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46TH CONGRESS, 2d Session. ç 1kTE. 1 REPORT No. 440. REPORT OF THE SELECT COMMITTEE TO INVESTIGATE THE • FREEDMAN'S SAVINGS AND TRUST COMPANY. UNITED STATES SENATE. APRIL 2, 1880. • WASHINGTON: GOVERNMENT PRINTING OFFICE. 1880. COMMITTEE: • BLANCHE K. BRUCE, of Mississippi, Chairman. ANGUS CAMERON, of Wisconsin. JOHN B. GORDON, of Georgia. ROBERT E. WITHERS, of Virginia. A. H. GARLAND, of Arkansas. • GEORGE W. CARTER, Clerk. I. NEWTON BAKER, Stenographer. J. N. FITZPATRICK, Expert Accountants. JNO. C. HUNTER, 46TH CONGRESS, 2d Session. SENATE. j REPORT No. 440. IN THE SENATE OF THE UNITED STATES. APRIL 2, 1880.—Ordered to be printed. Mr. BRUCE,from the Select Committee on the Freedman's Savings and Trust Company, submitted the following REPORT: [To accompany bills S..711 and S.1581.] RESOLUTION. Rewired, That the Select Committee on the Freedman's Savings and Trust Company, appointed by resolution of the Senate of April 7, 1879, is authorized and directed to investigate the affairs of said savings and trust company and its several branches, to ascertain and report to the Senate all matters relating to the management of the same and the cause or causes of failure, with such other facts relating thereto as may be iimportant to a full understanding of the management and present condition of the institution, and to a more economical administration and speedy adjustment of its affairs. Be itfurther resolved, That said committee, and any subcommittee thereof, shall be authorized to sit during the recess of the Senate, and be empowered to send for persons and papers, to summon witnesses to administer oaths, and shall be authorized to employ a stenographer and such other experts, accyuntants, and other assistants as may be necessary; and that the said committee be authorized to have printed, from time to time, for the use of the committee and the Senate all the testimony taken by them, together with the papers laid before it. Your committee, under the authorization and direction of the preceding resolution, have considered carefully the affairs and managements of the Freedman's Savings and Trust Company,and respectfully report the results of their investigation, together with the testimony and other evidence upon which their conclusions are based. The resolution directing this investigation proposed an inquiry into the affairs of this institution for the purpose of ascertaining the causes of its failure under the management provided in the original charter, and, also, to ascertain the condition of the institution as administered by the commissioners appointed under the act of 1874, with the view to reduce the present cost of management,and the speedy and final adjustment of the affairs of the bank. These purposes we kept steadily in view in our investigation, and while our inquiry has not been as complete in detail nor as full and definite in the ascertainment of important facts as might be desired, we have, nevertheless, proceeded far enough and determined enough to be prepared to suggest appropriate and adequate legislation upon the subof our inquiry. Pending the continuance of the civil war, and soon after the colored race became a considerable element in the military forces of the United States, the safe-keeping of the pay and bounty moneys of this class became a matter of great importance to them and their families, and to meet this exigency, military savings banks were created at Norfolk, Va., and Beaufort, S. C., centers at that time of colored troops. At the je/ iI FREEDMAN'S SAVINGS AND TICS r COMPANY. 'close of the war the emancipation of this IT ao increased the necessity of some financial agency to meet their economic and commercial wants, and in _response to this demand, taking suggestions and counsel of the expedients that military experience had suggested for the benefit of this people, the National Congress incorporated, Much 1865, the Freedman's Savings and Trust Company. As its name imports, the institution was designed to perform for a particular class of our people the simple but important functions of a savings bank; its declared purpose being "to receive on deposit such sums of money as may from time to time be offered therefor, by or on behalf of persons heretofore held in slavery in the United States or their descendants, and investing the same in the stocks, bonds, treasury notes, or other securities of the United States." Among its fifty incorporators were Peter Cooper, William Cullen Bryant, A. A. Low, S. B. Chittenden, and many other patriotic and philanthropic citizens, and the objects and patrons of the institution commended it to the confidence of the many thousand simple-hearted and trustful people who subsequently became its.depositors. The need for such an institution was real and pressing, and it not only met a public demand and supplied a great convenience to those for whose benefit it was ostensibly established, but it stimulated in them a spirit of thrift,frugality, and foresight which constitute important elements in the economic and industrial development of a people. From its modest beginnings it grew into an institution respectable in its pro-, portions and large in its influence, reaching in its ten years of active operation an aggregate of more than fifty-seven million dollars of deposits, taking hold of the earnings of more than seventy thousand depositors. Until 1868 the spirit and letter of the charter seemed to have been recognized very faithfully by the trustees and officers who administered the affairs of the company, and until the beginning of 1870 there do not appear to have been in the administration any serious and practical departures from the kindly and judicious programme indicated in the act. creating the institution. In May, 1870, an amendment to the charter was secured, which embodied a radical and what subsequent events proved to be a dangerous and hurtful change in the character of securities in which the trustees were empowered to invest the deposits of the institution. Two-thirds of the deposits, that portion from which the dividends were expected to accrue, were originally required %to be invested exclusively in United States securities, but by the amendment referred to one-half was subject to investment at the discretion of the trustees "in bonds or notes secured by mortgage on real estate in double the value of the loan." From this period began the speculative, indiscreet, and culpable transactions which ultimately caused the suspension of the bank, and disastrous losses to a very large extent upon an innocent, trusting, and necessitous class of citizens. The institution was originated for benevolent ends, and appealed to the active, intelligent agents who assumed charge of it to do a needful, helpful business -service without compensation therefor; and the attempt to conduct a business institution as a charity, looking for efficiency in its officers to their sympathies and philanthropic sentiments, rather than from any personal material benefit that would accrue to them, led to the construction of a charter without penal clauses, providing for the, infidelity or bad faith of the officers. The act of incorporation required no investment of money on the FREEDIJAN'S SAVINGS AND TRUST COMPANY. III part of the trustees in the enterprise, as a condition or qualification for holding their offices; it imposed no bomb upon them, except in a few limited cases, as a guarantee for fidelity to their trusts. These defects in the charter seem to have grown out of the philanthropic character of the institution, and appear to have been considered unnecessary in an institution so constituted, if not incongruous with its purposes and character. Whatever considerations conspired to create a fiscal institution of magnitude extended enough to reach and affect the interests of millions of a class of citizens, without providing for its permanency and the integrity of its management by incorporating the moneyed interests of the managers, as stockholders, with the fortunes of the institution over which they presided, and without providing adequate penalties for malfeasance or infidelity to their trusts, the institution thus created is, in the nature of things, exposed to more than ordinary dangers, and its continued permanent success could only be expected by the presence in its trustees and officers of that exceptional measure of intelligence and good faith that would hold the institution steadily to the purpose for which it was originally created. If the trustees who conducted this bank had been men of great discretion, great integrity, and entire devotion to the purpose of the enterprise under their control, there is no reason why either loss to the depositors should have followed or disaster to the institution should have come. Even the crisis of 1873 could not have affected this institution if it had been honestly and intelligently conducted as originally pro- • jected. We are to look, therefore, for the causes of failure to other than the ftbsence of these protective clauses to the charter. The trustees, after 1870,evidently either misapprehended the declared purposes of the charter relative to the character of the available fund, or else they intentionally perverted and violated the charter requirements. Section 6 of the charter declares that "It shall be the duty of the trustees of the corporation to invest, as soon as practicable, in the securities named in the next preceding section, all sums received by them beyond an available fund not exceeding one-third of the total amount of deposits with the corporation, at the discretion of the trustees." It further declares that the "available funds may be kept by the trustees to meet current payments of the corporation, and may by them be left on deposit at interest or otherwise, or in such available form as the trustees may direct." The evident and only meaning of this language, taken in its connection and interpreted in harmony with declared purposes of the institution as a savings bank, is this: "You shall invest two-thirds of the deposits in United States security; one-third you may need for employos and for paying such sums as the depositors may from time to time withdraw from the institution. These are the "payments of the corporation," and as a savings bank, under this charter, it can have no other payments. It is uncertain how much of the deposits will be left permanently in the institution, and can be therefore permanently invested in United States securities as a basis of dividends; but it is assumed that two-thirds will be left permanently and one third may be required for the purposes just indicated. You shall not exceed the maximum of one-third in constituting the available fund, and in your discretion you must not reserve as an available fund one-tenth unless it is necessary for the payments of the corporation. This available fund, thus discreetly determined and reserved, you may put on deposit in IV FREEDMAN'S SAVINGS AND TRT ST COMPANY. some safe bank, with or without interest, or you may loan it on short time on United States securities, so as to have it available for current payments of the corporation." This is the meaning, nothing more or less but the by-laws of the trustees show that they construed this discretion as to the available fund to authorize them to reserve one-third of the deposits, not to pay depositors and expenses of employes, but to do a general banking business—to enable them to discount paper; to do a business that can never be safely done except under compactly organized institutions, in which the moneyed interests of the trustees will guarantee discretion and care, and which,for success even then, demands the best and most experienced talent in its officers. Section 3 of the charter—and it has never been amended nor repealed —declares that "the affirmative vote of at least seven members of the board of trustees shall be requisite in making any order or authorizing the investment of any moneys or the sale or transferfor, of any stock or security belonging to the corporation." The seventh regulation of the bylaws puts a finance committee offive in charge of the securities and moneys of the company, and the thirteenth regulation authorizes them to do in this matter what under the charter can only be done by the trustees and practically three members of the finance committee nominaliy and frequently two, really usurped and exercised in many instances the important functions which the board of trustees, under the charter, alone could exercise by an affirmative vote of seven trustees; and from 1868 to 1873 even the actuary, by resolution, as appears by the records of the trustees, was authorized to exercise an equal potential power in the loan of large sums of money and the changing of the forms of investment with the finance committee and the board of trustees itself. All this occurred for years in handling the most sacred trust-funds, and currently with the printed and oral declaration of the officers to the ignorant and trusting depositors that the institution was not only in a sound condition, but was being faithfully and honestly administered for the purpose expressed in its charter and by the methods therein provided. Section 15 of the charter contemplates and provides that the president, vice-president, and subordinate agents of the company "shall give security for their fidelity and good conduct while in office." It does not appear from the testimony that a bond was generally exacted, or that when given it was adequate; but it does appear that George W. Stickney, the actuary, exercising, with the connivance of the trustees and with the consent of the finance committee, arbitrary power in making loans to the extent of many thouands of dollars, never gave any bond at all during his whole term of the office, and he even states in his testimony that he was never required to give any. It is a tax on our credulity to expect us to believe that sane and honest men could so trifle with a serious trust and so recklessly administer the funds of others. Section 12 declares that"no president, vice-president,trustee, or servant of the corporation shall, directly or indirectly, borrow the funds of the corporation or its deposits, or in any manlier use the same or any part thereof, except to pay necessary expenses." There are instances in which this provision has been disregarded directly; repeated instances in which members of a stock company, while holding office in the Freedman's Bank, would negotiate loans for the companies to which they belonged from said bank; instances in which the officers of the bank became security for borrowers from the institu- FREEDMAN'S SAVINGS AN TRUST COMPANY. V tion. These transactions violate n spirit of the charter, and create a grave suspicion that, while the ter of the law may have been observed to some extent, the officer addicted to this practice were indirectly, if not directly, interested • the loans of this questionable character. The amendments of the law c anging the character of securities required from borrowers, and the flagrant violation of tbe fundamental provisions that we have sugge ted, open the way for abuses and initiated the culpable mismanagement, and in some cases the dishonest transactions,that ultimately paralyzed the institution and robbed its depositors. (The amendatory act of 1870,*changing the form of security upon wilich loans were to be made, and the misapprehension of the character and uses of the available fund authorized by the charter, opened the way for speculative loans, offered opportunities for easy infidelity to official trusts, and invited a class of borrowers hurtful and dangerous to any fiscal institution, and complicated the methods of management, destroying the simplicity of administration,so important to the continued success of an institution like the Freedman's Savings and Trust Company. With all these disabilities, however, discretion and honesty in the management,if the bank had been held to the purposes of its creation, would have averted the•disasters that came upon it. No institution of this character, if administered in the interests of the only parties who had any rights in the premises, could for a moment have made many of the loans under consideration. No bank, whatever its charter, would have advisedly entered into the Seneca sandstone, the Kennedy, Fleming, Boyle, Lyons, Vandenburgh and the Abbott Company loans, with any expectation of protecting the stockholders and depositors of the company from loss. We must, therefore, find a motive for these loans, not in the desire to serve the interest of the depositors of the Freedman's Bank, but in the purpose to further directly or indirectly the interest of the officers who so culpably and recklessly discharged the functions of their trust, or in the desire of said officers to further the convenience and interest of their friends among a certain class of borrowers; and we cannot satisfactorily and fully account for the failure of the bank by reference to the causes heretofore enumerated only, but must add thereto as contributing to failure the ignorance, inexperience, or the dishonesty of men holding official position in the institution. If adequate penal provisions had been incorporated in the original charter to punish infidelity on the part of the officers of the bank, even such a provision as is found in the amendatory act of 1874, many of the parties who practically control the operations of the institution would in some cases have been subject or liable to criminal prosecution. / In maintenance of the conclusions that we have reached in this connection, and as illustrative of the questionable management of the bank, we call attention in some detail to several out of many of the transactions to which we have referred. The statement is not exhaustive, for transactions of this class were multitudinous,as will appear by report of experts and by the testimony, and involved the investment of nearly half a million of dollars, more than two-thirds of which will prove a total loss to the depositors; but the instances particularized are large in amount, and each possesses some unique and illustrative quality of recklessness or indiscretion, if not crime, on the part of the men responsible therefor. The men who appear to have been most prominent in the question- VI FREEDMAN'S SAVINGS AND TRUST COMPANY. able transaction that we have detailed, and in others, were Messrs. Alvord, Cooke, Clephane, Huntington, Tuttle, and Richards, all members of the board of trustees, and a majority of t6em at one time or another members of some one of the administrative committees of the bank ; and Messrs. Eaton and Stickney, the actuaries of the bank, who, under its loose administration and despite the charter, seemed to have exercised as much power in the management of the institution as the trustees themselves. Mr. Alvord, the president from 1868 to 1873; Mr. Eaton, the actuary unti11872,and Mr. Huntington,a member of the finance committee, are now dead, and the parties sharing their responsibility, so far as they have come before your committee to be questioned on their official acts, have pleaded forgetfulness or ignorance of the violated law, or good intentions and philanthropic motives, and, all other excuses failing, they have placed responsibility for all questionable acts upon their dead associates, Messrs. Alvord, Huntington, or Eaton. The living among these actors are, with few exceptions, believed to be insolvent, and a civil suit would be unproductive if instituted against them. Facts may be developed by the further administration of the institution that may make it appropriate to institute both civil and criminal suits against the officers who have been unfaithful to their trusts, and we provide for this contingency in the bill submitted herewith. THE SENECA SANDSTONE LOAN. In 1867, under the general incorporation laws of the State of Maryland, there was organized a company under the title of the Maryland Freestone Mining and Manufacturing Company. The basis of the new company was a landed property, located on the Chesapeake and Ohio Canal about 20 miles from the city of Washington, embracing more than 600 acres of land, said land .containing extensive, easily quarried, and very valuable building-stone, generally known as Seneca sandstone. The property and improvements cost the holders about $120,000, and was held by them to be worth $250,000, and was put in the incorporation at this valuation in the form of $500,000 of capital stock. The incorporators were Messrs. H. H. Dodge, H. D. Cooke, John L. Kidwell, Dodge, and Anderson. The real owners of the stock were the three first-mentioned persons, Dodge and Anderson holding, for purposes of organization only, about ten shares of stock. About $200,000 worth of this stock was, soon after the organization, sold to a large number of prominent citizens at the rate of $50 per share of $100 face value. During 1868, $100,000 of first-mortgage bonds were issued and sold by the company, and the moneys arising from the sale of stock and bonds were invested in mills and other equipments of the property. Mr. H. H. Dodge was the president of the company during the first year of its operation, but at the end of that time withdrew from the directory and disposed of his stock, and was succeded by Mr. John L. Kidwell as president. The property was essentially valuable, and appears to have been conducted for a period of two years as a legitimate and profitable business enterprise. In the mean while the management came into the possession of Messrs. Kidwell, Cooke, Huntington, and Hayden, and early in 1869 seemed no longer to be managed for the profits legitimately growing out of the development of the property, but for speculative purposes. To A FREEDMAN'S SAVINGS AND TRUST COMPANY. VII utilize it for these latter purposes there was a stock dividend declared, and the stock was increased by the issue of $300,000 of new stock, and at the same time a new issue was made of $100,000 of second-mortgage bonds. These bonds were used, as is more particularly hereafter stated, as a basis upon which were procured loans in large amounts from the Freedman's Savings and Trust Company under circumstances that suggest not only corruption in the transaction On the part of some of the parties to the negotiation, but which have resulted most disastrously to the bank. On the 8th of May, 1870, the Maryland Mining and Manufacturing Company, known as the Seneca Sandstone Company,obtained a loan of $4,000, and on the 27th of July, 1871, a loan of $27,000, for which they gave the bank as collateral $49,000 in second-mortgage bonds of the stone company, making a total loan to the Seneca company of $31,000. Under date of July 25, 1870, appears a purchase by the Freedman's Bank of$20,000 first-mortgage bonds of the stone company, for which $18,000 was paid, being at 90 cents on the dollar. Under date of January 2, 1872, an agreement was entered into between the actuary of the bank, D. L. Eaton, and three members of the finance committee, Messrs. Huntington,Tuttle, and Clephane, with Kilbourne and Evans, whereby the loan was transferred from the Seneca Sandstone Company to Kilbourn and Evans, who gave their note for $50,000. (See agreement in report.) In accordance with this agreement, on the 15th of November, 187.3, Kilbourn and Evans's note and all the securities, excepting the $75,000 second-mortgage bonds were returned to them, but their account on the books was not closed flail the 12th of February following. On that day a new account is opened with the Seneca company, and $50,000 principal and $7,500 accrued interestis charged against it, with the $75,000 sec•ond-mortgage bonds held as collateral. Kilbourn and Evans, in a letter to Mr. J. M. Langston, chairman of a committee appointed by the board of trustees to investigate this matter, deny having received any mon ey from the bank in the transaction. They state that their object in giving , their note for $50,000 was to accommodate the actuary, Mr. Eaton who wanted the note to appear in their name instead of in the name o? the Seneca Sandstone Company. Under date of January 9, 1872, appears a receipt signed by John L. Kidwell, then president of the Seneca Sandstone Company, acknowl edging to have received from D. L. Eaton, actuary, the $75,000 of second-mortgage bonds of the Seneca company, which were held as security for the two loans of $4,000 and $27,000 respectively. These bonds were the same that are mentioned in the agreement with Kilbourn and Evans. Mr. Stickney, then actuary, in a letter to Mr. J. M. Langston, on this subject, dated November 6, 1873,says that the Seneca company was indebted to the Freedman's Bank on the 2d of January, 1872, in the sum of $51,785.73, included in which amount he has the $18,000 paid for the first-mortgage bonds bought by the bank, and, states that on that date (January 2, 1872) a transaction covering the whole matter was had with Messrs. Kilbourn and Evans, whereby their note was given for $50,000, payable in six months, with various securities, among which was the $75,000 second-mortgage bonds. On the 9th of January, 1872, Mr. John L. Kidwell, president of the Seneca company, bought from the actuary, Mr. Eaton,the $20,000 firstmortgage bonds which the bank had purchased in July, 1870, paying therefor $18,000 as principal and $2,580 accrued interest, a total of VIII FREEDMAN'S SAVINGS AND IT .4 tMi ANY. 'red credit for this $20,580. The books do not show that the 1)R1 money. The bonds originally given as collateral for the loans to the Seneca Stone Company consisted of $49,000, second mortgage. The $20,000 first-mortgage bonds were disposed • of as the receipt of Mr. Kidwell shows. How the balance of $16,000 second-mortgage bonds came into the possession of the bank it is impossible to tell. None of the records or books show, nor does the testimony. This loan was made in plain violation of the provisions of the charter, and was entered into on the part of the bank by Mr. Eaton and Messrs. Clephane, Huntington, and Tuttle, of the finance committee, who attempted to cover it up by changing the form of the loan, and securing by secret agreement with Kilbourn and Evans the assumption of the debt by them. This secret agreement and the subsequent suspicious and unauthorized release of the note of Kilbourn and Evans were so suspicious and so suggestive of fraud, that when the facts were brought to the attention of the commissioners, one of them, Mr. Leipold, and the attorney of the commissioners, Mr. Totten, believed there were sufficient grounds for a legal prosecution against the parties to recover the money thus wrongfully taken from the bank. Mr. Creswell, another commissioner, in view of the expense of litigation and the grave doubts about procuring testimony in the case, advised against the prosecution, and no action was had. In this view Mr. Purvis, the other commissioner, concurred. J. C. KENNEDY LOAN. • A loan was made to J. C. Kennedy, March 27, 1872, for $12,000, on $20,000 second-mortgage bonds of the Seneca Sandstone Company. This loan was made just after the questionable transactions between the bank, the Seneca Stone Company, and Kilbourn and Evans, and made on the same kind of worthless security. This loan has never been paid, and the question of settlement is now pending in the courts on suit brought by the comnsissioners. The probabilities are that this amount will be lost to the bank. VANDENBURGH. Another set of loans by which the bank will suffer heavy loss are those made to J. V. W. Vandenburgh and the Abbott Paving Company, of which Vandenburgh was treasurer. Loans amounting in the aggregate to $122,000 were made to Vandenburgh, the collateral for which consisted of certificates of the board of public works of the Dis.trict of Columbia, and approved bills against the District for work done improving streets, &c. There is still due the bank from Vandenburgh about $77,000. The Abbott Paving Company, of which Vandenburgh was treasurer, also obtained large sums from the bank in the nature of loans, for which the same class of securities were given as in the Vandenburgh loans. The loans to the Abbott Paving Covipany aggregated $89,000, of which about $48,000 has been paid. It is estimated that the loss to the bank in these two cases will reach between $50,000 and $75,000. The loans made to Vandenburgh and the Abbott Paving Company were made at various times during the years 1870-'71-'72-'73 and '74. tJ FREEDMAN 78 SAVINGS AND TRUST COMPANY. IX EVAN LYONS LOAN. The loan of $34,000 to Evan Lyons, made on the 23d of July, 1872, has caused a loss of $25,000 to the bank. The collateral given consisted of 60 acres of land, known as the Lyons mill seat, in Washington County. Lyons made four applications for loans of smaller amounts, offering in each case the same collateral. Upon presentation of the application to the finance committee it was repeatedly rejected, and on the 8th of May, 1872, it was rejected absolutely. Yet on the 23d of the July following the same finance committee approved this loan to him for $34,000. The board of trustees, at a meeting of May 16, 1870, expressly forbid the making of any loan for a longer period than one year. When the bank closed in June, 1874, this loan remained unpaid, and when the affairs of the bank were turned over to the present commissioners there was due from Lyons, including accrued interest, the sum of $38,188.37. The commissioners of the company subsequently sold the property under the deed of trust held by the bank, and bought it in for $40,000. They still hold the property, being unable to obtain a purchaser for it at a price • anywhere near the amount of indebtedness. It is estimated that the loss on this loan will amount to $25,000. This statement of facts, taken from the books of the company, was not satisfactorily explained by the testimony taken on this point. K. I. FLEMING LOANS. The loans made to R. I. Fleming aggregated about $224,000. A balance is still due from Fleming of $35,026.98. The securities taken for the loans made to Fleming were often insufficient, consisting mainly of approved bills against the District of Columbia, Young Men's Christian Association stock, and collaterals of that character, and in some cases no security was taken. Fleming is now bankrupt, and there is very little prospect of the Freedman's Savings and Trust Company ever realizing anything on his indebtedness. The estimated loss on the Fleming loans will aggregate $32,000. The following named were members of finance committee and approved many of the loans made to Fleming, viz : Messrs. Kelly, Cooke, Huntington, Richards, Langston, Balloch, Olephane, and Tuttle. JUAN BOYLE LOANS. The loans appearing in the name of Juan Boyle were made in direct nay violation of the charter. The board of trustees had, by a yea and that show books The 1874. June of 29th the on bank the vote, closed For $33,366.66 was loaned Boyle on the 30th of June, the day after. been one loan, viz, $4,366.66, no collateral whatever appears to have taken, and for the other, viz, $29,000, collateral utterly worthless was accepted, in direct violation of the amended charter, which provided loan. that the collateral in all cases should be of double the value of the to out turned which of $10,000 $18,000, In this case it amounted to but security, the of part Boyle, of note $10,000 The . whatever no value of be was secured by real estate upon which there existed a prior lien, and the real estate in question was sold under this prior lien, thus leaving only the $8,000 of railroad bonds. The estimated loss on the Boyle loans is $31,000, which includes by the interest, costs, and expenses. These loans were not approved , Stickney Mr. actuary, The trustees. of finance committee or the. board S. Rep. 440-11 X FREEDMAN'S SAVINGS AND TRUST COMPANY. made the loans without obtaining the approval of the finance coin mittee, and he so states in his testimony. This loan was made after the bank had formally closed, was made without authority of law by the actuary Mr. Stickney, was made without advising with either the trustees or finance committee, was made by a man required to give a bond by the charter, but who not only refused to execute a bond, but perpetrated many high-handed and arbitrary acts without a bond, and with impunity from either censure or punishment by his superior officers. This was not only an unlawful act, but one impertinently offensive, and made subsequent to the amendatory act of 1874; and subject to the penalties provided therein. Why Mr. Stickney has not been dealt with we are not advised, but he is certainly subject to criminal action for his conduct in this if not in other-eases. PRESENT MANAGEMENT. The amendatory act of June 20, 1874, provided for closing up the entire business of the bank, when such action should be deemed advisable by the trustees, through the appointment of three commissioners, vesting in said commissioners the powers exercised by the trustees and such additional powers as might be necessary for the purposes of their appointment. On the 29th of June, 1874, the *bank by vote of the trustees was closed, and three commissioners—Messrs. Creswell,Purvis and Leipold— were appointed to close up the business of the bailk, and they qualified and entered upon'their duties July 11, theregter.1 The statements of the commissioners and the tabulated reports and schedules submitted by them to the committee are furnished herewith, and give a very full idea of the management and condition of the bank since they entered upon its control. The statements and reports show the total assets and liabilities of the bank when they assumed control, the amount of dividends to Hay,1879, the annual and aggregate expenses of administration, including taxes, salaries of commissioners and of employes, and other incidental items of expense, and the present assets and liabilities. It will be seen from these statements that 30 per cent. of dividends have been declared, and that there is reasonable ground to expect a further and final dividend of at least 20 per cent., leaving as a loss to the depositors something over $1,500,000. It will be seen also that the aggregate cost of administration for the six years during which the commissioners have had charge of the institution has been $335,994.77. Of this aggregate fifty odd thousand dollars have been paid as salaries to the commissioners, and more than $70,000 to agents and other employes, and more than $31,000 as attorneys' fees. • It was deemed desirable by those who procured the passage of the amendatory act of 1874 that the duties of the institution should be devolved upon three commissioners, the friends of the measure deeming it important that a responsible representative of the colored race should be on the commission, that one of the commissioners should be learned in the law, and that one of them should be practically familiar with details and methods of banking; and these considerations not only operated to produce the legislation in question, but were also recognized in the appointment of the gentlemen who have administered the affairs of the bank since July 11, 1874. Whatever motive prompted this feature of the law, the history of the affairs of the company for the period 14- FREEDMAN'S SAVINGS AND TRUST COMPANY. XI referred to show that the provision was an improvident one, and imposed upon the bank a needlessly large and expensive management. If this expensive machinery were ever needed or expedient it is no longer so, and we recommend the passage of a bill placing the affairs of the bank in the bands of a single person, with such powers conferred upon him and such restrictions as will lead to the earliest practicable ettlement of the business of the institution. ) Another item we deem worthy of attention and legislation, to wit, the urchase by the government, at such reasonable price as may be agreed upon, of the building located upon Pennsylvania avenue known as the Freedman's Bank and the real estate upon which it is situatedA The sale of this property at a fair price for an amount approximating its costs and equaling its real value is very inportant for the depositors, and as an incident to closing up the business of the company. If sold at a private sale or at auction, under ordinary circumstances, it would be sold at great sacriace, a sacrifice that the afflicted losers and patrons of this institution cannot well bear. If not sold at all, it postpones indefinitely the final settlement of the business of the bank. It is very • valuable property. (The building is already in use by the Department of Justice and the Court of Claims at an annual rental of about $20,000. The government needs it now, will need it still more in the future, will .want to purchase it in the future, and if sold to private parties it will he held at speculative prices, and when the public necessities make it imperative to purchase it, it must be bought at these prices. Under the circumstances, as a judicious investment for the public use no less than a legitimate measure of relief to a necessitous and deserving class of citizens, we favor the purchase of the building and adjoining property by the government. To carry into effect the views and recommendations that we have submitted, we have prepared and herewith submit, as amended, Senate bill No. 711, providing for a more economical administration of the Freedman's Savings and Trust Comyany and a speedier closing up of its business, and also a bill authorizing the purchase of the Freedman's Bank and adjoining property, and respectfully recommend the passage of the same. 1 iir INVESTIGATION OF THE TREEMIAN'S SAYINGS AND TRUST COMPANY, BY THE SELECT COMMITTEE OF THE SENATE, AUTHORIZED Under the resolutions of April 7 and May 16, 1879. COMMITTEE-ROOM OF THE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, D. C., May 20, 1879. The Select Committee of the Senate on The Freedman's Savings and. Trust Company met this day at 10 o'clock a. m. Present, B. K. Bruce (chairman), J. B. Gordon, R. E. Withers, A. H. Garland, and Angus Cameron. The resolutions under which the committee were appointed and authorized, are as follows. That of April 7, 1879: Resolved, That the President of the Senate appoint a select committee of five on the Freedman's Savings and Trust Company, to take into consideration all matters relating to said institution; that said committee be authorized to employ a clerk, and that the necessary expenses be paid out of the "miscellaneous items" of the contingent fund of the Senate. Also, the resolutions of May 16, 1879: Resolved, That the Select Committee on the Freedman's Savings and Trust Company, appointed by resolution of the Senate of April 7, 1879, is authorized and directed to investigate the affair's of said savings and trust company and its several branches, to ascertain and report to the Senate all matters relating to the management of the same and the cause or causes of failure, with such other facts relating thereto as may be important to a full understanding of the management and present condition of the institution, and to a more economical administration and speedy adjustment of its affairs. Be it farther resolved, That said committee, and any subcommittee thereof, shall be authorized to sit during the recess of the Senate, and be empowered to send for persons and papers, to summon witnesses,to administer oaths and shall be authorized to employ a stenographer and such other experts, accountants, ' and other assistants as may be necessary; and that the said committee be authorized to have printed, from time to time, for the use of the committee and the Senate all the testimony taken by them, together with the papers laid before it. THE COMMISSIONERS EXAMINED In compliance with the call of the chairman of the committee, Messrs. John A. J. Creswell, R. H.T. Leipold,and Robert Purvis,commissioners of The Freedman's Savings and Trust Company, appeared before the committee. 1F B 2 FREEDMAN'S SAVINGS AND TRUST COIIPANY. THE TESTIMONY. The CHAIRMAN. It is our desire, as a committee, to confer with. you as to the best plan of closing up the affairs of the Freedman's Bank, and we wish to have the benefit of such suggestions as you may be able to make. Mr. LEIPOLD. I suppose that the committee has seen the letter I addressed to the chairman in regard to the matter. [See Appendix, Communication No. 1.] Of course that contains my general ideas on the subject. There are items of assets (as will be shown by the papers which we have also brought here in answer to your communication) which could not be disposed of at the present time without immense sacrifice; in fact, they would be wholly sacrificed. The largest amount of assets are lawsuits, pending which we could hardly dispose of these assets at any price. But the expenses of the present commission are quite large, as was indicated in the letter, and I think that a more economical plan might be devised. My idea is that the remnants of the concern to be adjusted should be transferred to some government department, and in that department be wound up by a government officer in connection with his other business. In that case, I do not think it would require more than the employment of some competent business man to aid whatever officer the affairs of the company, might be transferred to; and they, together with the counsel which would be necessary,and which has already been engaged in the several cases, could wind up the concern with much less expense. That is my idea about it. THE GENERAL EXHIBITS PRESENTED. Mr. CRESWELL. In obedience to the requestofthe committee,Mr.Chairman, we have prepared an abstract, and brought it with us [see Communication No. 2, Appendix],showing, as nearly as we could, the present condition of the property. Here is a general abstract of the accounts of the commissioners [see Appendix, Schedule Al]. It states, first, the amount of liabilities, as far as ascertained, up to May 10, 1879, and the total amount of assets transferred to the commissioners; the total of cash receipts to May 10, 1879, and the cash disbursements to the same date, under general items. Then we have furnished a statement of other assets on hand, giving, first, under Schedule A [see Appendix, Schedule A], a statement in detail of the notes in process of collection and not yet matured under Schedule B [see Appendix Schedule B], a list of the lawsuits still pending; under Schedule C [see Appendix, Schedule C],the list ofjudgments obtained; and under Schedule D [see Appendix, Schedule D], a list of the real estate still on hand. This is a general statement of accounts. We have also furnished and brought with us a detailed statement of annual expenses up to November 30, 1878,in Exhibit E,and from that date to May 10,1879,in Exhibit F[see Appendix, Exhibits E and F]. By Mr. GORDON: Question. From what date h—Answer. From the commencement of our administration, July 13, 1874, up to May 10,1879. Our statement shows every penny we have received, every penny we have paid out, and every penny we have on hand.. Schedule G, herewith submitted, is a memorandum of balances clue depositors and of dividends paid by the branches. This shows the condition of each branch in general terms. [See Appendix, Schedule G.] • FREEDMAN'S SAVINGS AND TRUST COMPANY. 3. Schedule H is a cf,A ttat ,tient to May 10, 1879. [See Appendix, Schedule H.] It sbws the t.ash now in our hands to be *1,075.84; cash in the United States Treasury, $238,397.99; cash with the United States assistant treasurer at New York, $31,448.41; making the total of cash $270,922.24. The special deposits, when we took possession, amounted to $35,224.22. These we were required to pay first; they were "special" under the law, you will observe. The preferred claims were $38,239.07, making a total of $73,463.29, which we paid. The total amount deposited in the bank at the time when we took possession was $2,934,313.66, which includes, however, a special deposit amounting to $240.91. The amount of ordinary deposits, when we took possession, was $2,934,072.75. Then there was a special account, the Rost Home Colony, amounting to $23,968; branch drafts, amounting to $5,297.29, and miscellaneous claims of $652.07, making a total of liabilities of $3,037,453.40. Out of our collections we paid for special deposits and preferred.claims *73,222.38; and with the checks in vault for $240.91 of special deposits, above referred to we had a total of $73,463.29 to be deducted from the gross total of indebtedness named above; leaving the liabilities subject to dividends a total of $2,963,990.11. THE DIVIDENDS DECLARED. We declared one dividend of twenty per cent, on this gross sum of $219637990.117 which amounted to *592,798.02; and we paid on account of this dividend the sum of $547,683.04, leaving still due in our hands, on account of the first dividend, $45,114.98. By Mr. CAMERON: Q. That has not been applied for,—A. Not applied for. Mr. CRESWELL. Then we had a second dividend. By Mr. CAMERON: Q. That was ten per cent., was it not?—A. Yes, sir; ten per cent., and it amounted to $296,399.01. We have paid out on this second dividend $252,296.24; and we still have on hand, unapplied for, a balance due on this second ten per cent, dividend of $44,102.77. A statement, then, of the cash on hand shows that we have as applicable to the first dividend the sum of $45,114.98, and to the second dividend,$44,102.77, making a total from the two dividends of $89,217.55. Then we have, as a special deposit, a sum arising out of the proceeds of certain col. laterals sold in the cases of the bank against Vandenburgh and The Abbott Paving Company, of $76,260.24. By Mr. WITHERS: Q. Why was that made special °I—A. Because we had a large amount of collaterals in that case and the opportunity of selling some of them, and by agreement of all the parties it was determined that we should sell and deposit the proceeds in the treasury, subject to the agreement. Then we have a special deposit standing in my own name,as trustee, of $517.50; and a special deposit of $4,416.22, standing in the name of Enoch Totten, as trustee, that we. hold subject to the further decision of the courts. By Mr. GARLAND: Q. Are these cases in the Supreme Court at present?—A. Appeals have been taken. Mr. CRESWELL. This makes, subject to special liens and claims, a 4 FREEDMAN'S SAVINGS AND TRUST COMPANY. total of $170,411.71, and leaves as available eash in the Treasury the sum of *100,510.53. [See Appendix, Schedule H.] We beg to present also to the committee copies of communications which we addressed to the Speaker of the House of Representatives, Hon. Samuel J. Randall, on the opening of the 1.tst scssion of Congress, December 2, 1878, and to the honorable Secretary of the Treasury. The former is of the nature of a report and application for relief, and gives a synopsis of our condition, and in brief the views of the commission with reference to the legislation we desire. [See Appendix, Communications Nos. 3 and 4.] By Mr. WITHERS: Q. Has that communication to Mr. Randall ever been printed ?—A. No, sir; our last two or three reports have never b3en printed, to our regret. THE COMMISSIONERS DESIRE TO BE RELIEVED. I will say here, in reference to our desire to be relieved from the duties of commissioners, alluded to by Mr. Leipold, and made a part of the communication addressed to the Speaker of the House of Representatives, that we have applied to Congress at almost every session for the past two or three years to be relieved of our trust. We took possession as commissioners in July, 1874, and we gave our bond for one hundred thousand dollars, which is on file in the Treasury. Under the law, all collections we received were to be deposited in the Treasury. They have been so deposited in the Treasury, as fast as we could realize on them, with the exception of a small balance of a few hundred dollars, which we have been obliged to keep on hand,from time to time to pay the petty expenses, the minor current expenses. We applied to Congress at its first session after our appointment—the session of December,1874—for certain measures of relief and for certain assistance by way of additional legislation. Congress adjourned without giving us any, and they have lleclined, or rather failed, to give the additional legislation we have required, with the exception of one law authorizing us to sell any real estate at private sale, with the approval of one of the judges of the district court of the United States in the District of Columbia. Finding that we did not met the relief we sought, we immediately applied to the Secretary of the Treasuryto relieve us from our trust. The Secretary referred our application to the Attorney General,and the Attorney General decided that we could not be relieved from our present trust; and under that we have been obliged to go on, and shave been going on (ever since, and done the best we could. We still desire to be relieved, aiud trust that Congress will direct us to hand over the affairs of the company to some officer of the government,or other person, as will best promote the interests of the depositors. LEGISLATION PROPOSED BY THE COMMISSIONERS. We have prepared, and beg to present here,two or three bills embodying, one of them, in part, the provisions of a bill which was submitted by the Judiciary Committee at our request. We applied to them for such action at the last session. With certain additional suggestions which we make this is the bill. By Mr. WITHERS: Q. The Judiciary Committee of the House?—A. No,sir; of the Senate. I beg pardon, I was mistaken; it was the Finance Committee of FREEDMAN'S SAVING': AND TRUST COMPANY. 5 the Senate not the Judiciary G mmittee. It was presented by Mr. Bayard. We have ntade certain suggestions by way of amendment to that bill, which we think ought to be considered. By Mr. CAMERON: Q. What is the general object of the billf—A. To relieve us from the trust, first, and hand it over to the Comptroller of the Currency to be closed up; and having at the end of the bill provisions for the purchase of certain lots and parcels of ground with buildings and improvements belonging to the company. By the CH.AIR1VLIN: Q. Who introduced the billf—A. The bill was introduced by Senator Bayard. Q. He introduced two bills; I wanted to know which of them you have here with the suggested amendmentf—A. Mr. Dawes introduced one; that was simply a bill which came from the Committee on Public Buildings and Grounds, to purchase certain property. Mr.'LEIPoLD. You will remember, Mr. Creswell, that Senator Bayard did introduce another bill, which was changed considerably. This bill, originally introduced, made the Comptroller of the Currency a commissioner. The bill as subsequently introduced and reported from the committee gave power to the Secretary of the Treasury to appoint a receiver. This (the bill now placed before you by the commissioners) is the bill as originally introduced, making the Comptroller of the Currency a commissioner, and vesting him with the same rights and powers that the present commissioners have, and authorizing him to wind up the concern. [See appendix, Bill No. 1.1 Mr. CRESWELL. Well, we should be very glad, gentlemen, to be relieved from this trust and to hand it over to others,if it should meet the views of the committee. We have also prepared for the information of the committee, and by wax of suggestion a bill upon a somewhat different theory. [See Appendix, Bill No. 2.] This bill provides for the purchase of the Freedman's Bank property at a price to be fixed by the committee, and then it contains other provisions looking to the sale of the remaining property on hand within a certain specified time. I will read the second section: SEC. 2. The further sum of five thousand dollars, or so much thereof as may be necessary, is hereby appropriated, out of any money in the Treasury not otherwise appropriated, for the purpose of fitting up the rooms upon the first floor of the fireproof building upon said premises known as the Freedman's Bank building, under the direction of the Supervising Architect of the Capitol, for the use of the Court of Claims, and the removal of it and its records and papers thereto. THE RIGHT TO COMPOUND AND COMPROMISE CLAIMS. The bill also contains,in the third section, a provision which we deem of great importance to the right settlement of the affairs of the company. It is as follows; I read the third section: SEC.3. That the said commissioners of the Freedman's Savings and Trust Company, with the approval of the Secretary of the Treasury, shall have the right and authority to compound and compromise all debts due to and liabilities of the company, and that said commissioners, within six months from the passage of this act, shall, so far aS may be in their power, sell and dispose of,to the best advantage, all the property and assets of said company remaining in their hands or which may hereafter be acquired by them, and shall declare a further dividend among the creditors of said company who have heretofore presented their pass-books or other evidences of indebtedness on which their claims are respectively founded, or who may present said pass-book or evidence of indebtedness before the end of the said six months; and in said further dividend the said commissioners shall include the balances of former dividends not duly claimed before the expiration of five months from the passage of this act. And 6 FREEDMAN'S SAVINGS AD TRUST 'OOMPANY. upon the expiration of the said six months the said commissioners shall immediately deliver all moneys, property, books, vouchers, and assets then in their possession or sanding to their credit in the Treasury of the United States to the Comptroller of the Currency, who shall proceed to pay said dividend with as little delay as possible, and after the delivery aforesaid the said commissioners shall be relieved from any and all responsibility for the future conduct and management of the affairs of said company. Now this looks to two things, for the securing of which we think power should be given us, but as to which we are very much in doubt whether the authority was vested in us by the act of June 20, 1874, under which we qualified and under which we have been acting: one is, the power to compromise and adjust claims; and the other is, authority to appropriate the balances that stand over from the paid out dividends for the benefit of the other creditors who remain. There are some fifty or sixty thousand of these creditors whose individual balances are very small; many of them we can never reach; many of them have (lied; many have gone away; and there are, in addition to this, inaccuracies in the books which show balances in many cases where there really were no balances, and under the circumstances we think it is only right and proper, after giving due notice, that the balances of dividends remaining unclaimed should be distributed for the benefit of the ascertained creditors of the company; and this we have at present no authority to do under the law by which we are acting. These are two very important matters, as we think; matters on which we should have speedy and favorable action. DISTRIBUTION OF DIVIDENDS TO DEPOSITORS. By Mr. GORDON: Q. May I inquire how you managed the distribution of the two dividends heretofore paid? Did you do it by advertisements, and were the dividends sent to depositors by mail; or was it done by application of the creditors in person, or by attorney,at the principal office and branches?— A. We undertook,in the beginning, to obtain from the Secretary of the Treasury, or the government, authority to enable us to deposit the money in the mostconvenient United States depositories nearestto the company's branches, and require them to pay the'money out as government money. But to that the Secretary of the Treasury objected,and we were obliged to adopt the plan of paying on checks drawn to the order of each depositor, and to require that the evidence of indebtedness,the pass-books, should be presented in each case. Although this involved a great deal of labor by way of correspondence, it was the only safe and efficient way we could adopt, being thus thrown entirely on our own resources in the matter. Q. Did you attempt to correspond with individuals?