr. Evans; and tlhe last time Mr. Eaton camen,
sent for Mr. Evans, and we talked it over. We told Mr. Eaton we would do anything that
we could that was proper for thle benefit of the bank so long as we were hold harmless in
tile matter. Tlhe way Eaton expressed himself \asi that tile bank might got in l)ad odor on
account of tile papers detIoinecing this loan inade to the Seneca Stone Company, and he
wished us to come in as additional security. I sent 'or Mr. Evans, and
wl went over to

FREEDMAN'S SAVINGS AND T' UST COMPANY.

83

the bank and said that we would put in our securities, provided we were held harmless in
the matter, if it was any accommodation to the bank. There was nothing secret about it.
Eaton was the only person who over spoke to me about it. We transacted tih business
there. I hastily drew up a paper, and told him that if that was aliproved by tlh finance
committee, we would do it; and we did. When he brought the paper approved, we gave
him our securities, and took a receipt for them. Ho said le had $75,000 of bonds on whici
the Seneca Stone Company loan was made. I never saw tile bonds. In fact, I never saw
a bond or share of stock of tho Seneca Stone Company in ny lifo. Ile represented to us
that the matter was going to be fixed up in a short time by the company; and, at his solicitation, we did this. I did not know (and I do not know now) that there was anything secret
same formality as tho application for any
about it. So far as I knew, it went through
; but we
other loan did. It is a matter in which wvo had no interest, directly or
did it as one business neighbor does for another when application is made under simisimply
lar circumstances, and we supposed that the matter would be fixed right up. We did not
get the return of our securities, I think, till after the failure of Jay Cooke & Co. No consideration passed to us ill tile matter. We did not receive a cent in connection with it.
said that tile bank had securities there on which it advanced this money to the Seneca
Eqton
Stone Company.
that tile substitution of the
Q. Did not you understand, at the time of tlat transaction,
notes of what is commonly called
joint note of Htallet Kilbournwasand John 0. Evans for the
a temporary expedient to make it appear that tile loan to tile
tie Seneca Stone Company
Seneca Stone Company had been liquidated and settled ?-A. I do not know that the Seneca
Stone Company ever had a note il tile bank. I do not know now, and did not know then.
I understood tilit it was an advance made to the company by the Freedman's Banik, but I
did not know that the bank had a note for it.
Q. Do you mean to say that you executed and deposited in the bank an acknowledgment
of debt to tie amount of $50,000, with a specific agreement lthat that obligation, with all its
collaterals, was to.be returned to you, and that the bank should retain as security only $75,000
of second-mortgage bonds of tile Seneca Stone Company,' which it already lad, but yet
that you know nothing ot the nature and character and object of that arrangement ?-A. In
the first place I knew nothing about the character of tile bonds held by the bank. I never
saw them. I only know that Mr. Eaton stated that they had $75,000 of bonds on which lie
made tile loan, and lie wished us to put in some other secnrilies and let the loan appear in
our name, which we did. In tle light of subsequent events, I am satisfied that two business men never did a more foolish thling in the world. But they were just as sincere and
you about it. We did it at Mr. Eaton's
straightforward about it as I am now in tellingBank
was good, and that if it loaned money
solicitation. We supposed tha tthe
securities were good. We did it just for tile reason stated. The only
upon securities,
tile
reason that lie assigned was that tile newspapers had been pitching into tlih bank about it.
Q. Our object is to show that you understood that Eaton's purpose was to cover up a tran1saction which he did not wish known.-A, Wliat his individual object was it is not for me
to say; I can only state what lie represented his object to be.
Q. And what was his object as he stated it ?-A. That lie wanted tlhe loan to appear in our
namiie.
Q. That is, le wanted to substitute your note for the note of the Seneca Stone Company ?
-A. I did not know that he ever had any note at all from the Seneca Stone Company, but.
to have tlhe loan appear in our name. It was a temporary matter, as I understood.
beQ.wanlietedwanted
it to appear (and you understood it in that way) that the loan which had
been nlade to tlhe Seneca Stone Conmpuny was in fact canceled andi transferred to you ?--A..
Yes; and he gave us assurance that it would be fixed up in a short time ; that the security
was good. &c.
By Mr. STENGEnt:
Q. You did not know tile shape in which that "loan was made ?-A. No, sir; and I do not
know now. We did tils tiling as what we call a thanking job." It appears, right oil tile
face, that they wanted to transfer the loan to us. Their secret motive we did not know.
That can probably be got at through some other source.
Q. There was a written engagement entered into at the same time between yourself and
Evans on the one part, and Eaton, Clephlane, Huntington, and Tuttle on the other part,
that your note, with the collaterals that you placed with it, was to be returned to you after
a season. Who held that agreement?-A. We never hnd any agreement with Messrs.
Eaton, Huntington, Tuttle, and Clophane. I never spoke to anybody but Eaton about it.
We drew up tile paper in the back office and took a copy of it and we kept that copy. I
never spoke to anybody else about it but Eaton.
Q. Did you not say a while ago that only consented to go into tile arrangement which
Eaton proposed on its being approved you
by tile finance committee, and wore not Clephane,
and Tuttlo members of that committee ?-A. I did say so, and they were memHIuntinlgton,
bers of that committee, and Eaton brought their endorsement on our document. I never
a word to any of them about it, nor they to me. I did it as I do all business transacspoke
tious and loans. T'ie history of that matter is a part of the report of the commissioners of
thie reedimanl's Bank to Congress, with all the documents and our statement in regard to it,
which I would like to have
niako part of mly testimony iin this cse.

tile

Freednlan's

indirectly

84

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q. This paper, on page 56 of the first report of the commissioners, is tlel paper to which
you refer, I presumn?-A. (After looking at it.) Yes, sir.
Q. I see by this paper, wilich I understand you to say you drew up, that you are represented as depositing, as collateral security for this debt, the $75,000 of second-mortgage
bonds of thle Seneca Stone Company.-A. Those bonds are enumerated among the list of
securities. I never saw them. Mr. Eaton stated that he had them there, but we did not
then. Thlle paper is rather bunglingly drawn, because it states that our collateral
deposit
are to be returned to us, and tile others received in payment of the debt. So fir as we were
concerned, we kneow nothing about tile relations of the Freedmtan's Bank with the Seneca
Stone Company.
Q. Did any conversation pass between you and Mr. Eaton, the actuary, with reference to
the putting of these facts into this paper ?-A. Yes, sir, we enumerated what we put in, and
he said he had $75.000 of bonds; wioether ie suggested to put them in or not, or whether I,
ust in a hurry, put them in, I do not recollect. I only know that it was at his suggestion,
as he wanted to have the loan transferred.
Q. Did it not appear from his conversation tlat he wanted this color to be put on the
this was the original negotiation, so far as the 8$75,000 of second-mortgage
transactionl-that
bonds went- ?-A. I should think not; because, as I understood, they were there, and the
trustees and everybody, I suppose, must have known about them,
Q. Was it intended that this agreement was to'go on the books of the company ?-A. I
do not know. I suppose it did, as a matter of course. I suppose that everything went on
the record.
Q. Did anything appear in the conversation with Eaton by which you were led to believe
that lie wanted all the former transactions with the Maryland Freestone Mining and Man.
ufacturing Company wiped out ?-A. No; I do not think there was. It was not a very long
interview.
Q. So that it should appear tliat tie loan was made to you and Evans, and not to the Seneca
Stone Company ?-A. I only know that Eaton wanted to have tile loan appear in our name,
as I have said. Whether the Seneca Stone Company had a note in tlim bank,or whether
just
there was any record on the books about it, I did not know until I saw tile statement of the
assistant actuary.
Q. You have seen that statement by Mr. Stickney, from which it appears that tile bank,
'at that date whenm you gave these securities, was tile creditor of tile Seneca Stone Company
to tile amount of some $51,000 ?-A. Yes.

By tile CAIRMANn :
Q. Did you know beforehand, or did 1). L. Eaton say to you, that Joln M. Langston,
chairman of special committee, (to inquire, among other tlilngs, into the dealings of the bank
with the Seneca Stone Company,) had received a communication from G. W. Stickney ex.
and itemizing that transaction, or those transactions ?-A. No.
planning
Q. You had no knowledge of it yourself, and ieo did not say so ?-A. No; I had no
of anything about it. Ite told me about some newvsp'iper articles.
knowledge
Q. Was the date given to the transaction between D. L. Eaton and yourself and Evans,
which appears in the commissioners' report, page 56, to be Deceniber 30, 1873, the true
date ?-A. I think it should be 1871. I think that 1873 is a misprint,
Q. Is the date of tbo receipt signed by yourself and Evans, bearing date November, 1873,
correct ?-A. I think it is correct.
Q. On page 7 of the commissioners' report, under date of November 6, 1873, is a detailed
signed by G. W. Stiekney, actuary, and addressed to J. M. Langston, csq., chair.
Statement
man of special committee, exhibiting tile state of the account between the Freedman's Bank
and the Seneca Stone Company. Look at the same, and say whether any reference was
made to that paper in your conversation with Eaton, or Stickney, or any other officer or
conagentof the bank, or whether you had any knowledge of itbefore ?--A. I never had anyabout
versation except with Eaton about it. I never
had any conversation with Stickney
it, and I do not recollect of Mr. Eaton's going into any details. I know nothing about this
statement until I saw it in

print. I think that Mr. Eaton told us that the bank had advanced
the Seneca Stone Company $50,000, but how, or when, or for what, or on what security, he
did not state.
Q. Did Eaton tell you that the bank had advanced money to the Seneca Stono Company ?-A. Yes; he said that they had made a loan of $50,000 to the Seneca Stone Company, which hoe wanted to have transferred to us, or to let it appear as if it were transferred.
that under date of July 25, 1870, there was a
Q. From the statement referred to, it
loan to tile Seneca Stone Company, or aappears
the Freedman's Bank from the Seneca
purchase
Stone Company of twenty first-mottgago bonds ofbythe company at $18,000. Did Mr. Eaton
or Mr. Stickney say what disposition had been made of those bonds ?-A. Not to me; they
said nothing to me about it.
Q. The last item in this statement reads, "Interest due on tlhe above loans December 30,
1871, $2,785.73;" and that, you say, is the true date of the arrangement which you entered
into with Eaton, and which was misdated December, 18737--A. I think that that is the
date. My impression is that it was the 30th of December, 1871.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

85

Q. Then the date of that statement and the date of your agreement with Eaton are coincident?-A. I suppose that the books are settled up to that time, and that Mr. Stickney has
given tile statement of tle account of the Seneca Stone Company with the bank up to that
same day.
Q. Wts Mr. Stickney privy to the engagement between yourself and Evans and D. L.
Eaton t-A. I had no conversation with Stickney about it. We transacted the business
there in tihe presence of the bank-officerl.. There were several clerks there. I do not know
whether Sticknoy was there or not. We sat down at the center-table and transacted the
business during business hours.
Q. Why did you permit your note and the collaterals which you placed with it to remain
in the possession of the Freedman's Bank until November 15, 1873, just nine days after the
rendition of the statement of Stickney to Langston above referred to, if you knew' nothing
of the nature of tlat transaction between tlle bank and the Seneca Stone Company ?-A.
We made a personal application for them. Mr. Langston and President Alvord came over
to our office, and we made an application for the return of our documents, and probably it
was on that application that this report was got up. I think that Mr. Evans went over to
tihe bank and made a personal application. I think that that brought Mr. Alvord and Mr.
to our office, and then the matter was fully developed. I suppose that, after we
Langston
made our personal application, they had this report made out to see the status of affairs.
It was a piece of neglect on our part to let our note and securities remain so long, but I
was away out of the country for some time. I do not know whether Mr. Evans made any
for them or not. I do not know that there was ever any application made for
application
them before. I think tlat the panic and the failure of Jay Cooko & Co. stirred us up about
this matter right to a point and getting back our note and collateral.
bringing
You say something about Alvord and Laugston coming to your office to inquire into
Q.
the transaction. Was it not evident that they were ignorant of it until a short time prior to
that ?-A. I think it is evident that they were, because they said they know nothing about
it when they came over.
Q. Then, when I some time ago characterized it as a secret transaction, I was correct ?-A.
There was no secrecy on our part.
The ClHAIRMAN. I said it was a transaction secret to the other officers of the bank.
Thle WTrNESS. You included in your question officers of the finance committee, to whom we
never spoke a word, and so far as secrecy on our part was concerned, we had no reason to
suppose tlat the matter was not spread right on the books of tile bank as every other transaction was. There was no secrecy about it on our part. Our business was straightforward.
By Mr. BRADFORD:
Q. Woulld not the transaction have been robbed of all its force and significance if it had
been publicly known that you had the right to withdraw all the available securities on
which tlat loan was seemingly based ?-A. That is a matter of interpretation. I do not
know how it was known that tile Freedman's Bank had made a loan to tleo Seneca Stone
Eaton said that it was so reported in the papers, and that the report was injurCompany.
the credit of the bank, and that if we would make this temporary arrangement, the
ing
Soneca Stone Company was good for the debt.
Q. But was it not tile design to induce the public to believe tlat it was a good loan, because tlhe bank had the pledge of Kilbourn and Evans to pay it ?-A. I cannot say as to tile
design.Was it not
Q.
your design to assist the bank in inducing the public to believe that the
loan was on the pledge of Kilbourn and Eyans, and was accompanied by avaiilablo securities ?-A. Our pulrposo was to loan the bank our name and collaterals, if it would aid tlhe
credit of the bank. We were willing, so long as we were protected, to put in our name and
our securities.
Q. Were you not business men enough to know at that time that if tie knowledge of your
obligation had been accompanied by the corresponding knowledge that you ihad the right to
withdraw all your available collaterals it would have robbed thle arrangement of all its
force ?-A. Our loan was accompanied witl that very document,
Mr. BIRA1)FOit). That passed subl siltetio.
The WrITNESS. It all passed together. WhIat disposition they made of the paper was something we did not know at tile time.
By Mr. RIDDLE:
Q. You never got any money out of tie transaction --A. Never a cent.
By tile CIIAIRMIAN:
Q. Tlhe public had a right, under tile charter of tile company, to inspect tlle books of tile
company. liow would tile credit of the bank have been assisted in the estimation of the
public or of tile newspaper-pross by finding that one bad loan had been substituted by a
worse one --A. As I understood it, tile bank did not consider that the Seneca Stone Company's loan was a bad one, but considered it a good loan. That is tile way I understood it,

86

FRFELDM)AN'lN SAVINGS

AND TRUST COMPANY.

but the public press, or whoever was pitching into tile bank, did not think tlit the loan was
good.
The ClrAIRMAN. It turned out that tile public judged correctly.
Tile WITNESS. I guess tile loan was good tit di1t. time.
By Mr. BRAI)DFOID:
Q. You stated a while ago that no consideration moved you, or your partner Eva;'s, in reto the transaction, and that it was founded on no colsileratiou moving directly either
gard
of you -A. Either directly or indirectly.
Q. Did you not expect to be benefited by the increased facilities with which you could
loans with the bank ?-A. Not a particle; we had not done any business with the
negotiate
banks for some time.
Q.. Are you a debtor to tile bank? -A. Not a dollar.
This $14,000 loan and $3,000 loan that I find in the commissioners' report, are they
?-A. Yes; we do not owe the lFreedmani's Bank a cent. Every obligation that we
paid
up
over had there has been paid. We do not owe tile Freedman's Bank a cent in tile world:
By Mfr. RI)IL)r,:
Q. You went into tile transaction to befriend Eaton --A. To befriend the Freed man's
Bank.
By Mr. BRADlFORD:
Q. Did you not owe the bank in March, 1863, $2,9507--A. Tllere is a note which I
signed as president of the National Junction Company. That note has been sued upon, but
I never got a cent on it out of the Freedman's Bank.
Q. Is it not your individual obligation --A. No, sir.
Q. Did you sign that obligation as president ?-A. Yes, sir. The National Junction Railroad Company was organized by act of Congress to rin a railroad through this city. I was
elected president and Mr. Huntington treasurer. It was an enterprise that was being manI may say, by Governor Cooke, who expected to make some arrangement with the
aged,
Baltimore and Ohio Railroad Company. Governor Cooke bought ia cargo of iron to have it
laid down, but the thing all came to nought. In the mean time there were expenses, and I
Bank for three or four
borrowed, as president of tlhe company, $3,000 from the Firstor National
months. That note was transferred by Mr. Huntington by the F irst National Bank to
the Freedman's Bank, and has been renewed there once or twice. I never got a cent from
the Freedman's Bank. That note is in suit now.
By Mr. S'rENae :
First National Bank must have got the money from the Freedmlan's Bank ?
Q. Then the
-A. I got the money from the First National Batik and Mr. Huntington transferred the
note to the Freedman's Bank.
By the CHAIRMAN:
Q. And the Freedman's Bank re-imbursed the First National Bank ?-A. I suppose so
the record will show that.
R "hit,: . rrlis PavQ. Here seems to be another transfer by Mr. Huntington of a debt of tlie
ing Company of $28,113.60 from the First National Bank ; do you know for whiat purpose
that money was obtained ?-A. I do not know. Tlhe Metropolis Paving Company, I think,
borrowed money of the Freedman's Batik once or twice and paid it, and I presume that is
one of the loans.
Q. Have theso loans been paid ?-A. Everything.
Q. Do you know how they were paid ?--A. With cash, when they became due.
Q. Do you know anything about Huntington depositing $55,000 in city assessments to
secure this loan of $28,113.60 1-A. I do not know anything about it. I liad nothing to do
with the business management of the company. I know that tile Metropolis Paving Company does not owe the lFreedmen's Bank anything.
1By M. S'TrssNG.1t:
Q. With reference to this loan to you as president of tlio National Junction Railroad Compaty; I understood you to say that that company was incorporated by act of Congress,-A.
Yes.
Q. And there was no personal liability ?-A. No.
Q. And the note was given as a corporation-noteo -A. Yes; I signed it as president.
This was when tile company was starting. A loan was got from the First National Bank, df
wiich Mr. Huntington was cashier, lie being also treasurer of the company.
Q. And that note found its way to the Freedmnan's Bank, ti!e First National Bank being
reimbursed f-A. I suppose so.
Q. 1)o you know why that transfer was made ?-A. I do not. The note has been renewed
once or twice to the Freednian's Bank, and is in suit now. They try to hold nre individually responsible for it.
By the CIIAllRMAN:
Do
Q.
you know of tany fiect or circumstance tending to lslow, or creating tile belief in

FREEDMAN'S SAVINGS AND TRUST COMPANY.

87

nlind, thit any officer or agent of the Freedman's Banlk ever had any interest, directly
your
or indirectly, in any of the loans made by that bank to third parties ?-A. I do not, in any
except so far as some of tlhe bank officers nnay have been stockholders
way, shape, or manner,
that
these loans.
in nssoci:tions

procured

SfILECT COMMITTEE ON FRtEEDMAN'S BANK,
Washington, February 29, 1876.
The committee met at 10 o'clock a. in. Present, Messrs. Bradford, Riddle, and Rainey.
CIARLES W. HIAYI)N (recalled) affirmed anid examined.
By Mr. BIRADIF ID):
You were examined before this committee on a former day ?-Answer. Yes.
Question.
Q. What did you say on tliat occasion in reference to tlio cash-hook of the Seneca Stone
Company --A. That it was in the lands of Mr. Risley, the treasurer.
Q. Have you since obtained
possession of it 7-A. itYes.
is, (producing it.) This is the origiQ. Have you the book with you f-A. Yes ; here
nal cash-book of the Maryland Freestone Miling and Manufacturinng Company.
Q. Can you give any reason why the cash-book was not produced by yourself or Mr.
Alvord earlier --A. No; I can give no reason,
Q. In whose possession has it been since the first examination of yourself before the
committee ?-A. In the hands of Mr. Risloy, until a few days ago. The secretary (Mr.
Jones) turned it over to me for examination.
Q. Do you know of any search being made for the book by Mr. Alvord ?-A. Yes; I believe he has been looking for it.
could he not get possession of it ?-A. lHe is not entitled to tile possession of it.
Q. Why
of the company f-A. I hardly think he is. leo has allowed
Q. Is le not the president
two annual meetings to pass without calling the stockholders together to elect officers,
and I rather think the whole company has gone by default. He may claim to be president
still. Besides, he could not explain the book.
Q, You think that the corporate existence of tile company has ceased by non-user 7-A.

That is a legal question that I am not able to answer. I am not now an officer of the company.
Q. How did you get possession of this book ?--A. I got possession of it from the secretary
of the company. l-e turned it over to me for examination. I am the old officer of the
who kept the book.
company
Q. Does this book show what was paid by those who obtained stock of the company,
sucli as Mr. Seward, Mr. Caleb Cushing, and others who purchased the stock at the same
time?-A. No; they purchased the stock from private individuals,
Q. And this book shows nothing in regard to transactions of that sort 7-A. No, sir. They
purchased( their stock from Kidwell, Dodge, tand Cooke, and not from the company. There
are credits in the book to Kidwell, Dodge, and Cooke for moneys loaned by them to the
company.
Q. Wore those loans paid by that stock ?-A. The loans were paid by the first-mortgage
bonds. They loaned the company money and took first-mortgage bonds for it; that is shown
in tile cash-book.
Q. Have you got any book tlat shows what was paid for that stock which tileso gentlemen, Mr. Cushing, Mr. Seward, General Grant, and others obtained ?-A. No, sir.
Q. That was purely a private matter ?-A. Purely a private matter.
Q. Is this tile only cash-book kept by tle company Y-A. Yes.
Q. This is tile cash-book from tle commencement to the end --A. The company has
another cash.book since that time, but it does not contain any of these original tranxactions.
This book goes from 18(;7 up to toe first of January, 1873, I think.
By Mr. RIDDLE)L
This
is just an expense-book of the company ?-A. Yes.
Q.
Q. Wherein you charged yourself with cash on one side and credited yourself with dis.
bursemients on tile other ?-A. Yes.

WASIIINITON, D. C., Ftbrwury D9, 1876.
J. W. Avo)i lccalled.
By Mr. BRtAlFORD:
of tile Seneca Stone Company 7Question. Is this (showing it to witness) tlhe cash-book
Answer, I cannot toll, I never saw
it before. I will look at it and give you my opinion.

it :) my improssipn is that this is the book.
(After'examining
hold of it ?-A. They did not lot meIo have it.
Q. Why could you not get

88

FREEDMAN'S SAVINGS AND TRUST COMPANY.

WASIIINGTON, D. C., February'29, 1876.
GEOirE I). J)tJNSON sworn and examined.
By Mr. BRADFORD:
Question. What, if any, connection have you over had with the Freed man's Bank ?Answer. I have been general book-keeper. I went in first as a book-keeper to the Washfour, or five, or six months I was made general book-keeper.
ington branch,didand afterenter
the employment of the bank ?-A. I think in January, 1871
Q. When
you
or 1872. The bank was then down on Seventh street.
Q. In what capacity did you first enter the bank ?-A. I went in as book-keeper of the
branch, anld then became general book-keeper.
Washington
Q. What was within the line of your duty as general book-keeper ?-A. To keep the accounts of the branches, and to open and assort the mail in the morning. I kept the books
and made out the statements of the condition of the company from month to month.
Q. Who seemed to control the financial affairs of the bank while you were there; who
was the clief man ?-A. The actuary.
Q. Were you ever present at the meetings of the finance committee 1-A. No, sir.
Q. How often did that committee meet ?-A. Once a week.
Q. Were its meetings regular ?-A. Yes; they met quite regularly indeed.
Q. Did they have a quorum at every meeting ?-A. No; I think not. I remember instances where there was not a quorum.
Q. What members of the committee were generally present when there was not a quorum ?-A. I remember that General Balloch was one of the committee, and Mr. Tuttle, who
was at that time assistant treasurer of the United States, and Mr. Langston, and Mr. Richards, and I think Mr. French.
Q. Were you ever present at the meetings of the trustees of the Freedman's Bank ?-A
No, sir; when they met, I would go into another roopl.
Q. Did the trustees have any stated time of meeting ?--A. Once a month.
Q. Did the trustees all generally attend these meetings ?-A. They generally had a quorum
once a month.
Q. Can you recollect any loans made by tlat bank without security ?-A. Yes; I know
several such loans, but none of any great importance, except t, the branches in tile South.
At some of those branches there were overdrafts. At the Jacksonville branch there were
overdrafts by Eppinger, Raslor & Company, and by Allen Fehrer & Company.
Q. To what extent were those overdrafts ?-A. When Allen Fehrer & Company failed, I
think they owed forty-two or forty-three thousand dollars. I remember that we held a good
many of their overdrafts dishonored. Allen Fehrer, at Jacksonville, drew on Allen Fohrer,
at Baltimore, and the drafts came to us protested.
Q. Do you know where tlose parties did business?-A. They had a lumber-mill on Saint
John's River in]Florida, and when they made shipments, would draw on the concern to which
them.
they made
Q. Can you recollect any other loans that were irregularly made ?-A. There was a party
at BeaIufort, South Carolina, who used to get overdrafts. In fact there were several overdrafts for two or three or five thousand dollars, and one I think as high as eight thousand
dollars.
Q. What was the aggregate amount of those drafts ?-A. I do not know. None of them
were protested, it seems. They seemed to be all good ; but at thle Beaufort branch there were
loans out amounting to $100,000, I think.
Q. Were they bad loans ?-A. I do not think that the bank will get more than $13,000 on
the whole of them. The same is true at Jacksonville. At Vieksburgh the cashier, Benjamin F. Lee, was at tile same time mayor of the city, and made loans on some city scrip,
which he reported as cash. Ho would draw drafts upon us and take up this scrip, and it
would show in his cash-account as cash. I believe that once Mr. Sperry, the inspector,
went down there. He reported that the scrip was counted in as cash.
Q. What was the amount of that scrip in liou of cash ?-A. Some $7,000 or $8,000.
Q. Do you know of any other improper loans ?-A. At Memphis they made advances on
cotton. The cashier said he would take the responsibility of doing so. His name was N.
D. Smith.
Q. Iow much did he advance on cotton ?-A. I think between $25,000 and $30,000. Tlhe
bank has never been able to collect anything out of it. There were numerous instances in
the principal office here.
Q. Tell us about some of them.-A. For instance, they would make advances to clerks in
the Departmenta. That is, they would advance them money on their pay, and only have
·

disbursing-officer.
Q. Did the bank get back those advances ?-A. Some of them they did not get back.
Q. Do you know anything about tihe loans of money to Vandonburgh ?-A. Yes.
Q. What do you know about them, showing that they were irregular and improper ?A. I do not know that I can tell anything about them. I only know that advances were
made to the full value of the bonds whiciho deposited.
Q. Explain thle transaction.-A. The bank made loans to him on the District 8 per cent.

an

order on the

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

89

bonds, advancing him 90 per cent. of the face value of those bonds, and the bonds were
afterward selling here at fronm'68 to 70. Vandenburgh got about $300,000 or $400,000. He
was associated, at that time, with the Ballard Paving Company.
constituted that company ?-A. Vandenburgh, I guess. I do not know of anyQ, Who
it but Vandenburgh. i did know the president's name, but I have forgotten it.
body inWho
assisted Vandenburgh in getting these loans at the bank ?-A. He negotiated
Q.

with Stickney; most of these loans were made by Mr. Stickney, perhaps with the advice
of the finance committee.
Q. Do you know any other irregularities in the loans negotiated by that bank i-A. I
know that parties came in there and had their notes discounted regularly. There were
numerous instances of that sort; small amounts, $75, $100, $'00, anid $300.
Q. Do you know anything tending to sho~y that aly officers of the bank profited by any
of those loans that were improperly made, about which you have spoken 1-A. I do not
know that I do.
or indirectly ?-A. I do not know anything about them.
Q. Directly
Q. Iave you examined the report of the commissioners of the Freedman's Bank?A. No, sir; I had a copy of the first report, but I lent it and did not get it back. I have
seen the last report, but could not get a copy of it. I wished to look over it. There are
some loans there which I would like to refresh my memory about.
Q Do you recollect the loan to Kit Carson ?-A. No. sir; I recollect a loan to Perry H.
Carson; I think it was for $500. Carson told me that Mr. Langston got the loan for him.
I know that I made out a deed of trust, leaving the amount blank because there was a pre.
vious loan of $500, and lie was about to borrow another $500. I did not know what the
amount of the interest on the first loan was, and therefore 1 made out the deed of trust with
the amount blank, and the deed was recorded in just that way too, without having the amount
stated in it.
Q. Do you know what Langston had to do With the loan other than as Carson told you
about it ?-A. I do not.
Q. Did you see Langston at the time the loan was made, assisting in the negotiation ?A. I did not notice particularly; lie was there every day.
Q. Did you not borrow $5,690.64 from the bank ?-A. Not from the bank. I borrowed
it from the receiver in the Allen Fehrer case. His name is Charles L. Mathew.
Q. It is charged up to you by the bank?-A. Yes.
Q. Is it not rightly clargeable to you by the bank ?-A. No, sir. I did not. look at it in
that way. l'he firn of Alien Fehrer & Company was insolvent and owed other parties.
Q. And you borrowed this money from the receiver ?-A. Yes; and the matter is in suit
now. That was about the time that Mr. Alvord went crazy. lHe was insane, and was
taken to Wilmington, Delaware, to some hospital.
Q. Was any other officer of that institution insane ?-A. I cannot say.
Q. Then do you not now owe that money to the Frcedman's Bank --A. No, I do not claim
to owe it to the Freedman's Bank.
Q. Your paper for that amount is outstanding and in the hands of the bank ?-A. Yes.
Q. And you say that suit has been brought on that paper against you ?-A. Yes, against
us.

Q. What security did you give for the loan ?-A. We did not give any security at all for
it. We afterwards went up to Mr. Leipold, one of the commissioners, and I offered to give
him a security on a piece of ground on Eighteenth street. Thi3 was, I believe, before the
suit was brought, and I did not want to have a law-suit in the matter. Mr. Scott and I went
there and tendered deeds of trust, but they were not accepted by Mr, Leipold, who said he
woild bring suit, and he did bring suit.
Q. Was the security that was offered by you and Mr. Scott ample ?-A. Yes.
Q. Did you and Scott sign a joint obligation for the amount ?-A. I gave a note for half
thle amount, which Scott indorsed, and Scott gave a note for the other half which I endorsed.
There were two notes of $5,694 each.
Q. You tendered to Mr. Loipold, one of the commissioners of tihe Freedman's Bauk, ample
on real estate for the payment of these notes ?-A. Yes, sir.
security
Q. And lie declined to take it ?-A. Yes. That was giving us two years to pay the money,
which was only carrying out the original understanding with Mr. Alvord, and that we were
willing to do.
Q. Has Mr. Leipold any security for this matter, except your personal liability ?-A. No,
sir.
Q. What was the value of the property on which you proposed to give a deed of trust ?A. I offered to give a deed of trust on 30,000 feet of ground in square 172, (the whole front
of the square,) for which I was offered $'20,500 in trade just before the panic.
Q. What was it worth at the time that you offered to give a deed of trust on it to Mr.
least 30 cents a foot; that would be $9,000.
LeipoldDid?-A. Itofferwasto wortha atdeed
of trust on any other real estate? -A. Mr. Scott offered to
Q. a you
give
deed of trust onl property of his that was worth six or seven thousand dollars, to secure
give
the same note.
Q. And Leipold refused both ?-A. lie refused both.

90

FREEDMAN8'

SAVINGS AND TRUST COMPANY.

Q. 1Have you anything to do with the bookkeeping of the company now ?-A. No, sir.
Q. You are not in tile employment of the commiissioners'?-A. No, sir; I resigned in
1874.
February,
Q. Can you give any reason why tho books of the Freedman's Bank were so loosely and unskillfully
kept l-A. When Mr. Stickney was assistant actuary under Mr. Eaton, lie attempted
to act both as assistant actuary and as book-keeper, and things wore very loosely kept. When
I went in as general book-keeper, it was just as much as I could do to keep up the current
business without attempting to go back to straighten up the books. We fixed it up the best
we could and balanced up the old books, and from about 1873 wo just started anew, and
from that time we balanced the books every Saturday night. Every Saturday night we
made a trial balance sheet and submitted it to tie president on Monday morning.
Q. Could you understand the old books; were they intelligible ?-A. Oh, yes.
Q. Whiy was not an effort made to straighten up those old books prior to the time you entered ?-A. I do not know. The business was so
when I went in

there
rapidly increasing
that it was as much as I could do to attend to the current work. I could not got up the
work that was behind.
Q. Are you acquainted with Mr. Loipold, one of the commissioners ?-A. Yes.
Q. What connection has lie with the bank f-A. He is commissioner.
Q. Do you know of his having any interest, except as commissioner, in prosecuting or
defending
any cases of the Freedman's Iank in court ?-A. I know that lie is associated in
several suits tor the bank with Mr. Totteni. Mr. Totten is attorney for tlhe bank in those
suits, and Mr. Leipold is associated with him, as the records of the court show.
Q. Do you know anything about it, except the fact that le appears as associate attorney
with Mr. Gotten on the record of the court f-A. Only from hearsay.
Q. Have you heard him say anything about it ?-A. No, sir.
Q. Have you heard Mr. Totten say anything on the subject ?-A. No, sir neither of them.
From what source do you derive your'information that Mr. Loipold has such connecQ.
tion with Mr. Totten or any other attorney ?-A. I heard through one of the attorneys that
Mr. Leipold told Mr. Sperry that Totten had made a proposition to him to divide fees with
him if he appointed him attorney for the bank, and asked Mr. Sporry's opinion about it, and
that Mr. Sperry told him not to touch it.
Q. What reason did Mr. Leipold assign for not accepting the security which you and Scott
tendered to him for the loan made to you ?-A, He said he had been fooling with us long
and was tired of the thing, and would go and get judgment. He possibly thought
enough
that we would not make any figlt upon it.
Q. Does his name
appear as attorney in your suit ?-A. No; I do not think it does.
How is lie related to Totten ?-A. I do not know. John I-. Cook, my attorney, is
Q.
the man who informed me of it.
By Mr. RAINEY:
the Freedman's Bank who was, directly
Io you know any man who gottheloans from the
Q.
or indirectly, associated with any ot
officers of
bank l-A. I cannot say that I do.
Q. Do you know of any of them having an interest, directly or indirectly, in aly of the
loans got by outside parties ?-A. I do not.
By Mr. RIDDLE:
Did
Q.
you endeavor to make a balance-sheet for the Washington branch; and, if so, did
succeed in doing so ?-A. I made the attempt, but I never could succeed in it. The
you
books were mixed up andj could not balance then.
Q. About how much did the books fail in balancing?-A.. I do not recollect how much.
I found that they were fearfully out of balance.
Q. Were tie entries intelligible ?-A. No; there seemed to be trouble about the duplicating
of the accounts. For instance, a man's account would be entered in two different places.
Q. Did you notice any items of charges or credits that vere not carried forward 1 Could
you trace tihe interest through the books at all ?-A. No, sir; I could not. Mr. Sperry atto balance tile books and made $600 difference, and some months afterward Mr.
temptedattempted
to balance them and made $40,000 or $50,000 difference. After I became
MIeigs
general book-keeper, I balanced my books every Saturday night, but I could not balance
the books that I found there, particularly the books of the branch office. When I wont into
the principal office, I commenced a new set of books altogether, took a statement of the assets of the company, and opened new books. For instance, a man would sometimes draw
his check, and we would throw out the check because it would appear, front hris account,
that there was nothing to his credit, and lie would afterward bring his book to thie bank
which would show us where his real account was kept.

FREEDMAN'S SAVINGS AND TRUST COMPANY.
SELEC'T COMnMI'rTE o( NE I'I

lE
IIEI

AN'S BANK,
March 4, 1876,

'Ihe committee met at 10 o'clock a. m. Present, Messrs. Douglas, Bradford, Riddle,

Stenger, and Rainey.

91
Hooker,

JosEI'Il J. STEIWAwr sworn and examined.
By the CHAIIRMAN:
Where do you reside ?-Answer. In Baltimore.
Question.
Q. Were you a trustee of the I'reedinan's Savings nlld Trust Complany ?-A. I was a
trustee for about three years, from the latter part of 1869 until the latter part of 1872, when
I resigned.
Q. Why did you resign 7-A. Generally, because I thought the management of the institution unsound, and because all my efforts to correct it proved unavailing ; particularly,
because, having been invited by the president, Mr. Alvord, to give hliml a legal opinion in
regard to the sufficiency and legality of certificates of indobtedntecs issued by the board of
public works of tlhe District of Columbia, as investments for tile company, I had pronounced against them, and [ saw that my views were not acceptable, and that the institution would not be governed by them.
Q. Did the company invest anything in the securities that you have mentioned 1 If so,
state why you deemed them unsound as securities for tile bank.-A. Tlie official reports of
the commissioners shlow that that bank did invest largely in them after I left. There
were two classes of certificates, the first called contractors' certificates, one of which wit3
shown to me, on which I understood an advance had been made by the bank. It was very
printed in script type, on plain, white paper, something like an ordinary
simple in form,
note or due-bill, certifying that tile board of public works stood indebted to the
promissory on
contractor, its books, in a certain amount, and signed by the clerk of the board. It had
no seal to it. It seemed to nme to be nothing more than tan acknowledgment which might
be duplicated. It had no safeguards, legal or otherwise, thrown around it, and I thought it
a very unsafe sort of paper to make advances on. The other sort of certificate was that
issued by the board of public works under'an act of tile general assembly of tile District,
declaring them to be liens on real estate for assessment for special improvements. I did not
see any authority under the charter, or under the organic act, so called, of the local government, for issuing that sort of paper, and I deemed this government (although it had a more
hi ghsounding appellation) only a municipal corporation, with powers limited by its charter.
I did not conceive that the legislature had any authority to pass
tie law, or the board of
public works any for issuing these certificates. 1 thought it would require an act of Congress to give them validity. They would be, moreover, subject to litigation in every individual case, the responsibility of their payment being transferred from tile shoulders of the
local government to those of tile assessed property-owner, who might choose, in each case,
to resist payment on legal grounds; tile validity of the title to tie property, if sold under
such a certificate, being subject, at last, to a test on a suit in ejectment, for the purpose of
possession. Hence I concluded that they were poor investments for a savings-bank.
gainingWho
constituted tile board of public works of tile District at the time these certifiQ.
cates were issued and the loans obtained on them ?-A. I can only answer that on public information. I remember that tile names which were signed to such certificates were Alexander R.
Shepherd, Henry D. Cooke, S. P. Brown, and a Mr. Magruder. I cannot recollect all the
names of the board of public owrks.
Q. By whom was your suggestion in regard to tih insecurity of loans on District securities resisted in the board of trustees Y-A. I cannot tell you that. There was a scene in the
board of trustees of manifest antagoniism, and I resigned and left them, telling them that I
would stand by the law of my opinion; and that, in order that they might be at liberty to
repudiate it, I resigned my position.
Q. You have mentioned that the management of the institution was unsound. Please exwhat you mean by that.-A. I think that the organization of the company was defectplain
Ive in its inception. It consisted of fifty trustees, residing in various States of the Union,
and nine )f them were made a quorum for the transaction of business. Among these trustees
were many whose names gave character to the institute on, such as Peter Cooper, William C.
Bryant, lHenry D. Cooke, John Jay, Governor Claflin, of Masseachusetts, Bland Ballard, of
Kentucky, and others. It was only the association of men of such respectability that induced me to accept tile vacancy which I was invited to fill in the board of trustees. Any
name could be
from the list, under the second section, for six months' absence from
the meetings of dropped
the board; yet there was no requirement that it should be dropped, or that
the vacancy should be filled by a person residing in the same State. As only ten votes were
to elect a trustee, this enabled the Washington manaagers to take full control of the
necessary
institution and to run it as they saw fit. I was
frst asked to fill a vacancy in tie board by Mr.
Samuel Townsend, of Baltimore, a trustee, and an eminent member of the Society of friends.
He showed me tlio charter, which limited loans to United States securities, with the names of
the trustees, and assured me that tile financial management was in the excellent hands of Henry D. Cooke, a member of the firm of Jay Cooke & Co., and Mr. Huntington, cashier of tile

92

FREEDMAN'S SAVINGS AND TRUST COMPANY.

First National Bank of Washington, and other equally capable financiers. The concern had
then been in operation over four years. It hadl a central office itn Washington, and tinumerous
branch ofticos elsewhere. Tho bl)oad.moetilgs were hold about once a month, and were
after bank hours, the by-laws giving to the finance committee and to the actuary control of
the fihnaneos. This gave but little opportunity to persons not Immediately concerned in the
to gai anan insight into it, oven when punctual iI their attendane. Very tow
management.
of theos who lived at a (distance over came to the meetings at Iall. I, living near, attended
as frequently as I could, but was sometimes unavoidably abUent. It took mo, therefore, a
considerable time to learn what was doing, and a still longer ttime to question its propriety,
fbr I had no (xp)erlence Ii blanking, and the management hero stood In high financial reI Was an outsider, and felt, ail the time, that. the local influences con.
pute. Besides,institution
wore too strong for me alone to overthrow. The deposits, too,
thie
trolling
were ait that time increasing under tth managemont-a practical argument against any oh.
have urgod to it. In 1871 the dolpoIlts Itincroarod over $7,000,000, ind tlihe
joetion I might
withdrawals loft a balance of nearly $'2,500,000 it the bank. Tho available funid, so calloJ, was
deposited in tho First National Bank at times to a very large amount, of which bank onel momber of the filnmeo committee (Mr. Cooko) was roesildent, and another (Mr, Ihuntlngton) was
cashlor. When I discovered that this avalhbl)o fund was being .0s(od for banklng piurposos,
loaned out oni prolnisory notes, with collateral securities, I inquired of the president for tile
to so do, and was informed by him and the actuary that thoe ftanceo committee had
authority
taken counsel on tih subject, and that such had boon their practice. I objected to it, and to
the class of collateral accepted as security ies for imany of these loans, compl)rising. at they
did stocks and bonds not of tilhe Govornmont, but of ticorport ()d institutions in the I)Istrict
unicknown to the stock.market, and therefore,' iit my estimation, without salable value, I
insisted that no stocks or bonds ought to be accepted as collatorals, except mmiUh s Vwore
in tlme daily stock-list as salable onf the market, I was not aware at that time that
quoted
members of tile fllnanceo comllnittoo wore also Incorporators or stockholdorslin the eOp)oratliolns
to which they loaned money and whoso stocks and bonds they accepted }as collateral, W hen
I did seeoo a tateilloet of that fact in the newspapers, I took advantage of the earliest oppor'
to call It to tlhe attention of the board, and to charactori'o it, t' true, as a broach of the
tliity
twelfth section of tho chierter, which Iprohiblts trustees and offlcors of the institution fri'o
borrowing or' using, directly or indirectly, its deposits, !as well as an immoral proceeding
flnanclally.
Q. In wliat iway was your attentionI called to it I-A. My attention wasa first called to it
the actuary In ')eemnber, 187 1. o handed 1mo a colpy of the Patriot, ntewspiapr pub.
by
lishod at tile tie in Washing'ton, containing an artIcle (fenounlCing the management of tlhe
Froodman's Bank, and lie asked me whe iothietir scoIuld not be done to stop stuIch tmn.
saults, as they wore inj during tile bank. I told himll Iht it was actionable, but t hat tie result
would depelid very fimch oil tile alllount of' proot it colntaiid.
Q. Have you that paper I-A. Yes ; here it is.
(The arllcle, taken( from tile Iatriot of' D)ecember 13, I'lI, was read by (lie elerl, and

put in evidence, as follows:
'l The Freedtmain's Saatlu/s-l l' iltld Trtst Copt)iany.-.-.l perep Ibfure nd li¢chinid the scerncs.Ifherce the. money comes from, hOm it ot.s, tiad truho it gtls to.--' Sleca ' tagain,-l'tncy
I hotns.'-Gencral Howard as a borrower'of th freedpavement compatnics.--Sundryt
meIl's
, ,(q;-- uti f/the things is dune.
l$moneyl ';
" The Washington correspondent oftiho Savaimli Morning News, in that journal of I)ocomber 9, writes as follows, (supplelomontary to a Ilrovious letter, which was roputlllslitld in
those collinlls nlot long since: )
' Old Dladdy ilson stands about five feeroot tell Inches in his boots, is square-built, solemn,
the color of pollshod coal-tar, and sports gold spectacles, You will find Daddy of a morning
looking
wisely over tho counter of the great 'savings and trust company' for freoodmin,.
Brother Boston, young, airy, dressed in tihe height of fashion, and the color of Java colfle,
moves lightly about among the ding
dingyand dlapdatd customers, many of them in rags, who
have come int to plant their little saving where, as they, innocently beeove, It will give thlem
six per cent, a year. Brother Boston isfond of finery, and fond of showing it, Finory and
words are Boston's weakness. Daddy Wilson is cashier of tie great savingsfine-sounding
bank. Brother Boston is toiler and son-in-law to Daddy Wilson. Daddy Wilson got his
wisdom in financial matters by keeooing a little nick-nack shop on Fifteenth street, Brother
Boston graduated from a lumbor-shlop'into the banking business. After all, Daddy Wilson
and Brother Boston are more ornamental than important to tlhe carrying out of aiiny great
in finance. To put it In the most amiable way, they are more fi gure-heads kept
principle
itn dumb.sow by thle cunning fellows who work tile Iachinery from behind thie scones
hero are
and filling their own pockets. Those cunning follows live in filno houses andrdle
ido in fe
coaches. Of course it would not do to have the cashier and toller of so great and good a
bankhingliouse live in a one-story tumnble-down tenement, litk the connimotn people of their
ace. If they themselves fired sumptuously, so must Daddy Wilson, chief gatherer of the

FREEDMAN 8 SAVINGS AND TRUST COMPANY.

9J3

accnumullations.' So they built Daddy Wilson a magnificent four-story house in G street,
of pressed brick and brown-stono (Seneca) trimmings, and with all tile modern ornaments.
In this palatial rosidonce.Daddy fares sumptuously every day, displays the choicest furniture,
atid
gives entertainments to tie aristocracy of his own people, for whose amusement Boston
drums on a grand piano. Love of truth constrains eno to add that these assotnbilics are at
times somewhat nixed, a number of persons who look to the bank for favors making a show
of bleached ftceso. Thlese entelrtaintonts cause no little jealousy among tho loss tortiunato of
the colored people, many of them looking up with alnitazlnelt anld wondering whore Daddy
all the money to do all that. It is very stupid of then to ask these (lquetiionH, since tile
got
is so readily found in their bank-books,
answer
"
ittlo by little tie confiding Sambo and Miss Chloe have dropped their ' accluulations '
into tlh lhopplrs of the great Preedmani's Savings and 'l'rust ompal)ny, until they havo
swelled to tie comfortable sum of twenty.soven milllono of dollars, or thereabouts, Wlat a
lesson for political economists I Of this, Sambo and Chloo lhavo drawn out about twentythree millions, leaving about four millions due to depositors. Attoemnt to draw out any considerable part of thi0 Tfou r milons, and I will venture to assort that thloro would bo a stranded
craft among tlhe breakers. Tlhe beach, too, would be strewn with tile most pernicious kind
of wreck-stuff called'nssets. Thloro would bo a great eoneca-stone banking.houso i cost
houses, all occupied at present
$'50,t00; Daddy Wilson's house and a numberinof other fine associated
with the groat bank.
and psaIl-singing follows some way
money-making
by
In addition to these, there would be found bonds of tile Seneca Stoeo Company, with a
fictitious value; shares in tile stock of certain savings-companies, also witli a fictitious value,
and whose officers are also officers of tile bank ; shares in tile Young Men's Christian Asso.
citation i a sasn and blind company ; corner lots enough for a city, but mnany. of' them of
doubtful value, and nearly a million of dollars of contractors' accounts against tho old and
new governments of this city, A very promiscuous and very suspicious kind of security
this for a savings-bank to do business on.
"low, tlon, fancy pavement companies, with thloir fancy stock, and no money of any account paid in, got so generously accommodated, except on tlio theory of improper connection
with the officers, is a subject that needs inquiring Into, A careful examinatlolnought to be
inade iltol tlh character of these assets, in order to see in what way the bank had fortified
itself independent of tlemn, so as to be ready at any timio to provide for and protect its poor
and too confiding depositors. It is easy to see how a bank that pays its depositors six per
cent., and exacts tel, and even twelve, per cent. from its borrowers,
may be tempted to take
dangerous risks and involve its capital. But tliat will not be accepted as an excuse when
tile day of reckoning comes, Nothing, in short, cant justify l6oseness and reckless conduct in
the manngemelnt of a savings-institution, vhoro the savings of the poor and the working
classes should be shielded by every safeguard that liuman virtue and honor can weave about
them, Any deviation from this will be s ure to bring ruin and distress to thousands, the most
of which we have recently had in Now York, Indeed, tlh modern savings.
painfull example
bank is little more than a lottery, and has too many of tlhe worst features of tile lottery, as it
was managed by northern men in tile Southern States. 'Tlio colored manwlas a good pav
tron of tile lottery j it was his weakness
anld his silt,. lo would go without food or ratimont
If lie could got money 0no101l to buy a ticket And he bought that ticket In the Innocent
belief tilat It would bring hlin a fortune. ''ho samHe natural impulse finds hilln vith his little
savings and hlis rags at tile counter of the Freedman's Savinlgs Bank and 'l rust Company,
to deposit Ills money in the happy belief that Daddy Wilson will make it grow him a fortuile.
" Let us go behind the scenes now and see what manner of men are thero, and how they
and how tile members of
havO formed a ring for the control of tills larg amount of capital, kind
of speculators.
It use tile money to enrich themselves and aid the most dangerous
"'rThe Seneca-stone ring, one of the most corrupt and grasping rings over formed for
selfish purplosos, leads the list of dangerous ventures.
"Dr. John L. Kidwell is president of the Seneca Stone Company, of which President
Grant is a large stockholder. 'lle Seneca Stono Company needed money, stand tho books of
the bank will show that Dr. John L, Kidwell (apotlheary) effected a loan of $18,000, at 10
cent., on $20,000 bonds of the Seneca Stone Company, at 90. Again, tile obsequious docper
tor appeared at the bank and effected a loan of $4i000 on bonds of the Seneca Company,
at 10lor cent., making In all $2',000.
"It those Seneca bonds have any permanent value, I can only say that few persons in
know it, Even tho great name of the President does not seem) to give any adWashington
ditional strength to the concern. But Mr. Henry D. Cooke, tho present governor of the
District, is tho great mogul of and the largest stocklloldor in the Seneca Stone Company, of
which concern he is also treasurer, lie was appointed governor by President Grant, himself
a stockholder in Mr. Cooko's stone company. Mr. Cooke is also chairman of tho 'finance
and Trust Company. I make these statements merely
committee' of tle Freeodman's Savings
to show what intimate relations exist between tle notorious Seneca-stone ring and the
great Freedmlan's Savings and Trust Company. I shall show, too, how this loau of $22,000
to the Seneca ring led to an unjustifiable and unnecessary expenditure of two hundred and
fifty thousand dollars of the poor colored tman's money. I want the reader to keepthis in

94

FREDI)MAN'S

SAVINGS AND TRUST COMPANY.

mind while reading these articles, because it throws a flood of light on subsequent transactions of the Seneca ring in connection with this bank which have heretofore appeared
dark and mysterious,
"' Tle next, and even more suggestive of jobbing, is a loan to H. K., (which cabalistic initials mean Hallot Kilbourn,) on three hundred shares of stock of the Metropolitan Paviing
cent. interest. Now, this Metropolitan
Company, valued atis a$30,000, of $14,000, at 10 per
light-comedy corporation, in which Governor Henry I). Cooke, Alex.
Paving Company
ander L. Shephord,'Hallet Kilbourn, Lewis Olephane, and one or two others of the stanm
are chief actors. Some idea may be formed of the soundness of this concern when
stripe
I say that only $3,(00 of the stock was ever paid up. An investigation into the personnel
of this concern would bring to light the secret of so many of our streets being paved with
this worse than worthless wood pavement just ait tis time, Two of tih most active mnemhors of this shamefutl swindle are on the finance committee of tile great Freedman's Saviing
and Trust Company ; another is a member of tlhe brard of public works, and controls its
action as completely as ever Mr. William Mh. Tweed controlled the action of the board
of public works in New York,
''The next is a 'loan made to Matthew 0. Emory of $25,000, at 10 per cent., on corpora.
tion coupon certificatess' Thils will speak for itself,
" We then havo a demand-note of tile Sharp Paving Company for $3,000, money loaned
on shares of the company. This is another funny concern, in which two members of Prosi.
dent Orant's board of public works and one gentleman on the finance committee of the
Freedman's Bafik aro believed to bo largely interested.
"' General O. O. Howard appears next on tle stage as a borrower of the frcodman's money.
General 0. O, Ioward was first vice-president of the company, and it seemed strange so good
a friend of the colored man should resign a position in which lie could bo of great rse to
his national wards. But there was a provision in tho charter which forbids an officer of tht
bank from borrowing its money,. Tihe general resigned his position of vice-presidont for
reasons, as was stated at tile time, and shortly afterward appeared at tile counter
prudential
of the bank as a borrower.
" On lot 1, block 4, subdivision of Smith's Farm, and sundry farming-bonds as collat.
tle general made a raise of $24,000. It is said that the general invested this money
orals,
in a sash and blind factory.
"' Tlio next nlnam is that of the Boss Tweed of our board of publ)l works, Mir. Alexander B.
Mir. Sliepherd caine up a good deal, as tile Bosd did, has all hIRs virtues, and
Shepherd.
o is a geonus in tile art of
some of our oldest inhabitants say one too many of his vices,
jobbery, and a great favorite with PresidetoGrant, After T'om Murlhy, I do nota knowIna
man (rant would have such profound respect for, or would more willFngly make place
hlis Cabinet for, than. our Boss of the boaid of public works. Unlike Tweed, however, Mr.
has been on both sides of politics, and sticks best where tore is tile most mouoy
Shepherd
to boe made,
"A. 1t. S. got $16,000 of tle freedman's money on lot 5 and square 452. A good
this
of real estate ili this city says those lots, if sold in thi market, would not bring one-halfjuldgt
amount,
"t Hon. Henry D. Cooko, present governor of the District, and chairman of tile finance
committee of tihe Freedman's Savings and Truslt Company, next appears as a borrower at
the bank's counter,s and ffcta a loan of $10,000 ol four hundred shares of the Young
Men's Chrlitian Association.
note for $500, indorsedbby 1). L. Eaton, actuaryy of the
1''Then we have S. T'. Langley's
loaned and no security.
bank,) moneywill
" Ihis you
say Is enough for tht present. It, however, is but a beginning. In my
next I will give some startling figures anl tfacts as to the reckless manner iln which tile freedmpla's money is loaned. Who will say after thlis that the great Freadman's Savings and
Trust Company is not run by a ring of desperate speculators, prominent in wlicll is the
men Y-C. IH. W."
Seneca-ring
Q. Do you know anything of the truth of tile allogatlons in tle article jist road ?-A.
little, if any; nothing, I am quito sure, that cannot be better ascertained from other
Very
sources. It was a now revelation to me in mInry respects.
Q, Do you know anything of tho Sotncan Stono Companly ?-A. Of miy owno knowledge,
I wlas not aware, until I read tlati rticle, tliat t wna tile
s
thing as the Maryotlring.
land LFreestoneo Mitniting and Manufacturing Colmpany.
Q. )D you know anything of the Metropolis Pavin g Company -A. Nothing.
Q. Did the actuary say anything more about tilo article ?-A. Yes; within a few days
oQ told te tlat it was satisfactorily arranged, and that nothing more would appear.
Q. Whlo was tile actuary at that time ?-A. D. L. Eaton.
Q. Did he say how it was arranged i-A. IHo did not tell me, and I do not know. But I
remember that at a subsequent meeting of tie board, when lio read out of the filnaco colnnmittee's report a loan of $50,000 on thie joint note of Hallet Kilbourn and John 0. Evans,
secured by collatorals of tlhe character mentioned in that article, such as tile Maryland Freestoneo Mining and Manulfacturing Company, marketlouse stock, Metropolis Pavemenlt Colnpany's stock, anldlson8 American Dredginlg Company's stock as collateral, I denounced thle

FREEDMAN'S SAVINGS AND TRUST COMPANY.

95

collaterals as worthless, and demanded that the note should be backed by other collaterals
and pressed for payment when due. The actuary called ne aside afterward and told me
I was mistake in my estimate of the value of the Maryland Freestone Mining and Mauufacturing Company; that their bonds were worth and would sell at 90 cents on the dollar.
I replied that I hoped he was right, but advised him to unload immediately, stating that
from what little experience .I had had in investing in that kind of stocks in Baltimore, I
would be glad to soil ouL at half price.
Q. Wore you informed that tilfs note of Kilbourn and Evans for $50,000 was not for
value received ?-A. No, I was not; nor wore any of the trustees, so far as I am aware. It
was read out as any other asset in the finance report, and I supposed that the men were
the note, although I did not like their collatorals,
good for
Were the trustees not made aware that there was a secret contract between the actQ, and
the finance committee, on the one part, and the makers of the note on the other,
uary
that payment should not be called for ?-A. I never heard of any sichl agreement till I saw

the printed correspondence in the commissioners' report, between Mr. Langston and Mr.
Kilbourn,
Q, Wlo constituted the finance committee at the time of that transaction ?-A. Henry D.
Cooke, chairman, Williami S. Hiuntington, Lewis Olophano, L. R. Tuttle, Assistant Treasurer
of the United States, and J. M. Brodhoad, Second Comptroller of the Treasury.
Q. Wore they or not the practical managers of tile company's affairs '-A. They wore,
in connection witli tho actuary, who appeared to be guided very much by Mr. liuntington
and Mr. Cooke, and consulted them almost exclusively.
actuary at that tinoe -A. 1), L, Eaton.
Q. Who was thenow
7--A. Ile is dead,
Q. IsWhere is he
S. luntington still living ?-A. No ; le is also dead,
Q, Is William
Q, this finance committee still .in existence; if not, when did it dissolvo?-A. No;
tills finance committee dissolved early in 1872,
Q, Can you tell any circumstances which led to its dissolution ?-A. I think I know, at
least, some circumstances in which I bore a part. I had been sick during the spring of 1871,
and, I think, did not get to any meetings of the board of trustees till July. Having heard
complaints outside of tile largo percentage required to got loans on real estate, involving
commissions to agents and for appraisal, in addition to the usual cost of securing the title,
at the July meeting I introduced ai resolution prohibiting the finance committee and tieo
any application for a loan coming through brokers or others who
actuary fromloans
considering
on commission, 'lThis resolution was referred, as a matter of course, to the
negotiated
finance committee, 'Thero was no meeting in August, and at tho Septembor meeting the
committee reported against my resolution. I moved its adoption, notwithstanding the coin.
mittee's adverse report, and, very much to my surprise, succeeded In carrying it. I think
that tills was tile first cheek which tile management had received, and they wore not pleased
with it. At a subsequent meeting, on hearing the finance report read, I learned that some
$44,000 had boon invested in Northern Pacific Railroad bonds, and I objected that that
investment was neither safe in fact nor in accordance with the charter of tile company, and
I Introduced a resolution, which passed, requiring tle finance committee to call on Jay
Cooke & Co. to redeem said bonds at the price paid for them with accrued interest.
The Northern Pacific bonds were then selling at high figures, and the house of Jay Cooke
& Co. was still in good credit. Thel finance committee at the next meeting, instead of
asked that it be rescinded, I then gave my reasons
having carried out the resolution,
for insisting on the redemption of the Northern Pacific bonds,
plain
in-very
language
and tile board sustained my view, I think tiat this precipitated the resignation of
Messrs. Cooke and Huntington, which came in at tho next meeting, and was accepted, This
was shortly followed by Mr. Broadhead's resignation and that of Dr-l. Eatonr-the actuary.
I had some lopes that a now management could be secured which would lift the bank
out of the local influences that wore then dominating it and I made an effort to that end
by
trying to secure an actuary from outside of the District of Columbia but the local
influences in tlho board wore too strong tor me, Moses Kolly, cashier of the Metropolitan
Bank, and General Balloch were oleoted on the finance coinmmlittee, and Mr. Sticknoy, a
of Mr. Eaton, as I understood, who had boon an assistant cashier under him, was
nepl)hew
elected to fill tile vacancy caused by lEaton's resignation. I opposed Mr. Kolly's election
to tilo board of trustees on tle ground thAt lie was cashier of another bank, and that I
had shown it not to be at tise policy to havo t Freeoodman's Bank manthought exporloienc
officers of other banks. 'ho president promised me that tile actuary's place should
aged
by
remain op)on for a few months, or be filled by teiassistant actuary till a proper man could
be secured to fill tho place, I wrote to a gentleman in Philadelphia, whom I thought wll
qualified, and told the president I had done so. But tlhat gentleman declined, land at the
next meeting, a very full one, evidently drummed up for the purpose, George W. Stickney was
elected actuary without any opposing candidate being named, and tlio financial arrange.
nmeit continued as before in the local interest. I introduced a resolution in February, 187',
compelling the president to give bonds in $50,000, with security, for a faithful discharge of
his duty, and also one setintig forth that, "under the twelfth section of the charter, no
person who is directly or indirectly a borrower, or ini any manner a user of any part of tie

96

FREEDMAN S SAVINGS AND

TRAUST COMPANY.

funds or deposits ot this corporation, or whose obligations, either as principal or indorser,
are held by it as assets, is eligible to the position of president, vice-president, trustee, offi.
cer, or servant thereof, or competent to act in any such position." These resolutions were
both passed. I soon found, however, that there was a disposition to dabble in District
culminated, as I stated in a former resecurities,in and my objection to the management
when I found that it was impossible to prevent the company
my
sponse,
resigning
position
from conducting its business in that way.
Q. At what time did your resignation take effect ?-A. In December, 1873.
Q. Have you any knowledge of any facts tending to show that any of the officers or
agents of the Freedman's Bank had business connection with parties who obtained loans
from the bank other than belong corporators or stockholders in certain corporate bodies which
were borrowers of the bank -A, I have not,
Q. What caused you to take so decided a stand against the negotiation of loans through the
medium of brokers 1-A, I had never known a savings.-bank to loan through brokers in
and I made inquiry of the president of our best savings-bank there in regard to
Baltimore,
the usage, and it seemed to me that It added largely to the expense of the borrower; that it
was not a part of the duty of the Freedman's Savings-Bank to accumulate money here for
the purpose of setting up real-estate agents in business, and that the 10 per cent. required to
he paid to the company was of itself a pretty heavy draught on a borrower, without compel.
him to pay 21 per cent. or moro commission for the privilege of getting it. In Baltimore
ling one
who has good real-estate security can go in person to tlhe president of a savings.
any
bank and ask to burrow the money, and if the security is good, and the bank lias money
to
loan, he receives it.
Q. You llave mentioned that many of those loans were negotiated at 10 per cent, State
whether that was not in excess of the legal rate of interest allowed by the laws of the Dis.
trict.-A, I think not. There wis an act of Congress authorizing loans at 10 per cent, on
agreement between the parties.
.Q. Were you aware that brokers occupied the double position of agents for the borrowers
in obtaining loans and agents for tile bank in appraising the securities on which the loans
wore obtained ?-A. I was not, I knew that thero was a real.estate firm that was made
appraisers, but I never know personally anything about their personal business in regard
to the bank,
Q. You mean to say, however, that your objection to the employment of brokers grow out
of the fact that it was illegal itself in the dealings of a savings-bank, and because of the
cost to the borrowers ?-A. Certainly.
largelyDoincreasedknow
of any instance in which any officer or agent of the bank received a
Q. on you
bonus any loan negotiated at its counter --A. go, sir,
Q. Are thero any other facts within your knowledge that would throw any light on this
investigation ?-A. I do not think of any other at tils time.
By Mr. RAINEY :
Were
a member of the board of trustees when the loans were made to Vanden.
Q. ?-A. you
I think not, I resigned because I foresaw that such loans were about to be
burgh
n ade. My objection lild been made, not against the loans to him specifically, but against
loans on District securities.
of the fact of any of tho Vandonburgh loans which were made in
Q. Were you cognizant
and November, 1872 ?-A. I do not recollect any such loans being made
October,
September,
to him. I understood that a $2,500 loan had been made to him. I was a member of the
board of trustees at that time, and I was in daily effort to try to counteract, as far as possible, the disposition to invest in these local securities, I was not particularly awaro (of course
those things were matters which the finance committee controlled) that any loans had been
made to Mr. Vandonburgh on such securities,
Q. Can you inform the committee whether or not, to your knowledge, tlese matters were
to the attention of the finance committee, or whether tihe loans were not made on the
brought
individual responsibility of the actuary ?-A, I do not know.