—A. There were some sixty-odd thousand individual depositors. Many of them were reached personally through our agents many sent their accounts to the banks for collection; a great many pass-books were sent to us by mail; on these we entered the dividend, in the book, so as to show the credit there; then we drew the check, signed by two commissioners, and returned it to the party in his book. Mr. LEIPOLD. Extended notice of the dividends was secured by the agents and friends of the Freedman's Bank in the several localities, and through the reading of the notice by prominent clergymen in the churches in many parts of the country. Mr. WITHERS. Yes; I had observed that fact in relation to the notice ,of dividends. FREEDMAN'S SANT'N ; AND TRUST COMPANY. Mr. CRESWELL. We also endeavored to give the greatest possible publicity of the dividends through the newspapers. As soon as it was determined that a dividend would be declared, we notified the newspapers of the fact, and the news would thus soon be circulated through the country, and by the time we were ready to pay the dividend, we had a large collection of books gathered together. The payment of the dividends was of itself no small matter, involving a great deal Of labor and always the employment of additional clerks. Mr. PURVIS. I think that we found the proof of the success of our method in the fact that so large a number of books were received, and , so large a percentage of the dividend was paid out. Mr. WITHERS. One singular fact I have observed, that the dividend unclaimed under the ten per cent. call was nearly as great as under the twenty per cent. call. Mr. CRESWELL. Yes; that is a little remarkable; and it is a fact,too, that the second dividend called out a good many books that failed to respond at first. Mr. PURVIS. And a good many who are waiting for the third dividend, are waiting to get the second and third dividends at the same time. FLTRTHER PROVISIONS OF THE BILLS. Mr. CRESWELL. The bill that we have prepared further provides, in its fourth section, as follows: "SEC. 4. That,immediately upon the expiration ofsaid six months,the Secretary of the Treasury is hereby authorized and directed to appoint the Comptroller of the Currency a commissioner, who shall execute a bond to the United States, with good sureties,in the penal sum of twenty thousand dollars, conditioned for the faithful discharge of .his duties as commissioner aforesaid, and take an oath faithfully to perform his duties hich bond shall be executed in the presence of said Secretary and approved by him, and by him safely kept, and when said bond shall have been executed and oath taken,then said commissioner shall be invested with the possession and legal title to all the property of said company for the purposes of this act, and the said act of June twentieth, eighteen hundred and seventy-four" (that is the act under which we qualified— see Appendix, Act of June 20, 1874), "and shall have all the rights, prerogatives,and privileges, and perform all the duties, that were conferred and enjoined upon the three commissioners mentioned in said act of June twentieth, eighteen hundred and seventy-four." Now it is proper that I should say that we were appointed, originally, by trustees of the company, and our appointment was required to be ratified by the Secretary of the Treasury. That was done, and our compensation was also fixed under the law, not exceeding a certain sum per annum. The question arises whether Congress can—this being a Private corporation—designate new commissioners and vest in them the authority of the corporation without having obtained consent from the trustees or such parties as carry the legal entity of the body. That question was raised on us at Nashville, as to our authority to represent the company and bring suits. The chancellor there decided, after quite a long discussion, and I presume an able one, that we were authorized to act, because we had the consent of the corporate body, and that consent vested whatever authority to act the corporation itself had in the commissioners. It will be for the committee to consider that as a legal proposition, as to the power of the commissioner who is to succeed us, 8FREEDMAN'S SAVINGS AND TRUST COMPANY. because he will have to carry on the litigation now in process and may be called upon to bring new suits. Mr. LEIPOLD. That is provided for in the amendmunt to the bill introduced by Senator Bayard it is the interlineation in the second section which provides that the Secretary of the Treasury be authorized and directed to appoint the Comptroller of the Currency a commissioner, &c.,"a majority of the board of trustees of said company approving." This insertion,"a majority of the board of trustees of said company approving," meets the case, I think, as stated by Mr. Creswell. Mr. CRESWELL. Well, I make the suggestion that the question be looked into as a legal proposition by the committee in its bearing upon any transfer that may be made. As to the bill introduced by Senator Bayard, we have added one or two amendments in the second section, the one referred to by Mr. Leipold and the following at the end of the section, namely: Provided, That nothing contained in this act shall in any way impede or delay any case or cases instituted in any court by or against the commissioners appointed under the provisions of the act to which this act is amendatory; but every such case shall, upon suggestion of the appointment of the Comptroller aforesaid and due entry of the change on the dockets of the respective courts in which they may be pending, be proceedgi with in the same manner as if such change had not been made. Then there is an amendment also added at the end of the eighth section. The eighth section reads: SEC. 8. That said commissioner shall make payments to those depositors only whose pass-books have been properly verified and balanced, unless said pass-books have been lost or destroyed; then, upon satisfactory proof of such loss or destruction, and the amount due them, he may pay as though they had pass-books. To this we have added as a part of the eighth section as follows: But all claims founded on pass-books or otherwise, not presented to said commissioner for examination and credit within-months from and after the passage of this act, as well as all dividends declared upon audited accounts not called for within years from the date oftheir declaration, shall be barred, and their amounts shall inure to the benefit of the other depositors of the company. Then there is a provision in the bill in regard to - the employment of an attorney to investigate the company's management and to institute proceedings in certain cases. It is section ninth of the bill. Twill read it: SEC. 9. That said commissioner is hereby authorized and directed to employ some competent attorney-at-law to investigate the manner in which said company has been managed by its trustees and others having control of the same; and if, in the judgment of said attorney, the affairs of said company have been mismanaged or managed fraudulently and corruptly, then said commissioner shall cause such civil and criminal proceedings to be instituted in the courts against those participating in said mismanagement or fraudulent and corrupt management as he shall deem right and proper to attain the ends of justice. He shall pay fees and costs of suits out of the funds in his hands as commissioner aforesaid: Provided, That the aggregate amount to be paid to attorneys shall not exceed five thousand dollars for any one year. We do not feel at liberty to interfere with this provision of the bill, although we very much doubt whether at this late day proceedings could be instituted under it with any degree of profit to the concern. REPORTS MADE BY THE COMMISSIONERS. We also beg to present to the committee, copies of all the reports we have made and which have been printed, together with memoranda of other reports we have made and which have not been printed. We have made,I think, six or seven reports. Here are four of them: one of date December 14, 1874; one of January 18, 1876; one of February 9 FREEDMAN'S SAVIN GS AND TRUST COMPANY. 12, 1876; and one I have alrea. y referred to, of March 19, 1878, to the Hon. Samuel J. Randall. By Mr. WITHERS: Q. Were not all the reports made to the Douglas committee printed? —A. No, sir; the reports were made, but not all printed. Mr.LEIPOLD. I think that the one of February 12,1876,is an itemized report, covering the term of the commissioners,from the date of their entering on their duties to the end of January,1876, and that it is annexed to the report made by the Douglas committee. I think it was put in print in that way. The fullest report was that of March 19, 1878, which contained a detailed statement of the receipts and disbursements to that time. We have also here, for the use of the committee, copies of the original act of June 20, 1874 (see appendix), which has been the guide for the conduct of the commissioners. In regard to the two bills read by Mr. Creswell, I may say that the only difference between them is that the new bill in manuscript proposes to keep the present commission in existence six months longer (see appendix, bill No. 2), and then, at the expiration of that time, to transfer all that remains of the corporation over to the Comptroller of the Currency. The other bill, introduced by Senator Bayard, and amended as read to the committee (see appendix, bill No. 1), proposes to do that thing at once; that is, to make the transfer of the trust at once,just as it now stands—of course from the date of the passage of the bill. Mr. CRESWELL. We have done, as commissioners, the best we could; and we are not only willing and desirous, but anxious that the committee should examine every order we have given; look into every expenditure we have made verify every cent we have received and every cent we have paid out; inspect all our accounts, examine our books, papers, memoranda, and all matters relating to the bank in our custody; but we would respectfully suggest that to do this most satisfactorily the committee should take a room at the bank, where they may have ready access to all the check-books, papers, vouchers, accounts, and everything else they will need to inspect, and so that they may be securely replaced after inspection by the ctimmittee. To bring these books and papers here would require ten or twelve four-horse wagons, and it would be impossible, not only to send them here, but there is not capacity in this room, or building, to receive them.* By Mr. WITHERS: Q. Have you all the books of all the branches there?—A. Yes, sir. By Mr. GORDON: Q. You have furnished us with the consolidated statements—the ledger balances, have you not?—A. Yes, sir; the balances. PRESENT CONDITION OF THE COMPANY'S ASSETS. By the CHAIRMAN: Q. Well, Mr. Creswell, what do you think of the character and shape of the assets of the bank at this present time?—A. We have already declared dividends amounting to 30 per cent. If we can sell the property on hand at a fair price, and collect the hopeful notes still outstandreasonably successful disposition of the cases now ing, and make *The committee held its meetings in a small room in a wooden ner of Delaware avenue and C street, northwest. Structure at the cor- 1.0 FREEDMAN'S SAVINGS AND TRUST COMPANY. pending, we think the bank will pay a dividend of 20 per cent, more, which will make in the aggregate 50 per cent. of our debt to depositors. That is all that we thought the bank would be able to pay,. at our first inspection of its condition, on taking charge of its affairs. Our trouble has been., as all business men know, that we have not been able to sell the property at any time during our administration of affairs, without great loss. We have advertised and advertised, but except at a fearful sacrifice (which we were unwilling to make, keeping in view the best interests of the creditors of the bank) we could not sell in these times of depreciated values in rear estate. By Mr. WITHERS: Q. Is there not now some evident appreciation in. the value of property l—A. Yes;'a better feeling ill 'real estate has manifested itself, and recently we have been able to sell some pieces of our property, but we have had to sell at very low figures indeed. Take as an illustration our bank property in Washington. It cost the company $258,000—the bank and the real estate. The lot was purchased at a comparatively low figure, and we think that the ground alone on which the bank stands should sell for half as much as the company paid for the whole property. Of course the building could now be built for less. With all our pub]ic advertising of the sale in the papers we have had but one nominal bid of $105,000. By Mr. GORDON: Q. That is the bank building in this city, that you are now occupying?—A. Yes, sir. Q. Does not the government want that building t—A. Yes, sir; the government needs it very much; and three or four bills have passed the Senate for the purchase of it, but somehow we have not been able to interest our friends in the House to get it through. Q. Does not the government now occupy a large portion of the building?—A. Yes; it occupies all the upper stories—all above the first floor— and has occupied it ever since we have bad possession, under a lease originally made with Mr. Williams, Attorney-General,at a rental of $17,000 a year. The lower story—the first floor—is badly wanted by the Court of Claims. It is admirably adapted for its uses. Indeed it is the only building in the city that will exactly'suit its purposes. If they leave the Capitol, where the great law library is; they are within reach of the only other great law library in the city, that of the Attorney-General's Office. This would be a great-advantage, and meet an actual necessity. Then, the room is an exceedingly fine one. It is sixty by one hundred and ten feet in dimensions, and is in every way suited admirably for a court-room. The spacious vaults and large safes for the deposit of valuable papers and documents, and the ample accommodations for retiring rooms for judges and for the clerks and officers, and for all the records and business of the court, make it at once the most available and satisfactory building for the government needs of any in Washington. THE TRUSTEES' POWER IN THE TRANSFER. Mr. PURVIS. Mr. Creswell and gentlemen: It occurs to me that in the statement concerning the bills presented here there was an omission to mention the fact of a conference we had with the trustees of the bank a, few months ago, in which the form of a bill was suggeSted which is not exactly in keeping with the one that has been read here. FREEDMAN S SA.VINGS AND TRUST COMPANY. 11 Mr. CRESWELL. T have read the two bills. Mr. PURVIS. Well, not in keeping with either of them. It bears upon the difficulty that has been suggested that might probably grow out of the transfer of the property, as the title seemed to rest with the trustees. The suggestion that we seemed to agree upon was that, in the appointment of any person, commissioner or commissioners, to take our places, it should be done by the Secretary of the Treasury, subject to the approval of the board of trustees, whom I recognize to be the proper custodians of this entire thing. Mr. CRESWELL. That is embodied in the bill I read—Mr. Bayard's bill as amended. Mr. PURVIS. I think not. Mr. GORDON. It reads "a majority of the board of trustees of said company approving." Mr. PURVIS. Not that bill. I refer to the one that is written—to the one in manuscript. That amended bill, in print, I have never seen before. Mr. CRESWELL. It is simply a copy of the bill I prepared and presented. Mr.PURVIS. That change was agreed upon as the result of the conference with the trustees. Mr. CRESWELL. I have stated the proposition to the committee, as suggested by the conference referred to. M.GA.RLA_ND. The bill, presented in manuscript,in its fourth section provides: That im nediately upon the expiration of said six months, the Secretary of the Treasury is hereby authorized and directed to appoint the Comptroller of the Currency a corn fliSii0 ler, who shIll execute a bond to the United States, with good sureties, in the penal sum of twenty thousand dollars, &c. Mr. P URVIS. That does not provide that the appointment of the commissioner shall be subject to the approval of the trustees. Mr. CRESWELL. The other bill does that in the- second section, and I stated to the committee that that was a matter for the committee to determine—a question of law for them to consider; and it is my opinion that the trustees should be consulted. Mr. LEIPOLD. There is a difference of opinion as to that—as to whether the trustees have any right in the matter. Mr. CRESWELL. I stated to the committee that that was a question • for them to consider. Mr. LEIPOLD. The Attorney-General has gone into it, and you. will find his printed opinion in the 14th volume of the Attorney-General's Reports. Mr. CRESWELL. I think you are mistaken as to the exact proposition he had before him in that decision. He passed upon the rights of the trustees to interfere with us, and not as to their authority over our appointment. Mr. LEIPOLD. The proposition before the board of trustees was simply this: If the Secretary.of the Treasury was to be vested with the authority to appoint a commissioner,then it should be subject to the approval of the board of trustees; but if the appointment was to be limited to the appointment of the Comptroller of the Currency as commissioner, that matter was waived. They all seemed to agree that they would be satisfied with that; it was only as to the appointment of an outside person or persons that the board of trustees was to be consulted as to who it should be. 12 FREEDMAN'S SAVINGS A TRUST COMPANY. Mr. WITHERS. It seems to me that it is simply a question of the appointment of the Comptroller as commissioner by Congress. Mr. LEIPOLD. That is all, sir. Mr. CRESWELL. In case the Comptroller were not appointed, but an outside party— Mr. PURVIS. To obviate that difficulty, it seemed necessary that this matter of appointing any one to succeed us should go into the hands who gave us existence. Mr. WITHERS. There is much force in that suggestion. "The power that created alone can unmake." ACCURACY OF THE ABSTRACT. By Mr. GARLAND: Q. I understand, Mr. Creswell, that the abstract you have made and presented here has been gone over by all the commissioners, and that they state, with you, that it is a true abstract of your accounts as commissionersi—A. Yes,sir. The abstract is correct as nearly as we can get at the exact condition of the company's affairs we believe it to be accurate in every particular. By Mr. WITHERS: Q. I suppose that the abstract, so far as it gives the assets and liabilities of the company, is absolutely true, is it not Your books ought to show the actual fact.-1. Yes, sir. We have to take the books as they are then we have to correct the books by the personal applications of individuals who come in and demand the balances due them. When they produce their books. as evidence of indebtedness, and there is a discrepancy, we have to go into an examination and do the best we can to arrive at the truth. These aemands,on error, have made slight variations in our books and this showing from time to time. Mr. LEIPOLD. You find a constant variation in your liabilities, either a decrease or an increase. Mr. GARLAND. I understand it. What I wanted to get at as a starting point was that this abstract is the joint work of the three commissioners. Mr. LEIPOLD. It simply represents what the books show. Mr. CRESWELL. We all believe the abstract we have presented to be accurate. • Mr. LEIPOLD. You will notice that the schedule of lawsuits gives the particulars of each item, and is a sort of epitome of the whole thing— the parties who owe the money, the nature of the claim, the ledger balance, and in what courts the suits are pending at the present time. NATURE OF THE LAWSUITS PENDING. By Mr. CAMERON: Q. About what number of suits are pending? . Mr. CRESWELL. A.—We have been concerned in over three hundred suits. And in this connection I would like to refer to a matter that has been charged against our conduct of the legal affairs of the company. It has been charged, and complaints have been made in the newspapers, that we have paid verylarge amounts to our attorneys. Now,we have had a struggle with the attorneys from the beginning. Wherever we have deemed it necessary for us to be represented in court, either as plaintiffs or defendants, we have thought it wisest and best to secure the FREEDMAN'S SAVINGS AND TRUST COMPANY. 13 services of attorneys that were the most competent and best qualified to conduct the case in our interest; and if the committee will examine the bills for attorneys' fees, they will find that we have gone over these bills very carefully and reduced them wherever we could. Sometimes we have had very sharp wrangles with our own attorneys in reference to these bills, but we have reduced them to the very lowest figures. Some of our suits have been very laborious, and have required the first order of talent at the bar. There are some forty-eight suits now pending in this District, besides a number of suits involving the balances at the branches, which are in the hands of attorneys of the company, for collection. These are in the branches at Memphis,Vicksburgh, Chattanooga, &c., and we cannot very well determine their exact number. Mr. PURVIS. The committee would like to know the amount involved. Mr. LEIPOLD. The amount, exclusive of balances, is some $509,000. By Mr. GARLAND: Q. Does the four thousand and odd dollars in the hands of Mr. Totten arise from one suit or several?—A. From one suit. Mr. CAMERON. That amount has been paid over by Mr. Totten,to the commissioners. Mr. LEIPOLD. Mr. Dodge, the defendant, has taken an appeal. By Mr. GORDON:' Q. What is the character of the indebtedness on which the company is suing?--A. On money loans and securities, particularly real estate. Q. What is the ground of defense against these suits?—A. Every conceivable ground. In one of the suits, that against Caroline Kaiser, where we have a deed of trust on three houses on Tenth street, between E and F, one defense set up was that she was a married woman at the time of the execution of the deed, and that her husband was insane, &c. The case has gone to the Supreme Court. We have two decisions in our favor in that case in the lower courts. By Mr. GORDON: Q. What is the amount involved in that case I—A. A ledger balance of over $17,000. Q. Did money go into these buildings?—A. Yes, sir; and we are bound to win the suit ultimately. Q. Let me ask you, Mr. Leipold, a-question in reference to the dividends. Mr. Creswell said that you hoped to pay twenty per cent. more, which would make fifty per cent. of the.original amount deposited; now, what does the fifty per cent. of loss consist of? Just such debts as you are suing on now I—A. It consists of shrinkage in the value of real estate Mr. CRESWELL. And in bad investments, represented in this list of judgments of $170,000. Mr. LEIPOLD. We have $509,116.80 of debts involved in the suits pending. On that we shall recover comparatively a small percentage, say $175,000. We have obtained judgments to the amount of $170,000. Mr. PURVIS. And if the government will purchase the Freedman's Bank property, we will be able to pay this twenty per cent. additional dividend. Mr. LEIPOLD. The collections obtained on these notes and judgments, these uncalled-for balances in our hands, what our properties will sell for, and especially the property on Pennsylvania avenue, for which in making up our estimate of twenty per cent. we considered we ought not to get less than $200,000, these are all included in the estimate by which 14 FREEDMAN'S 'SAVINGS AND TRUST COMPANY. we make up the twenty per cent. additional dividend we hope to be able • to declare. Mr. CRESWELL. It takes about $600,000 to mai'le up a dividend of twenty per cent. THE FIFTH BAPTIST CHURCH LOAN. By the CHAIRMAN: ,Q In reference to the debt of the Fifth Baptist Church of this city, that I notice in this schedule, what defense do they set up f—A. They are only trying to escape the payment of this debt'by an attempt to shift their responsibility, and in view of the fact that the security is not worth more than $3,500, we submitted the proposition to them that if they would raise $7,000 the commissioners would accept that sum in settlement. The CHAIRMAN. They allege that they did not receive the Money; that there was some hocus pocus in the mattter. I merely mention this. Mr. LEIPOLD. I know.that that has been the claim, made, that they did not receive the money; but it is their own fault. They had their trustees, elected by the church. These trustees were charged with the erection of this church building. They authorized them to borrow this Money. It was loaned to them. Now it is charged that in getting this money these trustees abused their trust and squandered the money. Of that,of course, we can take no account. Our books do not show:that; they simply show the debt due us. It was before we,as commissioners, had anything to do with the matter. •By Mr. WITHERS: Q. How much did they borrow?—A. Some $11,000. Q. On what security t—A. The church building. Q. What is the security worthl—A. I do not think the church building could be sold to-day for more than $3,500. Mr. WITHERS. There must have been some swindling somewhere. Mr. LEIPOLD, It could not have been built at the time it was built for any such sum, of course. Mr. CRESWELL. This is a case where we ought to have the authority to compromise and compound our claims, as provided in the bill brought to the committee's attention. And for the reason, in this case, for example, that if we prosecute and attempt to sell under a deed of trust we should be obliged to be in the attitude of selling out the church, and we should not realize more than $3,500; whereas, if we could make a compromise, we would certainly realize more than we could possibly hope to realize from a sale of the building. I want right here to make a remark, by way of defence. Some. complaint has been made that we have been so long about selling our property. The fact is this: We were holders of liens against this property, and of course we could not sell property until we had forced these liens to judgment and had the property offered at public sale. In almost all cases there were few or no bidders at these sales, and we were obliged to buy in the properties. Then,for the first time, we became holders of the properties and Could sell. Impediments were immediately thrown in our way. Injunctions were obtained—and they are very easily obtained here in the District—and we have been subjected to delays of two and three years, in some cases, in getting a decree, and have been obliged to come into the courts before we could get the permission to . • FREEDMAN'S S A.VINGS AND TRUST COMPANY. 15 sell, and then, when we put oar property up for sale,there were no bidders. We have offered the property over and over again, and held it hoping to get rid of it on more favorable terms in the interest of the company's creditors. It will thus be seen that the delays we have been subjected to in the sale of the properties have been unavoidable, unless we had submitted to a ruinous sacrifice of the interests and expectations of depositors. By Mr. GORDON: Q. Since what date have loans ceased to be made by this institution ?— A. Since the closing of the corporation, about June 30, 1874, and the turning of its affairs over to the commissioners. The books of the bank seem to show loans made under date of June 30, 1874, but they were only entries made in fixing up some old accounts. We took charge as commissioners on the 13th of July, 1874, thirteen days after.the closing of the bank. REAL ESTATE ON HAND. In the schedule we submit of real estate on hand [see Appendix, Schedule D], we have crossed out* a number of properties that were disposed of at public sale a few months ago, and the prices at which they were sold are'harked in the margin, as well as their assessed values, so that the committee may judge for themselves concerning the prices paid for the property we sold. Here, for instance [indicating on the schedule], is a piece of property that is assessed at $2,400. We sold it for $1,500. The claim of the bank was really much greater than the assessed value. SPECIAL DEPOSIT CLAIMS. Mr. CRESWELL. There are two other points I would like to explain here. One is the claim made for special deposits. These were made under the eighth section of the original act of June 20, 1874. They attempted to manage the concern for nearly a month after that,and these deposits were placed with the bank and made "special." Section 8 provides as follows: SEC. 8. That from and after the passage Of this act, and until the first day of July, eighteen hundred and seventy-five, all the deposits made in said Trust Company shall be held by the trustees of said company as special deposits, and any investments made of said deposits shall be made and held for the use and benefit of said depositors only; and it shall be the duty of said tiustees, on or before the first day of July, eighteen hundred and seventy-five, to make a full and complete statement of all the assets and liabilities of said company, and lay the same before the Secretary of the Treasury. And if said Secretary and the trustees shall at that time, after investigating the condition.of said company, believe the same to be solvent,then the trustees and said Secretary shall issue an order declaring that thereafter all deposits shall be general; but said order shall in no wise affect the special deposits, unless said depositors shall in writing consent that said special deposits shall become general deposits. But if the Secretary and trustees of said company shall on the first day of July, eighteen hundred and seventy-five, after the examination aforesaid, doubt the propriety of making the deposits thereafter general, then the deposits made shall still be special until the first day of July, eighteen hundred and seventy-six, or until the said Secretary and trustees deem it prudent to make said deposits general. Now, when we took possession of affairs, we found quite a number of these special deposits. They were made special by the provisions of this act, and we were obliged to pay them first. Then, again, the committee will find that we have claimed a credit here for cash advances— * In the printed schedule, in Appendix, the properties sold are not "crossed out," but indicated sufficiently by the prices at which they were sold, as set opposite to them on the margin. 16 FREEDMAN'S SAVINGS AND TRUST COMPANY. Mr. LEIPOLD. This act required that money should be set apart for the purpose of paying these special deposits; but as all the money had. been absorbed, and not a cent was there, we had to resort to the cash coming into our hands to pay them. By Mr. WITHERS: Q. These were special deposits not put on your general ledger as cash in hand Mr. LEIPOLD. A. Yes, sir; not put upon our books as cash; the law required them to be kept separate. Mr. CRESWELL. Then, you will find in our cash statement submitted a credit made for cash specially expended. That was to release certain property of the bank, certain stocks, &c., which were filed—one in this city, one in Boston, and one or two elsewhere—as collateral security for loans made to the bank before its failure. They used every possible effort to keep going and pay the depositors who made their demands upon them; and to obtain possession of these collaterals, we were obliged to obtain these loans. We did that to lift these loans; there was no other way of getting them. [The chairman submitting to Mr. Leipold's inspection a bound volume of reports and accompanying papers on the Freedman's Bank matter, Mr. Leipold replied to a question.] A. I think that that volume contains nearly all the reports that we have ever made as commissioners. I believe that all the principal reports are here in this volume, and I find one here that I did not think had been printed. One or two are not here that we were called upon to make for the use of Mr. Douglas's committee. By Mr. GARLAND: Q. Are these all the printed reports that were made by you f—A. I find that the main ones are there. That of March 19, 1878, containing a résumé of the whole matter, is there. I believe that only two reports are not in that volume. I was mistaken in saying previously that this report of March 19 was not printed. I was not aware that it had been printed. Mr. CRESWELL. By way of anticipation, I would like to say a word here, with the permission of the committee. It is very likely that you will have persons come before you who will complain that they have been harshly dealt with by the commissioners. Now,in all these cases you will do us the justice to believe that there are two sides, and we wish respectfully to ask the committee that if they hear the statements on the one side they will hear ours also. The CHAIRMAN and other members of the committee: Oh! certainly. STATEMENT OF EXPENDITURES. Mr. LEIPOLD (producing Schedules E and F). This is a statement representing our expenditures as commissioners, exclusive of the agencies. Mr. CRESWELL. We have kept our books so as to show the worst statement against on their face. That is to say, that where we have made collections, ourselves, at a distance, for instance, we have charged. ourselves with the total amount collected, without deducting the amount of the attorney's commission, which in another entry we have placed to our credit. So that, if we had a claim of $1,000 to be collected and the attorney's fee was five per cent, for collection, we have charged ourselves with the whole $1,000 and made a credit in another place of the FREEDMAN'S SAVINGS AND TRUST COMPANY. 17 $50 for attorney's fees. This makes our expenditures show larger than they really are but only in that way could the books be accurately kept. We could not charge ourselves only with that which we received,— the $950,—for that would not have shown the whole of the transaction. And in this way you will find that every transaction in our books will . show for itself in its entirety. Mr. LEIPOLD. Then,too,some of the heaviest items of expenses,those incident to the maintenance of properties,insurance,repairs,fuel, gas,&c., amounting to over$40,000,and taxes and arrearages oftaxes,amounting to $78,000, during the years of our administration, show heavily as against the expense account, while a proper set-off in the rents received from these properties does not so conspicuously appear. We have collected in rents alone some $121,000, which go in to swell the aggregate amounts of receipts of the corporation. The expenses incident to loans, insurance, advertising, auctioneers' fees, expenses of foreclosure, &c., have amounted to over $28,000, but a great many of these items of expense have been reimbursed to us; the insurance premiums,taxes, advertising, and other expenses advanced by the bank would on the settlement of the loans be reimbursed, and they would be entered in the column of receipts. In this way the statements present the worst showing for ourselves. Mr. GORDON. I see in the second item you have here, "Salaries of agents," that in 1875 it amounted to $17,000, and in the following year to only $9,000-odd. I presume that these were agents who collected the books and attended to the interests of the company at the various branches • Mr. LEIPOLD. That increased item in 1875 over 1876 is due mainly to the large number of clerks and others required for the disbursement of the first dividend of twenty per cent. An extra force had to be employed in the disbursing of the dividends to so many depositors. Mr. CRESWELL. And this is to be said, too: When we took possession we found thirty-five branches in various cities of the country. The first thing we did was to call in all the books and papers and close up each one of these branches but to do that we had to leave a cashier and a competent clerk at each branch in possession of the records, to call in the pass-books, and as agents to attend to the necessary duties daily to be performed in connection with a safe transfer of the business to the parent office. They had to be paid, and although the salary was but nominal in most cases, yet the aggregate made our expenses for the first year very large. It took several months in some of the branches to get these books and papersin our possession. Consolidating the business here in the principal office, we had these books and papers and records sent to us, and to make the transfer necessarily involved considerable expense. It must be borne in mind that our work has not been the simple closing up of the original bank we have had just as much labor and trouble as the receivers of thirty-five different banks would have,each one of which was in a different place, and conducted on its own plans and by its own methods. Each one of these branches has been a separate bank of itself. Mr. LEIPOLD. Speaking of the suits for collection pending in the Supreme Court of the -United States, I may say that a number of them will be reached at its next term the coming winter. Some of them will not be reached even then. Mr. CRESWELL. We have eight or nine cases in the Supreme Court. Mr. LEIPOLD. Nine. 2F B 18 FREEDMAN'S SAVINGS AND TRUST COMPANY. Mr. GARLAND. Supposing these suits could be disposed of in the next three years, how long would it require to wind up the institution ? Mr. CRESWELL. I am glad you have asked me that question. If we were to remain in possession three years, there would still be something to do and something to hand over to our successors. There would be these judgments—some of them may be realized upon six or eight or ten years hence. Then there may be some pieces of property remaining. unsold. And, then, these books and records should go into the hands of some officer, and should be placed where easy access could be had ta them, and where all the vouchers, &c., stacks of which we have, could be kept without risk of being destroyed, as they are the only evidence we have of our disbursements. Mr. LEIPOLD. There are also quite a number of these suits still pending in the lower courts of the District that will ultimately go to the Supreme Court of the -United States, and There is no telling how long it will be before they will be reached. PRACTICAL EFFECTS OF THE PROPOSED TRANSFER. By MT. GORDON: Q. Now let me ask one or two questions as to the practical working of this institution under the proposed transfer. The salaries of the commissioners are now $9,000. The salaries of the agents are from $5,000, to $7,000 and $9,000. They were $7,000 last year. Would these agents still be required ? Are they necessary now, or is there not a sort of Standstill, making it unnecessary and needlessly expensive to keep thee agents?—A. The main item of expense is for clerical hire at the time of paying the dividends. We have, also, in the bank two clerks and a messenger. It is my judgment,if the transfer is effected,that one. person,some competent business Irian, with the supervision of the'Comptroller of the Currency,if you please,could do all that would be necessary to be done in the way of clerical service, except at the time of paying a dividend. Q. That will not occur very soon ?—A. Not very soon nor often. Mr. CRESWELL. If Congress should authorize the committee to buy this property, we could probably soon make another dividend. Mr. LEIPOLD. Of course there would be attorney's fees. The Comptroller of the Currency could not be expected to be in the courts prosecuting these suits himself. Mr. CRESWELL. Then we should have to have an agent, also, to look after the interests of the distant creditors. Mr. LEIPOLD. I think that ought to be done away with. Q. How many agents are there,in all?—A. There are agents at only two of the branches now. There were thirty-three originally. These agents are at Beaufort, South Carolina, and Nashville, Tennessee. We pay but $25 a month at Beaufort and $10 per month at Nashville. REAL ESTATE PROPERTY OUTSIDE OF THE DISTRICT OF COLUMBIA. By the CHAIRMAN: Q. You now rent your Jacksonville property, do you not f—A. Yes. Q. You have no agent there, and are under no expense at that place, I believe f—A. No,sir; we have no agent there; the property is placed in charge of a savings-bank or real-estate agent, who collects the rent and receives a five per cent. commission. FREEDMAN'S SAVINGS AND TRUST COMPANY. 19 Mr. CRESWELL. The real-estate agent there is Greeley & Co. Mr. LEIPOLD. It occurs to me that the property at these branches ought to be sold at public sale. At Nashville we have been running behind a thousand dollars every year for two or three years, the expenses for taxes,insurance, &c., at that bank exceeding the income from rents over a thousand dollars every- year. Mr. GORDON. That is bad, very bad. Mr. LEIPOLD. The trouble is the property stands on the books of the company at $28,000, and I doubt very much whether it could be sold kw $6,000. By Mr. GORDON: Q. Well, it would be better to sell it for $6,000, if that is all it can be sold for, than to have the taxes eating up its value, would it not?—A. That is my,view of it. I think the branches should all be done away with. Q. Where else have you property under the care of the two agents you are paying; I mean outside of this agency?—A. Well, we have the. building at Jacksonville, Florida; and at Vicksburg, in Mississippi, We have a building which produces nothing. Q. Do you not have to pay taxes on -that?—A. Yes, sir and we derive no income. • Q. [Turning to the Chairman.] Do you know anything about the building at Vicksburg, Mr. Bruce? The CHAIRMAN. I have not seen it. Mr. LEIPOLD (resuming). We • have at Memphis a vacant lot; we have also a worthless property at Chattanooga, that is all covered with liens and taxes; and at Atlanta, Georgia, and Norfolk, Virginia. . Mr..CRESWELL. Here is a list of the property we have. [See Schedule D, Appendix.] Mr. LEIPOLD; It is my judgment that if the Comptroller of the Currency or some other Officer of the government is placed in charge at a salary as indicated by the bill of $1,000 a year for the additional labor imposed, with a competent clerk under him at a limited salary, it would be the best arrangement that could be effected. Still, that is a matter for the committee to decide. Of course there would be no messenger necessary, because it would be done in the Comptroller's office and the same messenger that takes care of the rooms for the other clerks could take care of this one also. By Mr. GARLAND: Q. And the matter of an attorney, why could not that be put upon the Solicitor of the Treasury, as a part of his duty f—A. I think it could. It would be better for the branches at any rate. We have had a great deal of trouble there. In many cases the fees at the branches have been equal to the amounts the attorneys have recovered. By the CHAIRMAN: Q. You can control your attorneys in the District much better?—A. 0, yes, sir. PROPERTY IN THE DISTRICT OF COLUMBIA. By Mr. GORDON (consulting Schedule D): Q. This whole printed list is of properties in this city and District, and the written part [the last nine lines, as printed in the schedule in 20 FREEDMAN'S SAVINGS AND TRUST COMPANY. Appendix] is of the outside properties ?—A. Yes, sir. The leading property, as you see, is in this city. Mr.'PURVIS. The commissioners have been very desirous of selling the property at Jacksonville to the government. The government needs it. It is paying something to us—is not a matter of expense to us—and it would be exceedingly unfortunate to have a forced sale of that valuable property. Mr. LEIPOLD. We do not think the government could build such a building at a cost under one hundred thousand dollars. Mr. CRESWELL. This property of the Freedman's Bank in the District is a large and valuable property. It has a front of 180 feet on the avenue. By Mr. GORDON: Q. What is the whole property worth now l—A. It ought to be worth four or five dollars a foot. Mr. PuRvis. 0, more than that. Mr. LEIPOLD. I consulted Mr. Riggs about it, and he thi nks it ought to be worth eight dollars a foot. He would not sell his property, adjoining it, for less than that. He thought that would be a fair valuation for it. We made an effort once or twice to have the assessment reduced. The present assessment is $170,000. It is a beautifully located property, and there is a large alley in the rear, a sixteen-foot alley. It extends one hundred and thirty-six feet opposite Lafayette Square, and one hundred and eighty-odd feet on Pennsylvania avenue. The bank building has a front of sixty feet, but the lot owned by the company extends to the corner opposite Lafayette Square. By the CHAIRMAN: Q. You made a suggestion as to the government purchasing the Jacksonville property. Does the government need that property f—A. Yes; for a post-office and custom-house. Mr. PURVIS. They need it badly. The present government building is a dilapidated one; and they need this property very much. By the CHAIRMAN: Q. And this building is just suited for it, you think ?—A. Exactly suited for it; the location is certainly one of the very best. Mr. CRESWELL. Reverting to the Washington property,it is certainly a superb property in every respect. Mr. LEIPOLD. As to this property, in 1875 a bill was passed in the Senate providing for its purchase at $325,000. It was also attached to an appropriation bill in the House, and it passed the House; but in the Senate the provisions of the bill were a little different. The Senate bill provided for an issue of four per cent. bonds, and the sale of them, for the purchase of the property. It went to a conference committee and was defeated there. 21 FREEDMAN'S SAVINGS AND TRUST COMPANY. DIAGRAM OF THE FREEDMAN'S BANK PROPERTY. Mr. CRESWELL. [Drawing a diagram and exhibiting it to the committee.] This will give some idea of the location of the property: LAFAYETTE SQUARE. 136 feet on Fifteenth-and-a-half street. DIAGRAM OF FREEDMAN'S BANK PROPERTY, CORNER PENNSYLVANIA AVENUE AND FIFTEENTH-AND-A-HALF STREET, WASHINGTON, D. C. 4.) BANK BUILDING. r-I e-I r-I 8 !,.. BRICK BUILDING. WOODEN BUILDINGS. 30 feet. 78 feet 6 inches. !Nr, 62 feet 6 inches. 186 feet 10 inches on Pennsylvania avenue. Mr. LEIPOLD. There is room here on the Lafayette Square front for the construction of several fine buildings. Mr. ORES WELL. Yes; and there are some wooden shanties between the corner and the bank—some three or four. Mr. GORDON. It is, indeed, a superb property I did not know that the compafiy owned clear to the corner. Mr. ORES WELL. We have had numerous applications to buy the corner lot, but would not sell that alone, because it is the key to the whole property. We were offered $50,000 for the corner at one time. Mr. PuRvis. Awd we were offered $250,000 at one time for the entire lot. Mr. LEiPoLD. But it is doubtful whether that was a bona fide offer. We consulted the Secretary of the Treasury about it, as there were propositions before both houses of Congress to purchase it, and Mr. Bristow advised us not to sell it at that price, for the reason that the government wanted it and would undoubtedly purchase it. Mr. CRESWELL. We also consulted the present Secretaryof the Treasury, Mr. Sherman,and he advised us by no means to take less than $225,000 for it. Then at public sale, during the recess of Congress, and at private sale, we offered it, but had no bona fide bidder at all. We have all along tried to obtain the advice of the Secretary of the Treasury, and to interest and implicate him, so far as we could, in whatever judgment and discretion we were called upon to exercise in the disposition of the property. Mr. LEIPOLD. The government has leased a part of the bank-building at an annual rental of $17,000, of which rental however, Congress has, only given us, the last four years, $14,000 a year, and this last year 22 FREEDMAN'S SAVINGS AND TRUST COMPANY. appropriated only $10,000 for the purpose. We have brought a suit in the Court of Claims to recover the arrearages of rent due us. By Mr. WITHERS: Q.. Was it a contract lease to the government at that rate—$17,000 a year?—A. Yes, sir. Q. Extending how many yearsl—A. From year to year. Q. Without limitation? Mr. CRESWELL. Without other limitation than upon notice received from the government. Q. And no such notice has been given by the government?—A. None whatover. Q. And the government has only appropriated for the last year $10,000, with the contract still in force? Mr. PURVIS. Yes,sir; and in the face of the contract they broke it. Mr. GORDON. Well, the government can borrow money at four per cent.z and at that rate they had better pay $300,000for the building and own it? Mr. CRESWELL. Yes, sir; we think so. They rent the four stories,for which the contract was $17,000. That is for the sixty feet front on the avenue—the bank building. With the other one hundred and twenty feet front,the remainder of the property on the avenue,they have nothing to We have no doubt that it would be economy for the government to buy the property for $300,000 rather than to pay the rent they do. By Mr. WITHERS: Q. The government pays $17,000 for the four stories 1—A. Yes, sir. And we are surprised at the want of information shown by, members of Congress during the several debates on the matter. They have forgotten that in addition to furnishing the room, there is the heating of the ,building, the engineer's and fireman's -salary,the repairs, the taxes, the insurance, &c., which we have to -pay; it really costs $10,000 a year to keep up that property. They do not take that into consideration. We were not before Congress to speak for ourselves, but we went to members and..tried to get them to make counter statements. Mr. PURVIS. It has been stated, in the debate, that the governthent was paying $17,000 for the use of four rooms. The fact is that the four stories are four plats each 60 by 110 feet,not four rooms only. There are thirty-six rooms in all. The committee adjourned to meet on the following Tuesday, May 27, at 10 o'clock a. m. do. COMMITTEE Room OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington,D.C May 27, 1879. Committee met at 10.30 a. m. Present, Messrs. Bruce (chairman), Garland, Withers, and Cameron. J. W. ALvoR,D called. J. W. ALVORD, FIRST PRESIDENT OF THE COMPANY. By Mr. GARLAND: Question. Mr.Alvord, we want to ask you a few questions, not for the purpose of going into an examination at present, but a few questions FREEDMAN'S SAVINGS AND TRUST COMPANY. 23 preliminary. You were connected with this institution called the Freedman's Savings and Trust Company, were you notf—Answer. Yes, sir. Q. Were you connected with it from the beginningf—A. Yes, sir. Q. When did your connection with it cease?—A. Well, I am still a trustee. Q. Yes; you went out of it, then, when it was placed in the hands ot the commiSsioners f—A. I went out when Mr. Douglass came in. Q. About what time was that?—A. I can refer to it, if you want the exact date. Q. Has it been two years, or something like that?—A. I will tell you exactly [referring to memoranda]; my memory is not very good. [Still referring to memoranda.] It was January 9,z1868. Q. 1868? Mr. PURVIS. No, no. Mr. WITHERS. It must have been subsequent to that. The CHAIRMAN. You must have resigned in 1874. Mr. PURVIS. It was the winter of 1874. Mr.ALvoRD. Well,I have it down here somewhere. My recollection is not good as to the date. I went out about the time that Mr. Douglass was elected. Mr. PURVIS. Will you allow me to remind you, Mr. Alvord, that that was three months before the appointment of commissioners? Mr.Douglass was not president over three months, and that was in 1874. Mr. GARLAND. Well, that is near enough for my present purpose. Up to that time you had been intimately connected in the management of the business, had you not?—A. Yes, sir. Q. Have you had anything to do with it since then?—A. No, sir. Q. Have you looked over the abstract of accounts furnished by the commissioners recently to this committee?—A. No, sir. Q. You have not seen them at all?—A. No, sir. MR. ALVORD TEMPORARILY EXCUSED AS WITNESS. Q. Where do you expect to be this summer?—A. Well, sir, I am on my way now to Colorado. Q. The purpose of asking that question is to see how and where your testimony might be had during the recess of Congress and before next fall and winter. Do you expect to be back heref—A. I expect to be traveling, sir. I am loosed from all things here, and am going to see my children in Colorado, and to visit other places. Q. You do not know,then,that you will be back here at all?—A. No, sir. I want to see the whole country.• By Mr.-WITHERS: Q. You have, then, a knowledge of all the transactions of the institution from the time of its inauguration until 1874—a personal knowledge, have you notf—A. Not of all its transactions. Q. You were the head of the establishment, were you not?—A. I was the president of it; not all of that time; but I was connected with it, and can tell you how it commenced and all about it, I suppose. I can tell you why it commenced. By Mr. GARLAND: Q. Could you not indicate to us now where you will be in the summer and fall, so that we may get your testimony? We want to interrogate you on a good many points.—A. Well, sir, I have been packed up to go 24 FREEDMAN S SAVINGS AND TRUST COMPANY. for some three weeks; was packed up and ready to start the next morning after your sergeant summoned me as a witness. By Mr. WITHERS: Q. You have only delayed here awaiting this investigation?—A. That is all. Q. You have no knowledge that you will be able to return here, or that your business will call you back here during the current year, say next winter f—A. I think I shall be back here next winter. I have closed up my business here, sold my place, pir( all my affairs in the hands of an attorney, and paid all my debts. The CHAIRMAN. The committee do not desire to give you any unnecessary delay or trouble; at the same time, they desired to avoid the expense of sending for you and bringing you back from Colorado or from• some other remote place, at such time as they may be ready to examine you. They are not now ready to go into your examination. Mr. ALVORD. I should be very happy to answer all questions now, but my plans are made for the summer. I am really leaving Washington to dwell among my children, one of whom is in Chicago, and two of whom are in Colorado; and to visit friends in Connecticut and Boston; to spend the summer in Colorado is rather the plan—is really our plan, I will say, and our winter perhaps in Washington. But we have no times and seasons. •We have no business that calls us; we go as we choose and where we choose. I have arranged it so that at my time of life, in my seventy-third year, I can have that sort of liberty. I want to see Colorado very much. I have been there once, and my two sons are there in business, and I want to go and look after them. They want some means, and I have told them to wait till the old gentleman(meaning myself)came. They want money, but I tell them to hold on; that old folks are more level-headed than young folks. They want to go to Leadville, and I hold them until I can get out there to them. Mr. GARLAND. Your testimony will be valuable to us, Mr. Alvord; and while we are not prepared to take it now, we shall want it further on in the investigation. The CHAIRMAN. We will try to find you when we want you. Possibly you will be here in the winter. If not we will try to find you. We should like to have your testimony. Mr. ALVORD. Well, I will tell you the truth at any rate. The CHAIRMAN: Q. Can you indicate where you will be, that we may address you, if necessary, during the summer l—A. You may address me,if you please, at Ravenswood, Ill., care of John A. Cole; or at Denver, Col., care of Samuel Alvord; or care of John W. Alvord, jr., care of Brainerd's Hotel, at Boulder, Colorado. The committee adjourned to meet at the call of the chairman. FREEDMAN'S SAVINGS AND TRUST COMPANY. 25 COMMITTEE-ROOM OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, D. C., December 11, 1879. The Select Committee of the Senate on the Freedman's Savings and Trust Company met this day in the committee-room of the Senate Committee on Manufactures, at 10 o'clock a. in. Present, Messrs. B. K. Bruce (chairman), Angus Cameron, and A. H. Garland. The committee experts engaged in examining the accounts of the Freedman's Bank submitted a report of the loan account of the Washington branch, and it was agreed that the report be handed to the members of the committee severally for examination. Adjourned to meet at the call of the chairman. COMMITTEE-ROOM OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, D. C., December 24, 1879. The Select Committee of the Senate on the Freedman's Savings and Trust Company met this day in the committee-room of the Senate Committee on Manufactures, at 10.30 o'clock a. m. Present, Messrs. B. K. Bruce (chairman) and A. H. Garland. • Adjourned to meet after the holiday recess at the call of the chairman. COMMITTEE-ROOM OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, D. C., January 8, 1880. the Freedman's Savings and Trust on The Senate Select Committee Committee met this day in the committee-room of the Senate Committee on Manufactures, at 10.30 o'clock a. in. Present, Messrs. B. K. Bruce (chairman), Angus Cameron, A. H. Garland, and R. E. Withers. A verbel report was submitted by the experts employed in the examination of the accounts, and the committee deliberated upon the course to be pursued in the further investigation. Adjourned to meet January 10, 1880. COMMITTEE Room OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, D. C., January 10, 1880. The Select Committee of the Senate on The Freedman's Savings and Trust Company met this day in the committee-room of the Senate Committee on Manufactures, at 10 o'clock a. in. Present. Messrs. B. K. Bruce (chairman), Angus Cameron, J. B. Gordon, A. H. Garland and R. E. Withers.. THE COMMISSIONERS EXAMINED. Messrs. John A. J. Creswell, R. H. T. Leipold, and Robert Purvis, commissioners of the Freedman's Savings and Trust Company,appeared as witnesses at the call of the committee. THE TESTIMONY. By the CHAIRMAN: The committee are familiar with the general plan of your operations as commissioners, in adjusting the affairs of the Freedman's Bank,. '26 FREEDMAN'S SAVINGS AND TRUST COMPANY. from your first report of December 14, 1874, and subsequent reports, but there are some points on which we desire to have explanation, and we shall be glad to have such explanation in answer to a few questions we shall put to you. Mr. CRESWELL. I have not the details of these reports in mind. By the CHAIRMAN: Let me .ask, Mr. Creswell, whether you have acted jointly and together in the performance of your duties as commissioners, or whether you have assigned different portions of the work to different members ,of your commission? RELATIVE DISTRIBUTION OF THE COMMISSIONERS' LABORS. Mr. CRESWELL. I do not know that there has been any formal assignment of duties to one or the other of the commissioners. Mr. Leipold has had the charge, mainly, of the adjustment of the accounts, of the paying of the dividends, and of the receipt of the moneys, and has given the affairs of the bank more attention in that way than either of the •other commissioners. We have always.supervised the transactions of the bank, and have all been consulted in each part of the proceedings, -especially, when there was a necessity for the exercise of any discretion. Mr. Purvis and myself have signed the checks for the several dividends, and Mr. Leipold has mainly supervised the payment of these checks, and the adjustment of the pass-books of the depositors. By the CHAIRMAN In making up your report of December IA, which we have before us, who acted in a subordinate capacity in making up the detailed statistical parts of that report? Mr. CRESWELL. Which of the commissioners prepared the details of that report, do you mean? The CHAIRMAN. No; which of the subordinates employed by you? I hardly supposed that the commissioners did that work alone. Mr. CRESWELL. You speak of the report of December 14, 1879? The CHAIRMAN. No, of December 14, 1874 your first statistical report to the committee after you were put in charge of the affairs of the institution. Mr. CRESWELL. That was made by several bookkeepers and examiners. I cannot now recall their names. There were a good many of them, and I have forgotten their names, because they have not been in the employ of the company for two or three years. We began to dismiss them just as rapidly as we could dispense with them. The report was made up by the bookkeepers and examiners who were then in charge. The CHAIRMAN. That is what I wished to get at, and also if this statistical report was not made up by subordinates who sustained a relation to the bank prior to your taking charge? Mr. CRESWELL. Yes some of them were retained by us because of their familiarity with the books and methods of business of the bank. Of course, in making up these detailed statements, and examining an immense number of books, we had to rely very much on the men detailed by the commissioners to do that work. The CHAIRMAN. Well, have you examined and verified for yourselves, FREEDMAN'S SAYINGS AND TRUST COMPANY. - 27 in detail, the report which you submitted December 14; 1874, on the books which were turned over to your care? Mr. CRESWELL. We gave the report a general examination, and I flank Mr. Leipold, in all probability, himself gave an examination of some of the details of the report. So far as we could generally, we : looked into it and ascertained its correctness. We have never, of course, examined all the books in detail. That would have been an endless work, which three of us could never have accomplished. We took every precaution we could take in the preparation of the report to insure its correctness,just as any officers in charge of such a trust would do AVAILABLE FUND LOANS AND REAL ESTATE LOANS. By the CHAIRMAN: In your report you give a list of" real estate loans at principal office," and "a list of available fund loans at principal office." That is to say, you classify some loans as real estate loans, and some as available fund_ • loans. I want to get at the difference between available fund loans and - real estate loans, for the reason that I find real estate loans included under both these heads—under the head of available fund loans and also under the head of real estate loans ?' •Mr. CRESWELL. "Available fund loans," as that phrase was originally employed, meant very much what I suppose a "call loan" would be in a bank. • They were.loans made temporarily, and subject to .the call of the trustees of the concern in case of contingencies—funds that they could call for on -short notice. But we. found when we came into possession of the bank affairs that the "available fund loans" were as unavailable as any loans of the bank, and that they realized very badly, in the general result. By the CHAIRMAN: I observe in the report that some real estate loans are . classed .both under the head of real-estate loans and. available-fund loans, and I want to get at the distinction. Mr. CRESWELL. The terms designated the original distinction in. the classes of loans, but that distinction was lost sight of to a very great extent. You know that in banking a bank will sometimes lend a portion of its capital on what are called "call loans," collaterals, &c.