SELECT COMMITTEE

The committee mot

at

ON

FREEDMAN'S BANK,

latshington, D. C,, March 9, 1876.
10 o'clock a, in, Present, Messrs. Douglas, Riddle, Stengor, and

Frost,
JONATHAN G. BIGELOW sworn and examined.
By the CHAIRMnAN:
State your residence and occupation.-Answor. I reside in the city of WashQuestion.
ington. I am an attorney alid counselor-at-law.
Q. Have you, ia the pursuit of your professional engagements, had any occasion to inves-

FREEI)MAN'S

SAVINGS AND TRUST COMPANY.

97

tigate any of the accounts of the Freedman's Savings and Trust Company? If so, state how
you came to do so, and the result,--A. I have. I was employed, about one year ago, by
Louisa McGahan, the widow of Francis MeGahan, to file a bill in equity, in the supreme
court of the District of Collmbia, to sot aside a pretended sale to the Freedman's Savings
and Trust Company, by Daniel L. Eaton, actuary of that company, made on the 1st of
1872. The facts of thlo case are briefly as follows: 1On tle '2Oth June, 1870, the
July,
Freedman's Savings and Trust Company loaned to Francis MeGalan $10,000, for one
year, with interest at 10 por cent., and, as security for the repayment of that suam of
money, had taken a deed of trust on the house and premises known as No. 915 E
street, northwest, being tho same promises as are now occupied by the topographical division
of teo Post-Offico Department, 'T'he loan was made nominally for one year, The first year's
interest was paid, and $100 of the second year's Interest. On or about the 6th of April,
1872, tlero being then in default about eight or nine hundred dollars interest, Daniel L.
Eaton, tile trustee in the deed of trust mentioned, advertised the property for sale, and the
sale took place on tile Ist of July, 1872. Tl'o sale was wholly Irregular, and in the protended conveyance of tlhe property by Eaton to tlhe Freedman's Savings and Trust Company, (that company being the purchaser at such sale,) Eat)on omitted to peal the deed, and
the acknowledgment thereof is without date, and the instrument is wholly defective and Inlsflicillt to convoy tih legal title to the bank. This property was sold at$13,000. No accountwas ever made, by either thle Froedman's Savings and rrust Company or by D. L. Eaton,
Ing
the trustee and actuary of tlh bank, to either MeGalhal, vwho borrowed the nloney, or to his
widow, Loulsa MeGahan, the bonfioelal owner of tiio property. The note has never boon surrenderod, and no0accounlit haN over been rendered of tle purchase-mnoney. Subsequently, on
the 6th Juno, 1873, Mr. Andrew 0. Bradley leased tils property to tile Post-Olico D)partmont, at ia rental of $1,200 per year; and on tih llth Jutne, ten days thereafter, tih Freed.
iman's Savings and Trust Company, by its president, J' hn W. Alvord, convoyed this proplC. Bradley, at a consideration, as reclted in the deed, of $18,600, of which
erty to Andrew was
amount 1,fi(00
paid in cash, and Bradley's notes were given for $17,(100, payablo to
the order of tlhe Freedmanll's Savings and Trust Company ill one, two, three, four, or five
years, And, as security therolor, tho bank took a deed of trust from Bradley and wife on
the same prrolmises,' BrIdloy, in this transaction, though appearing to bo tile principal, was,
in point oft flat, merely the agent of Alexander R. Shepherd. lte had no pecuniary Interest
in either the i'oating of the prolperly to tilo Governmlent or in its purchase fiom the Freedman's
Savings anld 'Trust Company. These facts which I havo stated appear in the sworn answer
of Alexander R. Shepherd, and in tioe sworn answer of Andrew C. Bradley, to the bill of
complaint of Louina McGalian, in the sutt llltionled, Shepherd is not it party to those
notes given by B3rldley to tile Freedman's Savings and Trust Company, and is in no way
porsontllly responsible for their payment; and le has, as appears by his answer, as well as
froi tlho records of the Post-Oico lDepartment, been receiving lte rents of $I4,L00 I year on
these buildings, from thoe date mentioned, Juno 01, 1873. Tloe deed of trust give by Bradto John WV. Alvord anld 0, W. Stickney, to secure to tile Freo.dmanall Savings and
ley
Trust Comnpany the said stin of $17,000, is absolutely null and void, for the reason that tho
Freedimain's Savings and Trust Company had, in tlho first placo, no title to the property to
convey It to Bradleoy and 1Bradley,having tno title himself, could cotivoy noo0 to Alvord
and Sticknoy, the trustees, So that tile only sectlrity that tile Flreodmlln's Savings anltl
Trust Company had for tlio payment of tlio $17,000 is tlio porsolinl obligation of Bradley.
Of te 17,0, Shopierd hs pd
tidlo stllll oft 82,400, 11s 1'appears froinI his answer to tlhe bill
of coililalint, Theo blilanice is still
unpaid, although on0110 or 111010 notes is or tire dlllo. I will
hero state, however, that
tleo event of it decree restoring tile property to tle coiplalinatllts
in
aid T rust omlpanly vwll bo paid tho $10,000,
inl tho bill mnoitiontl(o( tilo pFreedllNti's 'Savilngswitil
thlo amllount of the loati to Francis MeGallan,
intero.st, pIrovitlld Alexander R,. Sphllord
the atiounllt o
rtoi tire Gov ernment, The bill is t'or i n acceuliteig,
roftiirds
as well as for setting aside tioe proetClded sale. It lias already resulted inl i p)rolonlgedl litigtion, annd tlio cleo maiy possibly bo taken to the Suproeme Court of tilo Unlited States, inl
whieh etseo it will I)e very expensivOe This litigation arIsesfroy m thie carelessness of tile
to s3al tile doeed, aild ill a Vwantonl dlsroegrd otf tile debtor,
trustee, 1). L. Eaton, In ollmitting
as i1. n1or fully shown\ Illth11e records of tile callS plinteOd.
MICOIullII,
Q. Is there illty relationship p existing between A. R. Slloepherd and Andrew C. BradloylA. Yoes; AlldrOwv
C. Biadley Is brothor-in-lal w of AloxIander R. Shelop hord.
Q. Ilow do you account for tile fact that Anldrew C(. lBradloy had obtained from the Post.
Ofico I)opartlnm t a contract or lease, at an arnltual rental of $4,200, for thio property in (fieoslioen, then lIold (but by defective title) by tile Freeodmaliul's Savilis and T''rust Coumpany, toll
days in advance of any
transfer of theo
by tiho bank to 11ilm ?1-A. I ClnnlOt asw\Yer
that question satisfactorily to myself or property
to tihe committee. III a prolonged auud very severo
cross-exllaminationl by. myself of tilo wvitnosses oil tilis p)artlcular point, I am liable to determie, froIm tihe oevidnco in the case, through what means or b)y whioni this lease was nlegotiated.
Q. For what term was the lease mado ?-A. The lease was inade to begin o.June 5,
1873,nd11( to run thereafter for three years, at a rental of $1,'200, with thlo privilege
of reliewal
thereafter for two years. The three years will be up on the 5th of Juno next, No rents
7P 1

FREEDMAN^I SAVINGS AND TRU8T COMPANY.
have been collected on the property since the commencement of the present fiscal year. They
are still in the hands of the Postmaster-General.
Q. Would the annual rents, agreed to be paid for the property by the Post.Office Departthe debt due from McGsban to the Freedman's Savings and Trust
ment, haveifextinguishedhad
the bank
held or leased the property for its own benefit ?-A. Yes they
Company,
would have already extinguished the debt, The rents on this property for the three years'
lease and for the two years renewal thereafter, would have more than paid the purchase-money
In other words, the annual rent would more than pay for the accumulating
by Shepherd.
interest, so that at the expiration of the five years the property would not only have cost
Shepherd nothing in point of fact, but would have been a source of income to him to the
amount of V,r00.
Q. How long after the transfer to Bradloy by the bank was the property transferred by
to Shepherd ?-A. 'T'he protorty was transferred by Bradley to Shepherd In August,
~Bradley
1874. Bradley retained the title for Shepherd in the mean time; Shepherd receiving the
rents, which were collected through Bradley as agent.
Q, Are you able to state from any knowledge of your own, or by reference to tile report of
tlhe commissioners of the Freedman's Bank, whether or not Bradley's notes have been sub.
stituted for aild used to extinguish the McGahan debt on the books of the bank?-A. I am
not able to state how that is. As I stated, the Freedman's Sa\vings and Trust Company has
never rendered an accounting for tile sale of the property under the deed of trust of July 1,
the $10,000 note mentioned, nor in any way accounted for the
187', nor ofhastheit surrendered
sale to the complainants in the bill. What has become of the note I am
proceeds
unable to say. I do not presume, however, that tho F'reedman's Savings and ''rust Company can consider those notes as a part bf its assets in view of the pretended sales men.
tioned.
Q. Did you not, in the prayer of your bill asking the privilege to redeem the property, and
to have the sale made by Eaton set aside, ask for a surrender of this note Y-A. I did. I
have examined the report of tile commissioners of the Freedman's Bank, and am satisfied thi6
the MIGahan debt does not appear on it.
Q. As a lawyer, what is your inference from that---that it is there treated as extinguished
by the notes of Bradley I--A. By all of those transactions montionel.
By Mr. RIDDLE:
Q. Are Bradley's notes reported ?-A. Yes.
By the CJrAHIMAN:
Q. Do you know of any other fact allowing or tending to allow a conspirIacy between Shop
er aand rndley on the one hand d D1). L, Eaton on tile other, to defraud tleo bank or any
other parties V-A. I have no personal knowledge on the subject. I know Eaton well in his
life-time. llis health for the last three or four years of his life was very poor. lie was a
man of considerable intelligence, but his great fault, as financial manager of tis bank, in my
lay In the fact that he paid but little or no attention to the requirements of law in
judgment,
the transaction of business. Ho was exceedingly careless in the execution of papers relating
to the money transactions of the bank. That was particularly evidenced in tilis case. Even
the deed of trust, given to secure the Freedman's Sc.vings and Trust Company on the 20th
June, 1870, is not under seal, so that, as a matter of fact, the Freedman's Savings and Trust
had no legal title in that trust-deed, but the complainants in the bill do not ask to
Company
take any advantage of that omission,
Q. In other words, thle transaction between Eaton and Bradloy by which an extinguishmont of the debt of McGalhal Is apparently affected, left no security, available in law, to the
bank for the recovery of what was due from Bradley or from his principal Shepherd
l--A.
That is precisely the case. The result of Eaton's carelessness in the promises is, that the
bank is without any legal security. That 18 to say, it is secured on real estate without a
At the time of the leasing of this property to the Government, Eaton was not the
legal title,of the
actuaryto that Freedman's Savings and 'Trust Company. fie had resigned his position pre.
vious
date. George W. Stickney was the then actuary. Tlhe negotiation was carried on
on the part of tio bank either by Stickney or the finance committee,
with either B. 11. War.
ner acting on the part of Shepherd or with Bradley'acting in behal fof Shpherd. It is
to determine from the evidence in this case how tils transaction of leasexceedingly difficult
was accomplished, Evidently tile real parties to tlhe transaction are not
ing tile property
developed, That is the amount of it,
Q. Who is 13. H. Warner ?-A. He is a real-estate agent in the city of Washington, and
has had considerable money transactions with the Freedman's Savnlgs and Trust Cor.
also an auctioneer, and sold this property as such on the 1st of July, 187'2.
pany. DoHI- is know
Q. you
anything about the bills for advertising allowed to Warnor, and wheth.
er any one, and who, obtained a percentage on that allowance f-A. The whole transaction
was fraudulent from beginning to end, so far as I have been able to investigate it as against
the rights of the plaintiffs. Eaton, as stated, was the trustee in the deed ot trust. Ho was
likewise the actuary, at the time, of the Freodman's Savings and Trust Company. lIe employed Warner as auctioneer to sell this property under the deed of trust, and employed
'

FREEDMAN S SAVINGS AND TRUST COMPANY.

Warner to advertise a notice of the sale. Warner entered into an understanding with the
that published the advertisements, whereby he was to have 33i per cent, comnewspapers
mission, and he ran up the exorbitant bill of $736. 75. He was acting a agent of the bank

in that business.
Q, Who was the Postmaster-General at the time of that contract or lease ?-A. John A.
J. Creswell.

WASIIINGTON, 1). C., March 9, 1876.
GEolIOt W. STICKNEY sworn and examined.
By the CHlAIRMAN:

Question. State your occupation.--Answer. I am at present a real-estate agent.
Q. State whether or not you over hadl any official connection with tho Freo(liman's Bank.
-A. I was employed in the Freedman's Bank from the first of May, 18(7, to about tilo first of
I was employed as clerk from May 1, 1867, to about July 1, 1869; as assistant actJuly,1874.
unry from tlo latter date to August, 1872 ; and as actuary froin that date till the time the bank
suspended.
Q. Wore you, during your official connection with the bank, cognizant generally of the
loans made by It 1-A. I was, of most of then ; of some of thorn I was not.
Q. Do you know anything about the loan made to C. D. Bailey, treasurer, of $2,600,
secii'ed by 480 shares of Christian Association stock ?-A. Yes.
Q. Stato how and by whom that Qlan was effected ?-A, The loan that was first made was
mado inl 1867, I think, of $7,000, Then there were amounts paid on It from time to tine
until it was reduced to $2,600, Tholoan was passed by the finance committee when it was
first made, if I remember right, I was simply a clerk then, and tile only knowledge I had
of it Wis by entering it on the books.
Q. For whose benefit was that loan made ?-A. That I do not know.
Q. Do you know anything of a loan to 1,. II. Gassaway, in Marelh, 1872, of $3,300 on 50
shares of Metropolis Paving Company stock ?-A. 'lhat loan was made by Colonel Eaton,
then actuary of the bank, and passed, I think, by the finance committee, There were other
securities on the loan besides the paving stock, whiih securities were paid, reducing tile
amount of that note te some eleven or twelve hundred dollars.
Q. As nothing seems now to be held by the bank in the way of security for that loan exthe fifty shares of iMtropolis paving-stock, state what became of tlh other securities ?
cept
-A. T'l'he other securities
were paid There wore two notes ts security amounting to
$2,010,50. The parties came to the bank and plaid those notes, and the aliount pai(l onl
then was endorsed on Mr. Gassaway's notes.
Q. On page 34 of the report of the commissioners of the Freodman's BTink there appears a
loan on March 24, 1873, to Gassaway of $2,250, and ol November 7, 1872, a loan of $2 600,
on twenty shares of American Seal-tock Company, and twenty shares of the Capital Publishing Company, and notes for $,'260, secured by real estate, on which nothing has been
Can you explain thlat?-A. It is pretty hard to explain those loans without haviig
paid.
the loan book, for the reason that many of tioem were made long before those dates, and those
are only renewals of them.
Q. What were those securities worth at the time the loan was made on them t-A, I thlik
that at the time the loan was made the securities wore worth the amount of the loan, The
loan of tile 24th Marelc, 1873, was first made, it' I remember right, alout a year previous to
that date, It' was made by the actuary and was approved by tile finance committee, if I
recollect right. The loan was made
through Mr. Huntington, who was then cashier of the
First National Bank, If I recollect right, there was
with the twenty shares of stock of the
Mr. Huntington's obligation that he would pay eighteen htuCapital
Publishing
Company
dred or two thousand dollars for that stock at any time e was called upon; bi lt he died
soon after that and his estate was insolvent. I was ordered, about that date, either to collect Gassaway's note of 24th hMrch, 1873, or to additional security on it, and I got this
real-estato note of $2,260, which was worth, I get
suppose, about $1,000. It was the best I
could do, as I could not got the money,
Q. Gassaway at that tmne was in default to the bank?-A, Yes, sir.
Q, lWhy didn't you sell tile collaterals it' they had any market-value 1-A. Crhoy had no
market-value then, at that time
Q. inCan
you give us the names of sone of the stockholders iJn the Seal-Lock Company
tile Capital Publishin Company, if tlhe same were also trustees, officers, or agents udf
atid
tihe Freedmanus Bank ?-A, liknow of but onemtian who was connected with tile Seal-Lock
he was not an officer of the bank. That mian was F. W. Brooks. He was the
Company, Ibut
eer knew cqnniected with it. The company was chalrtered in New York, I do
manl
only
not know whether Mr, Huntington was a stockholder in it or not.
the
Q. Do you know anybody connected with the bank who was also a stockholder inin that
?-A. I do not; I do not know who the stockholders
Capital lPublishing Comipany
.

compilay were.

100

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. In August, 1870, a loan was made to A. B. Mullett, treasurer, of $1,400, on one hint.
dred shares of Morris Mining Company stock. Can you tell us something about that corn.
and what its stock was worth at the date of that loan ?-A. I know nothing about
pany
that loan except entering it on tie books of the company. I know nothing about the nature
of the stock. I iave been informed that it was worth about what it states liere at the time '
the loan was made.
Q. What was A. 13. Mullett treasurer of -A. He was treasurer of the Morris Mining
Company.
Q. tWhat was that company organized for and where was it located ?-A. It was located
in Colorado. I am sure I do not know what It was organized for, but I suppose it was to
make money.
loan of $2,917 to John A. Gray, treasurer, on the indorsoment
18,
Q. I see In May, 187,
of 1Robert I. Fleming. State of what John A. Gray wan trecasuror end what Rolbrt I. Floum.
was worth.-A, John AG.
Gray wns treasurer of thi Fifteenth street Prs-.
king's indorsement
Colored clilrch. Tlhe indorsement of IRobert I. Fleming at the time those loan was
bytorialn
made would have been taken for that amount in any bank in tile city.
Q. Whly didn't you collect that note when it became dueo?-A. It was renewed once
or twico, and Interest paid, and something paid on the prncilpal, If I recollect right.
,. 'There are very heavy loans at different dates to the salme Fleming, with no collateral.
Ilow did it happ)on that tile funds of the bank WOre so elmployed instead of being invested on
ample security, as required by law ?-A. It is almost impossible to explaitin tese loans with.
out the cashibook,. 'This loan was not made at that time. It was an old matter which 1 tried
to fix np,). Mr. Fleming was embarrassed and 1 tried to get all I could at the time. 'The
loan wsH made nearly two years before that.
Q. Whly did you allow such a large niaount of tilo funds of the Freedman's Bank to re.
main for sucl length of' tiim in Fleming's hands without security and whin ho watt in default for the interest 1-A. lio promised to pay from time to time, and I knew, aft'r this
became due, that it would not do any good to sue himt for tile amount. This loan for $1,000
was on lumber sold himi by President Alvord, It caile trom somn transactions il llorildi,
you, as actuary of tlo bank, make such loans to anybody without security,
Q. Whyto did
and in defiance ot the requirements of the law i-A. I made none of those
contrary
loans,
not cognizant of them ?-A. I might ho cognizant of them and not have
Q, Wereto you
do with tile tilakilg of them. All my duties at that titime were to enter thloin on
anything
the books. 'l'lt $:i,000 loan was first made to Mr. Fleming, if I recollect riglit, whell he
was erecting tlhe bank-building, with tile intention to take it out of tile amount due1 him by
th bank, e eBt
the noto in somei way was skipped, so that when lie settled with tloe bank
that was not deducted.
bank, or was
Q, IHad 0Robert . 1 leming any business connection with any officers of tle
1I-A. Not to
any officer of tlhe bank Interested il any contracts or operations of Fleming's
ny knowledge.
to believe that there was any such connection ?-A. I have not.
Q,. Have you any reason
In July, 187;3, thiore apl)ars a loant of $19,000 to Johnl 0. Elvans on the acceptance of
Q,
Janiiies Magrudor, treasurer of tlio board of public works, Was that loal in conformity to
thle charter and requirements of law' It' not, please explain wly you dealt itl that way
witl tlhe funds of the institution of which you were then actuary.-A. Some year or so pre
vious to that tliero ivas a loan inmade to somebody connected with tlhe Metropolis Paving
that company was piut in as security. 'Tllat noto was
$10,(000, andi stockof ofColonel
Colmpatnythisof $9,000(
Magruder as treCasurer, and lby cash fior the bal.
acepl)tance
paid byAt that time none
of the paper ot' tle board of' public works had over gone over, It
antce.
liad all )ben paid promptly, and tills $9!,000 las sincebleenI p)aid ill full. It was paidl by tlio
board of audit in nino thousand ;3.(5 bonds, which were sold at iiarket rates, and Mr.
Evanls patid tlhi dif'orence to make 1lu tlie $9,00(U, with interest at 10 per ceitt. for tlil
time thu note lild run. Thlliat wais in tie fall of 1874,
a loan of $1,3(i(0.(1 to Juan Boylo, on a note indorsod l)y Firank
Q. I see in May, 1874,
you tell us anything about that loian ?-A. ''lat noto was iultlad by mo,noteI
IBar'num,nldCall
passed by the finance committee afterward or before. Thoer was laIger
t\Jink,
than that for wliich part cash was paid, and that nlto was taken for tile blalanee.
Q, Who was Franik Barulm, and what was his personal responsibility '--.A. ,Frank Barnum was a young gentleman from Balltimore, wlho wvas a tttlat tie a partner of AMr.
and was supposed to be perfectly responsible. lie was supposed, at that tile, to be
Boyles,
of
worth solo $100,000. lie is a relation of the Blarniiuims of Baltimore, tlio proprietors
the old Barinum Hotel.
Q. Stato by what authority of law any loans wero made on personal securities, such as I
havo erlnumerated, aind on chattel mortgages, such as that of tile proprietor of tlhe Arliing
ton Hlotel.-A. I do riot know that I can state that. 'li'e matter was discussed by the
finance committee and by tho board of trustees, when those loans were made, and tley do.
cided tliat they lad the right to mnake thel. Tihe Arlington Hlotel loan wvas nade under the
of the charter f'or all ' available filid.
l
provision
Q. Were all the loans made by Eatuon, your predecessor , ald afterward by you, submitted

101
FREEDMAN'S SAVINGS AND TRUST COMPANY.
to and sanctioned by the finance committee?-A. Nearly all of them were. The finance
committee had a report of all the loans made by the bank. They were reported from time
to time both by Mr. Meigs, the examiner, and by myself.
Q. There is a loan in June, 1874, to W. J. Purman, of $3,025, on the security of $10;000
seven per cont. Florida bonds. Can you tell us how it happened that that loan was made
the bank was in the last
Y-A. There is a mistake in the date there. No loan
while

gasp

was made at that date.
Q. It so appears in the record. State by what authority of law any such loan was made
at the timo.-A. That loan was made a year previous to that, at ninety days, and was reneowed, as the securities wore good. I had a letter from one of the bankers at Tallahasseo,
that lie would give fifty cents onl tlhe dollar at any time for these bonds. They wore
saying
worth Imioro than that itn the market. The Inarket-prico was sixty. lThe loan to Purinan was

it fell due,
paid shortly after
Q, It (ldos not appear in the commissioners' report to havo been paid.-A, It has boon
the money for it myself and returned the securities.
paid, for I took
Q,. State when it was paid.-A. I think it was paid about tile time it fell duo, which was
on thlo 24th December, lt874,
Q, During your administration, there appears a loan of $21,000 to Juan Boyle, without
security. State how that loan was affected and on what authorlty.-A. Mr. lioylo raised
a good deal of money for us, as agent for tlle bank, anid ho ha some loans there before
wlich were consolidated into that $21,000. It was not made without collateral when it was
fixed up. But it was not collateral that came strictly under the charter. I supposed that
tile security was adoequato. I had the estimate of' Messrs. Fitch .& Fox on some real estate
for tile debt and
and
to that estimate I had

that was given as collateral,
security
according
sone little over,
Q, Why does that security not appear in the report of the commissioners, and of what
character was the collateral '-A. It should appear in tile report of' the commissioners beCauso it did appear on the books of the bank. I find it does appear in the commissoloners'
31. lThe loan was $69,000, of which $1,000 was paid and tile securities coimreport,a page
real-estate note for $10,000. Theou thore was a deed to myself as trustee on some
prise
other property, which deed I gave to the commissioners when they came in, and which
should appear hero. Then tire were $8,000 in lboids of the Selma, Marion and Memphis
Railroad Comipany, which were worth about forty at the timo tile loan was made, according
to tile report of lHenry Clows.
Q. Was any part of tlhe real estate, on which Coylo attempted to secure that loan, afterward sold t-.A. It was all sold.
Q. When, under whose advertisement, who became tile purchaser, and at what price ?A, 'T'h property on which tihe $10,000 note was secured vwas sold under a prior mortgage of
bought inl by the party who hold that mortgage. It was sold on their ad$B,0(00, and was their
trustees, When the loan was made, the estimate of Fitch & Fox on
vertisemont by
the property stated that it was worth at least $1.25 a foot, and that it could be sold for that
at any time. But there was a mortgage on it of $6,000 ahead of this security, and it was
sold under that mortgage, and was bought in by tihe party. Tlie estimate of Fitch & Fox
made the value of the property something over $16,000.
Q. 'That sale left the bank out in the cold altogether --A. Yes ; the parties bought it in
for tlhe amount of their debt.
Q. Who hold that first mortgage ?-A, The National Savings Bank.
Q. What about the other real estate what did it consist ot'-A. TIoh other real estate
was located at M street, between Twenty-tllird and Twenty-fourth streets, It was also sold
under a former trust, and was bought in by myself. I gave the commissioners a deed of
trust on it tor $20,000 before the sale, but it was sold under the previous trust,
Q. Then I understand you that the last-mentioned property was held by you as trustee of
the bank ?-A, Yes ; the property was sold ludor a trust for the buildlng-lnatorlal. That
the houses as additional
prior deed of trust was for $10,000, and Mr. Boyle agreed to finish
hle got into trouble with his partner, Mr, Barnum, and failed to do it, and the
security, but
property, as I say, was sold under tlhe former trust, and I bought it.I
Q, For yourself, or for the bank ?-A. I bought it for myself. gave the bank the two
trusts, but tile commissioners did not see fit to protect themselves llit, and I bought It.
Q. What did tile property sell for at the sale ?-A. About $16,000.
Q. HIow much of that amount remained after paying off the first incumbrance ?-.-A, It
did not quito cover the first itlcumbrance, with the expense, interest, &c,
Q. Then the real-estate securities on which Juan Boyle was allowed to draw money from
the Freed man's Bank were second encumbrance, which proved entirely worthless ?-A. Yes.
Q. Wlo granted those loans ?-A. As I said in the beginning, they were tile fixing up of
some old loans, and I took the best security I could get.
Q. What were those old loans, and where do they appear in the commissioners' reports
-A. lThey are not in those reports at all.
Q. Was not this amount of Boylo's indebtedness, in fact, the result of a charge for commissions made by him for negotiations of one sort or another, eff.ected for the batlk by
him, and by your authority ?-A. No, sir. Mr, Boyle pleads an offset for commissions to the
$4,000 note.

102

FREEDMANS8 SAVINGS AND TRUST COMPANY.

Boyle claim any interest in the property which you bought ?-A. No, 8ir.
Q. Does
Q. What relationship did you bear to the former actuary, 1). L. Eaton I-A. He was my
uncle.
Q. Did you ever employ Juan Boyle to go to Baltimore to sell aty bonds of the company Y
-A. He was employed by the president of the company to go to Baltimore and make some
loans on Utilted States
bonds, when the bank was in need of money and could not get any
in Washington. I think the first time he went he was sent by Mr. Alvord. That was in
October, 1873, I think, and it continued up to the spring of 1874. He was there several
times for us,
Q. Are you sure that John W. Alvord was at that time president of the bank ?-A. Yes,
I am; he was president of the bank up to the Morchl meeting of 1874.
Q. Was any mission of any sort intrusted to Boyle after the last-mentioned date; and, if
so, by whom 'I-A. After the last-mentloned date there were some missions intrusted to him
to get some money,
by myself
Q.. What amount of bonds was entrusted by you to him to negotiate tlhe sale of after that
date in March ?--A. There wore no bonds intrusted to him to sell after that date, to tle best
of my recollection.
Q. What kind of mission was he charged with in behalf of the bank ?-A. In 1873 he
made a loan from Mr. Lanahan of $10,000, on $20,000 eight per cent. bonds, ''The loan was
mado for ninety days, and Nyas renowo I for another tiiinety (lays, It became due on the
first of May, and le said that if I would give him certain real-estate notes of his, lie would
the loan with them. I gave him the notes, and lie paid tlih loan, and returned me the
pay
bonds.
Q. What real-estate notes were tho.:9 that were delivered to Lanahan for the bonds of
thle bank --A. Tle notes of Anne E. B3oyle for $8,000 and of Juan Boyle for $'2,500. The
note of Lanahan for $10,000 was dule and hle wanted hlis money, or wanted it fixed up another way, and we did not hiavo the monoy to pay it.
Q. In other words, that was a conversion of the notes of Juan Boyle and Anno E. Boyle
for money borrowed of Lanahan Y-A. Yes.
Q. Wihat were those notes originally given for?-A. They were given for money loaned
to Anne E. Boyle and Juan Boylp.
Q. WIhat then became of tile debt for which they wore pledged ?-A. They were marked
as paid on the books of tho bank, and the amount borrowed from Lnalhiu was also
marked as paid, just tile same as though wo had received the money for the two notes and
had paid it over to Lanalian.
Q. lThen tho money obtained from Latnallan was paid by tlio notes that were dlo to the
bank from Annio E. Boyle and Juan Boyle Y-A. Yes.
t troltnsttionl with L ainahan.1
Q. Thus making theso notes do tle office of cash inie
Why did you employ Juan Boyle to effect that arrantgement Y'-A. Mr. BIoylo made tilo original loan from Mr. Lanalamn, and I was pressing Boylo to pay hIls notes, as thloro was considerable interest duo on tlhei at the timo, cspeeially il histmotlher s note
Q.Was any commission allowed to anybody on tliat negotiation --A. No, sir.
. There is a loart, with no specific date to it, of :$3,000, to .. V.
Vandonburgh, without collateral. Do
know when and how
effected ?-A. I do not know
of
that loan was
you
ta t
Q. Do you know of any loany it
md
m
to Vandonburgh,ont tle personal assuranco of Alexander 1R. Slhphord that ti would be paid in a day or two i-A. 'That loan was
not made to Vandonburglh. I recollect the transaction you refer to. It occurred in November, 1873, I was away at the tile (simply for the Saturday.) Governor Shepherd and
Colonel Magrudor came to Mr, Alvord and, got the loan of $50,000 on a $30,000 chick ont the
First National Bank, drawn by J. A, Magruder, treasurer, and on a $20,000 certificate of the
board of public works, to be paid out of tlhe first motleys that the board received when the
was made by C'ongress. I found out from Mr. Tuttlo, tle Asseitant Treasurer,
appropriation
as soon as the cieck was made for the amount of tle approprlatlot, and the next moreidlg,
before the batk was opened, I went to tile First National Blank and deposited tilis $o30,00
anid got it placed to my credit by Mr, SwayIno, tho cashlor of the F Irst National Bank,
check,
l'J' $t20,OO0 certificate ran along witIout being paid until February or arch, 1874. One
day, as I was it the Metropolltall NatloIail Bank Mr. Moses Kolly said that the board of
public works wanted a loan of $35,0d(, and woulh give a six per cent. bond on the District
of Columbia for it, Mr. Koelly was one of tile finance committee at the time, and llo advised that the loan be made, saying that it was a good loan, and tlhe bonds wero good. The
was then 85, and the bonds could be sold in any amount for that. I told himli
market-price
I was not willing to make that loan unless the $20,000 certificate was included in it, and bonds;
deposited noiiglh to covor tlie $5)5,000, Tliat was agreed to, and I made teo loan of $35,000, and
took $65,000 in bonds to cover that loan and tile $20,000 certificate, which made the amount
That ran along some time, something less than a month, when te whole amount
$55,000.
was paid. Mr. Vandenburgh had nothing whatever to do with it, unless perhaps he got tih
money from the board of public works. The loan of $w0,000 was mIado to Governor Shoep
herd by Mr. Alvord.

any such loan.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

103

By Mr. STFNGE:
What was the certificate worth at that time ?-A. None of the certificates or obligaQ.
tions of the board of public works were over worth less than eighty-five or ninety up to that
(late. None of them brought less that eighty or eighty-five until after the panic, That
certificate was put into this new loan. I do not know where the idea of that $30,000 loan
to Vandenburgh came from, There never was any such loan as that.
Q. You know nothing about that loan of $30,000 to Vandenburgh ?-A. I know nothing
at all about any such loan as that at any one time,
Q. Did you never say to 0. B. Purvis, or to any other person, that you had done one
wrong thing, and that was allowing that money to be paid to Vandenburgh on the personal
pledge of ShepherdIn?-A. No sir; I have no recollection of that. I know where Dr. Purvis got that idea.
Novomber, 1872, Vandonburgh came to me and wanted some more
money-five or six thousand dollars-to pay his men, I told him that ieo was so much
indebted to the bank that I did not foel like letting him have any more money on the
securities of tile board of public works, as other people seemed to got their money and we
could not. Ho said it was for Mr. Shepherd. I went to Mr. Shepherd, and lie said, " If you
allow Vandonburgh to have that amount of money now, you shall have all that is duo you
paid lip when we got the first appropriation ; but if you lot htii have any more, it will be
your own lookout." I lot himn nav about five thousand dollars on that occasion, and wion
tihe appropriation was made I got $22',000 of lilin Instead of some hundred and odd thou.
to any sum of $30,000, I know nothing about it.
sand, as was promised but as that
ho would pay that money himself -A. No; he agreed
Mr. Shepherd agree
Q. itDid
that should be paid out of the first appropriation that the board got from Congress.
$'.J,000 instead of $100,000
?--A; Yes, 'There waS due the bank from
Q. And you and
got the
some one hundred thousand dollars, and we got about
paving-coimpany
Vandonburghthousand
dollars.
twenty-two
moant to say that when that loan of $5,000 was made, Mr. hepilherd said that you
Q. You
shIould have tile whole armolunt that had boon loaned by tile bank, which, at that time, was
over $100,000 f-A. Yes, sir.
Q. When did you become actuary of the Freedman's- Bank --A. About the first of
August, 1872.
Q. At the time you became actuary, did you not know that Vandenburgh wna debtor to
the bank and in default 1-A. No, sir; lie was not in default at that tinm. Thero was a
time of tile panic, when the securities fell so low. Up to tie first of
largo margin up to the of
1873, noneO tile securities of the District were sold for less than 75, and there
September,
wore plenty of them to cover the debts of Vandenburgh at that rate.
Q. I lindl by reference to thb'cominisslonors' report, on page 95, that at the date of that roport (1)oecenbor 14, 1874) there were then loans outstanding and due from .J. V. W. Vandenburghl amounting to $144,164.33, after crediting the whole ildebtednoss of Vandenburgh with
the sum of $35,903.75 ; and tho loans on which that indebtedness rest began on l)eeomiber 1,
1872, after you were actuary, and ran on through almost every month in tlie year 187:3. How
did it happen that J. V. W. Vandonburgh could obtain from the'bank, under your administration as actuary, such credit on such securities as he gave Y-A, Tile $80 216 and the
were made before I was actuary. I consolidated all tlhe
$35,000 loans, nearly all of them,securities.
The other loans were made because I supposed
loans into those two loans with
I had as good security as I had for-anything, and, up to the last date, I think the securities
were as good as any.
indebtedness of $80,216.82 is of December 1, 1872, and is to J. V. W. Vandeon
Q. This
as treasurer of the Abbott Paving Company?-A. Yes, sir,
burgl Was
tho Abbott Paving Company onlly another name for the Metropolis Paving Coin
Q.
Paving Company, so fir as I know.
pany 1-A, It had nothing to,do with the Metropolls
Tli Abbott Paving Company was made up of Vandonburgh, Harry S. Cranford, J. 1P, Cran
of the pavemeont, and some other
ford, of New York, and Mr, Abbott, who wnis theandpatentee
whose names I do not recollect.
gentlemen who did not belong to Washington,
Q. Had that company any location or business office in the city of Washington ?-A. It
had,
Q, Was it chartered hero ?-A. I think it was not an incorporated company. It was
simplyDoa private business
company.
for
Q,
you ktiow what tlo stock of a private unincorporated association of individuals, Ythe purpose of taking pavement contracts or any other purpose, was worth in the market
A. 1 do not, Tlhe loans wore lnot made on any stock of tio company. They were made on
the securities of the board of public works.
Q. Those securities were merely certificates issued by the board of public works in advance
.of appropriations by Congress ?-A. They were partly certificates and partly tile 8 per cent.
bonds issued
works.
Adjourned,

by tho board of public

104

FREEDMAN^S SAVINGS AND TRUST COMPANY.
SELECT COMMITTEE ON FREEDMAN'S BANK,

IWashington, March I1, 1876.
The committee met at 10 o'clock a. m. Present, Messrs. Douglas, Riddle, Farwell, Sten.
ger, and Hooker.
LE ROY TUTTLE sworn and examined.
By the CHAItRMAN:
Were you a member of the finance committee of tile Freedman's Savings and
Question;
TruHt Company ?-Answer, I was.
Q. In the report of the commissioners of that company there appear loans in largo
amounts to various persons without security, such as loans to J. V. W. Vandonburgh, Robert
I. Fleming, and others; explain how thoso transactions came to bo entered into.-A. I was
never aware that there a single loan made without security, or
security at least,
and security which I supposed was ample. If any such wore pretended
it was done by misnmade,
representation
entirely, I never handled a cent of tlh money of the bank, and never re.
coived( a cent, and had no interest whatever in it pecuniarlly. My recollection onl that
point is distinct,
positively clear. I doi not recollect to have amot Vandonburgh but once in
my life, and I should not know him if I saw himn to-day.
By Mr. FARIVWElI :
Q. Did you always attend the meetings of the finance committee -A. Not always.
Q, Was there a quorum without you ?-A. Yes ; tho fllianc coinmittoo consisted of live,
but three constituted a quoruml '1hey put tme otn that con minttco for a convenience, as they
said, I telling them at the samto time tlhatI Ihad not time to assume any responsibility, as I
was assistant treasurer of the United States under Gonoral Splinner.
By the CHAIRMAN:
These
Q.
loans, brought together hero on pago O5 of this report, commence in December,
1872, and run down to and inlullde Sltolmbolr, 18733; woro you aln active member of the
finance committee during tihe years 1872 and 1873 I-A. Yes; I am pretty suir I was. I
resigned over two years ago.
Q. Thlo whole amount of loans cliargod to J, V. W. Vandonburgh in thoso two years ag.
$180,0(68.68. )o youlmoan to say that during nto )part of that time aly of the
grogates
loans to Vandenburgh were brought to your notice as la memoor of tho finance cocommittee ?A. No, sir; I may liavo been with tlie 1lanlce committee when some of those loans piassod,
but I do not recollect one single thing about them.
By Mr. FARWIEVLL:
said that if you passed upon those loans it was through misrepresentation ; who
Q. You
made these mlisrepresentationst to you Y--A. Tlio president and actuary of the bank, first,
and then the other members of tlho finance committee, whlo generally mot promptly. I occasionally met witli them, Many times they voted in my absence. I said to tthom, ' You can
do as you please, for I cannot bo with you. I have too much to do,"
By tie CHAIRMAN:
Q. When you did attend thio meetings of tile finnnde committee, what monibers were
present and attending to tho duties of that conmmitteo I-A. When I wont in, the chairmnsu
of the finance committee was I[. D. Cooke, and IIuntington and Clophanlo were moeilbors. I do not recollect wlio the other member was. Then there wore some changes m1ade.
I was kept int, as tley said, for convonlontie sake, because they could run inl at my desk
in thoe Treasury and get me to approve of things. They always said they knewv whore to
find mo,.
Q. Do you mean to bo understood, by the last portion of your answer, that whont thley
would come to your desk to approve of tilings,
(to use your language,)
you took what they
said on trust t-A. Yes; In tills way I said that I wanted
two namos at least to precede
minel, and that I wanted tho actuary's name so as to see that it was all riglt. I had confl.
doece in thie actuary, Eaton. I thought ho was aln honest mtan.
Q, Weor thoso rp)rosontalions onlwhich you placed so much reliance made to you by the
D. L. Eaton, by I, D. Cooko and Williiami S. Iuntington, or either of them I-A,
actuary,
Yes, sir.
Q. Those are the parties otn whose representations you generally relied ?-A. Yes; during
their service onl tile oeinoiitte,
eil(l ,ifterwaud 1 hIad to depend on somebody else. But I always told thleln that they must not depend oIin me, that I tiust depend on them, and that they
must not deceive tile.
Q. You liavo alluded to changes in the finance committee, and that
developed
already
the fact elsewhere that Iienry D. Cooke ceased at some tieo to bo athey
of the finance
member
committee; do you kiiow at what time lie did cease1-A. I do not.
Q.IHave you at lnly time ha1 your attoltion drawn to the character and description of
tile particular securities nlntiidonil ill what is called available-fund loans, as described In the
report f lthe cotmirli.iiolnrs *-A. No, sir.
.

FREEDMAN'S SAVINGS AND TRUST COMPANY.
105
Q, Do you know anything of the value of thoeMetropolis Paving Company, thie National
Seal-Lock Company, the Columbia Railroad Company, the Building Block Company, the
Morris Mining Company, the Maryland Freestone Mining and Manufacturing Company, and
some others ot the same character; if so, please state what substantial basis they wore oil,
and what was the value of their capital stock respectively '-A. I know nothing about them.
meetings of the board of trustees, was General 0. 0. Howard
Q, When you attendedpartthein tile
business proceedings of the board '--A. I met him several
usuallybutpresent,
taking
I know he was not a constant attendant. I have met him only at tle annual
times,
meetings,
to exert any influence ?-A, lie seemed to have Influence,
Q. Did ie seem
On page 104 of, the report of fhe commissioners dated December 15, 1874, there is this
Q.
item " O. 0. Howard vice-president, IH. D, Cooke, treasurer. April 18, 1871, lots 3, 4,
and part lot 5, square 407, improved." Do you know what that loan.was for, and what was
the nature and value of the security for it '-A. No, sir; I do not,
Kilbourn and Joliu 0. Evans,
'
Q, On page 93 of the same report, I find this item: "HallOt
January 2, 1872, on $75,000 second-.mortgage bonds Maryland Miniing and Manufacturing
Company." Do you know anything of that ?-A. I ain sorry to say that I do not recollect
distinctly about the trasnaction at 11. I do not recollect anything about it, although it may
have been done at my desk in theahlirry o' business, during tile absence of Mr. Spinner in
1871.
T'io CHIAJIRMAN. This was in 1872.
The Wl'I'NH:s. I think thero were several transactions all leading to this one.
as an agreement between
Q. On page 56 and 57 there appears par which s
lHallt Kilbourn and John 0. Evians, and theo finance committee of the Freedman's Savings
and Trust Company, signed D, L.lalton,actuary ; approved, L. CIophano, Williamn S. lHutington, L. R. Tuttle, finance committee; which agreement refers to tile loan and arrangement entered into between the parties in relation thereto, to which reforonco has already
been made. Bo good enough to look at this papor andl explain it, if ryoet can.-A, I cannot
it; I can only state the fact that Mr. Hlluntington and Mr. Elaton and Governor
explain
Cooke said that everything in relation to the Stleneca Stone Copal)ny was all right; they
always said that in plain terms, Th'ly used to say that while (Governor Cooke was the
financial agent of th UlJnited States, tloe president of tie First National Bank, (of which
was cashier,) the president of tlhe board of public works, tile governor of the
Htuntingtol
District of Columil)l, and all those things. They said that everything pertaining to tile
Seonoca Stone Company was all right, and therefore I was not l)articular to Inquire into anyabout it,
thing Did
Q.
you over hear any of those parties, I-ntington, Cooko, Clophano, Eaton, Kilbourn,
or Evans, say, at any time, whether or not that transaction was intended to.covor up and
made directly to the Seneca Stona Company' If not, for what
extinguishdidloans previously
]Inllet Kilbourn and John 0. Evans execute their noto for $50,()(), with the
purpose
private understanding with the actuary and the finance conmmlltte that the note was afterward to be surrendered to them, and that all of tile collaterals deposited with It were to be
returned excel)t the $76,000 of second-mortgage bonds of tile Seneca Stone Company I-A.
I must colless to you tlat I do not know. I never talked with Kilbourn or Evans on the
matter, When they told me of the transaction, I told them there was a mystery about it
which I could not explain, and I never have been able to explain it. It is needless for tme
to attempt it.
Q. If I understand you correctly, you were rather a nominal member of tlhe finance committee than otherwise --A. Yes, sir.
Q. Aid you became so through a spirit of accommodation, and did not, generally, attend
the meetings in person ?-A. I did not.
Q. But you usually ratified whatever was done on thto representation of any two members
of the finance committee ?-A. Yes, sir, I was willing to ratity what they represented to
nm as correct. You may say that I was, nominally, one of the members,
StickQ. It appears, from tle report of tho commissioners embodying tlhe letter of G.to W.
actuary, to J. M, Langston, bearing date November 0, 1873, that, prior that time,
noy,
there had been several loans to the Seneca Stone Company, among them one of $18,000, on
bonds, aggregating $51,783.73. Can you Inform us how those firsttwenty first)-mortgage
bonds of the Seneca Stone Comnpany have disappeared entirely from among the
mortgage
assets of tihe bank, and whether, if tile $50,000 note of Kilbourn and Evans was intended
to represent or absorb tho indebtedness of the Seneca Stone Company to the bank, the balance of $1,783.73 has ever been accounted for --A. I do not recollect about that transaction, I was not a member'of the finance committee in 1873, When they told me about it
I said, " Hold on to the note and lot us find it out." But It seems that tlhe note was surrendered. The
of the board was in favor of surrendering it. I know nothli g of
the transaction, majority
and was surprised when I was first informed of it.
Q. Was Henry D. Cooke a member of the finance committee at the date of that transaction ?-A. He was not a member in 1873, if that is the date of it, but I am sure that the
transaction was in 1871, and at that time Henry D. Cooke was a member of the finance committee.

designated

106

FRE.EDMAN S SAVINGS AND TRUST COMPANY.

do not know what became of the twenty first-mortgage bonds of the Seneca Stone
Q. You ?-A.
No, sir; I never saw one of them.
Company
Q. Nor of the balance of the indebtedness of the Seneca Stone Company over and above
the $50,000 1-A. No, sir; I know nothing about it.
Q. Nor why that arrangement was entered into ?-A. No, sir; not a thing. I am sorry to
plead
ignorance, but I cannot tell you. I will repeat that I never have derived one cent
from the bank. I never even got a loan for a friend of mine from motives of friendship.
Neither directly nor indirectly have I ever had one cent from the bank.
Q. The report of the commissioners shows large loans at various times to the Seneca Stone
the Young Men's Christian Association, (or the building association of the
Company,
Young Men's Christian Association,) the First Congregational Church, (or on its securities,)
the Building-Block Company, the Metropolis Paving Company, the National Seal-Lock
the Morris Mining Company, &c. Charge your memory to the best of your
Company,
state whether you know the fact from the statement of the parties themselves or
ability, andthat
otherwise,
any member of the board of trustees or of the finance committee, or any officer or agent connected with the Freedman's Bank, was a corporator or owner of the stock of
of those companies '--A. GovernorCooke stated that he was a large owner in the Senoueca
any
Stone Company. That was the only case I know of.
Q. There appear loans to various individuals in large amounts; as for instance, to J. V.
W. Vandenburgh, Juan Boyle & Co., C. W. Havenner & Co., Robert I. Fleming, Hallett
Kilbourn, the National Junction Railroad Compan;y, &c. State whether you know that
there was any partnership or business connection between these parties, or any of them, and
any trustee, officer, or agent of the Freedman's Bank.-A. I cannot tell you. Mr. Fleming
was the architect of the bank-building. While I may have voted on some of these loans, I
do not recollect now, but I know of no partnership.
Q. Was it not according to the legal requirements and theory of the operations of the bank
that all these loans and investments were to pass the scrutiny and approval of the finance
committee before they were allowed ?-A. Yes, sir; and then they were afterward passed
upon by tihe board of trustees.

By Mr. STENGER:

Q. Let me read you a sentence from the testimony of Mr. Purvis, (reading that part of
Purvis's testimony where he describes the manner in which Mr. Tuttle is supposed to have
the agreement before referred to.)-A. I do not know that Cooke came in himself on
signed
that occasion, but Mr. Cooke had always told me that anything in regard to the Seneca Stone
I need not be afraid of, for it was all right.
Company
to say that you have no recollection of having signed a paper on which
Q. Do you mean
this exchange of bonds was authorized ?-A. I have no recollection of it. I always said
that two names must precede mine on any paper that I signed, and that I must not be asked
to look over the papers, as I had not time. That is the way it was done. I did not intend
to enter into the business at all, and told them I could not do it, but they said that if I
would let my name go, that is all they would ask, and I supposed that they would do right.
I am not certain that it was Mr. Cooke who presented the paper to me to sign, or whether it
was Huntington with the approval of Eaton. Both may have come together, and I think
owners in tho Seneca
Mr. Cooke
himself to me as one of the

did.
large
they
represented
Stone Company, and stated that General Grant and others of the principal men of the nation
were owners of the stock; and I assumed that it was all right.
Q. Have you any knowledge of any offer having been made by one of the present commissioners to purchase any of the accounts or books of the depositors of the Freedman's
Bank I-A. No, sir; I have not any knowledge at all. At one time, before I left the office
of the assistant treasurership, a colored man came into my room with a letter of recommendation from one of. the old trustees, Mr. C. Richards. I think he wanted a position in
the Treasury, I said I could not give him any. He said, "I am one of the unfortunate
Bank." I said, "I am sorry for that." He said, "It looks
depositors in theI Freedman's
am poor and they say that the bank will not pay more than 20 per cent."
pretty
gloomy.
I said, " Who says so ?" And he mentioned the name of one of the commissioners.
Q, Whose name did he mention ?-A. Mr. Leipold's. I said, "That is a mistake. The
bank will pay more than that." " Why," said he, " I am not offered even 20." I said,
"You are not going to sell for 20 ? There is about 20 per cent. deposited right in the other
room to the credit of the bank. If the bank-building s sold, it will pay nearly another
20 per cent,, which is 40 per cent. In my opinion, you will get 60 or 70 per cent., and
they tell me you will get 80, and yot must not sell for 20." I said, "Who offers you
that ? " Ho said, " Mr. Leipold. He does not really offer it, but he says that if it had not
been for him and the Secretary of the Treasury we would not get anything; that if the
trustees had continued, the depositors would not have got a cent." I said " That strikes me
hard. Do you think that one of those commissioners would purchase the books of
pretty
the depositors ?" Yes," said he, " he wants to buy my book." Said I, " I should not want
to advise you to sell it, but I should like to know whether one of the commissioners proposes to buy depositors' books in that way; that may account for the legislation that is going
in toon to

reduce the number of three commissioners to two." Said I to him, "Come

FREEDMAN '

SAVINGS AND TRUST COMPANY.

107

morrow," and he came in the next day and said that Mr. Leipold would not pay this 20 per
cent. until after a little legislation, and that he was to see him again. I asked him what
other books of depositors Mr. Leipold had ever offered to buy, and he gave me his own
name, Sanders Howell, and the name of Mrs. Rollins. I said to hin, " Will you bring
them before us at any time we want to see them ? " He said, "I'will bring them at any
time, and will swear to it." That is a year ago. Sanders Howell is a colored man, a
I see him every day.
preacher.
he say to you that Mr. Leipold would not give 20 per cent. for the books of deQ. Did?-A.
He said that Leipold said he did not think they were worth 20 per cent., but
positors
that he would see him after a little legislation. This was near the close of the last session
of Congress.
Q. Did he give you to understand that Leipold wanted to buy at less than 20 per cent, ?A. He gave me to understand that Leipold said he thought they were not worth 20
per cent.,
but that he might pay 20 per cent. after a little legislation. Then I was led to inquire what
the legislation was, and for the first time I came into this building and begged persons not
to pass the bill reducing the number of commissioners.

Q.

By Mr. HOOKER:

Do I understand you to say that Mr. Leipold, one of the commissioners, made a
sition to buy that colored man's book at some price or other, and sidd that he would tellpropohim
what he would give for it when this legislation took place ?--A. 'hat is what Mr. Howell
told me.

SELECT COMMITTEE ON FREEDMAN'S BANK,
Washington, March 14, 1876.
The committee met at 10 o'clock a. n. Present, Messrs. Douglas, Bradford, Stenger,
Riddle, and Farwell.
GEORGE W. STICKNEY recalled.
Question. At the time you became actuary of the Freedman's Bank was it not required
that you should give a bond as such actuary
No, sir; not particularly. It was
voted that I should give a bond, but I did not give it, and the trustees
were aware of that
fact. My reason for not giving it was that one of the parties who had agreed to go on the
bond for me was a borrower from the bank, and I did not want to have him-on
bond
until his indebtedness was settled. I thought he would fix it up, but he did not. my
Q. Why did not you go outside and others in his
They did not require me
to do it, and so the matter ran along. get
Q. It never occurred to you to have a proper bond executed and to tender the same ?-A.
No, sir; I thought that if it was necessary
ask me for it.
they would
Q. You knew, however, that the law required
it of you 1-A. Yes.
Q. Was the matter discussed more than once in
sir; only once,
and that was before the finance committee in 1874. your presence?-A. No,
* Q. Were all the officers of the bank cognizant of the fact that you were acting without a
bond ?-A. I think they were. The only
time the matter was discussed was in April, 1874.
Mr. Douglass was president then, and the question was discussed both in reference
to him
and to myself.
Q. Don't you think you would have been more prudent in the administration of the affairs of that office if you
had been acting on a solvent, reliable bond ?--A. No, sir. I tried
to do the best I could, as I saw it, for
the interest of the bank.
Q. Were you ever engaged in any business, other than actuary of the Freedman's Bank,
the time you held that position ?-A. No, sir.
duringWero
Q.
you ever engaged in any business disconnected from the affairs of the bank during the time that Mr. D. L. Eaton was actuary ?-A.' No, sir; I was not.
Q. Did you ever hear of a firm styled D. L. Eaton & Co. ?-A. Yes; I was interested
in that firm,
but I did not do
business in connection with it.
Of whom was that firm any
Q,
and what business did it transact?-A.
composed,
firm
of D. L. Eaton & Co. was started in 1867. It was composed of D. L. Eaton, J. W.The
Alvord,
Charles H. Howard, E. Whittlesey, Henry R. Searle, John Kimball, and Dwight Bliss.
Q. Were you a member of that firm ?-A. I was. I was interested in one-fourth of Colo.
nel Eaton's stock. I owned one-fourth of the stock held by D. L. Eaton.
Q. Was it a body-corporate ?-A. No, sir; it was simply an association.
Q. But you did not consider yourself liable,
for the debts of the concern, did
you --A. If Colonel Eaton, who owned one-sixthhowever,
of the stock, had to pay any debts of the
concern, I should have been liable for one twenty-fourth part of them.
Q. And, of course, would have been interested in the profits that might arise from the
business Y-A. Yes, toyou
that extent.
Q. What business did that company engage in -A. Making building-block, the same

--Answer.

place?--A.

material as the Howard University is built of.

108

FREEDMAN S SAVINGS AND TRUST COMPANY.