— first-class securities—subject to "call," generally a call of one day. If the borrowers call before twelve o'clock, they may expect the payment of the loan that day. If they do not call by twelve O'clock, they may not expect it after that hour. As a rule, the party has until twelve o'clock on a given day in which to make the loan good. I always supposed that"available funds" were treated in the same way—that they were funds which were called in on short notice, to be ready for any emergency. But as I said, in the affairs of the bank that distinction was lost sight of, and these "available funds" became unavailable to a very large extent from the manner in which they Were used. I suppose that at the time when the bank was in a strait these loans were sifted over, and -those that were first-class that could be called in were called in, and the.proceeds used in paying off the demands on the bank, and thus the worst of these were left on- hand. 28 FREEDMAN'S SAVINGS AND TRUST COMPANY. BEAUFORT BRANCH—COUNTY CERTIFICATES. By the CHAIRMAN: On page 40 of your report, as printed, under the head of "Loans at Beaufort Branch, South Carolina," I find the item— Mar. 18, 1872. County certificates. $10,994.32. I would be glad if you will explain what is meant by that. Without an explanation we are at a loss to determine exactly what the character of the loan is. Mr. CRESWELL. "County certificates," as I understand it, were certificates of the county that were purchased by that branch. You will observe that they are itemized as "witness," "jury," "constable,' "auditors," "miscellaneous," and "judgment against county." The CHAIRMAN. The Beaufort Branch, then, purchased these county certificates, and you have them now on hand ? Mr. ORES WELL. Some few of them were realized upon; most of them were retained. I think you will find some also against the State. We made quite an effort in South Carolina to secure these claims, but the legislature appointed a board to revise them, and we had to employ counsel to go before the board. We have been in almost every case unsuccessful in making anything whatever out of them. LETTERS OF COMPLAINT CONCERNING THE BEAUFORT BRANCH. By the CHAIRMAN: Referring to this Beaufort branch,I may say that letters have been received concerning the management of its affairs, upon which you may be able to give us some information or explanation. Mr. CRESWELL. Well, the management of that bank was not a very successful one for the depositors. There was a heavy loss there—quite a heavy loss. Some of the investments there proved to be quite indifferent—and among them some of these very county certificates and State certificates. How they were purchased I am not able to say—under what circumstances or by what arrangement of parties. By Mr. WITHERS: Q. At the time these assets were purchased, or came into possession of the bank there, was any report made to the commissioners,indicating the manner and cause of the investments being made?—A. These were all made before the commissioners were appointed. Q. Yes; but when' the commissioners were appointed, was any explanation ever given by the officers and managers of the bank as to the manner and cause of the making of these investments ?—A. Yes; we have reports from those in charge of the bank. All the sub-banks were required to make reports to the commissioners here. They were required to make a final statement and to close up the several branches as rapidly as possible, and this report is a summary of the statements as they came to us from the banks. They 1.eported to us as having these assets. Q. The securities, then, are in your possession, but you know nothing further as to the quo modo by which they were procured ?—A. No, sir. [The attention of witness being called to one of the letters alluded FREEDMAN'S SAVINGS AND TRUST COMPANY. 29 to by the chairman concerning the management of the Beaufort branch, witness, after reading, replied]: COMMISSIONERS' REPLY TO COMPLAINTS. It is an intimation that the commissioners were acting in collusion with the ex•cashier of that branch. That intimation, or imputation, I repel as utterly false in every particular. We have done the very best we could in the disposition of that property. We made every effort to sell it to the best advantage. We offered it publicly and privately, and sold it only upon terms that we believed were the very best that could be obtained after every effort we could make. We availed ourselves of the services of the only people there we could find who would render any service, and, as we supposed,the best people that could be procured for that work. By Mr. GARLAND: Q. Had you beard any intimation of that sort before f—A. No, sir; I had not. Mr. PURVIS. Yes, We had. Mr. CRESWELL. Perhaps I had, but I have forgotten it; perhaps I had. Mr. LEIPOLD. Yes; we received some such intimations from that branch. Mr. CRESWELL. Well, I say that there is not a single word of truth in any Such imputations on the commissioners or any of them. We made the very best disposition of the bank's assets that we could. Q. The default or trouble complained of in that branch was before the Commissioners came in, was it not ? Mr. CRESWELL. Yes, sir. We found certain property in the custody of the bank, and made every effort to realize upon it.. The Sea Island property Mr. Purvis went down himself to see, at the instance of the commissioners, and made a personal examination of it, reporting to us what disposition we should make of it, after he had carefully inspected the whole matter. He found the property very greatly depreciated in condition and value, and that no one was disposed to buy it. Finally, after it had been a source of expense to us for several years, we having obtained but a small rental for it, and the expenses in taxes and repairs being a continued drain, we sold it on the very best terms we could get for it. Mr. PURVIS. I think it is the bank property that is referred to in the • letter. Mr. CRESWELL. The bank, as well as the Sea Island Hotel and other properties. The letter charges that in the transaction there was a loss of about $20,000 to the bank. Mr. PURVIS. Worse than that. Mr. CRESWELL. I believe Mr. Small writes the letter. I have not met that individual. Mr. LEEPOLD. We had a number of letters from Mr. Small which are on tile in our office, as also our replies to him. Q. Had the commissioners many- applications to dispose of that property or any of it Mr. CRESWELL. I do not remember that we' had any purchasers for it. Mr. LEIPOLD. Concerning the Sea-Island Hotel property we had some correspondence. 30 FREEDMAN'S SAVINGS AND TRUST. COMPANY. Mr. CRESWELL. We are perfectly willing to lay all that correspondence, from beginning to end, before the committee that they May see precisely how we acted, and upon what motives. Q. Well, sofar as you recollect the propositions, what were they— any of them, if you can recall them Mr. CRESWELL. I cannot now recall them. They were many. We refer to the correspondence. We could not pretend tO give a statement of them, as we did not charge our memory with them. Mr. GARLAND. We should like to have them when you appear before the committee again. Q. There are two pieces of property in question, do you put them together when you speak of the correspondence f—A. No, sir. I speak now of the Sea-Island Hotel property. There were the banking-house and the Sea-Island Hotel. Mr. PURVIS. If 1 may be allowed to make a suggestion, I would say here that until proof is given to show—if we can discover it—what animated Mr. Small in his criticisms of the commissioners, we are entitled to the claim that we did the very best that could possibly have been done to realize on the property, after a general advertisement of it, and great effort on the part of the commissioners to sell this and. all the other properties to the very best advantage. Mr. LEIPOLD. Mr. Small, being a member of Congress at the time, wrote a letter to the commissioners about the sale of that banking house,. in which he stated that the price was very small, and objected to the sale.. That Was after the sale had been made. I sent a copy of the letter to Mr. Lockwood, who was the purchaser, and Mr. Lockwood expressed himself freely about the whole !natter, and finally said that he had made considerable improvements on the property. since he had bought it, but that he was perfectly willing to turn it over to Mr. Small at the price paid for it; and I heard no more about the matter. Mr. PURVIS. And that was in the .face of the statement that Mr. Small had made concerning the small .price the bank had received, and that a much larger sum could have been realized from a party from whom we afterwards obtained information that they declined to buy. Mr. LE113:)LD. And we also received advices from that party saying that he had never Made any such statement. By Mr. WITHERS: Q. What did that particular property sell for I—A. For $3,000; and . it was sold for $1,300 more than it cost. Q. Do you mean $1,300 more than it cost to the bank ?—A. Yes, sir; it was a small, a vet' small piece of property. Mr. WITHERS. There could not then have been any great cause of trouble in that transaction. Mr. CRESWELL. The difficulty was to sell property in some Southern cities, at any price. At Memphis and Jacksonville the trouble was toget any price offered. OFFERS MADE FOR THE JACKSONVILLE PROPERTY. By Mr. WITHERS: Q. Was not the Jacksonville property much more valuable I—A. Yes, sir; and we have been trying to get an offer for it, and have now an offer of $10,000. Q. That is only about one-third of its estimated value, is it not I—A.. FREEDMAN'S SAVINGS AND TRUST COMPANY. 31 Just about. But the question has been what to do with it. We have been holding it at a constant loss. By Mr. GARLAND: Q. Do you recollect the highest offer you have received for the South. Carolina property ?—A. I do not. Mr. LEIPOLD. We never had any higher offer for the banking-house than what it was sold for. It was placarded and advertised and Mr.. Small knew it was for sale by the Freedman's Bank, and he could have got it at any time. So far as the Sea Island Hotel is concerned, there 'was an offer made for it once,in paper—that is to say, there was no cash offer made, except a nominal sum—We made inquiry about it, and we found that he was not a responsible party—I think his name was Williams—and that he could not probably -carry out any offer he might make. My impression is that that offer was $14,000. The sale was for $12,000, and that sum has been fully paid. By Mr. WITHERS: Q. The $14000 you ascertained after investigation was by an irresponsible party, and it was not a money transaction f—A. Yes, sir. Q. What was the character of the security offered f—A. His own individual note, secured by a mortgage on the property. Q. That was allf—A. Yes, sir he hoped to make money out of the hotel, and in that way to pay for it. Mr. WITHERS. I understand I thought it was the security of a corporation or of individuals that he offered in pay for it. Mr. PURVIS. I have no hesitation in saying to the committee that these charges are lies, and base ones. Mr. GARLAND. In this connection I would suggest, Mr. Chairman, that you give these letters to the commissioners that they may look them over and examine them together, that they may make their reply. Mr. CRESWELL. I think that is due to the commissioners. And will say that we will take great pleasure in responding to these letters. and stand ready at any time to vindicate our action in all matters connected with our discharge of the trust committed to us. "DISCIMPANCIES" IN TABULAR REPORTS EXPLAINED. By the CHAIRMAN: Q. Will you explain, Mr. Creswell, what you call "discrepancies" in your tabular statement of May 10, 1879, as submitted to this committee ? I, take the Washington branch, for instance, and under the head of "discrepancies," I find the SUM of $42,292.50. Is the discrepancy a difference between two statements, or which statements are referred to? I would be glad for an explanation of that. Mr. CRESWELL. I supposed that the table itself exhibited that. It is the unexplained difference between the reports of the branches as furnished to us and the balance due depositors. The CHAIRMAN. And in the Washington branch there are over $42,000, thus placed under the head of"discrepancies"? Mr.-CRESWELL. Yes, sir. The CHAIRMAN. I wanted to know what the losses were and how you accounted for them—whether all losses were carried as "discrepancies."' Take the branch at Washington,for instance, where $42,000 are carried under the head of "discrepancies"—whether you mean that all lossesoccurring in the branch banks are placed under that head ? 32 , FREEDMAN'S SAVINGS AND TRUST COMPANY. Mr. CRESWELL. No, not losses. These are the unexplained differences between the branch reports and the balances due depositors, as we found them on making up our statement from the books held by depositors. Mr. WITHERS. Being presumable errors in the methods by which the accounts were kept—the books failing to balance by that sum ? Mr. CRESWELL. Yes, sir. They were errors we could not reconcile in bookkeeping, between the balances on the books of the banks and the balances appearing in the depositors' books. REPORTS OF THE BRANCHES MADE TO THE PRINCIPAL OFFICE. By the CHAIRMAN: Q. How often did the branches report to the parent office before the •commissioners took possession ? Mr. CRESWELL. That is more than I remember now, sir. I do not know what the regulations required in that.respect. I am not sure that there was any ',Articular and fixed period required for the making of reports to the chief office. As we say in our first report in '74, we found the books so badly kept that it was almost impossible to reconcile the accounts of the bank, and we had to do the very best we could. DEPOSITORS' PASS-BOOKS AS EVIDENCE OF INDEBTEDNESS. By the CHATItMAN: Q. Have you found the pass-books of the depositors reliable, as a rule, .or more reliable, than. the books of the bank ? Mr.CRESWELL. The pass-books are the evidence that depositors held against the bank, and we were bound by them. It is just as it the bank had issued an obligation. We were bound by them unless we could show that they were clearly in error in the pass-books. The CHAIRMAN. You have taken them, then, as your guide I Mr. CRESWELL. Yes; we have taken them as our principal guide. We did not feel that we would be justified in attempting to go behind them, for that would, probably have led to litigation in which vie would not have been able to sustain ourselves. By Mr. WITHERS: Q. There are discrepancieS between the pass-books and the accountbooks,and you have assumed the correctness of the pass-books rather than of the accounts I—A. Yes, sir; because we did not feel that we could attack successfully an obligation which the bank itself had issued. LOSS AT THE BEAUFORT BRANCH. By Mr. GARLAND: Q. Going back for a moment to the letter of 1Vir. Small. It speaks of the bank there, at Beaufort, having lost some $80,000. I do not exactly remember the figures, nor gather what he means by that assertiort. Is that your recollection of the amount of loss there I—A. He means, I suppose. that the assets fell short by that amount of the charges against -the bank. Mr. WITHERS. I think it was $60,000, as I remember it, as made in vone of the published reports? The CHAIRMAN. It is stated in one of the reports. FREEDMAN'S SAVINGS AND TWIST COMPANY. 33 Mr. GARLAND. He put it at $80,000. I (10-not know whether it the same thing that the $60,000 called for, or whether it was sunk is in some other way. Mr. PURVIS. May I ask whether Mr. Small has furnished you, Mr. Chairman, with any facts that he advises you he is in possession of to sustain himself in the charges he made ? The CHAIRMAN. That letter is all, I believe. There may be one other. My recollection is that he has written me twice, or possibly inclosed me a letter from some one else. It was during the summer, and the papers have been put away, and we have not before us all the correspondence. TRANSFER OF ACCOUNTS AND SET-OFFS. Q. I will ask you now, Mr. Creswell, to explain the matter of transfer of deposit accounts in the settlement of loans in this the table [showing table]. Here, for example, is Mrs. Annie Darby's account, and her deposit has been applied to the payment of Ralph H. Darby's account. The same is true in several other accounts. RALPH H. DARBY'S ACCOUNT. Mr. GRES WELL. That was a case which was taken into the court. We contested the right to have that account transferred. We held that where a party, at the time of the failure of the bank, had a sum of money due from the bank, and that party at the same time was indebted to the bank, on the established principles of law, he was entitled to a set-off. I think all lawyers will understand that position. In this case, Dr. Darby came in and claimed that the deposit held by the bank to the credit of his wife should be placed as a set-off to the claim against him. We contested. The case went to the court, and the court ruled against us. Mr. LEIPOLD. Dr.Darby had died. The claim was made by his widow, who was the sole heir. Mr. CRESWELL. At all events, the court ruled against us, and decided that we should allow that as a set-off. . All the other cases of set-off I think you will find were made under the general principle I stated in the beginning of my reply to your question. By Mr. GARLAND: Q. What court—A. Judge Wylie, I think. The supreme court of the District. Mr. LEIPOLD. It went to the court in general term. That court sustained the judge below. The expense involved in carrying the litigation any further was so great that it was deemed best to settle the case, because they looked upon Mrs. Darby as the surety for the note,inasmuch as the property was hers, and they applied the principle of set-off and said she was entitled to a set-off. By Mr. WITHERS: Q. Was she the indorser of the note'? A CASE IN WHICH THE SET-OFF WAS DECLINED. . Mr. LEIPOLD. She was. Mr. LEIPOLD. We had another case in point, a very close case, that caused a good deal of ill feeling on the part of the gentleman who 3F B 34 FREEDMAN'S SAVINGS AND TRUST COMPANY. held the account. We won that. That was a case where the party was indebted to the Freedman's Bank, and held. the check of a depositor, drawn on the 8th of Yuly, for $3,200, and endeavored to set off that deposit on the ground that it was their own, that the money belonged to them, and they endeavored to set it off against their indebtedness. But we found when we came to take charge that the $3,200 still stood to the credit of the original depositor, and had not been transferred before the failure of the company. We declined to make the set-off, and the court sustained us. THE CLIFFORD ARRICK ACCOUNT. By the CHAIRMAN: Q. On this schedule, Mr. Leipold, there are several cases of deposits transferred to the accounts of other persons. Possibly you remember one Clifford Arrick's case I will of.them—the account of Clifford Arrick designate, although there are several, as a representative case. What I want to get at is whether, if Mr. Arrick, or any other person, deposits money in your bank, and at the same time has a loan from the bank secured by a mortgage (as I see in one case it has been done), do you allow that account to be' transferred from the deposit to the loan account, and permit the party to receive dollar for dollar, whereas other depositors in the bank can only receive their pro rata of the dividend, of 30 or 50 per cent., as the case may be ? Does not that seem to make preferred Creditors of these parties ? THE PRINCIPAL OF "TRANSFER" ILLUSTRATED. Mr. LEIPOLD. The principle involved is one of established law. To illustrate: .Here is a man who borrows, say, $5,000, from the Freedman's Bank, and gives his note as security, and that note is held in the loan account. of the hank as against the man. The man, however, has a deposit account in the same institution, and he has $4,000 to his credit in that, account, we will say, when. the bank fails. A receiver now comes- in and takes charge of the bank. He finds that the man owes the bank $5,000 on his promissory note,'secured by a deed of trust, and he also,tiiidS that the institution owes him $4,000 on his deposit account. Now, suppose that the receiver declines,, as we did in one or two cases, to allow the man a credit, and calls upor him to pay the $5,000? He says,"You owe me '*4,000; I will pay you the balance." "0, no," we say," we cannot do that." We go into the courts and endeavor to enforce the payment of that 0,000 loan. The man pleads his deposit account as a set-off, and the court allows it, and will allow it every time; that is, provided that that is the condition of-the account at the time of the failure of the institution. Mr. WITHERS. That may be all right, and that may be the law, but it does not meet the point made by the chairman. It is not the law of transfer. Mr,. LEIPOLD: That I take it is a mere technicality. Whoever calls that a transfer I do ,not know. - Wherever we found that to be the case, the credit to the depositor's account was carried to the loan account and the deposita's account was closed at, the time. Mr. WITHERS. That is customary in banking, I understand; but a transfer is one thing and an offset is another. A. transfer would indicate that the account had passed into the hands of other and different parties. FREEDMAN'S SAVINGS AND TRUST COMPANY. 35 Mr. LEIPOLD. This is a transfer from one book to another of the same man's account—the taking of the credit on the deposit account and applying it to the extinguishment of the $5,000 loan on the loan account. The Clifford Arrick matter is a different, matter again. , The CHAIRMAN. Exactly so; and my reason for calling, attention to the Clifford Arrick account—and there are many similar cases on the schedule before me—was to learn the rule you had anplien in such cases. THE CASE OF BOUGHTON & MOORE. 4,r By the CHAIRMAN: Q. Could you, without having to refer to your books, explain to us, Mr. Leipold. the ease of Boughton & Moore ? I see they are here as"bankrupts"; and it appears that the note given was a real estate note of Boughton & Moore for $6,480. As it was a real-estate note, and they are here as bankrupts, I would be glad to have information of that account. Mr..L1AIPOLD. Probably Boughton &,Moore had a running account in the Freedman's Bank, and gave notes to cover the balances due from them to the bank, and secured thee notes by real-estate notes. When we took charge of the affairs of the institution, and I examine& the assets„ I found that these real-estate notes were covered by second or third deeds of trust. My friend on the right .(Mr. DouglaSs)'probably knows something about that. He, too, had a mortgage on the same property, ahead sof the bank, and I believe lost part, if .not all, his claim. They were utterly worthless. The property had been sold under a prior deed of trust, and the parties had gone into bankruptcy. By Mr. GARLAND: Q. Was the matter presented in the bankrupt court A. Yes, sir.; and they had no assets. Q. While you are upon that point, to illustrate several matters that, run through these accounts, was it known, when these and similar securities were taken, that previous mortgages or liens existed ?\• Mr. CRESWELL (answering). These securities were not taken by us., but by the Managers of the bank that came ahead of us. Q. Well, Mr. .Leipold, the instance you gave a little while ago—the two separate accounts—the deposit account and the loan account were any cases of that sort contested in the courts ? I mean the propriety of transferring the account. A. The Darby case was contested. That was different from this in this particular: That in the deposit account the credit was to the wife, • in the wife's name. The debt was by the husband. There was no mutuality, and of course we would not allow it, but the cella Overruled us. Q. Is it a stronger 'case than the one. you instanced f—A. No.. Where the credit was mutual there was no use in disputing,it ; we would only have wasted the assets of the bank by disputing such eases. THE MRS. FISKE AND LEONIDAS SCOTT ACCOUNT. By Mr. WITHERS: Q. Here is the account of Harriet P. Fiske on the schedule. It is a sum of $2,356.20 credited by loan to Leonidas Scott. Mr. LEIPOLD. Leonidas Scott, trustee. Mr. WITHERS. No; simply .Leonidas Scott. That would appear to FREEDMAN'S SAVINGS AND TRUST COMPANY. 36 be an off-set of a depositor's account, by the name of Fiske, by a loan account in the name of ,-.7.cott, a different individual entirely. Mr. LEIPOLD. That was examined into, and although the money apparently was to the credit of .Mrs. Fiske, the two were virtually the same parties; Leoidas Scott represented Mrs, Fiske. it was a trust •Inatter. 1c , By Mr. WITHERS: Q. Was he a trustee for Mrs. Fiske 1—A. Yes, sir; and the amount deposited was deposited to that trust fund, of • which he was trustee. • Mr. WITHERS. Well, the word "tiustee" should have been added to "Leonidas Scott," in order that the fact might have been seen and known at a glance. THE ELISHA A. BRUCE AND WORROCK ACCOUNT. By Mr. WITHERS: the case here of Elisha A. Bruce, of Jacksonville, Fla. He see I appears to have had a certain amount on deposit, which was applied to the payment of Worrock's loan. The parties seem to be totally different and distinct. What is the history in that case 1 It is a small account, but I would like to know the principle involved in it. Mr. LEIPOLD. That is a compromise settlement. The question in that case was to get the utmost possible out of it. Here was a man who owned this deposit book. All that we could get hold of in payment of that loan was taken. It was found that he had possession of that book in good faith, and although We had almost uniformerly rejected all transfers of deposif books, in this case it was thought best either to take that or nothing. Q. Worrock owned the deposit book instead of Bruce? Mr. LEIPOLD. A lot of different things were turned in, in that case, and the question was to take that, or nothing. . It was a compromise settlement. We did the best we could, and got all that we could out of that case. Of course there is a history to each one of these cases. Mr. WITHERS. Each case must have its own history, of course; I wanted simply to get at the principle involved, upon which the commissioners acted. THE CLIFFORD ARRICK ACCOUNT. Mr. LEIPOLD. The Clifford Arrick case was about as large a case as any. It comes up in this way: Clifford Arrick owed a sum of money to the Freedman's Bank, and the matter was in litigation between Clifford Arrick and some outside parties, as to whether the outside parties should pay the Freedman's Bank or Clifford Arrick. Clifford Arrick was required to deposit the money which was due the Freedman's Bank. That was, of course, before the failure of the company. It was placed to the credit of Clifford Arrick in the deposit ledger, and a certificate of deposit was issued for the amount. The certificate of deposit was filed in the loan department of the bank so that the money could not be drawn out. It was subsequently decided that Clifford Arrick must pay that money, and the certificate was canceled and carried over to the loan account. 4 e4, FREEDMAN'S SAVINGS AND TRUST COMPANY. • 37 - THE WILLIAM O. AVERY ACCOUNT., By the CHAIRMAN: Let me call your attention to the William 0. Avery account of $585.32. Mr. LEipoLD. In the William 0. Avery ease,• Mrs. Avery (a,S Mrs. :Helen M. B. Upson, before her marriage to Mr. Avery) bought a piece of property, and gave notes for it, secured by a deed of trust on certain property, which notes were bought by the Freedman's Bank. When the commissioners came in charge, they found a number of these notes. So meof them had not yet matured; some were overdue. Mrs.Upson paid for them for some time as Mrs. Upson and also for some time after she had • become the wife of Mr. Avery. Finally, she could not pay any more; her husband had got into pecuniary trouble, and we ,sold the property under the deed of trust and bought it in, and there was still a balance due on these notes. I myself brought suit against Mrs. Avery (she having other property, as I understood), and was defeated in the courts, on the ground that she, as a married woman, was not personally liable for mites given by her in purchase of property. Mr. Avery had a balance to his credit on the deposit books. He never called for his dividend. When he was chief- clerk in the Treasury Department .I had conversations with him, and while I did not inform him personally in any of' these conversations that there was a balance due him on our books. I told him that I wished depositors would bring.in their hooks. I did this to 'find out whether he • would speak of his account. He never did, nor.did he ever apply for the balance due him. My impression is, that the amount was paid to him and not charged on the books against him. When we were defeated in the court, 1 arbitrarily turned his deposit balance over to the , balance that was due from Mrs. Avery, on the ground that Mr. Avery, as her husband, was liable for it. But as a matter Of fact, I do not believe that the money was due to Mr. Avery, and I took the course I did by way of precaution in the interests of the Freedman's Bank, and to prevent Mr. Avery's 'being paid until he had established a valid claim. The moment Mr. Avery furnishes .proof that that money is his, we Will pursue the claim anew, and hold it as a set-off against the debt of his wife. Mr. PURVIS. Thus leaving the impression that Mr. Avery had 'drawn out all he ever put in the bank, and reflecting upon the management of the institution by those in -charge. Mr..LEIPOLD. We cannot help that impression. The defective management will be abundantly proven before this committee gets through. It is my opinion that nothing is due Mr. Avery. He is a man in great poverty and distress, and if he knew or believed that he .had a dollar with us, he would have presented or would present his claim for it. PROPORTION OF UNPAID LOANS THAT CAN BE MADE GOOD. By Mr. GARLAND: Q. Mr. Creswell, you have seen this schedule made out by the accountants, have you not 7--A. No, sir ; I have not. Q. There is an aggregate of $511,000 there, and something over, that the institution is behind,in the loan account of the Washington branch. Have you any idea—and either of the commissioners can answer, in order that we may expedite the examination—how much of that sum due on account of loans could be made good'? 38. FREEDMAN'S SAVINGS -AND TRUST COMPANY. Mr. CRESWELL. Does that mean. the balance still standing on the ledger ?, Mr. GARLAND. Yes, sir; the schedule shows the amount of unpaid loans of the Washington branch as it appears from the ledger up to the date of September 17, 1879. • Mr. CRESWELL. Irrespective of all credits? Mr. GARLAND. No; allowing all credits. Mr. CRESWELL; It would be difficult to estimate how much of this amount could be made good without going over all the accounts. A large amount will never be realized upon.. LITTLE VALUE OR THE PERSONAL SECtTRITIES. By Mr. GARLAND: Q. Take the first case on the schedule, the case of William R. Arnold, involving a balance due of $496.70. The property given as security for this loan was sold and bought in by the commissioners for $395, the balance being still unpaid. Is that the only security, for example, you have now—the property there mentioned? Mr. CRESWELL. In all those cases where we thought there was any possibility or probability of recovering on the loans, after the sale of the property was made and a deficiency shown, we brought Suit. In many of the loans, the personal security was worthless. The only real security the bank had was in connection with the deeds of trust. By Mr. GARLAND: Q. In most cases, your statement is, that the personal security was worth -nothing ?—A. Yes, sir; almost nothing. In some cases we obtained judgment, and may ultimately recover. Q. You could not now, give any estimate of the amPuut of loans that will thus prove worthless ?—A. Not any accurate estimate. Q. Well,I would like to get such estimate from the commissioners before the examination closes: Did the commissioners, or any of them, take any of these loans themselves; or were they all taken before they Came in charge of the corapan3's affairs?—A. They were all effected before We came in. Mr. LEIPoLD. There are some of the accounts represented here where we have sold property on time; fOr instance, where parties gave notes for part ,payment, secured by a deed of trust on the property we sold them. Mr. CRESWELL. A separate list is given of these. • SECURITIES INSUFFICIENT TO COVER LOANS. By MR. GARLAND: Q. For further information of the committee take, for example, the loan of the Fifth Baptist Church. It seems that the.property was not ,worth, by a large sum,the amount of the loan made upon it. Was that the fact, that it was not worth the amount of the loan when the loan was taken, or has the difference in value arisen from the depreciation of . the property since, or from other causes? Mr. CRESWELL. Largely by reason of the depreciation of property . generally. At the time when many of these loans were -taken, real estate was at a high value, and high valuations were put upon it at the time of making the loans, and in many cases the properties were overrated in value. 04 4 FREEDMAN'S SAVINGS AND TRUST COMPANY. ' 39 Mr. LEIPOLD. In the case of the Fifth Baptist Church, I do not believe that the property was ever worth the amount of the loan taken upon it. Mr. WITHERS. And the depreciation has been greater in the case of that church property, and of church property generally, I suppose ? Mr. CRESWELL. The general depreciation of property has been very great. By Mr. GARLAND: Q. How many cases, in the recollectioii. of the commissioners, are there in which you found the security given, at the time when the loan was effected, entirely insufficient to cover the loan; of course I mean an estimated, approximate number, that may be in your mind, as you would have to go to the books to find them all out ? Mr, CRESWELL. Yes,- we would have to go over the books and mike , examination of that particular point. We have never made an special a examination with a view to set out in detail all these eases,and I am not able to give any accurate estimate of the number of such cases. Mr. PURVIS. The rule recognized in the making of loans should have loan, been that the security should be worth double the value of the defithe that great so been has 'values property in ge shrinka the but cent. per hundred one over ciency in many cases has been Mr. LEIPOLD. I have personally attended almost all the sales we have been compelled to make, and I found in quite a large number of cases that the properties were overestimated in value at the time when the ,loan was made. Mr. CRESWELL. We had to _buy in almost every Piece of property we we advertised. We sold, and were always anxious to sell, provided es properti the of Some s. advance bank's the cover could sell so as to we have. since sold, some of them at a loss, but our aim in selling has always been to sell upon the best terms we could possibly.obtain. of Mr. PURVIS. And I think that some of the -properties now are them. little value compared with the amounts that were loaned .upon time. I have no doubt that they were conscientiously estimated at the We have one instance, that large property of Lyons, where the party which: owning it refused seventy-five thousand dollars for it, but upon . suppose I dollars, d thousan we could not now realize twenty By Mr. WITHERS: an Q. But that would not indicate the general case; that is rather has values property in tion deprecia the Well, t—A. not exception, is it been without parallel. CONCERNING CASES IN LITIGATION: By Mr. GARLAND: Q. You testified - last spring, Mr. Creswell, as to litigations pending in this District, in reference to a number of pieces of property. Have any of these cases been disposed off—A. Very few of them. We have had some eases decided ih the Supreme Court. We have had two or three cases this term decided in our favor. I Q. Can you state the amount involved in them t—A. I cannot. tively compara are they But dollars. of should suppose some thousands n. small in amount compared with the gross balances now in litigatio Mr. f—A. quo statu in still that is Totten, Q. The matter of Enoch case? Totten has had charge of many cases-,do you mean the heavy 40 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Yes, sir.—A. No material advance has been had in that case, but we have been pushing it. We were anxious to have it up this term, but defendant's counsel was engaged in other important cases, and the case went over, against our protest. COMMISSIONERS' PERSONAL INTEREST IN LOANS. By Mr. GARLAND: Q. Were the commissioners, or any of them, interested personally-in any of the properties pledged for any of these loans? Mr. CRESWELL. No, sir. Q.-Directly or indirectly ?—A. No,sir. Q. Is that your answer also, Mr. Leipold ? Mr. LEIPOLD. Yes, sir, Q. And yours, Mr. Purvis? Mr. PURVIS. Yes, sir. Mr. LEIPOLD. I may state here that I bought a piece of property in '72, 1 think it was, and assumed the payment of a deed of trust on it. I bought it from Mr. S. R. Bond, and the deed of trust was given, I believe, by a man by the name of Putnphrey. I found that the note was held in the Freedman's Bank, and I paid it. That was, of course, long before the failure of the bank, and before I became a commissioner. Mr. PURVIS. Before I was appointed a commissioner of The Freed-. man's Bank, or had any expectation of such appointment, with a view of aiding the bank, I took several of its loans. I hold them yet, to my regret and loss. By Mr. GARLAND: The question did not mean to reach that far—only, of course, to the period since your appointment as commissioner. Mr. LEIPOLD. I did not know whether the question did not reach as far as the statement I made. Mr. PURVIS. I did not judge that it did. Mr. LEIPOLD. I stated the case in my reply because that was a loan held by The Freedman's.Bank in which I Was indirectly interested. By Mr. GARLAND: My question was addressed to you as commissioner, and was meant to cover, of course,'only the time since you become clothed with the character of commissioners. Mr. CRESWEL-L. And I may add to my reply, that outside of my salary I do not think that I have ever made one cent by any transaction, remote, contingent, or otherwise, in the loans or assets of the institu• tion, except to realize out of them the very last cent we could for the benefit of the depositors. That is my answer, and I believe it to bq the answer of one and all of my associates. If they ever had any connection with the loans or assets of the bank for their personal profit, I am entirely ignorant of it: For myself, I am sure that I have not. FEES OF COUNSEL IN THE DIFFERENT SUITS. • By Mr. GARLAND: Q. Is there in your books a statement as to the amount of fees you have paid counsel for these different suits?—A. Yes, sir; we made a statement last spring, and we have paid Mr. Totten some since. fit A FREEDMAN'S SAVINGS AND TRUST COMPANY. 41 Q. How much ?—A. A comparatively small sum, I could not state exactly how much I do not suppose it has exceeded a thousand dollars. Mr. LEIPOLD. About that sum. Q. Have you paid others beside Mr. Totten ?—A. Yes, sir, we have paid some others. Who are they f—A. We paid to Mr. Smith here, Mr. James H. Smith, some money.in small sums. We have also paid some attorneys at distant points, since then. They are all set out in the account. EXPENSE OF THE COMMISSION. By Mr. GARLAND: Q. What has been about the expense of your management of affairs since you were before the committee last spring ? Mr. CRESWELL. We could only tell by reference to the accounts, and by making up a statement from them. Mn. LEIPOLD. I think they average at the rate of twenty thousand dollars•a year—about as much as that. Q. You think that that would be a fair average of your expenses since you were before the committee last May I—A. They may be a little lower than that now at that time I think that was about the average I guess that that is what-it would amount to. * Mr. CRESWELL. The commissioners are exceedingly anxious to be relieved from their duties and responsibilities to this institution, if the committee will favor them to that extent, by any process, plan or system they may devise. We have been anxious that this should be brought about for the last three or four years, and you will remember that we sent in our resignation once, but it was declined on the opinion of the Attorney-General that we could not withdraw. Mr. GARLAND. I.know that, and we submitted a bill to Congress last spring, but had it recommitted in view of the examination going 911. Mr. CRESWELL. We will heartily acquiesce in anything looking towards this relief that we desire. Mr. LEIPOLD. I think that it ought to be done, by all means. I think that the affairs of the company can be conducted at much less expense than is now made necessary, and can be wound up in a more rapid manner, and more satisfactorily in every way. THE GOVERNMENT SHOULD PURCHASE CERTAIN PROPERTIES. Mr. CRESWELL. We should be very glad also if the committee in relieving us should also conclude to purchase the bank property now occupied by the Attorney-General's office and the Court of Claims, and furthermore the banking property at Jacksonville, Florida. If that should be done it would enable our successor, whoever he may be, to declare another dividend. These are both very valuable properties, and it is our opinion that the government ought to purchase them. OFFERS FOR THE JACKSONVILLE PROPERTY. By the CHAIRMAN: Q. You had an offer for the Jacksonville property, had you not'? Mr. CRESWELL. Yes, sir. We had an offer some time ago of $10,000 for it, which we declined, as it was so far below what we ought to ob. 42 FREEDMAN'S SAVINGS AND TRUST COMPANY. tam n for it. We did not wish to sacrifice it, and yet it is an expense to the company to bold it, and it has become a question whether it ought not tO be disposed of speedily. By the CHAIRMAN: did the 'Jacksonville property cost—A. I believe some What Q. $40,000. Mr. CRESWELL. It is a valuable property. I went myself to Jacksonville, and have inspected it. By Mr. WITHERS: Q. I cannot think that there has been generally in Florida anything like Such a depreciation of property as this offer of$10,000 would seem to indicate. Mr. CRESWELL. The county commissioners made an offer of $10,000. a year ago. Mr. LEIPOLD. 0, they offered $25,000 for it at one time; one-third of the sum to .be paid, not in cash, but in one year after purchase, and nothing to be paid immediately; and the offer was based upon the acquiescence of the people of the county. They have recently taken a vote upon it, and it was defeated. Of course we could not accept the proposition, because it included no money. By Mr.'WITITERS: Q. What about 'the offer for $10,000 referred to a moment ago? Was not that a bona fide offer?—A. Yes, sir. That was made by a Member of Congress, but we did not judge that it would be right to accept such low figure. The present income of the property is not, however, even a fair interest on that sum. CFFER FOR THE NASHVILLE PROPERTY. Mr. CRESWELL. We have had an offer from Nashville for the property there, of $10,000—one-third cash. By the CII4tIRMAN : Q. You have not much property at Nashville, I believe? Mr. LEIPOLD. No, sir; 'there is only the banking-house, and a small property besides. Mr. PURVIS. I do not think, however, that a $10,000 offer for the Jacksonville property ought to be entertained. Mr. CRESWELL. And yet, I think, that we ought to sell it for that sum if we cannot get more. OFFERS FOR THE VICKSBURG PROPERTY. By the CHAIRMAN: Q. Have you had any propositions to purchase the Vicksburg property? Mr. LEIPOLD. No,sir. I have heard that property estimated lately at not more than three thousand dollars. It cost the bank sixteen thousand dollars. EFFORTS TO SELL THE DIFFERENT PROPERTIES. Mr. LEIPOLD: I have been very much in favor of selling the Jacksonville property, and any other property of the bank, where we could get any responsible offer, at anything like a reasonable price, with a view to hasten the closing up of the concern and reducing expenses to the lowest limit. FREEDMAN'S SAVINGS AND TRUST COMPANY. 43 By advertising and otherwise we have offered these properties, and the best offer we have been able lately to get for the Jacksonville property is the one we now have Of ten thousand dollars cash. I was in favor of directing our agent there to advertise that property for, public sale, and to make every possible effort to get a larger slim for it at such sale, but to limit the price to a minimum bid of ten thousand dollars, and if no better offer were made to let it go at that figure. We have been trying to sell it, I think, for the last five years, but we cannot sell it. The reports of its condition are that it is rapidly depreciating, the timbers are decaying and it is suffering for the want of repairs, &e., while • the income from it is very small. Mr. PuttyIs. Within the live-years we have been offered upwards of twenty thousand dollars for it. Mr. LEVOLD. That was not an immediate cash offer, as I have said. There was a gentleman in our office who said that be would make an offer of twenty-five thousand dollars for it, but he did not make the offer.. THE MEMPHIS PROPERTY. By the CHAIRMAN: Q. Have you any property in Memphis? Mr. LEIPOLD. We have a lot there,,in litigation. We could probably sell.it if it was free from litigation. It is involved -so that we cannot sell it at present. Mr. CRESWELL. It should be remembered, also, that it is a very easy matter vi7hen we have sold any property at a low figure, to-find persons complain that it has been sold far below its value, but in nearly every , case it has been a question whether it would n )t ha hatter to sell for what it would fetch rather than to hold on to it. We are paying taxes and repairs all the time. . Mr. LEI.Pot,' n. I Want to add here that, as matters now stand, our current income is virtually ansorhed by the expenses of the commission. I do not see how anything whatever can he gained by delaying to close up the concern. . Messrs. Frederick Douglass, and "Zalmon 'Richards, subpoenaed as witnesses, were at their verbal request excused from testifying at present, and Mr. Henry D. Cooke replied by letter through his son that illness prevented him temporarily from answering the committee's summons. By suggestion of Mr. Garland, at least one of the commissioners was requested to be present at each session of the committee, in order to facilitate the examination. • Adjourned to meet on the following Tuesday, January 13, 1880, at 10.30 o'clock, a. m. COMMITTEE-ROOM OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, 1). C., January IA 1880. The Select Committee of the Seaate on the Freedman's Savings and Trust Company met this day in the comtbittee room of the Senate Committee on Manufactures, at 10.30 o'clock a. m. Present, Messrs.. B. K. Bruce (chairman), A. H. Garland, J. B. Gordon, and R. E. Withers. Adjourned to January 15, 1880. 44 FREEDMAN'S SAVINGS AND TRUST COMPANY. COMMITTEE-ROOM OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK; Washington, D. C., January 15, 1880. The Senate Select Committee on the Freedman's Savings and Trust Cotupany wet this day in the committee-room of the Senate Committee on Manufactures, at 1030 a. m. Present, Messrs. B. K. Bruce (chairman) and A. H. Garland. DISTRIBUTION OF LABOR AMONG THE COMMISSIONERS• Mr. R. H. T. Leipold, commissioner, read the following letter, addressed to the committee: OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington, D. C., January 14, 1880.' Hon. B. K. BRUCE, Chairman Senate Committee Freedman's Savings and Trust Company: SIR: Permit me to call your attention and that of your committee to the statement of Mr. Creswell, made on Friday, the 9th instant, in .reply to your question as to the division of the duties or labor of the commission among the several commissioners. I do not wish my silence on this point at that time to be regarded as an acquiescence in the correctness of that statement. As far as that statement seeks to convey the impression that any considerable portion of the work of the commission has been discharged by Commissioners Creswell and Purvis, or that they have devoted any ex-, tended time or attention to the business of the. bank,I most emphatically dissent from it. On the corftrary, I will state, and that without fear of successful contradiction, that almost the entire management of the institution has devolved upon me. For the first two years after the commissioners took charge of the company's affairs, add while the duties, complications, and annoyances were at their maximum, Mr. Creswell was the United States attorney for the Alabama Claims Commission, and scarcely ever at the bank; and Mr. Purvis spent a large portion of his time in Philadelphia and thereabouts; and since that time, as far as the actual labors of the commission are concerned, it has been no.better, although Mr. Purvis has spent more of his time at the bank. Both of these gentlemen, especially Commissioner Purvis, have virtually assumed the position that, aside from a sort of undefined general supervision, they did not undertake to do any of the work when they became commissioners. I have several times remonstrated with these gentlemen about the injustice of throwing the entire burden.upon me, but without any satisfactory result. On the 6th of May,1875,I'addressed theft' a letter, a copy of which I inclose. This letter brought a verbal proposition from'Mr. Creswell,offering to pay me $250 every six months for the additional labor required of me, to which I replied, by letter of May 20, 1875. (See correspond( nce, below). I then received a communication from each of these gentlemen, dated May '22 and 25, 1872, respectively, copies of which are also presented herewith. Finding that neither of the other commissioners would consent to a fair division or apportionment of the work, I reluctantly accepted their offer, and they twice paid me the sum of $250 each, once July 1, 1875, and once 'January 1, 1876. After this, Mr. Purvis having become more bold and offensive in his claim that he was not expected to do any of the work, I refused to receive .any farther payments from them. It is true, that in matters of importance—requiring the exercise of discretion—I have consulted those gentlemen, especially Mr. Creswell, hilt in every such case they had the full benefit of my labors, byn preseutatiOn of the facts previously ascertained by me, and their action has been based upon such ascertained facts. So,too,have they signed the dividend checks; but, even most of these were signed by them at their own homes, and involved nothing but the physical labor of appending their signatures. But in the collection of the assets, the examinations of accounts, the planning and systematiiing of the work,the payment of dividends,the voldminous correspondence,the'preparation of testimony and documents for suits pending in. the courts, the preparation of the official reports, the buying in and selling of.properties, and, in fact, the Whole current work of the .commission, Messrs. Creswell and Purvis have taken but little active part; and this is notorious, 1• no I very much wish that that the committee would look and examine into this matter. It may throw some light on the propriety or impropriety of continuing an expenditure of $9,000 per annum,from the money of the creditors of the company,for the services rendered. I most emphatically protest against its further continuance. I have the honor to be, very respectfully, your obedient servant, R. H. T. LEIPOLD, Of the Commissioners. V A. FREEDMAN'S SAVINGS AND: TRUST COMPANY. 45 Mr. LE1P0LD. Before' reading the correspondence whidh I wish to offer to the committee, I will state that the first letter, of date May 6, 1875, was written ten months after the commissioners took charge of the affairs of the institution. It is as follows: MR. LEIPOLD TO MESSRS. JOHN A. J. CRESWELL AND ROBERT PURVIS. OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington, D. C., May 6, 1875. Messrs. JOHN A. J. CRESWELL and ROBERT PURVIS, Commissioners Freedman's Savings and Trust Company: GENTLEMEN: As the responsibility of the position and my constant application to the infinite variety of complicated and annoying details arising from the closing up of the affairs of this company are beginning to have their effect on my health, &c., I am not willing, nor ought it to be expected,considering the limited compensation allowed, that the entire charge of the matter should any longer be left to me. I have, therefore, to request that you should determine among yourselves upon some plan whereby the duties arising out of our joint connection with this company, as well as the time necessary to attend to them, may hereafter be equally divided between us. It certainly never was contemplated by any one that the entire management of this concern should fall upon one commissioner, as has substantially been the case for the last ten months, as long as there are three appointed and paid. Mr. Stickney's resignation which took effect on the 1st instant, does not by any means diminish the care and anxiety incident to the business. I am, very respectfully, your obedient servant, R. H. T. LEIPOLD. , [Vol. 4 Correspondence Book, pages 287, 288.] Mr. LEIPOLD. The above letter was followed by a verbal proposition of a compensation, to which I replied as follows: MR. LEIPOLD TO MESSRS. CRESWELL AND PURVIS. OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVING. AND TRUST COMPANY, Washington, D. C., May 20, 1875. Messrs. J. A.J CRESWELL and ROBERT PURVIS, Commissioners: GENTLEMEN: Referring to your verbal proposition that,in consideration of my continuing to devote my time to the general supervision of the duties arising out of the closing up of the affairs of this company,to the exclusion of other private business, and for the purpose of relieving you of the necessity of a daily attendance at the office of the commissioners, which you claim to be impossible, you would pay me thp sum of $250 each on the 1st of July next, and a similar sum every six months thereafter as long as the extra duties thus devolving upon me would prevent me from engaging in any other business pursuit, I have to say that I much prefer some arrangement could be perfected whereby I might have a portion (say,one-half) of my time daily to devote to the practice of my profession, thus enabling me to obtain some relief from the constantly recurring annoyances incident to this business, and at the same time to carry out the object I had in view when I severed my connection with the Treasury Department and accepted the appointment of commissioner. If you cannot be personally present, might not the desired result be attained by you jointly employing some persort in whom you have confidence, and for whose acts you are willing to be responsible, to represent you? I have the honor to be, &c., R. H. T. LEIPOLD. [Pages 77-78.] MR. CRESWELL TO MR. LEIPOLD. In answer to these two letters, I received the following replies: WASHINGTON, D. C., Nay 22, 1875. H. H. T. LEIPOLD, / esq.: MY DEAR SIR; I acknowledge the receipt of yours of May 6 and May 20. Waiving for the present any difference of opinion I may have as to the positions taken by you in yours of May 6, I have to say in reply that when I consented to become 46 FREEDMAN'S SAVINGS AND TRUST COMPANY. one of the comfnissioners of the Freedman's Savings and Trust Company, it was with the distinct understanding that I could not undertake the personal charge volved labors of that extended concern; all that I expected and promised of the ingive to the business a general supervision and attention, so that, with the to do was to co-operation of those having the direct management, the affairs of the company might be to the best interests of depositors and creditors. My expectation was that closed up you would take personal charge of the institution and its property. Realizing equally with yourself that the duties required of the commissio been much more onerous and exacting than any of us at first supposed, and nerspave deeming it important to have one of the commissioners remain in charge,I am entirely willing to consent to the proposition contained in yours of May 20, as a matter of justice to you. lam satisfied that you have been disappointed in having your time entirely taken up with the duties of commissioner, thereby preventing you from engaging iu the practice of the law, as you intended. In consideration ot the extra services required of you, I am willing to pay you the sum of $250 on the 1st day of July next, and'an equal sum eyery six months thereafter, so_long as the extra duties thus devolved upon you will prJvent you from engaging in any other business pursuit. This arrangement, however, to continue only so long as we may remain commissioners, and it being understood that the payment next is not to be made if we should be relieved from our duties as commissiofor January ners before the expiration of that month.As to the suggestion contained in the close of your letter of May 20, it ion that the duties imposed upon the commissioners cannot be devolvedis my opin,upon any third party, and hence I greatly prefer that you should remain specially in charge. Very truly, yours, J NO. A. J. CRESWELL. MR. PURVIS TO MR. LEIPOLD. WASHINGTON, D. C., ,Ilay 25, 1875. R. H. T. LEIPOLD, esq.: DEAR SM.: Your favor of the 6th instant is received. In it I am glad to know that the,proposition of J. A. J. Creswell, esq., in which I cordially unite, is accepted to wit, that by reason of the partial relief from our duties as commissioners by you, S. & T. Co., with yourself, thereby imposing upon you an increased amount of the F. we individually tender to you :the sum of $250 dollars for such extra services,of labor, 1st day of July,for the ensuing six months, and promise a like sum at the from the of said six months should you continue in the performance of such extra expiration duties. Yours,respectfully, ROBT. PURVIS. Mr. LEIPOLD: That is all I have to say on this point. I humbly trust and ask, Mr. Chairman and gentlemen that the coin mittee look into the matter, as a matter IA justice to myself as well as to this committee, that they should know how the duties of this commission have been distributed, and by whom the great bulk of these duties has been performed. MR. LEIPOLD'EXAMINED. By Mr. GARLAND: Question. Mr. Leipold,I will ask you one or two questions in connection with that matter—with your permission, Mr. Cfrairman. Where wasiour lace of business; at the bank ?L—Answer. Ye, sir.. Q. How many hours a day were you at the office, on an average ?—A. From nine o'clock until four every day, unless I was called to the courts in connection with some business of the bank. Q. How much of the time did Mr. Purvis and Mr. Creswell .spend there l—A. For the first two years I Should judge that Mr. Purvis may have been at the bank about half of the time; that is, as regards the, days. He comes there, when he is here, about half past nine or ten o'clock, and goes away about one or two. Q. Well,, how in reference to Mr. Creswell ?-7.-A. Mr. Creswell. comes. there very seldom, unless I send for him. FREEDMAN'S SAVINGS AND TRUST COMPANY. 47 Q. Was there any:understanding,,when you three gentlemen went in, that this work should be devolved upon you in the main; that you should be the one to take care of and look into all this business, and that they would consult with you Not when we took charge. I want to say a word here. At the meeting of the board of trustees after the commissioners were elected— . Q. The present commissioners ?—A. Yes, sir. Mr. Creswell got up and stated, as far as I can recollect, that if the board of trustees expected him to give his entire time to the details of the commission that they were mistaken; that he could not afford'to do it. Thereupon Mr. Langston, one of the trustees, spoke up and said, "General, we don't want your time, we want your name"; and Mr.. Creswell replied, "If that is what you want, you can have.that." I do not remember whether any one said anything, to. Mr. Purvis. I said something of this kind to them: "All that I can refer to in this matter is my record and the fact that I am a working man. .1 will do my share of the work." Mr. Purvis said something to this effect: "Well, what am I going to do ?" and I think that I turned to him and said, "You will find plenty to do; there will be plenty to do for all of us." That is the best of my recollection. Mr. PURVIS. (Addressing Mr. Leipold.) Let me ask as to this. point: Did I not really tender my resignation and say that I would not accept I Mr. LEIPOLD. I do not remember. Mr. Putrvis. Of course you do not. By Mr. GARLAND: Q. When you passed upon any matter of special importance with reference to the bank, did you not call these gentlemen into consultation upon itf—A. I did, in matters that required any special exercise of discretion. I did; yes, sir. Q. Well, were these gentlemen ready at all times to give you the, .benefit of their advice and to consult with you ?—A. Whenever I could get at them; yes, sir. I will state that the only reason for my making this statement— (Mr. GARLAND. I understand that.) was in answer to the position taken by Mr. Creswell. Q. Well, did more Of the work devolve on you afterwards than you expected, when you mentioned the fact and called attention to your record as a worker'?—A; Yes, sir; most decidedly, Most decidedly. Q. You refer to the letter of May 15; was it written with a view of relieving you of more than your proportion of the Work, or with a view to getting increased pay for it?—No, sir; it was to be relieved. Q. Of the surplus work l—A. Yes, sir; of the extra work. Q. If I understand your figures correctly, the other commissioners paid you as mueh as $1,000 a year f—A. Yes, sir; for one year only. Each or them paid me $500. , Q. For this Surplus work f—A. Yes, sir. Q. That was all'that was paid ?—A. Yes, sir; that was all. I think at'the time the last $250 was paid that Mr.Purvis made objection to it, and I said to him "It is purely a voluntary matter, I never asked you for it," and I refused afterward to receive anything, although in justice to Mr. Creswell I will say that he was willing to pay it. Mr. GARLAND. I have no further questions to ask on that. • 48 FREEDMAN'S SAVINGS AND TRUST COMPANY. THE LEONIDAS SCOTT AND MRS. FISKE TRUSTEE ACCOUNT. Mr. LEIPOLD. There is one explanation I wish to make in connection with the statement I made at the last meeting, with reference to the set-off, Mr. Garland. That is the set-off of a balance to the credit of Mrs. Harriet P. Fiske to the loan account of Leonidas Scott. I then stated that Leonidas Scott's account was a trustee account. I find upon examination that Mrs. Fiske's account was the trustee account, but that the two accounts were virtually the same. It is merely a reversal of the position of the two parties. By Mr. WITHERS: Q. Mrs. Fiske then was trustee for Leonidas Scott?—A. Yes, sir; she put that money in the bank for Scott,and it was understood by the officers of the bank when she put it there that she put it there for Scott —for services rendered by him in building her certain houses. Mr. GARLAND. It does not change the legal shape of the question. Mr. WITHERS. No, it is only a mutatis mutandis. THE BEAUFORT PROPERTIES. _ Mr. LEIPOLD. Yes, sir; substantially the same. Mr. Chairman, the commissioners were asked to furnish some correspondence that took place in the matter of the Beaufort properties, and I have a number of letters here on that subject. Shall I file them? The CHAIRMAN. I presume that that will be sufficient, and we will select from them such letters as may be necessary to go upon the reCord. By Mr. GARLAND: Q. Is there anything in any of-them--without going into detail—that would explain what was brought out the other day I—A. We called upon our agent there, who bid in one of these pieces of property, for an explanation of the charges made by Mr..Smalls, and be explains that. Then I have also brought copies of some of the correspondence, which I find is very voluminous, by the - way, in relation to the sale of the Sea Island Hotel. With the final sale of it Mr. Lockwood had nothing to do whatever, and I suppose I had better file these letters with the committee. By Mr. GARLAND: Q. They are the most material, are they I—A. Yes, sir; they show that there was a previous offer of $12,000 for the Sea Island Hotel in 1875; also an offer of $1b,000 in 1875, conditional upon our giving possession of it within a certain time; but as there was a lease existing upon the property for two years, we could not at -that time comply with the proposition, and had to decline that $15,000 offer. Q. You declined the $12,000 for what purpose—that it was not a sufficient price?—A. Yes, sir; we finally sold it, however, at $12;000. There are a great many more letters on that subject, but I thought it would lumber up the record and make it too bulky. I have selected those that are material. [See appendix for these letters.] STATEMENT OF MR. ROBERT PURVIS IN REPLY TO MR. LEIPOLD. Mr. PURVIS: Gentlemen and Mr. Chairman: This unexpected onslaught, untruthful, FREEDMAN'S SAVINGS AND TRUST COMPANY. 49 from an ungrateful man, will be met in its order, and I think we shall be able to show you, most truthfully, the spirit that animates him. I have no intercourse with him; it is impossible that I should have . any.. I say, this unexpected and untruthful onslaught—for it is at variance with the truth and with all the circumstances connected with the appointment of myself and of that of Mr. Creswell—this underrating of our services, is grossly untruthful. The statement that only one-half of my time has been spent here is equally so < I was sent twice on a mission, even with a distressed and sick family, a daughter and wife both of whom have passed away. I left them to look after the interests of this concern, and went as far as Florida. I assert that in every instance where any matter was ever brought before us as commissioners, we passed our judgment upon it. It was submitted to us, and sometimes we differed, but generally we agreed, harmoniously. APPOINTMENT OF THE COMMISSIONERS. In regard to this matter of being appointed, it is well to begin at the beginning. It was entirely unexpected on my part, and unsolicited. I came from my home, and I trust you will make some allowance, from the position in which I have been placed so unexpectedly, for what would savor of egotism in the matter—I was appointed to come to Washington; and when the trustees met us, they declared to us that they were ready to put this trust into our hands. Mr. Creswell hesitated. He said he would hold the matter in abeyance, and I think he slept on it a night; notwithstanding the strong appeal which was made to him by Mr. Langston, who represented the trustees, and said that they wanted him there; that his name was of some importance; that he of all men in the Cabinet had more fully and more justly made the amendments of the Constitution a fact, in the recognition of the citizenship of the colored men, by giving them places in his department, as Postmaster-General; that they had his confidence; that they needed confidence because that confidence had been abused; and that it was said by some that the commission was to be made up of men who were sneeringly represented as "men of eminent respectability, men of substance, men of character," &c. Mr. Creswell was assured that in him (pointing to Mr. Leipold) we had a man who had solicited the place, "a working man," a man whom we should have a supervision of, and our eye upon, as we have kept it upon him, and that we should only be wanted there upon such occasions as would be required, when a judgment or opinion was to be passed upon any measure that should come up. Mr. Leipold next spoke and said: "I am a working man; I know nothing else but work." I remarked, as I have given in my testimony before the Beverly Douglas committee: "I fear that I am a supernumerary in this matter; I therefore decline accepting this trust", and I thanked the trustees. for the honor which they would confer upon 'me, but insisted that I -must decline to serve. I was waited upon by Mr. Frederick Douglass, who was then president, or had up to this time been president of the institution, and he said,"No; we want you here; you are known among this people ; you have claims upon them and they recognize it." I told of the condition of my family. Mr. Ela made a like application. The. vice-president, Mr. Alvord, did the same, and I could name half a dozen others; all urged me to take the position. My son importuned me also.. I held the matter until the next day, and at last, with great reluctance, accepted this position. Gentlemen, it ill becomes me, perhaps, to say that I have rendered service whenever that service was demanded. I 4F B 50 FREEDMAN'S SAVINGS AND TRUST COMPANY. have been three or four of my last few years going back and forth from Philadelphia, where I live, but I have been ready to go on any mission, to serve the institution in any capacity, that wOuld be required of me. As I intimated, I left my family, even when some members of it were ill, and went as far as Florida to look after our interests there. Mr. Creswell I always found prompt in any demand we made upon him. We had the benefit of his large experience and his legal opinions in all cases where they involved questions of law. He was always ready to serve. He and I have gone through all of this property that has come into our hands. We have attended some of the sales and we have had some correspondence. It is a fact that the burden of this has been upon Mr. Leipold. EXTRA COMPENSATION TO MR. LEIPOLD. It was one of the most generous acts on the part of Mr. Creswell, in view of his, Leipold's, frequent interlarding, as he did, in his conversation with the other commissioners, that he was "a poor man," &c., that Mr. Creswell proposed making him a present, as I understood it from Mr.Creswell himself. I was not aware of Mr.Creswell's letter to Leipold. I do not know that I ever saw it. But I at once responded to the joint proposition with Mr. Creswell to give him $500. There was a good deal of affectation on his part about receiving it. It was so simple and clearly transparent as to his taking the money and in refusing it afterwards,that the result shows very clearly that Mr. Leipold certainly had consulted with some of his friends, and they thought that he might take it. I have never considered that Mr. Leipold did anything more than his duty. He was unknown, a stranger,. an adventurer here, a foreigner, not known to any of these depositors and the question to-day, as from the beginning, is,"Who is he r Now, there is something that was sneeringly referred to in some letters from a newspaper reporter with whom be is associated,about respectability, and all that. There is something in respectability, in ability, and responsibility, and we .needed men of that stamp. As to responsibility, there was in Mr. Creswell ample security. I know that there is in myself the fullest security for all I have assumed in this matter, and we are literally the bondsmen. Mr. LEIPOLD. Mr. Purvis has virtually conceded all that I claim, and that is all the object I had in making the statement I have made. I did not wish it to go out. or that this committee should labor under any misapprehension as to the relative distribution of our duties as commissioners. The matter being already notorious who did the work of the commission, I did not want it to go out as if I consented to a position that could not be sustained by the facts. Now, all I ask is that the matter be examined into by this committee, because you have heard my statement and you have heard Mr. Purvis's statement. I should be very glad to have Mr. Creswell called upon to make his statement, and then the committee could take it in their hands Mr. PURVIS (interrupting). Both Mr. Creswell and myself, I wish to say here, desired to be released almost immediately after we entered into this duty, and we have had that desire year after year. Nothing would I desire more than that this day, this very moment, as we have all along importuned and begged, Congress ,would give us the legislation that would release us from these labors. Mr. LEIPOLD (resuming). I do most emphatically deny that there was FREEDMAN'S SAVINGS AND TRUST COMPANY. 51 any "interlarding of poverty" in the conversation had between me and Mr. Creswell on this subject. I deny it, and challenge him— Mr. WITHERS. Well, that is not a matter of special importance in this investigation, as to the arrangements made between these commissioners. It is entirely beyond the purview of this investigation, as I understand it, that these merely personal arrangements between these gentlemen should be considered. Mr. PURVIS. I deny that any arrangement was ever made with a view of being released from any service, and that that service was to be imposed upon Mr. Leipold. We assert that we have done fully our duty. Mr. WITHERS. That you have stated, Mr. Purvis. TESTIMONY OF HENRY D. COOKE. WASHINGTON, January 15, 1880. HENRY D. COOKE sworn and examined. By the CHAIRMAN: Question. Mr. Cooke, I will ask you to state to the committee what relations you sustained to the late Freedman's Saving and Trust Coinpany?—Answer. I was a member of the board of trustees for several years; I cannot give you the dates, because I do not remember precisely, but for a number of years, and I was also a member of the committee on finance. Q. How long were you a member of the finance committee f—A. The report will show; I cannot tell. By Mr. WITHERS: Q. You can state it approximately, I suppose ?—A. Well, I should say about six years. FUNCTIONS AND METHODS OF THE FINANCE COMMITTEE. By the CHAIRMAN: Q. Will you state what. was the function of the finance committee in connection with the loans made by the institution ?—A. The current loans or ordinary loan transactions, of course, were made by the regular officers of the company, the actuary and other officers, and the question of loans involving the consideration of loans of heavy amount and larger questions of sales of stocks and bonds or property investments of the company were submitted to the finance committee, and these loans were reported at the monthly meeting of the committee on finance and approved or disapproved by the committee. Q. Did the finance committee act on all applications made to them ?— A. No, sir. Q. Did notf—A. No, sir; the current business, of course, the finance committee could not devote all their time to; they were not expected to do so. Q. Do you know of any loans having been made by the officers of the institution contrary to the views, or without the approval of, the finance committee f—A. Yes; I could not state specifically. There was a statement made to the finance committee at its meeting, at which there was reported what the officers were doing, showing the general condition of the business. 52 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Sometimes the finance committee was consulted as to the propriety of a loan; at other times the loan was made without regard to them 1 —A. Yes, sir; very frequently these loans were made, and then were reported afterwards. Q. After they were made 1—A. Yes, sir; just simply showing the condition of the current business. By Mr. WITHERS: Q. Would the finance committee in this ease have had any revisory power over the action of the officers of the bank, if the loan had been made by officers of the bank and subsequently reported to the committee ? Suppose such loans not reported by the committee proved to have been made on securities that were not sufficient, could they have controlled it then ?—A. I am referring now to minor loans; but if they had involved questions of investments, the sale or exchange of investments, or anything of that kind, of course these investments, or changes of investments, would hardly have been made except by the consent and concurrence of the finance committee. THE SENECA SANDSTONE COMPANY. By the CHAIRMAN: Q. I will as you to state to the committee what you know of the so-called Seneca Sandstone Company. Loans were made to that company from time to time, and we would be glad to have you state what you know of them ?—A. That was a company doing a large business and employing a large number of hands, who were principally residents of Washington and Georgetown, although they worked up there. They were, very largely—a majority of them probably—at the time citizens here, and sometimes made loans of the company, as all large manufacturing establishments do,from time to time. In that way the indebtedness of that company accumulated with the savings bank. The CHAIRMAN. Well, go on and give a full statement of the whole transaction, as far as your knowledge of it goes. Mr. COOKE. That I could not do. I cannot at this time enter into the details. It has been a good many years ago, and I was a man with a great deal of business. I had a great many business cares on my mind, and other points occupied my attention; and I gave what time I could in assisting this company in its development and its growth and its success for a long time, until they were overtaken by these hard times, which impaired and destroyed the value of its securities, as well as of itself, its standin,?.. That company were the victims of a widespread, universal financial trouble, by which I myself, my firm, have been heavy losers, as well as others, and I have always regarded this trouble of the company as having been the result of a widespread, universal, sweeping financial disaster. By Mr. GARLAND: Q. What became of the property of the company, Mr. Cooke l—A. The property is there still. Q. Is it disbanded or broken up?—A. No; it is still there. Q. Had you an interest in the property of the company? State to the committee how you got that interest and when you got it—A. was one of the original purchasers of the property, and bid it in afterwards. I had full confidence in it, and I showed my confidence in it by purchasing and paying money for it, and what interest I own I bought and paid for. FREEDMAN'S SAVINGS AND TRUST COMPANY. 53 Q. When did you make that purchaser—A. Daring the first three or four or five years I bought that and other miscellaneous securities. (I was dealing in securities of all kinds.) I bought the bonds and stock of the company at different times. Q. Was this purchase made before you were a member of this finance committee f—A. Partly before and partly afterwards. Q. At different times; some you purchased before and some after r— A. Yes, sir; just as I made any other purchases. I had full faith in the company, and I have still. Q. What was the extent of your Literest in that—a third or fourth or fifth ?—A. No,I had about $90,000. Q. $90,000 f—A. Yes, sir. By Mr. WITHERS: Q. What was the nominal capital of the company r—A. $1,000,000. It was like a good many other enterprises that I have had and that I suppose we have all had; though I had confidence in them at the time and did what I did for the best, did it honestly, and in the exercise of what I supposed was good judgment. It was my misfortune that these anticipations and hopes were not all realized. By Mr. GARLAND: Q. Did Mr. Kidwell have an interest also with you in that—A. Yes, sir Q. Does he still keep his interest?—A. I presume that he does. Q. Whom did you purchase from directly, Mr. Cook r—A. Well, I purchased of a number of persons. Q. A number of persons?—A. Yes sir; and at different times. I 'or securities. bought it just as I did any other stock Q. Who owns the land ? There was some land belonging to the (I know the person very well but cannot recompany.—A. Mr. -call his name at this moment), of Montgomery County, who lives, or did live, in Montgomery County, Maryland. Q. Was it Dodge ?—A. No. By Mr. WITHERS: Q. You were not one ofthe original corporators of the company, then ? —A. No, sir-0,of the Seneca Company; yes, we bought the property and organized the company. Q. Then you were among those that formed the company. The shares amounted to $1,000000; what was the par value of the shares,$100— A. Yes, sir; $100. Q. Do you know how much money was actually paid in before the company was incorporated —A. The company was incorporated originally at a less amount, but I cannot state exactly what it was. Q. You don't know what percentage of the stock was paid in cash ?— A. About fifty per cent., I think. Q. What was the amount of the capital stock at the time. the company was incorporated tr—A. $500,000, I think. Q. And fifty per cent. was paid in r—A. Yes, sir; fifty per cent, was paid in. By Mr. GARLAND: Q. Do you remeMber the number of shares of stock you had in that company?—A. I don't remember; though that is a matter of record; I could furnish the committee with that information any time. Q. The testimony of Mr. Dodge,I believe, before what was called the Douglas committee, was that after the improvements were put on the 54 FREEDMAN'S SAVINGS AND TRUST COMPANY. lands, his valuation of it was $70,000. $50,000 was put in the company at a valuation of $500,000; do you recollect anything of that; if so, It appears that the improvements put upon what is the explanation the land were valued by Mr. Dodge in this testimony before the Douglas committee at $70,000 f—A. Well, $70,000 and $50,000, the cost of the land, would run it up to $150,000. Q. Does that make one hundred and fifty thousand dollars f—A. Yes, sir. By Mr. WITHERS: Q. $70,000 and $50,000 would be $120,000?—A. Yes, sir; $120,000. That was before the property was developed.' By Mr. GARLAND: Q. These were improvements put on the property to develop it f—. A. Yes, sir. Q. Then it seems, according to that, the stock was issued in equal parts to Dodge, yourself, and Kidwell, is that correct f—A. Yes, sir; that is correct. MR. H. H. DODGE AND THE SENECA COMPANY'S LOAN. Q. Have you examined that testimony of Mr. Dodge at all ?—A. No, sir. Mr. GARLAND (addressing the chairman). It would be well, Mr. Chairman, it Mr. Cooke could examine that and he can be interrogated upon it. (To the witness.) It is in this book, Mr. Cooke,if you have not seen it. The CHAIRMAN. We will give you the testimony of Mr. Dodge. Mr. COOKE. I said I had not examined it. It was, reported at the time, in the papers, but I do not recollect anything about it now. Mr. GARLAND. I have an abstract of it, Mr. Cooke; it won't take you but a few minutes to go through it and tell us what you have to say in regard to it. Mr. COOKE. The man I bought from was Peters; Mr. George Peters was the name I was trying to recollect a moment ago. Mr. COOKE. (Handing back the paper which had been submitted to him for examination.) This testimony of Mr. Dodge's, I believe, is substantially correct. By Mr. GARLAND: • Q. This is what we wanted to know of you, Mr. Cooke, if possible. Dodge testified that $75,000, and then $50,000, were put into the company at a valuation of $500,000. If you can explain that, please do so, if you recollect anything about that transaction; if you do not recollect now, you can take some other time to answer.—A. Well, there is a good deal in the way a case is stated, you know. Mr. GARLAND. Yes. Mr. COOKE. My recollection of that is that at a meeting of the company it was resolved to increase the capital stock, in view of these developments of the property—the discovery of those magnificent ledges of stone which we did not know existed or not, when we leased the property. It was like striking a vein in a gold mine. Until you do that you do not know what it is worth. After you strike the vein you can tell a great deal better than you could before. Here they discovered what we believed, what I believed, and what I believe yet, to be the finest ledge or deposit of that kind of stone with in FREEDMAN'S SAVINGS AND TRUST COMPANY. 55 a great distance of this place. There is, in fact, nothing like it anywhere in this country. And it is of incalculable value. It will be of still more value I believe. They want a building-stone of this quality, and accessible, that can be gotten out and gotten cheaper to the market. I do not believe—although I may be altogether wrong in my estimate of the value of this building-stone—but my belief always was, and is now, through all the trouble which has befallen the company, I hold on to the belief that the valuation of the deposit was not excessive. That is my honest belief. • I may be wrong in it. I do not claim that I am infallible. That was my belief then it is my belief now. I believe it will be yet justified what sort of stone this is, and that it is bound .to be in demand. There are qualities about it which belong to no other stone that is accessible at double or treble the price that this would be delivered for here. For instance, after the Boston fire there were builders down here to examine that stone with a view to using it in the construction of buildings that should be fire-proof. We know, the committee all know, everybody knows, that granite, however permanent a material it may be for.building purposes, is destructible when it comes to stand the intense heat of great fires. It cracks and breaks all to pieces; it is almost as destructible as pine wood would be; but this stone is absolutely indestructible. It hardens when subjected to a fire. When they had that fire in the Smithsonian Institution the stone became very hard, so indurated on the surface that it cost more to redress it, to clean it, as it were, than it would to carve out, quarry out the new stone, bring it down, cut it, and put it in the walls; and they did that, in the Smithsonian building. REPURCHASE OF BONDS BY THE SENECA COMPANY. By the CHAIRMAN: Q. We would be glad, Mr. Cooke, if you would tell us whether you have any knowledge of the purchase by the bank of $20,000 of firstmortgage bonds of the company, and the agreement of the Seneca Sand Stone Company to repurchase the same within two years. Do you remember that transaction 1—A. I think I do. Q. Please state what you remember about ft.—A. I was not here at the time the negotiation was made; It was done by the acting manager of the company, Mr. Hayden, and I think by Mr. Huntington, who was acting as member on the finance committee. Q. Well, we would be glad to have you state all you know about it.— A. That is all I remember—all I could swear to. Q. Well, have you any knowledge of the repurchase by the Seneca Sandstone Company of the $20,000 first-mortgage bonds 1—A, No, sir. By Mr. WITHERS: Q. Mr. Huntington at the time was a stockholder also _in the company, was he 1—A. Yes,sir. Q. Did he have any official position in the company 1—A. Yes; he was on the finance committee. Q. I mean of the Seneca Sandstone Company.—A. No, sir. Q. I understood he Was one of the finance committee of the bank 1— • A. Yes; of the bank. Q. And this sale was negotiated by him as the agent of the bank /— A. So I have understood. As the agent of the bank I do not know that that was negotiated by him alone; I suppose by him or other members of the committee,,or the acting officer of the committee. 56 FREEDMAN'S SAITJWC4S AND TRUST COMPANY. Q. I understood you to say that he was a member of the finance cornMittee of the bank, that passed upon and approved these purchases ?— A. Yes, sir. By the CHAIRMAN: Q. Can you give as any information, Mr. Cooke,regarding the agree-, ment under date of December 30, 1871, relative to the transfer of the loan in the name of the Seneca Sandstone Company to that of Kilbourn & Evans?—A. No, sir; I don't know anything about that. THE EVAN LYONS LOAN. Q. Returning.to the question put to you a while ago touching your connection with the finance committee, there is one point I shall be glad to have you inform us upon. Why was it that the loan to Evan Lyons, of $34,000, was approved on the 23d day of July, 1872, after having been rejected four several times before* on an application for, 418,000, and absolutely rejected on the 8th of May,1872?—A. The loan to whom!. Q. To Evan Lyons. To make my question a little clearer, perhaps, I will state that four applications had been made for loans, and in each instance the application had, been rejected: and on the 8th of May,.1872, an application for $18,000 was rejected absolutely; and yet, on the 23d of July, 1872, a loan of $34,000 was made to that party. It was about this that I wished to ask you, if you remember?—A. I would very gladly explain that if I could, but I have no recollection of these facts that you. state. I do not know whether I was present at this meeting of the finance committee that approved that or not. Perhaps you could give me some information! Mr. CLEPHANE. That loan was made after Mr. Cooke resigned. Mr. COOKE. You must excuse me for not remembering these matters of detail. They occurred six or seven years ago, when I gave my attention only incidentally to these matters. They were generally brought before us and acted upon at the time, and dismissed from our attention, and they have escaped my memory. WHAT CONSTITUTED _A QUORUM OF THE FINANCE COMMITTEE. By the CHAIRMAN: Q. Didn't the by-laws provide that three members of the finance coinMittee should constitute a quorum for the transaction of business! There were five members, were there not, on the board of finance (1—A. I do not know whether the by-laws provided that or not, but I presume that the authority existed somewhere. The majority of the committee generally make a quorum. Q. Was that always your custom ?—A. Yes, sir. Q. Have you no recollection of any violation of that custom ?—A. .No sir. GARLAND. Did you transact any business, you or.any members of the committee, with less than a quorum! Mr. Comm. I think not. Mr. GARLAND. It appears from the minutes of the finance committee that you and Mr. Huntington on several occasions acted upon loans in the absence of a quorum. Do you have any recollection of this!— A. No, sir. FREEDMAN'S SAVINGS AND TRUST COMPANY. 57 Mr. GARLAND. I suspect, Mr. Cooke, that you had better look over these matters and see if you can recall any of them to mind; for we would like to have you make some explanation of them. Mr. COOKE. I suppose if there were anything of that kind, these things happened so long ago that I have forgotten them long since. It may have been done; there may have been occasions in which less than a quorum have transacted business. Two members may have agreed to a measure provided they had the consent of the other members of the committee, and they might have got that consent, you know, in that informal way, which would be just as binding and just as good as a quorum. Mr. GARLAND. Whatever the explanation is, we would like to have it. It appears from the minutes that in several instances things of that sort were done, and we desire to know about it. Mr. COOKE. Yes, there may have been occasions also in which the action taken was by three or four of the whole committee when there were only a portion of the committee to attest the fact of the transactions; and there may have been a neglect to get the other signatures. Mr. GARLAND. Yes, sir; whatever the explanation is, of course we want it. Mr. WITHERS. These indefinite answers and hypothetical suggestions amount to nothing. We want you, Mr.Cooke,to examine and see whether these things occurred. Mr. CooKE. Exactly ; I will do that, of course.. It is very possible that there was not that strict attention to the detail of keeping the minutes; these may have been mere omissions, you know. Mr. GARLAND. Well, whatever.may be the explanation, of course we want to have it. You will have an opportunity to get from the minutes and the notes of the clerk points which we desire to have explained as to whether there has been a lack of economy and .all that in administering the affairs of the bank. Whatever explanation you can give after consultation with other gentlemen with whom you acted, and after looking at the records and refreshing your memory, why of course we. shall be glad to have it. By the CHAIRMAN: Q. We will desire to have you before us again, Mr. Cooke, and in the Meantime we wish you to refresh your memory by examining into the matters upon which we have been interrogating you. Mr. COOKE. Will you be good enough to name some of these points? The CHAIRMAN. We have asked you about the Seneca Company's loan, and the Lyon's loan, and the matter of the action at different times of members less than a quorum on the finance committee, scourself and Mr. Huntington, or yourself and some one else. Mr. WITHERS. Also the date of your official connection with the company as a member of the finance committee, when you assumed the duties, and when you resigned your place on that committee. TESTIMONY OF LEWIS CLEPHANE. WASHINGTON, D. C., January 15, 1880. Mr. LEWIS CLEPHANE sworn and examined. By the CHAIRMAN: Question. Mr. Clephane, will you please state to the committee what ,your connections were with the late Freedman's Savings and Trust 58 FREEDMAN'S SAVINGS AND TRUST COMPANY. Company /—Answer. I was a member of the board of trustees; and I believe a portion of the time, also, a member of the finance committee. Q. Did you hold any other office in the company /—A. Yes, sir; I was elected vice-president. QUORUM OF THE FINANCE COMMITTEE. Q. Who composed the finance committee when you were a member of it, and state at the same time how many were required to constitute a quorum 01—A. I think the committee was, when I was there, compOsed of Mr. Cooke, Mr. Huntington, Mr. Tuttle, Dr. Purvis, and myself; although I think some of the members had vacated at different times. Q. How many composed the committee 1—A. Five. Q. How many constituted a quorum 1—A. Well,I presume that three did. They very seldom all met with the committee—very seldom. Q. You do not know then whether three or two constituted a quorutn 1 —A. I do not; no, sir. Q. Where were these meetings held while you were a member, and bow often did they meet /—A. When I met them as a committee they were held at the Freedman's Bank. Q. Did they hold regular meetings 1—A. I think not. Q. Well state how irregularly they were held 1—A. I can say that I attended very irregularly. They may have been held regularly, but I think not—just as anything came up to be referred to the committee, I think. Q. Can you tell me whether less than a quorum, assuming that there was a quorum., ever approved a loan 1—A. That is more than I can say. I don't know. Q. You have no recollection concerning it,1—A. I cannot say. • LOANS MADE OUTSIDE OF FINANCE COMMITTEE. Q. Do you remember any instance in which you approved of a loan that was given outside of the committee /—A. Yes, sir; I do. Q. Will you state some of the circumstances that attended it 1—A. I could not, except some particular case should be brought to my attention; but the actuary, Mr. Eaton, a man in whom I had the utmost confidence, would sometimes come to me to get my approval of some transaction which had been made by the committee, and I would sign it on his representation that everything was correct and right about it. I would sign, although I was not at the meeting when the thing was passed upon by the committee. Q. Can yoll state any particular instance in which this occurred 1—A. The particular instance I have in mind is one in regard to some additional security on the Seneca loan that I had forgotten all about for a long time, but afterwards I refreshed my memory about it; in fact, Mr. Eaton came to my place of business, or somewhere else", I cannot say now, and stated that these parties had agreed to put up additional security for that loan. I did not read the paper at all; and on his representations I approved the additional security. I do not remember precisely what the security was now. Q. You signed it on representation and not from any examination you had made 1—A. Yes, sir. Q. You think, then, that that is the only case you can call to mind 1— A. All I can call to mind. There may possibly have been some others that I might call to mind if my attention were directed to thew. FREEDMAN'S SAVINGS AND TRUST COMPANY. 59 THE LOAN TO R. P. DODGE. R. P. Dodge on JanQ. Well, have you any knowledge of a loan to all the information get to glad be shall we ; uary 24, 1870, of *13,786.50 of that whatever. edge knowl no you'can give on that loan l—A. I have tion has never atten your that; about ing anyth know not Q. You do been called to it l—A. No, sir. By Mr. GARLAND: Mr. Eaton particrelation to the other loan you spoke of, was is additional seIn Q. it—th ve appro and se indor to ularly urgent to get you ctly now about his urgency curity,I mean /—A. I cannot remember distin as additional security. tome it d sente repre he but it; in reference to e of the security l—A. No, Q. And you do not remember now the natur that. sir; I do not remember anything about acted with you in this Q. Was it your habit, or the habit of those who them, or examining ng knowi ut witho business, to approve securities sentationtof othrepre mere the d beyon ry inqui some ng them, or maki to examine into. ry actua the to much very ers f—A. Well, we left that Of course he s. thing of tion We were very apt.to.take his representa into them; ne exami to and s thing these do to was there under pay had every I as ions, assert his take and I know that I was very apt to man. confidence in the act separately, and not Q. Was it the custom for each one of you to he take your approval, did or to have any consultation on these matters, I—A. I know he has in just as be might happen to meet and to find you ous meeting of the comprevi a one or two cases; whether there had been I know that sometimes he mittee with reference to it I do not know. the committee, and I reof ns actio trans has come after me to approve with tegard to the meetme member on one or two occasions he came to there and he came to me um quor a not was there ings of the trustees; ;" and he would tell me and said,"I am going to enter you as present what was done. this new security /—A. Q. And you do not recollect now the amount of borrowed money from No, sir; I would state that, personally, I never ctly in any loans made indire the bank; I was never interested directly or all. at there KILBOURN & EVANS. TRANSFER OF SENECA LOAN TO By the CHAIRMAN:• any knowledge of the Q. I will ask you, Mr. Clephane, if you have Company,to Messrs. tone Sands a Senec transfer of the loan made to the transaction I—A. No, sir. Kilbourn & Evans I Do you remember that regarding the agreement ection recoll your state Q. Will you please ers of the finance committhat was approved and signed by three memb & Evans under date of urn Kilbo s. Messr with one being tee, yourself had reference to, the have I one the is December 30, 1871 I—A. That it was additional that tion one I signed without reading; on representa security, I signed it. the purchase of $20,000 Q. I will ask you if you know anything about Seneca Sandstone Comfirst-mortgage bonds, of what was called the . pany I—A. Not personally cted with that transQ. You have no knowledge of it; were not conne loan. It was the first that with cted conne not action I—A. No, sir; CO FREEDMAN'S SAVINGS AND TRUST COMPANY. habit always of the actuary'and finance committee to report all these loans at each meeting of the board of trustees for their approval. Mr. WITHERS. But, as I understand, the board of trustees had no regular days of meeting; they were merely convened on call. Mr. CLEPHANE. No; the finance committee, the trustees of the board, had their regular monthly meetings. Q. They had their monthly Meetings ?—A. Yes, sir. Q. And all the minutes of their operations were recorded Yes, sir; and very often there were special meetings also of the trustees. COMMITTEE Room OF THE SENATE SELECT COMMITTEE ON THE FREEDMAN'S SAYINGS AND TRUST COMPANY, Washington, D. C., January 17, 1880. The Senate Select Committee of Investigation into the Freedman's Savings and Trust Company held its meeting in the committee room of the Senate Committee on Manufactures this day, at 10 o'clock a. m. Present, Messrs. B. K. Bruce (chairman) and A. H. Garland. TESTIMONY OF LEWIS CLEPHANE—Continued. LEWIS CLEPHANE recalled and examined. Mr. CLEPHANE. Before proceeding, Mr. Chairman I should like to make a correction in my former testimony. I stated 'that the finance committee generally met at the bank; I remember now that it was before the bank building was built; their meetings were held in Mr. Cooke's bank. By Mr. GARLAND: Question. You were interrogated the other day, Mr. Clephane, upon some matters about which you had no recollection, and you were to take some time to examine into them. Are you now prepared to reply tO those questions?—Answer. I am not prepared to reply to any special points. Q. Were you not examined upon matters on last Thursday that you (lid not then recollect about?—A. I do not remember what they were. THE AGREEMENT. WITH KILBOURN & EVANS. Q. You were interrogated the other day, Mr.Clephane, with reference to an agreement approved and signed by three members of the board of finance, yourself being one, with Messrs. Kilbourn & Evans, on December 30, 1871.—A. Yes. Q. Can you now state your recollections as to that ? Give us the history of it as succinctly as you can.—A. My only recollection about that is that Mr. Eaton brought that paper to me and stated that it was additional security for the loan made to the Seneca Sandstone Company. Q. Well, that you stated the other day; have you no further information about that than that which you gave the other day ?—A.. No,sir; I signed it under that impression. I might state here that I ceased to be a member of the finance committee in March, 1872. Q. March, 1872 ?—A. Yes,sir. I did not state that the other day. Q. You did not?—A. No, sir. FREEDMAN'S SAYINGS AND TRUST COMPANY. 61 Mr. GARLAND. I wish you would look at these interrogatories and see if you were asked concerning them all, and if you come to any questions you know were not put to you, you may answer them now SO as to shorten the examination as much as possible. Mr. CLEPHANE. [Reading.] Question marked 21 was not asked me. It is this: "Q. Did Kilbourn & Evans pay or receive anything on account of the loan under date of June 2, 1872, for $50,000 l" I know nothing whatever in regard to that. Q. You have no information in regard to that ?—A. No,sir. Mr. CLEPHANE. "Question 22. Was this loan subsequently again transferred to the name of the so-called Seneca Sandstone Company 1'7 That I have no knowledge of. "Question 23. Seven days after this loan was transferred to Kilbourn & Evans and the signing of the agreement, it appears, from the receipt of Mr. Kidwell, that the bonds passed out of the hands of the bank, and when the loan account is again put on the books, to the name of the Seneca Sandstone Company,these bonds still figure as security. Please explain how this could happen ?" I have no knowledge whatever of that. Q. You cannot give any explanation of that_?—A. No, sir; none at all. [Reading.] "Question 24. Did you ever indorse notes for any person upon which money was obtained from the bank as loans ?" I am not aware of and do not remember of any. It . says here: "If the answer is no, see re• port in schedule for cases where it was done." I do not remember any such cases. No, sir. Q. You do not l—A. No, sir; I certainly never did. It may have been on some notes that got into the Freednian's Bank, but by no action of mine. Some of my notes may have been discounted there, but not to my knowledge. If it would be in order I would state that in looking over the Douglas investigation I find that I am put down as belonging to several companies which made loans from the bank; one is the American Seal Lock Company, another the Abbott Paving Company. I had no connection whatever with any of these companies, and know nothing in regard to them. By Mr. GARLAND: Q. Just state in that connection if you had any connection at all with any company, not only those mentioned, but any others that made transactions with the bank.--A. No other company except the Metropolitan Paving Company, and, as a company, I don't think we ever borrowed anything from the bank. The stock may have been put in as collateral securities from other parties, but there is nothing from the company. Q. You were not interested then directly or indirectly in any of these transactions l—A. Not at all. Mr. GARLAND. That is all I have to ask you at present. By the CHAIRMAN: Q. You were asked, Mr. Clephane, to look over the records when you were last before us; have you done so ?—A. The records themselves must tell; I could not of my own knowledge say anything more. • 62 FREEDMAN'S SAVINGS AND TRUST COMPANY. MR. PURVIS'S STATEMENT—Continued. 'WASHINGTON, D. C., January 17, 1880. Mr. PURVIS: Mr. Chairman and gentlemen of the Committee: I feel that I owe it to you, Mr. Chairman, and to the members of this committee, as I owe it to myself, to say, by way of apology, that if, under the aggravating circumstances, I was betrayed, on Thursday last, into the use of any speech that would seem improper, I regret it for your sake and for my sake. I shall ask—and I am glad that in all fairness, for that s all desire, and my reputation is dear to me, dearer than life—that you will allow me a full opportunity to meet this sneaking assault that has been made upon us. I characterize it as such. Mr. Creswell, who is also held up to public odium, or to the odium of this committee, was asked if be knew of these charges alleged, and the response was, that he did not—certainly not. We will show you, sir, in the course of this investigation in regard to this person (Mr. Leipold), that it is but char-. acteristic of him in his course of action. I was obnoxious to this man. I was in his way. I had discovered that he was untruthful. I had discovered that he endeavored to secure this trust with all its vast interest; 4nd that he speaks impertinently—I will say, as is characteristic of him—of these people, and of his not having come here to make sacrifices for them; and I will show you that I have discovered not only his untruthfulness, but, gentlemen, if you will allow me, that he has also been guilty of an act of perfidy so treacherous that there is no parallel in the scope of my experience of bad men and bad acts. It will come in very due time. PERSONAL PRESENCE AT THE BANK. He charges that for a very large portion of the time Mr. Purvis was in Philadelphia. Now I came reluctantly here. I had a sick wife; but notwithstanding her condition, and with her consent, I offered my services, and they were accepted by the commissioners, to go south to look after the interests of these depositors, and went, as I stated, as far south as Florida. I made a subsequent trip at the instance and at the request of the commissioners, as far as South Carolina, doing all that I .could do, up to the measure or my humble ability, in the interest of these depositors. In the year 1874 we declared a dividend; and the charge is (for it has been stated here), that even in the mere mechanical duty of signing checks which Mr. Creswell and myself did, it being required by the law that two of the commissioners should sign them—the charge is, that I have been wanting in attendance at the bank. The fact is that for the purpose of performing that which to me was somewhat of an onerous duty, involving a continuous labor for more than two months (for there were thousands and tens of thousands to be signed), that I found it necessary to have these checkbooks, during a great part of the time, perhaps about one-half that time, on account of the condition of my family, sent to me. They were signed however. There was no delay, and then I would go back and forth to the bank. In 1876 I broke up my housekeeping and stored my things, hoping to be released from the duty of commissioner by securing from Congress such legislation as would release me (for we had desired all along to be released), and as the word goes, I was solidly here, a resident of this District, signing under the eyes of that man the thousands FREEDMAN'S SAVINGS AND TRUST COMPANY. 63 of ch( clis at the little desk at which I sat, with the exception of one or two, or three or four instances at most, when I would take some of the books at home to labor upon at night until eleven or twelve o'clock, so that I might promptly complete this work. But I was for the entire two years, nearly, here in the District of Columbia, and signed every check. had no home but such as I found here. Besides that, I attended to a part of the duties of meeting hundreds of our poor depositors, and I did this, not by rebuffing them and curtly replying to them, which was the manner that characterized this individual, but by exhibiting the manners and habit of a gentleman; for I felt that we were but servants of these people, paid by them for services rendered them, and I could not therefore treat them with the discourtesy with which he always treated them, but I endeavored to do my duty towards these depoitors by identifying them and talking with them in my way, and after the manner and breeding of my life. But I ought to go back. In 1875, Mr.Creswell,as has been intimated, was counsel in the Alabama Court of Claims. He also gave his attention to the bank and to his duty as commissioner, as it seemed to me. He always responded cheerfully and with alacrity to any demand made upon him. And I wish to say, since Mr. Leipold has stated that the labors Of the banE were always upon him, that Mr. Creswell supplied him with all that he needed in the shape of clerical help. He had a man, his superior by education and birth, in the person of Mr. Sperry; he had the actuary, who could tell the ins and the outs of all the notes that were negotiated,so that this burden of duty was divided. He could never have got along without it. And therefore, he was not left in the condition that he would make it appear, as if the whole of this matter was upon him. When a subject of any importance came up, we had the benefit of the large experience of Mr. Creswell. These matters were all submitted to him, and literally no sum of money was ever paid, but we all gave expression to our opinion, and exercised our judgment as commissioners in regard to the matter. DISAGREEMENT CONCERNING THE ACTUARY. And here I am willing to relate a single instance. When we found that the last actuary had been guilty ot some irregularities, I formally demanded his discharge, though it was not done immediately, and for the reason that we wanted his services. He was allowed to sell property (and Mr. Creswell happened to be present and will vouch for what I say), and it was agreed that he should have a certain percentage for the service. A certain amount was to be retained by him, for which we could give him credit in the payment of his -debt to the bank. I came in in the morning, on the occasion I refer to, and found that Mr. Leipold had said that for the sale of some property on which the commissions amounted to about one hundred and forty dollars(they were lands sold to the Agricultural Association of this District), Mr. Stickney should have the whole amount less $25, that should go to his credit on account of his indebtedness. Mr. Creswell had concurred. I came in. I have a conscience and a judgment. I meant no offense to any one. I simply stated that I thought that Mr. Stickney (writing out my views), would be glad of an opportunity to pay, and I thought he ought to have given us the whole amount, or at least if his necessities were such he should have the $25, and the rest go to us for the benefit of the depositors. I wrote that. Would you believe it, gentlemen Simply for writing that, this man—and that is his custom purely from affectation, for he is a 64 FREEDMAN'S SAVINGS AND TRUST COMPANY. great actor—juinped up, threw his hands violently about, and got into a spasm. Mr. LEIPOLD (interrupting). It would be difficult for any one to be more spasmodic than you are at this moment, wouldn't it.? Mr. PURVIS (resuming). When Mr. Creswell came in, he made this remark," Why, Mr. Purvis has a right to his opinion." Now, I would just halt here to ask—and I think I have never said a word to Mr. Creswell about this matter since—do . I represent or mispresent that matter, Mr. Creswell .? Mr. CRESWELL. Your statement is substantially correct. Mr. PuRvis (resuming). Well, that is the man that we have to deal with, and we shall bring you abundant testimony when the time comes,to show you his true character. THE EXTRA COMPENSATION. In refereece to this proposition of $250, the impression he intends to convey to your mind, gentlemen, is that it was given by us for duties that we were shirking, and that he was performing. There was about Mm a snivelling whining about his poverty, as I represented to you before. There was, however, a faithfulness in the discharge of his duty, and he cannot compel me now, notwithstanding I despise him, to detract from that. Mr. LEIPOLD. That is the point. Mr. Plums. Like a blind horse, he is accustomed to going around in the mill, and he could not help it. He did his duty—nothing more, nothing less. For that he importuned his appointment for that he was appointed. Mr. LEIPOLD. I did my duty. That is the point. Did you yours ? Mr.PURVIS. Mr. Creswell, as I understood it, from generous impulses as I felt it, proposed giving this man by reason of his faithfulness, and by reason of his so often complaining of his poverty, $500. I suggested whether he had not better make it $250 for six months, and $250 for six months thereafter. I responded to the proposition at once. My son, who is wiser than I, said "You are making a mistake about this. You are doing all your duty and making an immense sacrifice by being here, and it is not required of you to do this thing." I would like to say here, gentlemen, although I do not wish to speak of myself too often, that when this bank was opened I looked upon it as a great educator of these people with whom I. am identified. I invested a large portion of my property in taking their notes to aid it, and, if possible, to save it from destruction, advising at the same time that my son, through whom this was effected, should receive no pay for his services. They were allowing a large discount in that way, and for the purpose of collecting some money for the payment of a dividend, I took about $27,500 of their notes, many of them perfectly safe, while some of them have given me great anxiety from loss, and if to-day they should attempt to foreclose I should be a loser of several thousand dollars. It may not be so, but it has certainly given me great anxiety. One of the properties has had to be foreclosed, and it has come into my hands. Mr. CRESWELL (interrupting). All that was before you became commissioner ? Mr. PURVIS. 0, yes, before we became commissioners. It was one of the things that, perhaps, induced these gentlemen to select me as commissioner. I don't know how far that may have operated; perhaps,that did not do it. They knew my life,'though. FREEDMAN'S SAVINGS AND TRUST COMPANY. I tit 65' As to that money, we gave him $500. I had no idea what Mr. Creswell had written; my letter did not bear that interpretation. It bears simply the interpretation that $250 were paid on the 1st of July, and $250 on the 1st of January. You have the letter before you. I didn't know the contents of the letter until I read it just now. I kept no copy of it. I thought that that was to end it; but I soon saw, however, that this was an attempt to blackmail me. I soon saw, when the $250 came ta an end, that the same spasms began to ensue. It was then he says that "Purvis became more bold and offensive." Mr. GARLAND. Mr. Purvis, before leaving the matter of the payment of the $250, I would like you to state exactly just what your view was of the consideration for which that sum was paid Mr. Leipold. Mr. PURVIS. So help me God! purely as a benefaction; with no idea that I was not doing my duty. I was doing more than my duty. The extra duty which seemed to devolve upon him was meeting these people that came in. It was part of my duty, and looking after the interests of all this property was an extra duty imposed entirely upon Mr. Leipold, to which he again drew my attention. I refer to that and nothing more. I want you to bear in mind (addressing Mr. Leipold), that I demand to know what special duty was assigned me. None. There was no special duty assigned me. He never marked out for Mr. Creswell and myself what we were to do; but over and over again we have said to him, "Is there anything we can relieve you of?" And we have done it. Mr. LEIPOLD. Well, how was it about these properties on our hands? Mr. PURVIS. When a large number of these properties came into our hands, Mr. Creswell and myself devoted ten days, I think (it certainly was a week), to a critical examination of them. I have over and over again done the same thing upon my own motion, without any request, and have been willing to do it at all times, and did do it. By Mr. GARLAND: Q. You do not admit, then, Mr. Purvis, that you are in default in your duty to the amount of. the $250 you paid him, as compared with the whole salary you received ?—A. Not a particle, sir. I consider that I have done more than I expected to do; and evidence will be given to prove this to you, sir, by those who can be summoned here. Q. The $250 was for extra service put upon Mr. Leipold for seeing these parties and attending to the details of the work, was it?