Q. Sun burned brick ?-A. No, sir; blocks made of limo and sand.
concern borrow any money, directly or indirectly, from the Freedman's
Q. Did that
Bank ?-A. I have no recollection of its having ever made any loan from the bank.
Q. Do you know of anybody borrowing any money from the Freedman's Bank for the
benefit of the firm of D. L. Eaton & Co. 1-A. I have no recollection of it. Tlhere was an
overdraft of the company on the books of the Freedman's Bank, amounting to eighty or
I kept the books for the company at that time, and I tried faithfully to find
ninety dollars.
out where the difference was between the two accounts, but I could not succeed. This was
the only indebtedness of thie company that I ever knew of to the Freedman's Bank.
Q. Was Mr. Eaton actuary of the Freedman's Bank during the continuance of the existence of that firm --A. He was.
Q. Whose duty was it to prosecute defaulting officers of the bank, cashiers, &c. ?-A.
It was the duty of the executive officers, the president and the actuary, under the direction of
the trustees. It was the duty of the trustees to order the prosecution.
Q. Was it ever done ?-A. It was never done except in one case, the case of Corey, at
Atlanta.
Q. What became of the prosecution in that case ?- A. Mr. Corey was convicted, but
whether he was ever sentenced or not I do not know. He moved for a new trial, and lie was
out on bail when the bank suspended.
Q. Was it usual for you to grant loans without the concurrence and direction of the
finance committee ?-A. I did, sometimes.
Q. What loans did you negotiate without tile concurrence and direction of the finance
committee?-A. No new loans which I negotiated-loans that were entirely new. I had
the fixing up of old loans, and I tried to get the best security I could for them. I did con-

siderable of that without directions,
Q. How many loans did you negotiate in the first instance ?-A. I cannot tell that now.
Q. What is your best recollection as to the aggregate amount of the unpaid loans of that
sort which you negotiated ?-A. I suppose about forty or fifty thousand dollars.
Q. Would that cover all the indebtedness of persons to the bank to whom you loaned
without the directions of tie finance committee ?.-A. I cannot say that without seemoney
I do not recollect them, and I cannot tell pwhat has. been paid and what not.
ing theYouloans.
stated the other day that you knew nothing of those Vandenburgh loans ?-A. No.
Q.
sir; I did not say so.
Q. How did it happen that such heavy loans were made 'to Vandenburgh ?-A. We had
the money there, and we made the loans to him on what we supposed to be good security.
Those loans were made with the knowledge of the trustees. They asked me from time to
time the amount of Mr. Vandenburgh's loans, and I told them, and they asked me the.
amount of his securities, and I told them. They asked me that from time to time.
Q. How much of these loans to Vandenburgh remain uncollected 1-A. I do not know.
Q. At the time that your connection with the bank ceased, how much remained uncollected ?-A. I think about $150,000, with security enough, at the market-rates, to pay the
original loans, leaving off interest. The reason why the security was so much reduced was,
that during the panic, I sold considerable of the securities of Vandenburgh a great deal lower
than they are now. They were sold at 70, and are now worth from 85 to 90.
Q. Do you recollect anything of a loan for the benefit of the Young Men's Christian Association-a loan of $33,000 ?-A. Yes.
A. Give us some account of that.-A. That loan was passed by the finance committee. It
was made by D. L. Eaton, actuary, on a supposed first mortgage. During the latter part of
1873, when the panic came, and when the bank wanted money, I was negotiating a loan
a broker, and got W. H. Ward to examine the title that we had in this mortgage on
through
the Young Men's Christian Association property. He examined the title and reported against
it, saying that the joint-stock company had no right to mortgage the property. Of course, I
was not able to negotiate the loan. There are two associations connected with the Young
Men's Christian Association. The loan was made to the joint-stock company, and Mr. Ward
that that company had no right to deed the property except to the Young Menl's
reported
Christian Association proper, when that association could pay for it. The Young AMen's
Christian Association owns about $16,000 worth of stock out of $200,000 worth issued for the
building. The rest of it is held by different parties.
Q. Was that money borrowed by Cooke and Howard for that association, or was the loan
negotiated
directly with the Young Men's Christian Association ?-A. It was negotiated by
A. S. Pratt for the joint-stock company of the Young M.en's Christian Association. All the
negotiations were made by him.
Q. Who actually got the benefit of that loan? -A. The joint-stock company. There
were some loans at the time that were negotiated on the stock of the company, but they
were taken up entirely.
Q. Was there any mortgage or deed of trust executed to secure this loan ?-A. Yes.
Q. On what property ?-A. On the property of the Young Men's Christian Association,
corner of Ninth and D streets. At the time the loan was made it was supposed to be good,
and it would have been good if the title had been good.
Q. Whose fault was it that that mistake was made f-A. I do not know. I did not have
anything to do with it.

FREEDMAN S SAVINGS AND TRUST COMPANY.

109

Q. Were you not actuary at the time ?-A. No, sir: Mr. Eaton was actuary. who the
mistake was made by the party that made the abstract of title. I do not knowI'think
th :t
was.
Q. Were those who borrowed the money aware of their incapacity to convey the title ?A. No, sir.
Q, Who constituted this joint-stock company ?-A. I do not know.
Q. Who were the directors in.chief of it f Were any of them officers of the Freedman's
Bank ?-A. IHenry D. Cooke was a member of the company; I think he was treasurer at
the time,
Q. He was one of the borrowers of the money ?-A. Yes.
Q. Aid was also one of the lenders of the money ?-A. He was a member of the finance
committee of the Freedman's Bank at the time.
Q. That loan was negotiated after the finance committee-had approved it ?-A. Yes.
lie was also a member of the association which received the money ?-A. Yes.
Q, And
was treasurer of that association ?-A. I think so.
Q. Ilo
Q. H-ave you any distinct recollection whether hle lad a personal knowledge of tihe fact
that that loan was going to be negotiated ?-A. I think le did have.

By the CIAIRIIMAN:

Q. Was not General O. O. Toward also a member of that joint-stock association ?-A. Hte
was.
Q. And an honorary member of tile board of trustees of the Freedman's Bank ?-A. I
think he was not an honorary member till after that date.
I-A. I think it was made in April, 1871.
Q,. When was that loan negotiated
loans reported by the commissioners, generally in small sums,
Q. Thereonarethea number of
to parties
security of holdings, of some sort, on the B'Irry farm; do you know for
what purpose and by what agency these loans were granted' -A. The loans were granted
to enable parties who had bought property there to pay for it.
Q. Do you menn to say that those parties who held lots on the Barry farm, and borrowed
money on those lots, obtained it for the purpose of paying the purchase-money of the same
to tlhe holders of the Barry farm ?--A. Yes.
Q. Do you know who the holders were ?-A. The holders of the Barry farm were the
trustees to whom the farm was deeded. The money went to certain educational institutions,
as I understood.
Q. Who were the parties who held this farm and sold out these lots ?-A. S. C, Pomeroy
and 0. 0. Howard were the trustees, I think.
Q. Was not J. W. Alvord one of the trustees ?-A. No, sir.
Q. Do you know whether the trustees of tie Barry farm obtained any money from the
bank for the purpose of paying for the same ?-A. 'hey did not.
Q. During the administration of Mr. Eaton as actuary, and afterward during your own

administration as actuary, was it customary to make investments or loans of the funds of
the Freedman's Bank without previous direction or assent of the board of trustees Y-A. Yes.
A good many loans were made, both during Mr. Eaton's administration and my own, but
most of them, and I think all of them, were reported to the board of trustees afterward, and
by the board.
approved
Q. Was it ever the case that these loans, or any of them, were not reported to the board of
trustees, or, if reported, not approved by them ?-A. There may have been a few lotrns that
were not reported. I cannot recollect now what loans they were. I have no recollection of
but one or two that were not approved,
(f. State, to tohe best of your recollection, what loans were not reported at all and what
loans were disapproved, and what action was afterward taken in relation thoreto.-A. I
catnot recollect now what loans were not reported, because it was always my intention to
report them all, and if they were not all reported it was because I skipped some of them.
There were some small loans of one hundred dollars or so, on personal
security, ainounting
in the whole to about eight or ten thousand dollars, which used to run along without
being
all. 'The trustees all knew that they were there without being reported.
reportedDidatnot
J. W. Alvord, as president of the Freedman's Bank, and ex-officio chairman of
Q.
its several committees, repeatedly protest against loans on such securities as the Seneca Stone
stock, thle Metropolis Paving Companly stock, the National Seal-Lock Companiy's stock, the
Columbia Rwilroad stock, and other collaterals of that character '-A. I believe lie protested
against those loans that were made after they were made, but I do not know that lie was tihe
first one who did so.
Q. Did lie not go to Mr. Eaton and to yourself and tell you that these loans must be
H-e never came to me. I do not know whether lhe did to Mr. Eaton.
stoppedt-A.
(Q Did you niake, any loans on security of that description ?-A. No, sir.
Q. 'Those loans that were reported as having been made on that class of securities were
made before you became actuary t-A. Yes, sir.
Q. Why did J. W. Alvord
against those loans after they were made, if they had
been made with the approval protest
and sanction of the board, of which lie was the official head ?
-A. I think that most of those loans were made outside of the finance committee. I do
not think that they were made at regular meetings of the committee.

110

FREEDMAN'S SAVINGS AND TRUISTr COMPANY.

Q. Describe the operation by which it was done.-A. I don't know the modus operandi,
because I was not inside.
Q. Were you assistant actuary ?-A. All these matters were brought to me, and I sim.
ply had to enter them up.
By Mr. BRADFORD:
Q. State fully and circumstantially the manner in which they were negotiated.-A. The
Seal-Lock Company's loan, I think, was negotiated and approved by Mr. Iluntington alone,
who was one of the finance committee. When we had a meeting of the full finance corn.
mittee these loans would be reported and approved. After that they were reported to the
board of trustees. I think that the record shows that all these loans were reported by the
finance committee, after they were made, to the board of trustees and approved by the
board of trustees, and I do not think that a protest was entered at the time.against any one
of them.
Q. Can you account for the loose and careless manner in which the books of the bank
were kept, and the reckless manner in which the assets of the bank were frittered away ?A. In regard to the way that the books of the bank were kept, the reason was that we never
had help enough to get the books up and to keep them up. While I was actuary I never
could get the help that I really wanted.
Q. What was the reason T-A. Somebody would protest that-we were paying men who
could not do it, or else they wanted some friend to have the place.
Q. Who would make such a protest -A. It was made in the board of trustees several
times.
Q. Can you recollect an individual person who-made that protest ?-A. Mr. Langston, for
one, at the last annual meeting. He was for cutting down the salary of the book-keeper.
Q. Prior to that time who made any such protest ?-A. It came through tile agency com.
mittee and the finance committee. They thought that the men we had could do the busi.
ness.
Q. Then you account for the loose and careless keeping of those books (if it was not
criminal keeping of them) iby the want of clerical force --A. By the' want. of clerical
force; but while the books of the principal office were not kept quite as they should be, we
never lost anything by it, and, so far as I could find out, there is no mistake or error in them.
In the Wasllington branch there is a discrepancy of from thirty-five thousand to fifty thou.
sand dollars of difference between the amount shown to be due to depositors on the ledger,
and the amount shown on the journal. This discrepancy I never could find out. I employed Mr. Wygatt, afterward cashier of the Citizens' Bank, and book-keeper of the First
National Bank, for three or four months, and he went over the books and could'not find out
the discrepancy.
Q. Who is chiefly responsible for the loans of money on securities contrary to the terms of
the charter ?-A. I think the board of trustees and the finance committee are as much reas any one.
sponsible
Q. Do you know any individual member of the. board of trustees, or of the finance corn
mittee, who was more responsible for them than any other ?-A. I think that the first finance
committee we had made the Seneca Stone loan. Those loans on miscellaneous securities, and
all this matter in regard to the Seneca Stone loan, were before the board and discussed, and
there was a long report from Mr. Cooko as to the value of the Seneca Stone property. The
board of trustees acceded to the loans in the first instance.
By the CHAIRMAN:
third section of the charter of the Freedman's Bank prescribes that the affirmative
The
Q.
vote of at least seven members of the board shall be required in making any order for or autransfer of any stocks or securities bethorizingtothetlieinvestment of oranythemoneys, or the ofsale or officer
receiving any salary therefrom.
any
corporation,
longing not
appointment
Dq you know that investments of the funds of the company, and sales and transfers of
securities held by it, were habitually made without such order, and without the sanction reby law ?--A. I think that'almost all'the loans were made in the first instance withquired
out that sanction, because they were made by the finance committee, which consisted of only
five members.
Q. Was it not an habitual practice to invest the funds of the company, and to sell and
transfer these securities, without the sanction of such an order as was required by the charter?-A. Yes, it was.
Q. By whom were those investments and transfers made, thus without authority ?-A.
of the company, and by the finance committee.
They were made by the officers
" officers of the company," D. L. Eaton and yourselfl?-A. I
Q. Do you mean by the
meau Mr. Eaton, myself, and the president, Mr. Alvord.
Q. Did you ever sell or dispose of any of the securities of the Freedman's Bank after you
became actuary? If so, state when, under what circumstances, and' by whose authority I
-A. I sold $60,000 of the 10 per cent. special-improvement certificates in New York, which
was afterward reported to the board of trustees and approved by them. I sold these because
the bank was in need of the money at the time to pay demands of depositors. I sold at different times notes secured by deeds of trust to different parties. Some of the parties were
trustees of the Freedman's Bank at the time I made the sale.

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

111

and state what the securities were.--A. I cannot recollect what securities

them,
Q.
were, because there was a good deal done in that way. That was almost the only way
they
that we could collect money out of real-estate securities in the latter end of 1873 and the
Name

of 1874.
beginning
that some trustees of the bank became
You

parties to the purchase of securities held
Q.
say
bank ?-A. Yes.
byQ.theName
such trustees.--A. I sold three or four notes to Thomas L. Tullock. And I
sold rome $20,000 of notes to Dr. C. B. Purvis for his father. He paid in full, principal and
interest, the amount due on the notes.
Q. Do you recollect any other parties who bought such securities ?-A. No, sir. When I
would write to parties, whose notes were due, to come and pay them, other parties would
for
and I would transfer the notes to these
come and take the notes
sometimes

up

them,

par-

ties who took them up.
By Mr. STENGER:
Did
Q. you realize out of all the notes sold in this way the full amount of the loan with
interest ?-A. We did not.
Q. Were any of the notes purchased at a discount? If so, how much was the discount,
and by.whom were the notes purchased ?-A. There was a note bought by Mr. Tullock,
and I discounted a part of the interest that had accrued on it.
Q. Can you tell what securities they were that Tullock bought?-A. He bought a note
of James T. Pike given on property on Eleventh street, and a further note of Pike's secured
on some property on New Jersey avenue south of the Capitol. The interest had been long
overdue on these notes, and I discounted them because if I sold them just at the time of the
not have realized the full amount of the notes, and as we wanted the
panic theI bank would
The other notes that I sold I made about
mouey thought it best to take off some discount.
the usual discount on, which is '2 per cent. commission on the face of the note. That is
the general commission for discounting notes. None of these notes were ever discounted
unless when it was necessary for the bank to have money.
By the CHAIRMAN:
Q. You sold the notes at 2. per cent. discount ?-A. Yes; I got 971 per cent. for them.
By Mr. STENGER:
Q. Through what period of time did that course of business run ?-A. From about the 1st
of November, 1873, till about the time that the bank suspended. While there was no vote on
the matter, the trustees individually told me to do the best I could in regard to raising money
for the bank and that they would stand by me.
Q. You mean to say that they gave you unlimited authority in the matter?-A. While
there was not any vote of the board on the subject, that is what the members individually
told me. I would consult with some of them individually, in regard to what was best to do,
when we could not get a meeting of the full board.
from your recollection, was the amount of notes that was so sold ?-A. I supQ. What,one
hundred and fifty to two hundred thousand dollars. I sold to Mr. Corcoran
about
,pose
about $50,000, but he charged no discount, except that I had to pay his lawyer for making
a new abstract of title.
Q. Were any of those notes sold to the First National Bank ?-A. No, sir; we had no
need of selling notes till after the First National Bank was past buying notes.
By the CHAIRMAN:
bid
you employ any agent to effect the sale of securities in New York ?-A; No, sir;
Q.
I took them there myself and sold them. The Government bonds that we had at the time
of the panic, (about $600,000,) were mostly sold through the American Exchange National
Bank.
Q. Something was said a while ago about the insufficient clerical force of the Freedman's
Bank as accounting for the condition in which the books were kept. It may be true that
force would prevent the books being got up in time, but is that any
inadequacy ofof clerical
that such books as were kept, were in such inextricable confusion as
fact
the
*explanation
to "darken counsel " rather than explain the transactions of the bank-as appears to be the
fact from the report of our own experts 1-A. I do not think that'the books are in such a
condition as that. If the experts were to ask me for information I think J could give them
some information that would help them in the matter.
leaves being cut out of some of the
Q. Will the inadequacy of clerical force account for
and for other leaves being pasted together, and false balances being made -A. I
books,
never knew that there were anly leaves cut out or any leaves pasted together.
Q. We hear frequently on the street, and around the Capitol, of a real-estate pool existing
in this city; can you tell us what that pool was, and who were the members I-A. I suppose
you refer to the real-estate pool in which property was deeded to Kilbourn &. Latta as trus*tees. My understanding is that certain property was bought in the northwest part of the
city and deeded to Messrs. Kilbourn & Latta, and Olmstead, as trustees. Who the mem-

112

FREEDMAN S SAVINGS AND TRUST COMPANY.

bers of the company were I do not know, and never did know, and had no means of know:
ing. Were other
Q.
parties, mentioned as connected with that pool, at any time intrusted
any
with confidential business of the Freedman's Batik or did they hold confidential relations
with the bank ?-A. When the charter of the bank was first awarded, authorizing it to
make loans on real estate, Messrs. Kilbourn & Latta were appointed appraisers, or valuers,
of property.
Q. Do you not know that a good many of the loans negotiated by Kilbourn & Latta,
as brokers, and secured on property appraised by them as the business agents of the bank,
were made for the purpose of improving and developing this property of the real-estate
No loans that I know of were made for that purpose.
pool ?-A.
Q. Were there not loans obtained on real estate in tlat section of the city I-A. No, sir;
there wore some loans on notes bought by the bank which were given by Messrs. Kilbourn
& Latta, I think, but they were taken from the parties to whom the notes had been given
in part payment of the property. No loans that I know of were made directly with either
of those gentlemen.
Q. IIn other words, the business men ot the real-estate pool were Kilbourn & Latta, and
they were also the business men in the Freedman's Bank 1-A. I do not think that they made
of property for tlie Freedman's Bank since the real-estate pool was started.
any estimates
Q. Are you certain about that ?-A. I am quite certain.
Q. When was tlhe real-estate pool started 1--A. The only way I know is by the date of
the notes given for the property, and those notes were dated in June, 1872, 1 think.
By Mr. STENGER !
Q. Do you know whether the deed is dated at the same time ?-A. I do not know, but I
suppose the deed is of even date with the notes.
By the ClAIRAMAN:
What
were those notes given for?-A. For tile deferred payment of purchase-money.
Q,
paid so much in cash and gave their notes for the balance. These notes got into the
They
bank from third parties-from tle parties froml whom they had bought the property.
Q. I understand you now to say that while you know of no loans that were made directly
on tlle security of the property held by the real-estate pool, many of the notes that were given
by tihe individual' members of tile pool found tleir way into the bank and were there cashed.
-A. I cannot say " many," but about $,(),000 altogether, I think.
Q. Who negotiated those loans ?-A. They vore taken from the parties from whom the
the property.
pool bouglit
bank passed these notes ?-A. They were all passed, I think, by
Q. Wlat officer of tile
thle finance committee, and they have been all paid in fill.
By Mr. BRAD'FORD:
Q. Was not H-enry D. Cooko a member of the finance committee at that time?-A. I
tlink not. I think he resigned on'the 1st of January, 187'2; either 1872 or 1873.
IBy tile CHAIRMAN :j
Can
you not tell us who tlhe parties were wlo gave these notes, and who were the
Q.
to whom they were given--A. Notes for $15,000 were given to W.W. R apley,
parties
firm of Kilbourn & Latta. Some of the notes were made by Latta, some
Iy one of theand
some by Olmstead. Whom tile other notes were given by 1 do not know.
by Kilbourn,
Q. I understand from your evidence e that Kilbourn & Latta and Olnistead were tnistees
of an association that was standing behind them. Do you know any of tile members of
that association
?'-A. I do not.
Q. Did you ever hear Kilbourn, Latta, or Olmstead say who were tile members of the
pool ?-A. No, sir.

By Mr. BRADIORD:

Q. D)o you know anything tending to show whio was a member of that concern ?-A.
No, sir. 1 do not.
By the CHlAIRMAN:
Q. Was the pool, so called, a mere private association or 'as it an incorporated body?A. It was a private association, I supposed.
Q. Were there any other securities than those that you have mentioned held by the
bank, which you sold or transferred, without any order or authority from tlhe board of
trustees ?--A. I do not recollect any other.
Q. What becameasofathe $15,0(Q0 of United States securities owned by the Rest Home Colspecial trust-llund in the Freedman's Bantk ?-A. When I was made
ony and ofdeposited
I found that the New Orleans branch of the bank was carrying on its
tile tobank Rost
actuaryas due
Home Colony, some $15,000, and from correspondence afterward
books,
tile
1 found that it was held as any other deposit, and that the bank held
tile bonds the sante as
any other securities of the bank. At the time of the panic, (not knowing what might happen

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

113

to the bank,) I ordered the cashier at New Orleans to charge the amount up to our account,
and he put it on his books as charged to the principal office, and 1 took the bonds out afterward and sold them, and took the best real-estate notes that I could find and put them in the
place of the bonds. Those real-estate notes have since been paid, and the commissioners of
thoeFreedman's Bank have the funds in their hands as cash. The bonds were registered
bonds, and were sold under the direction of the finance committee and the board of
trustees.
By the CHAIRMAN:
commissioners' report of December 14, 1874, says: "In addition to the liabiliQ.andTheassets
shown by Exhibit II, we have on hand a real-estate note for $15,000, dated
ties
7, 1871, and payable one year from its date, drawn by George Mattingly to the
August
order of the Freedman's Savings and Trust Company, and bearing interest at the rate of 10
or annum, and $1,856.94 cash. The note is secured by a deed of trust on the
percent. situated
at the northeast corner of Ninth and E streets, and the interest has been
property
to August 7, 1874. These assets are held in the nature of a trust-fund under the seventh
paid
section of the act of March 3, 1865, and, as far as we have been able to ascertain the facts of
the case, the history of this fund is as follows: On the 1st of February, 1867, the Freedman's Savings and Trust Company received from the Bureau of Freedmen, Refigees and
Abandoned Lands the sum of $15,000 in currency, being the net proceeds of a crop made on
the Destrehan plantation, in Louisiana, (Rost Home Colony,) after the expenses of raising
it had been paid, to be invested in United States bonds, and held in trust for the purposes set
forth in the order of Maj. Gen. 0. O. Howard, Commissionrr, under date of December 29, 1866.
The funds were duly remitted to the principal office of the company, then in New York City,
and on the 11th of February, 1867, $10,000 of 5-20 United States bonds were bought by the
and on the 24th of April, 1867, $4,150 additional 5-20s were purchased, On the
company,
18th of July, 1867, a further deposit of $870.07 was received from the Bureau of Refugees,
Freedmen and Abandoned Lands on the same account, which was invested on the '23d of the
same month in $800 5-20 bonds.. Interest was credited on account of this trust to July 1,
1873, amounting to $7,077.36, against which checks amounting to $2,328.47 were drawn
and paid, leaving a balance of $4,748.89 due, standing on the books of the New Orleans
branch. No interest seems to have been credited since July 1, 1873. On the 9th of July,
1873, the books of the Washington branch show that those bonds were sold and the proceeds placed to the credit of the Rost Home Colony, and on the 23d of September this depositaccount was closed, and the amount realized fiom the sale of the original bonds re-invested
in United States currency sixes. Subsequently, during the 'run ' of October, 1873, it appears that these 'sixes' were sold with other Government bonds, the property of the company, to meet the demands of the depositors, and tile $15,000 real-estate loan, referred to
above, and another for $1,500, were substituted for the Government bonds. This last-named
loan was afterward paid, and the currency has been placed with the other loan." Is that
the transaction to which you have referred in the foregoing statement ?-A. Yes.
Q. Has there been substituted for the securities held as a special trust for the Rest Home
Colony anything besides the $15,000 real-estate loan ?-A. Nothing else; and that has been
paid.
Q. Where are those funds now deposited ?-A. I suppose they are in the hands of the
commissioners, I signed a release, and Mr. Leipold told me, about a week ago, that he had
the money. I got these facts when the commissioners made their report, from the New
Orleans branch, after the bank had suspended and after the books had been sent up here.
When the transaction was first made I knew nothing about it. It simply appeared on the
books of the New Orleans branch as a deposit, and the bonds were sold the same as any
other deposits.
By Mr. FARIWELL:
Q. I understood you to say that they were a special deposit not carried on the books.-A.
carried on the books.
They were
Q. Was interest credited to that account until you took it off?-A. Yes.
By the CIAIRMAN:
Q. After the transfer, exchange, or swapping of these securities, one after the other, was
there not a balance of interest, considerable in amount, which was not carried forward to tbe
credit of the Rest Home Colony, or debited to the bank, but which you deposited to your
own individual credit in some other banking institution ?-A. There was about $1,000 interest paid on that $15,000, which I deposited to my own credit until I fixed the other matter
I deposited it for about three weeks or a month, until I drew the money and sent it
up.
over to the commissioners, when I turned over the rest of the funds.
Q. Did you make known to the commissioners the existence of that deposit to your own
name, or acknowledge any liability of your own to account for it, until they discovered the
fact and made a demand on you for payment f-A. I did not, for the reason that they promised they would pay the $15,000
note, and I wanted to get Government bonds for it and
return the deposit in Government bonds. The money was at my credit, but I did not use
it in any way, shape or form.

8FB

114

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q. If the books of the bank, kept under your supervision and direction, exhibit the true
character of the transaction as to other arts and parcels of that debt, why was it that they
did not exhibit also the state of the interest account ?-A. The books of the bank did not
exhibit the statement of that account at all. The real-estate notes were locked up in the
safe, and were there all the time.
By Mr. RIDDLE:
who has testified before this committee, and who was employed as
Q; Was Mr. Johnson,
in the Freedman's Bank, fully qualified for the discharge of the duties of book
book-keeper
?-A. I do not think he was.
keeperWas
he a good clerk ?-A. Ioe was a good clerk for some part of the work, but not fo
Q.
that particular business of general book-keeper.
By Mr. FARWELL:
Who
Q.
represented this colony and who deposited these bonds as agent of the colony ?-A. They were deposited by the assistant commissioner of the Freedmen's Bureau at New
Orleans.
Q. What were his instructions when he left this deposit with your company ?-A. There
do not appear to be any instructions on record, except the order of General O. O. Howard.
I Q. Under whose instruction's did you make this transfer from a current account back to a
?-A. I did that of my own accord, because I
special deposit, after you itcame in as actuary
thought that was where ought to be, so tar as J could find out after correspondence with
the cashier.
directions from anybody ?-A. Yes.
Q. You did it without
did you change the bonds from five-twenties to currency sixes ?Q. By whose directions
A. The five-twenties could be sold on the market better than the others, and I simply sold
them and substituted currency sixes for them.
Q. By whose authority and direction did you change thoso currency sixes into real-estate
notes --A. My own.
Q. Is the committee to understand that all this manipulation of bonds and accounts was
done entirely by you I Was the original deposit made as a special deposit on a current
account ?-A. It was made as a current account. It appeared on the books of the New Orleans branch at the time as a current deposit, as $15,000 to the credit of the Rost Home Colony.
Q. Then by your action this colony will get 100 cents on the dollar ?-A. Yes; whereas
otherwise it would only have got its regular percentage or dividend.
By Mr. BRADFORD:
Were
Q.
you not named as trustee in many deeds of trust that were taken to secure loans
from the Freedman's Bank ?--A. I was.
Q, Did you ever receive compensation other than your salary as actuary in connection
with these trust-deeds?--A. I suppose that during the time I was actuary I received about
:500 as trustee.
Q. Have you any further claim against the bank, on account ofservices rendered as trustee?
-A. I have some claims for services rendered as trustee since I left the employment of the
bank. I have no claim for services before that.
Q. It was simply in the execution of trusts which existed prior to the severance of your
connection with the bank that you have these claims ?-A. Yes.
Q. You have charged for those services ?-A. Yes. I stated that I wanted some compensation, but not the full amount.
Q. Then your present account or claims against the bank include claims for services rendered before you ceased to be actuary ?-A. No, sir.
By Mr. STENGER:
Q. Do I understand you to mean that on all these deeds of trust in which you were
named as trustee, you still claim a commission, to the amount for which tihe property has
been sold, or shall be sold ?-A. I claim a commission on the amount for which the property
has been sold, but not a full commission, I told tile commissioners, when they bought the
I did not want a full commission, but that I thought I should have some
property in, thatbecause
these trusts took me away from my business, and I had to be recompensation,
for the sales.
sponsible
Q. Do you not know that the understanding with Eaton was that no commission whatever was to be charged by him on those deeds of trust, which were a mere nominal matter ?-A. I do not think there was over such an understanding. Dr. Purvis introduced a
resolution in the board of trustees, which never was acted' on, in relation to the matter.'
There were other matters connected with it, and when I was made actuary he moved that
the resolution be withdrawn, and it was withdrawn, and no action was over taken.
Q. In those deeds, where you are named as trustee, was any amount fixed as commission ?-A. The commission is 4 per cent. on the gross amount of the sales.
Q. And that is the amount which you claim to be due to you on all this property sold 1A, I did not say so.

.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

115

That is the amount which would be legally due you ?-A. Yes.
Q. And
less that you chose to take would be so much remitted to the bank, in
Q, view ?-A.
anything
Yes,
your
Q. Have you intimated to the commissioners what percentage you 'are willing to take?A. I have not.
Q. Do you know the pecuniary circumstances of the members of the finance committee
and of the board of trustees before they became such members, and their pecuniary circumstances now ?-A. I think a great many of them are a great deal poorer now than when
they became trustees. I know of none of them who are any better off.
Q. Does that same rule apply to the actuary ?-A. It does most decidedly.
SELECT COMMITTEE

Committee met at 10 o'clock a.

Stenger.

ON FREEDMAN'S BANK,
WIashington, March J6, 1876.
nm. Present, Messrs. Douglas, Bradford, Riddle, and

B, W.
W. BaR sworn and examined.
By Mr. STE:NER :
Question. Where are you residing now ?-Answer. In Baltimore.
?-A. Yes.
Q. Were you isat itone time Paymaster-General of the United States Army
How long
since you ceased to be in that position ?-A. I was placed on the
Q.
retired-list January 1, 1872.
Q. Were you at any time one of the trustees of the Freedman's Bank ?-A. I was one of
the corporators in the original act, by special request, a request to which I acceded only on
condition that no duties should be required of me, as my own official duties demanded all
'y time at that period.
Q. Do you recollect at whose request you became trustee ?--A. At the request of General
0. 0. Howard, who was the procurer of the legislation, I think.
officers of some of the departments of the Government also named as
Q. There were other were
there not ?--A. I have no knowledge or remembrance as to that.
or trustees,
corporators
I never gave the subject a second thought; I attended the first meeting after the organization
of the board, but I never afterwards met with the board, I never was in their office or banking-house, and I know nothing whatever of their proceedings.
Q, 'Do you recollect whether Hon. E. B. French, Second Auditor of the Treasury, was one
of those corporators or trustees t-A. Very possibly, but I have no recollection on the subject.
The truth is, I think I never read the act of incorporation.
Q. Do you know anything of a company known as the Maryland Freestone Mining and
Manufacturing
Company, otherwise called the Seneca Stone Company ?-A. I was at one
time a stockholder of that company.
Q. Do you recollect at what time you procured your stock ?-A. I think in the year 1866;
certainly in 1866 or 1867.
Q. Please state to the committee how you came to be an owner of the stock,-A. The
president of the company, or one I understood to be the president of the company, Mr. John
L. Kidwell, came to my office and solicited me to become a stockholder of the company,
that he desired select subscriptions, that he wanted to reserve the stock, as he con.
alleging
sidered it very valuable for persons of some influence and position. At the first interview I
gave him no satisfaction, Ife repeated his call subsequently some days afterward. Then I
told'him I would make
and determine whether 1 would take the stock or not. At
that time I had a depositinquiry
in the First National Bank of some money, which was collected by
that bank and transmitted to
own credit, derived from my patrimony in Ohio-my
father's estate-and that creditmyin the First National Bank was
known to Kidwell, as I
learned from the conversation, and I suppose now (I did not then) that it was that deposit
which he was seeking, as lie needed inoney. Mr. Henry D. Cooke, then governor of the
was a brother Ohioan, and one whose father I had known many years ago very well.
District,
I had made an agreeable acquaintance with him and reposed entire confidence
in what he would
represent to me. I waited on Mr. Cooke and told him that I could not afford to make an unsafe
investment or to go into any sort of speculation; that what little surplus I had I wanted to
invest in some productive stock, one that would be entirely safe ; tlat I preferred a small
interest with certain
safety to any hazard in regard to the matter, and that I had deto invest that deposit theii in the bank in Government stocks, where I had heresigned
tofore made some investments of money derived from the same source. Mr. Cooke assured
me, with great emphasis, that I could not make . better investment of my money than
in the stock of that Seneca Stone Quarry Company. He gave assurances that very shortly
it must pay valuable dividends, and
that it was a perfectly safe company. 1 had told
Mr. Cooke in the conversation that I sought his opinion
and advice on te subject as a
friend, and that I wanted a frank and perfectly sincere statement from him as to-his
opinion

116

FREEDMAN'S SAVINGS AND TRUST COMPANY.

in regard to the stock. He gave it to me as I have stated, and I invested L$0,000; paying
50 per cent. on 200 shares of stock.
Q. Do you know by whom that stock was issued to you ?-A. It was issued to me by
the secretary of the company on printed scrip.
Q. Did you receipt for the stock-certificate yourself on the books, or had it been receipted
for by some one else andhanded to you ?-A. I presume that I went through all the necesI do not recollect all the details now.
sary forms.
Q. To whom did you pay the money ?-A. I gave a check for the money to Kidwell. I
never considered that in any conversation with Mr. Kidwell I had fully committed myself to
the subscription which he sought of me; but a few days after my conversation with Mr.
Cooke, (just referred to,) a check for $10,000 was presented to me by Mr. Huntington, the
cashier of the First National Bank, for my signature. Ho stated that he had paid over the
amount to Mr. Kidwell. My deposit in the First National Bank did not quite attain to
but Huntington presented me at the same time a note for the remainder, which I
$10,000,
a few days afterward. He said that Kidwell had represented to him that I had agreed
paid
to make a subscription. I concluded to acquiesce without any further question or demurrer
about it, particularly as I had been persuaded that the stock was a select and choice stock,
and that it would pay valuable dividends, and that very shortly.
Q. Have you no knowledge of the taking of any of the stock by any other persons ?A. I have no specific knowledge. A list of the stockholders, then in existence, was exhibited to me, a few of the names of which I remember, but not all.
Q. What names do you remember now as having been on that stock-list at the time that
Kidwell solicited the subscription from you ?-A. General Grant was one; his brother-in.
law, Genral Dent; the Surgeon-General, General Barnes; the Adjutant-General, General
Robert Williams, and I think General Babcock; but I am not positive about hilm.
Q. Did you see the name of Caleb Cushing --A. Yes.
Q. And of William H. Seward ?-A. I think so. I know that it struck me as a very distinguished list.
Q. Have you no knowledge from any one of those parties named, or from any other of the
stockholders, as to what they paid for their stock ?-A. None whatever.
Q. Had you no other information in relation to the company and to the subscriptions for
its stock than what you have given !-A. I have not.
By the CHAIRMAN:
any dividend oh your stock in that company ?-A. Yes; I
Q. Have you ever received
received a dividend in 1871, I think, in the form of additional stock. I was invited to a
meeting of the stockholders of that company, at which a Mr. Kennedy, who was a stock
holder, and who appeared to be the leading spirit and manager, spoke. The logic and eloquence of Mr. Kennedy induced the meeting to assent to a watering of the stock, I think.
50 per cent., and at the same time that meeting declared a dividend of the watered stock.
That was the only dividend I ever received.

By Mr. STENGER:

Q. So that the investment was completely lost ?-A. No, I realized out of it afterward;
not fully, but very satisfactorily, considering its condition. I realized, through a combination of fortunate circumstances, and lost only the interest on my investment for six years.

By the CHAIRMAN:

Q. Do you recollect whether at that meeting (when the stock was watered) any resolution
was adopted in regard to the issuing of second-mortgage bonds ?--A. There was as to the
bonds, and I think they were second-mortgage bonds. I know that it was
issuing of some
to the'issuing of bonds that the stock was watered. Mr. Kennedy claimed that
preparatory
the original stockholders had a right to this benefit, as they had borne the brunt of the company's embarrassments for six years, and as they were about to borrow money and make
extensive improvements which would bring the stock up in the market, he said that the
original stockholders had the right to that benefit. It was a sealed letter to me, for I had no
familiarity with the subject and never gave much attention to it. I had become convinced
about the time of that meeting that the stock was unavailable, It was paying no dividends,
and could not be sold in the market, so I did not care what they did with it.
SELECT COMMITTEE ON TIlE FREEDMAN'S BANK,
Washington, D. C., March 18, 1876.
The committee met at half past 10 o'clock. Present, Messrs. Douglas, Riddle, Frost, and
Farwell.
SANDERS L. HOWELL sworn and examined.
By the CHAIRMAN:
State your residence and avocation.-Answer. I reside at the corner of TwentyQuestion.
first and L streets, Washington City. I am a clergyman.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

117

State whether, since the suspension of the Freedman's Bank, you have had any com,IQ.
munication with the commissioners in regard to the condition of its affairs.-A. About the

time of the bank's closing I had some money in it, and there was a report in the newspapers
that the bank was supposed to pay ninety-five cents on the dollar. Soon after that there
was another report that it could only pay seventy cents to the dollar, and so I went to Mr.
one of the commissioners, and asked why these various statements were made, and
Leipold,
how we came to be so misled as to the value of the bank, as we thought that the Government was bound for the money deposited in the bank. He said that the Government was
not bound for it, and that we were all foolish to put our money in there. He-went on to
slightingly of the republican party getting up a bank for freedmen, or for negroes, as
speak
becaled us. I saw him again near the close of Congress, last year, and asked him concorning the bank. ie asked me how much money I had in it; and I told him as nearly as
I could come to it. He asked me what I would take for it. I told him I did not know exbut that I wanted all of it if I could get it. "Well," said he, " you will not get
actly,
all of it; and if I had not taken it up as soon as I did, you would not have got a
penny. But," said he, "I think it probable that I can give you twenty cents on
the dollar for your book." Said I, "That is strange to me, after the reports in the
papers." Said he, "'I have looked over the books and papers of the bank, and I do not
think it will pay over 20 cents; however, I can probably give you that, if you will take it."
I told him that I did not feel like taking that for it. He then went ou to ask me if he
could not buy up quite a number of depositors' books through me, and then he would assure me that he would give me 20 cents on the dollar for mine, but that he wanted to get
the others as low as possible. I told him that I was engaged in a different business from
that sort, and that I would rather have my own money if i could get it. Said he, " I do
not know that I can give you 20 cents on the dollar, until I see a little further in reference
to the new legislation in Congress. I think I can give you 20 cents on the dollar, and you
may rest assured that I will do the best I can for you all; but if I had not taken up this
bank as soon as I did, you would not have got a penny, not even for the bank-building;
but I will do the best I can for you all." Hie often treated the depositors very slightingly,
and if they asked him any questions, he would say, " What are you pestering me fort" He
has told hundreds of them that they had no business in putting their money in there, and
he would say, "Whoever knew of a Freedman's Bank in the world? If I had not taken up
this bank, you would not have had a dollar. We brought you out of slavery. You had noth-

ing then, and you need not think anything of these

little losses."

By Mr. FROST:

Q. Are you certain that he said just these words ?-A. Yes, sir; that is what Mr. Leipold
,said. That is about as much as - can recollect of it. When lie was paying the dividends,
I noticed that he made all kinds of game of the people for putting their money in the Freedman's Bank. He even made fun of a white lady who was there. I do not know who' she
was.

By the CHAIRMAN:

you know of Mr. Leipold, or of anybody connected with the operation of winding
the affairs' of the bank, making offers to other depositors to buy their books?-A. He
up
made the effort to get the book of a young man named Phil. Rollins, and of another young
man whose name fdo not recollect.
in the conversation you refer to, intimate what kind of legislation he
Q. Did Mr.
wanted before heLeipold,
could make you any further offer ?-A. He seemed to refer to some movement in Congress. It was at the close of the last Congress, in 1875.
Q. You have stated that you put your money in the bank under the impression that the
United States Government was responsible for it ?--A. I did.
Q. How was that impression made on your mind ?-A. Mr. Wilson, the cashier of the
bank, made that impression
on my mind, and so did D. W. Anderson, the pastor of theNineteenth-street colored Baptist Church. I do not know whether Mr. Anderson said particularly
that the Government was bound in it, but he stated that it was a good thing. I belonged to
that church, and we all believed that what the pastor said was true.
Mr. Wilson, who was
cashier of the bank, stated that the Government was bound for every dollar, and that the
money was placed in Government bonds, otherwise I should not have put any money in
there.
Q. Did you have any conversation with J. M. Alvord or any of the trustees of the bank
in regard to the
of the Government ?-A. I have talked with Mr. Alvord since about
Q.

Do

liability
it. I did not know
much about him before the close of the bank, but I talked with him
several times since then. lie said that he used to be president of it, and that old man Fred.
and that he (Mr. Alvord) was in no way responsible for
had come to be
Douglass
the
affairs of the bank. president,
know of any other facts that would tend to show that the affairs of the bank
Q. Do
had been you
injudiciously
managed ?-.A. Nothing that I know of.
Do you know of any other colored persons who lost their money there I-A. Yes, sir.
Q.
The Zion Church, in Georgetown, lost $3,000 there, I think.

118

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. Have you ever been paid any dividends on your deposits ?-A. Yes, sir: I was paid
Q. What percentage was that ?-A. Twenty per cent.
By Mr. FROST
about $760 ?-A. About that.
Q, Then your whole deposit was?-A.
You say you are a preacher
Yes, sir; I am a licensed minister from the Nine
Q.
teenth-strect Baptist Church. I preach in different churches, and very often I travel, but I
have been losing my healtL considerably. I often go on missionary work, and do things of
that sort. About two years ago I left the theological institution. I was out of money, and
I had got all the education I could. I came to Washington from Virginia, and went to
work to making something to try to start on, but I lost all I had in the bank, and I lost a
good deal of my earnings in the board of public works, as I was not paid for my work.
$153.92, I think.

SELECT

COIMMITTEE

ON FREEDMAN'S BANK,

Iltashinglon, D. C., March 21, 1876.
Messrs.
Present,
Douglas, Bradford, Riddle, Farvell,

The committee met at 10, a. m.
and Frost.
JOHN L. KIDWELL sworn and examined.
By the CIAIRMAN:
Question. State your residence and occupation.-Answer. I an a druggist by profession.
I live in Georgetown; my business is in Washington.
Q. Were you one of the corporators and stockholders of the Maryland Freestone Mining
and Manufacturing Company t-A. Yes.
Q. State whether, during your official connection with the Maryland Freestone Mining
and Manufacturing Company, there were any loans contracted by that company with the
Freedman's Savings and Trust Company.-A. I think it was during my administration
that the loan was made.
Q. State, as nearly as you can, the dates and the amounts of the several loans, and the
character and description of the securities deposited therefor?-A. I cannot do that at all,
because I did not make the loans, nor did I know at the time that they were nade there.
Q. By whose authority were the loans made ?-A. The financial matters of the,company
were managed entirely by Mr. Henry D. Cooke and Mr. William S. Huntington. ''he
treasurer of the company was Mr. Hayden, brother-in-law of Henry D. Cooke. all the loans that were obtained from the Freedman's Bank were made by and
Q. Andthem
?-A. They were made by and through them. I was never brought in conthrough
tact with the Freedman's Bank in any one transaction, nor until the loans were made did
I know that they were made there.
Q. Have you, since those loans were contracted, obtained in any way information as to
the several dates, amounts, and character of securities pledged therelor?-A. The loans
in amount about $50,000. I have not been president of the company for three
aggregated
and have sought no information on the subject.
years, Do
Q.
you know anything of $20,000 face-value of first-mortgage bonds being deposited
with the Freedman's Bank, either on conditional sale or as security for money obtained by
the Maryland Freestone Mining and Manufacturing Company ?-A. I did not until that was
shown me in the report of the commissioners. I have no knowledge of such a transaction.
Q. Do you know from any communication of Henry D. Cooke or William S. Huntington,
or Mr. Hayden, how that loan, and the'other loans, to the Maryland Freestone Mining and
were adjusted and settled, or what became of the $20,000 of the
Manufacturingbonds
Company
?-A. If I were to express an opinion about that, I would say that the
first-mortgage
of the $20,000 first-mortgage bonds is a mistake. I am not positive about It. I do
deposit
not know the facts in the transaction at all. I cannot imagine what the ban} got $20,000
of the first-mortgage bonds for. If that transaction took place I have no knowledge of it.
of the Maryland Freestone Mining and Manufacturing ComQ. It appears from the books
known as the Seneca Stone Company, that after issuing $500,000( of stock,
pany,
generally
which was distributed in the first instance to the five original incorporators, the company
issued $100,000 in first-mortgage bonds. State how those bonds were disposed of.--A. In
the first place I think that issue of $500,000 of stock was not made to the five original inMy impression'is that the quarries were sold to the company for $500,000, and
corporators.
that the company was to issue its stock to the amount of $200,000, which was to be credited
to Cooke, Dodge, and myself, and for which we were to take first-mortgage bonds. The purof the quarries, and the expenditure on them, was in cash, about one hundred
chase-money
and twenty-five or thirty thousand dollars. The company was organized at $500,000, with
the purpose of selling its stock at $50, which would realize $250,000.. We three were the
original purchasersof the quarries, and we developed them, using cash all the time; and we
thought that from the developments made, and from the character of the quarries, we were

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

11

the rate of $250,000, double the amount of
justified in organizing a company atthat
perfectly
the agreement was that the stock should
is,
money vhich we had
my

paid;

impression

be issued to the subscribers to the amount of $200,000, and that the money received should
be for furnishing further mills and developments, and that we were to take the first-mortgage boards to the amount of that sum, ($100,000.) That is my understanding and my

recollection about it.
Q. The gist of my inquiry wa to ascertain the reason for issuing the $100,000
first-mor'gage bonds and the disposition made of them. If I understand you correctly
you say fiat those bonds were issued for the purpose of indeminifyng yourself Cooke, and
tie original purchasers of the quarry, for your advances on the property put into the
Dodge,
common itock ?-A, From the money paid by the subscribers, which was allowed to go
into the treasury of the company, as I tell you, there was $200,000 of stock sold, which
realized 9100,000. We allowed that to go into the treasury of the company for further
developments, and in lieu of that the company issued to us three the $100,000 of first-mortgage bonis.
of first-mortgage bonds was absorbed by the three
Q. I understand now thatis$100,000
known as the Peters farm, which constituted the basis of the
original irchiasers of what and
Mining Manufacturing Company ?-A. That is my recollection; we
Maryland'reostone
them, dollar for dollar. We gave $100,000 for them.
pa for
paying
Q. rhi, if I understand, you, the company had $100,000 as the proceeds of the sale of
50 cents on the dollar?-A. Yes.
$200,000if stock, atcash
Ani($100,000
Q.
proceeds from the sale of the first-mortgage bonds ?-A. No; I did
not want;o be understood in that way. We sold the quarries for $500,000 of the stock of
$'00,000 of the stock was sold by the company, realizing $100,000. That
thecompiny;
wnt into the treasury of the company and we were credited with it, as so much cash furi'shed by us in lieu of $100,000 of first-mortgage bonds, which we took at par.
Q. Tien the $100,000 of first-mortgage bonds went into tie hands of the original purthe Peters farm, in lieu of $I00,000 previously received by the company on the
cbasereof
sale ofthe stock Y-A. That is my recollection of it.
Q. Vho holds those bonds now ?-A. I have not the list of the bondholders. I suppose
it woull be difficult to get a correct list of them. The bonds are distributed pretty generally. Hold some of them myself. Mr. Dodge is the largest holder of them, I think.
Q. llsve you ever deposited any of those bonds in the Freedman's Savings and Trust
as security for any loan to yourself ?-A. Yes, I have; but that I would be glad
Comply
to expln.
The ,IAInMAN. Make any explanation you wish.
A. I id to you that I had never made
loan myself from the Freedman's Bank, and
that sta ment I want to sustain. I went any
to Mr. Huntington, cashier of the First National
Bank, oone occasion while I was president of the company, and said to him, " Mr. Huntington, nust have a couple of thousand dollars to.day." He said, "All right." Said I,
"I onl ant it till the day after to-morrow, and I would be
to have a memorandum
due-bil it." He said, " Very well; I will manage so tliat glad
it vill be considered as cash
until they after to-morrow." I had
which were realized, of receiving in
two day seven or eight thousand dollars expectations,
from the sale of stone, or something, and I said to
him, " I ant to leave a collateral for this loan." He said, " What will you leave 1" I
left wit him bonds-not Seneca stone bonds, but negotiable bonds, which were
then woe 75 or 80, and which were my own personal securities. I went the
second
afterward and said to him, ". . Huntington, here is the money;
give me ck my securities and my due-bill." His answer was, "' Doctor, I am very busy.
If you wi excuse me and will call in to-morrow I will hunt up that little due-bill and return
you
your curities." I called the next day and said, "Give mne my dueFbill and securities
and let m traighten this up." But he again put me off. Said I, " Mr. Huntington, I do
not like tl You have got my securities, and I have got no receipt for them, and I have
got the m y to pay for this due-bill." " Well," said he, 'I have been looking for that
cannot find it." Said I, "You must find it, for I want that thing straightened."
due-bill,
I regret t ave to mention this, but it is necessary in order to explain my position. I kept
could not get my securities or my due-bill. After two or three months Mr.
calling, b Iwas
taken sick, and sent for me one day, asking me to come to the bank-the
Huntingt
First Nati al Bank, of which he was cashier. I went to the bank and I found four men
carrying I down stairs I sick. I said to him, " Mr. Huntington, I am sorry you are
sick." H aid, ."Doctor,very
am
that you did not come here when I wrote yott the
note." I d him that I had beensorry
at store, and could not leave. He said, " I
engaged
feel very i pleasant and very sick, and I want my
to straighten up that transaction of yours."
Said I, " Huntington, i will make no difference. You will
be out in a day or two, and
you can tighten it up then." He said, "I feel very much worried about it, because
I have di ed of those securities of yours, and I feel very unpleasant about it. I have
treated yo ry badly, and now that I am sick I know that that ought to be straightened
if had come up earlier to the bank I would have straightened it up." I told
up, andI waiory
him
to hear that, for I did not expect an acknowledgment from him that
he had holiny securities. He wont home, and
the result of his sickness was that he

120

FREEDMAN S SAVINGS AND TRUST COMPANY.

died. A short time after he died I found this due-bill of mine in the Freedman's Bank,
on having a notification sent to me. I lost my securities, and I found my due-lill at the
Freedman's Bank. It was for $2,000. It was no loan of mine. My securities were for a
great deal more than that. The reason that I left the securities was that it war a casual
and I had made it a rule not to put myself under obligations to any one. They no.
timing,
tified me at the Freedman's Bank that they had this note of mine, and I called there and
saw the actuary, and said to hinm, "There is some hardship attending this matter of mine.
You have my due-bill, and I will pay it; but there are some hardships attending it, and it
is not exactly convenient for me to pay it to-day. Mr. Huntington is dead, ati I do not
know what the condition of his estate is. I would like, if you allow me, to pay e part of it,
with the hope of getting the balance of it out of Mr. Huntington's estate." ?hey said,
Doctor." I said, "Gentlemen, I do not want you to indulge meat ll without
"Certainly, collaterals
;" so I left there again, collaterals, a chattel-mortgage of V$,000--not
you
leaving
own chattel-mortgage-and left, in addition to that, five thousand of first-inorttage bonds
my
of the Seneca Stone Company. That was $8,000 collateral as security for $1,60(. (I paid
$500 on the due-billon the spot.) I left that additional security with the Freed n's Bank,
and I have gone on reducing the amount of my indebtedness, hoping that Mr. IIltington's
estate would pay something. I think the debt is reduced now to a little over the hundred
for which there is some seven or eight thousand dollars collaterals as security. They
dollars,
have offered the collateral to me several times, but I have said, " No, geutlelin, I want
those securities to remain until the last dollar of the debt is paid. There are ome hardit," but I did not choose to explain what they were.
ships attending
Q. Did I understand you to say that the first-mortgage bonds which you deported at the
bank on discovering the trick which Huntington had played you, have been since Vithdrawn
No, sir; they are there still.
by youAt?-A.
was lie a member of the finance
Q. the time of this transaction withI am
Huntington,
not positive about that, but my impression
committee of the Freedman's Bankl?-A.
is that he was.
Q. Have these first-mortgage bonds of the Seneca Stone Company ever been pala aby the
still hold as a mortgage-debt against it ?-A. They are held as mortcompany, or are they
the company.
gage:debt
against
Q. The books of the company show that, at a subsequent date to the one I am referring
to, the stock of that company was increased by an issue of $300,000 in nominal value, and
another 100,000 of bonds, secured by a second-mortgage, were issued. Why was that
arrangement adopted, and for what purpose, and to what use were those second-mortgage
bonds applied?-A. Up to that time the quarries were a great success, We had more
orders than we could fill, and the stockholders, in a very large meeting, claimed that instead
of dividends there should be an increase of stock, and that the stock should be distributed
to the stockholders as a stock-dividend. By a vote of the stockholders that was done. They
also instructed the directors to issue another 100,000 of second-mortgage bonds, with a view
of having an increased capital. The orders at that particular time were coming in very heavy.
and the prospects of the quarry were very inviting. This was done by a full vote of the
stockholders.
Q. If the operations of the company had become so great a success in a legitimate manner, why were not the dividends declared to the original stockholders in cash ? What could
have been the necessity for paying the only dividend which the company ever declared,in anew
issue of stock, and at the same time increasing the debt of the company by a second mortgage I-A. The increase of the stock and the issue of the second-mortgage bonds were, I
believe, on the same day. The purpose was to build an additional mill, and to enlarge the
facilities for carrying 'stone, and it was deemed advisable to issue the seconl-mortgage
bonds to raise money for that purpose.
Q. What disposition was made of those second-mortgage bonds ?-A. The eoaomany at that
time was Indebted to Henry D. Cooke, and my recollection of it is that he took ,5,000 of
those second-mortgage bonds and credited the company with the amount. Thljt I did not
know at the time, until I afterward saw the entry. The balance, 895,000, i'as pledged
when this debt to the Freedman's Bank assumed the shape of $50,000. It was pledged as
collateral for that $50,000. I did not know the details of that transaction, therefore I will
not attempt to give them. It was managed by these men entirely.
Q. You wish to say, then, that you have no knowledge as to the details of the transaction
between the Seneca Stone Company and the Freedman's Bank, and that all you do know is
that $95,000 of these second-mortgage bonds found their way into the bank I--A. That is
what I would say.
exactlyState
whether that was done with your knowledge, or through whose agency in the
Q.
Seneca Stone Company that was done ?-A. To the best of my recollection Mr. -Iuntington
was named as trustee of the debt, to secure those bonds, and the bonds had necessarily to
be negotiated through the agency of Mr. Huntington. That was really the fact. By a vote
of the directors, himself and Cooke were recognized as the financial men of the company.
They were the men who moved this whole thing.
Q. Do you know anything of the juggle by which this loan to the Seneia Stone Company
appeared for a time to be extinguished by a note of John 0. Evans and H4llet Kilbourn, and
.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

121

how, afterward, it was revived, and Evans's and Kilbourn's note was withdrawn from the
Freedman's Bank, and nothing left except the $95,000 in second-mortgage bonds of the Seneca
Stone Company ?-A. It was a piece of jugglery which I know nothing about, and could not
have anything to do with. I have no association with that kind of people. When it
possibly
was known to nme that the loan at the Freedman's Bank had been created to the extent of
that second-mortgage bonds to the amount of $95,000 had been deposited as
$50,000, and
I said to Henry D. Cooke that I felt unpleasant about that transaction, and I offered,
security,
with him, to raise $25,000 by the sale of real estate, if he would do the sanie, and to take up
those bonds, myself and himself; from the Freedman's Bank, paying them dollar for dollar. He
but ho failed to do it. I then said to him, "( Mr.
promisedthisme from month to month toI do it,not
does not suit nle; will
have any imputation resting on my children,
Cooke,
thing
out of this matter, and although it will give me inconvenience, I will make a proposigrowing
tion to you, (lie was then one of the trustees of the Freedman'a Bank :) I will give the bank
real estate to the amount of $50,000, to take up those bonds, and I will select one man, and
lot the bank select one man, to fix the value of the property." He carried my proposition, as
le said, to the Freedman's Bank, but it was declined. He soon vacated his position as
trustee of the Freedmnan's Bank, and Mr. Moses Kelly, who was then cashier of the Metropolitan Bank, succeeded him as trustee. Mr. Kolly and I wore friends. I went to Mr.
Kelly and I renewed this proposition to him. I told him that I felt unpleasant about the

transaction, and I induced Mr. Kelly to renew, my proposition to the Freedman's Bank.
Kelly proposed it at two different meetings of the board of trustees. lie was again
unsuccessful, and, strange to say, he reported to me that the proposition was defeated by the
colored members of the board. In that proposition I offered to give real estate on Vermont
avenue, a little above the Arlington House, on tihe corner of K street and running up Vermont avenue to L street., at-$1.65 a foot, for that $50,000. The next time the ofter was made
through the actuary, Mr. Stickney, and with the knowledge of the president, Mr. Alvord. It
was again refused. I afterward sold a portion of that property at $1.80 a foot, having
offered it to the Freedman's Bank for $1.65, and out of the proceeds I loaned $30,000 to the
Seneca Stone Company, with the hope of getting the Freedman's Bank paid. I made that
loan with the view of giving vitality and force to the Seneca Stone Company il hopes that
it would pay the debt to that bank. I did it to sustain the credit of tile company.
Mr.

By Mr. FAR WELL:

Q. -Was there any reason given you by the trustees of the Freedman's Bank for not accepting your proposition ?-A. They claimed that technically there was no law to allow
theli to take anything but money in payment of a debt. That is not the only proposition
we made; but they claimed all the time that they had no authority to accept it.
By the CHIAIRMAN:
Q. Can you tell us about what time this proposition of yours to exchange real estate, or
to settle the debt of the Seneca Stone Company to the Freedman's Bank by a transfer of
real estate, was made ?-A, It was a very short time after the second-mortgage bonls were
of that transaction were without my knowledge, although I wis then
deposited. ofThethedetails
The loan was made without my knowledge,
presidentCooko andSeneca Stone who
Company.
were the financial agents of the company.
throughYou
Iuntington,
Q.
spoke of a sale of stock by which $200,000 worth of stock was sold for $100,000;
vho were the purchasers of that stock ?-A. General Barnes, Win. H. Seward, Caleb Cushing,
Adj. Gen. Townsend, General Brice, General Dout, and General Grant, (before lie was
elected President ;) men of that stamp.
Did
the dollar for

these parties actually pay the Seneca Stone Company fifty cents on
Q.
the stock issued to them
i--A. That is my impression.
By Mr. FARWVELL.:
Q. This stock that was issued to them, was it originally issued on tile books of tile company, and the money received from it paid into the company, or was it sold to thom by the
getters up of the company ?--A; The money that was received from these gentlemen for their
stock went into the treasury of the company, and the original " getters up " were credited with
the amount, and the bonds were issued to them in lieu of that amount.
Q. How do you mean that they were credited with that amount ?-A. We sold the quarry
to the company for $500,000, in stock of the company. The company was to issue that
stock to the subscribers, and we were to be credited with the amount which the company received. 'ho
was then to issue first-nortgage bonds, which we were to receive in
lieu of the cash.company
That is tile way that the money got into the treasury. The stock was
issued, not in the names of the original corporators, but in the names of those gentlemen
who received it. The understanding
at tile time was that the money received from that
stock wIas to go o our credit, and we were re-imbursed by the bonds.

122

FREEDMAN'S SAVINGS AND TRUST COMPANY.

SELECT COMMITTEE ON TIE FREEDMAN'S BANK,
IWashington, 'D. C., March 23, 1876.
Committee met at 10 o'clock a. m. Present, Messrs. Douglas, Bradford, Riddle, Farwell,
and Frost.
JAMES B. JOHNSON sworn and examined.

By the CHAIRMAN:

Question. State your full name.-Answer. James B. Johnson.
Q. You are the treasurer of Howard University ?-A. Yes.
Q. How long have you held that office ?-A. Since September 1, 1872.
Q. On page 26 of the report of the Commissioners of the Freedman's Savings and Trust
15, 1874, there is this item : "October '22, 1872, Howard UniCompany, made December
000, secured on property known its college reservation, in Washington, D. C."
$76
versity,
Will you tell us all you may know In regard to the manner in which this loan was negotiated,
and by whom, and to what uses it was applied ?-A. When I entered on the duties of the
office the university was in debt to the Lreedman's Ban k $56,500,in sums borrowed at
different times, I believe one loan was $40,000, one $8,000, and three or four smaller sums
borrowed for different tiniest, some longer and some shorter. I found this condition of affairs,
and reported it to the executive committee, and suggested the funding of these loans into
one, consolidating them into one loan. The board of trustees had authorized the borrowof $20,000; and Professor Barber, who was then acting president, made application to
ing
the bank to increase the loan to $76,000, and increase the security; and it was borrowed
for one year. I remember distinctly that the difference between the existing loan and
$75,000 was $18,500. The money had all been used previous to my term of office. That
$18,500 was, I believe, placed in the treasury of the university and used for all current exin the payment of salaries, payment of interest, and other expenses. After I repenses,
ceived my summons, I made a pencil-memorandum, supposing that was what was desired,
I found, from the cash-book, the loans made, were $8,000 on November 3, 1870; $40,000
on August 22, 1871 $2,000 on March 22, 1872; $3,000 on April 11, 1872; $2,000 in June,
1872; and $1,600 on July 3, 1872. Total, $56,500. l he other loan was dated from October
22, 1872, the day the directors agreed to consolidate the loan.
Q. You say that this consolidated debt was contracted to be paid in one year ?-A. Yes, sir.
Q. Hlas any part of it been paid I-A. I believe they had a rule that they only made loans
for one year at a time, but it was agreed they would extend it. It was extended at the eid
of one year on condition that we increased the interest fiom 8 to 10 per cent. At that time
$37,500 hau been paid. The balance due is $37,508, so that a trifle less than $37,500 had
been paid.
Q. State, if you please, as nearly as you can, when the debt was reduced as you have
described in your last answer.-A. Twenty thousand dollars in the months of December,
1874, and January, 1875. Three payments were made; I think, in all, $20,000, .and a
was
smaller payment was made in the spring following of less than $2,000; and the balance

paid about two or three months ago. I cannot give the exact dates without referring to
my cash-book.
Q. What does the property known as college reservation consist of?-A. Tihre are
about 35 acres in the field on which the buildings stand. That is called the " campus," or
"reservation." The part of this included In this mortgage is all of that part east of the
buildings,
consisting of about 20 acres without improvements. It is described as bounded
on the north by Lincoln street, on the south by College street, on the east by Moore's land,
and on the west by Four-and-a-half street, if it were extended. It is described more minbut those are the boundaries. That is not all the property included in the mortgage.
utely, That
is the property secured to the bank ?-A. The bank has mortgage on more than
Q.
that; then there is our reservation.
Q. It has been stated here in tile course of this investigation that the security given by
the university for its loan w'as afterward shifted for certain securities given by Barber &
?-A. That is a mistake. I will explain that when you desire me to,
Langdon
for,
Q. I want you to explain that transaction-how it came about, what it was intended
and why it was entered upon.-A, There never was any arrangement to that effect. The
executive committee made some arrangement with Barber & Langdon. They owed the
university some money, and their debt was not due for eight years. The executive committee made a proposition to them that if they would pay the money within nine months' time,
in installments of $5,000 each, to enable them to pay their entire debt, they would release
them from their obligation for a certain amount of money. It was understood that those
be made in such a way that the money was to pay the indebtedness of the
payments should
to the Free-Jman's Bank, and $10,000 to the German-American Savings Bank.
university
After they had paid $20,000 they backed out. They were not placed under bonds, as there
was no written contract, It was a mere agreement. 'he executive committee referred the
matter to one or two gentlemen, who claimed to know the law, and they said that the memorandum would not bind them to do it, and they were permitted to withdraw. While it was
reported that they had assumed the debt, it was never understood that they had assumed
it. In the mean time the security which the university had given the bank was not to.be

FREEDMAN'S SAVINGS AND TRUST COMPANY.

123

touched until the debt had been paid the Freedman's Bank, and it never has been touched.
It remains now as it was given in 1872.
Q. Did Barber & Langdon receive accommodation at the bank to raise the money ?-A.
Not that I am aware of. I do not know who they obtained it from. They paid the money
to me, and I paid it to the Freedman's Bank.
Q. You state that the bank held other security for the debt of the university than the land
of which you have spoken; state what it consisted of.-A. A piece of land south of the
university consisting of about 11 acres unimproved. It is intended eventually to make a
of it. It is designed as a park. It is bounded by College street on the north, Fourth.
park
and.a.halfstreet on the east, Sixth street on the west, and Pomeroy street on the south, containig between 10 and II acres of land. There is also square 105.4 in the city limits, lying
one and a half miles east of this place-one of the large original squares of the city. I forget
now its dimensions.
that thel-Ioward University, and the property and lands geiiQ. Do you know the fact
under that designation, and the real estate held by it in the city of Washerally understood
ington, donations from General 0. 0. Howard, were all paid for out of public funds, which, it
is believed, by some.at least, General Howard had no right to appropriate iu that way, and
that there may be a reclamation by the Government at some future day I-A. I have heard
it intimated that there were parties who believed that General Howard's donations were not
was
legal, but I am not lawyer enough to know. The land on which the buildings standHowpurchased, byI the board of trustees, of John A. Smith, and how much money General
ard donated am unable to state; huit know the trustees purchased that land on credit,
and then sold lots, the money for which wont into the treasury. Some has not boon paid
for yet. I am speaking of that parcel of land known as the Snith land.
Q. Don't you know that afterward General HIoward put in a small'piece of land before
purchased
by him, adjacent to or adjoining the ground, and that it was all held under one
grant for the university ?-A. I am aware of hils deeding, or causing to be dededl,,whtt was
known as the Miller property to tlle university, but the conditions 1 have never seen. I
suppose the conditions must be in the records, if they are in the university.
Q. You said the property known as the Smith farm was purchased by tle trustees --A.
Yes, sir.
Q. Did they ever get a free and unincumbered title to the property ?-A. They did; so
free and unincumbered that the best real-estate lawyers and agents have titken the title of
the university in smaller lots.
Q. Have you any knowledge as to how the property known as the Smith farm and the
Miller property was paid for?-A. 1 have no knowledge whatever of the Miller property
being paid for; how it was paid for. The money did not go through tle university hands.
The Smith farm was paid for by the treasurer-the former treasurer.
Q. Who was he I-A. GeneralBalloch, I think it was. John A. Cole, son-in-law of J.
W. Alvord, was acting treasurer before I came, though only a short time.
Q.. Was there any portion of that Smith property subdivided into lots?-A. Yes, sir.
Q. And sold, among others, to J. W. Alvord, 0. 0. Howard, General Balloch, or other par ties connected with the Freedman's Bank ?-A. I cannot say how many of them were connected with the Freedman's Bank. I have no knowledge on that. They bought lots from
the college. I am quite sure that General Balloch purchased two or three lots. He bought
others from other parties who had bought some, so that he owns several lots. Mr. Alvord
did the same. I am not sure that he bought it all from other parties. That occurred before
I was treasurer, Their names appear, I think,, on the book; at least General Balloch's does.
Q. Can you state, from your knowledge of the books and memoranda preserved by the
whether the funds obtained from the'Freedman's Bank were applied to tlhe puruniversity,
chase of the Smith farm, and relieving tlle incumbrance on it for the deterred
payment YA; No, sir; I think that was all paid for before any loan was made from the Freedmalln's
Bank. I am under the impression that tlhe money borrowed from the Freedman's Bank
generally went to pay the current expenses of the university.

Adjourned.

SELECT COM.MIrTT1EE; ON TrllE FREEDMAN'S BANK,
Washington, D. C., March 30, 1876.
Committee met at 10 o'clock a. m.--Present, Messrs. Douglas, 13radford,Stengor, Riddle,

and Frost.
JOHN V, W. VANDENBURG sworn and examined.
State
residence and occupation.-Answer. I reside in Washington City.
Question.
I am a contractor. your
of the Freedman's Savings and Trust Company, dated 14th
Q. It appears from the
have at various times obtained loans from tlie Freedman's Bank
December, 1874, that you report

124

FREEDMAN'S SAYINGS AND TRUST COMPANY.

to an amount exceeding $180,000. Please state with what officer of the bank those loans
were negotiated.-A. My connection and operations with the Freedman's Bank are, I sup.
of any other man who had anything to do with it. I commenced at its
pose, unlike those
I was then connected with the Freedmen's Bureau, and kept my accounts
organization.
there entirely. I continued to do the same in my own business. All my loans were made
with the actuary. Most of my transactions were with Colonel Eaton up to the time that
he severed his connection with the bank. He left there and went to the Second National
Bank. Then Mr. Stickney was made actuary, and all my business was with him. On one
or two occasions I think I made a small loan through the president, Mr. Alvord, in the absence of the actuary.
bank directly with the officers whom
Q. Were your negotiations for accommodation at the
or through the intervention of any third party ?-A. I do not think that iu
named,
you have
case I had anybody between me and the bank-not that I recollect.
any one
Q. Were you in the habit of receiving the money immediately on your application, or
were your applications filed and submitted to the finance committee ?-A, That I cannot
tell. I suppose that, doing a general business with them, it was understood that to a cer.
tain limit on my securities I should have what money I needed. Of course I cannot tell
what individual matters were referred to the finance committee,
Q. Did you receive your accommodation at once, or was your application filed and submitted to the finance committee, or did Mr. Eaton, and after him Mr. Stickney, grant the
accommodation on the general understanding that you were to have it ?-A. I know that on
some occasions I would have to wait several days before I got my money, but whether it
was through want of money by the bank, or through waiting for the application to be sub.
mitted to the finance committee, I do not know.
Q. Do you recollect any occasion when you obtained loans at the bank without depositing
any security for them I-A. No, sir; never.
Q. State what was the class and description of collaterals on which you usually obtained
accommodation at the bank.-A. I used what was known as corporation sewer-scrip. In
some instances I put in some Government bonds, but I most generally put in auditor's cortificates of the board of public works of the District of Columbia. I had some of my loans
on real estate.
Q. Were these certificates immediately payable, or were they given in advance on an expected appropriation of Congress to meet the expenses incurred by the hoard of public
works ?-A. I cannot tell, of course, whatthe board of public works intended to do. I drew
my certificates after my work was completed. Of course, if the board of public works had
the money, they would not give me the certificates.
Q, Then, the board of public works had no money ?-A. No, sir.
Q And gave you certificates ?-A. Yes,
credit at the bank ?-A. Yes.
Q. And those certificates youof used to obtain
Q. Who were the auditors the board of public works?-A. Benjamin F. Mead, and
after him J, C. Lay.
Q. Who constituted the board of public works of the District of Columbia ?-A. At its
first organization, it was composed of Alexander R. Shepherd, A. B. Mullett, S. P. Brown,
and James A, Magruder, (who was also treasurer of the board.) Henry D. Cooke was governor of the District, and ex-offcio member of the board of public works.
early date, growQ. You have stated that your dealings with the bank were from a very
connection did you
ing, first, out of your connection with the Freedmen's Bureau. What
have with the Freedmen's Bureau?-A. I was local superintendent of the District.
Q. Who were the other officers and agents of the Freedmen's Bureau who were located in
the city ?-A. General O. 0. Howard had his headquarters here. Charles Howard was assistant commissioner for a certain number of districts about :here. I cannot name the other
officers. They were subordinate to headquarters.
Q. Was not J. W. Alvord, the president of the Freedman's Bank, connected in some way
with the Freedmen's Bureau?-A. I think he was connected with the schools of the Ireedmen's Bureau in some way, superintendent of schools or of education.
Q. Was not G. W. Balloch connected with the Freedmen's Bureau ?-A. Yes.
Q. And Alvord and Balloch were also trustees of the Freedman's Bank, and at one time
General Howard was ?--A. I think they were, I do not recollect who the first trustees were.
Q. When did you commence dealing with
George W. Stickney, as actuary or assistant
of the Freedman's Bank ?-A. He was there all tile time, either as actuary or asactuary
sistant actuary, from the organization of the bank, if I recollect right.
Q. Do you mean by your last answer to convey the idea that G. W. Stickney, while assistant cashiei, was cognizant of what was going on in the office of the actuary and was
aiding in the business of the actuary?-A. Yes; I suppose so, of course. He could not
help it.I notice in this
Q.
report of the commissioners of the Freedman's Bank this item, as of
December 1,1872: " J. V. W. Vandenburg, treasurer Abbott Paving Company, $80,216.82."
What was the Abbott Paving Company ?-A. It was a company which was laying concrete
hero.
pavement
Q. Was it an incorporated body?-A. No, sir; it was a partnership association.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

125

Q. Who were its members ?-A. John P. Cranford and Henry L. Cranford, of Brooklyn,
and myself. It was an old paving company in Brooklyn that came here, and I took an interest with them, and we organized what was called the Abbott Paving Company. They
had a certain interest in it and I had a certain interest in it.
Q. Did you three constitute the entire company known as the Abbott Paving Company ?A. Yes, with the party whom Mr. Cranford represented, who were, I think, three or four
other persons. I do not recollect who they were. We were the representatives of the comthe president, treasurer, and superintendent.
pany, Can
Q.
you not charge your memory so far as to inform us fully who these other members were ?-A. There was a gentleman named 0. B. Abbott, I think, of Brooklyn. I would
be puzzled if I undertook to tell who they all were. I never mot any of the other members except John P. Cranford, Henry L. Cranford, and Mr. Abbott. The other parties I did
not know. They never were here, nor had they any business here. Their interests were
by Mlr. John P. Cranford.
represented
Have you no books or memoranda that show of whom
Q.
partnership consisted ?-A.
The institution was made up of what they called the Scrimshaw Paving Company and myself. I think there were five of that party. I think it possible that Mr. Crantord's father
was another member of it, and I think a man named Buell. I do not think I have any
record of the names.
Q. It appears that you must have been engaged in very extensive business operations, and
I presume that you were a capable business man; do you mean to say that you entered into
a partnership with men, and as a member of that partnership, and, as its officer, contracted
loans to the amount of $80,(00 and upward, at one time, without knowing who your partners were ?-A. 1'his Scrimshaw Paving Company was a chartered institution, represented
its president. Mr. Cranford represented his party by powers of attorney to sign con
by
tracts with me.
Q. This loan of $80,000 was made to you as the treasurer of the Abbott Paving Company;
did you give your individual note for it, or the note of the Abbott Paving Company signed
as treasurer ?-A. I think I signed it as treasurer of the Abbott Paving Company.
by youAnd
you had authority to do that, I suppose ?-A. I had authority to do that from the
Q.
other partners. This note was not all one loan. It was an aggregation of several loans
that had run along and that were consolidated into one note at that time, December 1,
1879.
Q. Were the loans which were consolidated into that note of December 1, 1872, also
made for and on account of the Abbott Company ?-A. Yes, sir.
Q. Was not that company in default, both on account of principal and interest, of the
loans previously made, prior to that consolidation ?-A. No, sir; we put our securities back
of them all the time. We gave this bank a power of
to draw all the certificates
and all the money due to us, and in fact it did draw ourattorney
for all the work that we didpay
the bank advancing us money from time to time as we needed it. We were never behind,
but always ahead.
Q. On the 1st of December, 1872, whether in the form of' a consolidation of previously
indebtedness, or in the form of a new loan, you became indebted to the Freedman's
existing
Bank in .$0,216.8'2 on the note of the Abbott Paving
executed by yourself;
Company
has any part of that debt been since paid ?-A. That's cannot
tell you.
Q. Do you think that if it were
you would not have known something about it?A. I cannot tell whether they havepaid,
indorsed payments on that note or on so0me other note.
This matter between the Freedman's Bapk and us and me is in the courts now.
Q. Do you recollect any loans obtained by you on your own credit, or as treasurer of the
Abbott Paving Company, previous to the 1st of December, 1872, that were not consolidated
into that $80,216.82 note?-A, My private account is not in that at all. I had some loans
on my own private account. But that $80,216.82 covered all the indebtedness of the company toThethe bank up to that day.
first loan that I see in this
Q.
of the commissioners to J. V. W. Vandenburg is dated June 13,1871-$1,251.50,report
on a balance of $5,000 on a claim for work on the
Washington Aqueduct; what was the nature of that claim, and how was it sustained, and
has the debt ever been paid to the bank ?-A. That was not a claim against the Washington Aqueduct. I had a contract with the Government to raise the slope-walls of the Washington Aqueduct, and when I organized the work I did it with the understanding that
Major Elliot, then the chiefengineer of the water-works, should
the amount of my first
estimates to the bank, which was done, leaving that balance. I pay
think it has been all wiped
out, at least it should have been if there was money to do it with. I disown that report
entirely I do not acknowledge its being correct in any one instance.
Q. This report is made from the books of the
and I want to know what explanation you can give of that transaction.-A. Well,bank,
that is the explanation.
sir,
Q. What was the nature of that claim ?-A. I had a contract with the Government,
of the Washington reservoir, and I gave an
through
Major Elliot, to lay hethe slope-walls
order on Major Elliot, which
accepted, and on that order I made this loan with the

thie

Freedman's Bank, depositing the order and
right over to the bank.

my contract. The first estimate

was turned

126

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q; The next item charged to yol is of September 21, 1872-$4,000, on a certified bill fot
work on Virginia avenue, of $4,'250.-A. That was an auditors' certificate.
Q. On which the bank advanced you $4,000 ?-A.- Yes. At that time the board of works
was paying money. I presume that the bank got that amount.
Q. The next item is one of September 25, 1872, $600 on the same class of security.-A.
Six hundred dollars is the loan, but what is back of it, the report does not state.
Q. Then it states certificates of the board of public works; do you recollect the amount of
the certificates deposited for that loan ?-A. I do not recollect,
Q. The next item is of October 26, 1872, to the amount of $'2,650, on certificates of the board
of public works; do you recollect anything about that transaction ?-A. I presume that that
was one of the cases where I had to borrow money to bridge over for a few days. The board
of works paid in cash at that time, but sometimes it did not have the money on hand,
Q. The next item is one of November 9, 1872; $2,550 on certificates of the board of public works, indorsed by D. L. Eaton; can you give us any account of that transaction ?-A.
That was also on auditors' certificates. That was after Colonel Eaton had severed his connection with the Freedman's Bank.
Q. Who was the actuary at that time ?-A. Georgo W. Stickney.
loans and others to which I
Q. Were you aware, at thlethetime of obtaining these various
will call your attention, that officers of theireeldmlan's Bank had no authority to invest
the funds of the bank, or to lend then out in the way they were doing ?--A. No, sir, I was
not.
Q. Did you have any contracts for the paving of the streets in your individual character,
or in any other way than as a member and partner in the Abbott Paving Company ?-A. I
laid sidewalks and all that sort of thing myself. As to paving streets outside of that company, 1 had nothing to do with it. My private work entirely in giadiag, sewering, laying sidewalks, &c.
Q. You were a general contractor ?-A. Yes, sir.
had other wolk besides tllat of paving in connection witl the Abbott Paving
Q. And ?-A.
Yes; a good deal of it.
Company
with the Freedman's Bank, as such general contractor, to aid
Q. Did you contract loais
?-A. Yes, sir.
youQ.inState
your whether
operations
in any of those contracts you had any partners or associates, and who
were.-A. I do not now recollect any other party being interested with me in any of
theywork
outside of that paving company. In some little job some one may have had an
my
interest with me, but I do not recollect it now. It was nothing of any moment.
Q. Beginning now with the date January 24, 1873, and running through nearly every
month of that year down to and including September 13, 1873, there are loans charged
to you amounting to about seventy or seventy-seven thousand dollars. Look at this list,
of the commissioners to witness,] and say with whom these loans were
[handing theandreport
how it happened that while you were so lmfgely in arrears to the bank you
negotiated,
were able to continue to draw so heavily on its resources.-A. I see here an item of
made during that year, but for loans that were condensed
$35,000. oneThis was not foraloans
note. Quito number of different loans were condensed and put into this
into this
that money was not loaned during that year. Forinstance,
$35,000 note on this date, soorthat
ten notes into one note. They were all made on securities.
I would consolidate eight
I put securities in there just when tlhe bank called for them. I recollect that at one time the
value of the securities dropped, and they told nme that tley wanted more, and I put in more.
Q. What class of securities did you deposit for these loans I-A. As a general thing,
auditor's certificates. There may have been, in some other little operations, some real
estate or something or other of tliat kind put in. I made a loan of $6,000 on real estate
whicl I have subsequently paid, but as a general thing the loans were on auditor's certificates for work.
Q. With whom were those loans negotiated --A. Generally with Mr. Stickney. I think
that lie was actuary all tile way through that year.
Q. Answer the last part of my previous questlon.-A. I suppose it ;,'as because the bank
had the money and wanted to loan it and I wanted to borrow it, and I put my securities in
and got it.
make these negotiations with G. W. Sticknoy?-A. Yes, or with the presiQ. Did you there
were one or two instances, when Mr. Stickney was absent, that I got
dent. I think
the money from Mr. Alvord, the president.
Q. I-low were these certificates of the board of public works accepted and authenticated1
-A. The auditor issued his certificate on the measurement of the engineer. The paper was
a certificate from the audtior stating that there was so much due to me for work
simply
done under a certain contract on a certain street, and was signed by the auditor of the board
of public works. That is all that there wias of it.
Q. If these certificates had been presented at tlie treasurer's officer of tile board ot public
works for payment, was it required or not that they should be accepted by the treasurer and
paid, or were they paid on the simple certificate of the auditor?-A. Tho auditor's certificates were the authority'of the treasurer for paying them.
Q. Would it not have been as easy for you to obtain the money from the treasurer of the

wva'3

FREEDMAN S SAVINGS AND TRUST COMPANY,

127

board of public works as from the Freedman's Bank on these certificates --A. I would
much prefer to have done that, I assure you.
did you not do it ?-A. The board of public works did not have the money.
Q. Why
were those certificates, drawn on an empty treasury, worth on the market-as
Q. What
salable securities or as evidences of debt ?-A. I do not tlink they wore worth 4 cents a
bushel. The court had decided that they wore not transferable except by power of attorney.
That is what I mean by that answer, They were worth money, of course, but what I mean
to say Is that if a man sold them without a power of attorney, they were not worth 4 cents
a bushel. They were sold on the street here and in New York City as high as 95 cents on
the dollar.
endorsed hy soeiibody else, I suppose ?-A. Yes, I suppose so.
Q. When
Q. Was there any power of attorney executed on those certificates deposited by you in
the Freedman's Batk --A. I gave the bank a general power of attorney for all the work ot
the Abbott Paving Company, and a general power of attorney to draw all the money that
was falling due to mle. In fact Mr. Stickney was my attorney. I gave a joint power.of
to Eaton as actuary, and to Stickney as assistant actuary.
attorney
the auditor the money due to you t-A, Yes, to receive it and dispose
Q, To receive from
of it, which they did in almost all the cases. They receipted for the money themselves and
went down and got it. A good many of those certificates were drawn to the order of G. W.
Stclkney,
actuary, as attorney for me.
From your last answer I infer that you had taken the proper steps to transfer these
Q,
certificates to tht bank which wore otherwise not transtfrable 1-A. Yes, sir.
security for loans ?-A. Yes.
Q. As
were these certificates worth while in your hands, or in tlio hands of' your
Q. Whatunless
transferce,
they were backed by a responsible indorsor; what were they worth in
the market ?~A. That would be a very hard question to answer. n thle first place, I ,never
sold one of them in my life, and never saw one of them sold. I do not know of imy personal knowledge what they did bring.
Q. Do you recollect on one occasion, late on Saturday evening, after tioe usual businesshours, obtaining a loan from tlle FIreedman's Bank on the personal assurance of Alexander
R. Shepherd to tile actuary ?-A. At tlhe present moment I do not recollect any such trans.
action. I cannot recall any individual case of that kind, and I doubt very much that it
ever occurred, I have no recollection of ever getting a dollar out of that bank outside of
business-hours, and I do not think I ever did. This I am sure of, that I never got any
from the bank without putting in securities,
moneyYou
are very positive that you never .got any money on tlhe personal assurance ot
Q.
Alexander R. Shepherd, William S. Huntington, or any other person --A. I am not positive of it; but I am positive that I do not recollect any such thing. I recollect Mr. Stick.
ney going with me once to Mr. Shepherd's store, and Mr. Shepherd told him that if lie would
let me have some money (how much it was I do not now recollect) on my securities, he
(Mr. Shepherd) would positively see that it was paid at a certain time. That is the only

recollection I have of Mr. Stickney ever having a personal interview with Mr. Shepherd
about it. Mr. Shepherd and I were never in the Freedman's Bank together to my
knowledge.
Q. You say that Mr. Stickney went with you to Mr. Shepherd's store on that occasion ?A. On one occasion ; whether it was the one you refer to or not, I cannot say.
Q. Wliy did you go to Mr. Shepherd ?-A. Mr. Stickney hesitated to let me have the
money,
saying that lie was afraid the bank would not get it back. I told him what the board
of public works said as to its having tile money at a certain time. He said ho could not
take their word until he knew better; so I said, " come with me to Mr, Shepherd and he can
settle it with you." We went to Mr. Shepherd's, and Mr. Shepherd assured Stickney that
f he vould grant me that loan (it was a regular loan and on regular securities) the board of
works would have the money at a certain time, and that he would see it paid. I wanted
public
the money at that time to bridge
over some period. Stickney had hesitated to let me have
the money on the securities, fearing that he would have to carry them too long before he
got the money. I said simply that I had the assurance that on a certain day the board of
and would certainly pay it, and in order to assure him
public works would have the
that that was so, I took him tomoney
Mr. Shphelrd to have Mr. Shepherd say so to him himself,
and Mr. Shepherd said that lie would see that the money was paid at a certain time.
Q. And on that assurance Mr. Stickney let you have the money i--A. Yes, sir.
By Mr. RIDDLE:
that loan been settled --A. I cannot tell.
to that time, there was
Q. Has
thirty or forty thousand dollars paid in, which imay haveSubsequently
been applied to that particular loan
or to some other loans. I do not know where it was applied.
By the CHAIRMAN:
Q. What was the particular loan that was made on the assurance of Alexander R. Shepherd, and what was its amountl?-A. That I cannot tell; I simply recollect the circumstauce, but I have entirely forgotten the date.

128
Q.

FREEDMAN'S SAVINGS AND TRUST COMPANY.
Do you know how the

money was

obtained which you

say was afterward applied in

part to the discharge of your indebtedness ?-A. I think that Mr. Magruder went up to the
bank and paid it in himself, taking up a certain amount of securities. I am pretty certain
that was so. It was done in my absence. It should have been all paid at that time.
Q. Can you say whether or not this item does not cover the transaction to which you
allude in reduction of the aggregate of your indebtedness ? The commissioners report as
follows: "Less $39,658, eight per cent. bonds sold, netting $30,2'25,75."-A. No, sir ; I
think the selling applies to the accounts of the Abbott Paving Company.
Q. Look at this item in the commissioners' report and say whether by their footing this
item, as well as another item of $5,678, were not applied as credits to the aggregate debt of
J. V. W. Vandenburg as treasurer f the Abbott Paving Company and ofJ. V. W. Vandenburg
individually.-A. There comes in this very question again. I do not accept that report at all,
and I do not propose to. They had no business to sell these bonds, and whatever accrued

interest they have got and whatever they sold, that was their own business. It is one of'the
subjectsDidof controversy.
ever
to
or trustee of the Freedman's Bank
com-

Q.
you
pay any- officer,on agent,
any
loans taken at that institution I-A, I did not. I
enough in paying 10 per cent. interest.
paid dearly
Q. Was any officer or agent of that bank connected with you in any way beneficially,
either in the loans obtained from the bank or in the work or business to carry on which
were negotiated ?-A. I had a business transaction with Colonel Eaton, but it was
they
a matter entirely outside of the bank.
Q. Explain the nature of that transaction.-A. I had a contract to furnish sewer-pipes
for the board of public works of the District of Columbia. (By the way, I told you that I
had no partner. A Mr. Hiram L, Holmes was a partner with me in the pipe business; that
I had forgotten. He was then living in Brooklyn; he resides here now.) I was going to
state the connection of Colonel Eaton and myself, but it is a matter of personal character.
Colonel Eaton is dead, and of course I feel that it would not do hinm any harm and no
good. It is entirely personal in its character and has no connection whatever with the
Freedman's Bank.
Q. Did Colonel Eaton have an interest in that contract ?-A. Yes, a partial interest for a
certain time.
Q. What was the nature of that contract and what amount of expenditure did it involve ?-A. I don't recollect the amount of expenditure involved. It cost a good many
dollars, and there was a good deal of it paid in cash. The expenditure was in the neighborhood of $100,000 perhaps, or may be less; I cannot recollect.
Q. When was that contract obtained, and what was the work performed under it ?mission, or bonus, or compensation

A. The contract was obtained immediately after the board of public works took charge
here. That must have been in 1871.
Q. Was D. L. Eaton then the actuary of tie bank ?-A. lie was.
Q. Was it for the execution of that contract that you had occasion to obtain loans from
the bank 1-A. All the loans that I made through Colonel Eaton up to the time that he
severed his connection with the bank were simply when the cargo was being loaded in New
York and transshipped here, and as soon as it was delivered here the money was paid.
Q. What I want to know is whether, to enable you to execute that contract, you obtained
loans from the bank, either through Colonel Eaton, as actuary, or through George W.
Stickney, or through both ?-A. I did; through both.
Q. Do you know anything about the Metropolis Paving Company ?-A. No, sir; I had
no connection with it.
Q. Was Mr. Lewis Cleplhane ever interested with you in any of your paving contracts ?A. Never.
Q. Was any trustee of the Freedman's Bank interested, directly or indirectly, in any loans
obtained by you from the Freedman's Bank or in any contract that you carried on with
those loans ?-A. No, sir; never.
By Mr. BRADFORD:
Q. Did you make a general deposit of securities with the bank on which you drew at
,will for those loans made to you ?-A. No, sir; I deposited securities as I got the loans.
Q. You mean that you made successive deposits as you obtained loans I-A. Yes. to a
securities were of the character which you have described in answer
Q. And the
the chairman ?-A. Yes. Auditor's certificates.
by
question
Q. You made successive deposits as you obtained the several loans to which you have
referred ?-A. Yes. At times when the actuary would tell me that he thought he ought to
have more security, or that the trustees thought so, I deposited it. I recollect that at one
time I deposited 820,000.
Q. These
deposits were mere collateral securities ?-A. Yes.
Q. You did not sell them to the bank ?-A. Not at all.
Q. Then these matters to which you refer were pure loans to you, either as an individual
or as the treasurer of the Abbott Paving Company ?-A. Exactly. I think I told you that
we deposited our power of attorney with the bank, so that the bank might collect all the
money that we should earn.

FREEDMAN'S SAVINGS AND TRUST -COMPANY.
129
Q. That they were to do at their own option in case of default in payment ?-A. We did
not pretend to draw any of the money. They drew it all.
was left optional with them, so that in case you failed to pay the
Q. The sale of securities
sell the securities 1-A. Certainly.
Money they couldwhile
ago that you never were behind with the bank. How happens it that
Q. You said a
at one particular time you had a transaction in which you acknowledged indebtedness, as
treasurer of the Abbott Paving Company, to the amount of $80,216.8' 2 ?-A. We had the
security back of it all the time.
loan itself had not been paid ?-A. No, sir.
Q. The
you did owe the Freedman's Bank at the time mentioned some $80,000 f-A.
Q. Then
Yes; and if I recollect right we had some $120,000 to $130,000 in securities.
Q. But at that same time you owed the bank other money as an individual ?-A. Yes; but
my individual securities were there. These two operations were kept entirely separate.
Q. These securities were never accepted absolutely in lieu of the loans and you discharged
from the obligation to pay the loans ?-A. O, no, sir.
loans ?-A. In every instance.
you ever execute your note for any of those
Q. Did
?-A. I think I always signed the comQ. Do you recollect how you signed those notes of
pany's notes, " J. V, W. Vandenburg, treasurer the Abbott Paving Company." My
own individual notes I signed with my own name.
have been sued --A. Yes.
Q. In all of those you
matters been sued upon in one single suit or proceeding, or have sevQ. Iave all those
eral suits been instituted against you on them ?-A. I do not recollect how that is. I think
there are two suits-one against me personally and one against me with the partners.
Q. Are those men whom you mentioned a while ago as your partners, defendants in
one of those suits f-A. Yes.
Q. The very same men whom you mentioned as being interested in the Brooklyn Paving
?-A. Yes.
Company
Are they solvent ?-A. Henry L. Cranford is entirely so.
Q. That
loan of $80,216.82 you never have paid ?-A. No, sir.
Q.
These other loans mentioned you never have paid except to the extent mentioned in
Q.
the report of the commissioners of the Freedman's Bank. ?-A. I disown that report entirely. I do not want you to ask me to own up that book at all. I will not acknowledge
one single thing in that book as correct.
By the CHAIRMAN:
that you have paid those loans ?-A. No; I do not mean to
Q. Do you moantoto assert
say that; I mean say that they have made statements there which I claim are not correct.
Q. Why are they not correct ?-A. That I propose to show in the court. They do not
account for my securities, in the first place, and we do not agree about the amounts at all
in anything.
Q. Do you claim that the books of the bank, with reference to these particular transactions,
show a larger credit for you than is exhibited in the report of the commissioners ?-A. Yes;
I do not think they have a single auditor's certificate. They have sold some of them, and
transferred some of them, or have got money upon them; of course that they had to do, in
accordance with law. All these certificates were converted, I presume, into 3.65 bonds.
By Mr. BRADFORD:
Does
that in any way impair tlioir value ?-A. No.
Q.
Bank, I presume.
Q. Who owns those bonds now ?-A. The Freedman's
Q. Was anybody, (except Eaton,) who was connected with the bank, or connected with
the government of the District of Columbia, at that time, interested with you in any of the
transactions in which you used the nioney borrowed from the Freedman's Bank ?-A.
Never.
Q. Did you pay to anybody any bonus on those contracts ?-A. No, sir.
By Mr. STENGER:
that they say they hold $69,000
Q. I notice on page 39 of this report of the commissioners
theold $95,250
of District of Columbia 8 per cent. certificates, and that on page 95 t ssy they
District of Columbia 8 per cent, bonds. Can you account for that discrepancy ?-A. No,
sir; I do not pretend to account for any of those discrepancies. I do not think you will find
any two of those reports agree. that amount of the notes which
the
they claim to have then
Q. I see in this report of 1874,
held was $219,531.10, on which they credit payments to the amount of $79,875.11, leave.
the securities
ing a balance of $139,655.99 of principal and $20,432.39 of interest. Now
which they put opposite to that, and which they say the bank then hold for it, amounted to
$153,007.16. Can you account for it why the amount of these collateral securities does not
mean the nominal value ?-A.
the amount of the indebtedness at that time-I
No, sir;
equal
I cannot account for that statement at all.
are now in the bank
Q. Did you deposit any other collateral securities than those that have
to this report on page 39) and the securities which they
reported as sold,
(according
on page 95 ?-A. Certainly I have, or else I could not claim that I did not owe the bank.
9FP3

130

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

I did not deposit any of those securities; the securities which I deposited were auditor's
securities, and those have been transferred or converted.
Q. You say that all the collateral securities which you deposited for what was called these
available funds were auditor's certificates ?-.A. Yes.
Q. Did you deposit any Second National Bank stock ?-A. Yes, I suppose I did ; and also
some real estate,
Q. But you did not deposit any 8 per cent. District of Columbia bonds ?-A. No, I
did not. I presume they converted the certificates into them.
has examined you about an item of $80,°16.82 as due on tile 1st De.
Q. Thlo chairman
On that sum did you give another note for $58,025.71 individually '?-A. That
comber, 1872.I told
of all the loans previously had, putting them all in
occurred, allas of the you, in consolidation
and all of my own.
company's
together,
mean to say that at that date the wholo indebtedness of the Abbott Paving
Q. Do you
was embraced in the note of $80,216.82 and your indebtedness in the other note ICompany
A, There might have been two or three small loans outside of those, with different securities
that remained as they wore, but all the rest were scooped up in one note, and the securities
left. The bank did not want to have so many notes, and so I took up the others and consolidated them into one,
Q. At the time that that was done, did you deposit any additional security I-A, I don't
know that I did; they had plenty of security there.
Q. I understood you to claim that all the time the bank was abundantly secured in the
stocks or certificates, for youfindobtodness ?-A, Yes.
way of those
And that if the bank is not so secured now they have disposed of those certificates
Q.
and havo not given you the proper credits for them ?-A. 'That is vwat I claim. At any
rate they do not account for them.
Q. Have you had any settlement with tile Freedman's Bank ?-A. I tried to settle with
them, but could not.
By Mr. BiRADVORD:
Q. Did they malok any exhibit to you of the collaterals which they had on hand at the time
you made the tender of settlement --A. Several of them, (I do not mean the comnilssioners, I mean Mr, Stickney.)
Q. What securities of yours were wanting at the time you offered to settle with tile bank?
-A. I do not recollect now.
Q. What amount of then was wanting ?-A. I think that there was a difference between
Mr. Stickney and myself of some forty or fifty thousand dollars.
Q. Did that matter rest entirely withili your memory or did you have some memoranda
or account-book or something to which you referred ?-A. Yes, we all had our papers there
together. Ite was up tit my office several times.
Iy Mhr. RIDDLE:
Q. IDid
you keep an account of tile auditor's certificates deposited tn the bank ?-A. I
did; could account for them.
Q. Did you keep an account written down ?--A. I think I did.
By Mr. STrENGitER:
Q. You did not dispute the notes which tle bank held ?-A. Certainly not,
These notes are signed by you ?-A. Yes.
Q. But
Q.
you insist that the bank has realized more money than it has given you credit for
out of your securities ?-A. Yes.
Q. To the extent of forty or fifty thousand dollars ?-A. I cannot tell that, of course;
somewhere about that.
Q. Do you mean to say, from the accounts which the bank has rendered you of the collateral securities which it now holds, that other securities which you deposited with the bank
for your indebtedness h1ave disappeared I--A. I do not know wliat they have done with
them; they do not account for them.
not received credit for them ?-A. Yes.
Q. That you have
to a question of tlhe chairman, that you had paid no
Q. You said a whiledoago, in answer
bonus for any loan; you mean to be understood as saying that the cash which you procured from the bank cost you nothing whatever in addition to the 10 per cent. interest
which you paid ?-A. I mean to say just exactly that.
Q. You spoke of a pipe-contract, and said that while it was running you had procured
some loans from Mr. Eaton and from Mr. Stickney, the actuary and assistant actuary of the
bank.-A. All the operations with Eaton and all tle loans made by me with Mr. Stickney
were paid. Mr. Eaton got the money and paid everything up that lie had anything to do
with in regard to that pipe-contract. lie collected it himself.
Q. I was about to ask you whether Mr. Stickney, who was the assistant actuary at that
time, was cognizant of the fact that Mr. Eaton was aI partner with you in that pipe-contract.
-A. No, sir. Mr. Eaton was not a partner.
Q. lie was interested with you ?-A. Yes; I do not know that Mr. Stickney knew any.
lling about the matter; I do not know that anybody did.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

131

Q. You do not know whether he know it or not ?-A. I do not. I presume that he did
Q, State what the interest of Colonel Eaton in that contract was.-A. That would be
hard to tell, My recollection of it is, that after I got through with the contract, and got the
it, after settling all tle expenses in regard to it, I gave Mr. Eaton half of the
money for
which were very small.
profits,
Q. Was that in pursuance of an agreement with him at the beginning ?-A. Yes.
not,

By Mr. BRADFORDD:
cover anything else ?-A. No, sir.
Q. Did that agreementinterest
in any other operation in which you were engaged at tlat
he have any
Q. Did
time -A. No, sir.
By Mr, STENGEI :
WVhat was the consideration which Mr. Eaton was to give for which lie was to receive
Q.
half of the profits of that contract ?-A. Mr. Eaton had always been very clever to me, Hie
was building a house at that time, and was trying to struggle through. I wanted to get the
contract. Icould run it inl with my othor work without its taking much of my time, and I
wanted to help Eaton a little. Ie helped to get mo this contract, that is he talked for me
in the matter. I put in an open bid, underbid the other parties, and got the contract.
Q. I understand you to say, then, that Mr. Eaton went 1to the board of public works
and interested himself in procuring this contract for you ?-A. Yes. That was before any
arrangement. I do not know tlat lie interested himself any more than to say that, all
things being equal, he would be glad to have me get the contract-a thing which any friend

would do for another.
By Mr.BRADFORDa:
Q. Was that the solo consideration which induced you to let himlthein as partner ?-A, There
was no consideration whatever as I consider it. I had made
arrangement with the
bank to cover the amount of money which I wanted for a short time, while the pipe was
from Now York hero. I had to pay for it in New York, and to ship it here, land as
coming
soon as it arrived hero I turned the bill of lading over to the bank, and the money was
obtained from the board of public works. Up to 1871 or 1872, the board paid pretty genorally in cash, as it had $4,000,000 to work on.
By Mr. STENGERa:
Q. Mr. Eaton invested no money in tlo enterprise -A. No, sir.
By Mr. BRADFORD :
Q. At the time you made this arrangement you knew that Mr. Eaton was actuary of tihe
Freedman's Bank ?-A. Yes.
By Mr. STENGER:
Q. I understand you to say that Mr. Eaton had been clover to you and that lie was builda house 1-A. Yes; I had known Mr. Eaton a long time. I do not think that any busiing
ness transaction I had with Mr. Eaton had anything to do with the bank. I do not think that
I got one single advantage in the bank over any other man who made a loan there. I know
that I did not.
By Mr. RIDDLE:
(. Did you think that it would facilitate you in getting money at tile bank ?-A. No,
sir, Tleo arrangement for tile money was made before I mentioned the thing to Mr. Eaton,
By Mr. STENGER:
You agreed to give him onechalf of tlh profits of that contract which you supposed
Q.
would involve an expenditure of over ,100,000 ?-A. I could not tell how large tile expenditure would be.
Q. You agreed to do so out of pure personal friendship ?-A. Yes. This payment to him
did not cover the entire amount. It was
only for the first few ship-loads that came in. The
about the time that Mr. Eaton loft the bank. After that I had no transarrangement
expired
I gave the bank a power of attorney to collect this money, and put
actiolnamplewith him at ofall.course.
When I received the shipments I took the bill of lading and
up
security,
carried it, with the statement of the expense in New York, and deposited it with the bank,
and as soon as the tlingi was turned over they sent and collected the money.
two real-estate loans from Mr. Eaton before that time or about that
Q. You had
time ?-A. No,procured
I think not.
Q. Those loans were procured in 1871, were they not?-A. I think not. I think I ind
$2,o00 on real estate at one tinle, and subsequently $1,500. I do not recollect exactly.
got
It w"s when I tirst bought thle property,
and when I commenced building. I do not recollect

the date.

132

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q. Mr. Eaton left tho Freedman's Bank in 1872?-A. Then that must have been in the
fall of 1871. These loans have been all paid.
Q. Do you know in what month of 1872 Mr. Eaton left the bank ?-A. I do not
Q. There is a loan of $6,000 to you in June 1872; was that obtained from Mr. Eaton tA. I do not remember whether it was or not,
Q. And there is one for $5,000 on August 2,1872 ?-A. That got from Mr. Stickney.
That has also been paid.
Q. You cannot recollect whether the $6,000 loan was from Mr. Eo i or Mr. Stickney ?A. I think it was from Mr. Eaton, but I do not recollect,
(The clerk stated that it appeared from the minutes of the board of trustees that the
resignation of D. L. Eaton was accepted on the 1 Ith July, 1872.)

By Mr. RlIDDIn,:
You think that the bank on a fair settlement has been paid all the loans tiade to you.
Q.
-A. I think so.
SELECT COMMITTEE ON FREEDMAN'S BANK,
Washington, D. C., April 13, 1876.
Committee met at 11.30. Present, Messrs. Douglas, Bradford, Riddle, and Frost.
ROIIERT II. T. LEIPOLD sworn and examined.
By the CIAIRMlAN:
State your occupation and residence.-Answer. I am one of tho commissioners
Question.
of the Freedman's Savings and Trust Company. I reside at 934 P street, Washington.
Q. As one of the commissioners of the Freedman's Savings and Trust Company you are,
I believe, the principal business man of the commission, and most familiar with the books
and business of the Institution, are you not ?-A. Yes, sir; I believe so.
Q. State, if you please, all you know about the manipulation of the securities deposited
with the bank in trust for what is called the Rest Homo Colony, in Louisiana.-A. About
the time we were writing our first report to Congress, in December, 1874, Mr. Robert Purvis,
one of the commissioners, came in and asked me if I knew that Mr. Stickney was using part
of the money of the bank. I told him no, that I guessed that was a mistake. Ho said it
was something in connection with the Rost Home Colony. I thereupon remembered that
upon some inquiry made from the War Department I had occasion to look, among other
accounts, to this account and I found it closed. After Mr. Purvis told me that I went to the
account had been closed by the withdrawal of, I think, some
books, and found thatthetiechecks
been withdrawn, and found that
I looked up
by which asthe money had
$17,000.
for the Rost Home Colony. I then
W.
were
Stickney
signed
actuary,
by
George
they
went to Mr. Sticknoy and called him to account, and asked him what it meant, and why he
had not told us about It before. He said lie was in hopes of fixing it up every day, and to
straighten out the matter without burdening the commissioners with any information about
it. He then stated that the original funds deposited were in United States bonds; that
at the time of the run on the bank, in September, 1873, I think, he sold the bonds
and used the proceeds in paying depositors; that to secure the Rost Home Colony
lhe withdrew from the assets of the balk a note by George Mattingly for $15,000, and aun
other note of a man by the name of Torry for $1,500. I asked him to show me these notes,
and he showed me Mattingly's note for $15,000, and said that tie Terry note bad been paid.
Said I, " What has become of the money?" He said, " I will go now and get it :" and he
went and brought in to me $1,856.94 in money, being the proceeds of thel Terry note, and
some interest that had been collected on the Mattingly note. Upon further inquiry I
learned that he had deposited this interest in some of the banks, to his own private credit.
Of course I was not very well pleased with that, and that was one of the reasons why Mr.
Sticknoy soon afterward had to leave the bank. Since that time we have collected other
interest on the Mattingly note, and the principal of the note, too, recently. All the money
that wellaveobtained, either from Mr. Stickney, or from the notes, or interest, we have
placed to the credit of the Rost Home Colony.
Q. P. ior to the conversation with Mr. Purvis to which you refer, and to your subsequent
interview with Mr. Stickney, had he mentioned the subject to the commissioners, or called
their attention to that transaction ?-A. No, sir.
Q. Do you know anything of the debt of Juan Boyle, which I see reported by tile comr
missioners ? If so, state all you know about it.-A. In my examination of the assets of the
bank, I found a note of Juan Boyle for $29,000, with $1,000 indorsed on the back of the
note as paid the very day the note was made. In looking up the securities for the $29,000
note, I found that the security consisted of some Southern railroad-bonds to the extent of a
few thousand dollars, I forget the exact amount, and an overdue note of the directors 9f
tile Georgetown College, which was represented to me by Mr. Stickney as being secured by
first mortgage, but which, upon examination, it was found was secured by second mortgage,.

FREEDMAN'S

SAVINGS AND TRUST' COMPANY.

133

and tliat the first mortg.rgo covered tle full value of the l)roperty, so that we never got
anytliing out of it.
By Mr. FRoST:
Q. Is the Georgetown College insolvent ?-A. No, ir.
Q. They would not bo relieved from paying then, even if there was no mor'gago.-A.
I beg pardon ; it was not the note of' the Georgetown College. It was til note of Juan
Boyle after ihe was a director of that college, and indorsed by them, and not protested. It
cameo Into the possession of the bank after its maturity. 'lTio Georgetown Collego could
not be held liable. I had not a very high opinion of Mr. Boyle, I had hoard of some of
his transactions, nof
d, course, that was one of the first notes I took up to see what we
could do in regard.l to collecting it. I made some Inquiries about howv the debt accrued, and
found that Mr. Boyle was allowed to withdraw notes from tie banr, such as ho would
select, for tilo purl)ose of negotiating them. And I found upon the loan-clerk's scratch.
book that, under date of Juno :30, l1874, (one day after tile bank was legally closed,)a
nimbor of those notes were charged up as paid ; and they wore counterbalanced by tills
note of Boylo's for $28,000, and another note for something over $1,300. 'The other notes
were )paid by tilo Boyle notes, so fair as tile books show, Tho Boylo notes themselves,
however, boar date May (. Sir. Sticknoy stated to me that the transactions virtually took
on thio (th of Mnay, 1874, butt that they wore not entered on the books of the bank
place
until tile 30th of June, 1874. I do not remember exactly whoso notes they wore, but I
know that a number of them were given by some members of Mr. Boyle's family 'They
wero aniply secured. They were given to Mr. Boyle for tile purpose of' negotiating and
bringingof tlie
proceeds to tile bank, which he failed to do, and then, when the batik was
closed, course it wa s csay tat te ot would be entered Is paid, and they were
so entered.
Q. Do you mean tllat they were entered its paid, when they were not paid ?-A. They were
paid by his own individual notes; at least I think that the notes tlat wore given in paymont wore madlo by-Boylo & Co. Then, ili addition to tlhe security I enumerated for tle
to Mr. Sticknoy a lot of land on M
$D,000Owhich
Boylo note, there had been deeded bybut,Boylo
as it is alleged, with the understanding
was deeded to him absolutely,
street,
that the benefit of
inure to theo rooedmaU's Bank as security for this
property should
into that property, we found that there were prior mort$D9,000 note. Upontileexamining
gages for its fill value, in our estimation, at tlhe time the property was deeded to Mr. Stick.
Theoro wore then in
of erection a number of brick buildings upon tlho ground,
ney.
and we invited estimates process
as to tie cost of finishing tlose buildings. We found that if we
assumed thle prior mortgages, and ))aid out sufficient money to finish tlhe buildings, their cost
would be much
than tlhe amount we could ever hope to get out of them, and we did
not ftlel as if wegreater
could buy tile property and pay the prior mortgages; so that tile notes
are virtually

unpaid to-day.

By the CHAIRMAN:

Q, If I understand you correctly, in accounting for tihe Boyle debt, you state that lie was
allowed to withdraw, from tino to time, securities held by tlhe bank, which lie converted into

but did not account to the bank for ?-A. I do not know whether lie converted them
money,
into money.
Q. But he wan allowed to withdraw them 1-A. Yes, sir; tile books show that the notes
wore withdrawn by Boyle and paid for by Boyle's own note.
Q. And not by the delivery to the bank of the proceeds ot his notes ?-A. No, sir; but by
the notes of Boylo & Co., I think.
Q. You say that tlle property on M street which was deeded to Sticknoy as security for
that hote, was afterwards sold. Do you know what it sold for, and who was tle purchaser
-A. I do not remember exactly what the property was sold for, but Mr. Stickney became
the purchaser of it.
Q. Did it sell for enough to pay tlle first mortgage, and pay anything to tlhe bank 1-A.
No, sir.
Q. Who was the Co. of Juan Boyle & Co. ?-A. A gentleman by the name of Frank Barunm, I believe, was the other member of the firm.
in regard to the loans of J. V. W. VanQ. Have you ever examined thio books carefully
?-A. I have made some examination of them.
denburgh
the notes on their face call tor the precise amount of
Q. Have you or not discovered that whether
a margin in the shapo of discount was deover to Vandenburgh, or
money
paid
ducted ?-A. I never discovered any discount. I tlhik whenever a note was entered up on
the book, the book apparently shows that so much money, the face of the note, went out to
Vandenburgh.
Q. There is nothing to show that there was any discount retained ?-A. I think not,
so far as my examination extends.
Q. What were the character and value of the securities deposited by Vandonburgh for
his loans ?-A. Of course I can only give you information of such securities as came into
our hands when we took possession. l'There was $3,000 in Second National Bank stock;

134

FREEDMAN'8

SAVINGS AND TRUST COMPANY.

$69,000 in eight per cent. District of Columbia bonds, with accrued interest; $27,836.40 of
auditors' certificates; 812,000 of auditors' certificates additional, a separate lot; $1,425.90
of bills against the old corporation of Washington, which have since been disallowed by
the District government; a claim for $1,808.63 for an auditor's certificate, which was lost
before the failure of the bank ; $10,983 in acceptances by the board of public works. That
constitutes all the securities that came into our possession. That differs from the statement
in the margin of our first report to the extent of $15,000, in auditors' certificates,
given
which we never received, and we have never been able to ascertain anything definitely
about them. It must be borne in mind that when most of these securities, as they are
were given to us, they were in the hands of the District govornreported inat our report,
them were pending before the District government, and, when
ment, or, least, claims for the
government we found this deficiency of $15,000 in
payment was asmade to usto byus District
Mr. Stickney when we took possession. I remember
the amount given
by
writing a number of letters on the subject, and I have made personal examination in tile
office of the board of aud:', but have failed to find out anything satisfactory about the.
audit office and by Mr. Lay, to
$15,000. It was represented to us, both at the board of of
whom Mr. Stickney seems to have entrusted the collection that $15,000, that the $15,000
in auditors' certificates were filed in the office of the board of public works, in Mr. Willard's
office, the very day that the act of Congress which made a change in the District Government
and that somehow or other, in the confusion of transfer, they were lost.
passed,What
were the certificotes'and bonds which actually came to your hands ?-A. About
Q,
$90,000.
Q. What does he still owe ?-A. Iis present indebtedness, exclusive of interest, seems to
be $124,240. 93.
of the securities acQ. I want to know the relative value, so far as appearances indicate,
and the amount of the indebtedness at the time they came into
tually passed over to you,
possession ?-A. At the time they came into our possession the indebtedness was $160,your
088. 38.
Q. Were not all, or most, of the loans to Vandenburgh made fiont the available fuled
which, according to tlie charter of the company, was to bt ke)p on1 deposit, at interest or
otherwise, always in an available form1--A. I believe so. That is, tile book sslhow these to
be entered up itn the available loan ledger.
Q. Which means that they were loaned from tile available fund ?-A. Yes, sir.
'Q. With what officers of the bank do these available loans appear to have been negotiated ?--A. I could not tell you whither anybody else was cognizant of the transactions
aside from Mr. Slickney, or not. They appear in the regular books of the bank, entered
the loan clerk, just the same as tle other transactions of the bank.
up byThere
Q.
appears in the first report of the commissioners a loan to James G. Berret, president, of $28,500. Of what was James G. Berret president; in whose name and how was
that loan negotiated, and what security was given lor tlhe same ?-A. Mr. Berret was president of the Washington Club; the loan was negotiated in his naine, and the security was a
deed of. trust upon the property on New York avenue, oin which their club-house is located.
Q. Wus that security, when taken, sufficient to secure tile loan It' so, why has it not
been collected ?-A. Yes, sir; I consider the security ample for the loan, and the debt has
been collected.
Q. Since that first report ?-A. Yes, sir; since tile first report; it is reported in our last
maturity of the note, the debt was paid ait 6 per cent. interest-after
report. After tie the
maturity-against
protest of the commissioners. After the maturity of the note, Mr. A.
R. Shepherd called and asked that a statement should be made up between tile bank and
the club; and when lie demanded tlio statement he said lie would pay interest at 6 per
cent. after the maturity of the note, and that we would inve to take that or nothing.
Q. Had he frequently told you that there was no use in collecting that debt, as it was car10 per cent., and that was more than you would get if the money lay in the Treasury ?rying
A. 1 do not know that it was frequently ; it was once or twice. He had asked further delay, and said there vas no use in pressing it, because the money was bearing 10 per cent.
interest.
Q. What is t(l Washington Club I-A. I do not know, except' tlat it is an organization
of gentlemen. I do not know for what purpose.
Q. Is it a1. incorporated body '-A. I do not know that.
Q. Mention some of the members of it, as far as you can do so.-A. I am unable to mention any. I know nothing whatever about the club. I never have been brought in contact
with it, except in this particular transaction, and then only with Mr. Shepherd and Mr. Olinstead.
Q. What Ohnstead is that ?-A. He is a member of the firm of Kilbourn & Latta. Ie
also came to see men with reference to this dispute about interest once or twice.
same thing-that we ouglt not to press the
Q. What did he say about it ?-A. About theme
collection of tile debt. I forget whether he made use of the language that it was carrying
JO per cent. interest; I think very likely lle did. He and Mr. Samuel Cross came to the
bank finally, and handed us a check in payment of the debt.
Q. By whom was that check drawn, and by whom payable ?-A. I do not remember that.

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

135

I think it was drawn by Mr. Cross, payable to the commissioners of tle Freedman's Saving
and Trust Company.
He is an insurance agent. I think lhe took a new mortgage
Q. Who is Mr. Cross?-A.
and paid this one.
property,
upon the
Q. Have you a suit or suits pending against Vandenburgh ? If so, state whether or
not he resists that claim, in part, on the ground that the securities deposited by him have
or been converted, and no credit given him for tiho amount.-A. We have
disappeared,
a suit pending against Mr. Vandenburgh. So far as we are informed, it has been resisted
in tie court simply by a demurrer to our right to sue; which demurrer has been overruled
and leave given to answer. The answer ilas not yet been filed,
Q. You do not know what defense he would make on tlho merits ?-A. No, sir. He has,
however, incidentally, in conversations with me before 'the suit was brought, inado various claims that tile bank was obliged to take the securities which lhe deposited there, at
their face value ; that that was one of tlhe agreements between him and the officers of the
bank, and then. again, that securities had disappeared, or at least, that we had no account
of them, and he had never received credit for them. I never put much faith in that statement, however.
Q. You have stated before that there was $15,000 deposited there, of which no account
can be rendered.-A. There is no evidence on the books of tile bank of the $15,000 referred to as being missing. It was merely one of' tlle items given to the commissioners by
Mr. 8tickney, as being on deposit with the board of audit.
Q. You might not have known that the $I15,000 was missing, but lie probably did ?-A.
lie migllt have known it.
Q. Are not the books of that bank in such a confused and intricate condition as to render it extremely difficult to find out the true condition of any account from tlem ?-A. I
would not want to make it so general as tlat. Tlio books are in a very bad condition, escontaining tile record of the deposit accounts.
peciallyDothe books
Q. you know anything of a debt due to tle batik from George I). Johnson, amount$5,694 ?-A. Yes, sir.
ing to State
what. you know about tlat.-A. In answer to that question I state that there
Q.
were turned over to ns, long after we had taken possession of the affairs of tlhe bank, by Mr.
W. Alvord, the former president of the bank, two notes for $5,690.64 eah, one given by
J,Leonidas
Scott to the order of George D. Johnson, and indorsed by the latter, and tihe other
drawn by George D. Jolnson to the order of Leonidas Scott, and indorsed by tih latter.
These notes, Mr. Alvord stated to us, were the proceeds of certain lumber sold by himnto
Scott and Johnson.
for that note of his ?--A. I think we have a
Q. Did Johnson ever offer you any security
of his now in tile bank, which we have virtually rejected, in which lie offers to
proposition
amount of money, I think $5,000, and to give a mortgage upon certain vacant
pay a certain
in the southwestern part of the city, provided we would withdraw our suit and
ground
waive all claims against Mr. Scott.
Q. Who are Scott and Johnson, and what relations did they bear to the bank at tlat time 1
-A. Mr. Johnson was formerly employed in the bank as book-keeper. Mr. Scott is a colored
gentleman,
supposed to have considerable means, in this city, and lie has been carrying on
the lumber business with Jolhnson.
Q. With whom were those notes negotiated ?-A. They were tiken by Mr. Alvord in payment of lumber.
By Mr. B13AlFnoD:
?-A. Yes, sir ; that is the Jacksonville lumber.
Is
Q. that the Florida lumbernow
claim to be tile owner of the piece of property that was
Q. Does this man Stickney I think
so. The title to that property is in considerable
to him by Boyle ?-A.
conveyed
doubt. It has been sold and resold many times.
Q. But lie has purchased it and paid off all the incumbrances on it ?-A. I doubt whether
he ever paid one cent. tie was the nominal purchaser.
of it, is he !--A. I do not know how that stands now. I
Q. -lo is now in possession
have seen
it advertised over and over again. It bids fair to ruin him. I know that.
devolved upon you by the other two
Q. Are not all tile duties of tllo commissioners nowaffairs
of tile bank ?-A. I do not know
and do not you solely manage thle
commissioners,
that I can state that.
are devolved upon you alone.-A. The general
Q. State to what extent these duties me
of affairs is devolved upon
principally.
management
members have anything to do with the affairs
Q. Is it not only occasionally that tie otherCresivell
to consult him about some natter,
of tile bank ?-A. Once in a while I send for
because ours is a joint bond, and we are jointly liable, and I hate to take responsibilities in
some cases without consultation. Mr. Creswell calls in sometimes of his own accord.
Q. o-low often --A. Sometimes he calls in every day, for a few days, and then again he
does not call for some time, unless I send for him.
Q. But it is true that you are the only commissioner on constant and active duty ?-A.
Yes, sir; I give my time exclusively to the bank. I have been there every day.

136

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

Q. Could not one man perform all the duties that devolve upon the entire commissionera ?-A. That is my opinion; but I dislike to venture it.
witness hero stated that he had lead a statement in some newspaper, in which it was
(The that
Mr. George D. Johnson had given some testimony before this committee reflectalleged
on his (Mr. Leipold's) conduct in the matter of taking fees from depositors in the bank
ing
for attending to the payment of their dividends; and the witness said that he wished to deny

everything of the kind. )
By the ClAIRMIAN:
Q. Are you cognizant of any fact or circumstance derived from your inspection of the
books, or by your conversations with Mr. Stickney, or any other officer or officers of the
bank, tending to show, directly or indirectly, that any officer of the bank was interested in
the loans made by the bank ?-A. No, sir; all I know is that there must have been very
gross negligence, and very gross negligence in the general transaction of the business.
''hat is daily developed by the amount of taxes that were due at the time the loans were
made, and which were not investigated. Deeds of trust were taken upon property which, it
now turns out, was not the property of the parties, and there was a general looseness in the
of the business.

management

r
SELECT COnMMnITEl

ON

FREEDMAN'S]BANK,
D. C., Ap)ril 18, 1870(.