—A. Yes, sir; and I was doing whatever I could to meet persons who were coming in to make their inquiries,not taking them off shortly; for I wish you to understand that Mr. Leipold had set up this opposition and he naturally Went into it; he doesn't like to be crossed; he don't like a suggestion; he is a man extremely personal, and you cannot make a suggestion that he will approve, if it does not emanate from himself; and when he is crossed in his purposes or views, he gets mad and.exhibits it at once. He did just what he wanted to do; had pretty much his own way in the management of affairs. I was willing to help him, as I was here two years solidly in this District. I had no home but what was here (although it has been asserted that this was not the case). But when the time comes, Mr. Chairman, I will endeavor to show you the character of this man in the act which I have referred to, and which he does not know, perhaps, that I know. • PERSONALITIES DEPRECATED. The CHAIRMAN. I will say, sir, that all we want or have ever desired, 5F E 66 FREEDMAN'S SAVINGS AND TRUST COMPANY. was simply to understand how this trust was administered. I have no doubt that Mr. Leipold, in the first instance, traveled outside of the limits which we expected of him; and I take it that Mr. Purvis has done the same. We will be obliged, however, to limit this investigation of the commissioners, for the reason that we have a number of gentlemen here whom we are paying for attendance as witnesses. The commissioners we have with us always; these gentlemen we have not; and while I would not do injustice to anybody, yet it is plain to see that if this goes on, we will not be able to get through with this matter for two or three days. So I suggest that, without doing injustice to-anybody, we limit the scope of this investigation touching this particular matter of the commissioners. Mr. GARLAND. Yes; and the difficulty is, when gentlemen get into this condition, you do not know where they are going to land; and it is quite likely the testimony will have to be purged in some of its particulars. The CHAIRMAN. Gentlemen, we would not like to see in the record things which you yourselves would not like to see there. We propose to be just. We do not propose to hear one side and not the other, but to have our attention called simply to the facts. We would like to get at the facts of the case, and will ask you, gentlemen, to deal in as few personalities as possible. Mr. LEIPOLD. Of course, after this extraordinary language of Mr. Purvis, the committee will certainly give me an opportuniy to say something in reply. Mr. GARLAND. Well,let Mr. Purvis get through first. The CHAIRMAN (addressing Mr. Purvis). I do not wish you to think that I intended to cut you off. Mr.Pumas. Well, I have to say further, that this report(alluding to a newspaper article concerning the commissioners) has gone out unto the newspapers—very likely through this fellow. Mr. LEIPOLD. I deny it. Mr. PuRvis. Well, sir, I have written this in reference to the subject: Sin: The letter addressed to the Hon. B. K. Bruce, by R. H. T. Leipold, is so palpably insolent and scurrilous, and so malicious in its detraction as to demand no further notice than to say that it is but a repetition or renewal of what he has before said when under the exhilarating influence of an ambition which unfortunately overleaped itself in a fruitless attempt to carry out a cherished and itching desire to have placed in his hands the entire management of the affairs of the Freedman's Bank, by underrating the services of the other commissioners. Foiled in this attempt he became alarmed with the disclosure of a secret purpose, as commissioner, to secure counsel fees, which he calculated would be in the aggregate some forty or fifty thousand dollars. I call your attention, gentlemen, to the testimony of'A. M. Sperry, found on page 161 of the report of the select committee of the House on the Freedman's Bank—the committee of which the late Hon. Beverly Douglas was chairman. He was then compelled, under oath, to take back the words of detraction he had uttered in the following testimony, on page 170 of said report. I give you his words verbatim: Mr. LEIPOLD. I took back nothing. Mr. PURVIS (reading): If the inference created by that testimony was that the other two commissioners never rendered any service, it does them great injustice; and I have never meant to intimate any such thing. I do wish to say that from my understanding of the matter— And I wish to call your especial attention to this: 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. FREEDMAN'S SAVINGS AND TRUST COMPANY. 67 This is a sufficient comment upon that document; and then he says: And they have both rendered services, and verYimportant services. Now, sir, I submit that I have nothing more to say on that. By Mr. GARLAND: I want to ask you a question or two, Mr. Purvis. There seems to be considerable ill-feeling between you and Mr. Leipold, one of the commissioners with you. Did that feeling originate about any matter connected with the institution, or the management of it ? • Mr. PURVIS. I was in his way. I came here as commissioner to represent those colored people whose confidence I have. ALLEGED ATTEMPT TO DISRUPT THE COMMISSION. A We had been approached, and I had been approached, by gentlemen representing the trustees, desiring to know about the attempt that was made to disrupt this commission. I learned that it was an attempt in a covert and sneaking manner to abolish this commission,in order that it might go into the hands of this gentleman. I will give you the first instance I knew of it, He had evidently wormed himself into the good graces of Mr. Durham, from Kentucky, I believe— Mr. LEIPOLD (responding). Yes, that is the gentleman. Mr. PURVIS. (Resuming)—who reported a bill and urged it, that there were two commissioners who were doing very little or nothing, and he passed a high eulogy upon this gentleman,and said that he hoped a change would be effected, and that the management of the institution ought to go into the hands of one commissioner. My friends, Mr. Randall and Mr. Kelley, and gentlemen who knew me and who knew something of this bank, and who represented to some extent the depositors in the branch at Philadelphia, made a reply, in which, from their kindly feelings toward me,they made reference to myselfin terms highly commendatory, perhaps more so than I deserved. I was not aware of it; I knew nothing of it; I knew of the fact; and when the vote came, we blew them out of the water. There was not a baker's dozen, literally, to sustain the bill. When he came into the bank the next morning, this man exhibited one of his usual spasms and insulted meby saying, "You seem to be the only honest man in Washington!" I did not know what was the matter, or what was up. Mr. Sperry then came up and showed me the official organ, The Record, and there saw that my friend Mr. Randall had said some very complimentary things of me—as knowing me. He asked in his speech, "Who is this Leipohl?" Who is he '? That is what we ask. You will see it in his speech. Mr. LEIPOLD. Did Mr. Randall ever make a speech on this subject? Mr:PURVIS. 0, yes. Mr. LEIPOLD. I never saw it. Mr. PURVIS. 0, yes. He made some remarks that were offensive to you—that excited your ire, because they were complimentary to myself. I thought it was Mr. Randall. There were Mr. Randall, Mr. Kelley, Mr. Monroe, and several of them. However, that was the beginning of things. We felt—pardon the egotism (in deference to becoming modesty)—we felt that we had the confidence of these people, who had been- outraged in many respects, and that even if we gave our presence, we should give something to this matter. We had been sneeringly held up as simply "contributing our eminent respectability." But these people wanted that. I met people in my own city, and they 68 FREEDMAN'S SAVINGS AND TRUST COMPANY. would say to me, by way of compliment—and I had to disabuse them, for I have always been ready to give this man full credit—"If it was not for you we would not have got a dollar." It was this that helped to give them confidence that the affairs of the institution would be properly managed. And I may say that the selection was made with reference to that. The object was. to get two substantial men known in the community—men of character, men of pecuniary ability. This was due to these depositors. I do not wish to reflect upon the honesty of Mr. Leipold. Mr. LEIPOLD. He has done so. Mr. PURVIS. U, no; I said, in regard to that perfidious act, that its honesty or dishonesty will be shown. I have given him credit everywhere and at all times for the faithful discharge of his duty, but nothing more than his duty. Mr. LEIPOLD. I do not claim more than that. - Mr. PURVIS. But he had to admit under oath that we did ours. . Mr. GARLAND. State what matter you can call to mind, in the management of this institution, in which you crossed Mr. Leipold. Mr. PuRvis. That is an important matter. I was opposed to his maneuvering to disrupt this commission, with a view of having it drift into his hands. Mr. GARLAND. Was there nothing else in the management that you crossed him in that brought about this ill feeling? Mr. PURVIS. Yes, sir. Mr. GARLAND. State to this committee anything you can call to mind in respect to that.. EMPLOYMENT OF JOHN H. COOK AS COUNSEL. Mr. PURVIS. Yes, sir. Gentlemen,.it is characteristic of a class of people, not natives of our country, who come to this country—very soon, from a spirit of hostility (and no man can speak better of that than those who are victims of their persecution), to find, by hard scratching, some who, by public sentiment, are held as being beneath them and to persecute them. There was a man, by nature, sir, a gentleman; by education fitted—and he was so deemed by the trustees of the bank—to be their counsel; a young man, pure,sterling, ambitious, honorable. That man desired to be retained as counsel. Mr. Leipold, without consulting me—for I did not know it—had secured as his counsel for the bank a gentleman by the namerof Totten. This young man called upon me immediately, as it turned up from Mr. Totten's testimony—or at least very soon after I was made commissioner—and he was retained as counsel. I do not wish to be understood even by the remotest implication to reflect upon Mr. Totten. He has done his duty faithfully; and the only criticism I have to make upon him in the discharge of his duties is the enormous charges he made for fees. Mr. GARLAND. Was he competent for the duty? Mr. LEIPOLD. Yes, sir; fully competent. There was no question as to that. Mr. PURVIS. But my inclination and desire were, without asking any favor, but simply upon real merit, that this young man might have at least a share of the business of the concern, in its settlement. My son will narrate the circumstances, but it is not necessary. He called upon me. I said to him,"Address the commissioners and I will arrange your appointment." And when the appointment was made, he (meaning Mr. Leipold) showed his pettishness. And here I ought to state a fact FREEDMAN'S SAVINGS AND TRUST COMPANY. . 69 from which you, as well as myself, may now form an estimate of him. And that is this: Mr. Creswell declared that he .was unwilling, as Mr. Leipold did, to commit himself to the appointment of any one man; that their duty lay as they saw it, and truly, of course, in securing the services of a man that they thought would best do the work. They assumed that ground but there was more than that. There wa no need of this man's getting into a spasm,or using the violent and abusive language which he used, all of which will-be shown, if necessary. But there was this prejudice against this poor, honest, and honorable Man, and an act against him so perfidious that I think you will say it is without parallel. INT ERLINEATION IN THE LANDLORD AND TENANT NOTICE. Among the little matters that were given him was a request to notify a tenant who lived in one of the properties belonging to the bank, who was in arrears of rent and would not pay his rent, that he must vacate. In the usual form of a notice to quit, this young lawyer, Mr. Cook, was requested to notify this party to quit, and he served a similar notice, as the law requires, upon the magistrate. This tenant had demurred, he set off the fact that he had a .contract with the trustees, and he was going to give us trouble. The case came on. I went to the magistrate's office with Mr. Leipold. I was called out before the case was decided, and went away, and could not return. It was not necessary. I was there merely as a looker-on, at any rate. The next morning when I came into the bank, as I was wont, to ask about what was being done, or what was to do in affairs of that kind, of which I had some knowledge, I said to Mr. Leipold, "I suppose the court's decision was for us; that fellow will go, won't he ?" • He sprang to his feet and beat the air, and said he, "It would have gone for us if we had had a man who was competent for this work." "Why," said I,"What is the matter? Why such violence? What is it ?" "Well," said hb, "we have been obliged to submit to a non suit." "And wherefore?" I asked, "Well," lie said, "there was not an exact transcript—an exact copy—served upon the magistrate; exception was taken to it because there was an interlineation in the document; and we have to submit to a nonsuit, and all this work will have to be gone over, with all the expense attending it." I felt sorry, because I was anxious that this excellent young person should succeed in life. I thought it was one of the mistakes he had made, and that he had needlessly interlined the notice; so I went to him. He had an office in a building adjoining the company. I called his attention to the matter. He was such a cautious man—a man so cool and calm, and a man of such judgment,and a scholar withal,for he had taken the highest degree in the college from which he graduated, that I thought it strange he should have made such a mistake. When I brought the matter to his attention, he said,"Why,I never did anything of the kind." "0," said I,"you must have done it, because I' have just been informed that we were obliged to submit to a nonsuit in consequence of your interlining or interpolating in the notice what was unnecessary." Said he,"I will send for a copy to the magistrate." And he sent for it. When the copy was procured, I saw the interlineation of the unnecessary words, and I saw that it was in the handwriting of the man who sits there. (Pointing to Mr. Leipold.) The CHAIRMAN. In the handwriting of Mr. Leipold? Mr. PURVIS. Yes, sir. .But to make sure,I called Mr.Sperry to me— 70 FREEDMAN'S SAVINGS AND TRUST COMPANY. although it was not necessary,for I knew the handwriting myself, it was so peculiar—and I said to him,"Whose handwriting is that?" Said he,"Why, a blind man could see that it is Mr. Leipold's." But to make the thing beyond all question and doubt, a young man who is in the office with Mr. Totten said that he was cognizant of the fact that it was Mr. Leipold's handwriting upon that paper. Then said I, "Gracious God! am I in relations with a man who, for the purpose of serving a malignant bitterness and prtjudice would commit such an act himself, ' It was diabolical! and then charge it against another?" This is the perfidy of which I spoke, sir, and that is the man that did it. The CHAIRMAN. Have you had any conversation with the commissioners touching this paper? Mr. PURVIS. No, sir; for the reason that we, in obedience to this young man, Mr. Cook, who has gone to his account, made the request that he did not wish this thing to be brought up as a charge; and for my own personal comfort and convenience I made no charge, although it was a hard matter for me to keep it down. ALLEGED VIOLATION OF CHARTER BY TRUSTEES. But that is not all; there are other things. I can tell you of another thing, and how we met it. Upon one occasion, not a great while ago, he said, "When the proper time comes, I am going to show that some of these trustees violated the confidence that was reposed in them; that they have violated that provision of the act of incorporation which does not allow any accommodation to any of the trustees, either directly or indirectly, in the bank." I said I was not aware of any persons having been benefited—that is, the trustees—in any way; and I demanded of him at once the proof. He was telling this to a trustee, too, to whom it was new. The first name he gave was Dr. Purvis, my son. Mr. LEIPOLD. That is the trouble. Mr. PURVIS. I said to him, "Why, sir, it astounds me. My son guilty of a dishonorable act! Impossible! In the absence of proof, I demand the proof." He said, "The time will come when I will show it." Then said I, "In the absence of proof, you are a liar." And now I will prove it. After having taken nearly twenty thousand dollars of the notes of the bank, at a time when it wanted money to enable it to meet its demands, I wrote to my son—it was all done by writing—to know whether he could help me to raise any more money to take a smaller note of the bank of two thousand dollars. I had fifteen hundred dollars that I could spare. (I wish to say in regard to the larger sums that I loaned, that I sold city loans at par that are now bringing 20 per cent. premium, for the purpose of doing that thing; they were city loans of Phila(lelphia.) I wrote to my son, saying, "I have but fifteen hundred dollars; could you loan me five hundred ?" He went to the actuary, who is here, and proposed giving him seventeen hundred dollars, two hundred of which he had, and three hundred in addition, a due-bill for his services as professor in Howard University, thus making up the two thousand dollars. The CHAIRMAN. Was it a due-bill or a note? Dr. PURVIS. It was a note. Mr. PURVIS. Well, a note drawn to his order. After lending me that money, the $200, and the $300 note, the loan was made to the bank. It was an accommodation on my part to the bank. There was no possible risk in it—Howard University, with a million of property to back it, FREEDMAN'S SAVINGS AND TRUST . COMPANY. 71 and my son's ability to meet it, and • my own if anybody questioned it. And that was the accommodation that my son gave. When I came to the bank the next day, I called him out, and I think I asked my son about it. Said he,"No; I never did anything—never indorsed any note—don't know anything about.it." He had to go to the actuary; and then this thing that he had forgotten that he had done for the accommodation of the bank was brought up. There was no difficulty about it. Only three or four weeks ran, and it was paid; and if it had not been paid I should have met it. I called him out, and this fellow, putting on'a smiling face, said,"I knew you could explain it away." Mr. CRESWELL. You gave so much money and a note to take up a loan previously made by the bank to another party. How much money did you give ? Mr. PURVIS. Seventeen hundred dollars. Mr. CRESWELL. And you gave this note for $300? Mr. PURVIS. Yes, sir. Mr. CRESWELL. And that note remained how long in bank? Mr. LEIPOLD. Over a year, and it was not paid at maturity. Mr. PURVIS. I do not know how long; it was for the bank's accommodation. Mr. CRESWELL. It was ultimately paid? Mr. PURVIS. It was paid, certainly. Dr. PuRvis. Allow me to interrupt you a moment, please. I took up a note for $200, which paid 10 per cent., and this note given me by Howard University for • $300, which also bore 10 per cent. interest. I. indorsed the latter so that it was payable to my order; I was thus $500 out, until I was paid. Mr. PURVIS. That was the charge. The CHAIRMAN. (To Mr. Purvis and Mr. Creswell.) You accept this statement, gentlemen? Mr. PURVIS. Yes, sir. Mr. CRESWELL. The statement is correct. Mr. PURVIS. These were some of the causes that led, sir, to that state of feeling between us. And now, gentlemen, I implore you, I entreat you—for there is such a thing as a man's 'self-respect and personal dignity—for God's sake, do let us out of this! THE EXTRA COMPENSATION TO MR. LEIPOLD. The CHAIRMAN. Mr. Purvis, you paid two hundred and fifty or five hundred dollars to Mr. Leipold, I understand—five hundred in all, I believe—and at intervals of six months? Mr. PURVIS. It was my proposition to Mr. Creswell to divide the time of payment. I never knew that there was an intimation of a continuation of it. It was a gift, a benefaction; and when the money came to be paid, I sent it by my son, and I had no fault to find with it. And I will say here that Mr. Leipold was engaged at $10 a day, continuous service for two months, in the Treasury of the United States,in counting money. • The CHAIRMAN. Since he was a commissioner, do you mean, or be. ? Mr.PURVIS. No, sir; since he was a commissioner. We were glad of the respite. I was away and he chose to remain where he did. If I recollect, in one of his spasms (you do not see them here; I wish he would give you a specimen of them!) he so outraged Mr. Creswell, that when he said,"I want to go," Mr. Creswell said, using very emphatic language," Well, go!" I only tell you this to show that we 72 FREEDMAN'S SAVINGS AND TRUST COMPANY. wanted him to go. And when he did go away to spend his summers, I know that at any time he wanted to go, we should have gladly let him off, while we remained here for the purpose of having general supervision. Mr. GARLAND. If Mr. Creswell desires to make any explanation here in reference to the statement that Mr. Leipold has made, it would be well, perhaps, to take the opportunity now. Mr. LEIPOLD. Of course I shall be glad to bear Mr. Creswell's statement, but Mr. Purvis has traveled over so much ground that it will be difficult for me to keep track of it all. Mr. PURVIS. Mr. Leipold made his statement at full length. Mr. LEIPOLD. And I stand by that statement word for word. The CHAIRMAN. Of course we desire that each side should have an opportunity to be heard. MR LEIPOLD'S REPLY. Mr. LEIPOLD. There is just one suggestion, if you will permit me. I think Mr. Purvis misapprehends the purport of my statement. It certainly cannot be considered as an attack upon any of these gentlemen. They have assumed, and he has not denied, here before the committee, that I was the "working man"; that at the meeting of the board of trustees, when I was elected as a commissioner, I said that I was a working man; and that they were selected by reason of their standing and position. There is nothing whatever in my statement to contradict that position. The only thing that I say in this statement is, that I have done the work. I do not charge them with doing it. Mr. GARLAND. You heard the explanation of Mr. Purvis as to the matters in which he said that he had crossed you, and brought about this difficulty. What have you to say in regard to them, Mr. Leipold I Mr. LEIPOLD. I do not admit that they are properly stated. Mr. GARLAND. You have a right to make your explanation. The first is about your trying to get the commissioners ousted—as to Mr. Our. • bill to effect that. What have you to say on that point? ALLEGED ATTEMPT TO OUST THE COMMISSIONERS. Mr. LEIPOLD. I have never heard Mr. Purvis, until this moment, refer to any attempt on my part to oust the present commissioners at ,the time to which be refers. The first time that I became aware that I had displeased Mr. Purvis was after Senator Bayard had offered a bill to provide, among other things, that the affairs of the Freedman's Bank should be transferred to the Treasury of the United States. I had occasion to go to the Treasury Department, where I am well known, and where I have served a number of years in important positions, and I asked Mr.Knox,Comptroller of the Currency there, whether he had seen Mr. Bayard's bill. He said "Yes; but I do not know that I want to have anything to do with the Freedman's Bank. Has the Secretary seen this bull" Said I,"I don't know, sir." "Well,'you had better show it to him." I thereupon went to the Secretary—the present Secretary of the Treasury, and called his attention to Senator Bayard's bill, and he said to me,"0,this must not be done. I do not want the department to have anything to do with this matter. You go and see Senator Bayard for me, and say to him that this must not be done. If there must be a bill passed, let it be a bill providing for the closing up of the Freedman's Bank, under the national currency act, giving the Comp. FREEDMAN'S SAVINGS AND TRUST COMPANY. 73 troller of the Currency the appointment of a commissioner or receiver." I went over to the office, sat down and wrote a letter to Mr. Bayard, stating that the honorable Secretary of the Treasury desired me to say to him thus and so, repeating the language, as nearly as I could remember it, that Mr. Sherman used. Whether it was before I went to the Capitol that I exhibited that letter to Mr. Purvis and Mr. Creswell, or whether it was afterwards, I cannot now tell; I did show that letter to these gentlemen. Mr. CRESWELL. Just as you did the one you presented here the other day—after wards. Mr. LEIPOLD. Afterwards; very well. Mr. Purvis took exception to my acting in the matter. He said.that I had no business to come out and write such a letter without consulting the other commissioners. "Well," said I, "there was nothing in it. Mr. Sherman asked me, and I so stated in this letter, that Mr.Sherman asked me to do this." That was the first manifestation I had of any ill feeling on the part of Mr. Purvis—Mr. Robert Purvis. He had before that time, as he did before the Beverly Douglas committee, stated in the most emphatic language, as he did here to-day, that I had done my duty, and all that sort of thing. The matter went on for a few days and I don't know what brought out the conversation, but in a conversation that I had with Mr.Purvis with reference to that bill, he then intimated that it was an attempt on my part to secure that place, and that I was utterly unfitted for it. "Why," said I,"Mr:Purvis, either the position you now take, or the position you have heretofore taken,one or the other, must be false." That is, he had always previously complimented me by saying that I was the best man to successfully close up the business, and now he was saying that I was utterly unfit. SHOULD THE TRUSTEES BE CONSULTED IN TBE APPOINTMENT OF COMMISSIONERS °i That was the first time I knew there was any hard feeling on his part that I now remember. Subsequent to that time Mr. Purvis took the position, that in an3T, change that might be made in the winding up of the Freedman's Bank, in the personnel of the commissioners, the board of trustees ought to be consulted. Mr. Storam came in, the trustee that he has referred to (and I have no hesitation in having him called to testify in this matter, as I have never spoken to him from that day to this about it), and Mr. Purvis went on to say to Mr. Storam—referring to this act of mine in interfering with the legislation up there(and he spoke in rather spasmodic language; he attributes to me spasms, but he has exhibited several here to-day)—he said to Mr. Storam that no legislation should go through that did not recognize the trustees and the rights of those gentlemen in the premises. I turned around, although not addressed, and said, "Well, Mr. Storam, I do not agree with Mr. Purvis in that matter; there are some things here about some of the trustees that I do not think would make them the proper parties to consent to any change or to have anything more to do with the institution." Mr. Purvis came up and in emphatic language demanded,"What do you mean, sir?" "Well," said I, "a number of these trustees have certainly violated that part of the charter which forbids them from making loans and having an interest in them, either directly or indirectly." Said he,"Who do you mean ?" "Well," said I, "Dr. Purvis is one of them." And thereupon he said,"You lie." Said I,"Mr.Purvis,I have 74 4 FREEDMAN'S SAVINGS AND TRUST COMPANY. here the report that you have put your name to and that will be the proof of that assertion." And here it is, gentlemen. It is the commissioners' report of December 14, 1874. Upon referring to it you will find that Dr. Purvis discounted a note to his order drawn by J. B. Johnson, treasurer • of Howard University, dated April 21, 1874, for two hundred and seventy-five dollars and forty cents, and in the column of remarks,"This note was endorsed by C. B. Purvis." Dr. PuR-vis. What report ? Mr. LEIPOLD. The commissioners' report of December 14, 1874; and the books of the bank show that. Dr. PuRvis. I do not then know how the note came into the bank. Mr. LEIPOLD. The books show that it came in as any other note came in, and was cashed to Dr. Purvis. The note was drawn for one year, and was not paid at maturity; that was in April, 1875. I called attention to it, and then it was paid. Mr. Purvis then said, "Do you mean to insinuate or to assert that my son has done anything dishonest in this matter ?" Said I,"I mean to assert nothing but the facts; here are the facts in this report." Having called me a liar, I could not with any decent respect for myself consent to have any further communication with Mr. Purvis. I have not had from that day to this, except once,and that was about some trifling matter, in which he used some language to me similar to that which he made use of the other day, and which I cannot reply to, as I do not choose to degrade myself by replying to any such language. Mr. PURVIS. I wish you would tell it. PUTTING UP THE NOTICE FORBIDDING SMOKING. Mr. LEIPOLD. Well, it is too trifling and absurd a matter. Mr.PURVIS. I will tell it, then. Mr. LEIPOLD. It is something about smoking; I will tell it. Mr. PURVIS. It has a great deal to do with the management of the bank. Mr. GARLAND. If it is connected with the management of the bank, tell it. Mr. PURVIS. Yes, sir; it was a simple request for gentlemen not to smoke in the room because it annoyed me very much. Mr. LEIPOLD. Well,I will tell the circumstance. We had just moved from the old banking house into the new quarters at the corner of Fifteenth-and-a-half street. Gentlemen, the labor of that removal, which was very onerous and very disagreeable, devolved upon me, in the absence of these two gentlemen. Mr. Puny's. That is, you had it done. Mr. LEIPOLD. I superintended it, and the employes of this committee know about it. We had gone into the new quarters; Mr. Purvis, who paid no attention whatever to any of the details, had nothing to do with the supervision of this removal, nor had he anything to do with the renting of the other premises, because that was done in his absence, as a great many other things have been done in his absence. Mr. Purvis then came, after we were fixed in our new quarters, and happened to find me smoking, I think, at the time, as well as some of the gentlemen employed by this commission; and he put up a notice "GENTLEMEN WILL NOT SMOKE IN THIS ROOM." I objected to his posting any such notice there. I said, "I have to stay here in this bank and do the work, and I think I ought to be allowed to smoke without any reflection. I think it is a reflection upon me to put up this notice." FREEDMAN'S SAVINGS AND TRUST COMPANY. • 75 , Mr. PURVIS. Let me just there make a statement. I admit all that Mr. Leipold has said with regard to the management and supervision of this removal. He did it all, and did it well. When I came there and found these rooms divided only by a large door, and all of your experts here given to smoking, I appealed to them—I did not mean anything personal at all—simply that it annoyed me very much to have them smoking; and having no intercourse with this man at all, I simply wrote a request in these words: "GENTLEMEN ARE RESPECTFULLY REQUESTED NOT TO SMOKE IN THE ROOM WE ARE OCCUPYING." Not in any other room, room because we could close the doors; and it was a simple request. Mr. came in and I presented the paper to him, and I said, "Mr. Creswell, have you any objection to my putting this up 1" "Certainly not," he said. The moment I said that, this man sprang to his feet and made this remark: "If you put that notice up Twill tear it down." Mr. LEIPOLD. Did I do it that way, Mr.Purvis? Mr.PURVIS. Your did it as no one else can imitate you. You declared you would tear it down, and added insultingly that those who claim equal rights should do equal duties. I am sure I never supposed that he was to decide What duties I should do. I considered it an outrage. I said that I would put it up again, and I did, and he pulled it down. I put it up again, and it was taken down again. I then consulted the district attorney as to what right I, as a commissioner, had in the matter, and how.I amid defend that right. His words were: "If you should attempt to publish such a notice"--or,before that,Mr.Creswell, with a timely word, said, "There can be no objection to that; it was simply a request," I then called upon the counselldr to know what my right was, because I intended to defend that right, and he said to me, "It a man should attempt publicly or forcibly to put his hand over your mouth, you could knock him down." And I came to the resolution to defend my right. But, to my utter surprise, this man (Mr. Leipold) wrote me a reasonable, common sense letter—and I showed the letter to Mr. Creswell—in which he declared, "It is hardly necessary to put up a notice of this kind, Mr. Purvis, for I assure you there will be no smoking during your presence." I immediately replied courteously that I had no 'intention to do it, and that as the spirit of his letter was changed, that I should not put it up until I was annoyed. That is the whole truth and Mr. Creswell will vouch for it. • Mr. LEIPOLD. This trifling incident was the occasion of such language from this man as had never been used to me in my life before, and the language he made use of the other day was only a trifle to that he then made use of. Among other things he charged me then and there with being a liar, as be has intimated here to-day. I challenged him to produce proof; and there are three things he alleged against me as sustaining his accusation of falsehood. The first was my saying that his son had violated the charter. THE MATTER OF INCREASING NYMAN'S SALARY. The rrext was that I had said to a gentleman employed by the commissioners, who had applied for an increase of pay, that Mr.Purvis was • opposed to the increase, when in fact I knew that Mr. Purvis had advocated it. That was the other accusation he made to sustain his charge of falsehood against me. Now,the facts in that case are this: Mr. Nyman applied for an increase of.pay. Mr. Purvis, who was in Philadelphia at the time, I consulted by letter. Mr. Purvis wrote back that he 76 FREEDMAN'S SAVINGS AND TRUST COMPANY. was in favor of increasing Mr. Nyman's compensation. I wrote this letter on the subject, and submitted it to Mr. Creswell: Referring to the application of Mr. Nyman for increase of compensation, I have, after reflection, come to the conclusion that his request ought not to be complied with. The labors pertaining to Mr. Nyman's desk are -nothing to be compared with what they were soon after we first came here, and especially with what they were before the company failed, and yet his salary is as high to-day as it was then; in fact, I think that Mr. Nyman's services might be dispensed with and his work assigned to Mr. Wheeler, who, with such assistance as we may tender him,could very readily attend to the loan desk, in addition to the dividend desk. If this arrangement is made, I would suggest that $100 per annum be added to Mr. Wheeler's salary. That would result in a saving to the depositors of $1,100 per annum, rather than an increase of the expense account. I deem it my duty to make every effort to decrease it, even at the sacrifice of our own personal interest and time. I submitted that to Mr. Creswell,and be agreed with me not to increase the salary. I thereupon wrote a note to Mr. Nyman, saying: The commissioners are opposed to increasing your salary. It was not, by any. means, as Mr. Purvis has stated it. The commissioners were consulted about it, and Mr. Creswell agreed with me in that matter ; and as the majority opposed the increase, I had a right to notify Mr. Nyman that the commissioners were opposed to it, without going into further details by showing that one of them favored it. Mr. PURVIS. Well, prove to the contrary of what I have said. LOAN TO THE FIFTH BAPTIST CHURCH. Mr. LEIPOLD. The next accusation that he made in support of the charge that I was not truthful was that I had said to a Rev. John H. Brooks here, who had made an application to settle the loan of the Fifth Baptist Church for a sum of $5,000, that Mr. Purvis was opposed to it—that I had said to this man that Mr. Purvis was opposed to it. When the application was made, Mr. Purvis being in Philadelphia, I wrote to him—no,I wish to correct myself on that; Mr. Purvis being in Philadelphia was written to by Mr. Brooks, and Mr.Purvis returned that letter from Philadelphia. Mr. PURVIS. We had all passed our judgment in regard to that matter, and his letter to me was complaining of your charge against me. Mr. LEIPOLD. Well, Mr. Purvis was in Philadelphia and wrote back that he was in favor of settling that loan in that way; and Mr. Creswell and myself—at least I—refused to settle it in that way, but insisted either upon a cash payment of $7,000 or a payment of $5,000 and a second mortgage for the balance. I declined Mr. Brooks's application. I signed it myself, but used the plural pronoun, saying that the commissioners declined it. In fact, almost the entire correspondence of the commissioners, you will find, has been signed by me and written by me in that manner, except proforma letters. 4 THE,BAYARD BILL, AND POWER OF TRUSTEES TO ELECT A COMMISSIONER. There is one other thing. I do not want to go as far as Mr. Purvis has gone in his accusations; but he has traveled over a great deal of ground, and made a great many accusations and insinuations which I hope will be thoroughly investigated; I am sure that nobody wishes them to be more thoroughly investigated than I do. But there is a circumstance I think I ought to state; it May have something to do with FREEDMAN'S SAVINGS AND TRUST COMPANY. 77 this feeling or it may not. At the time that the question came up under the Bayard bill, I think, as to the appointment of a successor, Mr.Purvis asked me this question; I think he asked it in the presence of Mr. Creswell: "in case the trustees should elect a new commissioner, and the trustees should indicate by resolution or otherwise that he, Mr.Purvis, had come to the relief of the bank in taking its loans from the bank, which now had proved to be bad loans, in the .event of an expression of opinion on the part of the trustees that he ought now to be relieved of these loans, how far would a new commissioner, under such instructions, be required to follow them?" And I replied to that, "If he wishes to put his hands in his pocket and pay the money himself, he might relieve you; otherwise he certainly could not." Now, these are the only circumstances that I can imagine that have produced this feeling on the part of Mr. Purvis, especially my saying that his son had violated the charter. ALLEGED INTERLINEATION IN TRANSCRIPT. Mr. GARLAND. Now, Mr. Leipold, I want your explanation of that interlineation in the transcript. Mr. LEIPOLD. Yes, sir; I have no definite recollection about that matter. It was as Mr.Purvis has stated, a matter before a justice of the peace for an ejectment of some tenants. There was some fault found with the record. Whether it was the interlineation, or what it was, I do not know; but the conduct of the attorney,(who was a gentleman, I do not deny it, and I have letters from him showing that he at least appreciated that quality in me, too, although he was a colored man, and was— (Mr. PuRvis (interrupting). He was not a Dutchman.) Mr.LEIPOLD.(continuing)—and wassupposed to coincide in everything Purvis wanted him to coincide in) impressed me at that time, as I have been repeatedly impressed during the performance of his duties, with the fact that he (Mr. Cook).had not sufficient experience to cope with the attorneys that were opposed to him, and I may have expressed myself in an emphatic way that we lost that ease by reason of not having a competent attorney. I do not remember, sir, whether it was the interlineation or what it was about that record that lost us the suit; I do not remember. Mr. GARLAND. Was the interlineation put in by yourself? Mr, LEIPOLD. I do not remember, sir; very likely I did. It was merely a nominal matter; I never charged my mind about it. Mr. GARLAND. Now tell the committee of the difficulty between Mr. Purvis and yourself about that attoPney. You were in favor of Mr. Totten.and he wanted another? Mr. GARLAND. You suggested another, Mr. Purvis? Mr. PURVIS. Yes, sir. Mr. LEIPOLD. Soon after we took charge of the Freedman's Bank, this man opposite me [referring to Dr. Purvis] came to the bank, and in an interview insulted me in such a manner that I can never overlook it. Dr. PURVIS. A small matter, sir. Mr. LEIPOLD. Yes, a very small matter. RAPLOYMENT OF JOHN H. COOK AS ATTORNEY. Mr. LEIPOLD. I repeat, that soon after we became commissioners, Mr. Creswell's time being mainly taken up with other duties, Mr. Purvis 78 FREEDMAN'S SAVINGS AND TRUST COMPANY. being absent in Philadelphia, Dr. Purvis, as vice-president of the former board of trustees, came into the bank and called a meeting of the board of trustees several times. At one of these meetings he undertook by resolution to instruct the commissioners- what to do. I consulted Secretary Bristow about the.matter. I told him.what was being done. Secretary Bristow is a friend of mine. He said that the very language of the act under which we were appointed precluded the idea of the trustees having any further connection with the concern; and that if they undertook to do anything we certainly would be held responsible, and that I must not allow them to do that. I got up in the trustee meeting,the next succeeding trustee meeting I think it was, and stated that, while I would be glad at any time to see any individual member of the board of trustees and consult with him on any matter, as a board of trustees I certainly could not pay attention to anything that they might do, and that in saying so I spoke advisedly. Well, that caused some feeling. Afterwards Dr. Purvis came and presented an application of Mr..Cook, in which Mr. Cook asked to be appointed attorney for the eommissioners, and an application at the same time from Mr. Wormley, in which Mr. Worm Icy demanded, I think, the appointment of auctioneer to do the auction business. Mr. PURVIS. No; Mr. Wormley requested such appointment. Mr. LEIPOLD. The question came up between us then about the employment of these two gentlemen, and I opposed it oil the ground that we ought not to employ a regular attorney, but that we ought to be free to act in every case as it arose, in the matter of the selection of attorneys. That was in October, some time after we took charge. I then incidentally said that I might want to do some of this law business myself ; that I certainly did not come to the Freedman's Bank on account of the salary that was being paid me, because I had a similar salary in the Treasury; that I came there to make a reputation, and to do the very best I could for these depositors. Thereupon this man replied to me, "What time have you to do law business'? your business is to be here." I think I turned to him and said,•"It becomes you with ill. grace to make such a remark as that"; and I did that with a view to the absence of his father for a month or two just before. Mr. PURVIS. Scarcely a month. Mr. LEIPOLD. And then some high language passed between us. That, to the best of my recollection, was all that took place at that interview. . AS TO COMMISSIONERS TAKING FEES. It was attempted, in a previous I xamination, to connect that with some conversation about fees. I do not believe the word "fees" came in at that time, unless it was the fees charged by the loan clerk for making out releases. Now, as to the matter of fees, I did speak to Mr. Creswell and to Mr. Purvis at one time early in the history of the concern, and I asked this question, "If I were to do any of the law business of the concern, would I be entitled to any compensation ?" Mr. Creswell said, "In our State where a trustee renders legal service he submits an account to the court, and the court allows it or disallows it at its discretion." That matter may have come up between us two or three times, by way of conversation ; and that is all there is of it. I have never, although I have done a good deal of the law business of the concern—I have never received a cent on account of it, and I FREEDMAN'S SAVINGS AND TRUST COMPANY. 79 never expect to receive a cent, and there has been no charge made and no money paid on account of it. Mr. GARLAND. That is all I care to ask concerning that. Mr. LEIPOLD. I want to put in, most emphatically, a general denial of all the insinuations of falsehood and dishonesty and everything of that kind implied in Mr. Purvis's remarks. He— Mr. GARLAND. The only reason why we, cannot let you go on now is that we do not want to protract this matter. Mr. Purvis has said everything for you that he could in regard to the discharge of your duties. We have nothing at all to do with the private opinion and the personal relations of you and Mr. Purvis.one way or the Other. Mr. LEIPOLD. But I do want to disabuse, it' I can, the minds of both these gentlemen as to my intentions in making that statement. There is not a disrespectful word in it. These gentlemen have not attempted to do the hard labor connected with the concern, and I have not accused them of it. I have only said that I have had it to do. Mr. Purvis has said that I have done my duty, and that is all I care for. Mr. PURVIS. Nothing that I have said was intended to reflect in any shape or form upon Mr. Leipold in that respect. Dr. PURVIS.. I would like you, Mr. Leipold, to state what resolution I ever introduced in calling the trustees together. Mr. LEIPOLD. Whether it was a resolution or not I do not remember. You remember that I took the position that I could not pay any attention to what you should do as a body of trustees. Dr. PUR VIS. Was it not advice as to the removal of an officer ? Mr. LEIPOLD. I do not remember. Mr. GARLAND. You spoke of his introducing a resolution. What was the resolution, if you recollect ? Mr. LEIPOLD. I do mit remember. I looked upon it as an attempt at dictation to the commissioners, as to what I, as a commissioner, ought to do. I consulted Secretary Bristow on the subject purposely. Mr.PURVIS. He had nothing to do with it. Mr. LEIPOLD. I.say that he had; he approved our appointment. MR. LEIPOLD'S APPOINTMENT AS COMMISSIONER. Mr. LEIPOLD: Mr. Chairman and members of the committee, I want to add that before the present commissioners were elected the trustees selected three other commissioners; one was the brother of Mr. Langston; one was the brother of Mr. Richards; one was the father of Dr.Purvis—all three gentlemen named were trustees at the time. The names were presented to Secretary Bristow for confirmation, and he refused to confirm them. Dr. PURVIS. Not SO. Mr. LEIPOLD. He declined to do it. Dr. PURVIS. He was not present. Mr. LEIPOLD. I was informed he declined to approve their appointment. Dr. PURVIS. Oh! Mr. LEIPOLD. It has been stated here that I sought the position. It is due to myself to state how I came to seek it. Mr. Vanderbilt, a relative of one of the trustees, who was deputized to present the names to the Secretary of the Treasury, spoke to me on the subject, and said that these men had elected these three gentlemen, and that the Secretary would not consent to their confirmation, and, as it was in my line 80 FREEDMAN'S SAVINGS AND TRUST COMPANY. of business, he asked me why I did not apply for it. I thereupon spoke to General Balloch and to M.Tuttle on the subject. The CHAIRMAN. These gentlemen were trustees a? Mr. LEIPOLD. Yes, sir; and I said that they knew me, that they knew all about me, and if they could say anything for me I should be glad to have them do it. And that, gentlemen, is the way I came to be appointed a commissioner. Before I left the Treasury Department Secretary Bristow, rather than have me go, gave me an important promotion as an inducement to have me stay there; and I had partially made up my mind to abandon it, when Mr. Frederick Douglass, the president of the board of trustees, came to the Treasury Department, and in the presence of Mr. Hartley, Assistant Secretary, urged upon me to take this position on account of my well-known character and ability, if I must say it. How well 1 have done the work, gentlemen,I hope you will look into thoroughly and find out. Mr. GARLAND. I suggest that Mr. Creswell make his own statement as to the matters that have been brought up by the statements of Mr. Leipold and Mr. Purvis. Mr. CRESWELL. I thought, Mr. Chairman, of making a statement in writing, in reply to Mr. Leipold's communication, and preferred to do it in that way. Mr. GARLAND. Well, that would be better. You may just transmit it with the request that it be incorporated into the record as your own statement. VERBAL STATEMENT BY MR. CRESWELL. Mr. CRESWELL. I will state, Mr. Chairman, that my relations in connection with this commission have been exceedingly unpleasant for the four years last past. I desire, and have expressed that desire very strongly to every person ,with whom I have conversed on the subject, to be relieved, and I think Mr. Purvis has entertained the same view. Mr..Leipold is a very competent accountant. I believe he has faithfully and rigidly looked after the interest of these depositors; but at the same time I must say, in justice to myself, that he is the most disagreeable person with whom 1 have ever been associated. His temper and manners are exceedingly disagreeable, and at times almost insupportable. Nevertheless, we felt that our private grievances were not to be brought before the public; and I have suffered many things in my relations with him to pass in silence; and, although they were often as much as I could bear, yet I felt it to be my duty to submit to them, and in the interest of these depositors and creditors to go on with our work so long as I was required to act as a commissioner. We were in a position from which we could not withdraw. We had given a joint bond, on which the sureties of myself and Mr. Purvis are abundantly good. Certainly my surety is abundantly good for ten times the amount of my bond. I could not desert that bond, and therefore I felt it to.be my duty to go on and do the very best I could. The circumstances under which I was appointed on the commission are briefly these: Before I had retired from the Post-Office Department, though after my resignation had been presented, and after it was publicly known that I was to retire as soon as my successor could be appointed, Mr. Langston called upon me at the Post-Office Department and presented this matter of the Freedman's Bank and urged me to become one of the commissioners. I said to him, "Mr. Langston,I have had a good deal of experience as a receiver and trustee in FREEDMAN'S SAVINGS AND TRUST COMPANY. 81 closing out insolvent concerns, and I think I know pretty well what is required. You will need some one to take special charge of the books and • the details of the business; that is something that I cannot do; it is entirely inconsistent with my other obligations and duties; and my profession .is worth vastly more to me than the salary that the Secretary of the Treasurk is authorized to allow under the law. Therefore I must decline, with the kindest feelings toward the colored people and with every desire to see the Freedman'sBank settled in the best possible way." Mr. Langston continued to urge me to accept, and said that the trustees. had talked the matter over and were particularly desirous to have somebody as commissioner who was known generally to the colored people—known to be their friend. HOW THE LABORS OF THE COMMISSIONERS WERE DISTRIBUTED. We had a long conversation together., I ,left him, however, when the conversation closed, with this statement: "I don't see how it is possible for me to undertake the charge of the details of the bank. I cannot do it." He made me a second visit and still urged it upon me, and other friends of my own called—all urging me to accept. I made the same .statement to them. One of them then said that so far as the details c f the work were -concerned, that had been provided for; that Mr. Leipold, of the Treasury Department, with whom I had had no acquaintance, was a capital accountant and was desirous to be on the commission, and pledged himself to take charge of the details of the work, and that all they would ask me to do would be to supervise generally the operations of the concern; to see that the assets were faithfully and promptly collected and the money distributed honestly and rightfully. I still declined. Then by appointment, after several interviews with these gentlemen, there was a meeting of the trustees at which the whole matter was talked over, and I made known to them the difficulties I had, and that I could not go into the .office to supervise the adjustment of accounts and settlement of the pass-books and of the minutife involved in their settlement; and it was there and then distinctly understood, my statement having been made to the board and the merits of the thing having been fully canvassed in the presence of all—Messrs. Leipold and Purvis also being present—that what they expected me to do was to supervise the work generally and see to the collections and the payments,and also to the faithful administration of the affairs of the company. And after a long meeting—I think we were there three or four hours—it was finally settled that I was.to go into the commission with Mr. Purvis and Mr. Leipold; that we should give a joint bond in accordance with the terms of the law and then proceed with the administration of the trust on the theory I have stated. Mr. Leipold was to have charge of the.details and Mr. Purvis and myself were to assist in all matters of advice, and generally in the conduct of affairs. MR. CRESWELL'S PERSONAL ATTENDANCE AT THE BANK. We then entered upon our trust. Our first work was to prepare a statement of the exact condition of affairs and of the bank when we took possession. That involved a great deal of labor, and I was at the bank for the next six months, I think, almost every day. The court of Alabama claims was then organizing, but during the first six months very 6F B 82 FREEDMAN'S SAVINGS AND TRUST COMPANY. little work was done by the court, because that was the time allowed .for the filing of claims. There were no cases ready for trial, and it was not necesSary for me to be at the court to advise with the judges and see that the claims were properly filed more than an hour or two each day. I called at the bank sometimes in the morning and sometimes in the evening. So the business progressed for, perhaps, a year, when I became engaged in the trial of the cases in the Alabama court, and every moment of my time was taken up. The testimony in every case had to be read, with a view of offering such suggestions to the court as I thought woulct facilitate them in making their decisions. EXTRA COMPENSATION TO MR. LEIPOLD. In 1875, I think it was, Mr. Leipold grew very restless with regard to his duties, alleging that they were much more onerous than he had anticipated, and I am frank to say than I anticipated. If I had supposed that they would be so exacting I never would have engaged to do the work, and I have regretted a thousand times that I did, and especially when I found myself in a position from which I could not retire. He made complaint that I could not give more attention to the affairs of the details of the bank. I said to him,"Mr.Leipold, it is impossible for me to take charge of these details; that is not the understanding on which I was appointed, nor can I do it now without deserting another trust quite as important to me and to the government." Finally I suggested to him that in consideration of the increased duties, the additional duties that were imposed upon us all—much greater than any of us had anticipated—that I would be willing to pay him $250 every six months out of my salary; and that was finally accepted. Now, my object in that was simply this: to show a disposition on my part to compensate Mr. Leipold,from the fact that all his time, or nearly all of it, was taken up by the bank. He had said to me in the begin-S ning that it was his desire to commence the practice of law, and I did not suppose that up to that time he had had much if any opportunity for engaging in the practice of law, but as I was in the practice of the law myself I thought his desire was a reasonable one and that his complaint was made to me with a view to that very thing. Compensation was paid to him twice, two hundred and fifty dollars, I think, in the month of July, 1875, and two hundred and fifty dollars in the month of December of the same year. Then Mr. Leipold, having learned that this arrangement had become notorious and that some persons at that time were canvassing it(I think the committee had made some allusions to it), notified me that he would not receive any further payments. Mr: LEIPOLD. Did not I say that it was by reason of some remark made by Mr. Purvis Mr. CRESWEL.L. No, sir; you did not. Mr. LEIPOLD. All right. Mr. CRESWELL. I understood the reason to be that animadversions hag been made upon you for taking this money in excess of your compensation, and that therefore you would no longer receive it. I have this to say in regard to Mr. Leipold: I believe that he has faithfully and honestly managed the details of the bank ; I believe that he has given a great deal of attention and time to it. At the sam6 time, I have to say that Mr. Purvis and myself also have done the same. I will say for myself that I have given a great deal of time and a great FREEDMAN'S ',SAVINGS AND TRUST COMPANY, 83 deal of thought to the affairs of this bank, and I have responded to the calls made upon me, at all times, with a view of consultation on any questions that might arise. "DETAILS" OF THE MANAGEMNT, AS UNDERSTOOD BY THE COMMISSIONERS. Mr. LEIPOLD. Will you allow me to ask you a question, Mr. Creswell? Mr. CRESWELL. Certainly. Mr. LEIPOLD. What do you mean by details? Mr. CRESWELL. I mean by details, the adjustment of the books— interviews with the several creditors of the concern who came to have their accounts adjusted, and also with the debtors who came to inquire about and pay their indebtedness. Mr. LEIPOLD. Well, do you deny, Mr. Creswell, that almost every application and every request for the payment of the notes were made by me? Do you deny that? Mr. CRESWELL. I deny that they were made always through you; many of them were made directly to me. Mr. LEIPOLD. That is not what I mean. In attempting to collect the notes held by the Freedman's Bank, who conducted the correspondence looking to the collection of these notes? Mr. CRESWELL. You, mainly. Mr. LEIPOLD. Who conducted the interviews with the parties—the debtors of the bank? Mr. CRESWELL. You, mainly. I was present at quite a number of them myself; especially where there were disputed claims. Mr.LEIPOLD. Gentlemen [turning to the commissioners], you know of your own knowledge that a great many of these interviews were of a very unpleasant character and abusive in the extreme. Mr. CRESWELL. Yes, Mr. Leipold, I know that a good deal of that abuse was induced by your own manner. Mr. LEIPOLD. Well, that may be. Mr. CRESWELL. Well, you know the fact, and the further fact that a great many people have complained to me of your treatment of them. Mr. LEIPOLD. Debtors of the concern? Mr. CRESWELL. Yes, sir debtors of the concern. Mr. LEIPOLD. Do you admit, Mr. Creswell, that the planning and the systematizing of the work in the collection of the loans, and in the payment of the dividends, and in the keeping of the accounts accurately between the commissioners and the Treasury Department was attended to by myself? Mr. CRESWELL. Well,I don't suppose that there was much planning about keeping the accounts with the Treasury Department, because every dollar we received went into the Treasury, with the exception of a very small balance, which was kept on hand to meet expenses. Mr. LEIPOLD. You do not know of the complications, then? Mr. CRESWELL. In the payment of dividends? I know that there was a great deal of work in connection with the payment of dividends. Mr. LEIPOLD. Was that'done by the commissioners? Mr. CRESWELL. By yourself and Mr. Purvis, who was present on some occasions, and I know he had interviews with a good many people who brought their books in, and I also had interviews with some of these people, and I have consulted the original books to see if their accounts were correct. 