Wfashington,

Committee met at 10o'clock. Percent, Messrs. Douglas, Bradford, Steuger, Riddle, and
Frost.
JAMES A. NELSON sworn and examined.
By the CIIAIIMIAN:
Question. State your residence and occupation -Answer. I reside at 1633 Thirteenth
street, northwest. I am a contractor.
Q. State whether you have had occasion to obtain loans from the Frecdman's Savings and
Trust Company; and, if so, state what collaterals, if any, you deposited as security therefor--A. I have borrowed money from the Freedman's Bank, but always, except on one
occasion, I left as collateral District securities-bonds or certificates
Q. Have your accounts with the Freedman's Bank ever been settled up ' If so, state
whether the securities that you deposited have been properly accounted for to you in the set.
tlement ?-A. I borrowed $1,000 at one time and $700 at another time, and left securities
there of $2,000 in 18-year District bonds. These' bonds were sold, as I was informed, by
Mr. Stickney, at 73 cents on the dollar, and the proceeds were applied to pay the thousanddollar note. He said that the balance was placed to my credit, but I have never received a
cent of it since. That loft the $700 note there unpaid. They asked that that note should be
settled, and I then asked for my balance from the sale of tio $2,000 bonds, but they refused
to give any account of them, and the $700 note has never been paid.
Q. At the-time that Stickney sold tlose bonds you say that you had two notes at the
bank ?-A. Yes.
Q. And he applied a portion of the proceeds of the sale of the bonds to pay one of those
notes ?-A. Yes.
Q. But he did not apply the surplus in satisfaction of any part of the other note ?-A.
No, sir.
Q. That note still remains unpaid ?--A. Yes.
Q. And the balance has never been accounted for to you, although you have called for it ?A. No,sir.
Q. When did this transaction as to the sale of the bonds occur ?-A. I think it was about
the last of January or first of February, 1873.
Q. Do you know of any other instance where George W. Stickney has disposed of securities deposited with the bank and has failed to account properly for their proceeds ?-A. I do
not know of my personal knowledge.
Q. Have you since the time first alluded to ever called on Stickney to demand a settlement with a view to obtaining proper credit for the $460 over and above the amount required
to pay the thousand-dollar note?-A. Yes, I have; I called upon him some three months
after the bonds were sold. He had said nothing to me about that. I called upon him to
ask him about whether he had sold the bonds, or was going to sell them. lie then told me
he had sold them some time ago. I asked him what he got for them, and he said he got 73
cents on the dollar. I said, " Where is the money ? " He said, " I paid the thousand-dole
lar note." I then went to the bank' and I got the note. I asked Stickney for the balance of
tie proceeds of the bonds, and he said that he had placed the balance to my credit in the
bank.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

137

Q. Is that true ?-A. That is not true.
Q. The whole of tile $700 note is still held by the bank against you ?-A. It is still held
against me, but is being sued for in court. I filed an answer against the suit, claiming that
that money was not accounted for.
Q. I understand you that thesectrity sold by Stickney was 18-years District bonds hearing
?-A. Yes; gold interest at 7 per cent.
gold interest
were those bonds usually selling for on the market I-A. Those bonds at one
Q. Whatdown
as low as 55 cents. About the time I first got $6,000 worth of them in my
time were
possession they were down to 55. Then they commenced to go up a little, and from the first
of December, 1872, to the last of February, 1873, they had gone up from 55 to 73 and 75.
Q. Was the interest on those bonds usually paid promptly ?-A. Yes. I never collected
the interest on them myself, but Mr. Stickney told me that on the 1st of January the interest was paid.
Q. So that lie not only collected the interest on those bonds at 7 per cent. per annum, but
he afterward sold the bonds themselves ?-A. Yes.
Q. And he never accounted to you for the proceeds, except that lie applied them to the payment of that thousand-dollar note ?-A. That is all.
Q. You. do not know of anything else of that kind, do you ?-A. No, sir.
Q. Do you know of any other person besides yourself who has been similarly treated at
that bank by Mr. Stickney or by any of its officers ?-A. I know a man by the name of Willd M streets, who has been
iani Schooler, who lives near the corner of Twenty.second ad
treated in the same way. lie is the only one I know of.

ISAIAHl S. WASIINGTON affirmed and examined.

WASIINGTON, D. C., April 18, 1876.

By the CIAIRlMAN:
Question. State your residence and occupation.-Answer. I reside at 1807 T street, northwest. I am an attorney.
Q. State whether or not you over have had any transactions with the Freednman's Savings
and Trust Company ? If so, state everything ill relation thereto.-A. I have had business transactions with tile Freedman's Savings and Trust Company. On Malch 21,1874, I obtained from
the bank a loan of $75, and gave a promissory note for 60 days, secured. On April '2d, of
the same year, I obtained another loan of $75, and gave my promissory note, secured. In
addition to giving my own promissory notes, I gave two orders on the board of public works
for $400-$-- 00 each. One of tle orders was paid in certificates by the recent board of audit
of the District to George W. Stickney. Tho understanding was that Mr. Stickney was to
negotiate the certificates and apply the proceeds to paying off these promissory notes. He
did negotiate tle certificate for $200, but, I believe, did not apply the proceeds to pay off
either of the notes. IHe received the certificate on November 31, 1874, and never paid a cent
of the amount toward paying for either of those notes, and has not as yet done so to my
knowledge. Suit was brought against me for the recovery of the two notes by the commlissioners of the Freedman's Bank, and I filed a plea setting up that I bad paid those notes off
by the amount received from those certificates by Mr. Stickney, who was acting as actuary
of the Freedman's Bank, or in some other capacity in the bank. He filed an affidavit stating that he had received one of the certificates and had the proceeds, but that lie had not
themn.to pay off either of the notes, and that be did not consider that he was bound to
applied
do so. One of those notes was drawn to the order of Mr. Stickney and the other was drawn
payable to my order. T'he orders on the board of public works were given by me to Mr.
Stickney and made payable to his order. One of them he has not received, but the other he
received on November 30, 1874.
Q. Was the money which
obtained on your notes the money of the bank'?-A. Yes.
I made the notes out and wentyou
to the bank and drew the money.
Q. Do you know how much Stickney realized on the sale of this certificate ?-A. I think
lie got 68 or 70 cents on the dollar;
I am not positive. ie only sold the one certificate for
$.200.
Q. That would not have
the debt ?-A. No; it would not have overpaid the debt,
but it would have canceled overpaid
a portion of it; but he did not apply any of it. He did not give
me credit for any part of it, and the bank has sued me for the full amount of my two notes,
$150, with interest. The interest on one note was 10 per cent., and on the other 6 per cent.
Q. Do you know of any other colored person who obtained loans at that bank and whoso
collaterals were sold and
the proceeds not credited to them ?-A. I do not know positively;
I have only heard that that was
the case in regard to James A. Nelson and William Schooler.
Q. Are you cognizant of any other facts tending to show that George W. Stickney had
converted securities held by the bank and misapplied the proceeds ?--A. No, sir; I am not.

138

FREEDMAN'S SAVINGS

AND TRUST COMPANY.

SELECT COMMITTEE

ON

FREEDMAN'S BANK,

Washington, D. C., April 2'2, 187.
Committee met at 10 o'clock. Present, Messrs. Douglas, Bradford, Riddle, and Frost.
CHARLES W. IHAVENNER sworn and examined.
By the CHAIRMAN:
Question. State your residence and occupation.-Answer. I am a broker, and reside at
College Station, Prince
George's County, Maryland.
Q. Iave you, as broker, been employed at any time to negotiate loans of the Freed man's
and Trust Company ? If so, give us a detailed account of your transactions.-A. I
Savings
have very frequently negotiated loans with the Freedman's Savings and Trust Company.
Most of my business was done with that institution during the years 1870 and 1871. We
did then a very large business with that bank. Most of the negotiations at tlat time were
made by my partner, Charles A. Sherman. Since then I have occasionally made loans with
the bank off and on, but not to the extent that I did in those years.
Q. hExplain to the committee why it is that.loans which, according to tile report of tile
commissioners, are charged to you, seem to have been secured on tioe property of one Murdock.-A. Mr. Murdock at that time was building very extensively in Washinlgton, and we
were his brokers. IHo got in bad relute at the bank and Colonel EIaton said lie could not
discount any more of Murdock's paper; tlat lie was afraid Murdock would not meet his
interest. It was then suggested, in order to obviate that difficulty, that Murdock should
deed his property to me, and that I should give a deed of trust on the property to secure tile
loan, giving Mr. Murdock a right to redeem tile property within ia certain time by refundMurdock failed to redeem, and tlle property was sold by tile receivers aping tile money.
the ;'ourt to pay off those loans. Those receivers are now paying off the loans
pointed
by
as fast las tile cash payments for the property mature. They have already paid part of the
I think. That is about the history of the Murdock case.
loans, Did
I understand you to say that you obtained accommodation from tile bank for
Q.
Murdock on the security of Murdock's property t-A. For Murdock ; but, virtually, for mIyself, because the property had been deeded to me.
Q. Tlhat was a nominal conveyance '-A. Yes; tile understanding was that IMuridock
had tile privilege of redeeming.
Q. You obtained the loans for Murdock on tlie security of Murdock's property, because
Murdock could not obtainthem himself f-A. Yes ; tliat was it. It was not that th e property was not worth enough to pay the loans, but Colonel Eaton wvas afraid that Murdock
would default in his interest, and he wanted tie interest promptly.
Q. Are you familiar with the fact, so apparent in tihe report of tle commissioners, that tile
officers of the bank were constantly allowing tile interest-account on almost everybody's
notes to accumulate and run on ; and, if so, whly should they make this exception against
Murdock ?-A. I am confident that interest-accounts were allowed to accumulate, but the
was made. Colonel Eaton positively declined to do any more business in the name
exception
of Murdock. He would not do it without a responsible name on which lie could rely to get
his interest.
Q. You say that the notes put in in your name, and for tile benefit of Murdock, were discounted at the bank ?--A. Yes.
Q. At what rate-A. Ten per cent.
Q. I want to draw a distinction between a discount and a loan at tenl per coet. interest.
-A. Tlhe notes drew tile full face with tie interest accruing.
Q. Have you any knowledge of the fact that their actuary or any officer of tile bank was
interested in any loans negotiated by you or by any other person -A.
directly orI have
indirectly
not. I know that on several occasions a part of our commissions was paid
No, sir;
to Colonel Eaton for discounts whicli he procured for us, and which lie said was outside money
not belonging to the bank. -Io always claimed it as outside money which did not belong to
the bank.
Q. How were the notes drawn on which these payments were made in tile commission ol
which Colonel Eaton shared ?-A. As well as I can recollect they were an ordinary deed of trust
note, made payable to some second party and indorsed by tliat second prlty, and just
passed over to Colonel Eaton.
Q. Were they carried to your account on the books of the bank ?-A. That I cannot tell,
because I never saw the books of the bank.
Q. In settling for tile notes negotiated by you, did you have a private, personal settlement
with Colonel Eaton, or did you settle with him as actuary of tile bank ?-A. The notes were
generally in tile bank for collection. Sometimes we would go into the bank back room nud
call for a certain note, and pay the money. I do not know what became ofit.
of those notes drawn by you whicli appear by the commissioners' reQ. There were a numberHave
you examined that report; and, if so, will you state whether
port to be still unpaid.
you recognize any of them as the notes negotiated by you with Colonel Eaton and'in the
commission of which le shared.--A. I do not think there is a single note unpaid in which
lie shared the commission. I shouldilave said that those negotiations where Colonel Eaton

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

139

received that commlnmisslon were made by my partner most of'the time, if not the entire
time, and that the commission was charged on my cash-account as so much commission to
Colonel Eaton on such and such loans. I am speaking of the firm when I say "I."
Q. Was there any commission paid to .Mr. Eaton on notes negotiated by you or your firm
for Murdock with the bank ?-A. There was no commission paid to Colonel Eaton on ally
of them that I remember.
Q. What notes were they on which commission was paid to Colonel Eaton ?-A. I think
there was a note negotiated for John Wilkes, son of the Admiral, and I think there was a
commission paid on that to Colonel Eaton. It was a temporary loah, loaned on bonds. We
took bonds of the corporation of Washington, which he said belonged to a private friend,
and we were to return the money or the bonds when called for. That loan was taken up
and is now in litigation between Wilkes and ourselves, because there was a loss on the bonds
of some three or four thousand dollars. I think the bank held a $10,000 mortgage of John
Wilkes at the time of the failure of the bank, upon property which is near the Baltimore
and Ohio Railroad depot.
Q. Are you apprised of the fact that at one period of the company's history, or soon after
the amendment of the charter in 1870 allowing the bank to loan money on real-estate security, the bank encouraged and was generally besieged by brokers who were negotiating
loans for outside parties ?-A. I am apprised of the fact that a good many brokers besieged
the bank for loans, and I judge that a majority of the loans were negotiated through brokers.
Q. Did it not become, in consequence of that change, the policy of the bank to receive and
entertain brokers that came in to negotiate loans rather than parties who wanted the money
themselves ?-A. I think myself that that was very much tile case. It appeared to be the case.
Q. Are you prepared to state whether the funds which you obtained front Mr. Eaton and
in the commission on which lie shared, were in fact funds over which he had individual control, or were the funds of the corporation ?-A. I had only his word for it.
Q. Did you know of any business or employment outside of his connection with wasbank
althat would probably have placed Colonel Eaton in funds ?-A. None whatever. It thle
ways a mystery to mne where he got the funds.
Q. By reference to the commissioners' report of December 15, 1874, there appears to be a
real-estate loan to John Wilkes of $10,000, dated September 16, 1870. Is that tlhe loan tile
commission o0n which was partly paid to Colonel Eaton ?-A. I have been thinking that
over in my mind for two or three minutes, and I cannot convince nlyself tlat it was
question
or that it was not. It strikes me very forcibly that when we were called upon for thle bonds
we hiad to return the bonds, but that after that Eaton gavo us the money out of the bank. I
will not be certain of it. I cannot recollect all tlie facts connected with it sufficiently to speak
positively, but it strikes me very forcibly that that is tlie same loan; although the negotiation was made with the bank at a different time.

WASl.NGTON, D. C., April '2, 1870.
\WILLIAM. SCIIOOLERu sworn and examined.
By the CHAIRMAN :
Question. State your residence and occupation.-Answer. I reside at 2015 M street, N. W.
I am a contractor.
Q. Iave you had any dealings with the Frcedman's Savings and Trust Company? If so,
state what they were, and how you stand with the bank at this time.-A. When tile bank
first opened I deposited $20, and became a regular depositor. As I progressed in business
I deposited money there until the time that the bank failed. I made a loan front the bank
once of $3,000, and gave Mr. Stickney, the actuary, a-power of attorney to collect from the
board of public works an account of seven thousand and someI hundred dollars due to me.
I paid ten per cent. interest on the loan, and when I got my work measured Mr. Stickney
collected the money and settled with thle bank and paid every dollar I owed.
Q. Did you make any other loan at that bank --A. I did not. Mr. Stickney went into
in another job of work after that.
partnership
Q. Were you partners in that job?-A. No, sir, we were not. I liad a couple of contracts,
and I suggested one day to Mr. Stickney that if lie lad any surplus money, and would furnish it, I would execute thle work and would give him half the profits. H1e told me he would
look over the matter. I told him that lie would make his money pay more in this way than by
a percentage. ''he next day we made an agreement. I believe tlat the amount of money
in the work was about $12,000. Mr: Stickney had a power of attorney for both
expended
jobs, to collect and receipt for the money coming to me.
Q. Was the money advanced to you on that job advanced from the bank?--A. Mr. Stickney kept his bank-account there, I suppose. He said it was his individual money.
Q. Did you get the money out of the bank ?-A. Yes.
Q. Did he get half of the profits ?-A. He got the full amount of his advance back and
one-half the profits.
Q. Is there any instance where the securities deposited by you for a klan lad been converted and not accounted for to you ?-A. No, sir.

140

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

FIIEE)DMAN'S BANK.
Tho committee met at 10 o'clock a. m. Present: Messrs. Douglass, BraTlford, Rildle,
Farwell, Hooker, Frcst, aid Rainey.
WASHINGrTON, 1). C., April 29, 1876.
JUAN BOYLE sworn and examined.
By the CHAIRMAN:
Question. State your residence and occupation.-Answer. I reside in Washington, D. C.
I have not any occupation at present.
Q. On page 31 of tle report of the commissioners of the Freodman's Bank, dated 15th
December, 1874, there is an entry as of May 6, 1874, "Juan Boyle & Co., $29,000, due
May 6, 1875, secured by real-estate note for $10,000 and $S,000 in bonds of Selma, Marion
and Memphis Railroad Company." Please state all the circumstances attending the nego.
tiation of that loan, and what has since transpired in regard to it.-A. Shortly before the
of 1875 I was indebted in a small amount (some few thousand dollars) to the Freed.
panic
man's Bank. I went to Mr. Stickney and gave him a fee-simple deed (with the word
"trustee" inserted) of lots on M street, between 23d and 24th streets; about 14,000 square
feet of ground. There was at that time a small incumbrance on the property. Air. Stickbonds of tlhe District of Columbia,
ney loaned me, I think, $3,000 in 8 per cent, on the
which were worth then about 80 or 85 centsgold-bearing
dollar. That was before the closing of
& Co. At the time of the panic, either the day or tile day after Jay Cooke & Co.
Jay Cooke
closed, a gentleman came into my office and told me that Mr. Sticknoy lhad just gone to
Moses Kelly to borrow from the Metropolitan Bank $5,000 in currency to assist in running
the Freedman's Bank for that day, as that bank had an hour longer than the others to run,
and that he did not think Mr. Kclly would let him have the
because all the banks
at that time were afraid to part with their currency. I had in money,
safe $19,000 in cash, and
my
I took $10,000 of it to tlhe Freedman's Bank. When I reached there I found a
crowd
of depositors, who were drawing on tile bank, and a majority of the clerks weregreat
in a great
state of excitement. This was either the day or the day after the closing of Jay Cooke &
Co., which was the 18th of September, 1873. It was certainly not later than the day after.
When I went into the bank-room I found a number of gentlemen assembled, who I understood were members of the finance committee and of the board of directors. The president, Mr. Alvord, walked forward to the middle of the room, and I told him what I lad
called for; that I had $10,000 in cash to give the bank. He told me that lie had just given
orders to close the bank, as they had not sufficient money to run it with. I think he told
on
noe then, or tlat some one connected with the bank told me afterward, that the
laud lad run down to $4.20 or $2.40, and there was' then nearly an hour beforemoney
the time
for closing. I offered Mr. Alvord the $10,000 without saying a word to him in reto security, payment, or anything else. IIe hesitated for a few minutes, when sevgard
eral gentlemen from among the board of directors called out to him, "Take it and givo
him anything he wants." I think that one of tlhe gentlemen who made that remark
was Professor Langston. There was an old gentleman
Mir.
from Baltimore
Albert, who I understood was cno of tlhe directors, and I think that Mr. present,
Purvis was
also there. I said to Mr. Alvord, "Take tie money and you can fix with me afterward."
He immediately went behind the counter and deposited the $10,000. A few minutes after.
wards lie came back, and Mr. Alvord and myself
wont over to the Treasury. At that time I
had not seen Mr. Stickney or spoken to him on the subject. Mr. Alvord and I went to the
Treasury building and into the Register's office, where Mr. Alvord got the Register to transfor a lot of currency-sixes which were owned by the bank. He came
back again and I think
ho gave me $20,000 of those bonds, which I carried over and put into my
safe. I went
back to the Freedman's Bank, perhaps later in the evening, or it may have been the following morning very early, and gave the bank $9,000 more. Mr. Alvord and Mr. Stickney
talked with me in regard to my going to Baltimore to try and make some loans for the
bank. I went to Baltimore, and I think I
$15,000 in currency that day. When I
reached Baltimore the banks there were in angot
seemed
sound condition, and
apparently
satisfied to let out currency. When I came back to the Freedman'sthey
Bank they
perfectly
told me that they had failed to get what they had expected in New York and that they
wanted a very large sum of money. I told them that I thought I had found a place in Baltimore where I could borrow on their bonds. Mr. Alvord therefore gave me some more
bonds and I went back to Baltimore with them. The second installment of bonds were handed
to me by Mr. Alvord, and the first installment by Mr. Stickney. Before going to Baltimore
I told them that I had some securities of my own which at that time could not be used, and
that as I was working for the bank and had already sustained the bank and prevented its closing, I should have some of the money for my own use, They told me that if I would go to
Baltimore I should have for my own use any money that I wanted, and I think that at that
time I used some three or four thousand dollars of the money belonging to the bank. I do
not recollect how many bonds I negotiated in Baltimore. I never sold any of-them but
$10,000, but I borrowed money upon them, of course at a high rate of interest.
When I Yeturned the bank officers all seemed very much pleased with my action, and on several occaSELECT COMMITTEE ON THE

FREEDMAN'S SAVINGS AND TRUST COMPANY.
141
sions they sent over employes of the bank to see me with regard to my transactions, and
sometimes they brought money over from Baltimore to the bank. A few days after that
Professor Langston met me and told me that the board of directors were so pleased at my
action that they intended to give me a vote of thanks, (which did not pay very well,)
and Mr. Stickney and Mr. Alvord told me that I should be well paid for my services. I
think that the bank took advantage of the sixty days' notice which the law allows to savings
banks, and when the time was nearly expired and they were expecting a run upon the bank
they employed me to negotiate their real-estate securities or any other securities that they
had. I went to Baltimore again and took up the Government bonds which I had deposited
there, and put in their place District securities, and when that loan fell due I went over
and negotiated the real-estate loans with the parties who gave me the District securiagain
ties in
of them.

place
Q. What do you meanas by District securities ?--A. I mean bonds of the District of Columbia which were held collateral by the Freedman's Bank. These securities were then
the same to the bank as cash, while their mortgages were not. All the time during these
Mr. Stickney held the lots on M street which I have just mentioned. I told Mr.
negotiations
Alvord several times that I expected the bank to assist me in paying off my debt on this
Mr. Stickney made an agreement with me to allow me to go on and build the
property.which
I did. It had never been settled what I was to receive for my services to the
houses,
bank. Of course I know that they were worth a great deal, and that the money which I
advanced to the bank was worth a great deal more, so that I expected to claim at that time
what I have since claimed, $10,000, and I have now a suit in court against the bank for that
amount. I expected a credit of that amount on my debt to the bank, and I expected the
bank to give me every assistance that it could to pay my debt. I started the houses and
Mr. Sticknoy gave a deed of trustto Mr. William H. Ward, for me, (I giving the note,) for
to secure him for lumber and material of all kinds furnished for the houses, and for
$14,000,
certain

amount to be paid to the brick-layer, as that was the heaviest item. The building
a
went on and the houses were under roof and nearly completed when the Freedman's Bank
was closed. Mr. Stickney then came to me and said that my account was an open account
and that it had not been entirely settled up. At that time the credit of Juan Boyle
& Co.
was supposed to be good for twice the amount-I mean their individual note without any

security.
Q. You mean that it was good for $'28,000 ?-A. Yes. I mean the note of Juan Boyle &.
Co. was supposed to be good, (and I thought it to be good,) for at least $28,000 without any
security, Ias mythepartner was a very wealthy man, and I had made a great deal of money
myself.
gave note for $28,000 with the expectation that I would, of course, be allowed
this credit of $10,000. I deposited $S,000.Ain Selma, Marion and Memphis Railroad
Company's
first-mortgage bonds, which were secured by the endorsement of the
State of Alabama, and which bonds at that time were worth, I think, about 60
or 70 per cent. I also gave a note of $10,000 secured as a second mortgage on
lot 9, square 54, for which I had paid over $16,000. The bank also held the
trust on this M-street property. After the commissioners were appointed they apout this debt of mine in this way: $21,000 on the M-stroot houses, and the
portioned
remainder to go against the $10,000 note, the second mortgage, and the Selma, Marion
and Memphis Railroad bonds. Mr.
came to my office, and told me that he had
given a note to the bank for $21,000,Stickney
which he wanted me to sign. I went over to Mr.,
and had a talk with him on the subject. I first
that the bank should allow
Leipold
me to finish the M-street houses with the bank-money, proposed
and that then I would permit the
houses to be sold, and thought that the price they sold for would settle everything. He said
that he would consider the matter,
I think, the next
he declined my proposition. I
then proposed that the bank shouldand,
finish them, and he day
declined that proposition also. I
told him then that I thought that all things should be taken into consideration-the services
which I had rendered to the bank-and that I
to have some assistance from the bank to
enable me to finish tile houses; but that if theyought
did not give mo any other assistance, they, at
least, ought not to embarrass position by recording this $21,000 note which Mr. Stickney
had given to the bank withoutmyconsulting
me, (although he considered that lie had a perfect
to do so.) This was a note of Mlr. Stickney's on this M-strcet property which belonged
right
to ile.
By Mr. FARWELL:
Q. The title to it was in him --A. Yes.

By the CHIAIRMAN:
But with the clause giving him power to .s1d it for the benefit of tile bank ?-A. Yes;
Q.
as a trustee for the bank.
Q. Iave you a copy of that deed with you ?-A. N3, sir; I think Mr. Stickney has the
deed.
Q. Had you a written agreement with Mr. Stickney about that ?-A. I do not know
whether I had or not, but I do not think I had. Mr.
Leipold offered me the
000, either
to return me the note itself or to give me a credit for $21,000 on the $28,000 $21
which I owed
to the bank if I would turn over the houses to him. I told him that I thought that proposi-

142

FREEDMAN'S SAVINGS AND TRUST COMPANY.

tion was unfair, because if there was any money to be made out of the houses I should get
part of it, and I said that he should give me the privilege of finishing the houses and selling
them, and paying the bank the money which I owed it. He said that they would not do
that, but that they would keep the note off record; that is how I understood him. I left
the bank, and when I went back again I found that the note was on record, and therefore I
could never do anything more in regard to finishing the houses. The houses were sold under the deed of trust. I was present at the sale, and did not see any representative of the
Freedman's Bank present. Of course the security was entirely sacrificed. There was no
one present to run the property up in the interest of the bank, and the property was bid in
for, I think, some $14,000, just the amount that was there in bricks and mortar and in
lumber and materials, leaving out entirely the cash which I had paid, and which Mr. Stickhad assisted me in paying on the buildings. In June following the lot that had the
ney
second trust of $10,000 on it was also sold for the first mortgage of $6,000, and that lot went
for $6,000 and the interest and expenses. The commissioners brought suit against me for
the bonds and obtained a judgment, I believe, and I have entered a suit against them as an

offset, claiming $10,000 for my services.
By Mr. FARWELLA:
Q. You referred to some securities wlich you said you had, but which were not salable.
Why did you refer to them ?-A. Simply to show that I did not get money from the bank
without giving something as security, and which was supposed at the time to be perfectly
but they wvero city securities, like notes, &,c.
They wore not bonds,
good. These
for loans which you obtained from the bank ?-A. Yes; but not
Q.
you deposited
specifying anywhat
specialtimeamount.
wore those services of yours rendered ?-A. From the time of the
Q. During
in 1873 until the bank closed.
panic How
long was that T-A. About eight months, I think.
Q.
the class of services which you rendered for that claim of $10,000 ?-A. I
Q. What was from
saved the bank
being closed. I was told, I think, both by Mr. Alvord and Mr. Stickfor my services on those two days the officers of the bank would not have hesiney, that
tated to give me $5,000 a day. My expenses at Baltimore were from $25 to $30 a day, because I was an invalid at the time, and was obliged to ride. On one occasion I was at four
bunks in Baltimore before the hour for opening, in order to negotiate these matters.
Q. The services which you rendered were in negotiating bonds of the Freedman's Bank ?
-A. Yes; in negotiating loans. The times were extraordinary, and therefore, of course,
These
could

the services were extraordinary.
bonds
not be sold to any advantage on account of the closing of the stock-exchange in New York.
By the CHAIRMAN:
that you claimed this compensation of $10,000 for your services in
Q. You mean totosay
advancing funds the Freedman's Bank, and in negotiating the exchange of securities
owned by the bank, by which means the bank was kept afloat eight months longer than it
otherwise would have been ?-A. That is exactly what I mean.
Q. When that note of $28,000 was given, did it include the smaller loans that you spoke
of having previously obtained from the bank ?-A. It included everything.
Q. That note, thus executed, represented your entire indebtedness to the Freedman's
Bank 1-A. So I understood.
Q. You say that Mr. Stickney and Mr. Loipold, in adjusting, or attempting to adjust,
this debt of yours, apportioned it so as to allow $21,000 of the amount to stand against the
M street property, and the balance, $7,000, to stand against the second-mortgage note and
the Selma, Marion and Memphis Railroad bonds2?-A. Yes, sir; this was after the closing
of the Freedman's Bank.
Q. You called on Mr. Leipold, and, in the course of that interview, Mr. Loipold proposed
to surrender this $21,000 note which Mr. Stickney had drawn, (supposing you had sanctioned his proceeding,) or to give you credit for $21,000, and to take the M street property.
Do I understand -you correctly ?-A. Yes, sir.
Q. Were either of the other commissioners, Mr. Creswell or Mr. Purvis, present during
that interview ?-A. No, sir.
Q. Had they any knowledge of this proposed arrangement between you and Mr. Leias you know ?-A. I do not know.
pold, soYoufarrefused
that proposition of Mr. Leipold's i-A. Yes. sir.
Q.
Q. And shortly thereafter Mr. Stickney had the property sold under his deed in favor of
Ward ?-A. Mr. Ward had the property sold in favor of the parties secured.
,. Q. For working-material furnished on those houses ?-A. Yes, sir.
Q. And at that sale no person appeared to represent the Freedman's Bank, and the propFor something over $14,000. I did not see any one
erty was bought in for $14,000 ?-A.there
were very few bidders present. Most of them I
there to represent the bank, and

know.

Q. By whom was that property bought ?-A. By ar. Stickney.
Q. Have any of those houses been since sold;l If so, state at what piices.-A. I have
l,(lrrstonrl that several of them have been sold. I think they averaged fiom $5,000 to

$6,000 apiece.

FREEDMAN'S

143

SAVINGS AND TRUST COMPANY.

Q. From whom did you understand that?-A. I understood it from a gentleman who
bought one of the houses and had sold or made negotiations for selling one of thlor. I knew
of a house being sold to a Mr. Pendleton for $4,000 in notes and a piece of property for
which Mr. Pendleton had paid over $3,000.
Q. If there had been a fair competition at the salo of that property when it was sold under the deed of trust award and if there had been any person present to protect the interest
of the Freedman's Bank in that property, would it have brought more than $14,000 ?-A.
Mr. John 0. Evans was present at the sale, and I asked him his opinion as to tile value of
the houses, and the lowest valuation he put upon them was $2,100 on some of them, and
$4,500 on others. There were nine houses in the row, but there was some arrangement in
which arrangement I do not now recollect. I think that Mr. Stickregard to two ofoutthem,
a good deal of his own paper to assist in building the houses and that he
had given
ncy
was allowed two of them, and that the bank was to have the other seven.
Q. You were engaged at that time in tile real-estate business ?-A. I do not think I was
at tile time of the sale.
Q. But you had been ?~A. 0, yes; and I might have been considered so then, although
were about being wound up.
my affairs
Q. I want your opinion as an expert as to whether thoso houses, oven at that time, if there
had been a fair competition, and it there had been an effort to protect the interests of the
Freedman's Bank, would or would not have sold for more than enough to pay the $14,000
due for the material and workmanship on the buildings ?-A. They ought to have sold for more
than that. There was fourteen thousand feet of ground in the property, which I was told by
Fitch & Fox (who are considered among the best judges of real estate in the city) was worth
cents a foot. Every dollar of the $14,000 for which the property was being sold
sixty-five
was put in the property in the way of material. Besides that a large portion of the
I received fiom the bank went for tlh payment of labor on the houses. The
money which
was there and the money which I had put in was there and what Mr. Sticknoy had
ground
put in was there, and, therefore, I would say that the property was worth more than $14,000
on the opposite corner, which belonged to Mr. Walter Davidge,was held at
because,the ground
cents a foot, and was not more valuable than that ground.
seventy-five
Q. I understand that long before or some time before the deed was made by Mr. Stickney
to Ward in trust to secure the payment for the material and workmanship, you had made
a deed of the same property to Mr. Sticknoy with a clause authorizing him to sell as trustee
"
for the benefit of the bank
Tihe deed is

?-A.

simply a fee-simple deed with the word trustee"
Q. What did you and Stickney understand by the insertion of tlo word "trustee?"A. That the property was held under that deed as a trustee for the bank by Mr. Stickney to
secure some bonds which Mr. Stickney had loaned me. It was not considered that he had
loaned anything like the value of the property, and I only had them as a temporary matter.
between
Q. There was no
and
about it?-A.
sir.

inserted.

Q. It

misunderstanding

you

Stickney

No,

was understood that the real purpose of the deed was to secure the Freedman's
Bank for the bonds of the bank which Stickney had advanced you to raise money on ?-A.

Yes, sir.
Q. Was that a prior lien to any subsequent lieu or conveyance made by Mr. Stickney
to Mr. Ward ?-A. It was. Mr.
made that

Stickney
agreement
houses, and, instead of giving me the money out of the bank to do it with, he simply gave a
trust to secure the builders.
Q. In the conveyance which Stickney made lie did not secure anything to the bank ?A. It was understood between Sticknoy and myself that it would secure
tho bank.
Q. Did Stickney, in his conveyance to Ward, insert any provision for the security of the
bank ?-A. No, sir; because that provision was already in his deed.
was already encumbered for a debt to the
Q. My object is tol show that this
bank. Th'lat was so, was it not?-A. property
Yes.
Q. And Stickney afterward incumbered it for the material and workmanship in conthe houses ?-A. Yes.
structing
Q. And when the property'was sold the proceeds went to pay for the material and workin
tie houses and not to
-A.
to assist me to build the

That is it.
mauship
constructing
pay the bank
Q. In those transactions after the closing of the Freedman's Bank, I understand you to
say distinctly that you had no communication, directly or indirectly, with Mr. Creswell or
Mr. Purvis, the other
commissioners ?-A. I had not. I may have met Mr. Purvis once, but
I never spoke to him on tile subject. I do not know that
I ever spoke to any of the commissioners except Mr. Leipold.
Q. What became of the Selma, Marion and Memphis Railroad bonds ?~A. The commissioners hold them now.
Q, You say that they are guaranteed by the State of Alabama?-A. Yes, sir.
know whether
Q. Do
of them have been converted or whether

you
has
any attempt
been made to convert them any
in order to relieve you from the burden of your
debt
so
far
as the amount would go ?-A. No, sir; I called upon Mr. Tottep, the attorney for the commisseveral times, and lie
stated that the bonds were not worth anything. He
sioners,
told me that Mr. Leipold saidgenerally
they were not worth anything at all, and I have
requested

144

FREEDMAN'S SAVINGS AND

TRUST COMPANY.

him several times to ask Mr. Leipold to return them to me so that I might make an effort
to make them available.
Q. Where are those bonds now ?-A. I do not know. I left them with the Freedman's
Bank at the time I had the negotiations.
Q. 'Do you know whether they were over in the possession of Mr. Totten ?-A. Mr. Totten was the attorney who brought the suit against me for $28,000. I called to see what
he was going to do with reference to these bonds, as no credit had been given to me for
them. I also got my counsel to call and see him on the subject.
do not know whether Mr. Totten has the bonds ?-A. No; I do not know anyQ. You
about that.
thing Did
I understand you correctly as saying that the advance of $19,000, made by you on
Q.
the day that Jay Cooke & Co. failed, or on the day after, enabled the Freedman's Bank to
tide over the run made upon it at that time ?-A. I claim that it did, and I claim, besides, that
I tided it over with my assistance from that time until the bank closed.
Q. Have you had considerable experience in banking operations; in dealing in money 1A. Yes, sir.
the commissioner's report that the total balance due at the prinQ. I findononaccount
page 40ofofwhat
is denominated the available fund, was $312,968.53. If the
office
cipal
available fund of the bank, out of which these loans were made, actually had been kept as
the law requires, in an available form, could not the bank easily have met the run upon it,
and have survived that run ?-A. I suppose that at any other time but at the time of that
bank would have had cash enough on hand.
panic Ifthethat
fund had been kept in an available form to the amount of $312,968.63,
Q. not theavailable
bank have met the run made upon it at the time of the failure of Jay Cooke
could
& Co., and have survived that run?-A. It certainly could have run much longer than it
did without assistance.
Q. Would there have been any necessity for that amount if that amount of money, in an
available form, had been on deposit, for the bank to have sacrificed its securities in order to
raise moneys to meet the run ?-A. I should think not.
to make on your examination-inchief explanatory of
Q. If you have any otheronstatement
which you have been interrogated, you may make it now.any of those transactions
A. I wish to state that when I made these transactions in Baltimore I did not receive my
a few days since) from Mr. Stickney. I received it diauthority (as stated in theofnewspapers
the bank, Mr. J. W. Alvord. Tile first authority that I received
rectly from thefrom
president
was directly
him, Mr. Stickney not knowing that I was even in the bank-building at
the time, and I understood that it was sanctioned by the members of the finance committee
then present. I had also sent to me, by one of the employs of the bank, a certificate, with the
seal of the bank attached, authorizing me to make certain negotiations ; and another one, to
which Mr. Alvord's name was signed, authorizing Mr. Sticknoy, as actuary, to indorse my
for the purpose of raising money there, as I had influence there, which
paper in Baltimore,
the Freedman's Bank had not. I think that, at another time, I received from Mr. Alvord an
order to go to the branch of the Freedman's Bank in Baltimore and get bonds which they
had there. I have had transactions with Mr. Alvord amounting to $20,000, in United States
bonds, at one time, and I think to $60,000 in District bonds at another time, and I do not
recollect that he ever asked me for a receipt. The reason I wish to make this statement is,
that I read in Mr. Purvis's testimony a statement that I had been sent to Baltimore by Mhr.
it appeared as though I had no other authority.
Stickney, and
State whether you had any of these securities at the time that the bank went into the
Q.
hands of the commissioners.-A. Not when the commissioners took possession of the building, but I had when they were appointed. I think I had in my possession about S70,000
of real-estate notes. They were in my safe in the office. I returned all of them. I believe
that the books of the bank show that I never sold more than $10,000 of the United States
bonds belonging to the bank, (which I did through Lewis Johnson & Co.,) and that all the
I had were accounted for to Mr. Stickney, or to some officer of the bank, anl
negotiations
are now on the books. The reason why I make this statement is because Mr. Purvis states
in his testimony that I have never made any account of my transactions with the bank, and
that I have clever accounted for the bonds which I received from the bank.
Q. You say that in all these transactions you obtained no commission for your trouble.A. I never received a dollar for commission, or even for my expenses to Baltimore.
By Mr. BRADFORD:
state how muchImoney you raised for the bank during tlat period ?-A. I
Q. CanI you
cannot; have no recollection.
the amount ?-A. I expect it ,was as much as $100,000.
Q. Can you approximate
by the bank duringI that
Q. Have you any notion as to how nimch money was expended
1
no idea at all. was
have
--A.
creditors
or
their
in
the
of
payment
depositors
period so
with my own affairs and with the affairs of the Freedman's Bank that
constantly
occupied
I cannot recollect what amount I negotiated for the bank and turned over to it.
Q. Will you state from whom you derived the Selma, Marion and MAemphis Railroad
bonds of which you speak ?-A. I bought them i:l Baltimore, from Mr. Thomas N. Lanahan,
a very prominent lawyer in Baltimore.

FREEDMAN'S SAVINGS AND TRUST COMPANY.

145

long had you possession of them ?-A. I think two or three months.
Q. How
Do you know anything of the source from which lie procured the bonds --A. I underQ.
stood that he bought them from an estate in Baltimore, but I do not know what estate it was.
I think he told me that they cost 80 cents on the dollar.
Q. Do you recollect when you had this conversation with Mr. Lanahan ?-A. At the time
I purchased the bonds which was some time before they wore turned over to the bank.

Cross-examination:
By Mr. LEIPOLD:
Q, You stated that the conveyance which you made to Mr. Stickney, as trustee, was for
the benefit of the Freedman's Bank; was there any such consideration mentioned in the
deed itself ?-A. No, sir; the word trustee was in the deed.
Q. Was there anything in the body of the paper to indicate that it was given for any particular trust ? Was the trust declared in the body of the deed ?-A. No, sir; it was not.
Q. Could Mr. Stickney, under that conveyance, have absolutely disposed of that property
deeded to him in that manner without any action by the officers of the bank ? I ask you
that as a legal proposition.-A. I am not a lawyer, and cannot answer it as a legal proposition.
Q. Could Mr. Stickney have given a good title to the property without any corroborative
action on the part of any officer of thebank ?-A. I do not know what record he made of
it in the bank.
Mr. STICKNEY. It is an ordinary deed of conveyance to G. W. Stickney, tnrstee.
was subsequently furnished to the committee, and is as follows :)
(A copy of the deed
Mr, Stickney gave a note to the commissioners for
Q. State unler what circumstances
and secured that note by a deed of trust on this very property.-A. I only have it
$'21,000,
as stated to me in my office by Mr. Stickney after he had made the note, lie told me that
he had given the commissioners a note for $21,000 with the understanding that they would
not embarrass me in finishing the houses; that there had been some arrangement made by
which the note should not go on record, and that on account of that arrangement he had
invested $800 more just at that time in these same houses; but he afterward came back to
me and told me that the deed had been sent down and recorded without his knowing anyof it.
thing State
the circumstances of that conversation which you refer to that took place beQ.
tween you and me, and in which I offered to accept that $21,000 note and to give you credit
for the amount.-A. You had put the deed of trust for $21,000 on record, which of course
preventedand
my doing anything further in building the houses, as it ruined the credit of the
property
stopped the building. I asked you either to let me go on with the building,
or to give me money to finish it for the benefit of the bank, or for the bank to finish the
houses, and you declared that you would do nothing except take the houses in fee. I told
that I did not believe that it was the purpose of the commissioners to speculate on the
you
necessities of the debtors of the bank, and that therefore I thought that if there was anything
out of the houses over and above what was due to the ban!, I was justly entitled
coming
to it. I think that that was the last conversation which we had on the subject. I left, and
the sale took place immediately afterward.
Q. You stated that you came to see me with reference to my putting on record that deed
of trust, and that it was your impression then that after that deed of trust had gone on record
as against this property, there would have been no opportunity for you to have raised any
other money on the property 1-A. That is it.
Q. Then you came to me, and wished the commissioners to go on and finish these houses,
saying that from the profits of the houses your debt to the bank might be paid, and that the
difference, if any, should inure to your benefit. Was that the statement that you made?A. That is the statement that I made.
Q. Did I agree to do anything of that kind ?-A. You refused to give me the benefit ot
the property over and above what was due to the bank, but you still said that you would
take the houses just as they stood in fee.
Q. Take the houses for what-for the payment of the entire debt?-A. No, for the payment
of $21,000 of. the debt.
between you and me in regard to that matter fQ. What other conversation took
A. I do not recollect any other unlessplace
give me some reference to it.
you
Q. Did I make such a remark as this, that the bank could not afford to advance money
for the finishing of these houses in order that you might derive profit from it ?--A. I do not
recollect any such remark.
Q. Why did I refuse to allow you to share in the prospective profits that might be derived
from that row of houses? Did I give any reason why
?-A. No, but I have my own reason
for thinking why you refused.
Q. Give the reason.-A. The reason that I have is because I do not think
feelings toward me were very friendly. I so understood before and since. Thereforeyour
I did not think
that you were ready to give me any advantage at all, and thought that you would rather in the
meantime place me at every disadvantage.
Q. What was the entire amount of the incumbranccs on that property at the time that
10-F B

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FREEDMAN'S SAVINGS AND TRUST COMPANY.

you wished the commissioners to go ahead and finish that row of buildings -A. I think it
was a little over $14,000.
Q. What was the nature of the incumbrance Y-A. A deed of trust.
Q. Were there any builders' liens or any claims of that kind against the property ?-A. I
think not.
Q. How many houses were there that had been deeded to the commissioners as security
for that $'28,000 ?-A. There were nine in the row. I never was consulted in regard to the
deed of trust, and I never saw it, but I have understood that it embraced only seven of the
houses.
was the condition of those seven houses ?. How far had they progressed toward
Q. What?-A.
They had the floors and roofs. They had the sashes, blinds, and all the
completion
material so far as lumber is concerned, with the exception of the steps and the lumber to
the back fences,
put upWas
the condition of the whole seven houses ?-A. Yes.
Q. Were that
the seven houses all under roof -A. Yes, they were all under roof; all but one
Q.
or two of them had in the sashes and bay-windows, and the lumber for the others were
stored in some of the other houses. Some of the houses were further completed than others.
Some were entirely plastered, and some were not.
Q. Have you any idea what the probable cost o( finishing those houses would have been
at that time ?-A. I understood that there was a bid made for six thousand dollars odd to
finish the entire seven houses. I think I got that information from yourself.
Q. There are only seven houses included in the deed of trust to the commissioners ?-A.
I do not know that. I know that there were nine houses in the row. You told me that you
had an estimate or bid as to thecost of finishing the houses, and I think It was a matter of six
thousand dollars odd. I am not positive about it, for at that time I had really lost all in.
tereat in the matter.
Q. Now with reference to this proposed arrangement. You have stated in your testimony
that the security on these houses was given to the Freedman's Bank to secure it for the
amount of some bonds which Mr. Stickney had loaned to you; what were those bonds ?-A.
My testimony does not state it with regard to these houses. I spoke with regard to lots.
The houses were not then commenced. The bonds were 6 or 8 per cent. gold-bearing bonds,
called sinking-fund bonds of the District of Columbia.
Q. For what purpose had Mr. Stickney loaned you these bonds ?-A. I had use for them,
and Mr. Stickney loaned them just as he would have loaned me the money of the bank, and
he took this security for them.
any dealings with Mr. Stickney in regard to real-estate notes, the
Q. Did youtheever have
of
bank ?-A. Yes; just in the same connection as I had in relation to the
property
bonds.
you real-estate notes ?-A. No, sir.
Q. Mr. Stickney loaned
Q. Did he give them to you to negotiate ?-A. Yes.
Q. How did you pay for them ?-A. I paid the noney back to the bank for all the notes
that I negotiated, except that part which is included in the $28,000 note,
Q. Then the $28,000 note partially arose as a balance due from certain notes which were
handed to you by Mr. Stickney for the purpose of negotiating them; is that correct ?-A,
No, sir; Mr. Stickney gave me these notes instead of cash. He did not give them to me to
negotiate.
4. You had to negotiate them in order to use them ?-A. Yes, if I wanted to do so. and
I did negotiate some of them.
0. Do you recollect how much they amounted to ?-A. I do not.
Q. To what amount did you take these notes 'i-A. I had about $70,000 of these securities of the bank, and I think that I received out of them about $8,000 or, perhaps, $9,00
The notes were taken at their face value, and any loss or discount upon them I lost myself,
Q. At the time that you gave this note for $28, 000, did you understand that it was given
to the bank in payment for these very real-estate notes which you had taken from the bank
and negotiated for the purpose of erecting these buildings I-A. I did.
Q. Was there any other note that you gave to Stickney on or about the same date?-A.
There was a note for $4,000 odd, which was, I think, my note indorsed by Mr. Frank Barnum of Baltimore. Mr. Barnun's indorsement was then and long afterward and is to-day, I
suppose, good for a large amount. I gave him that note in settlement of some real-estate
notes on a piece of property which Mr. Barnum held in trust, and I gave the balance in
cash. The note fell due after the commissioners had taken possession of the bank, and it
was not protested, and I alone was held responsible for that note.
Q. Do you recollect the identical notes whIich were given to you by Mr. Stickney to negotiate, and in payment of which this $28,000 note of yours was given ?-A. No, sir; I
do not, there were so many of them.
you recollect on what day that transaction took place, when you handed Mr.
Q. Do this
$28,000 note and this $4,300 in payment of these other notes which he had
Stickney
surrendered to you previously ?- A. I do not think that this $4,300 note had any connect
tion with any affair of mine. The Freedman's Bank wanted money, and in negotiating these
real-estate notes in Baltimore, the parties made me offers for the notes, and we had no other

FREEDMAN'S SAVINGS AND TRUST COMPANY.

147

securities to give except Mr. Barnum's individual security to take up this note on his property, so we took up this real-estate note on his property, and gave Mr. Barnum's personal
note. I think that transaction occurred before the $28,000 matter. I do not think that it
had any connection whatever with the other matter, and I did not regard it as a matter of
own at all. Mr. Barnum was very apt to be out of town, and the note was, of course, to be
my
sent to me, and if I did not pay the whole of the note, I was to be allowed to curtail it for
Mr. Barnum's benefit.
Q. What I want to get at is whether, on the day that the notes bear date, the transaction
took place between you and Mr. Stickney. The notes bear date May 6, 1874; was that the
date when the transaction took place ?-A. I think that that was the date when I delivered
to Mr. Stickney the $4,300 note, but I do not think that it was the date when I gave Mr.
Stickney the $28,000 note. I can connect the two things as transactions of the same time.
By Mr. CRESWELL:1
Q. When did you give this deed to Stickney as trustee ?-A. I cannot give the date, but
I can furnish It.
Q. Was it before the commencement of building on these lots ?-A. Yes, sir.
Q. And it was for the lots and the seven houses --A. 0, no, sir; I do not know that the
houses had been more than thought of at the time.
Q. But it was for the ground on which the houses were afterward constructed ?-A. Yes.
Q. State at length, and clearly, exactly what the understanding was between you and
and what you meant to convey by the word trustee in this deed 7-A. My intenStickney,
tion was to give this to Mr. Stickney as security for the bonds which I got from the bank.
Q. Was that the understanding with Stickney Y Did he understand it clearly at the time ?
-A. He certainly did.
Q. Did you give him that deed of trust to secure ,he bonds which you got from the bank?
-A. Yes.
Q. And was the property to go entirely for the security and benefit of the bank ?-A. Cerit was. When I gave Mr. Stickney this deed as security, I gave it as much as a
tainly,
trust for myself as I did for the bank. At the same time, I expected to be required to pay
that indebtedness to the bank before Mr. Stickney would surrender the title to me.
Q. Then you had it understood with Mr. Stickney that this trust meant yourself as well
as the bank ?-A. Certainly.
Q. And meant Mr. Stickney as well as yourself ?-A. No, sir.
Q. Was it to secure anything which Mr. Stickney might lose by the transaction as well
as yourself and the bank ?-A. I think not.
Q. How largo was the actual amount of indebtedness which you intended to secure
that deed ?-A. I think I got $3,000 bonds, and $1,000. in cash the next day. That is
by
all I now remember.
Q. Then did you only intend to secure $4,000 to the bank by that deed to Stickney as
trustee ?-A. It might have been considered that if I wanted more I could have gone and
got it. But at the
time you gave the deed that was all that you intended to secure ?-A. I did
Q.
not expect to want any more than I had received.
Q. Did you ever receive anything more from the bank than that $4,000 which was to be
secured by that deed ?-A. Not until this transaction which I have spoken of.
Q. With whom did you make your arrangementt to build on these lots ?-A. With Mr.
Stickney.
Q. Who was the contractor ?-A. The first contractor was a man named Angus.
Q. Had you a contract with him ?-A. Yes, sir.
Q. You and Mr. Stickney represented one interest and Mr, Angus the other ?-A. Yes.
Q. Was it understood at the time you made this deed of trust to Stickney that he was to
go over and aid you in constructing these houses ?-A. Not at the time the deedthewas made.
Q. Was it understood then or afterward that he was to give a lien to secure builders
or mechanicsl-A. It was either intended that he should do that or that the bank should
advance him money sufficient to do the work with.
Q. And you made this arrangement with Stickney that the bank was to advance the
-A. Certainly. I do not know that all the arrangements were made with Stickney.
money
I know that I talked on several occasions with Mr. Alvord in regard to all my matters.
Q. Did you make any arrangement with Mr. Alvord ?-A. No; sir.
Q. Did you have no arrangement with any officer of the bank except Stickney that you
were to be assisted by the bank in erecting these buildings ?-A. No; but I had an underfrom the officers of the bank that I was to receive assistance from the bank.
standing
Q. With what officers did you have that understanding ?-A. I think with General Howard, (I believe he was connected with the bank,) and I think with Professor Langston.
Q. When did you have that understanding with General Howard ?-A. I had a conversation with General Howard just after the panic with reference to what I thought I ought to
do in regard to the matter.
Q. That was in September, 1873 ?-A. Yes, sir.
Q. When did you have a conversation with Mr. Langston -?A. I had a conversation

148

FREEDMAN S SAVINGS AND TRUST COMPANY.

with Mr. Langston after the houses were commenced. That was some time before turning
over the bank to the commissioners. I went to Mr. Langston's house, or rather to the col.
lege, and had two or three conversations with him with regard to paying the bank the loan
of$70,000 odd which was made to the Howard University. I called on these gentlemen to
make arrangements with regard to the loan. Mr. Stickney did not want to make the loan to
me unless the Howard University paid the commissions. That loan would then be due in
a few months, and the university would then have to pay it or be sold out, or borrow
at the expense of the institution. I went to see Mr. Langston several times on that subject,
and I requested him to make the loan. I went, when sent fQr, to meet a committee of gen.
tlemen belonging to the Howard University and connected with the Freedman's Bank. I do
not know who they were, except that Professor Langston was present. General Howard
sent me a note signed with his name, requesting me to call and be present at that meeting.
The meeting took place at the building of the Second National Bank, and I had this conversation in regard to the management of the bank, or rather in regard to furnishing the funds
for the bank. They sent some person to New York to see whether he could do better than
I could in raising funds, but he telegraphed them back that he could not.
Q. That was for furnishing money generally for the protection of the bank ?-A. Yes. The
reason why I make this statement is to show that I was not merely working with Mr.
Stickney in connection with the bank, but that these were matters which ran along sometimes for three or four weeks.
Q. What I want to know is about these lots and buildings. You say that you expended,
in the way of construction and for material on those lots, about $14,500, including the
value of the lots ?-A. No, sir; the lots contained 14,000 feet, and were valued at 50 cents
a foot. The material caine to $14,000 odd, not for any building, but for material. Then,
besides, there was the cash which I had put in the building and what Mr. Stickney had put
in it.
Q. Was there any lien to be on those lots and buildings for the amount of money ex.
Ended by way of construction, either for labor or materials ?-A. The $141,000 was given

for materials.

lien given on the buildings and grounds for that sutm ?-A.
Q. Was Ia before
stated.
groundToaswhom
?-A. To William H. Ward.

It was given on the

Q.
Q. Was it in your view, at tle time, that lie was to secure such sums of money as you
were to expend for materials and labor, and did you consider that he had authority to do it
under the deed of trust ?-A. I did not consider that he had authority, unless there was
some understanding between us.
had Stickney to give Ward this deed ?-A. lie gave it at my request.
Q. What rightdid
title
Stickney have to the property when he made the transfer 1-A. IHe had
Q. What
the title in fee.
made to hihm ?-A. It was made to him by me.
Q. By whom was the title in feeYes.
the deed as trustee l-A.
Q. In
Q. Do you claim that under that deed by which you conveyed the property to him as
trustee, he had authority to convey it to Ward I-A. Certainly.
Q. It was an exercise of authority, under the deed which you gave him ?-A. Certainly.
By Mr. Punvis, (formerly one of the board of trustees:)
Did
Q.
you make a return to the bank for every dollar of its securities which you sold t
-A. I have answered that question before. I made the return to the bank of every dollar
of
have
that I received from it, and I think it is so recorded in the books the institution. I
also stated that I had in my possession thousands of dollars of the funds of the bank.
There were a good many of the notes of the bank put in my hands for negotiation. I transacted business for the bank from the time of the passage of the act of Congress allowing the
bank to negotiate loans on real estate, and the bank has never lost a dollar by any investment that I made for it; I wish that to be distinctly understood. I repeat that I made many
loans for the Freedman's Bank, and I never have heard of any note which I negotiated at
the bank that was not paid, or of any investment that I made for it that was not good, and
I was connected with it for several years.
Re-examination by the committee.
By Mr. HOOKER:
I correctly understand your statement as being that two of the nine houses which
Did
Q.
on this property after the execution of that deed to Mr. Stickney were
you say were built
turned over to Mr. Stickney ?-A. I have so understood-that there was some arrangement
with reference to two of the houses made between Mr. Stickney and Mr. Leipold. I do not
know what the exact arrangement was. I have never seen the deed of trust securing the
to the bank, and do not know whether it was on seven houses or on the nine.
$21,000When
the trust, was it the
you executed this deed to Mr. Stickney investing himtowith
Q.
be built upoim for the
understanding between you and Sticknoy that this property was or
purpose of enabling you to repay your indebtedness to the bank, that if it was not repaid

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

149

then the bank was to take the property ?-A. There was no such understanding as that; it
would have been unnecessary.

By the CHAIRMAN:
Your
examination, both in chief and on the cross-examination, developed the fact that
Q.
there were two deeds on those M-street houses, one given by you to Stickney, as trustee,
and the other given by Stickney to Ward, as trustee. I wish to bring your attention back
distinctly to the object of the deed which you gave to Stickney. Was or was not that deed
intended as a security for money already advanced and as indemnity for any advance that
afterward obtain from the bank ?-A. It was.
you might
it was understood between you and Stickney that that was the purpose ?-A.
Q. And
Yes; that was the exact purpose of the deed.
By Mr. RIDDLE:
Had you paid for the property at the time that you executed the deed to Stickney ?Q.
A. It was very nearly entirely paid for, and it was paid for by installments afterward. There
was not over $1,000 due on the property at the time, I think. There was one note for $700
and another for a smaller amount due on it; which notes were paid afterward.
By Mr. RAINEY:
Under the arrangement to which you referred as having been made between yourself
Q.Mr.
Alvord to negotiate notes for the bank, did you have any understanding with him
and
as to what percentage you were to receive for your services in that direction ?-A. None

whatever.
Q. Did you feel yourself at liberty to charge whatever percentage you might think your
services were worth, or were you to charge the usual rates i-A. 1 was told by Mr. Alvord
and by Mr. Langston and by several other of the gentlemen at the bank, that I was to be
rewarded for my services; that the bank would never forget my services and
handsomely
would pay me handsomely, and that I should receive favors, &c., from the bank on account
of what I had done for it. I could have taken that $9,000, which I gave to the bank, and
I could have got for it two per cent. a day in Washington City. That would have run for
at least ten days. I had one call against Fisher & Sons, one of the oldest houses in Baltimore, for which I expect they would have paid me very nearly the face of the call in
except currency, to prevent my making the call on them. That was supposed
anything
to be the cause of their failure, and of the closing of their house. I put all these things towhat I should receive. I sat two or three days in Fisher's office asgether in considering sometimes
$400 and sometimes $500 at a time, just as the money was
sistingintothem,
getting
the bank. At that time Baltimore and Ohio Railroad stock could not be negopaid
tiated in Baltimore. I was brought in contact with Robert Garrett, the son of the president of the Baltimore and Ohio Railroad Company, and with several other prominent men
of Baltimore, and they offered me any amount of securities rather than I should make this
call on Fisher & Sons, and if Lhad wished to sell out to those gentlemen I could have made
as much as my charge against the Freedman's Bank. That is my opinion.
bank is predicated on the declaration made by
Q. Then your present claim against the
would be handsomely rewarded ?-A. Yes.
Alvord,Youthatfeelyouthat
Q.
you were not handsomely rewarded, and that you are at liberty to
for the services you have rendered ?-A. Yes.
chargeYou
never took pains to see what the percentage would be 1-A. No; I charge
Q.
not only as commission, and not only on the promise to reward me handsomely,
$10,000
but on account of the services actually rendered. I saved the bank from being closed, and
the closing of it for one day would have drawn it into litigation. If I had asked for
$20,000 the day I went into the bank with my money, I believe that not on'y the president, Mr. Alvord, but all the members of the finance committee, and of the board of trustees, would gladly have given me $20,000 rather than have the bank closed.
Q. Have you ever received any compensation for your services rendered ?-A. Not a
dollar.
Q. How long were you in the service of the Freedman's Bank i-A. From the time of the
panic until the close of the bank.
Q. How many months was that ?-A. About eight months.
Q. Then you rendered eight month's service to the b ink without receiving any compensation ?-A. I never received a dollar, not even my car-fare to Baltimore. You must also
take into consideration that at that time I was an invalid and could not walk, so that I had
a carriage to take me about Baltimore for some days, and my carriage-fare and expenses
amounted to $25 or $30 a day.
Q. At that time what was your personal indebtedness to the bank ?-A. Only a few thousand dollars. I could have gone to any bank in which I dealt and received the money o0
my note, and gone to the Freedman's Bank and paid it.
Q. Have of your notes in the Freedman's Bank gone to protest ?-A. I do not recollect any noteanyof mine
going to protest before the panic, oi before my difficulties, or even
v since the panic until after my own affairs came into lilig oon. Several years ago, before

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FREEDMAN'S SAVINGS AND TRUST COMPANY.

the bank was moved to Pennsylvania avenue, my account has been overdrawn to the
amount of $3,000 or $4,000, and my account was always made good.
Q. Was that note for $4,300 which Barnum indorsed for you ever paid ?-A. No. The
note fell due after the failure of the bank, and it was not protested. As my affairs were in liti.
gation, the only security for that note was AMr. Barnum's indorsement. It was not known
whether I was worth a dollar or not. That note was left in the bank and was never protested;
therefore it falls simply on myself again.
Q. What hindered it from being protested?-A. I do not know. I only know that it
was not protested.
Q. You had nothing to do with hindering its protest?-A. No, indeed, sir.
Q. Was the result of the non-protest the releasing of Barnum from liability for it ?-A.
The note was in the hands of the commissioners. So far as I know it was left
Certainly.
in the bank.
Q. Was Mr. Barnum a responsible indorser at that time ?-A. I think he was worth, then,
and is worth now, $70,000.
By Mr. STICKNEY, (formerly actuary of the bank :)
Q. Had I any personal interest in that M street property after the arrangement was made
with the commissioners, wihen I took tile two houses ?-A. None whatever.