84 FREEDMAN'S SAVINGS AND TRUST COMPANY. Mr. LEIPOLD. There are fifteen press copy-books of letters written by the commissioners. How many of these letters were written by me Mr. CRESWELL. A great many of them, no doubt. Mr. LEIPOLD. What proportion of them, should you tliink ? Mr. CRESWELL. A very large proportion, I should suppose. That was precisely the work, Mr. Leipold, that you agreed to do in the beginning. • Mr. LEIPOLD. The correspondence? Mr. CRESWELL. Yes, the correspondence connected with the details of the administration. Mr. LEIPOLD. Oh,I don't say that I did not. The preparation of testimony and whatever documents were necessary for the successful prosecution of suits in court, how was that done? Mr. CRESWELL. That was generally done by clerk.), under your supervision. Mr. LEIPOLD. Under my supervision ? Mr. CRESWELL. Yes. There were some cases where I was consulted. Mr. LEIPOLD. Well, a great many letters had to be written,I suppose you know, pertaining to the suits pending in court, a great many suits are pending. You know that a great many complicated questions arose in connection with these suits. Who among the commissioners attended to them, to the hunting up of the facts and proofs in the cases, and who suggested the law points that had been suggested in some of the courts to attorneys in other courts? Mr. CRESWELL. You did a large part of that work. Mr. LEIPOLD. Who prepared the reports of the commissioners submitted to Congress? Mr. CRESWELL. They were prepared by you and submttted to us for revision and examination; and every precaution was taken to have those reports accurate. Mr. LEIPOLD. Who attended generally to the buying in of all the properties, and the looking up of the claims against these properties prior to going to the sale? Mr. CRESWELL. You did that in many instances; Mr. Purvis in a good many cases, and I attended to some myself. Mr. LEIPOLD. Yes, sir; but the work of getting up the figures—the claims against these properties and the adjustment of the sales, and the limiting of the expenses involved in these sales, who offended to that Mr. CRESWELL. You had charge of the accounts; I presume it was mainly done by the clerks under your direction. Mr. LEIPOLD. Well, I will let it go that way. TESTIMONY AS TO THE COMMISSIONERS' FAITHFULNESS. I want to read two short extracts from the testimony before the Douglas committee. In answer to my question, "Tell the committee what you know about my general conduct in the management of 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," your answer was: "I Will state that very cheerfully. I have been very much impressed, Mr. Leipold, with your efficiency, and with the constant zeal and energy which you have displayed in your-efforts to promote the interests of the 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." Is that your impression now? FREEDMAN'S SAVINGS AND TRUST COMPANY. 85 Mr. CRESWELL. Does that vary from my statement to-day? I believe, sir, you have been very efficient. And, in that connection, will you please read a little extract from your own testimony with regard to the duties, responsibilities, and labors of the other commissioners? Mr. LEIPOLD. Mr. Creswell, I have said nothing in this statement about what you undertook to do. Mr. CRESWELL. You have said things different. Mr. LIPOLD. I beg your pardon; I think there is no real conflict between the two statements. Mr. Bradford put the question to me, "You are the only commissioner that has given his entire time to this matter"; and I said,"Yes,sir." I think • you yourself suggested after that that it might imply a reflection on you, and I came here voluntarily and said, I do not wish my answer to be understood that you. had done nothing, but that you both had rendered service. I say so in this statement. When the chairman of this committee asked Mr. Creswell about the division of duties among the commissioners, had Mr. Creswell said, as he has said to me repeatedly, and as Mr. Purvis has repeatedly said to me, that he had given but a sort of general supervision to this work, that Mr. Leipold had given his time to it, and that he(I) could answer any question, none of this would have been brought out at all. I only did it in justice to myself, and in confirmation of what everybody, who has had any connection with the Freedman's Bank,already knows, that I have been the pack-horse of the concern. I do not deny what I undertook to do, but I want credit for what I did do; that is all I want. -Mr. CRESWELL. Before you go to Mr. Purvis, Mr. Chairman, allow me to ask Mr. Leipold a question as to a portion of his testimony before the Douglas committee. , (Addressing Mr. Leipold). You said before that committee, Air. Leipold, under oath, on the first of May, 1876, as follows: There is another statement which I wish to make. From some testiniony 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 workingman 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." Thereupon the chairman said something to the effect that when he had been to the bank, I seemed to have been the workingman. 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 net come there for a week, but that whenever a matter of importance came up I would either send for him, or consult him about it. I believe that that was the full _extent of the testimony that I gave with reference to this subject. If the inference created by that testimony was that the other two commissioners never rendered any services,it does them great injustice, and I never meant to intimate any such thing. I do wish to shy that, from my understanding of the matter, both Mr. Creswell and Mr. Purvis did all they undertook to do priginally when the matter was discussed before the board of trustees who elected them, and they have both rendered. services, and very important services. Do you still adhere to that? REAL MEANING OF MR. LEIPOLOS "STATEMENT." Mr. LEIPOLD. I do not think there is anything in 'my present statement that denies that. Mr. CRESWELL. You have a singular notion of the force of langtrage, then; that is all I have to say. 86 FREEDMAN'S SAVINGS AND TRUST COMPANY. Mr. LEIPOLD. You affirmed that I examined the accounts, and you managed the concern. I was unwilling to leave that statement uncontradicted. Mr. CRESWELL. (Reading from Mr. Leipold's statement.) "I do not wish," you say in the statement made by you,"my silence on this point at that time to be regarded as an acquiescence in the correctness of that statement"; that is, my.statement made on Friday, the 9th of January, in reply to the question of the chairman as to the division of labor among the commissioners. "As far as that statement," you continue, "seeks to convey the impression that any considerable portion of the work of the commission has been discharged by Commissioners Creswell and Purvis, or that they have devoted any extended time or attention to the business of the bank, I most emphatically dissent from it. On the contrary,I will state, and that without fear of successful contradiction, that almost the entire management of the institution has devolved upon me. For the first two years after the commissioners took charge of the company's affairs,complications and annoyances were at their maximum; Mr. Creswell was the United States attorney for the Alabama Claims Commission and scarcely ever at the bank, and Mr. Purvis spent a large portion of his time in Philadelphia and thereabouts; and since that time, as far as the actual labors of the commission are concerned, it has been no better, although Mr. Purvis has spent more of his time at the bank," and so on. Mr. LEIPOLD. Well, that is my recollection and a statement of the facts. Mr. CRESWELL. It is very different from what you say there (referring to the testimony before the Douglas committee). Mr. LEIPOLD. Let me ask you, Mr. Creswell, a direct question. How much of your time have you spent at the bank? Mr. CRESWELL. Well, I have spent a portion of my time on a great many occasions. I have been there almost every day when I have been in town, and it has been my rule to go there every day. Sometimes I have been prevented by a press of engagements that I could not escape from. Mr. LEIPOLD. Have there not been times when you have not been near the bank for weeks and Weeks, and months and months together? Mr. CRESWELL. I have been out of town occasionally, but never for a longer time than a week or two. I was at the bank one whole mouth, managing its affairs in detail, when you and your family were off at the springs. I have been here every summer for three or four years past, in order to supervise the affairs of the bank. I repel any imputations, of neglect of duty. Mr. LEIPOLD. I only asked the question. Mr. CRESWELL. And I answer it. Mr. LEIPOLD. How many times have you been at the bank, say during any one month within the last two years? Mr. CRESWELL. I cannot say with accuracy. Mr. LEIPOLD. I mean without my sending for you? Mr. CRESWELL. Many times I have called at the bank when you have been out, and without your sending for me. I have been there on many occasions certainly on as many as four or five or six times each week, or every Clay of the week; then, again, two or three days of a week, as Mr. Piirvis will teStify, when I have been in town; and I have not been out of town for any length of time for three or four years. Mr. PuRvis. Whether you were there or not, your presence always was sufficient to cause no delay in the business. Mr. LEIPOLD. I do not admit that. FREEDMAN'S SAVINGS • AND TRUST COMPANY.1 8? COMMISSIONERS' DESIRE TO BE RELIEVED. • Mr. CRESWELL. Not to say anything further upon this point, I will just say here.that I am very glad, although I have felt myself bound to silence as to the personal relations subsisting between the commis*ioners, I am very glad that they have come out,.for I think that the usefulness of this commission is so impaired by the relations that have grown up be— tween the commissioners that this fact itself will secure that relief of which I have long been, and am now, very solicitous. Mr. LEIPOLD. So am I. Mr. CRESWELL. I hope the committee will make no delay in granting that relief. Mr. LEIPOLD. (To Mr. Creswell.) How far do you think the disagreeableness of my disposition was caused by the attempt on the part of two of the commissioners to leave me to do all the drudgery of.the concern? Mr. CRESWELL. That I cannot answer, Mr. Leipold. Mr. LEIPOLD. Do you remember, Mr. Creswell— Mr. CRESWELL (interrupting). I cannot be expected to account for the eccentricities of your temperament. Mr. LEIPOLD (resuming). Do you remember, Mr. Creswell, on one occasion coming into the bank after you had been. absent for some time, and throwing down some correspondence that had accumulated during • your absence, and speaking to me in rather a peremptory way, saying, "I wish you would,attend to that!'" and my asking you why you did not attend to them, and your replying with considerable profanity?.. Mr. CRESWELL. In what way; ,yvhat kind of profanity? Mr. LEIPOLD. I said something about having,to sit there all day having to do the work, and I suppose I meant to intimate that you had been away, and you spoke. to me in that way—I do not like to repeat the language; you said you did not care whether I was ever there or-not. Mr. CRESWELL. I might have said that, Mr. Leipold, when you endeavored to impress me with the idea that the work of the commission could not go on without you. Very likely I did use some emphatic language. I very soon found that while you were there, it was not worth while for me, or Mr. Purvis, to attempt Co take charge. I do not think that I ever made a proposition, that did not in some way emanate from you, that was not objected to. I remember walking into the bank on one occasion, and making some inquiries of you in a respectful tone in regard to a matter pending for adjustment by the commission, and asking,information upon it. You turned half around in your chair threw the papers'down, sprang to your feet, threw up your arms, and indulged in all sorts of exclamations, not calculated, I must say, to calm my temper in the presence of all the callers and employes. I then said to you that I would- not submit to such treatment from any man, and that I wanted.you to understand that I was there with equal rights with yourself. Mr. LEIPOLD. I have no such remembrance. • Mr. CRESWELL. I repeat there was just such a conversation; for a long time afterward you held yourself aloof from me. LEIPOLD. Ever since that? Mr. CRESWELL. No, sir; you have been very confidential, at times;• on one occasion since, I remember very well, you came to me to have me ask Mr. Sherman to give you a place in the Treasury Department, and I did it. .And when he said be could not tender you a place while if you were acting as commissioner for the.Freedman's Bank, and that, 88 FEE DMAN'S SAVINGS AND TRUST COMPANY. be were to offer you a place he could not give you the salary you were receiving, I came back and informed you of that fact. Mr. LEIPOLD. Was that since that interview? Mr. CRESWELL. Yes, sir; since that interview. Mr. LEIPOLD. I think not; I think it was before. Mr. CRESWELL. Well, I remember that you did not disdain to ask favors of me. Mr. LEIPOLD. Nor you of me. (Addressing.Mr. Purvis.) Mr. Purvis, you said of me, before the Douglas committee, some time in 1876,"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 could not be better done." Do you say that now? Mr. PURVIS. AllOW me to say in regard to that matter that I have nothing to take back. I have made such a statement before meetings of the depositors, both at the South and in the.North. But I am sorry to -say that, with all my honest and favorable opinion of this gentleman, he has no appreciative sense of it. Mr. CRESWELL. If the committee will allow, I would like the reporter to turn to my testimony respecting the pending question to which Mr.Leipold has taken such offense and have it read. In reply to him, it is necessary to justify myself. I want to show that in my .answer to the quPstion asked me, I did him no injustice. Mr. LEIPOLD. I think the purport of my communication was entirely misapprehended by this gentleman. All that I have claimed in the statement has been, I think, admitted by both of these gentlemen. AllI want is the credit of having done' the work, for I did do it, and they have virtually conceded that. Mr. PURVIS. If we had discovered at any time that you were not doing your duty faithfully we would have interposed. The CHAIRMAN. The committee are familiar with your general operations in advancement of the affairs of the Freedman's Bank, but there are some points on which we desired an explanation. MR. CRESWELL'S PREVIOUS STATEMENT AS TO DISTRIBUTION OF THE COMMISSIONERS' LABORS. Mr. Creswell's testimony given January 10, 1880, w as. here read as a further reply to Mr. Leipold's writ:en statement:] • By the CHAIRMAN: • Let me ask, Mr. Creswell, whether you have acted jointly and together in the performance of your duties as commissioners, or whether you have assigned different portions of the work tO different members of your commission ? Mr. CRESWELL. I do not know that there has been any formal assignment of duties to one or the other of the commissioners. Mr. Leipold has had the charge, mainly, of the adjustment of the accounts, of the paying of the dividends, and of the receipt of the moneys, and has given the affairs of the bank more attention in that *ay than either of the other commissioners. We have always supervised the transactions of the bank,and have all been consulted in each part of the proceedings, especially when there was a necessity for the exercise of any discretion. Mr. Purvis and myself have signed the checks for the several dividends, and Mr. Leipold has mainly supervised the payment of these checks,and the adjustment of the pass-books of the depositors. Mr. CRESWELL. Does not that give you fall credit? Mr. LEIPOLD. No, sir. My point is, that in that testimony (see testimony in full on pages 26 and 27, this report) you assumed virtually that you managed the concern, and that I have been in a sort of subordinate position. FREEDMAN'S SAVINGS AND TRUST COMPANY. 89 Mr. CRESWELL. Nothing of the sort. Now,I would like to make a statement in regard to the indorsement of checks, which Mr. Leipold thinks is a small matter. Mr.LEIPOLD. No; I am aware that that involved great physicAl labor. SIGNING THE DIVIDEND CHECKS. Mr. CRESWELL. I signed, myself,,some thirty-four thousand checks for each --of the dividends mage by the bank. These checks were all printed in books, four on a page ;. and I found, by actual experiment, that it required at least four hours of *steady, -uninterrupted Work to sign the checks in one of those books. It was as much work as a man could do in that titne; and I can write pretty rapidly, too, though my name, is a long one. It took four hours to sign the checks in one of those books, and blot them, and turn the pages. I commenced to do that work at the Freedman's Bank; but I soon found that interruptions there would prevent me , from getting through in time; so I had the books, in large packages, sent to my house; and I know that I spent more than four hours each day in signing. I found that I could not do more than that without losing the use of my hand. I do not think that uninterrupted work of that sort—making the same motion of the band Con stantly--can be done for any great length of time with outdanger of bringing on what is called "scrivener's paralysis;" and I sometimes found myself unable the next day to sign any checks at all. I therefore apportioned the work, giving to it four hours of labor each day, in order to get through with it. • MR. IlEIPOLD'S DEFENSE OF HIS ADMINISTRATION. Mr. LEiPoLD. One other matter comes to me just now; and it is something.that I am very sensitive about; that s my integrity; and I have a right to be sensitive about that. I am not SQ much.of an adventurer as Mr. Purvis would lead you to suppose. I have held positionsof trust before. He assumed that he and Mr. Creswell—and that is an assumption entirely new to me, one that has not been made before—were put there to watch me. Now I believe that We have collected a million and a half dollars of money—at least that much actual money—and I have been there in constant attendance at the bank, and have supervised the collection of that money and the depositing of it in the Treasury, and supervised it certainly in &awing it out of the Treasury, the checks being signed in advance in blank, by one of the commissioners, and then left for me to fill up as the disbursements were made. If it was necessary to watch me, I hardly think that both of these commissioners would have absented themselves at the same time,.or would have been willing to sign the checks in blank, for me to use as occasion might require. Mr. Purvis never, before this time, has made any such intimation as to my integrity; and I resent that imputation in the only way that I can resent it, by denying it; because I will not indulge in language simtlar to that which be used; and I ask the committee that they will thoroughly go into that question. If every cent going into that Treasury has not been fully accounted for, I wish to be held responsible for it. Mr. PURVIS. I will answer that by saying that I was there to watch him. I will say that the colored people, the depositors, looked mainly to me, for they had confidence in me, to see that that was properly done; and they used frequently to say to me,"If it were not for you we would not have got a dollar." Of course I have disabused them as to that. I 90 PREEDMAN:S SAVINGS AND TRUST COMPANY. have always said that these gentlemen were honest. My doubt aS to Mr. Leipold's integrity and honesty was not in regard to his handling or dealing out the money; it was want of honesty in regard to truthfulness that I have referred to. As to the matter of the checks in blank, he says this is the first time I have ever expressed any doubts as to his honesty. I have never entertained any; but I will say that, as a matter of precaution, I have invariably noted the amount of the checks that I signed in blank, and I have never signed a great many ahead—not more than fifty or sixty,perhaps. I have had a good many to pay out,especially when we had a great many persons employed there, which were used in payment of salaries. I noted that they were all numbered. I noted the numbers and the amounts, and I made it a part of my duty to come to the bank and go over every check that had been used, to see if had been properly used; because upon the margin there was a memorandum of the amount. The amounts were usually small; and I will say that I watched carefully, in that particular. I will not say how often I had resolved, by the advice of my friends—indeed,one gentleman said to me,"I would not for five thousand dollars be in your position; you know, nothing about Mr. Leipold." I replied to this gentleman, "All that I know of him is, that he has acted very fairly and squarely in that matter. But seeing that he is not responsible, though he professes to be a poor man yet all his bondsmen are of no account." Mr. LEIPOLD.' As you have represented them, Mr.Purvis. You know. that they are of as much account as yours. MD. PURVIS. I want to say this, that they are irresponsible. One of them is a bankrupt; and the other,(addressing Mr. Leipold), you told me yourself, was a poor man, who married a woman from whom he got . some money. For that reason I felt you had no responsibility. Mr. LEIPOLD. I deny I said that. My bond is good. Adjourned to Tuesday, January 20, 1880. COMMITTEE ROOIVI OF THE SENATE SELECT COMMITTEE ON THE FREEDMAN'S SAVING-S AND TRUST COMPANY, Washington, D. C. January 20, 1880. The Senate Select Committee on the Freedman's Savings and Trust Company met this day in the committee room of the Senate Committee on Manufactures, at 10 o'clock a. m. Present, Messrs. B. K. Bruce (chairman), Angus Cameron, A. H. Garland, J. B. Gordon, and R. E. Withers. ACTION TAKEN BY THE COMMISSIONERS ON THE SENECA COMPANY LOAN. Mr. LEIPOLD, commissioner, examined. By Mr. GARLAND: Question. Mr. Leipold, what action, if any, did the commissioners take to collect the Seneca Sandstone loan, and also the Kilbourn & Evans loan on the note of fifty thousand dollars Mr. LEIPOLD. The Seneca Sandstone Company Mr. GARLAND. Yes. Have you taken any steps to collect it; and if so, what were they ? Give them in full. Mr. LEIPOLD. As soon as the matter was brought to our attention, I FREEDMAN'S SAVINGS1 AND TRUST .COMPANY. 91 showed Colonel Totten the original papers, which I have here, with this secret agreement. By Mr. WITHERS: Q. Do you mean Enoch Totten, the lawyer? Mr. LEIPOLD. Yes, sir. I showed Colonel Totten the original papers, and consulted him as to what we ought to do in the matter, and he expressed himself very emphatically that the board of trustees were certainly responsible for that transaction, and especially the members of the finance committee, and that it was our duty as commissioners to prosecute them. Mr. GARLAND. State, while you are going on, Mr. Leipold, about what time it was when the matter was first brought to your attention, if you can recollect it. MR. LEIPOLD FAVORING ACTION TO RECOVER. • Mr. LEIPOLD. Well, I think it was finally . developed some time in 1875—the winter of 1875, I think. This conversation took place sometime in the winter of 1875—'76. After having a consultation with Colonel Totten, I went back to the bank and wrote a note to the other commissioners, which I have here. This is the original note that I wrote (producing the original). I see by the date that there must be some mistake as to the time. This was written in the summer of 1876,in July. (Reading.) OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington, D. C., July 21,1876. To Messrs. CRESWELL and Puny's, Commissioners: It having been shown,through some testimony taken in the suit against A.Langdon, that a number of deposit accounts were paid by the company after its suspension, June 29,1874, especially one of $1,000, to R. W.Tompkins, Colonel Totten suggests that suita should be brought for the recovery of all such moneys. Colonel Totten also expresses it as his opinion that the trustees, and especially the members of the finance committee who approved what is known as the secret agreement in the Seneca stone loan, can be held personally liable for the amount of said loan. Such being the case,it seems-to me some definite action ought to be taken at once looking to a recovery of these moneys thus illegally paid out and invested. • I favor immediate action, and that the whole matter be turned over to Mr. Totten, with instructions to make a careful examination of the law bearing on these cases, and if he should find that the law sustains his opinion he should be directed to proceed at once to the recovery of the several amounts. R. H. T. LEIPOLD, • COMMI881011er. This note is indorsed as follows: This matter had best lie over until it can be presented to all the commissioners, Mr. Purvis being now absent from Washington. JNO. A. J. CRESWELL. July 27, 1876. Also (in pencil memorandum): This paper was on Mr. Purvis's desk until April 15, 1879, and never acted on. R. L. LETTER ADVISING ACTION LAID. OVER. • Mr. LEIPOLD. (Resuming.) I put this communication, as I did every matter of importance involving an exercise of diseretion, on Mr. Purvis's desk. I did that on the 21st of July, 1876. On the 27th of July, , 1876, Mr. Creswell indorsed this paper: "This matter had best lie over until it can be presented to all the commissioners, Mr. Purvis being ab- 92 FREEDMAN'S SAVINGS AND IRUST COMPANY. sent from Washington." This paper then lay on Mr.Purvis's desk from that time until the 15th of April, 1879. By Mr. GORDON: Q. And What was the year when it first laid there l—A. In 1876. No action in writing was ever had on this subject by Commissioner Purvis. The matter was discussed between us as to the propriety of this thing, and Mr. Purvis was inclined to apologize for the board of trustees, both in this case and in a great many other cases, so that no united action -could have been had as against the board of trustees. • In this connection, the Secretary of the Treasury, Mr. Bristow, sent for me to bring over these original papers. I do not know whether this was before or subsequent to this discussion of the matter. I took these papers to him; he looked at them and said, "Is this our Mr. Tuttle?" Mr. Tuttle was then Assistant Treasurer of the United States. I said, "Yes." He seemed to be very much surprised at it, and expressed himself to the effect that he could not have any such man in his department—a man who would sign such an agreement as that. I had known Mr.Tuttle for a number of years and did not believe that Mr. Tuttle would affix his signature to any such paper if he knew the contents of it; and I told Mr. Secretary Bristow so. His reply was, that. no man has a right to put his name to a paper of that kind without knowing what was in it. And the result was that Mr. Tuttle left the department. Mr. Purvis has abused me once or twice in this case because I have made known that thing—he taking the ground that gratitude on my part to this man who had elected me as commissioner ought to make me keep quiet on the subject. I do not know that that was exactly his language, but I know that "gratitude" was the word he made use of, that "common gratitude to these men ought to have prevented me from prosecuting them," or words to that effect. Of course no other action has been taken as against the trustees in that matter. THE ONLY STEP TAKEN IN THE SENECA MATTER. By Mr. WITHERS: Q. No action ?—A. I was about to say that we did proceed to some extent. I presented the coupons of the Seneca Sandstone Cbmpany's bonds that we had in the bank, and had them protested for non-payment, and then instructed the trustees to foreclose the mortgage. A bill was filed on behalf of the Freedman's Bank and other parties, to have the property sold, and the property itself is now in litigation. That was all the action that was taken by the commissioners. I want to say, here, that in some conversation which took place last summer about the violation of the charter by some of the trustees, Mr. Purvis notified me that if I attempted to hold these men up to the ridicule of the community I would find that they would defend themselves; and I replied to him—and I think it was in the presence of Mr. Creswell—that I had no fears on that score; that whatever facts they knew they were welcome to bring.out; I did not care anything about it. By Mr. GARLAND: Q. After you read that letter, you stated,I believe, that you had some consultation with the other commissioners from time to time f—A. Yes. Q. And you agreed upon no definite course of action b—A. No,sir; not as against the trustees. Q. Well, you gave Mr. Totten, or your attorney, no instructions to bring in suit b—A. No, sir. FREEDMAN'S SAVINGS ANT) TRUST COMPANY. 93 Q. To enforce that ?—A. No,sir; nothing was done about it, except what you see there in the memorandum on the back of the letter. Q. Well, how many interviews do you suppose you three commissiontwo or ers had on the subject?—A. I do not think we had more than havnote the that, ll Creswe Mr. of sion impres three. I think it was the Evans. I do ing been given up, we had no action against Kilbourn and whether he to as f himsel sed expres ever ll Creswe not think that Mr. s. trustee t the thought we could recover as agains when you Q. You say that Mr. Purvis was absent in Philadelphia brought was it that it was back came he after 'wrote the note; how long absent iu to his attention ?—A. I do not know,sir. He was frequently a time, and Philadelphia, and gone for weeks and sometimes a month at with a these papers lay before him I put all these papers on his desk the feelof but some doubt no have I that say will I them. on weight occaing that has been exhibited here on the part of Mr. Purvis has been l's attention sioned by my bringing to his attention and to Mr. Creswel of the board the delinquencies, as I took them to be, of several members all these of trustees, and of course your examiners have come across transactions. CA MATTER. WHY NO ACTION WAS TAKEN IN THE SENE By Mr. WITHERS: returned Q. I understood you to say, Mr. Leipold, that Mr. Purvis sir; I do no, 0, ?—A. desk his on paper this laid you the day after the 21st of July, not know.when he returned. I laid it on his desk on . written was it which on day the 1876, addressed to Q. You refer to the letter and the statement you made sir. Mr. Creswell and Purvis?—A. Yes, on which Q. And that letter you laid upon Mr. Purvis's desk the day it was written ?—A. Yes, sir. Yes, sir. Q. And Mr. Creswell saw it on the 27th of July ?—A. was taken action before 1879, April, of 15th the Q. And it lay until than the conupon it?—A. No, sir; no action was taken on it further versation we had. attention of Mr. Q. You do not know .when it was brought to the desk; but his attenhis upon lay it that know only I No; s?—A. Purvi has known of it, for we tion has been called to it, and I am sure he talked it over. brought to his attenQ. All I wanted to know was, whether it was from the time it months two within tion.—A. He must bave seen it desk. his was put on d—for I deny the Mr. PURVIS. Lwould like to ask you, Mr. Leipol it was not agreed rule, whole statement you have made—whether, as a sioners should agree to that in any proceeding, when two of the commis it, that it was a rule? Mr. LEIPOLD. Yes. f had agreed in that Mr. PURVIS. So that Mr. Creswell and yoursel ? matter we did not agree;. Mr. LEIPOLD. No, sir; the statement shows that action. future for that Mr. Creswell reserved the matter I will say here, and Mr. PURVIS. I have no recollection of that; but at any time, I ever way, any in r whethe Nail ask Mr. Creswell to testify any one who has ute prosec hesitated for a single moment to bring up or trust? in held we which damaged the institution Mr. LEIPOLD. I am speaking of the trustees. 04 FREEDMAN'S SAVINGS AND TRUST COMPANY. NO PROCEEDINGS AS AGAINST THE TRUSTEES. Mr. PuRvis. Well, of the trustees. It is true, gentlemen, that I did not know that any of these trustees had committed any breach or violation of the trust that they held. If they did, certainly it was not wittingly. I do not recollect that they did at any time; and certainly Mr. Creswell ought to have been cognizant of it; if I ever showed an .opposing feeling to any proposition that looked to subserving the institution I would ask the question here of Mr. Creswell ? dr. GARLAND. Mr. Creswell can reply after you have finished your statement. Mr. PURVIS. It is very strange that Mr. Leipold should bring up a matter like this of which I have no special recollection, for he knows that none would be more ready than myself to enter heartily into any proposition looking to the interests of the institution. It is utterly astounding to me; but I am not surprised at any charge that he has made. I would put it to Mr. Creswell whether • he ever knew, at any time, that I protested against any measure looking towards the best performance of the trust we were holding. Mr. LEIPOLD. I limited my speech entirely to the matter of the trustees. Mr. GARLAND. The purpose was, Mr. Purvis, to have you make any statement you might wish to make in response to this question put to •Mr. Leipold: "What action, if any, did the commissioners take to collect the Seneca Sandstone Company's loan and Messrs. Kilbourn and Evans's loan on the note for fifty thousand 'dollars?" You have heard Mr. Leipold make his statement; now make yours, if you have any recollection of the matter at all. Mr.PURVIS. All I can recollect is that I was the only one—when I was entering upon my duties as commissioner,I desired to know the history and facts in connection with the Seneca Sandstone Company, and I sought the president of that company, Mr. Alvord,and desired to know if this was a bona fide institution, one in which the capital stock had been paid up or not, and demanded of him, or requested of him rather, a list of the stockholders. He brought it to me, and I then desired to know how much they had paid upon their individual shares. He could not recollect until it came to himself, and then I put the question to him directly, and he admitted that he had paid nothing. I soon saw that this was a bogus affair; that it was intended to get a loan from the bank, and that the whole thing was a fraud. And I am sure that I should be the last man, as I directed all my efforts in that way, to have hesitated for a single moment to develop all the facts connected with it. It is not possible that I should have raised any objection in the matter. It is not true. Nobody would believe it of me. By Mr. WITHERS: Q. The point is this: Whether any action was taken to collect this money ?—A. The point is whether by my not taking action that action was not taken. By Mr. GORDON: Q. No; that is not the question at all, addressed to you by the com.mittee. The point is to get your statement distinctly as to what action, if any, this commission took to collect that loan ?—A. I will say, none .that'J know of;'I do not know of any. Mr. GARLAND. Mr. Creswell, will you answer this question: What F..ZEEDMANIS SAVINGS AND TRUST COMPANY. 95 action, if any, did this commission take to collect the Seneca Sandstone loan and Kilbourn & Evans' loan on the note of $50,000! Mr. CRESWELL. This letter, the committee will observe, is dated July 21, 1876, nearly two years after we had taken charge of the assets. We had frequent conversations about this very matter before that. Mr. WITHERS. By "we," do you mean all the commissioners! COMMISSIONER CRESWELL'S OPINION ON AGAINST THE TRUSTEES. ACTION AS Mr. CRESWELL. Some of the commissioners; more than one of the could be commissionerS being present. . We had doubted whether there doubts -any recovery as against these trustees. I myself had very grave three about it. We were involved in a great many lawsuits, some hundred, I think, and the question was as to the:best mode of proceedor closed, had tee s commit Dougla the by ation examin the After ing. up between about that time, some unpleasant feeling was stirred this letter, I some of the trustees and Mr. Leipold. When I first saw be controlled thought now we must be guarded in the steps we take and . Therefore, by sound judgment rather than by any personal feeling back of it, the upon d indorse I me, to ted submit was letter the when the comall to ed present be can it until over "This matter had best lie My object missioners, Mr. Purvis being now absent from Washington." the case, to in this was to inquire carefully into the exact attitude of s; and trustee the against see whether it was proper for us to proceed proted had institu We y. harmon in act should we that was /0y desire the recover to a view' with nd, Maryla , ceedings in Montgomery County y. We em , securities—the bonds of this. Seneca Sandstone Compan man very ployed Messrs. Bradley and his assistant—I know the gentle to Montwell,but his name has escaped me—his partner. They proceeded I cannot gomery County and instituted proceedings there in the court. at this moment recall the gentleman's name. Mr. LEIPOLD. Was it not Duval? in chancery Mr. CRESWELL. Yes; that is the name—Duval. A bill bonds. these for ty 'proper the was filed there to enforce the claim upon . PREFERRED CREDITORS OF THE SENECA BONDS By Mr. WITHERS: ng to certain Q. What bonds are you referring to ?—A. I am referri the Freedby bonds of the Seneca Sandstone Company that were heldfrom memory. man's Bank,I think, as collateral for this note. I speak By Mr. GORDON: They were Q. These bonds you found when you came into office ?—A. in. came we when bank the of custody the in By Mr. GARLAND: er. That Q. As collateral for this note ?—A. Yes, as I now rememb but cerbonds, these to right resulted in. a decree which asserted our was realtain other creditors were declared to be preferred, and nothing d for the realize was nothing that fact, in , ized on our bonds. I believe effected. At preferred creditors, and I am not sure when the sale was we held bonds the that fact the proved there any rate the proceedings y by formall up called again were worthless. This matter was never indorse this when know not do I Purvis. Mr. or either Mr. Leipold Purvis. Mr. ment in pencil was put on by 96 FREEDMAN'S SAVINGS AND TRUST COMPANY, Mr. LEIPOLD. By whom? Mr. CRESWELL. By Mr. Purvis. Mr. LEIPOLD. There is no indorsement there by Mr. Purvis. Mr. CRESWELL. I beg pardon; it is your own indorsement; it is your writing: "This paper was on Mr. Purvis's desk until April 15, 1879, and never acted on. R. L." It being indistinctly traced in pencil,J thought it was Mr. PurVis's. However, there was no action taken as against the trustees. My own impression then was, and is now,that it would have been a profitless litigation for the bank to enter upon; that it would have subjected us to a great deal of expense in the way of counsel fees, and ultimately we would have derived no benefit, from it. That is the impression that I had, and under which I asked for the delay, in order to consider the matter carefully, and it is still my impression. By Mr. GARLAND: Q. Did you have that direct question examined by your legal adviser? No, sir; I think. not. Q. Was the question considered by the finance committee ? It refers to the finance committee, and they indorsed Yes., sir; it was indorsed by them.. Q. And it was your opinion that you could not hold them responsible ?—A. It was at that time, though it might have been modified by some further examination; but, as the case was then presented, that was my opinion. COMMISSIONERS NOT AGREED AS TO TAKING ACTION AGAINST THE TRUSTEES. By Mr. WITHERS: • Q. And the commissioners never came to any definite conclusion or took subsequent action upon it ?— A. No, sir; it was never called up for final action. Mr. Leipold and myself talked about it a number of times. Q. You and Mr. Leipold did not agree in your opinion on that Point; are you able to state whether Mr. Purvis had any conversation on the subject ?—A. Yes, sir; but I never saw in him any disposition to protect these trustees from any alleged abuses of their trust. Q. But I wish to know whether Mr. Purvis coincided with you and. Mr. Leipold as to taking action on these bonds ?—A. No, sir. Q. Mr. Purvis did not?—A. No, sir. Q. These bonds that you attempted to recover from the Seneca Sandstone Company, are they those mentioned in the special agreement as being deposited as collaterals for the security of that loan ?—A. My recollection now is that there were first-mortgage bonds deposited in the first place, and that these were withdrawn and second-mortgage bonds substituted for them. Q. There is a list of bonds mentioned in that agreement between the finance committee and the company, which were deposited as Collaterals for the security of this loan, and all of them were to be returned to the company except the one for $75,000; and these bonds are the ones that the committee subsequently attempted to recover ?—A. If you will allow me, I will read the agreement. (Reading): ANY. T FREEDMAN'S SAVINGS AND TRUS COMP 97 RN & EVANS. THE "AGREEMENT" WITH KILBOU PRINCIPAL OFFICE OF THE FREEDMAN'S SAVINGS -AND TRUST COMPANY,1871. Washington, December 30, day made a loan to John 0. this has ny Compa The Freedman's Saving and Trust the following-described seupon s, dollar and thous Evans and Hallet Kilbourn of fifty note: surities as collaterals to their American Dredging Co., Philadelphia; Two thousand four hundred dollars, stock ngton,D.C.; $75,000 M.F. M.& M. Co., Washi stock, Co. nce $2,000 Metropolitan Insura Md.; $7,500 Metropolitan Paving Co. stock, 45 per cent. gold bonds. Montgomery Co.,Market-House, Washington, D. C. ngton Washi 0 $50,00 Washington, D. C.; with ten per cent. interest; and in case Said note is payable six months after date, be paid as it becomes due, then it is fully not shall note rn's Kilbou & said Evans Trust Co. shall keep the seventy-five thouagreed that the Freedniap's Savings andM.& M. Co. as full payment of said note and F. M. the of bonds 00) ($75,0 s dollar sand Kilbourn the other securities above enumerinterest, and surrender to said Evans & of the M. F. M.& M. Co.), together with their ated (save and except the $75,000 bonds note. D. L. EATON, Actuary. the following indorsements; On the back of this agreement appear first this: 0. Evans. Agreement with Hallet Kilbourn and Jno. Approved. L. CLEPHANE, WM. S. HUNTINGTON, L. TUTTLE, Finance Committee. Also this receipt: of the actuary of the F. S. Sz. T. Co.,the Received, Washington, D. C., Nov. 15, 1873, mthe $75,000 bonds of the M. F. M. 4. M. of on excepti the with oned within-menti $50,000 is to be returned to us on or before for note our that g ties, tandin securi unders the Co., with the 18th instant. HALLET KILBOURN. JOHN 0. EVANS. Received note as agreed upon. JOHN 0. EVANS. rs that other collaterals Mr. CRESWELL (replying). Yes, sir; it appea pt indorsed on the back recei The ment. agree this under ited were depos the exception of the $75,000 is for "the within mentioned securities, with Manufacturing Company." and ng bonds of the Maryland Freestone Mini whether proceedings should be to as had was ssion Then further discu s on their note. It appears by taken against Hallet Kilbourn and Evan had been returned to them. this receipt on the back that their note By Mr. GARLAND: Leipold addressed to you Q. Now, Mr. Creswell, in the letter of Mr.Mr. Totten. Did you ever of on opini and Mr. Purvis, he speaks of the r I—A. I do not remember sconverse with Mr. Totten about this matte that I did; perhaps I did. opinion that the trustees were, Q. He speaks of Mr. Totten being of ttee that participated in this commi ce finan the liable, and -particularly conferred with Mr. Totten, you if approval. What is your recollection, I have no recollection of conA. it?— to ence refer in as to his opinion I may have done it, however. versing with Mr. Totten on that subject;on is deferred until I shall_ get Mr. PURVIS. You say that your opini do not recollect, or do you recolback to Washington. I suppose youperha ps have been brought to your lect (as it is a matter that would not FB 98 FREEDMAN'S SAVINGS AND TRUST COMPANY. attention), that I ever had an opposing feeling about that or any other matter that was for the interest of the bank? Mr. CRESWELL. 0, no, Mr. Purvis, I never supposed that you had any feelings that would induce you to shield anybody, who had improper connections with the bank. Mr. PURVIS. Mr. Leipold, when did you write that note upon the back of this letter—on what date—(reading),"This paper was on Mr.Purvis's desk until April 15, 1879, and never acted on. R. L." When did you write that? By Mr. WITHERS: Q. That indorsement you put there, did you not, Mr. Leipold ? Mr. LEIPOLD. Yes, sir. Mr. PURVIS. Well, it was put there three years after. Do you mean to convey the impression that I declined to act upon it? Mr. LEIPOLD. I mean to say that the matter was discussed betweep us and that you -took the ground that these men ought not to be prosecuted; that you did not think they were guilty of any improper act. Mr. PURVIS. You say I took that ground? Mr. LEIPOLD. I do most emphatically say it. Mr. PURVIS (to Mr. Creswell). Mr. Creswell, do you recollect any such occasion ? Mr. CRESWELL (to Mr. Purvis). I was not listening at the moment; excuse me; will you please repeat the question? Mr.LEIPOLD (resuming, to Mr. Purvis). I say, Mr. Purvis, that the matter was discussed between us, several times, and that you. took the ground that you did not believe that these gentlemen had done anything improper, and we ought not to press the matter against them. Mr. PURVIS (to Mr. Creswell). Do you remember that I took any such ground as that? THE TRUSTEES NOT LIABLE TO ACTION IN THE SENECA LOAN. Mr. CRESWELL. I do not remember. The committee will observe that the finance committee had approved this transaction it is signed by L. Clephane, William S. Huntington„ and L. Tuttle. My opinion was that to recover against them, we would be obliged to show in court that they had proceeded corruptly. I knew Mr. Tuttle by reputation; I had heard his statement about the transaction, and I did not believe that we could succeed in fastening upon him any such imputation. Huntington was dead,and Mr. Clephane I believe I did not know; I do not believe that I had ever met him more than casually; and that was the reason why I hesitated in authorizing that proceeding. Of course we could not reach Mr. Huntington, he being dead, nor could we reach the others except by showing improper and corrupt motives. Mr. LEIPOLD. The points in the case, are somewhat different from those stated by Mr. Creswell. I addressed a letter directing the trustee named in the mortgage to proceed to sell the property under the mortgage-covering the bonds. By Mr. GARLAND: Q. A letter to whom? Mr. LEIPOLD. A letter to Joseph T. Brown, who was trustee in the mortgage securinc,these bonds. And this Joseph T. Brown about the same time received b another communication, from an opposing interest, • FREEDMAN'S SAVINGS AND TRUST COMPANY. 99 requiring him to proceed to the sale of the property under the firstmortgage bond; and although our letter reached him first, he nevertheless . proceeded under the first-mortgage bond, and it was subsequent to that that we were brought into the courts about it; Adjourned to Thursday, January 22, 1880. COMMITTEE Room OF THE SENATE SELECT COMMITTEE ON THE FREEDMAN'S SAVINGS AND TRUST COMPANY, WASHINGTON, D. C., January 22, 1880. The Select Committee of the Senate on the Freedman's Savings and Trust Company met this day,in the committee room of the Senate Committee on Manufactures, at ten o'clock, a. m. Present, Messrs. B. K. Bruce (Chairman) and A. H. Garland. TESTIMONY OF HENRY D. COOKE. HENRY D. CooKE recalled. By the CHAIRMAN: Question. Let me ask you, Mr. Cooke, what relation, if any, you sustained to the Young Men's Christian Association of this city, in April, 1871 f—Answer. I was a member of the association, and I think I was , a 'member of some of its committees—which of the committees I could not state. Q. Were you an officer in the association —A. No, sir; I think not. Q. Were you a stockholder f—A. I held stock at one time, but I gave my stock to the association; I could not say whether that was before 1871 or afterward. Q. Can you say when you became a member of the association ?—A. No, sir. Q. Nor when your membership terminated f—A. I do not think it terminated at all. Q. You are still a member, then ?--A. I think so; although not an active member; because lam away a great deal of the time. Q. You say you are not now a stockholder ?—A. I am not an active member; I have not been for years. Q. You cannot say how long you were a stockholder?—A. No, sir; because I gave my stock to the association; I do not remember when it was, it has been so long ago. Q. You do not know whether it was since 1874, or before that time ?— A. "cannot say. Q. I refer to the stock.—A. I think it was before the year 1874, but I cannot be positive. LOAN TO TEIn YOUNG MEN'S CHRISTIAN ASSOCIATION. Q. Well, did you ever, while sustaining these relations—the relations you have mentioned, to the Young Men's Christian Association, being also a member of the finance committee of the Freedman's Bank—negotiate a loan from the Freedman's Bank for the Young Men's Christian Association ?—A. Not that I remember; if I did,I have no recollection of it. Q. Well, were you a member of the finance committee from 1867 to 1872—a period of six years ?—A. I cannot be positive as to the actual 100 FREEDMAN'S SAVINGS AND TRUST COMPANY. dates. I do not remember when I became connected - with the Freedman's Bank. Q. But that was, if I mistake not, one of the points submitted to you in your interrogation the other day, upon which you asked further time for consideration with a view of refreshing your memory; was it not ? think not. —A. No, sir; I' By Mr. GARLAND: Q. You might answer that, Mr. Cooke, by saying about what time you became a. member of the Young Men's Christian Association, and about whattime you ceased to be a member of the finance committee of the bank.—A. You see, going back ten or fifteen years, I cannot fix the dates precisely. Q. I understand;. but you can approximate to it, can you not; say within five or six, or seven years, whatever it is?—A. Well, I can say that I was a member,I think about five or six years. t4. About five or six years, you think?—A. Yes, sir, I think so; and my connection terminated in January, 1872,or perhaps some time during 1871. LOANS TO THE SENECA SANDSTONE COMPANY. By the CHAIRMAN: Q. Mr. Cooke, what relation or connection did you have with the Sen. tea Sandstone Company in 1870 and 1871?—A. I was a stockholder and one of the directors of that company. Q. Please state all you know of the loans made by the bank to the Seneca Sandstone Company, in May, 1870, in July, 1870, and in July, 1871; inform us as to who negotiated the loans for the Seneca Sandstone Company, upon what security they were made, and who were the finance committee thatapproved the loans on those securities.—A. Do .you mean the loans made at those specified dates? Q. The loans were made at those dates.—A. I have no positive recollection about those loans. Q. You have no recollection of the other loans I have referred to ?— A. No, sir. By Mr. GARLAND: Q. They appear to have been made when you were a member of the finance committee, in 1870 and 1871.—A. Yes, sir; I was a member of the finance committee at that time, but I do not recollect.; it was one Tmatter of business detail amongst hundreds of others that engaged my attention at that time. Q. Well, that was a little more prominent than some of the matters of business detail amongst hundreds of others, was it not? Was it not larger and more important than most of the other matters that came before you?—A. No,sir; not larger nor more important than business matters that I was attending to daily. Q. But was there not a good deal more negotiation about that, in fixing it up I had nothing to do with it; I have no recollection of it. Q. You do not remember whether the finance committee passed upon it all?—A. No,sir; at least I have no recollection now of it; it may have been so, but I have no distinct recollection of it. Q. Well, when we adjourned the other day, you remember, you were requested to refresh your memory upon some points on which we had FREEDMAN'S SAVINGS AND TRUST COMPANY. 101. been questioning you; have you made any examination with reference. to these f—A. No, sir; I supposed I was to be examined as to certain. specific points, in which these matters were not included at all. Q. You do not know, then, who approved the various propositions. made by this Seneca Sandstone Company ?—A. My impression always. has been, and my recollection also, that this was done by the balance. of the members of the committee, .particularly, perhaps, Mr. Huntington. Q. Did not you and Mr. Huntington approve a great many loans, and make a great many negotiations by yourselves, without reference to the• finance committee ?—A. I do not think we ever approved a loan without the consent of the committee. . Q. There was a requirement that three should constitute a quorum of the committee, was there not f—A. I think we got that, in all cases. Q. And 3 øu do not think that you and Mr. Huntington alone acted for the committee f—A. No, sir. Q. What business relations did Huntington bear toward you, outsideof this 1—A. He was cashier of the First National Bank, of which I_ was president. Q. You were president and he was cashier ?—A. Yes, sir; of the First National Bank of the District. YOUNG MEN'S CHRISTIAN ASSOCIATION -LOAN. Q. It appears in the books, somewh4re, Mr. Cooke, that a loan was negotiated by yoursself and General Howard, as officers of the Young Men's Christian Association; do you recollect the history of that?—A. No, sir. Q. Do you recollect approving that loan, as one of the finance committee 1—A. No, sir. I do not know what the loan was. Q. You have no recollection, then, of the matter, so as to give us any information'in regard to it f—A. No, sir; I can say generally, in regard to those things that happened at that time—so many years ago—that I would not be able to trust my memory so far as to state, specifically, anything about them. Q. Well, I will ask you this question: Were you directly interested in that loan ?—A. I do not know What the loan was. Q. The loan appears to have been from the Freedman's Bank to the Young Men's Christian Association. It seems that it was made through the efforts of General Howard and yourself; that is, that is the impression; I do not know whether it is so or not; and I want to find out whether that is true. You say that you do not recollect now whether you had any agency in it at all f—A. No, sir; I do not recollect, at this time, making any loan whatever. Q. Do you recollect whether General Howard ever made such a loan ? —A. No, sir; I do not recollect about it—not anything about it at all. The CHAIRMAN. I have sent for the minutes of the finance committee. We shall then inquire further of you, Mr. Cooke, as to matters touching this Seneca Sandstone loan. Mr. COOKE. I Want to say here, gentlemen, that I have not the slightest objection, and could not have possibly, to stating anything that I remember about these Matters that are the subject of your interrogatories. If I could do so, I would with pleasure; but I was at that time doing the work of two or three men, ordinarily. I was president of the bank and acting as a member of the firm of Jay Cooke & Co., when we were pushing the government loans, and had all that enormous work on .102 FREEDMAN'S SAVINGS AND TRUST COMPANY. hand; and this was entirely an outside and subsidiary•thing, that.I was in voluntarily, simply from a sincere desire to do good. These matters were all incidental to my regular'business. THE SENECA SANDSTONE COMPANY LOAN. By the CHAIRMAN: Q. Have you any knowledge, Mr. Cooke, of the purchase by the bank of twenty thousand dollars first-mortgage bonds of tha Seneca Sandstone Company and the agreement of the Seneca Sandstone Company to repurchase them within two years ;- and have you, any knowledge of the repurchase by the Seneca Sandstone Company, through Dr. Kidwell, of the twenty thousand dollars first-mortgage bonds f—A. No, sir. Q. Have you any knowledge whatever of that transaction I have no knowledge of it except that I am reminded of it by this question and this.discussion. Q. Do you know whether the Freedman's Bank received the 'benefit of the money—$20,580—purporting to have been paid by Kidwell, through Actuary Eaton, for these bonds in January, 1872?—A.I suppose the books will show whether or not' the bank received the money. Q. Well, I wanted to get your knowledge of the transaction . o; I never had any connection with the transaction; that is, I do not remember now Of having had any. By Mr. GARLAND: Q. In the examination before the Douglas comaiittee, as it is called, Mr.,Kidwell spoke of this Seneca Sandstone Company loan, and said, "It was made without my knowledge through Cooke and Huntington, who were the financial agents of the company." This has reference to the Seneca Sandstone Company; it seems that Mr. Kidwell, in his testimony, puts you and Huntington down as agents of that company.— A. We were not agents of the company any more than he'was or than any other member of the board of directors. I did the company a great many favors afterward.. I helped them and loaned them money. They owe us now some twenty or thirty thousand dollars. Q. Then you did not effect that loan; the loan to the company was not effected through your—A. No, sir; I had nothing to do with it. Mr. Kidwell is no doubt sincere in his impression, but he is mistaken in that matter. Q. Well, do you recollect who were the -agents of the company in making that loan f—A. My impression is that the financial, matters were all carried on by Mr. Hayden—Mr. C. W. Hayden—who was the manager of the company. Q. Well, have you any explanation as to why Kidwell was impressed with the idea that you and Huntington were agents of the company ? He states here, in his testimony— - . WITNESS. (Interrupting.) Well, I have given the reason for it, Mr. Garland. I was always ready to help the company when appealed to, and I did so frequently. By Mr. GARLAND: , Q. You do not know of any othetreason, then; why he should have reached the conclusion that you were their agent in making that loan ?— A. No, sir. Q. Nothing more than that you had done the company favors from time to time?—A. Nothing more. My impression is that that was done FREEDMAN'S SAVINGS AND TRUST COMPANY: 103 in the regular course of business by Mr. Hayden, who was the superintendent of the company. Q. Do you know whether Kidwell himself sustained any relati9n to the Seneca Sandstone Company ?—A. 0, yes; Mr. Kidwell was one of the stockholders. Q. Did he have any other relation to the company f—A. He was also a member of the board of directors, and took an active part in managing and advising. Q. He says, however, that the loan was made without his knowledge. —A. WelJ, that, would only confirm my theory, that it was done by Mr. Hayden. It was probably one of the matters that came right along in the regular course of business. THE R. P. DODGE LOAN. Q. Do you know anything of the loan to R. P. Dodge of January 24 1870? It you do, Mr. Cooke, tell us all you know about it; how it was I do.not know anything about that loan. arranged, Q. You do not ?—A. No, sir. Q. Can you call to mind any loan having been made,by the officers of the bank without the approval of the finance committee—A. As I .stated the other day, a great many of these loans were made by the actuary, Colonel Eaton, in the regular course of business, which were reported at the monthly meetings of the board. In these cases it was not considered necessary that the finance committee should act before the loans were consummated; although they were reported, I do not remember now, really, whether it was to the finance committee or to the meeting of the board, at which, you know, the finance committee were present. Q. Do I understand you that in any instance money was actually given out on loans before the approval of the finance committee or board of trustees was first had ? —A._ In our current business, yes, sir; all investments of importance were considered, and approved or advised against, by the finance committee. Q. But were they actually consummated and the money passed to the ,credit of or handed to the parties making loans, without the approval ,of the board, or of the finance committee f—A. I think not; not the large loans or loans of importance; current business, of course, could not be done in any other way;, you could not do any current business, if you had to call a meeting of the financial committee every time to pass upon them. - Q. You would answer, then, that there were no large or important loans consummated without the approval of the board, or of the committee; but that in matters of current business, loans were done in that 'way; is that your response to this question I—A. Yes, sir. THE VANDENBURGH LOANS. Q. Do you recollect anything,Mr.Cooke, as to the Vandenburgh loans, made in June, August, and September, 1871 f—A. No, sir; I do not. Q. They were not effected through you at all ?—A. No, sir; they were not. Q. You had no agency in or connection with them ?—A. They may possibly have been reported to the board, of which I was a member. Q. Were you a member of the board of trustees at that time ?—A. I 104 FREEDMAN'S SAVINGS AND TRUST COMPANY. do not recollect, positively, whether I was or not; I cannot say, certainly. Q. Would they not have been reported to the board f—A. I suppose that they would have been ; they certainly would have been if they, were of large amounts, or if there was any peculiar feature in the transaction involving a greater than usual length of time, or involving the character of the securities on which they were to be made. • Q. Do you recollect the character of the securities offered or given for this loan, or any of them f—A. No, sir; I have no recollection of it Whatever. Q. Do you recollect whether you signed any of them as an individual, or trustee, or agent of any company or companies that you were a member of—A. No, sir; well, I may have signed them without knowing what Mr. Vandenburgh was going to do with them—where he was. going to negotiate them; I may have done that, but I do not knoW ; I do not remember anything about it; I can give no information whatever concerning these loans, Q. Did you sign any of these securities as a member of the board of public works ?—A. I may have done so; very possibly I did, sir. Q. What is your recollection about it, Mr. Cooke?—A. I have no recollection about it at all, because we had hundreds and thousands of these transactions, I might say. I signed them in piles every day. almost. We had hundreds of contractors at work here; and some of these may have been Vandenburgh's, for all I know. There is nothing connected with it that can fix my recollection upon that point specifically or positively. Q. Mr. Joseph J. Stewart testified before the Douglas committee. When the question was put to him,"Who constituted the board of public works of the District at the time these certificates were issued and the loans were obtained on them?"(referring to the Vandenburgh loans,)he replied, "I can only answer that on public information. I remember that the names which were signed to such certificates were Alexander R. Shepherd, Henry D. Cooke, S. P. Brown, and a Mr. Magruder.”—A. Well, I could not deny that, or affirm that, because I have not seen the certificates; but I think it very probable that he is right. We signed them officially, in our capacity as a board, together with hundreds of other contractors' certificates. We certified What was due on their work from time to time. By Mr. WITHERS: ,Q. Mr. Vandenburgh Was a large contractor at that time, was henot 1—A. Yes, sir; he was continually sending in estimates of work done, and then our officers computed the amount due on the work done, issuing certificates for these amounts. Q. That is, certificates were issued to the contractors for these amounts due them f—A. Yes, sir; audit would be impossible for me or any one else to keep these things specifically in mind. I could not be expected ta remember each certificate, and the circumstances attending the issuing of it. THE LOAN TO J. J. STEWART. By Mr. GARLAND: Q. Do you recollect whether Mr. Stewart protested at that time against— The WITNESS (interrupting). No, sir; I do not even know who Mr. Stewart is. NY. FREEDMAN'S SAVINGS AND TRUST CONPA 105. Mr. Stewart, or Q. You have no recollection whatever of the loan toNo, sir; I do not f—A. it with ted connec s stance circum the of of any all. at that recollect anything about LOAN TO WILLIAM S. HUNTINGTON. ngton, on May 15, Q. There seems to be a loan to William S. Hunti If so, tell us that? of edge knowl any 1871: Mr. Cooke, have you to ask on that ary necess be not will it that so it, about know all you point again.—A. I know nothing at all about it. you were a memQ. If that loan was made at this time, it was while 15,1871, and you May was It not? it was tee, commit e ber of the financ uary,1872f—A. Yes, say that you did not go out until some time in.Jan sir. ng institution Q. Mr. Huntington was also connected with your banki ent of the presid was I and r at that time f—A. Yes, sir; he was cashie Bank. al First Nation may have been Q. Well, what do you know about the loan f—A. It away from the I was While made was it that le possib quite is it made; e. city. I was frequently absent. I had been in Europ Yes, sir; the Q. This was the same Mr. Huntington, was it f—A. ction that transa every of ant cogniz be not could I same; but of course he made. were members of Q. What I want to get at is, you and Huntington ngton was an Hunti and Bank, man's Freed the the finance committee of sir. Yes, f—A. ent presid officer of the bank of which you were THE LOANS TO BALLET KILBOURN. rn, and the Q. Can you tell what loans were made to Ballet Kilbou In fact, give us. securities that were given, and who approved them? not know what do your general knowledge of the whole* matter.—A. I the securities loans were made to Hallet Kilbourn, and I do not know them. on given that were to Kilbourn?— Q. Have you any recollection whatever about any loans A. I have not. offered f—A. No, Q. And know nothing of the securities that were in that case. I ties securi or loans sir; I know nothing about either the ction. transa the of er whatev g know nothin January, 1872—a. Q. That covers the period from October, 1870, to of the board of r period during which, as you say, you were a membe the board, but for trustees of the bank f—A. I was still a member of active interest the last six or eight months had taken but very little in it. LOANS TO GEORGE W. BALLOCH. W. Balloch f—A. Q. What do you know of the loans made to George Nothing at all. ties offered, Q. Have you any recollection of the date, amount, securi ed my tender had I sir No, f—A. that to regard in else or anything . before year a nearly bank, the of y actuar resignation to Mr. Eaton,the By Mr. WITHERS: the time. It Q. had been accepted f—A. It was not accepted at a member of as time any at act time that to Q. Did you subsequently 106 'FREEDMAN'S SAVINGS AND TRUST COMPANY. the finance board ?—A. I can say this, gentlemen, that I had comparatively little to do with it. The finance committee was composed of respectable gentlemen in whom I had entire confidence, and I suspended my resignation by withdrawing it, at Mr. Eaton's request and earnest solicitation. He said that ifI withdrew my name it would do the concern harm and really I was only nominally connected with the board for six or eight months before I absolutely made my resignation.a finality. That is why I have to reply as I do to this question, and as I do to a great many of your questions as to what occurred. I know that many loans and other financial transactions were carried out by the board without my personal and active participation. LOANS TO R. I. FLEMING. By Mr. GARLAND: Q. What do you recollect, if anything, about the loans made to R. L Fleming?—A. I do not know anything about them, whether they were for ten thousand dollars or five thousand dollars, or whether there was any loan at all. I do not know anything abOut it. Q. Well, it appears that loans were made in March, 1870, and along to January, 1872, at different periods. You say that you have no information or knowledge concerning them ?—A. I have none whatever. Q. It seems that they amounted in all to some $227,896.00; perhaps the fact that they were for such a large sum will bring the matter to your recollection. Would not the loaning of so large a sum have impressed you with the fact and circumstances connected with it ?—A. have no recollection whatever of those loans, or any of them. LOANS TO GENERAL 0. 0. HOWARD. Q. Do you recollect, Mr. Cooke, anything concerning the loans to General 0.0. Howard by the Freedman's Savings and Trust Company? If you do, please give a statement of them, how they were effected through the bank, what 'securities were given, the character of them, and all that.—A. I recollect that General 0.0. Howard had some transactions with the bank in the form of loans, but I could not at this distance of time give any particulars. I do not know the amount; I do not know what the securities were. I suppose, however, that the securities were considered sufficient at the time. I have just that general recollection, and no more. Q. You do not remember, then, whether the security was entirely personal or not ?=—A. My impression is—though I could not state it as an absolute fact—my impression is that it was loaned on real estate out here—the Howard University; but I may be mistaken about that. I have an indistinct impression also that it was on property opposite the river here, at Greensboro'. Mr. WITHERS. Giesboro', Maryland, you probably mean, Mr. Cooke? Mr. LEIPOLD. "The Barry Farm." Mr. COOKE. I do not remember the name of it, but it was property on the other side of the river, opposite the navy-yard here. Q. Who approved the securities on which the loan was made? Do you remember whether you did or not, as one of the committee ?—A. I do not recollect it, but I think it very probable, because I thought it a good loan at the time. Q. Who else with you approved it, Mr. Cooke?—A. That I cannot tell. FREEDMAN'S SAVINGS AND TRUST COMPANY. 107 I Mr. PURVIS. With your permission, Mr. Chairman, would like to are through you before , matter this g on bearin here, ask a question whether you with Governor Cooke. I should like to know, governor, was made to the did not resign as trustee of the bank after the loan Seneca Sandstone Company made to the Mr. COOKE. I do not know, now, when this loan was ny. Compa Seneca Sandstone That will answer Mr. PURVIS. Well, in what year did you resign my purpose. was acMr. COOKE. I resigned nearly a year before my resignation . a finality made and cepted Mr. PURVIS. When was it accepted, in what year ? Mr. COOKE. Early in January. Mr. PURVIS. January of 1872 Mr. COOKE. I believe so, sir. uting the Mr. PURVIS. And with you the rest of the trustees constit finance committee? d. Mr. COOKE. I do not know that they. resigned. I csigne TESTIMONY OF LEWIS CLEPHANE. WASHINGTON, D. C., January 22, 1880. Mr. LEWIS CLEPHANE recalled: By the CHAIRMAN: r of the finance Question. When did your connection as officer or membe it cease l— when did and begin Bank an's Freedm the of tee commit tee sometime in Answer. I think I was elected a member of the commit 1872. March, in 1869, and my resignation was accepted bank I—A. Yes, Q. Have you read the charter and by-laws of the sir. requirements of the Q. Then I suppose. you are familiar with all the ed and the power accept be to ies securit of class law in reference to the of the finance committee ?—A. Yes, sir. . THE SENECA SANDSTONE COMPANY LOANS by the bank to the Q. Please state what you know of the loans made and July, 1871. 1870, July, Seneca Sandstone Company in May, 1870, you can.— ation inform the all give to you ask will I On that point of these any rning .conce aion e inthrm A, Well, I really had no positiv the purchase of the was think I which one, first the ly probab loans except , or really, the purfirst-mortgage bonds of twenty thousand dollars not know about do I that chase of eighteen thousand dollars. After ny. Compa Stone Seneca the the transactions of that time, were Q. You were a member of the finance committee at I went in I was time the From was. I think I sir Yes, A. you notl— a member of the finance committee. By Mr. WITHERS: to this comQ. You know nothing of any loan subsequently granted based I—A. was it which upon ies securit the of ter pany, or the charac ings about No,sir; nothing at that time; of course I have learned someth it since. 108 FREEDMAN'S SAVING'S AND TRUST COMPANY. Q. You say yOu remember the purchase by the bank of twenty thousand dollars first-mortgage bonds ?—A. I remember that first transaction. Q. Will you state your knowledge of that transaction ?—A. I do not know that I have any recollection of the details of that transaction. Q. Do you remember the agreement of the Seneca Sandstone Company to repurchase these two notes; and have you any knowledge of the purchase by the Seneea, Company, through Pr. Kidwell, of twenty thousand dollars first-mortgage bonds ?=—A. I have no knowledge of that at all. As I stated the - other day, I -very seldom attended the meetings of the finance committee. In 1870 and 1871 I was receiver • for a railroad, which took me to different parts of the city, and I could not attend. Q. I believe I asked you the other day to give the committee- your knowledge of an agreement under. date December 30, 1871, did I not, relative to transfer of the loan in the name of the ,Seneca Sandstone Companyf—A. Yes,sir; I stated what I knew of it at that time. - Q. Do you remember now, or have you made an examination since your attention was called to it at the last meeting f—A. In what respect? Q. You then,if I remember,said that you did not recollect, or words to that effect, because so long a time had elapsed since f—A. I simply stated that Mr. Eaton brought me a paper to sign. Q. That is all you remember f—A. And that it was for the purpose of getting additional security to that loan; and, without reading the paper particularly, I took his word for.it, and approved it as additional security for the loan. Q. Do you remember whether Mr. Kidwell or any other person • pro• posed to you to protect the bank by substituting in lieu of the twenty thousand dollars first-mortgage bonds, other and better securities for fifty thousand dollars ?—A. I never had any conversation with Mr. Kidwell or any other person on the subject. THE LOAN TO R. P. DODGE. Q. Will you,tell the committee all you know of the loan to Dodge— R. P. Dodge—January 21, 1870, of *13,786.50 f—A. I have DO knowledge whatever of that loan. THE VANDENBURGH LOANS. Q. What do you know of the Vandenburgh loans made in August, June, and September, 1871, and the character of the securities approved by the finance committee ?—A. I do not remember anything about those loans; I do not remember whether I approved any as a member, of the finance committee; I might have done so, but I have no recollection about it. Q, You ,have no recollection whatever about it l—A. No, sir. These loans were generally made by Mr. Eaton, the actuary, on District securities, I think they were. Q. And not approved by the committee l—A. I think not; I do not think the committee passed on them; at least, not to my knowledge; I do not think I was there; it might have been done by other members of the committee. Q. You have no knewledge whether this loan was ever submitted to the finance committee for their approval f—A. No, sir. FREEDMAN'S SAVINGS AND TRUST COMPANY. 109 THE LOAN TO WILLIAM S. HUNTINGTON. Q. Will pin tell the committee what you know of the loans made by the Freedman's Bank to William S. Huntington May 15, 1871, and on what class of- security the loans were made and what members of the finance committee authorized them 1-•--A. I do not remember of any loans made to Mr. Huntington at any meeting of the finance committee when#I was present, and yet I know that Mr. Huntington did -borrow. Q. And you were not present at any meeting of the finance committee who approved the loans to Mr. Huntington 1—A. No; I do not remember that 1 was. Q. Mr. Huntington was himself a member of the finance committee, was he not1—A. Yes, sir. Q. And be borrowed money at the time from the Freedman's Bank? —A. Yes, sir ;- so I believe. Q. I believe you told me a moment ago that you had read the charter and by-laws of the bank I—A. Of course, if these particular loans were brought to my attention I might probably refresh my memory about them. THE LOANS TO HALLET KILBOURN. Q. Well, what is your recollection of the loans made to Hallet Kilbourn by the Freedman's Bank from October 17, 1870, to January 21, 1872, and tell the committee, if you can, what securities were given ?.— A. Those I know nothing about. By Mr. GARLAND: Q. In that connection I will ask: did you indorse for Kilbourn in that loan 1—A. No, sir; not tifat I am aware of; I do not know what it was. Q. Do you recollect indorsing for anybody making loans of the Freedman's Bank 1—A. Making loans from the Freedman's Bank? Q. Yes.—A. No, sir; I think sometimes there may have been transactions of Mr. Huntington's, or he may have .used them at the Freedman's Bank when we supposed they would be used at the First National Bank. Q. Now, in the exhibits of one of the records there, it appears that you were one of the sureties for Kilbourn. (Referring to record.)—A. I think possibly I was on that note, but I do not know that it ever went to the Freedman's Bank. That was a transaction of Mr. Huntington in the First National Bank. Q. It was not, then, surety upon a direct note, given for a note; it was collateral1—A. It was collateral. Q. That is the explanation 1—A. Yes sir; as I supposed it was done by Mr. Huntington through the First National Bank. ' Q. Was there any other note that you know or, but that one, that you went on 1—A. Yes, there is another one here of a later date. LOAN ON THE METROPOLITAN PAVING COMPANY'S STOCK. Q. The same parties I—A. The same parties, yes, sir; Kilbourn and Lewis Clephane,two thousand dollars; the Metropolitan Paving Company. It was a loan upon the Metropolitan Paving Company's stock, July 6, 1873. 110 FREEDMAN'S SAVINGS AND TRUST COMPANY. By Mr. WITHERS: Q. That was subsequent to your retiring from the Finance Committee 1—A. Yes, sir; I will state that Mr. Huntington was treasurer of the Metropolitan Paving Company. Q. What was your connection .with it 1—A. I was president of that company; and we made loans generally through Mr. Huntington, as we supposed, from the First National Bank. He did use,I know,some of our securities which we had deposited With him as treasurer in the Freedman's Bank. I.discovered that afterwards. Q. For whom did he get these loans For his own benefit or somebody else's 1—A. I cannot tell for whom. • That I did not know at the time. Q. You say you ascertained that he used securities belonging to the First National Bank 1—A. No; securities belonging to the Metropolitan Paving Company,of which he was treasurer. Q., Securities which lie had accepted as treasurer and used as the basis of loans to individuals1—A. It was not discovered until after Mr. Huntington's death, when after settling up his accounts it was found that there were some securities or transactions with the Freedman's Bank. Q. Securities which were deposited there without the knowledge or authority of the company of which be was treasurer 1—A. Yes, sir; but I believe all these notes have been paid. I should have regarded it as a safe transaction in any event. THE HALLET KILBOURN LOAN. By the CHAIRMAN: Q. Mr. Clephane, will you be good enough to tell us what you know about a loan of the Freedman's Bank to Hallet Kilbourn 1—A. I know nothing about that loan. • Q. This is the loan of October 17, 1870, made to Hallet Kil bourn Z3v. Co. 1—.A. Yes, sir • I do not know anything about it. I do not remember what it was. May I ask whether it was on real estate security °? Q. Yes, partly on real estate security.—A. I do not remember. THE LOAN TO GEORGE W. BALLOCEL Q. What do you know of a loan made to George W.Balloch while he was a Member of the finance committee 1—A. I do not remember anything at all about that. Q. Do you know whether any loans were made to him or not 1—A. I could not call them to mind at present. Of course a good deal of information has been gathered upon it since. THE LOANS TO R. I. FLEMING. Q. From March 14, 1870, to January, 1872, certain loans were made to R. I. Fleming. I should like to ask you about them 1—A. These I have no knowledge of. I think they were done by Mr. Eaton, the actunary. He was builder and contractor of the Freedman's Bank building. LOANS TO„ GENERAL 0. 0. HOWARD. Q. Can you tell us of the loans made to General 0.0. Howard by the, FREEDMAN'S SAVINGS AND TRUST COMPANY. 111 Freedman's Bank October 3, 1_70, or October 11, 1871 ?—A. Well, I have but a faint recollection that there were some such loans made to General 0. 0. Howard. The character of them I do not remember at this time, or which particular ones you refer to. Q. All the transactions to which I called your attention occurred while you were a member of the finance committee, did they not?—A., I presume so. Q. You have no recollection of any one of these transactions except the one to which you referred at the last meeting of this committee, in which Mr. Eaton asked you to sign your name to that paper ?—A. That is the particular one that I remember, because that has been vividly called to my mind by the transaction since. I might have approved a good many of these loans, but I cannot recollect them at this time. Mr. PURVIS. For the same reason as intimated I would like to ask Mr. Clephane, inasmuch as he resigned as trustee of the 1)ank in 1872, whether as a matter of course it is not a fact that he had nothing to do in appointing the commissioners? Mr. CLEPHANE. Yes, sir; it is a fact that I had nothing to do with the election of commissioners. Mr. PURVIS. Will you allow me to ask whether the rest of the trustees associated with you on the finance committee resigned at the same time ?: Mr. CLEPHANE. I think we had a new election for trustees of the finance committee,,and I positively declined serving. Before my resignation as trustee I positively declined re-election. Mr. PURVIS. Well, did you not know that all associated with you. likewise resigned? • Mr. CLEPHANE. I think they did, except, possibly, Mr. Tuttle; I do not know whether he did or not. I had tried to resign several times, but Mr. Alvord never Would allow me. I never could get off, although I had positively said I would not serve. THE LOAN TO EDWARD S. FOWLER. By the CHAIRMAN Q. Do you remember a loan made July 9,1872,to Edward S.Fowler?— A. To whom ? Q. To Edward S. Fowler.—A. I do not, know him at all; I do not know anything about that. The CHAIRMAN. That is all, Mr. Clephane. TESTIMONY OF HENRY D. COOKE—Continued. , WASHINGTON, D. C., January 22, 1880. HENRY D. COOKE recalled. THE SENECA SANDSTONE LOAN. By the CHAIRMAN: Q. I asked you a question about the loan made to the Seneca Sandstone Company, and you had forgotten whether you were present at the meeting of the committee which approved it or not. It will refresh 112 F.t-CEEDMAN7S SAVINGS AND TRUST COMPANY. to,look at this report Made by you upon. which the loans been made (handing to witness the minute-book of the -finance committee). • By Mr. GARLAND: Q. Examine the book, governor, and see if you recognize it as being the minutes of the committee.—A. I do not remember ever seeing this book before. By the CHAIRMAN: Q. Is not that your signature (indicating)?—A. Well, I can probably tell when I get down to it (examining closely). My impression is that this is one - of 41r. Eaton's reports as actuary, and prepared for the finance committee. I may have signed it. I do not know; I have no recollection of it. I do not recollect when I saw it, and have.no recollection of it .now. I supposed it was prepared by Mr. Eaton for the finance committee. Q. Well, Mr. Cooke, do you recognize the signature ?—A. That looks like my signature. Q. You cannot say that it is or is not your signature ?—A. I cannot say that it is not my signature, and I believe it looks like my signature. It is done in a burry, evidently, which may have caused a departure from my usual form of signature. I do not wish to throw any doubt on it at all. There is nothing in that report that I object to. Everything I have said there about the quarry I believe, and I •believe' it flow; I think it is true. I had full confidence in that company, and I showed my confidence in it by putting my own money there; but it has not turned out as well as we hoped for. It is a misfortune that I have suffered from and that I of course regret. Individtll,tlly, I have lost probably a good deal more than the bank has lost in this loan. By Mr. WITHERS: Q. We wish to verify the report of the finance committee and this signature?—A. Yes, sir. By the CHAIRMAN: Q. That is our object in referring you to these minutes.—A. Well, I .can say that I believe that is a report prepared by the actuary and presented to the committee and adopted by the committee and transmitted to the board of directors. your memory Seem to have EXCHANGE OF THE SENECA COMPANY'S BONDS. By Mr. GARLAND: Q. I want to ask you about the matter in the examination before the Douglas committee. Dr. Purvis, on February 19, 1876, testifies to a ,question as follows: Was there any paper or order signed by any person authorizing the exchange of first-mortgage bonds for second-mortgage bonds This is in reference, Mr. Cooke, to the Seneca Sandstone Company, about which you have been interrogated. He answers: Never. Mr. Tuttle says that Mr. Cooke had a hand in getting them exchanged; that he came to him one day, when he was busy signing bonds, and said, "I wish you would sign this paper in reference to the Seneca Sandstone Company." Cooke said that it was carrying out the wish of the board of trustees. Tuttle did not know what it was, and he said,"Mr. Cooke, I have not time to read it ; I am busy now signing bonds." Cooke asked him whether he would not believe what he said. "Well,"said Tuttle,"you have been the financial agent of thegovernment, and have had a great FREEDMAN'S SAVINGS AND TRUST COMPANY. 113 many millions pass through your hands. I have no doubt of what you say, and I will take your word." So he just signed his name to the paper, and Cooke went away with it. And that is the way Tuttle says that the first-mortgage bonds were exchanged for second-mortgage bonds. I met Mr. Tuttle on the street yesterday, and he told me this story, and says that Cooke will not deny it. Q. A question was propounded to you, Mr. Cooke,in reference to the Seneca Sandstone Company, and you did not seem to have any particular recollection of that matter. Have you any better recollection of it now ?—A. No; I had not then, and I have not now. Q. What do you say in reference to your statement concerning your agency in it?—A. I say that Mr. Tuttle—without impugning his veracity—has made a mistake. He said he did not read the paper; that he had not time to read it; that he did not know what the paper was, but signed it simply on my statement that the board or the finance committee wanted him to; that for that reason he signed it. Now,I am very positive on that point, as I said that I never knew anything about the exchange of these bonds; at least I do not recollect anything about it. I have not the slightest remembrance of it, and I do not believe I ever had anything to do with it. By Mr. GARLAND: Q. You do not recollect asking Mr. Tuttle if he would not take your word fir the matter as detailed there, through Dr. Purvis, as coming from Mr. Tuttle ?—A. No, sir; I do not recollect asking Mr. Tuttle that. It might have happened very easily, however, because in all the thousands of transactions I had—I was an extremely busy man in those days —and to recollect what occurred incidentally in this way,I cannot do it. Let me see, that was ten or twelve years ago,,was it not? Mr. GARLAND. Yes it was nine or ten years ago. Mr. COOKE. To recollect all these things that happened so many years ago is simply impossible. By Mr. WITHERS: Q. You have no recollection whatever, governor, as I understood you, of having had any agency in securing this exchange of first-mortgage bonds for second-mortgage bonds 1—A. No, sir; I am very positive on that point, because I have been under that impression in my Own feeling and consciousness, amounting to a certainty in my own mind, that there was nothing in that matter for anybody to find any fault with me about, because I had nothing whatever to do with it. Q. Were you aware of the fact that such an exchange had been made? —A. No, sir; not until afterwards—a long time afterwards. By the'CHAiRmAN : Q. Do you remember, Mr. Cooke the purchase of the twenty-thousand dollars first-mortgage bonds of the bank 1—A. No, sir; I rather think I have an impression of that, but I do not remember any of the details connected with it. The only difficulty about my answering all these questions in a perfectly satisfactory manner, is that they relate to operations that occurred years ago, and when I was only one of a board and only one of a committee, and having my special business which required so much of my time as to cause these incidental matters to make but a slight impression upon my mind; and I was not impressed by them as I would have been by transactions of my own. MR. COOKE'S REPLY TO DR. PURVIS'S TESTIMONY. By Mr. GARLAND: Q. Has your attention ever been called to this piece of testimony be8FB 114 FREEDMA.N'S SAVINGS AND TRUST COMPANY. fore ?—A. No, sir; I never saw it before. I assure you that I never read this report or this testimony. Q. Upon this short notice of that, what solution could there be in your mind, or what explanation could be given in your mind, as a reason why Mr.Tuttle gave that statement that Dr.Purvis makes? Was there any difficulty or misunderstanding, any trouble between you and Mr. Tuttle? Can you divine in your own mind why he would have stated that to Dr. Purvis? You see this is very explicit from the way it is stated ?—A. The matter refutes itself. He goes on to say that I brought a paper to him of such and such a tenor, and then says he had not time to read it, and did not read it, or did not know what it was. Q. But he states very positively that it was in reference to this very transaction, and that the transaction was consummated by that act?— A. Well, I can only say, I can only repeat, that he must be mistaken about it. Q. Now, what could have,induced him, as you can imagine in your own mind,to have made that statement? You do not impugn his honesty, and he makes a statement there in detail and very explicitly through Dr. Purvis? —A. In the first place, you do not get the statement from first hands. Q. I understand that, but Dr. Purvis makes this statement as coming from Mr. Tuttle, a very short time before. He says,"I met Mr. Tuttle on the street yesterday, and he told me this story, and says that Cooke will not deny it." The circumstances are detailed with a good deal of clearness l—A. Well, it all might have been. true. It is possible it is true. But even if I had effected the loan, there would not have been anything wrong about it. I regret it, of course, now. If our foresight was as good as our hindsight we would all perhaps avoid some mistakes that we make. We are all liable to mistakes, and this turned out to be an unfortunate loan, but it does not follow that there was anything wrong about it. Q. You cannot give any reason, then, for Mr. Tuttle's statement to Mr. Purvis, in reference to this matter?—A. I cannot suppose what his course of reasoning was that would lead him to make that statement. I think there must be some mistake about it. Q. But you were associated with him, and you knew him, and the committee would like to have some solution as to why he would make such a statement as that. That transaction had been in and out of the bank a good deal. It assumed a good many different phases and shapes there, and what troubles inc about it is why he should make such a statement l—A. All that might have been true, possibly, and yet I was sincere and honest in asking him to do it, if I did ask him to do it. Q. Now, here is the statement of Tuttle himself on page 103 of the Douglas committee report. When he is asked in 'reference to this agreement between Kilbourn & Evans and the finance committee, and is shown the agreement itself, he answers: I cannot explain it; I can only state the fact that Mr. Huntington and Mr. Eaton and Governor Cooke said that everything in relation to the Seneca Sandstone Company was all right. They always said that in plain term. They used to say that while Governor Cooke was the financial agent of the United States; the president of the First National Bank, of which Mr. Huntington was cashier; the president of the Board of Public Works; the Governor of the District of Columbia, and all these things— They used to say that it was all right while you held thesepositions; he goes on further: They said that everything pertaining to the Seneca Stone Company was all right, and therefore I was not particular to inquire into anything about it. FREEDMAN'S SAVINGS AND TRUST COMPANY. 115 Now, Mr. Tuttle's testimony is given in March, 1876. Mr. COOKE. But you know that it makes a great difference the way things are stated. Mr. GARLAND. I know that; but he says there, Governor, that you. made these representations of the Seneca Sandstone Company ;that you said that it was "all right," and so on. Mr. COOKE. Well, it was all right; it was a good property, and is a good property when properly handled, and in the proper time—I mean in good times. It will be worth all and more in such times, I believe, than we thought it was worth then. I have nothing to take back in regard to what I said about that property. I believed it then; I believe it now. I am sorry the loan was made, nevertheless, because I hate to be questioned years afterwards on anything of that kind, when I acted at the time according to the best light I had. Although I may have been mistaken in that instance, I am not going to deny my faith in the company, for I then had every faith in the property and in its value as we represented it. By the CHAIRMAN: Q. Following the statement made by Dr. Purvis as to the conversation had with Mr. Tuttle, this question is asked: Q. Then it was done by the order of Tuttle on the representations of Mr. Cooke? And be replies: A. Yes; when the actuary laid before us the demand of Mr. Stanton, we learned that this agreement had been signed and hidden away by Mr. Eaton, the actuary, by the finance committee, Mr. Cooke, Mr. Huntington, Mr. Clephane, Mr. Tuttle, and Mr. Broadhead. It seems they had all signed it, but had never reported it to the board of trustees. • I read from Dr. Purvis's testimony; have you no recollection of that '1 Mr. COOKE. I do not know what it relates to. Q. It is in reference to these bonds. I will reatl you what I refer to (reading from Dr. Purvis's testimony before the Douglas committee): Q. Was there any paper or any order signed by any person authorizing the exchange of first-mortgage bonds for second-mortgage bonds This question is put to Dr. C. B. Purvis by Mr. Stenger, and his answer is: Never. Mr. Tuttle says that Mr. Cooke had a hand in getting them exchanged; that he came to him one day when he was busy signing bonds, and said: wish you would sign this paper in reference to the Seneca Stone Company." "ICooke said that it was carrying out the wish of the board of trustees. Mr. TuttleMr. did not know what it was,and he said, "Mr. Cooke, I have not time to read it; I am bfisy now signing bonds." Mr. Cooke asked him whether he would not believe what he said. "Well," said Tuttle,"you have been the financial agent of the governmen and have bad a great many millions pass through your hands. I have no doubt oft,what you say, and I will take your word." So he just signed his name to the and Mr. Cooke went away with it. And that is the way Tuttle says that thepaper, first bonds were exchanged for second-mortgage bonds. I met Mr. Tuttle on -mortgage the street yesterday, and he told me this story, and says that Mr. Cooke will not deny it. This is the testimony of Dr. C. B. Purvis, that was referred to a moment ago, not the testimony of Mr. Robert Purvis the commissioner. Mr. COOKE. No. Q. Can you give any explanation of this, Mr. Cooke—A. I have made all the explanation I have to make. Q. Ile says it seems they had all signed it, but had never reported it to the board of trustees. From your recollection of the transaction had it been signed before being submitted to the board of trustees by the 116 FREEDMAN'S SAVINGS AND TRUST COMPANY. finance committee f—A. I do not know; I do not recollect. Very often when a member of the committee or of the board would comet to me on any matter that had been talked about or agreed upon, and would say to me,"Here, we want you to sign this report; it is so and so;" or to sign this paper; it is so and so; or to sign this certificate, or what not, I would do so, having confidence in him, without stopping always to go through the document entirely. That is a thing that is done every day, that is done constantly; and that is the way I suppose that the report you handed .me was signed. The actuary, Mr. Eaton, constantly conferred with the finance committee, and when he first produced that,report and stated what it was I have signed it, and evidently have done it in a hurry, because I see it is signed in pencil. MR. PURVIS'S REPLY TO THE CHARGE THAT HE DESIRED TO SCREEN THE TRUSTEES. Mr. PURVIS. I desire to state that the object I had in view when I asked 'Mr. Cooke the question in regard to bringing up the fact of the time in which Governor Cooke and Mr. Clephane resigned as trustees of the bank was to have a bearing upon the statement that was made yesterday to you by Mr. Leipold, in which an unworthy motive was attributed to me, as ,resisting any action being taken in regard to the advice by.our counsel, Mr. Totten, in prosecuting these gentlemen. You will bear in mind that these gentlemen who made that loan and constituted the finance committee of the Freedman's Bank had resigned two years before they even contemplated winding up the affairs of the bank, to say nothing of their not knowing me at all—not one of them— for I had no knowledge of them, and that it was not possible that I could be moved by any consideration of that kind—from "a sense of gratitude," I think it was stated—to pass by the transactions of these parties if we had supposed them guilty of wrong-doing of any kind. I wish to show that at that time they had no existence, and consequently could not have appointed us as commissioners. When the proper time comes, I wish to say here that I can very probably give a reason, and a very well-grounded, one, why that gentleman, in his hopes of finding out something, desired that suits should be multiplied in the matter. There is one other little matter which I would like to call your attention to; there is a paragraph, you may have seen, in "The Republican" this morning, in which reference is made to this very matter of the Seneca Stone Company, and I would like to bring that up. Adjourned to Saturday, January 24, 1880. COMMITTEE Room OF THE SELECT COMMITTEE OF THE SENATE ON THE FREEDMAN'S BANK, Washington, D. C., January 24, 1880. The Select Committee of the Senate on the Freedman's Savings and 'Trust Company met to-day in the committee-room of the Senate Committee on Manufactures, at 10 o'clock a. m. Present, Messes. B. K. Bruce (chairman,) Angus Cameron, A. H. Garland, and 11. E. Withers. The CHAIRMAN. I desire to place before the committee a communication from Mr. H. H. Dodge, which I have just received. FREEDMAN'S SAVINGS AND TRUST COMPANY. 117 STATEMENT OF H. H. DODGE SETTING FORTH HIS CONNECTION WITH THE SENEC.A: SANDSTONE COMPANY. The clerk read the communication, as follows: Hon. B. K. BRUCE, Chairman Senate Select Committee on Freedman's Savings and Trust Company: SIR: Before House committee, Hon. B. B. Douglas, chairman, that investigated the affairs of the Freedman's Savings and Trust Company in 1876,I was called as a witness and gave testimony relative to the organization and early management of the "Maryland Freestone Mining and Manufacturing Company," commonly called the Seneca Company. As appears from my testimony, I was one of the three originators of the company, and its first president. The original cost of the six hundred and fourteen acres of land, the whole underlaid with valuable building-stone, was about seventy thousand dollars, and the improvements placed upon the property before it passed into the hands of the stockholders cost an additional fifty thousand dollars. The company was organized under the laws of Maryland (where the property is located) as a legitimate business enterprise, the property being esteemed very valuable for the excellent quality of the stone, the stone having been highly indorsed by Prof. Henry, General Delafield, and other experts, before a committee of Congress (see report),* and during the year I was connected with it it was profitably worked as a legitimate business. Desiring to change my residence I sold out my stodk interest in the company, in 1868 and 1869,to Gov. H. D. Cooke, one of the original incorporators; and from that time my connection with the company ceased,and I have no personal knowledge of its subsequent transactions, and had no personal control in them, and was in no way responsible for them. The second-mortgage bonds,and the additional three thousand shares of stoclf issued by the company happened more than one year after my retirement from it, and the loans of money procured by the Seneca Company on the second-mortgage bonds thereof, from the Freedman's Savings and Trust Company, occurred more than two years after my withdrawal from it. These facts, in greater detail, appear in my testimony found in the printed testimony of the Douglas committee, pages 24, &c. In the report made by Mr. Douglas, page 8, the company is characterized as a "fancy stock gamble got up by H. D. Cooke, J. L. Kidwell, and H.H.Dodge," and the opprobrium that attached to the transactions of the company with the Freedman's Savings Bank is made to fall upon me, though I had severed- my connection with the company entirely, both as an officer and a stockholder,long before such transactions with the Freedman's Bank were made. I knew nothing of this injurious 'reference to me in the report until after it was printed and the committee had been discharged, and sought to protect myself as soon as advised of the reflection made upon me'''by letter written to Mr. Douglas, calling his attention to the injustice done me. My' letter to Mr. Douglas, and his reply, disclaiming any intention of reflecting upon me, are herewith submitted. GEORGETOWN, D. C., August 4, 1876. Hon. BEVERLY B. DOUGLAS, Chairman, 4c.: DEAR SIR: From the report made by your committee in relation to the investigation of the Freedman's Savings and Trust Company, and so published in the papers here • without the evidence given before your committee,it might be inferred that I, being one of the original incorporators of the Maryland Freestone M. & M. Company, was connected with the transactions of said company with the Freedman's Savings and Trust Company. You are aware from the testimony taken that I ceased to be a stockholder in the Maryland Freestone Company in 1869,about two years before any transactions (so far as I am informed) occurred between the two companies, nor was I a stockholdeewhen the company increased the stock 3,000 shares and issued the $100,000 second-mortgage bonds, and had nothing to do with the transaction, nor did I participate in it in any way. I cannot conceive that you or your committee intended to cast any censure upon me in regard to these matters, although it might appear so from the report. The Maryland Freestone Company was started in perfect good faith as a business enterprise, and for at least three years was generally considered with great favor throughout the District, and, in my judgment, would never have been in its present condition but for the miserable management it was under. 'For extracts from this report, see appendix. 118 EREEDMAN7S SAVINGS AND TRUST COMPANY. Believing that you or the committee did not intend to reflect upon my integrity, or to do me an injustice, I would be g141, if it. meets with your approval, if you would give me some assurance to that effect. Feeling conscious that I did no wrong, nor intended so to do, I remain, yours, very respectfully, H. H. DODGE. AUGUST 14, 1876. H.H. DODGE, Esq.: have no hesitation in saying that the committee on the Freedman's DEAR SIR: I Bank,of which I had the honor to be chairman, had no idea of reflecting upon you in connection with that institution. As an incident in the history of our investigation, we were obliged to take some notice of the Seneca Company, as it is usually called, but I do not believe that you were in any way a participant in the fraud practiced upon the bank, and I take pleasure in so assuring you. Very respectfully, &c., B. B. DOUGLAS. I beg that your honorable committee, as a matter of justice, will allow this statement and the accompanying letters to be placed upon record in your report, and,if desired by your committee, allow me to appear and make a statement of facts that will remove the aspersion unintentionally put upon me by the Douglas report. Very respectfully, &c., H. H. DODGE. GEORGETOWN, D. C., January 23, 1880. GEORGE W. CARTER (clerk of committee). I will say, Mr. Chair. man, that Mr. Dodge is now in the architect's room below attending to some business, and if it is desired he should be before the committee he can be reached. Mr. GARLAND. Mr. Dodge called to see me at the close of our last meeting, and named the matter to me which he has laid before you in his communication. I said to him that I did not think that we desired his testimony at this stage of the investigation, but that if we wanted his testimony the committee would doubtless take it in writing and put, it into the recold. 'TESTIMONY OF G. W. BALLOCH. WASHINGTON, D. C., January 21, 1880. G. W.BALLOCH sworn and examined. By the CHAIRMAN: Question. Mr. Ballocb, will you please state your relations to the Freedman's Savings Bank. When did they begin, and when were they closed ?—Answer. I was elected a trustee of the Freedman's Bank on the 16th day of April, 1867. I still continue in that relation, if any such relation exists. I was elected a member of the examining committee on the 9th of May, 1867. I was elected one of the building committee that had in charge the construction of the building opposite to the Treasury on the 14th of June, 1870; and I was the secretary of that committee. I was elected one of the finance committee on the 14th of March, 1872, and re-elected on the 13th of March, 1873. Q. Will you state your relations to the Howard University for the same time I—A. I was a trustee of Howard University all of the time, and part of the time was its treasurer. I am still a trustee of Howard University. FREEDMAN'S SAVINGS AND TRUST COMPANY. 119 Q. Did you ever approve of loans from the bank to the Howard University upon security not recognized by the charter l—A. By which. charter? Mr. CAMERON. The charter of the bank. Mr. BALLocH. Not that I know of. THE HALLET KILBO URN LOANS. By the CHAIRMAN: Q. I wish to call your attention to a loan made by the bank to Hallet Kilbourn on January 12, 1871, on a note indorsed by D. L. Eaton, the actuary of the bank, approved February 7, 1871. At the time there were present, as appears from the minutes of the finance committee, Messrs. Cooke, Alvord, and Tuttle, of the finance committee; and Messrs. Richards, Cole, and yourself, of the trustees. Do you remember that transaction f—A. No, sir. Q. This we take from the minutes of the finance committee. By Mr. CAMERON: Q. Are these minutes present, Mr. Chairman ? The CLERK OF THE COMMITTEE. Yes, sir. The CHAIRMAN. Perhaps the witness would like to refresh his memory by looking at the minutes. [The clerk turned to the original minutes of the finance committee.] The WITNESS [after reading]. I do not remember anything about that particular loan. By the CHAIRMAN: Q. You do not now remember f—A. No,I do not remember the details connected with that particular loan. Q. Do you remember the loan made to Hallet Kilbourn February 4, 1871, of three thousand dollars f—A. No, sir; I have no remembrance of that loan. Q. Was it the custom to make loans without the approval of the finance committee—loans of the character I have just referred to?—A. The actuary had some latitude in making loans of this kind. For instance, a party would come in and want to borrow money with an in, dorsement as collateral on any of the well-known stocks of the city— stocks- that were known to be good, that they could get the money on at a moment's notice; he had some latitude in such matters; but if it was simply indorsed paper, I suppose that a matter of that kind would naturally come before the finance committee. Q. It appears that there is no record of the approval of this loan by the finance committee; hence I ask the question whether that was customary or notl—A. The custom was to have loans of that kind approved by the finance committee. That was the rule. If there was any deviation from it, it was the exception. I cannot remember about these particular loans; LOANS TO HOWARD UNIVERSITY. , Q. Returning now to .the Howard University, I will ask you if the loans appearing in your name as treasurer were gotten for the Howard University f—A. Yes, sir. Q. They were for the Howard University f—A. Yes, sir. They have all been paid, principal and interest, in full. They were all secured on that immense realty at its estimated worth—a million of dollars. 320 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. What connection was there between a loan to you of forty thousand dollars, made September 5, 1871, and paid October 11, 1871, and the loan to Howard University of seventy-five thousand dollars October 11, 1871 ? Did you pay your loan in cash, or was it transferred to Howard University and charged as a part of the seventy-five thousand dollars ?—A. I suppose it was transferred and charged. The first loan of forty thousand dollars was probably part and parcel of the seventy-five thousand dollar loan. That appears afterward. That is my impression about it, that the $40,000 loan was canceled and then included in the seventy-five thousand dollar loan. Q. The forty thousand dollar loan made on the 5th of September was canceled ?—A. Yes, sir; that was canceled and became a part of the seventy-five thousand dollar loan. Q. Which was made on October 11, 187101—A. Yes, sir; that is my impression. THE LOANS TO GENERAL 0. 0. HOWARD. The CHAIRMAN. Here is a loan to General Howard of two thousand dollars, July 9, 1871, on an indorsement of yours. Mr. BALLOCIL Yes,that was made to accommodate General Howard. It was of no interest to me at all. I. indorsed it to oblige him, and I have somewhere in my papers a memorandum from him under his own handwriting, stating that it was for his accommodation. Q. Was this loan approved by the finance committee, or was it ever brought up before that committee ?—A. I presume it was approved by the finance committee. As I remember it, there was some real estate security connected with it.on Meridian Hill. Of course, at this late day I do not remember about it. I know that R. M. Hall had something to do with the transaction, if I remember aright. Q. Another loan to the same gentleman, indorsed by you, appears under date of April 8, 1872, of one thousand dollars?—A. A loan to General Howard? Q. Yes, to General Howard, of April 8, 1872, for one thousand dollars.—A. I think all these transactions grew out of a transaction General Howard had with R. M. Hall. He bought some land of R. M. Hall on Meridian Hill, and Hall took his notes in payment, indorsed by me, and then Hall put these notes into the Freedman's Bank for discount. Q. This was while you were a member of the finance committee?—A._ Yes, sir; but the transaction did not come into the bank at first; the transaction was with R. M. Hall; he put it into the bank; the bank had no connection with it at first. Mr. Hall took the note to the bank to be discounted; he made the arrangement with the Freedman's Bank, and neither General Howard nor myself knew that the note was in the Freedman's Bank to be discounted. It might have gone into the First or Second National Banks, or to Riggs's Bank, or anywhere else, as it was negotiable paper. He took it to the Freedman's Bank and they discounted it. By Mr. GARLAND: Q. Do you mean to say that it was not a loan from that bank, but simply the discounting of a note ?—A. It was not a loan from the bank originally. He took the note—Hall did—indorsed by me,and the bank discounted it. It was Hall who did that. Q. I understand you to say that when you signed that note you did not know it would go to that bank, or to what bank it would go ?—A. Yes, sir, that is it; I did not know it was going to the Freedman's Bank. FREEDMAN'S SAVINGS AND TRUST COMPANY. 121 By the CHAIRMAN: go to any other Q. It was, then, so far as you know, just as likely to have gone to might It ly. Exact ?—A. Bank man's Freed the bank as to to the Bank or Bank, s Riggs' to or Bank, the First or Second National of the Republic. Yes, sir. I am Q. Or to the Metropolitan Bank, or to no bank ?—A. a good deal worth was days those in proud to say that my indorsement now. much as worth was it wish I more than that. A LOAN TO HOWARD UNIVERSITY. rer, of $2,440.49, Q. General Balloch, here is a loan to you, as treasu ng, approved Flemi I. R. of t of January 17, 1871, on the indorsemen ttee there e commi financ the of es minut the From February 7, 1871. Tuttle, and d, Alvor , Cooke s. Messr time seem to have been present at the Mr.Cole, of the and rds Richa Mr. lf, yourse and ttee, commi e of the financ Howard University. ' trustees.—A. That was something connected withother institution. It If I remember right, I was not treasurer of any d University. must have some connection with that loan to Howar and it was us, for there out ngs Mr. Fleming built one of the buildi Clark Hall, for built He t. accoun that on ment settle some probably which he was paid twenty-five thousand dollars. wed by you as Q. And your recollection is, then, that it was borro borrowed in never I sir; Yes, ?—A. sity Univer d treasurer of Howar any other capacity. By Mr. GARLAND: Mr. Fleming except Q. Did you ever have any other transaction with sir. No, ?—A. ng buildi that in reference to this treasurer, was it?— Q. It was indorsed by him and signed by you as sity. Univer d Howar for A. Yes,sir; it was paying him for one Q. Then you think it was done for the purpose of with some work he tion connec in sir; Yes, f—A. there ngs of the buildi work for us. did for the University. He did a great deal of Men's Christian AssoQ. Were you not also treasurer of the Young anything to do with the ciation at that time f—A. No, sir; I never had some of their bonds take to t excep Young Men's Christian Association debt. a of nt once in payme N ASSOCIATION. A LOAN TO THE YOUNG MEN'S CHRISTIA to yourself as treasuQ. Perhaps you can explain this item. A loan stock of the Young on 1871, 25, March s, dollar ed hundr rer of fifteen was for Howard UniverMen's Christian Association.—A. Well, that thousand dollars' worth sity. They had a lot of stock,some twenty-fiveed a little of it for a few of it, or thereabouts. I presume I hypothecat never had .anything to do days for Howard University. I certainly except to be one of the ation Associ ian Christ Men's g with the Youn unfortunate stockholders. • By the CHAIRMAN: s, April 8, 1371, Q. I see there is also a loan of two thousand dollarYes, sir; I recol?—A. named just have I that on the same collateral sity. lect using same of it; it was money for Howard Univer LOAN TO J. E. DEXTER. call your attention Q. There is one other matter, General, I wish to 122 FREEDMAN'S SAVINGS AND TRUST COMPANY, to. It appeais that a loan was made to J. E. Dexter of five hundred dollars, February 15, 1873, on your indorsement. Do you remember about that °I—A. Yes, sir. By inadvertence [smiling], through that loan I became a borrower of the bank; it was by accident. I gave that gentleman some money to go down into Virginia to pay land damages in a railroad scheme with which I was connected. He Went down, used half of the money to pay the damages and gave his note for the rest, and used the other six hundred, or five hundred dollars, or whatever it was; and when it came to my knowledge I went to him, and, of course, I had to take his note. I was keeping an account then at the Freedman's Bank, and I just put it in with some other paper, for discount, and it was discounted. When it came due Dr. Dexter paid,I think, one hundred dollars, and he has paid a little along on it since. I made an arrangement with the officers of the bank to hold it over, and I held myself responsible for it. He has paid a part and I paid a part. The principal was reduced until there only remains a little over eight dollars due on the principal. There are a couple of hundred dollars due on the interest that I am working out as an insurance agent, insuring the property of the bank. I hold myself responsible for it. That loan was an inadvertence; it was accidental; I had no idea at the time that I was going to become a borrower of the bankin that transaction; and that was the only transaction while I was in connection with the bank in which either directly or indirectly, or by implication, I ever became a borrower, or ever received anything from the bank, and that was accidental. Q. You say you are paying this off now ?