WASI;INGTsONs, D. C., April '29, 1876.
Examination of R. II. T. LEIPOLD resumed.
By Mr. BOYLE, (the last witness:)
Question. When
you offered me the '21,000, the return of the note, or the credit on my
note of $21,000, did you do that for the benefit of the Freedman's Bank I -Answer.
$28,000
I do not admit that I ever offered you the note for $'21,000. It was not your note, and how
could I have offered it ?
Q. Either the credit or the note ?-A. When I offered you the credit, it was undoubtedly
for the benefit of the bank.
Q. Why was it that my security was allowed to be sacrificed, and that no one was present
on behalf of the bank at the sale of the M street property ?-A. When Mr. Stickney spoke
io me, (the title of the property being entirely in him, the fee-simple)-The CHAIRMAN. Was Mr. Boyle present at any conversation of yours with Mr. Sticknoy T
The WITNESS. I do not recollect that.
rThe CHAIRMAN. Then I object to anything in your answer that is to affect Mr. Boyle.
The WITNESS. I shall say nothing against Mr. Boyle. When Mr. Stickney spoke to me
about this, I knew, of my own knowledge, that there was money being borrowed and
encumbrances being given constantly on the property for the sake of getting material, and
for paying the laborers for the work that was going on. I spoke to Mr. Stickney, and said
that that must stop; that we must have security for that debt. Thereupon Mr. Stickney
agreed that he would give the commissioners a note of $3,000 on each of the seven houses,
and secure it by a deed of trust on the property. He stated to me something about reserving two of the houses; that he could not give a deed of trust on two of then, because he
had paper outstanding for which he was liable, and in regard to which he must protect
himself. The only thing he could do was to give a deed of trust on the seven remaining
houses. That conversation was by me brought to the attention of the other commissioners,
and the matter was fully discussed. The note was taken as well as the deed of trust. Mr.
at the time that he gave that deed of trust and that note, also gave me to understand
Stickney,
that if the paper were put on record it would keep them from going ahead and finishing the
and that then we would only have the bare walls. My understanding at that
buildings,
time was definite that all of the seven houses were not under roof; that they were in different processes of construction; that one or two of them were entirely covered byroof, others
nearly up to tile roof, and some of them only over the first story. That conversation with
Mr. Stickney was also brought to the attention of the other commissioners, and was thor.
oughly considered. They said, "What does the security amount to, unless we put it on
record?" I immediately sent and put it on record. Then came the trouble. The work on
the houses stopped at once. Everybodybecame aware that there was as much encumbrance
on the property as the property was worth, and they could not possibly raise any more
on the houses. Then the question came up between Mr. Boyle and me whether the
money
tank would go to work and advance the money to finish these buildings. I never acted
without the concurrence of the other commissioners, as the records of the bank will
show. I said to Mr. Boyle that I for one was not willing to advance the money of the
bank, and to finish these builngs and allow Mr. Boyle to participate in the ultimate
of the thing; that if the nk took that property and finished the buildings, whatever
profit
the property realized must belong to the bank, and that I would not consent to share any

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

151

Mr. Boyle. I had all along had conversations with Mr. Sticlney about the
surplus with
of his deeding to us absolutely in fee that property; that he could not do it withpropriety
out the concurrence of Mr. Boyle-or rather that he had no right to do it. I said this, however: If we take this property, we will take it under that deed of trust for the $21,000, and
give you credit for it." The question with Mr. Boyle was whether we would at once take
the property for his indebtedness to the bank, or whether we would allow him to share in
any surplus that there
might be after the bank had re-imbursed itsef- I would not make
by which any of the profits should go to Mr. Boyle '.i settled that Mr.
any agreement
should turn over the property in fee to us, but Mr. Boyle wi..-willing that the
Stickney should
be deeded to us, and refused to allow it to be done, bectai.;o ^ had refused to
property
him the benefit of any surplus that might arise. Then the question came up whether
give
we would let the property go to sale under prior deeds of trust, (there were several deeds of
trust ahead of us,) and it was determined that the property must be sold. In the mean time,
while the property was advertised, we went about getting estimates from responsible builders
(I think we have those estimates, and they will be produced) as to what it would cost to
finish these buildings. The encumbrances on the property, to the best of my recollection,
footed up about $16,000, and in addition to that there was something said about builders' liens
for labor, or something. We took the estimates of responsible builders, and put the amount
down, and put down the amount of the encumbrances, and we found that if we paid the encumbrances (which we would have to do in order to get a; clear title) and advanced the money
which the estimates showed to be necessary to finish the buildings, they would have cost us
more than, in our judgment and in the judgment of others who were consulted, they would
have been worth, and for that reason finally we came to the conclusion that we would abandon
the property, and therefore we did not attend the sale of the property. I know that we took
counsel of attorney in the matter, and I think his opinion in writing is on file in the bank.
Mr. CRESWYELL, (one of the commissioners.) Do you recollect the aggregate amount of
the expenditure which we would have been required to make 1
Mr. PURVs, (another of the commissioners.) I think it was something like $33,000, inthe previous loan.
cluding
The WITNESS. Yes, I think it would have amounted to about $34,000 to complete the
buildings.
By Mr. BOYLE:
Q. What would the houses have been worth when finished ?-A. I think we came to the
conclusion about that time that the houses would have been worth $35,000, or $5,000 apiece,
and they would have cost the bank $34,000.
Mr. CRESWEIL, With the uncertainty of making sales.
Q. Were any of the houses without roof at the time of the sale ?-A. I do not recollect
that. It was my impression at the time that the houses were in different stages of progress.
Whatever I knew about the matter I
from Mr.
got

Stickney.

Q. Was there not a waste of securities given by me to the Freedman's Bank ? In other
words, was there any attempt to save anything for me ?-A. Certainly, every attempt. No
matter was ever more carefully considered by the bank than your matter.
Q. In regard to the note which I left in the bank for $1,300, indorsed by Mr. Barnum,
was I protected fully ?-A. All that I can say in answer to that question is that we have
a gentleman employed who is known as the loan clerk, and who has charge more immediof the notes held in the bank. His name is H. S. Neiman. The question came up
ately
whether that note which you referred to was protested, and it was found that it had not been
protested, I asked Mr. Neiman about it, and he gave me to understand that the note was
not at that time among the notes in the bank. I asked him wha-tfad-beeoie-of it or where
it was, and he said he could not answer for that. Mr. Stickney at that time was in our embut he was absent from the bank. I am not personally cognizant of whether the
ployment,
note was or was not in the possession of the bank at that time.
Q. Is it not a matter of fact that there has been no opportunity given to me to protect myself in that particular, with reference to a note for $2,000
secured on a house on south A street
The property was sold and bought in by the bank, and afterward a suit was brought to recover what was regarded as a surplus above what they paid for it. Do you recollect anything
about that?-A, No, sir; that was a second mortgage-note, was it not?
Mr. BOYLE. Yes; the property, I think, was valued at about $3,000.
The WITNESS. I believe the
was bought in at $7,500. Mr. Stickney represents
us in that matter. It stands as ifproperty
it had been bought in at $7,500.

By the CHAIRMAN:

Q. It has been stated in the course of Mr. Boyle's examination, that in an arrangement of
his indebtedness with the Freedman's Bank there
was an apportionment made by Mr. Stickney in which a sum of $21,000 of the $X28,000 due by him was charged to the M street property, and the balance was charged to the second-mortgage note, to which he has referred,
and to the railroad bonds; is or is not that correct 1-A. It is very hard for me to answer that
question in that shape. I do not think that any arrangement of that kind was made, having
that

object in view particularly.

152

FREEDMAN 'S SAVINGS AND TRUST COMPANY.

Q. How did it happen that$21,000 of the indebtedness was embraced in the deed of trust
which it seems was made by Mr. Stickney for the security of the bank, and which amount
it is stated (in your hearing and not contradicted by you) you were willing to credit Mr.
Boyle with and to take the property ?-A. $21,000, I think, was represented to me as being
about the value of the seven houses; that each house was supposed to be worth, in its then
condition, $3,000. That was the reason why Mr. Stickney gave a deed of trust for the $21,000 and no more, although the debt was more.
Q. Does not that show that $21,000 of Mr. Boyle's debt was, in fact, by an arrangement
made by Mr. Stickney, charged to that property, and that you were willing to take the property and give Mr. Boyle credit for that amount -A. Not necessarily.
Q. Is it not a fact that Mr. Stickney did propose to charge $21,000 of Mr. Boyle's debt to
the M-street property, and that you were willing to give Boyle credit for $21,000, and to
take the property I-A. No, sir.
Q. Do you mean to say that the conversation which Boyle states he had with you on that
subject is not correctly given ? If so, please state what did transpire on that occasion.-A. I
mean to say, as far as I recollect it, that the conversation which took place between Mr.
Stickney and myself in the matter-The CHAIRMAnN. I am asking you about your conversation with Boyle.
The WITNESS. I do not exactly recollect the conversation with Mr. Boyle. I may have
said to him, in answer to a proposition which he made to me as to our assuming the finishof these houses and allowing him to share in any ultimate surplus that there might be,
ing
that I was willing to take the fee-simple to the houses in lieu of the $21,000 deed of trust.
The CHAIRMAN. That is exactly what Mr. Boyle says, and you do not contradict him in
that respect.
The WVITNESS. If what I have just said is exactly what Mr. Boyle says, I do not of
course contradict him.
By Mr. HOOKER:
Q. This estimate as to the value of the property was predicated on a calculation of seven
houses, at $3,000 apiece ?-A. Yes, sir.

By the CHAIRMAN :
On page 17 of the commissioners' report of December, 1574, there is this entry: "Dec.
1st, 1871; James G. Berret, president; $28,500." At the date of this report there was due,
including interest, $30,718. 22 on notes at 6,12, and 18 months on the books of the bank.
Was either the principal or interest of those notes collected at maturity.-A. No, sir; it was
not collected at maturity. Some interest had been paid on the notes.
Q. Is there any evidence that the interest was paid when the notes fell due ?-A. I say
that some interest had been paid.
Q. Do the records of the bank show that this loan was made at JO per cent. ?-A. I think
that the face of the notes shows that.
Mr. STICKNEY. The interest was 7 per cent.
The WITNESS. Well, I take Mr. Stickney's word for it.
Q. Do you know of any effort to collect that debt from Mr. Alexander R. Shepherd,and
of his refusal to pay interest at a higher rate than 6 per cent. ? If so, explain what connection
Mr. Shepherd had with the debt.-A. All that I remember about the matter is that very
soon after the commissioners came there we made an effort to collect that note. I wrote to
Mr. James 0. Berret, the maker of the note, the usual form of letter, that if the note were
not paid we would have to instruct the trustee to foreclose and to sell the property. There
was no attention paid whatever to that letter. I made repeated efforts, and wrote repeated
notes requesting the payment, and then I instructed the trustee to go ahead and sell the
There was some point in the deed of trust that was raised upon us as to whether the
property. trustee
had a right to sell, inasmuch as the word survivor was not used in the deed
surviving
of trust. At any rate, in the course of our efforts to raise this money, it came to my attention that Mr. Olmstead had something to do with it as representing the club. We still continued to make efforts to get the money, and one day Mr. Shepherd came to the bank and
asked me to make out an account of that club-house loan. I said, "All right." He walked off
two or three paces and then came back and said, "1 Make out the interest at 6 per cent. after
maturity." '' But," said I, " governor, that is hardly the understanding of it." " Well,"
said he, " you must either make it out in that way or not at all." Then I consulted with the
other commissioners about it, and we submitted the question to an attorney as to whether we
would be obliged to take 6 per cent, interestafter the maturity of the notes, inasmuch as some
of the interest had been paid beyond maturity, and we had an opinion in writing that there
was no remedy for us, but that we had to do it, and that is the way the notes were paid.
By Mr. BRAI)FORD:
Did
Mr. Shepherd ask you not to press for the 'payment of those notes, as you had
Q.
security at JO per cent. I-A. I do not recollect whether that conversation was with
ample
Mr. Shepherd in person, whether he wrote any such thing, or whether he told Mr. Stickney
so and that Mr. Stickney told me, or whether Mr. Olinstead said it. I think Mr. Olmstead
said, " That debt is drawing 10 per cent. interest; why do you want to collect it ?"
Q.

FREEDMAN'S SAVINGS AND TRUST' COMPANY.

153

By Mr. RIDDLE:

Q. Did you mean to say that a portion of the interest was paid before the maturity of the
debt?-A. Yes. The interest had been paid down to maturity and beyond maturity.
Q. Before it was due ?-A. No, but every six months afterward, as it became due.
By the CHAIRMnAN:
to the terms of the loan, one of those notes matured on the 1st of July, 1872,
Q. According
another on the 1st of January, 1873, and the 3d of July, 1873 ?-A. Yes, sir.
Q. And you say that the interest had been partially paid on those notes ?-A. I think so.
That is a matter of memory.
Q. Do you recollect the ground on which the attorney expressed the opinion that interest
at a higher rate than 6 per cent. could not be enforced ?-A. I do not recollect the ground.
We have got the written opinion and can submit it. He gave authorities, decisions of the
court, &c.
supreme
Since the conversation that you have mentioned with Mr. Shepherd, what steps have
Q. taken
to enforce the collection of those notes I-A. They have been all paid.
been
understand that that loan was made to Mr. Berret as president of the Washington
Q. I was
the property on which the mortgage or deed of trust was given improved at the
Club;

time of the loan ?-A. Yes, sir.
Q. ICan
you inform the committee who constituted the members of that club ?-A. No, sir.
see on page 15 of the commissioners' report of December 15, 1874, two items charged
Q.
to W.J. Cook, one of April 29, 1871, of $4,500, and the other of January, 1862, of $2,700,
and on the same date the amount due on the first note was $5,507.50, and on the second note
$2,857.05; can you state what steps were taken to collect the amount due on those notes ?A. The $4,500 note was secured by deed of trust on certain property on which the note referred to by Mr. Boyle in his testimony was also secured. That property has been sold and
in by the commissioners at an amount sufficient to pay the whole note. The $2,700
boughtI believe,
is to be paid to-day. The release was made out the day before yesterday.
note,
Did not Mr. Cook call upon you one day this week in reference to that note, and effect
Q.
an arrangement with you for a settlement ? If so, in what manner ?-A, Mr. Cook approached
me this week on the steps of the Treasury building as I was coming out. Said he, "LeiI want to pay that $2,700 note, but I have not got quite
enough money to do it. Will
pold,not
take $2,500 and take my notes for the balance ? " I said to him, " My dear fellow,
you
we cannot do that." " Well," said he, "I have made an arrangement to raise $2,500 at 6
per cent. and I want very badly to pay that note ; I wish you would do it." I said, "We
could not think of such a thing, we could not give up that security." That is all that hap.
pened. He came to the bank afterward and asked me whether the deed of trust was there.
looked at the papers and found that it was not. I found, however, a receipt of the clerk o f
the court, in Maryland, showing that certain papers had been sent to him on a certain date,
and we wrote him a letter and he wrote back that the papers had been returned to Mr.
In the mean time Mr. Cook had been up there and found that the papers had got
Stickney.
on record, and then he came back to the bank and asked us to prepare a release, as he was
to pay the loan in full, and that he would pay it to-day.
ready Did
he offer to discharge any part of that indebtedness with claims of depositors,
Q.
which he had purchased ?-A. No, sir; no such thing was ever mentioned.
Q. Did you know the fact that he was a holder of any such claims ?-A. I now remember, since you speak of it, that he did collect some dividends from the bank.
Q. On assigned claims i-A. On pretended assigned claims. The checks were made payable to the order of the depositors. I do not know what he has done with them.
Q. Were the dividends paid to him ?-A. The dividends were handed to him. He presented the books We make it arule to draw checks to the order of the depositors, but
if
reputable persons present the pass-book, we put the check in the pass-book, and hand it to
the man who presents it.
Q. What was the amount paid to this man Cook, and whose books were they that he
sented?-A. I do not recollect anything about it. He brought in a number of bookspre-at
different times-books which he represented himself as
and
by for
waytheofcollection
assignment,
some which he represented to be holding as agent for theholding
of their
depositors
dividends;.but in no case did we pay him a dividend. We simply handed him checks payahle to t he order of the depositors. That was the general rule adopted in pursuance of a
circular issued by us. Mr. Gilbert
of F street, in this city, has from time to
printed
time presented a large number of books atMoiers,
the Freedman's Bank, which we have until recently returned to hin as we did in all similar cases, with checks in the books drawn to the
order of the depositors. He afterward indorsed those checks as an attorney in fact, and they
were presented for payment to the assistant treasurer in New York. The assistant treasurer
refused to pay them on that indorsement. Subsequently a gentleman by the name of Harvey
came with those checks to the bank, and brought with the checks powers of atSpaulding
to have been executed
the
before a United States commistorney
purporting
sioner in the city of Vicksburgh, Miss., andbyI thinkdepositors
in Memphis, Tenn., authorizing Gilbert
Moiers to indorse the checks and to collect the dividends.

154

FREEDMAN'S SAVINGS AND TRUST COMPANY.

By Mr. HOOKER:

Q. Do you recollect the name of the colnmissioners before whom those powers of attorney
to have been executed ?-A. I do not. He asked me to authorize the assistant
purported
treasurer to pay the checks on those powers of attorney, and I refused to do so. It has
been subsequently reported to us that none of these people have ever heard of their books

or dividends.
By the CHAIRMAN:
On
is this item, "OctoQ. page 12 of the commissioners'duereport of I)etemhber 15,and1874,
no interest paid thereon;
ber 5, 8,
J. Murtagh, $1,200;
,
3, 1871,"
January
state whether that note is still due, and what steps have been taken to collect it.-A. Part
of the note is due. The interest has been all paid, and a small part of the principal; per.
or perhaps more.
haps $'00,
Q. In the commissioners' report of January 18, 1876, the balance reported due on that
note is $1,193.76; have you taken any steps since then to collect the amount ?-A. No, sir;
but there are small payments made on account of that loan every little while.
Q. Areyou not, in the effort to wind up the affairs of the bank, pressing vigorously the
collection of debts due to it; and if this is a good debt, is there any reason why it should
have been excepted from the general rule ?-A. I do not know any reason why it has been
are a great many loans that are not paid, but on which the interest is
excepted. There
We could only enforce payments by threatening to sell the security, and we
being
paid.
have made that threat.
Q. What is the security ?-A. Some real-estate security.
Q. It appears that the securities in other cases have been, pressed to sale when there was
no legal impediment, and to suits, when there was; why should any indulgence have been
granted in this case that was not extended to the others I-A. I do not know that any inin this case which has not been given to a hundred others, I
dulgence has beenthatgranted
the interest is all paid up, and that the principal is being paid up by
except
suppose,
installments. Besides, the times are hard, and we are all the time offering properly for sale
and not finding purchasers for it.
Q. It appears by your report that the interest was only paid in Dedember, 1875, and a
small portion of the principal, leaving still $1,193.76 due of the original $1,200 note. How
much of that has been paid since the date of this report, January 18, 1876 ?-A. I think
about two or three hundred dollars. At that time, or sonm time before that report was made,
there was a good deal of interest due, and we instructed the trustee to sell the property.
bMr. Murtagh came there and said, " I cannot pay this now, but I will pay the interest of it
up, and will try to make an arrangement to pay the principal as soon as I can ;" and Mr.
Murtagh paid enough money at that time, not only to pay the interest up to the date, but
beyond the dale, and to the next interest-day, and since that time small amounts have been

paid.

Q. You say that there are hundreds of debtors who have received the same kind of indul-

gence that has been extended to Mlurtagh; why has it not been extended to the others ?-A.
There must be a start somewhere. We cannot advertise all this property al} at once. There
must be a beginning somewhere. There is scarcely a day that advertisements do not apin the papers for the sale of property, and we are selling as last as we can possibly do
pear
so. Sometimes there are three or four sales on the same day, and it is impossible tor us to attend all of them. We take those persons who are in arrearages of interest, those who have
not attended to the payment of interest-we take them up first and go ahead with them.
Those who are showing a disposition to reduce their debt, either by the payment of interest

postponeuntil after the others are got out of the
Q. The commissioners entered on their duties on the 11th of July, 1874, and no interest was paid on this note of Murtagh till December, 1875. Are there any other debtors of
the bank, whose interest had accumulated from the time of your taking charge of the affairs
of the bank, who were allowed to run on for that length of time, without payment being demanded ?-A. In the first place, I am not ready to admit that there was no interest paid on
I
that this is not au exceptional
that loan until
and in the next
or by the
way.

partial payment of principal,

December, 1875,

we

place say

case; that there are a number of other cases in the same category.
Q. Was not there at the time, or since you took possession of the affairs of the bank, interest amounting to $187 due on that note?-A. Yes; at the time we took charge there
was $187 interest due.
Q. Was that interest, or any interest that accrued afterward, paid prior to the date given
in your report-December, 1875 ?-A. I cannot tell you. I can give you the information by
the indorsement on the note.
examining
Q. Do you not, in your report of January 18,1876, mean to state accurately the timesI
when the interest was paid, or do you mean to say now that it was at various times --A.
do not mean to give any date in my last report as to when the interest was paid. I say that
.the interest was paid to December, 1875.
Q. Was it in one payment or more ?-A. It vas in different payments.
Is Mr. Murtagh one of your bondsmen ?--A. He is.

,Q.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

155

Q. If Mr. Murtagh's pecuniary responsibility is such as to justify his being taken on your
bond as one of the commissioners of the Freedman's Savings & Trust Co,, ought he not to
be sufficiently able to pay a debt of $1,200 within twenty months' time ?-A. I suppose so.
Q. Do you suppose that Mr. Murtagh has any more use for that money than the depositors of the bank who are clamoring for the collection of the debts to the bank in order to get
their dividends 1-A. I do not know what use he has for his money. I have treated Mr.
like any other creditor of the bank. Mr. Stickney is trustee in the matter,
Murtagh-just
and I have addressed him communications, instructing him to sell out and to show Mr.
Murtagh no mercy.
By Mr. Hf( OcEIR:
Q. In point of fact up to this time you have not had any sale of this security ?-A. No,
sir.
Q. You mentioned a moment ago that there were hundreds of persons to whom indulgence is extended if they would pay the interest. Do you mean to say that this indulgence
was extended to persons whose debt to the bank was amply secured upon real estate or otherwise, which would enable the amount to be realized ?-A. No, sir; I doubt very much
whether there is a single loan on the books of the bank upon which we could go ahead
and sell the security at this time and get our money. When we have had sales, there frehas been nobody there to offer anything; and when there have been people there,
quently
the bank has not realized half the amount of its interest. When the property has been
offered for sale in the market, even when we thought that the amount of the bank's interest would certainly be realized, it has not amounted to anything, for we find that there are
repairs, and taxes, and all sorts of expenses.
Q. In the distribution of the dividend of 20 per cent. declared by the commissioners, has
evidence been presented to the commissioners, showing that depositors at Nashville
any
and Memphis have assigned their pass-books or disposed of them ?--A. A number of powers of attoi ney have been given to one Gilbert Moiers, with reference to Memphis books, and
they have been presented at the bank by him.
Q. And payments made to him ?-A. Yes, sir; in the way I have explained, by checks
to the order of the depositors.
By Mr. C. B. PURnvS:
Q. Since you have been commissioner, have not the commissioners exacted of Mr. Stick?-A. We have.
ney a Isbond
Q. not Mr. Murtagh one of his bondsmen ?-A. He is.
Q. And Stickney is trustee of the property that the bank holds as security for MIr. Murtagh ?-A. I believe he is the trustee.
By Mr. STICKNEY:
the commissioners wrote me to sell Mr. Murtagh's property, did I not see Mr.
After
Q.
inform him of what you had ordered me to do, and was there not some arMurtagh andmade
between Mr. Murtagh and you and myself in regard to the way in which
rangement
his loan should be paid ?-A. I don't remember whether there was any specific arrangement. Mr. Murtagh came there, or perhaps you came there and paid a part of the interest.
Mr. STICKNEY. Mr. Mhurtagh paid all the interest himself.
The WITNESS. Well, Mr. Murtagh paid all the interest up, and then it was stated that
Mr. Stickney would have advertising done for the sale of the property, and should apply it
on the payment of that-note.
Q. That was that I should put all the advertisements in his newspaper for proceedings
in sales, and that instead of your
paying the money for the advertisements, it was to go
on his note?-A. Credit should be given on that note for tbh advertisements.
By Mr. HOOKER:
Is that the way the whole interest has been paid ?--A. No, sir; that is the way some
Q.
of the principal has been paid.
By the CHAIRnAN:
The
Q.
report made by the commissioners, at the request of the committee, showing the
itemized statement of the expenses incurred by them in the management of the bank's affairs, shows very large amounts paid for advertising, to B. H. Warner. By whom were
bills incurred, and in what paper, or
were the advertisements published ?-A. The
bills were incurred by the trustee, uponpapers,
the order of the commissioners to proceed to sell the
I don't remember the
I
some were published in the
property.
Republican and some in the Star.papers particularly; suppose
Q. You do not know in what papers ?-A. In different papers.
Do you know of any
between the papers publishing those advertisements
Q.
and the auctioneer by whicharrangement
he was allowed a rebate or commission of 25 per cent. upon
the amount of the bill incurred for advertising ?-A. I don't know
of the fact, sir;
It is a mere matter of report. It is a' common report, I believe. anything

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FREEDMAN'S SAVINGS AND TRUST COMPANY.

By Mr. HOOKER:
Q. Can you furnish to the committee the amounts paid to the different papers for the publication of the notices of sale of property ?-A. No,sir; not the amounts paid to the different papers. The statement of our expenditures reported to the committee will show how
much was paid for auctioneer's fees.
By the CHAItRMAN:
When
the bills came in for advertising and you paid them, did you not preserve them
Q.
as vouchers ?-A. Certainly we did.
The chairman requests that the witness, when he returns on Tuesday, will produce those
papers.
The witness states that he will do so.
Q. Can you inform the committee at this time what amount, approximately, if not exhas been realized on collections since the first and only dividend was declared ?-A. I
actly,
don't know, sir; I think we have about $60,000, over and above the money required to pay
the first dividend, but that does not include all the collections, because all the expenses that
have accrued since that time have been paid out of the current collections. We have about
$60,000 net, after the first dividend.
Q. Then, if I understand you correctly, the net proceeds of all your collections since the
first dividend was declared, is about $60,000 Y-A. Yes, sir.
Q. What was the date of the dividend ?-A. November 1, 1875. I wish to state here that
we really did declare the dividend before we had got enough money, so that is one item that
comes into the calculation.
Q. State the aggregate amount that has come in, exclusive of interest.-A. That I cannot tell without referring to the books to see how much money we had on hand the day
when we declared that dividend.
By Mr. RIDDI.E:
How
much money ought you to have had before paying the dividend ?-A. Five hunQ.
dred and ninety-two thousand dollars, to declare a dividend of 20 per cent.
Q. And you do not remember how much less than that you had --A. No, sir; I cannot
recollect exactly; but there was not perhaps more than $20,000 difference.
The chairman, on behalf of the committee, extended to Mr. Leipold the privilege of making any explanation that he thought proper as to any matters heretofore testified to in which
he was implicated.
The WITNESS. I desire to say that before I knew the contents of any testimony that had
been given before this committee affecting my integrity or action as commissioner, I could
not possibly make any statement or avail myself of any opportunity to make a statement,
for, as I said to the committee when I was last before them, without knowing that there had
been any charges against me, I could have no statement to make. But if anything has been
said against me, and you will allow me to know what it is, I can make my statement.
By the CIHAIRMIAN:
You have a copy of the evidence, have you not?
The WITNESS. I have got one since I was last before the committee, and as to the matters
therein stated concerning me, I am prepared to make a statement now. I take it up in the
order in which it comes in the book. I will first refer to the testimony given by Dr. Purvis.
He refers to an interview that had taken place in the presence of the commissioners between
himself and myself. I know that great injustice has been done me in that statement, inasmuch as it did not give all the facts and all the language that was used at that time.
When Dr. Purvis came and presented to the commissioners the application of Mr. John H.
Cook and Mr. Wormley to be appointed the attorney and the auctioneer of the commissioners, I stated, "As far as I am concerned, I am not willing to agree to any such tiing; I want
to be left free to act in each individual case as the interests of the bank may require. I am
not willing to pledge myself to any one-man." That was the statement that I distinctly
made, and, said I, " By and by, when I get time, if I ever have time, I propose to attend to
some of this law business myself. I did not simply come here for this salary, because it was
the same salary that I received in the Treasury. I came here to try to get into my profeshave
sion, and to make some sort of reputation." Dr. Purvis then said to me, " What timePurvis
to practice your profession your place is here." It was that remark by Dr.
you
that affected me very unpleasantly, and made me angry. I said, somewhat quickly, "Doctor,
I am not the clerk of this commission; I am a commissioner; my hours are not limited
from 9 o'clock to 4 o'clock." Something of that kind took place; and Dr. Purvis said,
"
Well, I had no idea that you were coming here for any such purpose as that, or I should
not have voted for you." I said, "I wish you had not, and I wish nobody else had."
What I call attention to, particularly, in this connection, and what I want to substantiate,
and can substantiate by the testimony of the other commissioners, is, that I was opposed
to pledging myself to any one man in this matter, but desired to keep to myself the privito act in each individual case as the circumstances might require. Any one reading
lege
Dr. Purvis's statement would suppose that I wanted to do all this law business myself,
t

FREEDMAN'S SAVINGS AND TRUST COMPANY.

157

and that T wanted to make all the fees myself. I used no language to justify such a
statement. As proof, or at least as substantial proof, of this statement I produce a
book which is my own private property, showing the number and character of the
cases intrusted to the different attorneys. I have always felt, and have expressed myself
to the effect to Mr. Purvis and to Mr. Creswell, that, in my opinion, Mr. Cook (against
whom I have not a word to say, for he is a perfect gentleman) did not have experience
enough to meet some of the counsel opposed to him; and, inasmuch as we were bonded
officers arid responsible for our action, we could not defend ourselves against the misot an action simply by the remark that Mr. Cook was a colored man. Of
management
the number of cases that have been intrusted to Mr. Cook, there are fifty-one cases of
overdraft; eleven cases of promissory notes; twelve equity cases, and sixty-seven other
cases involving various questions.
The next point to which I wish to direct the attention of the committee, is the testimony of George T. Johnson. The import of that testimony seems to be that I favored a lawsuit rather than to accept security offered by Mr. Johnson for a certain debt.
I desire to state, first, that everything that was done in connection with this Johnson
case, came fully before the other commissioners. Mr. Johnson and his partner, Mr. Scott,
were indebted to the bank a large amount of money, over $11,000. I addressed notes
to Mr. Johnson and Mr. Scott separately, stating to them that certain notes had been
transferred to us by Mr. Alvord, the late president of the Freedmiian's Savings and Trust
Company; that they were over-due and must be paid. Thereupon, Mr. Johnson and, I
think, Mr. Scott came to the commissioners, and in the presence of Mr. Purvis, at least, there
was a long conversation between us. He found fault with our pressing hint. He wanted certain terms, and I agreed with him finally that if hMr. Scott, who was a responsible man,
would give us a deed of trust upon all his property, we would then, in accordance with the
made to him, that he was to have additional time if these notes matured
representations
and were not paid, give to him two years' time to pay the money; but Mr. Scott was not
willing to do that. He said lie would give a deed of trust on certain of his property, and
that Mr. Johnson would give a deed of trust on some other property that he held. I reasoned with Mr. Scott, and said to him, " We can go into court and get a judgment against
and thatjudgment will be a lien upon all your property at once; why not give us a
you,
deed of trust on all your property 7" That, however, lie positively refused to do. After that
interview, I placed the note in the hands of Mr. Cook, as attorney, to bring suit against
these men, and Mr. Cook at different times came to me and said that Mr. Johnson had
spoken to him about some offer he wanted to make to the commissioners, and I said, "Well,
let him put it in writing." He spoke to me twice about it, and that was my answer. lHe
did put it in writing, and this is the paper.
Witness produces the paper, which lie reads, as follows:
" WASHIN(GTON, D. C., March 10, 1876.
"To the Commissioners of the Frccdnan's Savings and Trust Company:
"GENTLEMEN: Will you accept $4,000 from Leonidas Scott, in part payment of our
notes on which you have brought suit; and also accept from me four notes for the balance,
in equal installments in twelve, eighteen, twenty-four, and thirty mouths, to be
payable
secured by a deed of trust on lots 9, 10, 11, 12,13, and west thirty feet of lots 14 and 16, in
in square 172, furnishing us at the same time a release of all demands against Mr. Scott, and
the authority of the receiver in the Florida suit for your acceptance of this proposition, in
order that no action may be brought by him against us.
"GEORGE T. JOHNSON,
"Of SCOTT & JOHNSON."

This was the first tangible offer that we had from them in writing. The first
that
I did upon the receipt of that offer was to inquire into the title of the property. thing
I found it
was a tax-title. The next thing I did was to send it down to the tax-office and get at the amount
of taxes. I then figured up, and found that the property comprised '26,400
square feet of

ground; that the assessed value was twelve cents a foot, which amounted to $3, 168, and that
the taxes upon the property at that time, exclusive of the interest on the tax, was $1,410.46.
The tax deducted trom the assessed value of the property, leaves $1,757.61 margin. That
added to the $4,000 makes $5,757.61, which we were asked to accept for an indebtedness of
$11,381.28 exclusive of interest, and we refused it. We were not satisfied, either, that the
tax-title was good. Tax-titles are, of course, good, what there is of them, but they are liable
to dispute.
Ou page 90 of the printed testimony Mr. Johnson was asked various questions as to what
interest 1 had in prosecuting
or defending cases of the Freedman's Bank in court, and he
said that lie knew I was associated
in several suits for the bank with Mr. Totten. Hie was
asked if he knew anything on the subject himself, and he said " No; " and when asked for
the source of his information, he said that he heard through somebody else that I had
told Mr. Sperry that Colonel Totten had made a proposition to me to divide fees with him if
he were appointed
attorney for the bank, and that I asked Mr. Sperry's opinion about it, and

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FREEDMAN'S SAVINGS AND TRUST COMPANY.

that Mr. Sperry told me not to touch it. Substantially the same testimony was given before
the committee by Dr. Purvis. As to that matter, I simply wish to say, as I have said in &
letter that I have addressed to Mr. Douglass, the chairman of this committee, that Mr. Totten
has never offered me any money; that he has never paid me any money; that there is no
arrangement between Mr. Totten and myself whereby I have already received any money,
or compensation, or consideration, or whereby I ever expect to receive any consideration,
either in money or otherwise; and in support of this testimony I have to request that the com.
mittee will put Mr. Totten under oath, and question him in regard to the entire matter. I
wish to say, however, that I did talk to the commissioners about the propriety of my partici.
pating in the legal business of the bank if I ever had time for that purpose; that the ques.
tion incidentally came up between us as to the participation of the fees. Mr. Creswell had
said that in any matters of trust it was customary in his State for a trustee who rendered
services outside of the ordinary duties of his position to submit an account to the court for
such services. If I remember correctly, Mr. Purvis stated it as his opinion that he did not
see what harm there could be in it, if it would not cost the bank anything more, and the
bank would not lose anything by it. That seems to me to have been the reply. Subsequently the matter came up again, I think between Mr. Creswell and myself, (I don't know
whether Mr. Purvis was present at the time,) and Mr. Creswell stated that in matters of this
sort, in connection with a public trust, he did not think it would be advisable to do anything
of the kind. I also had some talk with Mr. Totten on the subject. I said, to the best
of my
recollection, " Colonel Totten, in any business of this kind that we may give you, if I ever
have any time to attend to any part of it, would you have any objection to my going in and
the bank?" Said he, " Of course not." Said I, "If I were to render any
representing
such services, would not I be entitled to compensation ? " And he said, " Certainly." That
was the substance of what passed between Colonel Totten and myself on the subject. Afterward I thought the matter over in my own mind, and I doubted the wisdom of it. I saw
how it would be misconstrued, and how all sorts of things could be made of it. I myself
occasion to go to Colonel Totten's office about something, (and it was the only time,
having
I believe, that any conversation on any subject occurred between us, ) I said to him, " I have
about that matter we talked about the other day; it has worried me a great deal,
thought
and I won't have anything to do with it. I don't care whether it is right or wrong, it is
liable to be misconstrued, and I will not have anything to do with it." " Well," he said,
" You know what is right." That was before any money passed to the commissioners,
Since that time the matter has never been talked of between us, and there never has been
anyAsunderstanding between us on the subject.
to my having made some remarks to Mr. Sperry to the effect that Mr. Totten had
offered me any money, I do not remember having used that language. I do not deny that
I may have talked it over to Mr. Sperry just as'I did with the commissioners; but as to
that Mr. Totten had offered me any money, I could not have said it. It is not the
sayingand
it is not like me to say anything that is not true.
truth,
By the CHAIRMAN
Q. Was Dr. Purvis present when any of the conversations you have detailed with Mr.
Totten took place, and to which lie has deposed --A. No, sir; I don't remember that he

was.

Q.

By Mr. RIDDLE:

Is it not stated in the testimony that your name appears associated witli that of Mr.
Totten as an attorney on the dockets of the courts of the District of Columbia in cases in
which the Freedman's Bank is a party ?-A, Yes; and that is done at my own request, and
with the fill concurrence, as I understand it, of the other commissioners. In the first place,
while I have not, up to this time, had any chance, still, if I ever have time, it is my full
intention to participate in the
of these cases for the benefit of the bank, and
with the distinct understandingprosecution
with Colonel Totten that if I render any services in the
cases he would not. charge anything for them; and also so that if anything should happen
to Colonel 'Totten, and he should be taken sick, or anything of that kind, f would be able
to go on with those cases. I have talked with Mr. Creswell more than once. I don't know
that I ever did with Mr. Purvis on the subject. I will confess very freely that as a young
I did not think it would hurt me to have my name associated with that of'Mr. Totten.
lawyer
I desire to refer now to the testimony of Mr. Sanders L. Howell. All I can say on that
subject is this: No such conversation certainly ever took place between us. I think I know
the man, however. Mr. Purvis and myself have talked it over in the bank, and we have
tried to get at the man so as to know who he is, and I think we have come to the conclusion that we have an idea who he is. He used to come to the bank very often. He
had a large deposit there, and came to me a number of times and asked me some questions about the business, and then would go to all the other gentlemen in the bank.
Afterward he forsook me entirely, and would go to Mr. Purvis all the time, until Mr. Purvis got out of all patience with him. Mr. Purvis has told me since that he told him substantially that a Mr. Wilson had made those statements that Mr. Howell himself testifies
to. I have simply to say that I deny the whole thing. I deny that any such conversation
ever could have taken place between us. Its absurdity is on its face. The only conversa-

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SAVINCS AND TRUST COMPANY.

159

tion I have ever had witlr him was in reference to some legislation affecting the bank, and I
was accustomed to speak freely then as I am now. I said to him, "If the bill passes
making provision for the purchase of this property, (on investigation youwill find
Congress
that the bill was pending at the time,) we will be able to pay ydu a dividend of .0 per cent.
pretty soon ; but if it does not, there is no telling when we can pay you."
By Mr. FROST:
before the first dividend ?-A. Yes, sir; months before. I said that to him
Q. Wasasthat
then just I now say every day to other parties': " If Congress will come to our relief and
this property, we shall be able to make another dividend of 20 per cent. soon; but
purchase
if they do not there is no knowing when we can do so."
In reference to Mr. Tuttle's testimony, inasmuch as that is entirely based upon what this
man Howell says, my answer to it is the same as my answer to Mr. Howell's testimony.
As to the interview between Dr. Purvis and the commissioners in reference to the appoint.
ment of Mr. Cook and Mr. Wormley, I call upon'the other commissioners either to verify
or to deny what I have said in reference to that interview.
As to the charge, implied or otherwise, that there is an arrangement existing between
Colonel Totten and myself, whereby I am to participate in any past, present, or prospective
fees, I ask the committee to summon Colonel Totten.
As to the testimony of this man Howell, I ask that Mr. Purvis, with whom that gentle.
man has had many a conversation, shall be questioned on the subject, as well as the other
employs of the bank who have been constantly present through all the interviews that
took place between me and anybody who chose to come into the bank on business.
I will add here, if you will allow me, that I am not conscious of having done anything,
since I have been connected with that bank, but my duty and my whole duty; and sometimes more, really, than was expected of me. I have always most implicitly and most
earnestly
sought to protect and further the interests of these people; and for the verification of that statement I rely upon the commissioners and everybody else who has had any
business with the bank.
By Mr. C. B. Pulvls. Do you admit writing this letter appearing in the National Republican of the 22d of April, 1876, with your name attached ?
"In my letter to you of the 2d ultimo I respectfully requested that an opportunity be given
me to be heard on the subject of certain charges alleged to have been preferred against me before
your committeelby one George T. Johnson, and that I be permitted to confront him before you.
This was denied me, as was also my further request that I might see his testimony. I have a
similar requestto make with reference to the-testimony said to have been given before your
one C. B. Purvis and Mr. LeRoy Tuttle, reflecting upon my conduct as one of
committeeby
the commissioners of the Freedman's Savings and Trust Company; and in view of the very
character of this testimony, I sincerely hope'that the favor asked will be accorded
injurious
to me. The testimony is simply outrageous and wholly devoid of truth.
"I have never attempted, either directly or indirectly. to persuade or induce any depositor of the Freedman's Savings and Trust Company to dispose of his or her pass-book;
neither have I ever paid or offered to pay any money or other consideration for any such
pass-book or other claim against the company; neither have I ever had, nor have I now, any
interest, either directly or indirectly, in any such pass-books or claims. On the contrary, I
have always endeavored to persuade any and all who have approached me on the subject to
hold on to their books, telling them that they were more valuable to them than they could
one else, and to prevent any and all traffic in said books. I myself prepossibly be to anyand
pared, prescribed, rigidly adhered to a rule, under no circumstances to recognize any asThe statements of Purvis that I announced, soon after I was apsignment of such books.
pointed, my intention of making all I could out of the affair, and in fact the entire interview
which Purvis claims to have had on the subject of the appointment of Mr. John H. Cook
as attorney, and of Mr. Wormley as auctioneer for the commissioners, and my manner and
reply, is a gross perversion of truth; and if my colleagues, including his own father, are put
upon the stand and under oath, they cannot but corroborate what I say in regard to this
matter.

" Tile allegation that Mr. Totten had
or offered to pay me, any sum of money, is
also false; and so, too, is the charge'that paid,
there is any professional connection between us,
other than that I have asked him to associate my name as counsel of record in such of the
bank cases as might be intrusted to him. The
of this association of my name
propriety
with that of Mr. Totten in cases in which the bank
was interested was fully discussed and
approved by the other commissioners. My desire to be thus associated was mainly that I
might
perfect myself more and more in the practice of my profession, a purpose which I
had in view when
I resigned my position in the Treasury Department, and which I not
only gave to the honorable the Secretary of the Treasury
as the main reason for my resignation, but also announced to those of the trustees of the company who were friendly
to me at
the time of and prior to my election as commissioner. A further object to be secured by
the association was, that in the event of anything happening to Mr. Totten I might be fully
about the several cases, and, if
posted
take charge of them.
" The reason I have not appeared in necessary,
court in any of the cases has simply been because of

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FREEDMAN'S

SAVINGS AND TRUST COMPANY.

the want of time. I have never, however, received or charged, either directly or indirectly,
cent for services rendered in these cases, and Colonel Totten understands that any services
of this kind I may render are to inure to the benefit of the company entirely.
" When it is remembered that I incurred the serious displeasure of Purvis by my stren
uous resistance of his repeatedly attempted officious intermeddling in the business of the
commissioners, and his attempted dictation as to what we should and should not do, and as
to whom we should and should not employ, the animus of this cruel and unjust attack upon
my character by this person may readily be inferred.
"My dear sir, I court the fullest investigation into all my official acts, but do lot me have
a chance to defend myself and to confront my accusers."
A. I admit writing that letter.
Q. I ask you whether you have read the testimony which I gave before this committee ?A. I have now ; yes, sir.
Q. You say in this letter: " The statements of Purvis " (I suppose you mean me) " that I
announced, soon after I was appointed, my intention of making all I could out of the
affair," &c., "is a gross perversion of the truth," I ask you whether there is anything in my
testimony that
justifies that statement in your letter l-A. Not as it is printed in the official
sent to me by this committee.
testimony
Q. And you believe that testimony to be correct as printed ?-A. Yes, sir.
Q, Then you take back this statement?-A. No, sir; I do nut. I had not read this
as it is printed at the time I wrote that letter.
testimony
Do you think you had a right to write a letter until you knew what the testimony
Q.
was 1-A. Yes. I do not take that letter back.
Q. I ask you whether you think you
right to publish a letter based on the testimony
?-A. I think I had a right to do it. Whether it
until you knew what the testimony washadJl(
was just the time to do it or not is another question. I might think differently now after
reading this other testimony.
Q. In this letter you used the expression, "to make all I could out of the affair." You
-admit, then, that there is no such expression as that in my testimony ?-A. There is no such
thing as that printed in this official report of the testimony,
Q. Did you ever know me to tell you anything that was not true ?-A. Not that I know
of or now remember.
Q. When you stated that you did not accept the position merely for itself, and that you
wanted to do some of the law business, was not my reply that equity cases are not pleaded
at night ?-A. No, sir; I do not remember that you used that language. As I remember,
the language you used I gave it just now in my testimony: "You cannot practice law at
of that kind.
night,"Didor Isomething
not turn to Mr. Creswell and say to him: " When you were nominated and not
Q.
confirmed you said to the board of trustees that you (Mr. Creswell) intended to do the legal
work of this bank."-A. I do not remember that.
Q. Did not Mr. Creswell say, " Not in the sense that you understand it; it was merely to
?"-A. I do not remember that that conversation took place at that interview.
give advice
Q. Did I ever ask you in reference to the appointment of Mr. Cook before this interview
-A. I do not remember that. I think you spoke to me about it several times.
Q. Did I ever bring before you the appointment of any one besides Mr. Ccok and Mr.
at that particular time ?-A. I think not.
Wormley
Q. Was not Mr. Cook's application made before that interview took place ?-A. It must
have been made before because you brought it there.
Q. I mean, had not a previous application been made ?--A. I do not remember.
Q. Was that an application I brought, or was it merely a letter setting forth why he should
be appointed ?-A. As I understood it, it was an application for his appointment.
Q. You do not know, do you ?-A. It was a long document. Of course he set out certain
reasons why lie should be appointed, but nevertheless it was an'application.
Q. I believe you have complained within the last year or year and a half that you could
not sleep, and have been constantly complaining of your nervous condition; is that so ?-A.
No; it has only been within the last two or three days.
Q. Iave you not said that your mind troubled you, and has it not been suggested to you
that the constant use of tobacco has been the disturbing cause ?-A. I don't know, I am
sure; I have suffered a great deal from headache.
Q. You say in your letter to the chairman of this committee, " When it is remembered
that I incurred the serious displeasure of Mr. Purvis, by strenuous resistance of his attempted
officious intermeddling with the business of the commissioners, and his dictation as to what
we should and should not do, and as to whom we should and should not employ, the animus
of this cruel and unjust attack upon my character by this person may readily be inferred."
I would like to ask what you mean when you say that I attempted to intermeddle with the
business of the officers, and that I attempted to dictate to them what they should and what
should not do ?-A. I say this: that the manner in which you spoke to me was very
.they
offensive. When I spoke of my hope of transacting some of this legal business, you said,
"What business is that cf yours ? Your business is here in this bank ; what time have you
'to attend to law business ? You cannot attend to law business at night." I considered
one

FREEDMAN'S SAVINGS AND TRUST COMPANY.

161

that a most unwarrantable interference with my privileges and prerogatives, as commissioner,
and I said to you at the time, " I am not the clerk of this coiniihssion; my hours are not
limited here."
necessarily
mean to say that I said more than that I would not have voted fer you if I had
Q. Do youmeant
to make the position a stepping-stone for yourself?-A. I think you
thought you
said just what I have given in my testimony.
Q. Do you mean the first time you gave your testimony, and while giving it, or the statement you make now ?-A. I think the statements are the same.
Q. You did not mean then by my "intermeddling with the business of the commissioners"
that I was meddling with tile business of the batk when I came to ask you to proceed against
Mr. Stickney, or tiny one else who had been charged with using the funds illegally ?-A. No,
sir.
Q. Then what do you nmean ?-A. You kept coming there and calling the board of directors together, kept having meetings and attempting to get resolutions passed ordering
different, things, until I, myselt; went to the Secretary of the Treasury, and asked him what
the privileges of the commissioners were, and whether the board of trustees had tle right to
meet at the bank, &c. .I remember the Secretary's holding that they had not, and t at if
you gentlemen came in there, and did anything which might interfere in any way with tile
securities, or the affairs of the bank, we would be liable on our bond for any such interferelnce.
Q. How many meetings did we hold as trustees ?-A. I don't know, but there were several meetings.
Q. You did not know mly motive in calling the board of trustees together, did you ?-A.
No, sir.
Q. You had nothing to do witll it one way or the other, did you ?-A. Not that I know
of.
to question my right to call the board of trustees together ?-A. I
Q. You do not pretend
the board together at that bank.
to
call
your
right
question
to call the board of trustees together ?-A. No, sir;
Q. But you do not question my right
you certainly catn call them together if you wish it.
C . Putvis recalled.
By Mr. LEIiPOLD:
say, when you brought the matter ofMr.
Q. Do you remember whether I didforor did not
Cook's appointment before us, that I, one, was not willing to pledge myself to any oue
man, buit that I desired to be left free to act as the interests of the bank demanded in each
case ?-A. Yes, sir; I remember distinctly all about it. I remember that you made
particular
that remark in addition to what I have already sworn.
ANtSON M. Sp1ERrt recalled.
By Mr. C. B. Punvis:
do in refer.
Q. Did you tell me that Mr. Leipold htll consulted you as toto what lie should
ence to a proposition to divide $700) that Mr. ''otten had made lill'l-A. I said that probably in your presence, perhaps to you at your house.
Q. Did Mr. Leipold consult you for your opinion as to dividing any money that Mr. Totten offered to divide with him, or did you not tell him not to take it ?-A. I could not repeat
the exact words.
A. No, sir: I cannot answer'"yes or
Q. You can say "yes "or "no," can't you?~ offered
to share tlme fees with him, or that
"sno,",ibt lie either said that Colonel Totten had
lie could slare the fees with him. I advised himt not to do so.
By Mr. FRosT:
You mean fees as a lawyer and commissioner?-A. My understanding was, the fees
Q.
which Mr. Totten charged to the bank for his services.
Q. That Mr. Leipold was to divide them with Mr. Totten ?-A. That he either offered
him to share, or that he could share in these, or that he supposed he could, or words to that
effect, I cannot recall the exact words.
By Mr. C. B. PunyIs:
Q. Did you not say to me that you thought the amount was $700 ?-A. Yes, that is the
amount of the first payment made to Colonel Totten.
tell you, or did le not, that the suits that Colonel Totten had
Q. Did Mr.i
would involve Leipold
fees amounting to $40,000 or $50,000 ?-A. He did not tell me any more
than he told other persons. It was in conversation with Mr, Wheeler, and came up incidentally. It is due to Mr. Leipold to say that that came up when ho was regretting the
11 P 3

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FREEDMAN'S

SAVINGS AND TRUST COMPANY.

very large expense into which the bank was plunged by reason of the many complications
around it.
Q. Did you ever hear of Mr. Leipold making out any deeds of trust ?-A. No, sir.
Q. Or charging for them 1--A. No, sir.
Q. And that he refunded the money after taking the pay ?-A. I never heard of that as
to deeds of trust.
Q. Or as to deeds of release ?-A. It was in the case of the deed of release, I think, of
our Jacksonville property. Mr. Leipold will be quite willing that I shall tell all about it.
Mr. Leipold prepared that lease, for which he paid himself first by a check of $10, which he
drew. Upon his own motion or upon advice that that was an unusual charge for making
out such a paper, he reduced the amount to $6, and drew a check to his own order, which
was paid. Subsequently, Mr. Leipold, acting upon his conscience in the matter, and for expediency, I suppose, refunded the money.

By Mr. LEIPOLD:

Q. Do you remember distinctly that conversation which took place between us-can yot
where it was, and under what circumstances, in which you state that I said to you
place
that Colonel Totten had offered to share money with me ?-A. I cannot fix the date, but I
was standing at my desk, which was near yours, and you were standing near.
-Q. Have you any distinct recollection of what I said ?-A. Of course I could not recollect

the phraseology, but it was to that effect, that you had been offered a share in the fees, or
have a share in the fees.
supposed
you could
not a conversation that took place between me and the commissioners, as to
Q. Was it of
the propriety doing such a thing ?-A. No, sir; it was more definite than that. I remember my remark to you upon the subject of taking perquisites.
other remark which you say I made, (which did not appear in the evidence
Q. As to the
what were the circumstances under which I made that remark-that the law
heretofore,)
business as far as it had gone would now probably stand the bank in fees $40,000 or $50,000?
-A. It came up in the matter of prosecuting criminally Hamilton, of Lexington, the
defaulter, and in reference to pushing that suit, and whether it should be pushed or not.
This conversation was had in the presence of Mr. Wheeler, sitting down familiarly at his
desk; we were all sitting down talking the matter over primarily in reference to the prosecution. You were regretting the expense to which the bank was being put, and mentioned
in that connection, and by way of regret, that the lawsuits alone would now involve $40,000
or 850,000 fees.
Q. Are you quite sure that I mentioned Mr. Tottenfi name in that connection ?-A. I am
as sure as I can be of a conversation held at a remote period.
Q. Did I not say that the law business as far as it had gone would probably cost the concern $40,000 or $50,000 ?-A. No; I do not think that was it, sir.
By Mr. FROST:
connection was there between Mr. Totten and Mr. Leipold at that time ?-A. I
Q. What
am sure I do not know, sir.
Q. Was there any business connection between them; were they partners in business 1A. I don't know. Do you mean Mr. Leipold individually, or as commissioner ?
Q. Individually. Was there any partnership between them ?-A. Not to my knowledge,
sir. I have been told since that Mr. Ltipold was on the record as attorney in cases in which
the bank was involved.
By the CHAIRMIAN:
Q. Is there any relationship between Mr. Totten and Mr. Leipold by consanguinity or
otherwise ?-A. I have no reason to suppose that there is; on the contrary, I supposed quite
the reverse.

JOHN A. J. CIESWELL sworn and examined.
By Mr. LEIPOLD:
Question. Have you read the testimony, on page 77 of the printed record, represented to
have been given by Dr. Purvis, relating to the conversation which took place between the
doctor and the commissioners with reference to the appointments of Mr. J. H. Cook as attorney and Mr. Wormley as auctioneer for the commissioners t-Answer. Yes, I remember
there was such a conversation.
Q. Do you remember whether the language made use of, or which Dr. Purvis represents
me to have made use of, is the language that was used ?-A. I do not think that that states
it exactly.
Q. Will you please state to the committee, to the best of your recollection, what the conversation actually was ?-A. I can state very distinctly my own part in the conversation.
I said that, so far as our duties were concerned, it was incumbent upon us to secure the

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SAVINGS AND TRUST COMPANY.

163

most efficient management of the bank, and to close up its affairs so as to secure the largest
results to the depositors. I said that to that end we must secure efficient agents, and it
mattered not to us what color they were; if we could get them of one color, all right;
if not, we must get them of another, but at all events we must have efficient men. In the
next place, I said if we could get colored men who could do the work that we desired to
have done, other things being equal, we should prefer them; and I should be willing to
take Mr. Cook and Mr. Wormley both, if they could do the work for the bank and for the
commissioners as well as any others whom we could get in the city, but only upon those
conditions. There was something said by you in reference to the conduct of the law business in the courts. You said something about desiring to make a reputation as a lawyer at
the time you accepted the appointment, but I have no recollection that you used such
as that you desired to make all the fees in these cases yourself, or that there was
language said
on your part that indicated that you desired to exclude Mr. Cook as interanything
fering with your wish in that regard.
Q. Did I say that I wanted to do all the legal work myselfl?-A. I do not think there
was any such remark made by you.
Q. Was there any such remark employed as that "I wanted to do all the legal work
myself," as against Mr. Cook ?-A. I think not; not to my recollection.
Q. On the application being presented, did I say, "We will not do it ;" would that be
like me, to make that statement as for all the commissioners ?--A. I don't think you said
that, but I will frankly observe that you are a man of excitable temperament, and you
make such a remark for yourself. You did not make any such remark as for the
might
whole commission. I don't say but what you might have said that you were not disposed
to give all tile business of the bank to Mr. Cook.
Q. Have you any objection to stating what I said in connection with that matter of the
of Mr. Cook ---A. Not the slightest objection, It was merely that you desired
appointment
to be free to do what you thought was best for the benefit of the bank. I have no recollection whatever of your saying anything to the effect that you desired to exclude Mr. Cook
from the business of the bank, because of a desire to usurp it yourself. I think your objection to IMr. Cook was based on a different ground. I think you stated it correctly in your
own testimony that you desired to reserve to the commissioners the right to select such
attorney as they might see tit in each case.
By C. B. PURVIS:
Did
not Mr. Leipold get angry and say, the moment the application or letter of Mr.
Q.
Cook was read, that it was an insulting letter ?-A. I think there was some exception taken
by Mr. Leipold to the form of the application.
Q. Did he not get angry then ?--A. I do not know that he got angry, but he spoke with
some degree of feeling as to the.form of the application.
Q. You admit that he said something about his doing the legal work himself -A. Yes;
there was something said about that in the conversation later.
Q. And did I not say as a result of what he said that if I had known that he came there
to make the position a stepping-stone, I would not have voted for him ?-A. I do not know
that you said that, but you certainly said something by way of objection to his acting as
commissioner and as attorney at the same time.
Q. Do you not remember Mr. Leipold saying he saw no reason why he should not make
out all the deeds of trust and deeds of release at home at night himself?-A. There was
said about that.
something
of what Mr. Leipold said about his doing legal-work did I not turn to
Q. On the strength
you and say, " Mr. Creswell promised to do the legal work himself ?"-A. Yes; and I said
to you that you had misapprehended me altogether. I did not intend to take charge of the
conduct of all the cases of the bank in the courts. I said I would undertake to advise the
commissioners as to the course they should pursue.
Q. Did you not say to me, after that, when I applied to you, that the preference should be
given to Mr.I Cook, he being a colored man?-A. Yes, I did say so-other things being
said the same thing with regard to Mr. Wormley.
equal--and
Q. Your impression, then, is that the reason I said to Mr. Leipold that I would not vote for
him was because of what he said in reference to doing the legal work ?-A. Yes, sir; and
there is one remark I wish to make, that is that Mr. Leipold's position, during our whole
management
up there as commissioners, has been that we should'never recognize any assignment of these claims to any person. He has stated that strenuously and sometimes bitterly,
and his position on that question has been so determined that I think it due to him to state
it.
Q. Have I ever applied to you for a position for any one in that bank ?-A. No; except
this application of Mr.
Cook.
Q. Have you ever known me to attempt to meddle with the business of this bank ?-A.
No; not unless that could be construed as meddling. There is a matter personal to myself
as -to which I wish to make a remark. On pages 96 and 97 of the testimony given by
Jonathan Bigelow, he alludes to a lease made by me, when Postmaster-General, about the
month of June, 1673, to one Andrew C. Bradley, for a building on E street at a rental of

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FREEDMAN'S SAVINGS AND TRUST COMPANY.

$4,200 a year. If Mr. Bigelow had come up and examined the reports of the House of
Representatives he would have found the whole history of that matter detailed by me in
the report which I sent to the Committee on Appropriations, and which was printed by order
of the House. The facts are these: In the month of May or June, 1873, after the making
of the appropriations for 1874, it became apparent to me that there was not room sufficient
in the Post-Office building to properly work or employ all the clerks designated in the ap.
bill, and I named three gentlemen of the Post-Office Department to examine
propriation
and determine whether there was space enough. They reported to me that there was not;
that the public service required that there should be additional room; and after a thorough
examination of the Post-Office building they said that room could not be found within the
walls of that building, and it would be necessary to find additional accommodation outside.
'With that view, I addressed a note to tile Secretary of tile Treasury, asking him to assign
me some one in the architect's bureau of the Treasury to examine the buildings which
be from that time forward (and some of which had been already) submitted to me
might
for that purpose. The detail was made to me of some gentleman whose name I have forgotten, and all the applications of buildings submitted-eight or ten in all-were given to
him, and lie made a thorough examination of them and reported to me two or three buildto which he gave the preference. The one, however, to which he attributed the best
ings
accommodation was the building on E street. I knew nothing about Mr. Shepherd being
interested in it. I did not know Mr. Bradley, and I think this was the first time I met B.
H. Warner. Mr. Warner was acting as the agent of Mr. Bradley, and I did not know
Bradley or Shepherd in the matter at all. The reason why Mr. Warner came to me was
that he was the representative of that particular property. The agent of the Treasury, from
the architect's office, reported to me that this building was decidedly the best adapted for the
business of the Department; that the rent was $4,800, and that it was a reasonable rent.
I went down myself and examined the building, taking his report in my hand; and on
coming back to the Post-Officc Department I found Mr. Warner there, and I said, " Your
rent is too high, I will give you $4,200. If you take that, well and good; if not, we will
not take it." He retired, and in a while returned and said he would take that rent although
it was too small. I said further, " I rent tils building conditionally. I take it subject to
the approval of Congress, and that fact will be inserted in your lease, but you cannot get a
dollar for your building until Congress ratifies the lease." HIe inserted that statement in
the lease; and when Congress assembled I sent a full report of the whole transaction to
a list of all the applications submitted to me, the prices at which the owners
Congress, towith
rent the building, and nmy decision. Tlho whole matter was in that way laid
proposed
before the Committee on Appropriations, and they ratified it. The rent has since been reduced from $4,200 to $2,200 by the action of the House of Representatives, I think about
a year ago. So far as Bradley and Shepherd were concerned I knew nothing whatever
about them, and the only object I had in making thalt lease was to promote the interests of
the Post-Office Department.
By Mr. FROST:
in rent between the $1, 00 and the $,.200.?Q. low do you account for tlhe
A. I think Mr. Jeremiahl M. NWilson, of Indiana, said tile rent was excessive, and had it reduced from $4,'200 to $2,200; but it was the best building that I could get. and at the most
reasonable rent at tile time. Tl'll'o was a consitlerable tfll afterward il tlle rent of buildings in Wa-hington.
By the CHAIRMAN:
Did
Q.
you not observe, lwhenl reading that testimony, that tlih information sought to be
elicited by tile examination of Mr. lsigelow had notaniy 'erefeece to thle motive of tile PostOffice Department in making thle lease, but to find ouit if he could explain how it was that
a party could obtain from the Government a lease of that property tell days in advance of
his having any title to it, colorable or genuine?-A. I did not examine the titlo'when Mr.
Warner came to me. The lease was drawn up by thle Solicitor of tle Treasury, and all questions of law anld title were of course to be submitted to himn, and to be subjected to an examination by the committee before any payment should be made.
By Mr. LEIPOLD:
what you know about my general conduct in the management of
Q. Tell the committee
the business of the Freedman's Savings and Trust Company, as far as it foreshadows
whether or not I tried to promote, as far as possible, the interests of the depositors of that
concern.-A. I will state that very cheerfully. I have been very much impressed, Mr. Leiwith your efficiency, and with tlh constant zeal and energy which you have displayed
pold,
in your efforts to promote the interests of tile depositors and creditors of that bank. I think
your management has been efficient to an extent equal to that of any trustee I have ever
known.
Q. Has anything over come to your knowledge that has for one moment impaired your
confidence in my integrity and honesty, as connected with any transaction of that bankl?A. Nothing whatever. I have as much confidence in you now as I had when I began.
Just as soon as my confidence should be impaired I should make it known.

diltfi'ence

FREEDMAN'S SAVINGS AND TRUST COMPANY.

165'

ROBERT PURvIS sworn and examined.
The WI1'NESS. Having heard the statement or explanation given by Mr. Leipold in regard to the matter of our claims against Johnson and Scott, as well as the charges that have
been brought against hint by a man by the name of Howell, I am hero to confirm fully ill
all that he has said in defense of himself. I think that whatever was said
every respect
or done in regard to the Scott and Johnson affair had my hearty approval, and was consistent with that singleness of purpose which has characterized his conduct in the prosecution of all the claims of the bank against the parties. I think he acted wisely and justly in
that matter, and I was filly in accord with him. In regard to this man Howell, and the
selling of books, I think he may be perhaps honest about it, only that he has confounded
the name of Mr. Leipold with some other person, for lhe came continually to the bank, and
me, latterly, to make complaint against Mr. Wilson, the former cashier of the bank.
sought
I never heard him say anything against Mr. Leipold in that connection, and I may say that
'when anything was said in regard to this matter, Mri. Lelpold always, with myself, felt and
said that the depositors had better hold on to their books, and that it was worth moro to
them than anybody else. As to the matter of conversation at the meeting that we had, I
have a perfect and, I am sorry to say, a very painful recollection of what transpired.
By the CIIAIRMAN:
Q Which interview was that?-A. I am speaking now in regard to the conversation
touching the application of Mr. Cook and Mr. Wormley. These gentlemen both desired
to be employed. One of them had been solicitor to the bank 'when in existence, and from
my knowledge of Mr. Cook I thought him suitable in every respect, being a man of education and a gentleman. I had a little talk with Mr. Creswell in regard to the appointment of colored men. The colored people looked to me as somewhat representing them
there, asking no favors, to be sure, but, as Mr. Creswell said, all tIings being equal, they
ought to be heard and represented there. Mr. Cook addressed me first in the
thought Ithey
matter, think. He talked to me about the place, and I hesitated somewhat and told him
I thought he had better address a letter to the commissioners. From some little thing tha
happened before this time, -I thought it was, to some extent, true that Mr. Leipold had some
unreasonable prejudice against him, and against the appointment (as it seemed to me aftersome preconceived plans of his with regard to
ward) of any onethethat wouldI interfere withwhen
the counsel for
bank. was present
my son presented the application, and I at
once saw an opposing feeling. Mr. Leipold is a hasty man and, I think, unwittingly does
many things in a hurry. I recollect his speaking up at once and saying, " I am opposed to
it. I am not here to make sacrifices for the colored people. I am hero to make a reputation
and to take these cases into court with such counsel as we may appoint, and to divide the
fees." That was distinctly stated, and I have talked with Mr. Leipold since, and I do not
think he has attempted to deny it. Then my son, equally hasty with him, said, "If you
had avowed that, you never would have been appointed; I should have opposed you."
Mr. Leipold did say in regard to Mr. Cook that he would not commit himself to putting the
interests of this bank into the hands of any one man, and I think Mr. Creswell, too, said,
in substance, the same thing. Beyond that I do not know that I recollect. A great deal
of it was in the manner; it was very decidedly opposing. It certainly impressed me dewas very much opposed to the appointment of Mr. Cook, because he had
cidedly that he
out, as he avowed above-board, that lie wanted to go into the courts and have a
planned
part interest in this matter, and lie did not at that time see, I suppose, as he afterward saw,
that there was any impropriety in it, but he certainly did expressly avow the views 1 have
mentioned.
By Mr. LEIPOLD:
You
are quite certain that the question of fees came tip at tlat particular interview ?Q
A. That was your language exactly.
Q. And at that particular interview ?-A. Yes, at that particular interview. I
Q. At that interview, was it not something of this kind that was said : that was opposed
to pledging myself to any one man; that I wished to be free to ac.t in each case as it came
up, and that by and by, if I should get time, I wanted to attend to some of this law business myself?-A. Well, we have frequently talked about that, and I have frequently heard
you say that you wanted, as a young lawyer, to have practice and experience; but I do not
think it was said then. I think you were excited at the time.
Q. Is there not a very great distinction between that and whlit I am represented in this
as saying-that I wanted to do all this law business myself?-A. I did not hear
testimonythat.
You declared very distinctly what I have said, that your purpose was not to
you say
make sacrifices for the colored people,
(which was a very gratuitous remark,) but ltlt you
came there to make a reputation, and to get into court and to share the fees.
Mr. FROST to Mr.
Do you admit that remark, Mr. Leipold 1
Mr. LEIPOLD. I doLeipold.
not admit that the matter of fees was discussed at that time. I said,
as I have already stated, that we had talked of fees.

The WVITNESS. Or share tile fees with such counsel as may be associated wiht the matter?
Mr. LEIlOLU. I do not admit anything of the kind.
The WrITNESS. Then Mr. Creswell said
about the impropriety of committing
the commissioners to any one person, but.thesomething
feeling was very decided about Mr. Clok.

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SAVINGS AND TRUST COMPANY.

By Mr. LEIPOLD:
Are
Q.
you not aware that the law business is distributed among different attorneys ?-A.
You have told me that you have given Mr. Cook a portion of the suits. I made it my busi.
ness to inquire of Mr. Cook in the matter, and I feel sorry to know, as he has informed me,
that what you gave him were such insignificant cases, with such little pay, that a single case
or two that Mr. Totten holds would probably cover all that you have given him, and that
you seemed to be doling out to him in a way that must be regarded as very exceptionable.
I have never said anything to you in regard to it, but 1 have got that from Mr. Cook himself. I understand that you have given him simple matters of over-draft, some of them inI don't know the amount involved.
volvingHasonly a few dollars;
come to your knowledge in the conduct of the business of the bank by
Q.
anything
that would impair your confidence in my integrity ?-A. Only so far as I may have
myself
been impressed by the statements that Mr. Sperry made to me touching the matter of dividing a $700 fee with Mr. Totten.
Q. From what you know of the conduct of the business in that bank, are you prepared to
say that I have left anything undone which was necessary to be done for the protection of
the depositors of that concern ?-A. I am free to say here, as I have said everywhere, that I
have known of no man that with such good faith and persistency has attended to the interests of these depositors. It cannot be better done.
By Mr. C. B. PURvIS:
Q. The only difference between my statements and Mr. Leipold's, I understand, is the use
of the word " all" in connection with the legal business ?-A. Yes, sir; that is very material.
Q. Did you understand me as saying
distinctly to Mr. Leipold that I would not have
voted for him
if I had known what he then stated, and was not that remark of mine the outof what I said in regard to having these lawsuits himself ?-A. Certainly.
growth
Q. Did I not urge the appointment of Mr. Cook on account of his color, all things else beI think you made some such remark; I don't recall it exactly.
ing equal?-A.
Q. Did you not urge his appointment?-A. Yes, sir; I thought he was competent.
Q. Did not Mr. Leipold say he saw no reason why he could not take some deeds of trust
home and make them out and take the pay for them ?-A. Yes, sir; and I confess I did not
see any reason against it myself at the time.
Q. Did not Mr. Leipold, when he first came to the bank, say he was a man for work ?A. Yes, sir.
Q. Did not Mr. Creswell say, " I will attend to the legal part ?"-A. Well, I understood
him so, with the explanation that he subsequently gave.
Q. I mean at that interview with the trustees ?-A. Yes, sir; when Mr. Leipold had declared that he was a working man, and a man that would look after these accounts, and Mr.
Creswell referred to the fact that he would give the benefit of his experience and knowledge
on any question involving law points, then it occurred to me that although I had received
the compliment of a unanimous vote, yet that I was a supernumerary, and I at once said I
will not accept this position; but I was told by Mr. Ela and other gentlemen, "We want
people and it would impart confidence to this
you there; you are known to itthe colored and
and urged and pressed upon me,
finallyI yielded. Although I have said that
thing;"
I was a supernumerary, and one of the members of this committee has presented Mr. Creswell
and myself in a light very annoying to me, yet I will say that 1 have rendered services and
so has Mr. Creswell.
Q. Have I ever. directly or indirectly interfered with the commissioners ?-A. Never.
Q. Have I ever attempted to dictate any of the appointments ?-A. Never.
Q. Was Mr. Cook your recommendation, or was lie mine, to your colleagues ?-A. IHe was
my recommendation.
). Did not Mr. Creswell say when lie accepted the nomination that he wanted our cooperation ?-A. Yes, sir; and moral support.
moral
Q. Didinyou understand that my calling theI trustees together was giving himbethat
support motive.
prosecuting defaulters?-A. So understood it, and there could no other
possible
Q. When I went as one of the committee to have Mr. George Stickney removed from the
trusteeship Iof the deed of trust, did not Mr. Leipold treat us badly ?-A. Ile treated you
thought.
cavalierly,
Q. Do you not know that Mr. Leipold has from the beginning had some prejudice against
Mr. Cook ?-A. I have already stated that.
Q. Have you not heard, time and time again, that Mr. Leipold had no sympathy with
colored people?-A. I heard him make the remark that he had not come there to make
sacrifices for the colored race.
At the request of Dr. Purvis, the chairman states that he never saw Dr. Purvis in his life
until he met him in theco'lmittee-room as a witness; that he was suhpoenaed on the sugon the ground that he could communicate something that was of im.gestion ofinsomebody
portance the progress of the investigation.

Adjourned.

FREEDMANS' SAVINGS AND TRUST COMPANY.

167

SELECT COMMITTEE ON FREEDMAN'S BANK,
Washington, D. C., May 1, 1876.
The committee met at 10 o'clock; present, Messrs. Douglas and Riddle.
ENocH TOTTEN sworn and examined.
By the CHAIRMAN:
State your residence and occupation.-Answer. I reside in the city of WashQuestion.
ington. I am a practicing lawyer here, and have been practicing here about eleven years.
Q. In the course of your professional engagement have you been employed frequently and
in important matters by the commissioners of the Freedman's Savings and Trust Company?A. I have been engaged in a good many important matters, and in some that are not very
I have'done a good deal of their legal business.
important.
of the professional value of the services rendered
give an approximate estimate
Q. Can you
to be rendered on the matters now in hand -A. I do
you up to that time,toand ofatthose
by
not know exactly how get that estimate. I have charge of probably thirty or forty
cases. If my services were to be terminated now, the value of such services would be somewhere in the neighborhood of $6,000 or $8,000. I have never calculated the matter at all.
The CHAIRMAN. I thought you very probably had some entries on your books.
The WITNESS. I have some entries of various things. When I get a case I usually charge
a small fee, which I call a retaining-fee. The cases are going on constantly, and I do not
for each thing I do in them. When I terminate a case then I make my charge for
charge
the whole business in that case. So far as future work is concerned, I do not think I could
about it. The services wfiich I may hereafter render in time will be
give you any estimate
on the extent and earnestness of the fight made in them. Where there is
dependent
entirely
no controversy the fees do not amount to anything of consequence. My cases are nearly all
-cases that are litigated with a good deal of vigor. I have but very few cases on promissory
notes where judgment is taken by default, and I have several which are very bitterly contested.
Q. Have you ever intimated to any one, ,(to Mr. Leipold, for instance,) that the litigated,matter confided to you as attorney for the bank would reach probably to $40,000 or .50,000 ?
-A. I never have, neither to Mr. Leipold nor to any other person. I never have said anything from which any such inference could be drawn. I never had an idea that my fees
could reach that sum.
Q. Did I understand you to say thatifrom $6,000 to $ff,000 would cover your fees for services rendered up to that time ?-A. I think that they would probably not go over $8,000,
and most likely would fall short of that sum. I have been doing business for the commis:sioners since sometime in the month of August, 1874.
Q. What heavy, hotly-contested cases, where there is a possibility of realizing anything
for the bank are now under your professional charge ?-A. I can give you some of them.
In the first place I have a case against Stephen Talty; that is in the .Supreme Court of
the United States. We have had two bitter trials of that case, one before a jury, and
one in the court of appeals, and it is now gone to the Supreme Court. The amount in,volved is about $64,000 or $65,000. That case arose before the commissioners came into
office. It was given to me by Mr. Eaton. It is a corporation-stock case. Talty is the
who took out a writ of replevin. I represent the bank against him.
plaintiffWhat
?-A. He claimed that the property was
Q.and waswas the ground of his claim toto areplevin
man named Kendig, and that Kendig sold it
as collateral security
his,
given
without authority. I regard that case as a good one, and believe that the bank will get the
Then there is the case of the Freedmati's Bank against Dodge & Darneille, which
money,
'is a proceeding to set aside a deed of release alleged to have been improperly given, and to
.sell the release, which consists of.property in'Georgetown. I got beaten before the chancellor
in that case, but on an appeal the judgment was reversed, and I got a decree, and from
that decree an appeal has been taken to the Supreme Court of the United States. The case
will not be reached till some time next term. The next case, which is also an old case,
arises out of a deed of trust on the furniture in the St. James Hotel. That has s'me conmuection with the Spicer note. I have also had a decree in that case. That case arises
through a controversy as to the distribution of the assets arising from the sale of the St.
..James Hotel furniture under the chattel-mortgage, The conflict is between the landlord's
lien and the chattel-mortgage held by the Freedman's Bank. I got a decree in that case, also,
and it is gone up for review to the Supreme Court. I am not as confident about that case as
I am in the Talty case and the other one, but I think it is also a good one. There is another
which we have with the Young Men's Christian Association which is very
.controversy
and we have also another controversy quite lively with S. T. Suit. That case was
lively,
tried in the Prince George's circuit court and has gone to the court of appeals in Maryland,
and will probably come up to the Supreme Court. In that case they assail the statute
under which the commissioners are acting as being unconstitutional and void. I have also
a case against General Robert Williams to foreclose a mortgage near I street, and that case
'has been
very bitterly contested. Then there are two of the Vandenburgh cases which are
'fought step by step in order to-get as.nmuch time as possible. I have two cases against a

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FREEDMAN S SAVINGS AND TRUST COMPANY.

man named Lanahan, with whom we are having a controversy; but whether we will get anything out of them depends a good deal on the opinion of the court.
The CIAIRMAN. And on the ability of the defendaut-the value of the security ?
The WITNESS. The security is pretty good. The notes have got into the hands of Mr.
Lananh, and I am assailing his title. Tile case arises out of some transaction with Mr.
Boyle. There are a good many other cases, but I have given you the bitterest ones. They
all light furiously. 'T hey seem to think that the Freedman's Bank is busted, and that they
of it as anybody else.
may as well get ofclear
Q. Speaking the Dodge suit you said that there was an improper lease made which it
is the effort of the bank, through you, to set aside; who made that release ?-A. Mr. Huntwant to swear that it was an improper release.
ington.YouI do not
that this release was made by W. S. Huntington ?-A. If I did say so I ought
Q.
say
not to have said so. As I understand it, it was made at the request of Mr. Huntington as
the holder of the note, and the request was made to the trustees, F. WV. Jones and Mr. Darneille. I think they were innocent in the matter. Mr. Jones, one of the trustees, held the
for the benefit of the bank, as the assignee of the note, and lie states that this note
mortgage
was in the hands of W. S. Hulntington,
Q. By what authority did W. S. Huntington make the release ; did lie have possession of
the notes ?-A, I do not know. I argued in the case that if he did have possession of them
he had no business to have possession of them, and the court, I think, adopted my theory
of the case, that these notes belong to the assets of the Freedmanl's Bank, and that if' Hunting.
ton did direct the release to be made by the trustees, le had no authority to do it, and
no business to execute the release on his say-so; but as a matter of fact, the records
they had
show that he did order that release to be irade.
Q. You are aware of the fact that W. S. Huntington was one of the finance committee of
the Freedman's Bank' -A. I have no doubt that lie was at one time a member of the finance
committee.
Q. Were you aware of tile fact that tlie most intimate and confiding relation existed between W. S. Huntington and the actuary of the Freedman's Bank ?-A. I cannot swear to
not very intimately acquainted with either of the gentlemen.
that, but I think so. ofI was
Q. Are you aware the fact that W. S. Huntington and R. T. Dodge were both stock.
holders in the Seneca Sandstone Company ?-A. I do not know it, but I think so. I do not
know whether Huntington had stock in that company or not. It was understood as a matter
of general information that he had to do with that concern, and that some Mr. Dodge had
also to do with it, but whether it was R. P. Dodge, I do not know.
By Mr. LEIPOLD:
whether any conversation took place between you and me about
Q. I wish you to detail
my associating myself with you in the bank cases, and about my participating in the fees, and
what the facts are as to my participating in any fees, either prospectively, retrospectively,
or in any way. Tell all that ever occurred between us on the subject.-A. Soon after Mr.
Leipold and these other gentlemen were appointed commissioners, Mr. Leipold told me that
he was anxious to get into the practice of law, and that he expected to attend himself professionally to the business of that bank, or rather that he should have the charge of it, and
that he wanted me to assist him in the business. He said that he had but little experience
in the practice of the law, and that the matters must be important, and he desired my assistance. What we said about -fees I do not recollect distinctly, but I remember that he said
that the fees to be charged for the work were to be the ordinary compensation that attorneys
for such services. I do not think he said anything about a division of fees or that
charge
he was to have any of them. But my notion about it at the time was that if he did work,
lie would be entitled to be paid for it; and that for what I did I should be entitled to be paid a
reasonable compensation. After a while Mr. Stickney got me to do some business. Soon
afterward, (I do not recollect how long, nor can I give the dates about it,) Mr..Leipold came
to me and told me that he found from the situation of affairs of the bank that he could not
practice law ; that he had not time to do it, and that the conversation which he ihad with me
go for naught. He said that he would have nothing to do with the professional busimight
ness of the concern, and that he wanted me to understand that there was nothing more of
that idea which was in his mind at the outset. I think that he said something about the embarrassment which hle was laboring under in getting the work of the bank straight. At all
events lie said that he would inot help me in any way ; that he could not do it, but that if
the time did come when he could help me in the business, he would let me know. That was
the end of the conversation. I do not think he has had any conversation about it since,
until very recently-until it was published in the newspapers that lie had divided fees with
me. I never did divide any fees with him, nor did I expect to do so. I have received from
the bank, from time to time, fees on account of my services, but I never offered Mr. Leipold, or
any part of them, nor did I expect to divide fees with him or anybody else,
anybody else,
else swore here that there was a professional connection between us. That is not
Somebody
true. He has not anything more to do with my business than you have, and the only conversation from which anything of the kind could be drawn was the original conversation
which he had when he thought he could attend to the professional business of the concern.

169

FREEDMAN S SAVINGS AND TRUST COMPANY.

That is all that there was about it. I have been attending regularly to the business for the
bank, and I go in there nearly every day on my way down town.I Mr. Leipold generally has
a lot of memoranda on which he wishes to ask my advice, and give him advice every day
of my life. I do not charge him for this, however. I have done a good deal of work for
the bank which I have not calculated to charge for, and do not intend to. It is a customary
that I have, and I think that almost all the members of the bar hero have it, when we
way
are doing work for a man to give him horseback opinions when he wants them. If, however, it is a matter of. importance, I decline to let my clients act on an opinion of mine
come lip about which my opinion is, in my own ,judggiven off-hand; but frequently matters
as dividing fees with Mr. Leipold is concerned, that is
ment, perfectly reliable. But so far
not true. I never supposed that Mr. Leipold's idea was that I should divide fees with him.
that the
My idea was, that if he did work for the bank, le could charge the bank for it,
other commissioners could regulate his fees as they do mine.
Q. Is not my name, as a matter of fact, associated with yours as an attorney in the bank
cases that are intrusted to you ?-A. Yes.
is your understanding about that ?--A. Ar. Leipold's name is signed tb all the
Q. Whatand
proceedings, except, perhaps, in a few cases, where I have forgotten it, and
pleadings
Mr. Leipold's idea, and my own, too, in having that done was that when he gets the business of the bank cleared up so that he might not stay there all the time, he might como tend
me to do the legal work, andlrelieve me fionm the drudgery of the business. lHe wants to
helpinto
the practice of tile law, and I have kept the proceedings in that way so that if I
get
should die or should go awaiy, Mr. Leipold could take charge of these cases and close them

annd

By the ClAIRMAN:

Q. I understand you to say that the beginning of your employment as counsel for the
bank was by Mr. Leipold associating you with himself ?-A. To do the business. That was
my understanding ; that he, being a young man, wanted assistance from somebody older

than himself in the practice of the law.
Q. That did not constitute any copartnership between you and him which entitled him to
any share in your fees ?-A. No, sir.
Q. If you are the assistant counsel, whether senior or junior, and if AMr. Loipold is 'counsel of record in those cases, what is to prevent him, according to the practice of the profession, from charging his fees to the bank 7 Has he not a right to charge his fees ?-A. He
would have a right to charge his fees if he did anything.
Q. Then, whenever he has leisure he has a right to come in and do what he likes in those
cases and charge fees for his services. In other words, the associating of your name with
his is not so much to afford him an opportunity to come in from time to time as to keep the
cases open for him to come in when he chooses I-A. It is to give him an opportunity to
come in if he chooses.
CONTINUATION OF THE STATEMENT OF MR. LEIPOLD.

The WITNESS. I wish to make two corrections in my testimony given on Saturday last.
The first is with reference to the failure to have the note of Mr. Juan Boyle protested. If I
recollectlcorrectly,the
testimony that I gave was that I did not think the note was in possession
of the bank at the tinle that it matured, and that for that reason it was not protested. On
records, and having an interview with the loan-clerk who has charge of the
lookingI atfindthethat
that is not so. The note was in possession of the bank-at least Iprenotes,
sume it was-but when it came into the bank originally (the loan-clerk being absent) the
clerk in charge of that'particular branch for that day neglected to enter the note on what
call the tickler. When a note comes into the possession of the bank it is entered under
they
the regular date of its maturity, so that two weeks before the note becomes due the clerk
looks over the books and sends the notices. This note not having been entered on this little
book, it was overlooked at the tine that it matured. Any impression that may have been
created that Mr. Stickney had anything to do in withholding that note from protest would be
unjust to him. It was simply an oversight of the clerk who had charge of that part of the
business. There is another statement which I wish to make. From some testimony which
I am supposed to have given before the committee a little over a week ago, two gentlemen
of the committee have drawn the inference that I meant to testify that the other two commissioners never rendered any services. I am not conscious of having given such testimony. The question that was addressed to me by the chairman of the committee was something like this: "You are the working man of the commission ?" I hesitated, and if I did
not say, I wanted to say,(I think I did say,) " I do not like to say anything on that subject."
the chairman said something to the effect that when he had been to the bunk I
Thereupon
seemed to have been the working man. Toward the last of my examination another member of the committee asked me some question about some matter which I hesitated to answer,
but I did say, in answer to a question of his, that Mr. Creswell came to the bank sometimes
every day for a week, and that then again he would not come there for a week, but that
whenever a matter of importance came up I would either send for him or consult him about

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FREEDMAN'S SAVINGS AND TRUST COMPANY.

it. I believe that that was the fill extent of the testimony that I gave with reference to this
If the inference created by that testimony was that the other two commissioners
subject.
never rendered any services, it does them great injustice, and I never meant to intimate any
such thing. I do wish to say that, from my understanding of the matter, both Mr. Creswell
and Mr. Purvis did all they undertook to do originally when the matter was discussed before the board of trustees who elected them, and they have both rendered services, and very
important services. As to the services rendered to the bank by myself; I would much rather
that others speak of them than speak of them myself.
By the CHAIRMAN:
Q. On Saturday last, when you were under examination, you stated that there had
been no discrimination made between the classes of the debtors of the bank in enforcing
payments, and you left the impression on my mind that whenever the debt was well secured,
and when the interest was promptly paid or collectible, the same indulgence was extended
to all. Am I correct in putting that interpretation on your evidence ? If not, please state
what you did mean to say on that occasion.-A. No intentional discrimination has been
made.
Q. On the occasion referred to in the last preceding question, I was examining you as to
the debt of W. J. Murtagh, as stated on page 12 of the commissioners' report. I find on the
,same page a debt charged to J. H. J. Schureman for $1,200, (the same amount as is charged
to Murtagh,) on which it appears that $13.42 interest was paid to the commissioners, while
but $2.88 had been paid by Murtagh. Has the same indulgence been extended to Schure.
man as was extended to Murtagh ?-A. Yes, sir.
Q. Have you not caused the security on which Schureman's loan was obtained to be sold,
and is there not a balance in the hands of the trustees due to Schureman over and above his
debt 1-A. In the first Iplace, there is no comparison between the value of the security in
the Schureman case and in the Murtaugh case. In the next place, Mr. Schureman had
made no payment since the date of the report, (if I remember correctly, ) either on account of
interest or on account of principal. Mr. Murtagh had. In the next place, there was a large
accumulation of taxes against the Schureman property, amounting, I think, to over $350.
After trying in every way to induce Schureman to make some payment, we found that he
was not the owner of the property at all; that he had disposed of it to a man named George
T. Johnson, who is largely indebted in other matters. Having used every effort without
success to induce Mr, Johnson to pay at least a portion of that debt, we filed a bill in the
court to have a trustee appointed and the property sold. The value of the security is shown
the fact that we have had to buy the property at $600, while the amount of the indebtedby
ness was about $1,700.
Q. The commissioners' report shows that at its date $187 had accrued on Murtagh's debt,
and that ho.had paid $2.88. The same report shows that $237 of interest had accumulated
on Schureman's debt, and that he had paid $32.40, In what respect was he in greater default than Murtagh ?-A. The figures themselves show that at the time of the report the indebtedness of Murtagh was $1,389.88, and the indebtedness of Schureman, $1,409.40; but
the discrepancy between the two arose subsequently to that first report, and all action had
either matter, was subsequent to that first report.
by us,Isinthis
Q.
[handing a paper to witness] your handwriting ?-A. Yes.
Q. I hold in my hand a note, dated September 15, 1874, admitted by you to be in your
"J. H. A. Schureman, esq. Dear Sir: Your note for
handwriting, to the following effect:
24th, 1872, was due April 24th, 1873. If not paid by the 30th inst., the
$1,400, dated
April
will be advertised for sale under the terms of the deed of trust." I have another
property
note of the same date, also written by you, addressed to the same party, in the following
words: " Dear Sir: Your note for $200, dated April 24th, 1872, was due April 24th, 1874.
If not paid by the 30th inst., the property will be advertised for sale under the terms of the
deed of trust." How much interest was due on the debt of $1,600, and how was that debt
secured?-A. The interest due at the time of our making our first
report was $274.22.
Q. How much was due at the date of these notes ?-A. cannot tell without referring to
the bank and figuring it up.
Q. Look at these notes [handing them to the witness] and see if they are the notes referred to.-A. They are.
Q. Do the notes show that the interest was paid in full on both of them up to April 24,
1873 ?-A. Yes, sir.
before
Q. Did him
you apply to Schureman for any interest (being a little over one yearI due)
of the sale stated aforesaid ?-A. I do not recollect. I presume did.
notifying
Q. Did you have the property sold 1-A. We did.
and enforcing
Q. You stated as a reason for directing Schureman's property to be sold
the collection of the debt, that you had discovered that the property was not 'his, and that,
besides, the taxes had been allowed to accumulate to the amount of some $3Q0 ?-A. I made
no such statement with reference to that particular property. You ate speaking now of
another loan entirely. This is a $1,600 loan secured by different property entirely.
The CHAIRMAN. The $1,600 loan is secured on lot 24, square 7'8 ?
The WITNESS. Yes, sir.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

171

The CHAIRMAN. And the $1,200 loan is secured on part of lot 24, square 7S8. The only
difference between the two is that one is secured on part of the lot and the other on the
whole lot ?
A. No; but on another part of the lot.
does that appear ?-A. It is put down hero [referring to the commissioners' reQ. How
as
the
whole lot, but that is a mistake; it is only part of the lot--the $1,600 note is
port]
secured by a different part of lot 24 from the $1,200 note.
of lot 24 was sold for only $600 ?-A. The part securing the $1,200 loan.
Q. Which that
part matter
now in litigation on the suit to foreclose a mortgage ?-A. No, sir;
Q. Is not
it has been disposed of since our last report.
Q. Then the $1,600 note was or was not amply secured; what do you say about it?-A.
I think it was amply secured.
Q. If the debt was amply secured, and there was no more interest in arrears than in the
other case, why did you order this property to be sold when you extended indulgences to
others in the same situation, and especially to W. J. Murtagh ?-A. To that I can simply say
that we held hundreds of notes secured by real estate; that'we had to make a beginning
somewhere: that without any intention to discriminate against Mr. Schureman, his case
to be put up before the case of the other gentleman; but, if I recollect correctly, it
happened
was because Mr. Schureman was not in a position, either then or prospectively, to reduce
his indebtedness, and il addition to that there was a very large accumulation of taxes on
that property.
Q. Who sold the property for the commissioners ?-A. I think it was Mr. Stickney.
Q. Has,he ever made any return of the proceeds to you ?-A. Yes; as far as the interest
of the bank called for it.
Q. Are you acquainted with Mr. Stickney's
handwriting ?-A. Yes.
statement, [handing it to the witness, 1 purporting to be an account of sale
Q.thatLook at thisand
of
property, see if there was not a clear surplus over and above the payment of the
debt, principal and interest, accrued taxes, and most extraordinary charges for actuaryfees, commission, and advertising.-A. There seems to have been such a surplus. I would
like to state here that it was not a sale. The property was bought by the holder of the second
There was another deed of trust against the property.
mortgage.
Q. There was a surplus over and above the amount due to the Freedman's Bank ?-A.
Yes.
Q. And everything else lie owed in the shape of taxes, interest, actuary-fees, commission,
and advertising ?-A. Yes.
Therefore the debt to the Freedman's Bank was amply secured ?-A. Yes.
Q. And
there was but one year's interest in arrears ?-A. There was over two years'
Q.
interest.
after that. Itwas six or
Q. When you served that notico?-A. We gave him lots of timetime
when we served the
months after that before the property was sold, between the
eightnotice
and the time that the property was sold. There was nine months between the
first
of the property.
servingIfof thedidfirstnotnoticetileand the sale
from the purchaser, and if you sold the property to someQ. you
get
money
body else, what was the use of your selling it on Schureman.-A. That is a matter for the
trustees.

Q. You sold the property of one man because he did not pay his debt, and you sold it to
another man, who does not pay the debt, and you take security on the same piece of propcould not do otherwise. The deed of trust provides the terms on which the
erty?-A.is We
property to be sold, and we could not set aside those terms.

Adjourned.

SELECT COMMITTEE

ON TIHE

FREEDMAN'S BANK,

Washington, D. C., May 2, 1876.
Messrs.
Douglas, B:adford, and Riddle.
Present,

The committee met at 10.30 a. m.
Examination of R. H. T. LEllOLD resumed.
By the CIIAIRMAN:
In deposing heretofore in regard to the settlement had by the commissioners of
Question.
the Freedman's Bank with G. W. Sticknoy, you mentioned a sum retained by him, and not
accounted for or paid over to the commissioners until discovered and demanded by them,
which sum appears to have been accrued interest on what was known as the Rest Home
Colony fund. Please state whether there are any other instances in which there was
similar default in rendering his accounts made by Mr. Stickney.-A. 'lhe money which
you refer to was composed partly of interest on a $15,000 note, which was the capital
of the Rost Home Colony fund, and partly of the amount of a $1,500 note which he had
collected. In the course of our examination and efforts to collect the different notes

172

FREEDMAN'S SAVINGS AND TRUST COMPANY.

$1,117.53, purportby the Freednman's Bank, we found a note of one to have for
been disposed of by Mr.
ing to be secured by some District securities, which seemed Dillard.
Stickney, and to have been applied in payment of the note. The note is still due. In questioning Mr. Stickney on that subject, he said (and it so appears) that he had been appointed
as an attorney by Dillard to collect any sums that might be due him by the District government; that he was also attorney for Dillard to transact all his money business, and that he
himself had personally advanced moneys to Dillard ; to re-imburse himself for it, he claims
to have disposed of these securities. We have also a note of William Williams, purporting
to be secured by certain real estate; which, on ipvostitation, we found to have been sold under
a foreclosure, and a balance of $1,106.58 remains due on it. Mr. Stickney, in answer to our

held

on the subject, informed us that ho had used a portion of those moneys in
interrogatories
the payment of taxes that had accrued on the Wilkes property, sold by him as trustee for the
benefit of the bank, and which property was security for a $10,000 note of Wilkes. We also
find that there is on the books'of the bank a record of a note of W. M. Pumplhrey for $1,001),
I think. 'hio note, however, is missing. I do not recollect ever having seen it. The books
show that there, is a balance duo on it of $1(50. On having the title examined to see whether
that note had been released, we found that it had been released. On speaking to Mr. Stickney
on the subject, he does not seen to recollect how it happened. He holds himself responsible for
that sum of money, and says (as lie does in all the other cases) that he fully intends to
Schoolor for $100, which, however, has very
pay it. We also found a note of William
Mr. Stickney. We also found two notes of Isaiah Washington for
by
recently been
paid
$75 each, the payment of which MIr. Washington refuses, on the ground that he paid the
to Mr. Stickney. lWhether that is a fact or not we cannot tell. We also find an evimcney
dence of indebtedness on the part of one Otho Brownson for $105, with a memorandum in
Mr. Stickney's handwriting that ho is responsible for it. We further find a note of one
Nelson for $700, payment of which Nelson disputes, on the ground that part of it had been
paid to Mr. Stickney. Mr. Sticknoy, however, has (I think to my entire satisfaction) shown
me that Nelson is mistaken; that the money was put to Nelson's credit in the bank, and
was subsequently drawn out by Nelson on his book. We have, at various times, made
efforts to collect from Mr. Stickney these different sums of money. Mr. Stickney has always
said that he did not dispute his owing them, and that he fully intended to pay them, but
that he had an account against the commissioners, and that he wanted the claim which he
had against the commissioners allowed as a set-off against those claims. I have endeavored
to get Mr. Stickney to make such a proposition to tlie commissioners in writing, but up to
this time he has not done it. The claim which Mr. Stickney has against the commissioners
is for trustee's fees arising from the several cases of foreclosure, in which Mr. Stickney has
officiated since he loft the employment of the bank, and I confess that, so far as we are concerned, we think that Mr. Stickney has a legal claim to those fees. We have, however,
always resisted the allowance to him of the fees in full, as provided under deeds of trust, but
have expressed our willingness to make him some compensation for the time and labor and
incident to his making these sales. We have also a note of one Margaret
responsibility
Hetzel on which a balance of several hundred dollars appears due. The deed of trust securing it has been released by Mr. Stickney, and he states that that was done by mistake. I
forget the exact account due on that note.
Q. Although Mr. Stickney does acknowledge an indebtedness to the Frecdman's Bank on
account of the several items enumerated in your last answer, had he any right, moral orlegal, to divert the property of the bank from its legal purpose-in paying the debt for
which it was secured ?-A. I think he had no legal right to do so. I would rather not answer the moral part of it.
By Mr. BRADFORD:
Q. Did Stickney's claims for fees anttedate his withdrawal front the employment of the
Freedman's Bank I-A. He never has made any claim for fees preceding that time.
By the CHAIRMAN:
Is
while Stickney was making such
Q. it or is it not a fact, that during the period of time not
a free use of the securities of the bank was an
bonded l--A. I do not know

he

actuary

whether he was bonded, but from some statements that I have overheard, I believe that lie
never was bonded as actuary. I have never seen any b6nd of his, and I do not believe he
ever gave bond as actuary.

By AMr. RIDDLE:
Q. Has either of the other commissioners given you a compensation for attending
business ?--A. I have received soine compensation from the other commissioners.

to his

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

173

WASHINGTON, D. C., May 2, 1876.
WILLIAM J. MURTAGI sworn and examined.
By the CHAIRMAN:
Question. State your residence and occupation.-Answer. I reside in Washington City;
I am publisher of the National Republican.
of the Freedman's Savings and Trust
Q. It appears from the report of the commissioners
institution. State when that obligation
Company that you are one of the debtors of that
was contracted, and when it became due.-A. I cannot give you the exact date when the
loan was made, nor the date when it matured. I borrowed from the Freedman's Bank
being secured on a piece of property valued at
$1,200, at 10 per cent, per annum, theof money
commissioners, I find that the note was dated Oc$2,500. By reference to the report the
tober 5, 1870, and fell due January 3, 1871.
you have been required by the actuary of the bank, before it went into
Q. State whether
or by the commissioners since, to pay that debt, and whether you have. made
liquidation,
auy arrangement in relation thereto, and what.-A. My attention was called to theamount
due. I called at the bank, paid the interest on the note, and asked an extension of time for
payment, as no dividend was about to be declared, and as the money was bearing 10 per
cent. interest, and was amply secured, and would bear no interest in the Treasury of the
United States. That extension was granted, with the understanding that 1 was liable to be
called upon for the money at any moment, or to have the property sold. On the examination of my books in my office, I find that the note is practically paid; a sufficient amount
having accrued from advertising done by the National Republican for the bank to pay the
note.

of interest and heo request for extension referred to in the foregoing
Did the
ers?-A. I am not able to answer that question.
Q. Was such payment of interest made before or after the 20th of December, 1875 ?-A.
The interest was paid in advance a considerable time before December 20, 1875.
Q, Have you made more than one payment of interest on that note to the commissioneis?-A. I think I have.
Q. State how much you have paid on account of interest, and how you have paid itwhether in cash or in advertising bills.-A. Both in cash and in bills for advertising. The
amount I cannot now state.
Q, When you settled with the commissioners, not only for the interest accrued but for
that which might accrue subsequently to the date of your settlement, why was it that you
omitted to present your own advertising bill ?-A. I cannot recall the circumstances sufficiently t'answver that question.
Q. Whllen you last settled with the commissioners was there any agreement or understanding between yourself and them that your note would be held up and might be discharged from time to time by bills for advertising ?-A. I have no recollection of any such
agreement.
Freedman's Bank for
Q. State what amount now appears on your books against the tothecommas
ioners.and whether bills for the same ha ever been presented
advertising,
A. The amount on the books remaining unsettled is about 81,000. The accounts are in
the posesessio of the trustee or auctioneer to be applied to that purpose.
auctioneer to whom you refer ?-A. Mr. George W. Stickney.
Q. Who is the trustee or work
was that indebtedness incurred ?--A. For advertising. I
Q. When anid for what
cannot give tile items out of my head. 'Ihe time, I think, was between September or
October, 1875, and the present date.
Q. Was your settlement with the commissioners, referred to in your former answer, prior
to the 6th of October, 1875 ?-A. It was prior to October, 1T75. I cannot give the exact
date. I know that it was several months before December.
Q. Was it prior to October ?-A. Yes. I think, on reflection, that it was somewhere about
that time. It was some time before l)ecember.
Q. If it was about October, why were not the bills presented on that settlement ?-A.
Because I did not examine my books to see what was due by the bank to me, and the interest was paid iil cash,
Q. Youl are the publisher of the National Republican. Are you not also the editor and
proprietor-A. I am.
Q. Are you not, as such, responsible for what appears in its editorial columns ?-A. I am

Q.
payment
answer, occur before or since the dividend of 20 per cent. was declared by the commission-

so.
pecuniarily
Q. Are you not in tihe forum of conscience responsible for statements under editorial
sanction that assail the integrity and honor of other persons --A. I am.
Q. Be good enough to inform the committee when and how much money hasthebeen apFreedthe books of
propriated to pay experts employed by this committee to examine
lan's Savings and Trust Company.-A. That I cannot answer without information.
Q. Do you know that any appropriation has been made for that purpose ?-A. I have
been so informed.

174

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Q. State who was your informant. -A. I prefer not to mention conversations in my own
office, but if it is demanded I will give the name.

The CHAIRMAN. It is demanded.
The WITNESS. Mr. E. P. Brooks.
Q. Look at the paper now handed to you and state whether it purports to show the
whole amount of money that has been paid on the certificate of the chairman of this committee (as all the money paid out for the purpose of this investigation has necessarily to be
paid on such certificate.)-A. (After reading the paper.) The amount stated in the paper
before me is $667.48.
Q. How much of that amount appears to have been paid for the employment of experts 7
-A. Between $500 and $600.
Q. D)o you know, or have you allowed it to go under your editorial sanction without
knowing, that there has been a dollar paid, or that a dollar is now subject to be paid on the
order of this committee for those services or for any other services connected with this inwhich has not been applied to the object for which it was lawfully designed ?
vestigation,
-A. The statement was printed in the Republican before I saw it, and I am having the
matter investigated to determine its correctness.
The CHAIRMAN. Will you be good enough, since you are in favor of open investigation,
to allow me to be present when that investigation 'akes place, or to notify me of the time
and place ?
The WITNESS. You can be present at the investigation, and you will be so notified if you
desire it.
The CHIAIRMAN. I do desire it.
Q. In the paragraph from the Republican of the 28th April referred to, I am accused by
innuendo of having employed moneys tha twere appropriated for the purpose of this investigation.
The WITNE.SS. I cannot determine that question until I make my examination.
Q. I ask if you know or knew when the paragraph appeared that it was true ?-A. I did
not.

Q. This paragraph has this sentence: ''If Mr. Double B. D. does not know, we will simsay that several of his political supporters, and among them journalists, were the men
ply
who salted the people's money appropriated for the expenses of examining the affairs of the
bank." As I am from past association and habit not familiar with any of the slang phrases
of roguery, please inform me what the word "salted " means.
The WITNESS. Before answering that question, I should like to ask you a question;
whether I am being investigated and the Republican, or the Freedman's Bank ?
The CmAIIRMAN. Thlhe question is answered by saying that the examination into the conduct of the Republican becomes germane, to the extent that the Republican has made itself a
party in opposition to the proceedings of this committee; and I now desire to know, without
imputing to this witness any roguery, what the term " salted " moans in the paragraph before referred to.

The WITNESS. The witness is as ignorant of such term as the chairman, and therefore he
cannot answer that questo '.
The CHAIRMAN. i'he chairman of this committtee is accused in the same paragraph of
bestowed the people's money on his constituents and political supporters. Who are
having
they ?
The WITNESS. That will appear when my examination shall have been made.
The CHAIIRMAN. Do you mean to say or to have it understood that you have published a
slander against the chairman of this committee, such as that recited in the paragraph aforesaid, without knowing that it had any fact to support it?
The WITNESS. I have already stated that I did not see that paragraph until after it was
printed. I have made some examination about the matters contained in it, and I shall continue that examination. If it shall prove to be without foundation a statement to that effect
will be made.
The chairman called Mr. Bradford to take the chair and administer an oath to himself.
BEVERLY B. DOUGLAS, chairman of the committee, was thereupon sworn and examined
follows:
By Mr. BRADFORD:
Question. Have you seen an article in the National Republican reflecting on your conduct as chairman of this committee in the administration or disposition of any funds of the
Government ?-A. I have. In the editorials of that paper of Friday, April 28, 1876, 1 saw
this paragraph:
" Will Mr. Double B. Douglas inform us how much of the money appropriated to pay the
to examine the affairs of the Freedman's Bank went into the pockets
experts who attempted
of his constituency ? If Mr. Double B. D. does not know, we will simply say that several
of his political supporters, and among them journalists, were the men who salted the people's
money appropriated for the expenses of examining the affairs of the bank."
as

FREEDMAN'S

175
Q. What have you got to say in reply to that ?-A. I state in reply to that paragraph, that
there is not one word of truth in the intimation it contains, charging me with a misappllcaSAVINGS AND TRUST COMPANY.

tion of the funds appropriated for the expense of investigating the affairs of the Freedman's
Bank. I will state further, that not one of my constituents has.reeiv.i ndo'idllar out of any
such moneys. As to journalists who are referred to in it, I am wholly unable to say who
But before I proceed, I will state (if it is not known by the author of the parathey are.
in question) that no money has been appropriated for the expense of this committee;
graph
that one of the experts employed was James Watkins, of New York, who was recommended
to me by Col. James R. O'Beirne, one of the correspondents of the New York Herald, and
who was only employed after an ineffectual effort previously made to secure the services of Mr.
Edward Warren, of New York, whose skill and thorough acquaintance of books and accounts have obtained for him a national reputation. Whether Mr. Watkins had any connection with any journal or newspaper, I did not know then, and do not know now. As to
his politics, I have never inquired, and do not, at this moment, know to which of the great
political parties in the country he belongs. The other expert was Mr. J. F. Dyer, a gentleman of this city, who may. or may not, so far as I know, be connected with domne.phper or
other; and he was appointed on the recommendation of Mr. Lewis McKenzie, a prominent
of the city of Alexandria, and of a large number of other leading business-men
republican
of that city, without regard to party; and his political opinions were entirely unknown to
me when I first became acquainted with him, which was on his handing me the letter of introduction and recommendation referred to. All the other money that has been paid by this
committee, and which is certified to by the Clerk of the House of Representatives, whose
certificate is now before me, has been paid for the attendance of witnesses; and these witnesses have been summoned without regard to party, race, color, or previous condition of
servitude. Every dollar of it has been paid out of the contingent fund of the House until
it was exhausted, and the remainder of the witnesses who hold certificates from the chairman, (myself,) including the special messenger and watchman of the committee, remain unNo money has as yet been appropriated for the use of this committee. The experts
paid.
referred to were discharged after 36 days' work, on my motion, and on their reporting their
to make any satisfactory progress in the work to which they bad been assigned.
inability
The amount paid them, $8 a day, was fixed by the committee, on the motion of Mr. Faras the minutes and proceedings of the committee
well, a republican member of the same,
will show and to which the author of this paragraph may have access if lie desires it, As
to any political friends of mine having been rewarded in any way, directly or indirectly, it
is wholly untrue, except to the extent that the clerk of this committee, who was appointed
under an order of the House, allowing the committee to have a clerk, and who was appointed
on my recommendation, is of the same political party with myself, and is a personal friend
of many years' standing; but is not and never was a constituent of mine. I should add that
the author of this paragraph, if he has not willfully falsified in the statement which it contains, has been misled by some one who has, and I will say to him, quoting a distinguished
Senator, (as was done once on the floor of the House this year,) that he is authorized by
me to say to his informant, that " That informant's informant is a liar."
The following is the letter from the Clerk of the House referred to in the testimony of William J. Murtagh and of B. B. Douglas:
"CLERK'S OFFICE, HOUSE OF REPRESENTATIVES U. S.,

IWashington, D. C., April 29, 1876.
28th
of
the
letter
instant,
your
calling for a schedule of payments made
this office on account of expenses of the investigation of the Frecdman's Savings and
by
Trust Company, under a resolution of the House of Representatives of January 5, 1876, I
have the honor to transmit herewith a complete statement of such payments.to this date, viz:
John Watkins, witness ........................................ ........
$4 00
J. B. Ford, expenses in summoning witnesses
20 40
J. F. Dyer, expert
288 00
B. W. Brice, witness. .....................................................
4 00
J. W Alvord, witness..................................................... 20 00
3 08
....................................................
L.Whitney,
J.J. Stewart,telegraphing
16 00
witness
Samuel Watkins, expert ........... ..
288 00
S. Howells, witness
4 00
....
....,...... .....................
A. M. Sperry, witness ..................................................... 20 00
"

" Sit:

In

reply to

.................................

......

....

................

...........

............

.

...........................

...........................

....................

.................

...........

..

667 48

"Very respectfully,
"Hon. B. B. DOUGLASS,

" Chairman Comnmittee on Freedman's

"GEO. M. ADAMS,

" Clerk house Representatives U. S.

Savings and Trust Company."

176
Comniite

Rainey.

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

SELECT COMNMITTEE ON TIHE FREEDMAN'S BANK,
Wfashington, D. C., May 6, 1876.
met at 104 o'clock. Present, Messrs. Douglas, Stenger, Riddle, Frost, and

FREDERICK W. JONES sworn and examined.
By the CHAIRMAN :
Question. State your residence and occupation.-Answer. I reside in Georgetown, and
an an attorney at law.
Q. Have you at any time had any business connection witl tile company commonly
.known as the Seneca Stone Company ?-A. I was elected secretary of the company in the
of 1874, and I continue to hold that office.
springHave
Q.
you tho stub-book of the company, showing to whom and at what times stock
was issued to the several persons appearing as stockholders in said company? -A. I have
what we call the stock-book, which is the only stock-book of the company that I know of.
I produce it here in obedience to the subpoena duces tecunm.
Q. Look at that book, and say whether the stock issued to General U. S. Grant is receipted
for in his own name or by some other person.-A. I have looked through the stock-book,
and I find but two certificates issued to General U. S. Grant. The first, No. 12, dated Novellber 22, 18(07, for 200 shares, is receipted for by William S. Huntington. The other, No. 91,
21, 1870, for 120 shares, (being the dividend stock,) is receipted for by U. S. Grant.
January
I cannot say that this is his signature, but it is just like one to a proxy of his which I have.
I never saw him write, and do not know his signature.
Q. Have you in your possession any paper or instrument in writing relating to the stock
issued to General Grant which you know to bear his signature ? If so, state what is the
character of the instrument.-A. I have in my possession the usual proxy to vote stock at
a meeting of the company, but I am equally ignorant whether that is his signature or not.
It-was used as his proxy, and the record of the meeting shows that the 320 shares owned by
General Grant were represented by the person named in and holding that proxy.
Q. It has been recognized as General Grant's proxy, and the person holding it has voted
on his stock ?-A. Yes, sir. It is necessary, of course, that a quorum of the stock shall be
represented, and it was only with extreme difficulty that we could get a.quorum. There has
been some drumming necessary to get proxies, so as to have a quorum, within the last two
This proxy is dated in 1873.
years. Have
you any knowledge, derived either from Henry D. Cooke or from General Grant,
Q.
as to the manner and consideration of that issue of stock to General Grant, different from
what appears in tlle record to whicl you have referred ?-A. I do not think that I ever discussed the subject witfi Governor Cooke or General Grant. There is nothing different in
these two certificates to General Grant from any others. I am familiar with the history of the
company. I know that a stock dividend of (60 per cent. was made, but as to what consideration vas paid for any of the stock, I never heard it discussed by anybody.
Were you a member of the company at the time of that stock-dividend?-A. No, sir;
Q.connection
with tile company has been quite recent, although I have been its attorney
my
fur some years. There were tell shares of stock given to me, to qualify me to act. I paid
for it, and I did not want it. as it involved too great an individual liability.
nothingWho
is thle attorney mentioned in thl proxy of General Grant ?-A. lHenry D. Cooke.
Q.
Q. State by whom the stock which was issued to General Barnes, General Townsend,
General Brice, Mr. Seward, and Mr. Cushing was receipted for, and who was the translbragent to dispose of the stock of the company at that time.-A. Certificate No. 14, issued to
'illiam HI. Seward, for 200 shares, was receipted for by Wi'liam S. Huntington. Certificate
No. 15, issued to General Barnes, was also receipted by Mr. Huntington. Certificate No.
17, to Caleb Cushing; for 200 shares, was also receipted for by Mr. Huntington. Certificate
No. 45, issued to General Dent, for 100 shares, is receipted for by himself, and certificate No.
46, issued to Mrs. Dent, for 100 shares, is receipted for by General Dent. General Brice's
.certificate seems to have been receipted for by no one; it is numbered 51. The original certificate has been returned, it having been transferred to Thonas B. Bryan, on December 19,
1870, when a now certificate was issued in lieu of it (No. 115) to Thomas B. Bryan,
Q. Who, at that time, was the transfer-agent of the company ?-A. 1 think that William
M. 'renlney was tile transfer-agent, but I am not certain. He was a clerk at Jay Cooke &
Co.'s. I find tlat certificate No. 145, which was issued to Thomas B.Bryan, in lieu of
General Brice's stock, (320 shares,) is receipted for by General Brice.
Q. I want to know whether the busiliess of placing, transferring and receipting for the
stock of that company was not actually done in the banking-house of Jay Cooke & Co.,
under the immediate supervision of lenry D. Cooke himself, Mr. William S. Huntington,
his cashier, and Mr. Tonney, his clerk, aiding and assisting therein ?-A. I presume that
that is the case, but my presumption is based solely on the records of the company, in which
I find that Jay Cooke & Co. were the transfer-agents, and that William M. T'enney was
I have no actual knowledge on tile subject.
.transfer-agent.
Q. Do the records of the company show that Jay Cooke & Co., immediately after or at

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

177

the time of the organization of the company, were appointed its transfer agents ?-A. Yes,
sir.
Q, Was not Henry D. Cooke a prominent member of that firm, and was not William S.
Huntington the cashier of the First National Bank, of which Henry D. Cooke was president, and was not Mr. Tenney, of whom you have spoken, an employ in the bank of Jay
Cooke & Co. ?-A. Yes, sir.
the officers of the First National Bank, and of Jay Cooke & Co., in the same
Q. Were
?-A. Yes; Jay Cooke & Co. occupied one floor, and the First National Bank the
building
floor above.
Q. Look at the certificate of stock issued to E. B. Washburne, and state by whom that is
No. :6, for one hundred shares, to E. B. Washlurne. dated May
receiptedisfor.-A. Certificate
5, 1868, receipted for by Henry D. Cooke, and certificate No. 30, for one hundred shares,
also to Mr. Washburne, dated January 17, 1868, is also receipted for by Henry D. Cooke.
The dividend-stock of E. B. Washburne, certificate No. 100, for one hundred and twenty
shares, is not receipted for.
out?-A. The certificate is out.
Q. IsDothe certificate
not know that that stock of Mr. Wasliburne's was subscribed for without
Q. you or
his authority, and that his funds were issued to pay for it by Mr. Cooke ?-A. I have no
on the subject.
knowledge
Q. Does that stock still stand in the name of E. B. Washburne?-A.'It does, so far as
these books show.
Q. Is there any book or record that shows that for any consideration or any inducement
whatever, Henry D. Cooke has caused the transfer of these shares from E. B. Washburne to
himself?-A, The others have not been transferred, so far as the stock-book shows.
Q. They never have been transferred ?-A. No, sir; or if they have been, there is some
about it. The rule requires that, on a transfer of a certificate of stock, the old
irregularity
certificate shall be surrendered and put in the place from which it was taken, and a reference
on it made to the certificate issued in its place.
By Mr. STENGER :
Q. With reference to what election was that proxy given to Mr. Cooke ?-A. It was
given for the annual meeting of the stockholders in 1873, to elect officers.
By Mr. RAINEY:
Q. Was there any other business transacted at that meeting, with the'exception of the
election of officers ?-A .I cannot tell without consulting the minutes. I do not know that
there was anything except the ordinary routine business. The meeting was before the failure of Jay Cooke & Co.
Q. You do not know of any proposition being made there to obtain a loan ?--A. No, sir.
By Mr. STENGER:
Have
Q.
you any knowledge of any other stock than that issued to yourself having been
issued without payment of money therefor ?-A. There were-ten shares issued to Mr. Alvord
at the time he was elected president, on the same consideration. I do not know of any other.
I had been repeatedly importuned to embark in the enterprise; but always declined doing
so0. By Mr. FROST:
You
do not mean to say by that that you believe that all the stockholders received
Q.
stock without paying for it --A. No, sir; I am firmly of the belief that every stockholder
did pay fifty cents on the dollar for the stock which he received. I have heard that from
many of them.
By Mr. STENGER:
Q. Have all the books of the company been produced that were called for ?--A. I presume
so. This is the first time that I have been called upon by the committee.
Q. Are all the books of the company in existence that have ever been in use by the company ?-A. To the best of my knowledge, they are.
By Mr. RIDDLE:
Q.if You do not know of the destruction of any --A. I do not; and I think I would know
it, any were destroyed. Tie books are in my custody, and none of them have disappeared,
so far as I know.
12 F I}

178

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

SELECT COMMITTEE ON TIlE FREEDMAN'S BANK,
WVashington, D. C., fay 15, 1876.
Committee met at 10 o'clock. Present: Messrs. Douglas, Riddle, and Frost.
ANSON M. SERHnY recalled at his own request.
By the CHAIrItMArN:

Question. In your former examination, on the 29th of January, 1876, you were
asked this question:
"Q. Are there any other matters'resting in your knowledge which, as a good citizen
and a friend to the freedmen who have lost money by this bank, you, testifying under
think it your duty to communicate to this committee?-A. I cannot at this
oath,
instant recall any other matters; but, as a good citizen, and as a matter of conscience,
I would ask that I may be recalled if at any thie matters occur to me of importance
for the committee to know, and of which I will duly apprise the committee."
Please state if, since that time, any such matters have occurred to you, and what they
are.-Answer. I was not anxious to incumber the evidence with statements of my own
at that time, hoping that some matters might come out through the testimony of
other parties. But I have thought that the committee should know, and that it
should go upon tile record, that there were some intelligent efforts made, both by the
friends of the bank and by the last Congress, to reledy the evils which we all recognized were afflicting the institution. My attention was first drawn to them after the
defalcation at Beaufort, early in 1873. I there discovered that not only had the bank
been robbed, but that, under its existing charter, it could be robbed almost with impunity. I was advised that the institution had no status in the State courts. It had
no crimninl status in the United States court under its charter, and when we were
about to undertake the criminal prosecution of Mr. Scovel, who had defaulted to us, it.
was quite evident that we would be thrown out of court. Thereupon, as the affairs of
the bank were being investigated at tile'time under the direction of the Comptroller of
the Currency, I addressed a letter to the Comptroller as the only means in my power of
attracting attention to this thing, in which letter I recited the difficulties under which
the bank labored, and asked that something might be done. My hope was not only to
get special legislation covering this point, but also to attract the attention of the Comp.
troller and of Congress to the bank, and to get a thorough investigation. It was to
that that I alluded when I said that I could prove to you that I had been trying to get
an investigation. Nothing, however, cane of it. After the panic in 1873, I had been
through the South, and had come back to Washington and had found the affairs of the
bank in the greatest confusion, and the otieers here feeling that the bank could not go
on. That was somewhere along in November or early in December, 1873. The bank
would be called upon early in January, 1874, to nake heavy payments, for which the
funds did not appear. 'The question canne up whether or not we should close the institution. I opposed it, for the reason that we were bound in all conscience, to save
it if possible, and I did not think that the emergency had arisen. It was in December,
I think, that I became further satisfied that nothing hut the most radical measures
would save the concern. As a subordinate officer, it was a very delicate business for
me to meddle with. The management by the trustees was wholly inefficient. There
were but few persons to advise vith, and gradually the whole. burden of the thing was
Mr. Stickney, the late actuary, and myself, while we had very little
falling onMore
than that, I was satisfied that the truth was not being told to the parties
power.in
most interest--some of our good friends. It was at that time that Ex-Governor Clafof Boston, one of the corporate trustees, a gentleman of very high character, came
lii,
into the Washington office and had a conversation with the president of the bank, to
which I waq, perforce, a listener, my desk being near. I was extremely dissatisfied wih
the impression which the president made on the governor, because the latter was led to
believe that we were going through all right, and that there were no special dificillties
in the way; and he went away hoping for the best; while the fact was that we did not
know whether we could keep open until the 1st of January or not. About the same time
Mr. Samuel M. Arnell, of Colunibia, Tennessee, also a gentleman of high character anda
member of a former Congress, came to Washington for tihe purpose of getting permission to enlarge the business of the Columbia branch, for the organization of which he
was mainly resl'o-isible. He had a long talk with the president of the bank, to which
I was again a listener. The substance of his proposition was that if the trustees of
the bank in Columbia-leading citizens there--would organize their own committee,
and won'd raise the line of deposits to $50,000 or more, they should be allowed to make
investments there, under the charter, in real estate, for the management of which they
would be themselves responsible; in other words, to put tie Columbia branch on its
f et as a permanent, solv, ut branch of the company. He was again led to believe that
the institution was all right, and that there was no reason at the Washington office
this should not be done. I-Ie was told to go back home and to do what leo cold,
why
and that the bank would b.t(k him up in it. I then made up my mind that the thing
must stop. We were sailing under false colors by compulsion, but we need not deceive,

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

179

our friends. The next time that Mr. Arnell came in (he was personally a stranger to
I happened to be alone in the office, and called him to me, and, in as few words as
Ilme)
I could, I told him our situation. I told him that the reason why I interfered in the
matter was that I felt that he was being led into difficulties which would involve
his personal reputation, and that the thing had better stop; that unless there could
be a radical change, both in the organization and in the management of the concern,
I would not turn my hand over to keep it open twenty-four hours. I had done what
I could, not only in tle case that I mentioned with the Comptroller, but in other ways,
to get Congress to interfere and to got rid of the old trustees. I-said to him in substance, " Now, Mr. Arnell, you know a good many members of the present Congress. I
have confidence in you. I want you to go to them and state exactly what have stated
to yon, and ask them if they will got such legislation as will save the institution, I
want to know this before the first of January." He staid here tel days and made a
thorough canvass of the House, visiting gentlemen without regard to their politics,
and cane back to me and saiden I have seen ney every man i the House, of infl
ence, and I have told them the story as you have told it to me, and I am surprised-at
the unanimity of feeling of everybody toward the bank. They will do anything that
is necessary, or that they reasonably can, to save the institution. They simply want
to know what you want." After consultation, it was decided that we would draught a
bill embodying our views with reference to the reforms necessary, and submit it to our
friends. Such a bill was draughted. It provided as the first thing, as a sine qua non,
a thorough reconstruction of the board of trustees, and for the selection of those trustees
to the number of two-thirds of the whole at those points where the branbches f the company were located, they being named by thelocal committee, and made it the duty of the
board to keep those comtnittees fully informed of all that was doie. It provided, among
other things, a penal clause, which was finally incorporated in the act of June 20, 1874
for the punishment of offenses against the institution. Mr. Arnell, I think, lodged the bill
with either Mr. Whitthorne or Mr. Dunham. At any rate, it was lodged with some good
friends who promised to see it through with as much promptitude as possible. It was
about that time that I told the actuary what we were doing, and secured his hearty
co-operation. Ho had been disgusted, and wanted to resign and lot the thing go. We
then made up our mind to stick by the institution to the last. I provided, as much as
possible, that on the 1st of January as little money should be drawn as possible, and
Mr. Stickney provided as well as he could that the;e should be as much money ready to
make payments as it was possible to have. At that stage, the proceedings had necescome to the knowledge of the president of the bank. They had before that had
sarily
a committee on legislation, and the thing which I most dreadled transpired. The mat.
ter full into the hands of the trustees, who, through their committee on legislation, had
a hearing before the Committee on Banking and Currency. The whole business became plblic, got into the newspapers, delay was the consequence, and the golden opportunity of doing anything was passed. Tle ultimate purpose of -that legislation was
to provide for the disintegration of the institution without loss. The trustees were to
be changed so as to get the branches under local control; those Washington investments
were to recalled in and re-invested at the branches. The institutions was gradually to be
hedged in and drawn down to a paying basif.- in the hope that at some future time we
might be able to turn the whole concern over to local organizations under State chartors, and so dissolve the Freednma's Savings and Trust Company without loss,
still keeping the good results which we had already attained. On the 1st of January,
1874, when we had to meet our difficulties, wo got through very nicely, and I was
still in the hope that this prompt legislation would be had; that by thle re-organization of the board of trustees, public confidence would be given to us, and so we might
go on, tide the thing over the immediate emergency, and provide, as I have stated for

the gradual change of the character of the institution. After the thing became public,
our friends in Congress did tlmh) best they could, but it dragged along during the sesthus in honer bound to fight the thing through until Congress did
sion, and we Itwere
was not, finally, nntil the 20th of June that the bill passed, and only
something.
after so much discussion and such changes of opinion, and such alterations in the circumstances of the bank, as that the final legislation which we got was probably as
as anything that could bo done. Tie institution had to go. This explains in part,
good
and probably in whole, the long struggle which the bank made to keep its head above
water. After the 1st of January, after the time that we really entered on this struggle to
reform the institution, we were bound to keep it, if possible, until wecould get appropriate
legislation, for if we had abandoned it, proceedings in baukruptoy would have been commenced against us in every State where we had a branch, and no man could see the end of
confusion and of the loss that would be entailed on the institution. I took into my confidence also, Mr. Meigs, the national-bank examiner, told him just how we were situated,
toldhim I was perfectly aware that we must fail, but hoped that we might succeed, and
asked him what he thought it was my duty as a n'an, and Mr. Stiokney's duty, (he
asked him the same question,) toward the depositors. It was truethat if we took money
on deposit we might not be able to pay it back again, wholly. We came to the conclu-

180

FREDIDMAN'S

SAVINGS AND TRUST COMPANY.

sion, under his advice, that we were doing the best we could, that we wore bound to
make the best fight possible; which fight we did make. One other circumstance,
which I su1pl)Ose discouraged me more than anything else, was, that while we were in
the midst of the run, (I cannot give the date, but it was when we applied what we
call our 60-day rule, at the Washington office,) the bank being very low in funds, the
two-nmembers of the board of trustees who had any money on deposit there, came
only
in one night and took out their last cent.
Mr. FIlOST. What were their names
T'leo Wn'ITNE . Mr. Worinley was one. I am not certain of the name of the other. I
recollect it distinctly, because the sum drawn by them amounted to about $10,000, and
left us with about $600 cash on hand in the face of a pretty severe run. The only trustee who came near us that night was Dr. Purvis. Stickney and I had gone to the
bank fully' determined to go next morning before business hours to the Comptroller of
tle Currency, tell him how we were placed, and ask him to appoint a receiver. Dr.
l'urvis came in and we sat down and talked the matter over, and came to the conclusion tllat it was a bad time to show the white feather until we had exhausted every
resource, and it was decided unanimously that we would apply the sixty days
possible
rule; that is, require each depositor to give sixty days' notice before he could draw any
of his money. The doctor wrote thle notices for tie papers, and I wrote little local notices
for thle papers. We lad our alvertisemenelt in every city-paper the next morning, and
to our surprise everybody simply said, * Why didn't you do tllat before " Wo gained
what we wanted, our sixty days' time, but the fact that tiho trustees, in that great emergency, did not give us any support, was thoroughly disheartening. I will mention
one other fact.
Before the first of January, 1874, while the existence of the concern was under discussion, it was evi(lent that tho expensa-accolunt had got to be cut down. The actuary
and myself figured out a reduction of $25,000 in the salary-account and pledged ourselves to a $10,000 reduction in the general expense-account. Of course it was going
to take great economy to do this, but it was to be an annual reduction and we agreed
to do it. We did pult it in force, and wo could have done better. A part of the plan I
could not carry out without the co-operation of some of the trustees. Of course I
could control the men below me, but not tile men above me. I had always regarded
the office of president as a sinecure, and the first thing was to got rid of the presidency. Then we could appeal to our men, to their esprit de corps, for a further reductiou of salaries and expenses. The matter was mentioned to Mr. John M. Langston,
one of the trustees, and he said to Mr. Stickney and myself, ( Come out to my ouse
on Sunday and we will talk the matter over." We went out. I said to him," Now, Mr.
Langston, I suppose we are talking business." Ho said, 'Yes." I then said, "The
first thing to be done is to abolish the presidency; either that or make it a nominal
a nominal salary." Dr. Purvis had said to me that he would take the presplace with
if necessary, and that we could get presidents enough. Mr. Langidency for nothing,
ston agreed to see that the office of the president would be either abolished or that the pay
would be out down to$1,000 a year. It was then $3,000, with some contingent expenses
If we could not get the former we would take the latter. I then said that I would
recommend the discharge of Mr. Wilson, who had $2,500 a year and $1,200 for contingent expenses as general agent and canvasser, and that I would see that Mr. Boston
was removed; and I said, let such and such be done, making up a list that would cover
a reduction of $25,000. \We went home feeling that we had done a good Sunday's
work. The meeting of the board of trustees came off. I went on record with my
recommendations and they went through. Much to my surprise and disgust the office
of the president was retained, and I was informed that Mr. Langston made a speech
ill the board in favor of retaining the presidency at $3,000 a year. Mr. Alvord was
at that time. This incident occurred before my conversation with Mr.
presidentwhich
conclusion that if we saved the concern we had got the
Arnell, kind ofleda me toonthehand.
That was the only thing which decided me in going
biggestof officialfight
and in working, as I did, behind them and without
my
ba'o
supporters,
their knowledge.
Mr. FROST. After you gave the notice that depositors would not be paid unless they
60 days' notice, did you receive any deposits ?
gave
The WITNESS. 0, yes. rWe had to do that business. Wo were bound to receive deright straight up to the last day of closing, otherwise it would have been a conposits
fession of weakness, and would have sounded the alarm, and we might as well have
shut our doors instantly. That was one of the things which we had to do, and take
the consequences as business men. It is what every bank would have to do under similar circumstances. I make tils statement, because tlere is a general impression
among many of our men that the institution was swamped byinits expense-accountnoand by
its interest-account; and the further impression is a broad the country that intelligent effort was ever made to save it. It is due to gentlemen of the last Congress,
who made such a good fight for us, that I put this statement on record.
Mr. FROST. I think you testified before as to the amount of money received, and the

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

181

amount of money paid back; how much was it-the total amount of deposits from
first to last ?
The WITNESS. Between flfty-six and fifty-seven million dollars was received, and of
course between fifty-three and fifty-four millions paid back, leaving a balance due to
at the time the concern closed, of about three million dollars.
depositors,
We have since made one dividend of 20 per cent. on that three millions. It is du(
to some of the cashiers that I say that a few of them I took into my confidence and
told them how things were going, and I engaged their hearty co-operation in an effort
to save the concern. These gentlemen were not dishonest men. 'hey were able men.
were inl a bad fix, of course, as business men, but they had their reputation in it,
They
and the fight was worthy of being made, and was so made. I have had letters from
several of the cashiers who felt aggrieved in being included in a sweeping assertion
that the cashiers at the branches were all rascals. Better men never lived than some
of these men. I do not care to give their names unless the committee desire it. It is
due to Mr. Sticknoy that I say that he was exceedingly desirous of getting out of the
concern immediately after the panic, and felt that we ought to let it go and got out.

By the CIIAIRMANN:

Q. It was stated by a witness, a few days ago, that the amount of collections made
since the dividend was declared in November last was about $63,000; state whether
any collections have l)en made since then ?-A. I am not able to say. The matter has
not come directly to my attention.
Q. Do you, or not, know whether the debt due by the Young IMen's Christian Association has been paid --A. I think it has not been paid. It may have been, but,,if so,
it is very singular that I have not heard of it. I will send you the information to-day.
Q. State whether the auctioneers employed to sell property for the benefit of the bank
are allowed to advertise in whatever papers they please, and in as many, and on their
own terms ?-A. I do not know that any restriction has been put on auctioneers in that
matter. I suppose they would be governed by their own judgment of what was best.
Q. Do you know whether there is any arrangement between the auctioneer and the
papers in which tlh advertisements appear, that he is to receive a drawback or percentage on the amount of the advertising-bills ?-A. Of my own knowledge I know
nothing about it; but it is generally understood that the auctioneers do get a drawback of some 25 per cent. or thereabouts.
ever had your attention called to the itemized account furnished by the
Q. Have you on
the call of this committee, of expenses incurred by them in the mancommissioners,
agemenit of the bank, and especially for the items of advertising ?-A. I have remarked

them.
Q. Were you present when Mr. W. Ji Murtagh of the National Republican gave his
testimony before this committee ?-A. I was not.
Q. Look at this account for advertising, [handing paper to witness] which, it will be
extends from August, 1874, to April 12, 1876, and which amounts to $4,714.73,
seen,
and state whether or not it is exorbitant, in view of the amount of business transacted within that time ?-A. It undoubtedly is, in my opinion.
Q. If that account, as it stands, is exorbitant, what would you say of it if there was
or more to be added to it ?-A. I would say that it was still more exorbitant.
$1,000
I have always regarded this local advertising of trustees' sales as altogether wrongas a job, iln short. There is no use il minilig words ablut it.

182

FREEDMAN'S

SAVINGS AND TRUST COMPANY.

WAR DEPIARTMENT,
1Washington City, February1 12, 1876.
Pursuant to section 882 of the Revised Statutes, I hereby certify that the annexed
on file ill this Dopartmlnot.
papers are true copies of the originals
In witness whereof I have hereunto set my hand, and caused the seal of the War
Department to be affixed, on the day and year first above written.
1WM.I W. BELKNAP,
[C.lAL.]
Secretary of allr.
WARt DEPARTMENT,
A7djutant-General's Office, Washington, D. C., Jlne 26, 1875.
GENERAL : I have the honor to inclose herewith a copy of memorandum prepared in
this office covering certain financial transactions of the late Bureau of Refugees, Freed.
men and Abandoned Lands, developed by the report of the commissioners of the
Freodmau's Savings and Trust Company to the Speaker of the House of Representa.
ties, Forty-third Congress, second session; .also copies of certain correspondence
between the War 4qd Treasury Departments in relation to the matters thero'n referred
to, and a printed copy of Mis. Doe. 16, H. R., second session Forty-third Congress.
These papers fully explain themselves, and will exhibit to you all the facts, so far
as are known to this office.
With the view that the funds now in the possession of the commissioners of the
Freedman's Savings and Trust Company are public, I am directed by the Secretary of
War to request that you will furnish this office with all information ill your possession,
or that you can obtain, relative to this transaction, thus to aid in securing to the Government the amount involved.
The records of this office are open to any one yon nmay designate to examine them,
and the oflico will aid you in any way you may indicate.
Very respectfully, your obedient servant,
THOMAS M. VINCENT,
A 8ssiista t .Ajl ta t- enLcerl,
Brig. Gen .O. IIow.x), U. S. A.,
Late Commliissioner Bureaut RLeJifecs,l,'reedmllcn ald Albanlioned Lands.
IMEMORnANDUM.-The following in connection with the financial transactions of the
late Bureau of R., F. and A. Lands, has been developed by the report of the commifisioners of the Freedman's Savings and Trust Company to the Speaker of the House of
Representatives, Forty-third Congress, second session, Mis. Doo. No. 16:
On the first day of February, 1867, the F. S. and T. Co. received from the said Bureau R., F. and A. L., $15,000 in currency, and again on the 18th day of July, 1867,
the further suImi of $870.07, to be held by said bank in the nature of a trust-fund under
the 7th section of tho act approved March 3, 1865. Shortly after the receipt of said
sums they were invested in 5-20 United States bonds. A copy of the order of General
0. O. Howard, late Comlmissioner of the Bureau of R., F. and A. Lands, with reference
to said fund is attached to the report mentioned, and directs the deposit of tle balance
of the proceeds of the crop made on Destrohan plantation (Rost Home Colony) with
the Freedman's Bank, in the city of Now Orleans, " which has agreed to invest it in
United States bonds, and pay full interest on the same," the. said interest to be oxoended in the support of the educational establishment for freedmen in the State of
Louisiana, under the direction of the assistant commissioner for the time being.

Up to July 1, 1B73, interest was credited on tlio books of said bank on account of this
trust, amounting to $7,077.36, against which checks amounting to $'2,328.47 were drawn
anld paid, leaving a balance of $4,748.89 dto.
'The United Stittes bonds originally l)urlhased have been sold by tihe
bank, and a realestate note for $15,000, secured by dledl of trust on property in tlis city, substituted in
liol of etid bonds. InI addit Jii to the balance above monltionld and the $15,000 note,
the commissioners of the bank hold $1,856.94 cash, which amount is prestlmed to be
interest collected on said note, or so much thereof as, under the agroomenat, should be
credited to said trust.
In view of these facts, an examination of the records of the late Bureau of Refilgeos
and Abandoned Lands hlas been mlado to determine, if possible, the exact
Freedmlen
from the fllanoial
history of this transaction, but nothing intelligent can be obtained
records, cash-books, ledgl.s, journals, accounts-current, &o,, that should contain the
information. Accounts were rendered in 1868 and subsequently, by the assistant commissioner for Louisiana, but tlhe only thing to connect the same with this matter is a
note in red ink'as follows, R. II. C. fund." Judgitig from the amounts of receipts

183

FREEDMAN S SAVINGS AND TRUST COMPANY.

and disbursements, as shown by said accounts, nothing entered into the same save such
interest asawas received and expended.
From the report of the assistant commissioner of the State of Louisiana, for the year
October 31, 1866, it. appears thatending
" In tie latter part of 1865 numbers of infirm and helpless freed-people were, for
of economy, collected upon the Distrehan plantation, owned by P. A. Rost,
purposes
The restoration of the property of Judge Rost was soon after ordered, and, with
esq.
the eceptionl of this plantation, all was restored as soon as possible. This was retained
the provisions of Circular.No. 20, of 1, from War Department Bureau, &o.
under
1
th pnioso great, on account of
The necessity for retaining the antatin this year seeming
the large number of old and helpless which were there under our charge, arrangements
were finally made to cultivate the place, raise a crop of sugar and cotton, pay Judge
Rost a reasonable rent, and at tile same time provide for the dependents without expense to the Government. The prospect thus far is very flattering, and there is evAry
reason to believe that, after all oxponses are paid, there will boe a considerable balance
in favor of the Bureau.
" Rations and clothing have been furnished tllis colony; also medical attendance, the
estimated value of whill is shown inl tle appro.xim:it tabular statement herewith.
"The average number of freed-peopl uponll he plaunt-tionI hal been about seven
hundred and eleven, (711.) Of this number abo)t rive h undrad and flfty, (550,) old and
are dpendenut onl thie Burau for support. 8.In ), however, h-lvo rendered more
young,
or loss asistlOanc, as they were able, in gathlringl tll cronp ; a ant the sa no tilm have
physically beoeliterl themselves.
" At the close of th year the place will bo given ip. and the helpless now there othernwise provided for."
The following is a copy of exhibits, &3.:

Exhibit showing the approximate co08t, ))lobable productions, anid balance itl favor of Rost
Homte Colony, ,'Saint Charles Parish, La.,front January 1 to Octobcr 31, 1866.
EIxpCnI ses.

Estimated receipts from plantation.

Subsistouce-176,513 rations, at 15 cents. $26, 476 9510
.......... ?..
.
7,:102
Forntge...................
of
WageslabInrers
...................... ,000 00
for
laborers
...................
1. 00) 00
Clotiilna
medicines ...... 1, 400 00
annd..................
Medicdanttendance
7150 00
Scliooltoacller's salary
Rent of plantation ...................... 13, 350 00
of
...................
500 00
Repairs machinery
81 00
Coal for blacksmiths, $50; iron, :31
510 00
Leather, $25; wagon.grease and tallow. $2
700 00
$150
Iloop.poles, $300; rope, $250;white
bagging,
and red
Grain.sacks, $150; hbeltilg,
200 00
lead, $50 .............................
for
1'20 00
and
,inmo,
sanitary
purposes,
repairs.
In idntal expenses
50 00
Balauce in fdvor of the plantation ....... 19,120 00

31,500
pounds of cotton ginned, at 35
cents ................... ........
11, 025 00
10,500 pounds of cotton, unpicked, at
35 cnts......
3,675 05
350 acres of sugar cane, eatilnatod td produce420, 000 pounds of sugar, at 15 cents
pIr pound
63,000 00
6,000 gallons of molasses, at 40 cents
400 00
.........................

80, 100 05

80, 100 05

......

..............

.

........................

per gallon

2,

....................

/

II his report for the year ending September 30, 1867, the
Louisiana, says:

assistant commissioner for
" At the close of last year the Rost Home Colony was discontinued, (meaning close
of the year 1866.)
«
#
X
*
»
«
"1The crop raised * was
w
and there was a balance in favor of the
disposed
of,
Bureau amounting to the sum of $14,150, which was invested in 5.20 United States
bonds
and deposited in the Freedman's Savings-Bauk."
»
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Y
*
* U
From the foregoing it will be soon that in connection with the Rost Home Colony
large sums of money wore received and expended. No record showing in detail the
transaction can be found.
Thle act of June 15, 1866, (General Orders 63, 186q,) provides that all moneys raised
in the United States for the support of refugees or freedman and received by any
officer of the United States Army, shall be charged aainr, ist such offiior on the books of
the Treasury Departmlent, and accounted for by him in like manner as if such moneys
were drawn from the Treasury of the United States.
There can be no question but the mnondys received from the sales of the crop made
on this plantation should have been accounted for under the provision of the act above
cited, and ilf its requirements have bueen copllliel with by the officers of the lato Bureau
-

184

FREEDMANI S SAVINGS AND TRUST COMPANY.

of Refugees, Freedmen and Abandoned Lands, a reference to the accounts of said
officers will throw additional light on these matters, and to this end it is recommended
that the whole subject be placed before the Secretary of the Treasury in order that the
necessary stops be taken to secure to the Government the money now in the Freedman's
and Trust Company, and such additional moneys as may be found to have been
Savings
received by the officers of the late Bureau on this account and not properly accounted
for to the Treasury. If the funds in question have been accounted for to the Treasury,
it is suggested that copies of the accounts bo called for to complete the records of this
Oflico.
It may be added that the $15,000 with accrued interest has most certainly not been
accounted for to the Treasury, else it would not now be in the late Freedman's Savings
andTrrust Company. As it is a part of the whole, it is fair to infer that no part of the
amount, some $80,000, realized for the crop has been accounted for, otherwise the
accounting-officers would have been advised of the amounts in the FreedTreasury
man's Savings and r''ust Company.
Respectfully submitted to the Adjutant-General.
TI-IOMAS M. VINCENT,
Assistant Adjutant-General.
ADJUT.ANTr-GCxENIERAI S OI:IC, Ja)I((I)ary 2, 1875.

[General Orders No. 55.]

DIEPAI'raMENT, AI)J UTANT-GENnERAIL'S O1FFICE,
l'ashlinyton, June 25, 1872.
I. Pursuant to provisions of' tlie " Act [General Nature--No. 133] making appropriations for sundry civil expenses of the Government for the fiscal year ending June 30,
1873, and for other pulpo0ses," approved June 10, 1872, the Bureau of Refugees, Freedmen
and Abandoned Lands will be discontinued from and after June 30, 1872, and, after
that date, all business relating in any way to tle said lbureau-exclusive of the Freedmon's hospital and asylum at Washington-with all the accounts and claims connected
or date, or lwhensoever incurred, will be conducted
therewith,theof whatever character
of tlo Army, to whom all the records, checks and Treasthrough
Adjutant-Genoral
ury certificates (received under section 1 of the act of March 29, 1867,) or tile amounts
received tlerefrom, and all other funds, papers, and property, will be delivered by
the first of July proximo, at such place as the Adjutant-General may designate.
II. After .June 30, 1872, all business relate ingin an y to tlhe " Freedmen's hospital
and asylum at Washington, D. C.," witi all tlie accounts connected therewith, of whatever character or date, will be conducted through the Surgeon-General of the Army, to
whom all the records, papers, funds, and property will be turned over by the first of
July
proximo.
III. The Adjutant-General and Surgeon-General will arr-nge, promptly, for the execution of this order, andl, after the transfer, submit for the actla n of tlh Secretary of
War such regulations as may be necessary for the future transaction of the business.
Agents, clerks, and other employ ds whose services may not be required by the Adjutant-General and Surgeon-General in effecting the transfer, will be discharged June
others as soon as the transfer shall have been completed.
30;IV.allThe
following are the portions of tile act of Congress under which the foregoing
is ordered:
Be itl enacted by! the Senate and Ifouse of Representatihes of the Unlited States of America in
ess assembled, That the followinglls ms be, and the sam e are hereby, appropriated,
Congr
for the objects hereinafter expressed, for the fiscal year ending June thirtieth, eighteen
hundred and seventy-three, viz:
*
a
For collection and payment of bounty, prize-money, and other legitimate claims of
colored soldiers and sailors, viz: For salaries of agents and clerks; rent of offices, fuel,
and lights ; stationery and printing; office furniture and repairs; mileage and transportatibn of officers and agents; telegraphing and postage, one hundred thousand dollars: I'rovided, That the Bureau of Refugees, Freedmen and Abandoned Lands shall
be discontinued from and after June thirtieth, eighteen hundred and seventy-two, and
that all agents, clerks, and other employs then on duty shall be discharged, except
such as may be retained by the Secretary of War for the purposes of this proviso; and
all acts and part of acts pertaining to the collection and paymelit of bounties, or other
due to colored soldiers, sailors, and marines, or their heirs, shall remain in force
moneys
until otherwise ordered by Congress, the same to carried into effect by the Secretary of
such clerical force as may be necessary for the purpose.
War, who may employ
For the support of Freedmen's hospital and asylum at ,rWashington, District of
Columbia, viz: Pay of medical officers anu attendants, medicines, medical supplies,
rWAiR

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X

#

FREEDMAN S SAVINGS AND TRUST COMPANY.

185

and rations; clothing, rent of hospital buildings, fuel, and lights ; repairs and transportation, seventy-four thousand dollars: Provided, That no part of said on account of
shall be used in the support of, or to pay any of, the aforesaid expenses appropriation
hereafter to be admitted to said hospital and asylunn, unless persons reany persons
moved thither frotn some other Government hospital: Provided, That after June thirl
tieth, eighteen hundred and seventy-two, the Freedmon's hospital in the District of
Columbia shall, until otherwise ordered by Congress, be continued under the supervision and control of the Secretary of War, who shall make all estimates and pass all
accounts, and be accountable to the Treasury of the United States for all expenditures.
By order of the Secretary of War.
E. D. TOWNSEND,
A djl tan t- CGeneral.
Official:
Assistant A djutant- Geleral.

IHEADQUARTERS DEPArIrMTENT OP TrlE COLUMI~[A,
To the ADJU'rANT-GrEN1EIAL OF THE ARnMY,

Wl'ashington:

Portland, Oregon, August 4, 1675.

SIR: On my return from Fort Klamatl, I found your letter of June 26, 1875, with
inclosures.
By direction of the Secretary of War, you request me to furnish, concerning the Rost
Home Colony, Louisiana, " all information in your (my) possession, or tlat I can obtain,
*
*
thus to aid in securing to the Government the amount involved."
I answer, first, that I havo no information whatever, except what you send me with
your letter.no
Second, possible way occurs to me of obtaining information except through the
officers who are accountable for the fund in question.
General Mower, to whom I gave the order, (copy marked inclosure " C," appended to
the report of the commissioners of the Freedman's Savings and Trust Company,) is
dead. His disbursing-officer, Capt. W. B. Armstrong, assistant quartermaster, was soon
after mustered out of service. I have no information concerning his present residence.
W. II. Wood, then lieutenent-colonel First United States Infantry, was assistant commissioner succeeding General Mower. Col. Robert C. Buchanan succeeded Colonel
Wood.
It will be noticed in' the accounts you inclose, that the disbursements were made in
1865 and 1866, when General A. Baird was assistant commissioner, andi prior to any order
directing the disposition of the not proceeds. If the successors to the record of tlhe
Freedmen's Bureau will write a note of inquiry to each of the officers named who are
now in the Army, the replies may furnish all required information, or give some reason
why this Rost Home Colony: was treated differently from other a.sylums and hospitals
under charge of the Bureau.
It appears to me that as the deposit was made holding "the balance of proceeds"
subject to the order of the commissioner, the withdrawal from deposit should be by
the same authority. The honorable Secretary of War being to all intents and purposes
the successor in law to the commissioner, his order should to sufficient.
Capt. W. B. Armstrong, assistant quartermaster, accounted directly to the
of the United States, being a bonded disbursing-officer of the Army. The Treasury
assistant
commissioner supervised his accounts in detail, but they did not come under my eye.
Believing that I have done all in my power to throw light upon the subject at issue,
and being unwilling to shoulder greater responsibility than my plain duty seems to
require, I respectfully request that the Assistant Adjutant-General, now in charge of
the freedmen's branch of the War Department, conduct tile correspondence with the
Army officers or others who may be, directly or indirectly, connected with the case.
I am, very respectfully, your obedient servant,
0. 0. HOWARD,
.Brigadier-General, United States rmty.
P. S.-I will name Geo. W. Dyer, esq., of Washington, D. C., as my attorney, in case
any legal proceedings be h(ad.
O. 0. HOWARD,
nBrigadier-Genleral, United States Army.

186

FREEDMANd' SAVINGS AND TRUST COMPANY.
WARt

I)El'PARTMleNT,
Sin: Referring to your communication of tel 27th of January, 1875, transmitting
for further action or sBuggestion
COpy of letter from R. I{. T. Leipold, ono of tioe coinnissloners of the Froodman ' Savings and Trust Company, and copy of another from the
Third Auditor of the Treasury, both bearing upon the matter of tho " IRost 'Homno Colonly," a full statomeut of which, so far as shown by the records of tlhe late Bureau
tRefilgees, Freedmen and Abandoned Lands, was submitted to you by War Dl)epartelolnt
letter of the 11th of January, 1875, I have the honor to inform you that, mubsqouelit
to the correspondence referred to above, the subject was placed bleforo the late Commissioner of the Freedmen's Bureau by letter dated June '26, 1875, (copy herewith,) to
whichli h as replied by letter of August 4, 1875, (copy herewith,) and wherein he declines to assume any responsibility.
I now view it as the duty of tlle Treasury Department to tako tlhe necessary steps
to secure to the Governmentt the money now with the Froodman's Savings andTlrust
t amount
Company arising from the Rost Hlomo Colony transaction, and also thelargo
which has not been account d for, that is, the value of the crol)s (see estimate $ 0,000 and
upward) lessandtiletoamount
actually deposited with said Freedman's Savings aund Trust
that end I now place the matter before you.
Company;
I nmy particularly refer to the fact that the late Comlmissiooner, in violation of law,
placed the amount, $15,000 and $870.07, total, $15,870.07, in tile Freedman's Savings
and Trust Company, and did not, at tlhe date of the transfer of tleo late bureau to the
of the Army, under General Order No. 55, of 1872, (copy herewith,)
Adjutant-General
or subsequently, refer to tie money being there, although the general order referred
to directed that all "funds, papers, and property will be delivered by the lirst of July
proximo."
There is no doubt as to the funds being public, and the accountability for them falls
under the act of Juno 15, 1866, entitled "An act to provide for the settlement
clearly
of accounts of certain public officers."
I deem it proper to further invite your attention to the memorandum transmitted to
you January 11, 1875, from which it appears that ratios were furnished to this colony
to an amount exceeding $26,000 in value.
The Commissary-General of Subsistence, United States Army, reports that said rations
were supplied through Captain I. T. tIaskell, comimissary-sibsistelce, vol
r, at
New Orleans, La., but can find no evidence that payment therefore was ever Iadel by
the late Bureau Refugees, Freedmen and Abandoned Lands.
Very respectfully, your obedient servant,
W. W. BELKNAP,
Secretary of ia,'r.
The lion. SECRI.ETARIIY OF TIlE TlI.EASUIIY,.
1'ashingto,, D. C.

WI'ashitgton City, S'-ptember 21, 1875.

TREASURY DEPARITMENT,

WIashingtoln, D. C., October 9, 1875.
Sill: Acknowledging the receipt of your letter of the 21st ultimo, relative to money
from the ' Rost Home Colony," and alleged to be yet due the Government, I
accruing
have the honor to inform you that all the papers In the case in possession of this Office
have been transmitted to the honorable Second Comptroller of this Department with
request that he cause a thorough examination of the whole matter in question to be
made, and that he take such further steps as may be. deemed necessary to secure to the
Government any interest it may have therein, and to cause a proper adjustment of all
accounts pertaining thereto.
Very respectfully,
B. IT. BRISTOW, Scecretary.
lion . W.
W. BELKNAP,
Semetary of lVar.
WVAI DEPAIITMENT1, AD)JUTANT-GENERALt'S OFLI'ICE,

l'ashington, D. C., October 9,1875.
Relative to certain matters pertaining to the affairs of the late
Bureau of Refugees, Freedmenu and Abandoned Lands, the following will indicate as
to their condition at this time:
SIRi:

*

"

*

W

1i

W

»
*

*

if

Rost Homo Colony," involving some $80,000.
las, in part, been before the Treasury Department, and was first developed by
'Thlis
the commissioners of the Freedman's Savings and Trust Company, through their
7th.

"

187

FREEDMAN'S SAVINGS AND TRUST COMPANY.

iiMicellanoous Donument 10, Housso of Representattives, Forty-third Congress,
report
second sHssion. No accounts covering, la required by act of Junlo 15, 1866, (14 Stat.,
filed in the Treasury Departnuent, nor can any detailed statement,
pago 65,) have been
in explanation, be found. Th'1o War Department 1101(1 that accounts in detail with
vouchers should be rendered; all funds not legally and duily accounted for should be
looking to securing, immediately, the amount, some
recovered, and notion hald
of the Freedman's Savings and Trust Coll)pany.
$'21,605.83, in the hands
Tile subject was, on June 26, 1875, (Itily placed before the late comm issioner, who, in
has stated that le has no information whatever, except what wan sent him by
reply,
tho communication of Juno 26, from this Offico. No explanation has been made as to
thle Frecdmatn's Savings and Trust Company, and placed
why the amount found.in
of the late Commissioner, was permitted to remain there instead of
there y the orders
transferring it under War Department Orders No. 55, series of 1872, for the transfer of
the late bureau to the oharge of tills Office.
By letter of September 21, 1875, the Secretary of War placed the subject finally
before tloe Secretary of the Treasury, concluding as follows:
"I now view it as the duty of the Treasury Department to take tle necessary stops
to secure to the Government tile money now with tile Freedman's Savings ant Trust
Collmpany, arising from the lost Ilome Colony transaction, and also the large amount
which has not been accounted for, that is, the value of thl crops (see estimate $80,000
and upward) ]ess the amount actually deposited with said Freedlmau's Savinllgs and
Trust Comllpany; and to that end I now place the matter before you."
4
"There is no doubt ts to tilo funds being public, and the accountability for them
fills clearly under tlle act of Juno 15, 1866, entitled 'Au act to provide for the settlenmet of accounts of certain public otlicors."
October 9, the Secretary of the Treasury informed tlio Secretary of War that the
Second Colmptroller had boon requested "to cause a thoroughly examination of the
whole matter in question to bo malo, and that hle take such further stops as may be
deemed necessary to secure to the Government any interest it lmay have therein, and
to cause a proper adjustment of all accounts pertaining thereto."
Very respectfully, general, your obedient servant,
TIOMAIS M.
*

x

i

*

*

4

H

*

*

To tle ADImUTANT'-Gl:'NElALl, OL'rillE AIMY.

4

*

A 8i8ista n t

v

4

VINCENT,
A(jltUlan t-G' ecra l

188

FREEDMAN
'

SAVINGS AND TRUST COMPANY.

SELECT COMMITTEE ON FItEEDMAN'S BANK,
IVashington, D. C., 1Februa;ry 1, 1876.
Your
with
stated
commnln ication,
DEA.1 Srl:
inclosures, of this (late to tile chairman has been received. In reply, I have to inform you that tlhe paper designated as
" ay-roll" does not embody the information asked, and the committee desire to bo
informed by a tabular or itemized statement of the entire expenses on all accounts
incurred by the commissioners in the settlement of the affairs of the Freedmlan's Savand Trust Company, in which they wish particularly all accounts for fees and
ings
commissions to attorneys, and the nanes of said attorneys; in short, the wholo amount
of disbursements by the commissioners up to the date of t e returns hereby asked for,
and the daily expense on which the business is now being conducted, withlany suggestions as to how and to what extent said expenses may be reduced.
all the drafts embraced under the
Also, that offyou" will please insendtlheto the committee
this (ay received.
overdrafts,"
report
designation
By order of the committee.
Yours, respectfully,
GEO. C. WEDI)E RB3URN,
Clerk Committee Inlrestigation Freedlmanll's Svings and T)uNt Conipalny.
R. I-. T. LEIrOILD, Esq.,
Of Ihe Comnmissioners Frcedmlan's Sarings and Trust Comlpa"ly, pr'e8Ct.

OF TIE COMMIISSIONEIZS OF TIHE
IFEEDMAN'S SAVINGS ANI) TRUST COMPANY,

OFFICE

WIashington, D. C., IFebriary 12,1876.
Sin: In reply to your communication of the 1st instant, we have the honor to transmit herewith the following tabular or itemize(l statements of the entire expenses on
all accounts incurred by the commissioners of the Freedman's Savings and Trust Comof the affairs of said company, and those previously incurre(l,
pany in the settlement
but paid by them, from the 13th day of July, 1874, the (lay when they entered upon
the performance of their duties, to and including the 31st day of January, 1876, viz:
No. 1. Statement of ordinary expenses;
No. 2. Statement of salaries;
No. 3. Statement of attorneys' fees and costs;

No. 1. Statement of miscellaneous expenses;
No. 5. Statement of expenses incurred in connection witl loans; and
No. 6. Statement of expenses incident to the preservation, &c., of properties belongto the company.
ing1The
expenses incurred in connection with loans consist mainly of the expenses of
and the overdue and unpaid taxes oni property upon which the company held
sales,
Leedss of trust, the property having been bid in by us at trustees' sale to prevent its

being sacrificed.

We also inclose an itemized statement of the overdrafts at the several branches, and
such of the drafts themselves by which the overdrafts at the Washington branch were
incurred as we have been able to find.
The paid and canceled drafts of the other branches, that were sent to us at tlie time
the branches were closed, are contained in 35 large eases of unassorted miscellaneous
papers and canceled pass-books. To examine these thoroughly with at view to discover whether any of the drafts asked for are among them will require weeks--perhaps
months. Hence, we forward the desired statements without awaiting the result of so
long a search.
Iiaving made every effort to limit the expenses of the commission to the lowest possible figure, and to reduce them as fast as practicable, we are not able, at this time, to
suggest any further reduction other than that contemplated in Senate bill No. 141, now
in possession of your committee. By transferring the payment of the future dividend,
to the Government depositaries, the expense of expressago and postage on pass-booksa considerable suim-will be saved.
We are expending now such sums only as in our opinion are absolutely necessary for
the prompt execution of our trust, and tihe protection of the assets committed to our
care.
We have the honor to be, very respectfully, your obedient servants,
JNO. A. J. CRESWELL,
R. IT-. T. LEIPOLD,
Of the, Commis8sioners.
One hundred checks inclosed, which please return.
Hon. B. B. DouoLAs,
Chairmlan Committee of Inrestigalion Freednian's Savings and Trust Company.

189

FREEDMAN'S SAVINGS AND TRUST COMPANY.

Statement of orerdraflt of the Freedmatn' Savings and Tru8t Company.
of over.
Datedrafts.

Paymenits.

A mount.

Name.

WAHIINGTON lIANCHI.
M iller..................................................
Aug. 1,1873 John
HI. BUls ...................................................
Abbott Pavement Company
Frank T. Iowe, buinuoss manager
J, G.M. yerso................................................
William McGulro............................................
Jan. 3,1873
arry Dolihue ............................................
Brown ...............
J.M.
Sept. 7,1872
A pril 30, 1874 J. V. W. Vandenbl rgh
Swallow

Dl),. 2,1873
July 29, 1873
Nov. 8,1872
Sept. 3,1873
June 4,1874

.

................................
...........................

.............

......................................

Nov.
Mar.
Dec.
Nov.

Oct.
Juno
A ug,

Mar,
July

Mar.

May

5,1872 Benjamin
..........................................
2,1874 Marcelhin
14,1873 E. L. S idt................................................
16, 1872 II. N. Howard ..............................................
2,1872 Charles I. Ulis............................................
3,1874 Edward Jones ...........................................
2,1873 lbJbert E. Williams
12,1873 Ilonry Johnson
22,1872 Zalmon Richards
18,1874 John W. Starr...............................................
5,1874 Ira A. Iopkins..............................................

Bailey............................................

m

.

..

20

Sept. 19,1873
Sept. 4,1873
Sept. 8, 1873
May 6,1874
Jan. 5,1874
9,1873
Aug.
Nov, 17,1873
30,1874
April
Feb. 16,1874
Feb. 9,1874
Jun" 10, 1874
18,1874
April
June 2,1874
June 26 1874
June 30,1874
July
3,1874
Feb. 12,1874
Feb. 18,1873
2,1874
May
May 29,1874
Oct. 25,1866
Feo).
2, 1860

15,1866
10,1867
St pt. 1,1871
17,1872
Sept.
Nov. 11,1872
Mar. 30,1872
Juno 7,1869
D)c, 31,1871
Mar. 2,1869
Nov. 6,1869
May 18,1868
Nov. 13,1869
Aug. 21,18669

Sept.
14, 1869
Mar.

JuJne 20, 1807
iMar. 31,1868
Dec. 19, 1867
Aug. 31,1869
Nov. 1:3,1868
July 232,1869
June 30, 1869
Jan, 24,1868

Leonidas Scott..............................................

Dr. Joseph T. Johnson
Israel Dll1, (dead)
John H, MIChesney ................................;.......
Charles R. Douglaass

.......................................

..........................................

..........

Brothers
Douglas
Robert A.

.......................

.....................................

Phillip...........................................

J.W.
JIW
Wrigh.
Wright................................................
C. W. Soatou.................................................
It. M.Hall
Horace Boghton ...........................................
Roswell
..................................................

Waldo..............................................
J.J,
W. W. Chlckring
Chlkering
H. Warner

............................................

...............................................

.

Harris
R. J. Nicholson...............................................
Sarah M. Choffer...............
Joseph E. Snodgrass.........................................
Ballard Pavement Company................................
J. Daniels..................................................
F, S. Lamson ...............................................
Smolnsk & Lyl
...............
J.J. Geor
............................................
WJ.Cooke ............................ ............
James H. MdcGill
A. Cuem lngs ...........................................
J. Cooke.................................................
J. T. Wormley
W. Stiokney.........................................
George
George D. Johnson, agent
D. Johnson...........................
George
Holden & Sponoe
E.-L. Sizer.................................................
Worioey & Johnson......................................
William'E. Matthews
Ellock La Rue
James Vincent
John Lane
James Dent
Patience IIardy.............................................
Enoch Magruder
Joseph It. Parker
F..

................................................

.........................

.............

........

.

.

..............................

.

.............................................

.................................
.............

...........................................

.......................................

...........................................

..............................................

...............................................

............................................

...........................................

1,020 66

8 40

35
8
14:
188
25

............

............

..........

............

............

............
............

............
.......

....

..

............
............

........ ....
0|
03
...........

1

2 00

1 02

I............
...........

......
95
13
295
11............
55
I............
5 00 ............

...............................................

.................

............

............

..........

.................................................

.....o.s...................

............

...........

.............................................

..........................................

............

............

........................................

Georgo Oriceo........................................
RobrtDlany..............................................
Muary E. Wllliams. ......................
William Dodson .....................................
James G. Madison.................................
Caroline Jackson
Sunan Walker...............................................
Augustus Jones

205 40

115 51.......
4 08
408
74 54
2'11 40
206 46
8 07
8 67
9 10
10 00
100 00
22 14 ............
561 52
1589
814 64
814 64
45 24
45 24
838 98
00
2
18 02
18 02
100 00
160 00
3 28
328
500
500
600
1 92
1 2
19 72
50 00
13 46
140 22
528 92
40 06
01
756 40
756 40
40
46
5 33
1 50
150
3 42
3 42
57 22
57 2
19 00
28 11
49 ...... ....
'
29 20
26 50
7 22
7 2-2
30.........
10 00.
000..........
500 0 ............
1 38
...............
............
5 00001
!...........

..........................................

.

4
09

............

............

8 09
00
15
40...........
13: 8............
0;............

John Smliloy...............................................
Brown
Joseph
Aloiuda Letchor............................................
D. LEato& Co

John Kimblml
G. P. Hopkins ...............................................
Daniel Shaw
Sandy Plator................................................
Mrs
r. '1T. Goodall ........
................................

341

1,201 20

.........................................

.........................................

............

I1
81 11
480 00 ..........
3:1 32 ............
1971
641 65
641 05

..............................................

May 10,1874
May 18,1874
Jan. 7,1874
Jan. 25,1873
Nov. 27,1872
Nov. 30, 1872.
Jan. ,1873
July 1,1874
Mar. 11,1873
June 20,1873
Mar. 25, 1873
May 6,1873
June 5,1873
June
Mar. 3,1874
Mar. 14, 1874

Mar.

$10 :35

5

1051 ............
............
550
0

....................

25

50

20 00 j............
3:1 ............
5 502............
j

3 5

50'

13 00

..........

5
............

190

FREEDMAN S SAVINGS AND TRUST COMPANY.

,Statment

of overdrafts of theIercedmain' Savl8ys and ru8st Colmpany-Contilnucd.
____

.___.L_.

Dnto of over.
draftN.

_.

I_

Name.
_______

___ _.___________

Amount.

Pnymonte.

__.__.__.I____
____
__
·

VWAHilNITON BlANXCII-Contililed.
Juno 10, 1808
eob. 0, 1873
Nov. 27, 1860
Juno 20, 1873
22, 1860
April
Tan, 22, 1808
Jun 25, 1808
Jan. 24, 1808
Nov. 21, 1818
Nov. 10, 1870
July 21,1808
1872
ot. 12, 1808
An. 8, 1870
ol). 3,
Dee,
6,1870
Jan, 30, 186
Nov. 0, 100
1800
April29,
Nov. 13, 18'1
Fob. 21, 1871
Dee, 1, 1871
Jan, 5,1800
July 6, 1870
Sopt. 10,18(1
1871
April 11, 1800
AUlg, 10,
1870
J11y 27, 1869
Sent10,

1871
July
iar,. 29,0, 1870
Mar. 14, 1870
Aug.
4,1800
Aug. 8,1808
10,1870
July
Jan. 13, 1874
1870
Sept, 21, 1871
19,
Oet.
Juuo 17, 1870
1,1871
July
Nov. 10, 1870
2,1873
Jan,.
Mar. 3,1870
Mar. 17, 170
13, 1871
Mhny
Ju1ie 12, 1871
Doo, 4,1870
M3ar. 10, 1871
April 30 1870
8,1870
1)oo,
Oct. 30, 1808
Doe, 7,1861
April 1,1870
186
Sept. 4, 1871
April i
July 10, 18'1
1874
Jitno 20, 1870
Nov.
10,
Feb, 1,1871
1869
Sefpt. 30,13 1871

Juno1 , 1870
oFb, 21, 1870
Oot.
Nov. 8,1801

Fob. 0,1872
Oot, 25,, 1871
Juno
1870

Deo. 20, 1800
9,1870
Jut1o
9,1870
Aug.
Jn,. 27,1870
Dee. 20, 18900

Maly l101670
Juno
May 27,1871
Mlnr. 17, 1871

28,1870

Ocorgn Waslilngton...............
Elllizabot lIorlh rt...........................................

........................

WVllinm II. Brown ..........................................
Ellizaboth 1, Brown ..........................................
WIlllini Warnior. ..........................................
.........................................
Jolhn J. (ray
Wahington .........................................
Mar,
Wn'ifa
1, Doolittle ........................................
l
Alexander AAhley ................................... .......
Folny Jolthnon ..............................................
Lewl IB rne ..........................................
SamIIIIOl Leo ................................................
Charles 11. Ohurn.. ........................................
Edward GIlbson l............................................
Jaltu Win, Ilwhin ........................................
WGorge Ingralii ..........................................
Iofertr A, O.arnott .........................................
Wlliram 1. Gyn ............................................
Win, B1rn....e ....................e.............
oeorgo Jolson
............................................
Georg
n
JudM (H0I ard. .............................................
Edward .8, Fowler, treas. 1st Cong, S.
88
........................................
Dtugnu
Margaret
'Mary (I reason, ...................... ..............
Charlote Watts ...........................................
Joln 11. Woodward ..........................................
Abraham Johnson ...........................................
Amnola Colbert .............................................
Chlrles Meyer .............................................
Smith ...............................................
GeorgoBlollohi.......
John
Cloli(ld Clnxton .............. ..............................
(. A. Stowart ...............................................
.

.......................

.........................................

lPayne
Stalonnrd
Wiiu e ltaildall
William Skippoth. ..........................................
Maria lIiok ...............................................
It. oloes..............................................
Mnry
Itllunrcd 1111,.............................................
tRobecca Lnncnastr..........................................
Brnxton Iarrlsoii ............................................
Ed nd 'Tylor ...............................................
Tyl)'. ................................................
Emily
JameOH 8Hhoolor..............................................
'IPatrick Coagrovo............................................
Amilolin I, IBrown ............
Cornella IIniltlton
....
A. (olo, Hps elal fund. .. ........................
Johll
O. , W ll.................................................
(. W M dlng ...............................................
Grant ...............................................
GOorgoHin
(t,IRI'.(frjllle
H F. ...............................................
Grimes.0* *.... z
Oharlres Mullhloy............................................
Jonties Solholor, triuteo ............ .......................
Catherlno Lancnator ...................... ..................
latlllda A, VWheoler.......................................
Dr. llobert Phlillips ...... ... ................
Octavia lhlorldon .............
Samnuol I. Davi .............................................
Law'roc10o G. Fletchtor.....................................
(Clrl cesWeiss ...............................................
LuOlu W. S lydnor.........................................
Mrm. A. 0C Cdaston, nagctl...............................
.....
............
...........
ElIn a Bolhdon
1clmhol Mason.............. .......................
ontlor
Joinlls W,
E,
.............. .........
J'oseph
Vponing
Al oxnndor..........................................
Willam
'llhomnH Horroll ...........................................
A , S aulll g ...
W, ]oloaug
W:
G.G. hldrhll ............. ...................................
John O. \in ....
Sonl andl dnu. of Maybrry.................................
Loulsa Contes ..............
Peotor Ioberts
'l'oilnas PLer r ................
.........................................

.............................................

......................

.................

..........

.........

.

.........................

.........

......

....................................

..........

.........................................

.

............................................

.....

3, 173
DeO.
Oct. 20,1872
July 25,1870 Thomalls LittIo..

...............

.................

............

..............................

...................

...............

..............

.

$1 0 0

...........

1 0 8 ............
3, 0 ...........
7(0 ............
0O(0 ............
14 0'4 ...........
6 5(0 ............

4

............

............

9

............

1 0(
4 91
0 5(
59 0( 1

............
............
............
...

.......

11 0() ............
O,
1 0O ............
8 7' ............
3 84 ......,.....
1E ............
8 31 ............
...........
5 O0
66 ............
700
37
10 00
15 D............
175
80 00
25 00
20
21 08
2 55
02
40
01
40
37 58
100 (0
02
02
1 25
1 76
14 95
10 00 ...........
30 00
25 00 ............
............I
45 54 ...........
25 00 ............
............
48 ...........
38
70 00
25 00 ............
00 20
5 04
1 07
10 00
3 12 ...........
02
200
15 00
5 00
27 510
4 ,oil
n01
5 10
02
02 . ...........
11
5 00
15 00
9 40 . ...........
50
50 . ...........
09
10
1 35
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.

FREEDMAN'S SAVINGS

191

AND TRUST COMPANY.

Statemcnlt of overdqrfts of the Freedmn an' Savings and Trust Com pany-Continued.
n of over
two

Name.

Amount.

Payments.

WAHINOTONN jBRlANCll-Contintled.
E.
Knowlea
J,
...............................05 65
Sept. 2,1871
Mar. 27, 1871 Jamice Grant ............... ...........
10 27 ............
..................
..
Deo. 7,1869 William I. oodcre.........ro...............................
28 25............
Dco. 9, 1870 eorgo T. Cook.............................................
65:3 96 ...........
ar. 4,1872 John J. Knox...........................
..............20...........
John
5 00
u0ll ...................................................
May 31,1870
............
10
Sept. 1, 1873 FranolH Henry ... ................. .
Oct. 7, 1070 Alexander Wllllanmon .....................................
0 00 ............
.......................
10,1673 Aloxander Davisa .
49 50............
Sept.
3:1 00
Jan. 2,1872 J. 0. Lowl.................................
255 07
Pillbroo
B.
...................................
go 85
.........
10,1870
July
171 54
Oct. 20,1871 Danlol L, Welch & Co .......
........
JTune 18,1870 A. Pannell ........ ............. .....................221 51
i& Wheolor.........................................
30 ..........
July 91, 1810 MoNalr
20,1870 Colly Jolf'or ...............................................18 00 ...........
July
F, ,. 0,1871 J'oellnua Whitnoe 'y Co........... ................0.......
150 41 ..........
Juno 14, 1873 Nanoy Lonnx ........................
............ .........5 00...........
Mar. 30, 1871 "Now 4iuroh Book and Tract Society ... ..... ... ......35 71..........
144 841
..........
...........................
144 84
Apr. 15, 1673 I, Hau .dors .
Feb. 4,1871 F. 1I. Young................................................
22 08 ...........
Mar, 281872 John S, I'olor ............................................18 01 ...........
0 00
May 192,1871 Chrl.., &Collnn......... ............ .....................
1872 I'rindlo IDyer...... ........
1 82
1 82
.....................
Mar,
Fob, 4, 1872
5 51
5 51
gannrdlan ......... .........................
Oct. 15, 1870 JE, Ayres ....................0...........................
35 00 ............
Jani, 10,1871 Johni H. Arrlaou .......................... ................
24 78 ...........
)ec. 12,1870 John L, Duffoo .................. ..........................
70 00 ...........
Mar, 22,1871 Jolin attlo ..........................................
.0...
Mr. 0, 1871 Honry Bayloy.................................
70 30....
........
Mi y 25,1874 Henry Mooro ...............................................
19 05
10 05
........

...........

............

........

.................

.

...........

......

...........

...........

....

.

...

...........

SoplhR Ilolhnoc,

........

Jn. 20,1871 11., ,'AddlRon.....a....... .............................
7'
.4
Jina 11,1871JHameaI.I 9..l. ......................................
28 1 .............
9, 871 Al., DtII'y
00............
ay
..............12
Dco.
5 00
28.1b70c A.1], ltloorson .................
ler
...........
Dec, 14,1871 N, H.,
................................................17 84
Feb. 17,1872 William Rowo ............................................
3 90
1Do), 27,1870 Charlte E. Catpliurt .......................................10 87
1 00 ...........
8,1871 dward Lloyd ..............................................
April
A april o,. 1871 Julln A. Ilolmnea . ............
15 85 ...........
........................
FannloE.
Rufi
4 44
nMar. 13,1872
............................................
..
J,. hrlckalor.
...........25 20...........
April
29, 1871 T.
Oct. 24, 1973 M ry Elinge .............................................
20
1 07
Thominpon ....................................
Thomiea
Mny
10,1871
Juno 7,1873 Mount Olv1ot Lodge, No. 1333 ..... .... ..............
4 07 ............
Mnr. 5, 1872 ,L, McO. Porkins ............................................
25 00............
pt, 91873 Lu Ny
oy ..................
Fob, 3,1872 Tliho,
nith ..............................................22 7700............
Jnn, 31, 1873:1Fraol A, Pannoll ............................. ........
John W. Smith ............... ...............................
)co, 1 187:1
15............
DI)co 27,
871
lizabth Baldwin ..........................................5 00....
50 0050 00
WVlln Po1...............................................
7,1874
Apri11
Oct. 23,1871 Thonin .Connolly.........................................06
00
WIllin 11. Woodward ................. ................
3 91 ............
May
13.1872
Manr, 9,1872 Ocorgo Sohornorliorn . .............. .......................
288 90
Sept., 16873 Jano Stevoetnsol ...
9 92............
.......
...............
Fob, 14, 873 Tlions Bond
2 05
........
................................
Francis Johnson ...........................................
April
02
4,-1874
Oct. 25, 1873 S9mith Kelloy
00 ............
.......3
S fil. . .......................................
5:1............
Dco, 1871
Oct. 11,1872 Jooph
and 'Trronc I) .................................
03 ............
Dantlol
Willam B. Loga ...................
15
.............
April i, 187 I,
..........
00............
10 00 ...........
.8 Stotor... ......... .................................
Jnan, 22,18741
7, 1874 Allen lruthorord ..
94
85
April
..................
......
Mar. 2,174 W111tilliam GuilllHOlI
87
25 00
Jnan, 12,1874.1 Samol Barow ............... ..............
3 7'2
34 32 ...........
12, 1872 ChanrleAWcrman ...................... ................
Jain.
Mn 1,1t,673 oplhronl ,Wrado
200
..........................
Wnlh ........................ .......... .....
07
11,1872
Dooe, 25,
Jun
, ate .
1873 Josephl
onnott
...........................................02............
Jmn. 25,1873 A, Erdmnn .......
25 75
...
Feob, 10, 18,74 Evollne Itolhlihon ..... ............
75..........
................ ...............
Thomlas W. lhano...
20
Spt.
75 ...........
.. ....................
20,16873
..........
Nov. 20, 1872 John'lBradford.....r
00
. .........
.....................00...........I
Jaiin. 3,1874 Charles N Thoma ............................................
1 42
14 42
Oct. 2,1873 J. W. Alvorl, .Ir.. ............................................
0
April 15,2,1872
WlliantnO, McOnttro ...
.
..............
Aug. 1872 J. M. McAvo ...............................................0 00............
0 75
75
Aug. 3, l8.2 11. D. Cook, j............................................
...........

.

....

......

............................

..

...........

............
...........

...........

.........

............

............

......

..............

............

,

I

............

....

............

......

............

.......

,

..............

..

......................................

...........

..........

%

...................

....

...........

.....

......

...........

.

.................

192

FREEDMAN'S SAVINGS AND

TRUST COMPANY.

Statement of overdrafts of the Freedman's Savings and Trust
I.

__

Company-Contliuued.

_

Date of over.
drafts.

_

Name.

Amount.

Payments

WASIIINOTON B1tANCII-ContlllUOd.

Julo 18,1874
Junlo 30, 1872
April 30, 1871
Out. 15,1872
2,1873
July
May 28,1874
Oet. 23,1872
July 1,1874

17,187:
hMar. 31, 1872
May 24, 1873
Jal, 3, 1873
July 21, 1873
Aug. 15, 1872
O0t, 5, 1872
Oot. 18,1872
ir. 1, 1873
oeb. .25,1873
Mar. 12,1873
Oct. 14,1872
3, 1872
May
Jal. 2,1872
Sept. 10, 1872
'Fob. 1, 1874
lMar. 1, 1873
Oct. 12,1872
Fob. 28, 1873
Apr. 15, 1872
Sept. 24, 1873
l)eo. 4,1873
10,1873
npt.
ar. 30, 1874
Juno 10,1872
May 19, 174
Mar. 21,1874
Nov. 29, 1873
13, 1873
Aug.
Mar. 12,1873
Nov. 1,1873
8,1872
July
Oct, 20, 1872
Jan. 2'2,1873
Apr. 27, 1874
13,1872
July
Jan. 29,1873
13,1873
Aug.
Mar. 10, 1