—A. The principal is all paid up to about eight or nine dollars. I am an insurance agent. I get the property of the bank insured, and I turn over my commission to the bank.. By Mr. WITHERS: Q. The arrears of interest are now being extinguished by you in that way f—A. Yes, sir. It will all be paid. If I do not extinguish it in that way I will in some other way. I was very sorry that it occurred, because it might be construed that I violated that provision of the charter, on account of being a member of the board of trustees, that I should appear as a borrower. But I repeat that was by accident; I have no excuse to make except that it was by accident. I did not intend to violate the law. I never thought that that did violate the law until last year Mr. Leipold called my attention to it, and coming to look it all over I really thought, when my attention was called to it, and I had considered the matter, that I had violated the law; but I did it ignorantly and by accident. THE LOAN TO R. P. DODGE. By the CHAIRMAN: Q. Do you recollect the loan to R. P. Dodge of $13,586.50 of January 24, 1870f—A. No, sir; I do not remember anything about that loan. A large loan like that was probably made in the full board. Q. You mean the board of trustees or the finance committee f—A. I do not think the finance committee would make as large a loan as that, even on real estate in the District of Columbia. Ordinarily, the loans were made on real estate in the District of Columbia; after I became a member of the board I know that thA was the case. We met on eVery Thursday at 3 o'clock, and every loan was submitted to us with all the FREEDMAN'S SAVINGS AND TRUST COMPANY. 123 details, and carefully gone over. Mr. Kelly, then cashier of the Metropolitan Bank, was a member of the board and a very careful man, and we spent two and sometimes three hours every week going over these matters. Mr. Richards (who is now present) was a member of the board, and I know that he carefully scrutinized every loan that was offered. For an ordinary loan of three, or four or five, or six thousand dollars on real estate in the city Or District of' Columbia, that we knew all about, we would approve, on the authority we had. Q. The finance committee?—A. Yes, sir; but if the loan was outside of the District, or for a very large amount in the District, we would not take the responsibility, as I understood it, but would refer it to the full board with the details we had at hand, and make such suggestions and recommendations as we thought necessary and leave it to them. I notice that in the year 1872, from 1872 to 1873, the finance committee had forty-eight meetings. Out of the fifty-two weeks of the year,we met forty-eight times; and I know that so far as I am concerned every loan was scrutinized with just as much severity as I would have exercised if I was going to make the loan myself. I made it a point to ask this question: "If I had this money to loan myself, would I loan it on this property ?" If I could answer "yes," I would vote for it; if not, I always voted against it. Q. Were loans approved by the board of trustees after being approved by the finance committee; was that the usual form of proceeding?—A. No, sir. If we did not feel that we could in the finance committee authorize a loan; that is, if it was a little too big, and we did not want to take the responsibility, we would refer, it to the board of trustees, perhaps with our recommendation; then it would come up for discussion in the full board, and the pros and cons would be discussed, and all the information we could get from the actuary or members of the board would be considered, and all the light would be brought to bear upon it that we could get, and then the board would vote whether to make the loan or not. All loans outside of the District were made in the full board, and some of the larger loans in the District were brought before the full board. Q. In this case there is no record of approval.—A. In what year was it? Q. January '24, 1870.—A. That was before I had any connection with the finance committee. Q. You were not a member at that time?—A. No, sir; not until March,1872. THE LOANS TO NEWMAN & MIDDLETON. Q. There were loans made to Newman & Middleton which seem to have been'made on orders on the board of public works; have you any recollection of those transactions?—A. No, sir; I presume that was a class of loans that the actuary felt justified in making; I presume they were put up as collateral securities by the board of public works or the auditor of the board. Mr. Stickney will be able to explain to you all about that. THE EVAN LYONS LOAN. I do not like to volunteer any information, but I heard you ask a witness here about a loan on the Lyons property; I would like to answer a question on that matter. 124 - FREEDMAN'S SAVINGS AND TRUST COMPANY. The CHAIRMAN. Certainly. Mr. BALLOCH. I think it was Senator Garland who asked why that application was refused several times and then a loan of thirty-four thousand dollars made. The reason was, there was a mortgage on the property and they wanted us to take a second-mortgage,which we would not do. Then the parties who owned the first-mortgage canceled their claim and allowed us to take the first-mortgage, which we did. Mr. Herr, who held the first-mortgage of five or six thousand dollars, was willing to let his mortgage go and let us take the first, and he came in on a second-mortgage; that is what I remember about that transaction. The reason why it was refused at first was because there was a mortgage on it and they wanted us to take the second-mortgage, which we refused to do. I may be wrong about this matter, but my recollection of it is that when it was first offered to us there was a prior mortgage on it. Mr. LEIPOLD. General, did not Mr. Herr get a part of the money of the thirty-four thousand dollars that was loaned by the bank ? Mr. BALLOCH. 0,I could not tell who got the money. Mr. LEIPOLD. Was not at least part of the claim againSt the property paid by the thirty-four thousand dollars ? Mr. BALLOCH. I do not remember. I only know that when the firstmortgage was offered to us they wanted us to take a second-mortgage, but we never intended to play second fiddle to anybody. By Mr. WITHERS: Q. You do not know whether a portion of this thirty-four thousand dollars subsequently loaned on that property was used to extinguish the debt for which the first-mortgage was created ?—A. No, I do not; the actuary is the only man who can tell that. I only know the general fact. SURRENDER OF THE KILBOURN & EVANS NOTE. By Mr. GARLAND: Q. The other day, general, there was a statement made—I believe you wiere present—as to the action of the trustees in surrendering the fiftythousand-dollar note of Kilbourn & Evans in connection with the loan to the Seneca Sandstone Company. If you recollect that transaction,please state to the committee all the facts about it, and why that surrender was made by the trustees.—A. Some time in the first days'of March, 1873, Mr. Kelly, then being a member of the finance committee, met me on the street near the bank one day, and asked me if I was aware that that note of Kilbourn & Evans that we held at the bank, with these collaterals behind it, was worthless. I told him no He pulled out of his pocket a copy of that agreement, whioh you have all seen, and handed it to me, and said,"What do you think of that? 12 I looked at it and was thunderstruck, if I may use the expression. Well, at a meeting of the finance committee held a few days afterwards the matter came up and was discussed in the board. Mr. Richards was present, Mr. Langston was present, and I recollect that Mr. Kelly was present, and myself. We were all very firm at that time that we would not surrender either the note or the securities, that we had them and they were ours, and that we would fight it out on that line. Well, on the 10th of June the actuary reported it to us. We still held it under advisement. FREEDMAN'S SAVINGS AND TRUST COMPANY. 125 By Mr. WITHERS: Q. One moment. When was that conference of the committee in reference to the matter held ?—A. It was held early in March, a few days after Mr. Kelly called my attention to it. It was at the March meeting, the very next meeting of the committee after my attention had been called to it. Well, on the 10th of June the actuary reported that he had seen Governor Cooke, and that the governor stated to him that he expected to have the matter settled satisfactorily to the company. That appears on the records of the finance committee. At every meeting of the committee the matter would come up and we would discuss it; and 1 may say that we were all pretty stubborn about giving up these securities—that note. Mr. Langston and myself were appointed a subcommittee to investigate the matter, to take legal advice, and report. On the 4th of November we asked for furtUer time, and on the 13th of February, as you will see by reference to the record, we made a full and exhaustive report on the matter. In the mean time I consulted one of the ablest attorneys in the town herefor my own satisfaction, laid the whole matter before him, and he said to me, "You cannot hold these securities; you are bound by the act of your actuary, and you have got to surrender them." Mr. Langston took advice. I do not know whom he consulted, but he came to the same conclusion. Mr. Kelly took the same course. I do not know what steps Mr. Richards took, but on the most thorough examination and investigation that we could make, and with the aid of the best legal talent of the city that we could procure, we came to the conclusion that we could not hold the securities. By the CHAIRMAN: Q. Who was the actuary at the time?—A. Mr. Stickney,for Mr. Eaton had died. Mr. Stickney was actuary at this time. So we vimy reluctantly surrendered the securities behind that note. For myself I may say that I did it very reluctantly. I never did anything in my life that hurt me as that did. By Mr. WITHERS: Q. Did the finance committee take any steps to see whether the actuary was not liable for transcending his powers in that transaction ?— A. I do not know that they did. The actuary was then dead. Q. At the time that agreement was made I—A. [Addressing Mr. Leipold.] Was he not dead at that time, Mr. Leipold I Mr. LEIPOLD. He was dead in 1873, when you gave up those securities. Mr. BALLOCH. Not when the matter first came up. When itfirst came up he was cashier of the Second National Bank. By Mr. GARLAND: Q. Was that the first intimation the board had of the agreement with Messrs. Kilbourn & Evans I—A. Yes, sir. Q. Where had it been; who had been the custodian of the agreement?—A. It had been either in the hands of Mr. Kilbourn or Mr. Evans;. one or the other brought that agreement to Mr. Kelly and showed it to him. Q. Had it been of record anywhere, General I—A. No, sir; I don't know that it had. The first intimation we had of it was when one or the other of these gentlemen brought it to Mr. Kelly and showed it to him, and said, "F-want my securities." Q. Did you and Mr. Langston consult attorneys together, or did you consult one attorney and Mr. Langston another I—A. I don't know but we consulted one in common. Mr. Langston and I had several meetings 126 FREEDMAN'S SAVINGS AND TRUST COMPANY. together and went over the whole ground, he being an able lawyer himself. Q. Did you get a written opinion from any attorney ?—A. No, sir; I consulted Mr. William A. Cook, of this city, myself. I have no hesitation in saying whom I consulted. I took all the facts and went over the ground very carefully. It appears to me that Mr. Langston and myself went together and consulted some one. Q. Whom were you in the habit of consulting in matters of business of the bank ? Did you have a regular attorney at that time ?—A. We had had one or two. Mr. STICKNEY. Mr. Langston himself was attorney of the bank at that time. Mr. BALLOCH. I know at least that there was very great reluctance felt and expressed about giving up that security. By Mr. GARLAND: Q. No attempt was made at law to enforce payment of the loan ?—A. No, sir. Q. You took no legal steps?—A. No, sir. After looking the ground all over we were satisfied we could not hold them. Q. Were they surrendered on a unanimous vote of the board, or do you recollect about that`I—A. That I do not remember. I think the finance committee recommended that they be surrendered. The records of the board will show, I presume. I do not remember; I have not read up to ascertain about that. I only remember the fact that I was pretty stubborn about giving them up. I thought they were ours in right and equity, and that we had a right to hold them. I wanted to hold them and make a fight over it, but I became satisfied finally that it would not do any good. By Mr. WITHERS: Q. In that opinion the then attorney for the bank coincided ?—A. Yes, sir.; Mr. Langston said we could not hold them. Q. But I understood you to say that Mr. Langston agreed with you in the beginning that the finance committee should retain these securities.—A. The first meeting of the finance committee, when the matter was first reported, every one said,"We will hold on to this thing; we .are not going to give it up." That was the first impulse. Mr. WITHERS. I understand that. Mr. BALLOCEL We had them in our possession, and "possession is nine points of the law," you know, and we thought that we would take the benefit of it. Yon see we did not give them up until some time afterwards. It was in March when the thing first came up, and we did not surrender them until November. Mr. WITHERS. Yes, I remember. Mr. BALLOCH. We kept growling over it all the summer. Dr. C. B. PURVIS. Did not Mr. Langston go to Baltimore in reference to that matter and get an attorney's written opinion upon it 'I Mr. BALLOCH. I rather think he did it was merely hearsay; how. ever, with me. I think, however, he went to Baltimore and consulted some attorney there. By the CHAIRMAN: Q. Why were not the seventy-five thqusand dollars' of bonds of the Seneca Sandstone Company surrendered at the same time ?—A. I think by agreement that Colonel Eaton, the actuary, bound the bank to keep these in satisfaction of the loan that is the way I remember, it. It FREEDMAN'S SAVINGS AND TRUST COMPANY. 127 actually became a purchase. I think, now that Dr. Purvis calls my attention to it, that it was Mr. Stockbridge, of Baltimore, that Mr. Langston consulted. By Mr. GARLAND: Q. Do you know in that connection whether he got a written opinion from Mr. Stockbridge or not I—A. He did, I am quite sure. Q. Do you recollect reading it I—A. I think I did read it. Q. Was it filed in the papers of the bank or retained in the private papers of Mr. Langston I—A. That I do not remember; I couldn't tell about that. So many years have gone by since the transaction that I cannot remember all the little details. SELECTION OF THE COMMISSIONERS. Q. In the selection Of the three commissioners, Mr. Creswell, Mr. Leipold, and Mr. Purvis, did you participate I—A. I did. Q.There has been a little difference ofopinion between these gentlemen in reference to the relative distribution of their duties as commissioners, which may or not be of importance as this investigation proceeds; will you state as near as you can recollect, General, the facts and circumstances attending the selection of these gentlemen by the trustees of the bank, and the particular reasons given, if any, for selecting either or all of them to be commissioners I—A. It was the desire of the trustees to get three of the best men that could be found to act as commissioners. After canvassing the matter carefully we concluded that we wanted Mr. Creswell, from his well-known ability as a lawyer,and from his standing before the country as being in sympathy with the colored people, and from his broad philanthropy. We wanted Mr. Purvis on account of his connection with the colored people; and we wanted Mr. Leipold on account of his knowledge of Treasury matters. We knew that he—at least I did, because I had had official transactions with him in the Treasury—I knew that he was an experienced accountant, and that he had the ear of the Treasury Department; and as long as our matters were going into the Treasury, we wanted somebody that was acquainted in the Treasury. Hence the selection was made. And I venture to say to pill, gentlemen of the committee, that if we had taken the whole country over we could not have gotten three better representative men for the position than we did. Q. The trustees that made the selection, did they have, so far as you know, knowledge of these matters; that is, of the peculiar fitness and qualifications of these men for the position of commissioner I—A. Yes, sir; it was all discussed in the board. Q. Was any solicitude manifested by any of these gentlemen to be made commissioner I—A. Not any particular solicitude that I know of. Mr. Leipold being a friend of mine came to me and said that he would like to be one of the commissioners, that he thought it would rather enlarge his sphere of business and bring him more before the public. He said he was a young lawyer and wanted to get into the practice of law, and that he thought it would help him. Mr. Purvis and Mr. Creswell did not want to be commissioners. Q. Did not I—A. No, sir; I will mention particularly Mr. Langston, and I believe that some other members of the board, urged Mr. Creswell to take the position. I know that Mr. Creswell came before the board two or three times, and it was the longest time before we could get Mr. Creswell to consent to serve, and we rather insisted that he must serve on account of his position. Mr. Purvis also hesitated, and 128 FREEDMAN'S SAVINGS AND TRUST COMPANY. it was with the greatest persuasion that we could get him to serve. He was in delicate health and he lived in Philadelphia, and was nicely fixed there in his home, and he did not want to serve; but we brought all the arguments we could to bear upon him and he finally consented to serve. It was with the greatest reluctance that these two gentlemen consented to serve. DISTRIBUTION OF THE COMMISSIONERS' LABORS. Q. In designating these gentlemen as commissioners was anything §aid by the trustees indicating a partition of the work between them as to the character of the work or the quantity of it ?—A. I do not remember that there was. That was left to them. I know that Mr. Creswell said distinctly,"I cannot give my time to go into the details of this business; I am engaged before another commission—am the attorney for some commission—and I cannot do it. If you expect me to go into the details of this business, I cannot do it. I will give it a general oversight and the benefft of my knowledge as a lawyer, but if you expect rue to go into the details of this business, why I cannot do it and won't." We assured him—I think he had the assurance—that he would not be expected to do that. Mr. LEIPOLD. I would like to ask the gentleman a question, with your permission, Mr. Chairman. The CHAIRMAN. Certainly. Mr. LEIPOLD. Did not the board of trustees, before they elected the commissioners—Mr. Creswell, Mr. Purvis, and myself—select three other gentlemen in that capacity ? Mr. BALLOCH. Yes, sir; but there was some objection to them at the Treasury Department; either that they were brothers, or brothers-inlaw, or in some way or other related to the trustees. Mr. LEIPOLD. Who were they ? Mr. BALLOCH. Major Richards was one, Mr. Langston's brother was one, and the third I do not remember. Mr. LEIPOLD. Mr. Purvis, was it not? Mr. BALLOCH. 0, yes; Mr.Purvis. I am obliged to you, gentlemen of the committee, for giving me a chance to tell what I know about this institution. I have been villified in Congress and out of Congress on account of my connection with it, and I have never before had an opportunity to explain my relations to that institution. I am very glad, indeed, that I have had this opportunity. By Mr. GARLAND: Q. You were not, then, a witness before the Douglas committee ?—A. No, sir; I was not. TESTIMONY OF MR. ZALMON RICHARDS. WASHINGTON, 1). C., January 24, 1880. ZALMON RICHARDS sworn and examined. By the CHAIRMAN: Question. Will you tell the committee,Mr.Richards,what your relations were to the Freedman's Savings and Trust Company; when did they begin FREEDMAN'S SAVINGS AND TRUST COMPANY. 129 ' and when did they cease 7—Answer. I do not know that I can give the exact dates. My Brst connection was that of a trustee, and the beginning of that service I cannot now quite recollect. I should think it was as early as 1870 and 1871. Q. Was it not in 1872?—A. Possibly it was. I am not positive as to that. I have no memorandum—at least, I did not consult any memorandum—with reference to the time that I became a member. In fact, I was a member, I believe, for some time before I knew it; at least, before I was aware that I was expected to serve; and I did not attend any of the meetings of the board at first after my election. My next connection was that of becoming a member of the finance committee, and that date I cannot recollect, but it was immediatly after the death of Mr. Huntington, whose place, I think, I was elected to fill. I served on that committee till the business.of the bank was surrendered to the present'commissioners. Q. On the finance committee ?—A. Yes, sir; on the finance committee of the bank. Q You have read the provisions of the charter relative to security to be accepted by the bank as the basis of loans, have you not? —A. I have read those provisions, but not lately, however; nor did I for more than two or three years after I was a member of the board, because I had nothing to do with the loans until I became a member of the finance committee. Q. Have you read the by-laws determining the power of the finance Yes, sir; when I became a member of the finance comcommittee mittee I read the by-laws. Q. Were any loans made on your indorsement while you were a member of the finance committee I—A. I do not know but there were; not by my ,knowledge, however. There have been loans made upon my indorsement, but whether it was when I was a member of the finance committee or not I cannot say; I think it must have been, however, though I cannot quite tell now. Q. You think it was while you were a member of the finance committee ? —A. I cannot remember precisely the date when I was a member of the finance committee. If any one can give me the date, or nearly the date, of the death of Mr. Huntington, I could tell from that. THE LOAN TO R. R. HAZARD. Q. I wish You would read this paper and tell us whether or not you recognize it as being in your hand-writing 3? (handing witness the following letter): AUDITOR'S OFFICE, DISTRICT OF COLUMBIA, COLUMBIAN RUILDING, Washington, February 20, 1872. D. L.EATON,Esq.: My friend R. R. Hazard has a claim approved for the sum of ($615.97) six hundred and fifteen and No dollars. He needs some money now,and I have agreed to help him,as I know him to be worthy and in need. Can you accommodate him on the note, which I will assume at maturity if he is unable to do so? Yours,respectfully, Z. RICHARDS. • Mr. RICEIARDS. That is my letter. I think I was not on the finance committee at that time. I cannot precisely remember. I recollect this distinctly, however (the,letter). I recollect distinctly, too,that the note was met at maturity. 9F B 130 FREEDMAN'S SAVINGS AND TRUST COMPANY. By the CHAIRMAN: Q. You do not remember whether you were a member of the finance committee when that was written or not ?—A. I have no recollection about that—about the precise date. If I was, I did not at the time suppose that 1 was doing anything more than I had a right to do. If I was a member of the finance committee, I was not aware of the character of the obligations upon the finance committee. Q. This letter I believe is written in 1872?—A. Yes, sir; February 20, 1872. Q. From the record, your conuction with the committee seems to be of the date of February 14, and this letter is dated February 20?—A. I presume if I had been elected a member I was not then acting as a member. I did not serve on the finance committee or board of trustees till some time after my election. It was some little time after tliat I was notified. THE LOANS TO F. S. LAMSON. Q. Do you remember concerning the loans made to F. S. Lamson ? If so, please state- what you know about them.—A. I know that Mr. Lamson indorsed a note of mine and got the proceeds at the bank. He took the indorsed notes—the notes that I had indorsed for his benefit—and got them cashed at the bank; but I did not know that he was going to get them cashed at the bank when he took them. He has some thousands of dollars—a good many notes of my indorsement. By Mr. CAMERON: Q. Were your indorsements accommodation indorsements?—A. Yes, sir; simply accommodation indorsements. Q. Not business paper at all?—A. No, sir; they were given for no consideration whatever; the result of which has been the loss of all my property. THE RUDOLPH LOBSIGER LOANS. By the CHAIRMAN: Q. What do you know of the loans made to Rudolph Lobsiger, upon chattel mortgage and other security,in January and February, 1874?— A. I do not recollect the name at all. Q. Lobsiger. (Spelling it.) L-o-b-s-i-g-e-r.—A. I do not recollect the name at all. I cannot call up any fact or any impression about it now. It is barely possible I may have known it at the time, but it has entirely passed out of my memory, and every incident in connection with it. It is barely possible that I may have known about the transaction. By Mr GARLAND: Q. There seems to have been three of these loans. Don't you call to mind either of them 1—A. To this same party do you mean? Q. Yes, sir.—A. I have no recollection of the name; I never was 'present when such loans were authorized, that I know of. I have no recollection whatever of them. Were they of large amounts? The CHAIRMAN. No, sir. One is for three thousand dollars, one for twenty-three hundred dollars, and one for eight hundred dollars. Mr. RICHARDS. I have no recollection of them. I cannot recall anything as to' the money, the name or anything whatever connected with it. It would appear that the whole loan amounted to six thousand dollars and more. ANY. FREEDMAN'S SAYINGS AND TRUST COMP 131 By Mr. CAMERON: part, held by the bank Q. Is the loan now, either in whole or in ed by property that was secur was notes these Mr. LEIPOLD. One of thousand dollars. It three for s sold and bought in by the commissioner id. unpa rs dolla red hund y-one leaves only thirt you from Mr. Leipold, and I Q. Look at that letter. It is a letter to is to the loans concerning r am informed that the reference in the lette you. which the chairman has just examined I have no recollection of ever reMr. RICHARDS. (Reading the letter.) have received it. It may have ceiving a letter of this kind. I may of it. If I had, I should have at on lecti come to me, but I have no recol Leipold, and asserted to him that once made a written statement to Mr. that money in any way or shape of any ved it was not true that I recei whatever. fact that you yourself are Q. I notice that it says: "In view of the of the notes referred to."— one for y reported to have received the mone of the notes referred to? A. That I received the money for one call your attention especially. to e desir I Q. Yes, sir. It was to that is the first intimation I have —A. I never heard of that before. Thisbut I never knew that I had r, rumo e vagu of had of it, except a sort money. It is not a fact; I will been reported as having received that any consideration in any way or ved recei r neve I . say that positively r received one farthing then or shape connected with any loan. I neve since from Mr. Lamson or any one else. ld, at the time he called Your Q. Do you remember whether Mr. Leipo payment1—A. After I had their upon attention to these loans, insisted e, as indorser, he called my attenfound the loans in the bank, of cours Leipold may have notified me Mr. but tion to them. I do not know H.Cook, but not till after I had himself, perhaps. I was notified by John been taken from me. had ng ythi ever and been entirely disabled E, FOR A CHURCH PROPENDORSING MR. LAMSON'S NOT H STREET. ENT RTE FOU ERTY ON of indorsetnent you gave Mr. Q. What was the aggregate amount , if I recollect; one for three notes Lamson 7—A. I think there were two dollars. dred -hun four for hundred and another you made?—A. Yes, all of them. Q. Are these all the indorsements I indorsed one of them. The three I indorsed these notes. I know that on about whatever. I have tried lecti recol no hundred-dollar note I have never seen the note since it have I to call it up a good many times, but sed them. If so, it was indor I y likel is it that ume was made, but I pres , but I did not know good was osed at a time when Mr. Lamson I supp r had any consideration from it in neve have I it. t abou anything at all any way. a question, Mr.Richards. Did Mr. LEIPOLD. I would like to ask you al times in answer to the letsever bank the at me you not come to see .did you not at one interview tell ters that were addressed to you, and a church—not for you, perhaps, me that the money was gotten to buildchurch out on Fourteenth street? but that it was gotten to build a little that exactly. I can state what Mr. RICHARDS. No, sir; I do not sayof the church, Mr. Lamson was er matt the In that transaction was. a little piece of property—a church interested with me in the buying of ing. Mr. Lamson agreed to take a property; it was not a church build a certain portion, of sixteen huncertain portion, and I agreed to take amount. We were to pay sixteen dred dollars. I think that was the 132 FREEDMAN'S SAVINGS AND TRUST COMPANY. hundred dollars. I assumed twelve hundred;and Mr. Lamson assumed the four hundred. At that time he had a note of mine for four hundred dollars. I do not know but he had the three hundred. dollars before that. I cannot say as to that. I paid him twelve hundred dollars out of the sixteen hundred.. I paid the twelve-hundred-dollar note or the twelve hundred dollars out of the sixteen hundred dollars. It was when I was in a better condition financially than I am now. Mr.Lamson was to pay the other. He finally got me to indorse this four-hundred-dollar note, and I suppose. he went to the bank with that and got the money. In relation to the question of Mr. Leipold, I did call on Mr. Leipold soy, eral times, hoping that by some means Mr. Lamson would make an arrangement to meet that four hundred dollars, and he has assured me many and many a time that he would do ,so. I would like to ask Mr. Leipold whether Mr. Lawson ,has not often called upon him as to making arrangements about it, assuming • in that way that he was responsible for it. Mr. LEIPOLD. I do not remember. Mr. CAMERON. No doubt Mr. Lamson, being the maker of the note, is liable at least. Mr. RICHARDS. I wanted to know if Mr. Lamson did not call on Mr. Leipold with reference to making an arrangement for that note. I asked him the question to show that I did not receive any consideration for it; because if Mr.Lamson still assumes that he is responsible, he would not do that if I had received,a Consideration on that note. Mr. LEIPOLD. I do not know Mr. Lamson. I do not know that he called to see me. There was a gentleman whose name I do not recall (it was not Lamson) who has been to see me and has .spoken to me on the subject several times, as to whether the commissioners would not make some compromise; that it was a church affair and they would like very much to make some compromise. Mr. RICHARDS. He has never paid it, and I do not know whether he will ever be able to pay it. I have been assured by Mr. Lamson frequently that he had called on Mr. Leipold and spoken to him about it. Mr. LEIPOLD. We have judgment for the amount of money against Mr. Lamson and Richards both. Mr. RICHARDS. I am aware of that. I know that judgment was . taken against me as an indorser, and Tom free to say that if the Lord ever puts money enough into my pocket I will pay it. Mr. CAMERON. The Lord will not do it for you. You must do it yourself in some way. Mr. RICHARDS. Well, the Lord may help me to do it. I have got a good deal of confidence in the Lord yet. The CHAIRMAN. The Lord, Mr. Richards, doubtless is engaged in more profitable business than putting money in your pockets. THE D. A. CONNOLY LOAN. Q. Let me ask you, Mr. Richards, what you know about the loan to D. A. Connoly in September, 1872. Upon what security was that loan made, and who approved the security "?—A. I have no recollection of it whatever. I do not know the man, and I do not know anything about the loan. THE VANDENBURGH LOANS. Q. What do you know of the loans made to Vandenburgh horn Oc- FREEDMAN'S SAVINGS AND TRUST COMYANY. 133 tober, 1872, to April, 1873, and what were the securities upon which these loans were made f—A. I think I do not know all of the loans made to Vandenburgh. I think some of them were made before I became a member of the finance committee, and I do not recollect of any loans being made to him by the action of the finance committee after I was a member. My impression was then and is now that his loans were made on the strength of District securities; that is, that he deposited District securities in the .bank and took money for them. I cannot say about that. I had nothing to do with tke financial work of the bank. I only knew it was said that he was drawing money on District securitiespbut I had no personal acquaintance with him. He never came to me with reference to them at any time whatever. Q. There were two loans made to Vandenburgh when you were reported in the minutes of the comrnitte as being present. [The clerk of the committee read the minutes of date October 9,1873.] Mr. RICHARDS. Does it specify the loans? The CHAIRMAN. One is for twenty-two hundred and forty-eight dollars and one for five thousand dollars. There were present in the committee at the time Messrs. Alvord, Cole, Balloch, Richards, Tuttle, and Langston. Mr. RICHARDS. I presume that is the one I have in mind. I recollect the application, and that I opposed the application and considered that the Distinct securities were not the right kind of securities to effect loans upon the bank. I took that ground at almost all the meetings. Many of the loans were made, however, upon them when I was not present. I think some of them were the Vandenburgh loans. I know that I, at that time, did not consider that District securities were the proper kind of securities for the bank to loan upon. By Mr. WITHERS: Q. I understand that a majority of the finance committee thought differently ?—A. Yes sir. Q. And authorized 'the loans I—A. Yes, sir. THE LOANS TO R. I. FLEMING. By the CHAIRMAN: Q. What do you know about the loans made to R. I. Fleming from July, 1872, to January, 1874 1 What was the character of the securities when given, and who approved them as members of the finance committee I—A. I cannot mention the securities except in this case. Whenever any loan was called for before the finance committee, and an application was presented to the finance committee, there was never a loan made without a good report accompanying it in regard to the value of the property, and that we were assured by the actuary,and by other parties who were employed to examine the property, that there was at least a value of double the amount called for in every case. So far as I know, this was the custom. I do not know of a single instance when we were not particular in regard to that. I think there were some loans to Mr. Fleming, but in all cases his securities were considered more than double the amount that wa's called for; that iS, they were so considered at the time. Q. You were on the finance committee when this loan was made, were you not 1—A. Yes, sir; when some of them were made; but the identical loans I could not mention. • 134 FREEDMAN'S SAVINGS AND TRUST COMPANY. THE LOANS TO A. PANNELL. Q. What connection had you with the loans made to A. Pannell?— A. None whatever, that I know of. Q. Have you any recollection of those loans?—A. No, sir; none whatever. I cannot think of any now. THE EVAN LYONS LOAN. There is one point in reference to the Evan Lyons loan that I might possibly volunteer a statement upon, as General Ballochedid, if I may be permitted. The CHAIRMAN. You are at liberty of course to make such statement. Mr. RICHARDS. I happen to know as much about that as about any other loan, because Lyons came frequently to me in my office to secure my influence. I was rather opposed to it, and on the ground that General Balloch stated that there was at first another lien upon it, and my impression is that at the first offer that was made there was not the full amount of his property guaranteed. Ithink there wassome division of his property, so that while all his property was not guaranteed when he asked forloans at first, they werefor small amounts; finally the loan was carried up to $34,000, and the full amount of his property was given as security. My impression in regard to that is similar to that of General Balloch. It strikes me that when he asked for the first loans they were of small amounts, and he did not offer the whole of his property as security, and he afterwards changed that. I recollect in a conversation with me he first wanted to get a small loan; then he changed his mind. He was to see me half a dozen times, and finally he came to me and said that the whole of his property should be given as security for the loan. Then I said, "If the property is worth double the amount of thirty-four thousand dollars I have no objection to the loan." THE SENECA SANDSTONE COMPANY LOAN. I would like also to say a word in regard to the loan to the Seneca Sandstone Company. I was present at the time that the subject of the loan to that company was brought before the finance committee. That was the first that I knew of it, and I thought with the rest that there were some objections to it, and I took very decided grounds against the surrender of those securities; and I may say that to the last I took decided grounds against it. I believe that I never waived my objections. By Mr. CAMERON: Q. You wanted to let it be fought out in the courts ?—A. Yes, sir; I thought if they felt they really had a claim upon those securities that we ought to let them test it by law. That is the position I took. Mr. CAMERON. That is what ought to have been done. By Mr. GARLAND: was the vote of the trustees on that proposition ?—A. I canWhat Q. not quite say. My impression is that when the final vote was taken I was not present at the meeting of the finance committee. I have no recollection of voting. I may have been present; if so, I know that I took my ground against it, but I have no recollection of being present when that vote was taken. I think I was called away and the vote was taken when I was not at the meeting. I cannot recollect of the vote ever having been taken. FREEDMAN'S SAVINGS AND TRUST COMPANY. 135 Q. Were there any opinions from legal gentlemen given on the subject f—A. Yes, sir; I recollect especially that an opinion was given by Mr. Langston, after he had consulted with others. Still, I took the ground that if we did not do it, the better way was for us to let them secure it by a suit. They were given for some consideration I suppose, and I felt as though, having been given for some consideration, we ought not, as a matter of course, to surrender them until they could prove that we had no right to them. SELECTION OF THE COMMISSIONERS. Q. You were present at the time of the selection of the three commissioners, were you not ?—A. Yes, sir; I was. Q. You have heard the statement of General Balloch in reference to that f—A. Yes, sir; and I fully agree with his statement. Q. You have no other facts or circumstances that will give any additional light upon that ?—A. None at all. He has stated very clearly all the facts of the case. PROVISIONS REGULATING ACTION OF THE BOARD. By Mr. WITHERS: Q. I see under section 3 of the act of incorporation the following provision regarding the management of the business of the corpora• tion (reading): SECTION 3. Be it further enacted, That the business of the corporation shall be man aged and directed by the board of trustees, who shall elect from their number a president and two vice-presidents, and may appoint such other officers as they may see fit; nine of the trustees, of whom the president or one of the vice-presidents shall be one' shall form a quorum for the transaction of business at any regular or adjourned meeting of the board of trustees; and the affirmative vote of at least seven members of the board shall be requisite in making any order for or authorizing the investment of any moneys, or the sale or transfer of any stock or securities belonging to the corporation, or the appointment of any officer receiving any salary therefrom. Q. Do you know whether the provisions of that law were observed in reference to this transaction f—A. I know that it was the intention to observe them after I became acquainted with them and became a member. Q. A member of the board ?—A. No; of the finance committee. I had nothing to do with the loans excepting in the general meetings before. I do not know that my attention was ever called to that particular act. I know there was a very great degree of hesitancy in all cases in regard to loans. I know that loans were refused on that ground after I was a member of the finance committee. Q. You are unable to state whether that particular provision of the law was or was not observed in the transaction which we have now under consideration ?—A. I think it was in all cases that came before the finance committee. I do not know, what was done outside of the finance committee, but I know that the finance committee acted on the loans rigidly, and that we had our meetings, as General Balloch stated, once a week, sometimes oftener, and they lasted for two or three hours a day. PROVISION CONCERNING A QUORUM. By Mr. CAMERON: Q. Of how many members did the finance committee consist, Mr. Richards f—A. I think we always considered five a quorum. 136 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. So, then, if five was a quorum, a majority of a quorum could transact business ? A. My impression is that there were nine members. I do not quite remember. I know that we considered five to be a quorum.; that is the impression that I have. I may be mistaken about that, but I think the number was changed to five, and I think that three was considered to be a majority of the quorum. But there are some points about that which I cannot at this time quite recollect. Q. If five mem bers constituted a quorum and a majority of the five could make and d.etermine all matters before them, then you can see that three of the nine members could accept or reject loans, or do any other business that might properly come before the finance committee.— A. I understand from that section of the act incorporating the company, which you have read'that there were nine members of the finance committee. Mr. BALLOCH. There were only five members of the finance committee. By Mr. WITHERS: Q. This has reference to the board of trustees, not to the finance cornmittee.—A. 0, a quorum of the trustees. I recollect. Then it was five, and three constituted a quorum of the finance committee and nine for-the board of trustees. I recollect now. FINANCE COMMITTEE'S ACTION ON LOANS. By Mr. CAMERON: Q. Did not the board of trustees, in fact, render the provision of the charter read by Senator Withers nugatory when they authorized the finance committee of five to accept loans and transfer securities and do any other business that might come before the board l—A. I do not know that I can give an answer to that question. I can hardly say whether it was legally correct or not. Whenever the finance committee made a loan, it was always understood that the loan, or that decision of the finance committee, was to be reported to the full board at its next monthly meeting, for their approval. Q. Was that understood for loans that were of the ordinary nature?— A. Always; every loan. The report of the actuary was made to the full board monthly, and all these subjects that had come before the finance committee were then acted on or reacted upon, and approved or .rejected by the board; in some cases rejected. By Mr. WITHERS: Q. What I wanted to get at was if you knew and could inform us who were the seven affirmative votes in the board by which this transfer of securities was authorized f—A. Of the board of trustees ? Q. Yes, sir.—A. Of the Seneca Sandstone loan ? Q. Yes,sir.—A. Will you please state the provisions of the act again 7 Mr. WITHERS. This by-law requires that the— Affirmative vote of at least seven members of the board shall be requisite in making any order for or authorizing the investment of any moneys or the sale or transfer of any stock or securities belonging to the corporation, or the appointment of any officer receiving any salary therefrom. Now,loans were made,to secure which certain securities were deposited. These securities were transferred afterwards. I wish to ascertain whether that .transter was made in accordance with the provisions of the law I have quoted.—A. Well, I cannot tell. I do not know who NY. FREEDMAN'S SAVINGS AND TRUST COMPA 137 that I cannot were present in the board; I cannot say precisely about have been may It board. the before upon recollect when it was acted made with less when I was present, but I do not remember; and if of the law. than a majority of seven, of course it was a violation ;I not f—A. or was r it Q. But you have no recollection whethe t. presen not I was action final the of time think at the of trusMr. LEIPOLD. You will probably find the action of the board es' mintruste the in date that ding succee g meetin next very the at tees ute-book there (referring to the book). that of NoMr. WITHERS. I find that it was the next meeting after d, Stilwell, . Alvor t Messrs presen were there see I and 1873, vember 13, and Ward, ta, h, Augus Balloc ton, Langs Lewis, Wormley, Purvis, . Bowen ed it. All Mr. BALLOCEL Mr. Bowen was the only man who oppos the rest voted for it. g? Mr. RICHARDS. Are these the minutes of the meetin were present at Mr. WITHERS. Yes, sir; it does not appear that you is mentioned that It h. thoug ed record not is vote The g. that meetin and no record of the they adopted the report of the finance committee, vote by which it was done is given. By Mr. CAMERON: gs of the board Q. Mr. Richards, how often were the regular meetin ly, unless we Month of trustees held? Were they held weekly ?—A. had occasional special meetings. r day of the Q. What day in the month f—A. It was on a regula day. what just tell now t canno I but e, suppos month, I Mr. LEIPOLD. On the second Thursday. second week of Mr. WITHERS. They seem to have been held in the the month. By Mr. CAMERON: se the if an application were made for a loan, we will suppo ed to Now, Q. referr were it if , month any in met es truste of day after the board until it was submitted the finance committee, was the loan made or notg, a month thereafter 7 meetin next their at es truste .of to the board the report of the Were not the loans, as a matter of fact, made upon board of trustees, the to them ting submit t withou ttee, commi e financ is that in all eases where without waiting a month f—A.My impression estimation of the finance. the in there was any doubt as to the securities but not in large sums. ts, amoun small in d effecte were committee,loans sally—were brought univer think I Large sums almost universally— but I think that ed; accept were they before board whole before the doubt as to the any be to ered consid was in small amounts, when there ttee acted e commi financ the security, the loans were effected. At least the pains to took never I e. suppos I them, ved appro upon them and the tinancte committee examine what the actuary did after the vote of They were always repaid. y usuall were they se suppo I bat was hal, meeting, so that there ported, however, even then, at the next monthly think in one or two, I roval. was a chance for their approval or disapp had been paid, and money which in es al—eas revers cases there was a two cases of that or one were there it had to be refunded. 1 think kind. the loan. I think Q. Refunded by whom 7—A. By the party effecting I cannot call up cases. two I have a recollection of the fact in one or es did not truste the that ber remem I think I the facts distinctly, but ed. approve the loans and they were refund 138 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Suppose such a loan was made on a note due in sixty days, and the maker of the note or the person who had it discounted had received the money; you do not pretend to say, do you, that you could compel him to refund or pay the money until the note matured ?—A. It was not allowed to be reissued. I won't be positive about that, but I have one case in mind where the loan was not extended at all in consequence of some doubt about it. Q. Well, my only object in asking this question was to ascertain whether the board of trustees really strictly followed out the provisions of the statute read by Senator Withers, or whether they delegated their authority to the finance committee to make the loan.—A. I cannot state with regard to that, because I do not know that there was any formal act on the part of the trustees in delegating power to the finance committee, any other than is given in the law. Mr. CAMERON. Well, that is all at present, Mr. Richards. I suppose that if you desire to make any further explanations we will hear them. PERSONAL ACCOUNT OF Z. RICHARDS. Mr. RICHARDS. I would like to state that my pass-book. which I used in connection with the bank, says that there is in my favor a certain amount to offset the notes which I was indorsed for. I find, however, that a new entry has been made upon my pass-book of two hundred dollars, charged against me, which is a second charge; it is charged twice over. I make this statement here so that when I come to settle with the bank, as I hope to do, I shall have that matter brought up. By Mr. GARLAND: Q. Well, in that connection, Mr. Richards, have you examined the books of the bank to see whether or not you have overdrawn your account f—A. I have not examined the bank-books. Q. You have not examined the books of the bank l—A. No, sir; I have not examined them; I have my check-book. Mr. GARLAND. You had better make an examination of that, for we may interrogate you again on that point. Mr. LEIPOLD. Why, Mr. Richards, you have your own pass-book, you say; did you ever speak to the commissioners, or to any one of them, about that—A. I did, sir; and have letters from you on that very point. Mr. LE1P0LD. On what point; that your account is overdrawn ? Mr. RICHARDS. Yes, sir; in order to make it overdrawn the entry of two hundred dollars is made twice over. Mr. LEIPOLD. Did you ever come back with your pass-book to have it examined into ? Mr. RrodIARDs. I have sent a statement to yourself in writing. Mr. LEIPOLD. You have ? I do not remember any such statement. The fact is, Mr. Richards, your account is overdrawn, and I have written you letters calling your attention to it. Mr. CAMERON. He explains that by stating that the sum of two hundred dollars was charged against him twice on the same day, and the same two hundred dollars. Mr. LEIPOLD (addressing Mr. Fitzpatrick, committee's expert). Has Mr. Richards's account been examined? Mr. FITZPATRICK. Yes, sir; and it shows an overdraft of about one hundred and fifteen dollars. FREKDMAN'S SAVINGS AND TRUST COMPANY. 139 TESTIMONY C.,\F.1 GEORGE W. STICKNEY. WASHINGTON, D. C., January 24, 1880. Mr. GEORGE W. STICKNEY sworn and examined. By Mr. CAMERON: Question. Mr. Stickney, where do you reside at the present time ?— Answer. In Washington, D. C. Q. How long have you resided in Washington 7—A. Almost sixteen years. Q. What connection, official or otherwise, had you with the Freedman's Bank,as it is called I—A. I was clerk in that bank from the 1st of May, 1867, to the 1st of July, 1869. I was then elected assistant actuary, and was assistant actuary till the 1st of August, 1872, and actuary from that time till the bank closed. Q. You may state, generally, what the duties of the assistant actuary were I—A. About the same as the duties of an assistant cashier in an ordinary bank. Q. Who was the actuary during the lime that you were assistant actuary I—A. Mr. D. L. Eaton. Q. And the duties of the actuary were about the same as those of a cashier in an ordinary bank I—A. Yes, sir. Q. Was the office of assistant actuary and actuary a bonded office I— A. It was not, sir. Q. Neither I—A. The assistant actuary was not. Q. Was the actuary I—A. Yes, sir; it was. Q. Did you give bonds when you became actuary I—A. I did not; no, sir. Q. How were you excused from giving bonds I—A. I never was asked or required to give bonds until the meeting in March, 1874, I think, or the first of April, when the question came up of bonding the officers; and at that time I said, knowing the Condition of the bank, that I did not feel like giving a bond, and if it was required of me, I would resign. Q. You declined to give a bond,then, at that time, and it was not insisted upon I—A. Yes, sir. METHOD OF OBTAINING LOANS FROM THE BANK. Q. Explain, now, if you please, in a general way, the method of obtaining loans from the Freedman's Bank.—A. Generally the application was made to the actuary, or to the president of the board, and by them referred to the finance committee for their approval. If they were realestate loans, the finance committee generally referred them to the actuary and president, or to the actuary alone, for valuation of the property, to report at the next meeting. The finance committee held meetings once a week; upon the approval of the finance committee the loans were made. There were some loans on personal securities that were made by the officers; most of them were reported to the finance committee for their approval. If any securities were objected to by the finance committee, why, it was not done again. Q. The rule, then, was to refer applications to the finance committee —A. Yes, sir. Q. And the applications would then be passed upon by the finance committee, for approval by that committee I—A. Yes,sir; and the loan was made. 140 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Was it made prior to submitting it to the board of trustees ?—A. It was. Q. The only loans submitted to the board of trustees were those that had been already made.—A. Yes, sir. Q. No matter whether the loan was for a larger or smaller amount ?— A. Except for loans on real estate and other securities outside of Washington. We had applications for loans from the different branches. All these were referred to the finance committee, and by them to the board of trustees. There were no loans made outside of the city, unless authorized by the board of trustees. LOANS UPON INDIVIDUAL NOTES. Q. Do you recollect whether any loans were ever made upon the personal guarantee of any member of the board of trustees ? What I mean by guarantee is, upon the note of individuals, or their indorsement V— A. I do not remember of any loans having been made on any notes— that is, personal notes—of members of the board of trustees. Some of them may appear as officers of corporations, when loans were made. A ew foams won- e made on the indorsements of one or two of the members, wo of whom have been here this morning. Q. Do you know, as a matter of,fact, whether you as assistant actuary, or as actuary, have made any loans that were not approved by the finance committee?—A. I think there are some few; yes, sir. Q. Can you state now what loans these were ?—A. I cannot; it was a long time ago. Q. Well, when not approved, what wa8 done in such cases?—A. There were but a few loans, a few small loans, and some vouchers, and one thing or other, amounting perhaps to four or five thousand dollars, that were carried along from mouth to month without anything being said about them, and some small notes, amounting to eight or ten thousand dollars, of that kind. Q. I suppose you would try to collect them and not make any more such loans?—A. 0,no; these were kept along from month to month. THE SENECA SANDSTONE COMPANY LOAN. Q. A great deal has been said about this loan to the Seneca Sandstone Company; can you give us any information in regard to that loan ? —A, The only information 1 can give you in regard to that loan is what is in here, and my statement to the finance committee and board of trustees at the time the matter came up of returning the securities and the note. Q. Well, you may repeat that, so that it may go into the record ?—A. I will read a statement that I made to Mr. Langston as chairman of the finance cominittee. THE MATTER OF THE "SENECA STONE COMPANY." Statement of the actuary of the Freedman's Savings and Trust Company in regard to the transactions had with the Maryland Freestone Mining and .Manufacturing Company, and with Messrs. Kilbourn and Evans. . WASHINGTON,D. C:, November 6, 1873. J. M. LANGSTON Esq., Special Committee; Chairman' At your request I would make the following statement as to transactions had by this company with the Maryland Mining and Manufacturing Company, and with Messrs. Kilbourn and Evans. FREEDMAN'S SAVINGS AND TRUST COMPANY. 141 $4,000 was loaned to said 1st. As shown by the books of the company, May 18, 1870, secured by $10,000 of their y, Compan Mining and turing Manufac ne d Freesto Marylan second-mortgage bonds. y bought of said Mary2d. July 25, 1870, the Freedman's Savings and Trust Compan tgage bonds at 90, with land Freestone and Mining Company $20,000 of their first-mor said bonds back from the bank the verbal understanding that the company would take at par after two years. n's Savings and Trust 3d. July 17, 1871, a further loan was made of the Freedma by $49,000 second-mortgage Company by said Mining Company, of $27,000, securedthat up to January 2,1872,the bonds of the same as col'ateral. This statement shows and Manufacturing Combank held second-mortgage bonds of the Maryland Mining pany, $59,000, and $20,000 of the first-mertgage. ions as between the bank 4th. On January 2, 1872,as shown by the books,the transact in debt to the Freedbeing date that at y compan said settled, were y compan and said loaned: cash for y, Compan Trust and Savings man's $4,000 00 1st. Loan of May 18,1870 18,000 00 e bonds 2d. Loan of July 25,1870, being amount paid for 20 first mortgag 27,000 00 3d. Loan of July 17,1871 2,785 73 4th. Interest due on above loans December 30,1871 51,783 73 Total due Freedman's Savings and Trust Company ,this ion covering transact a , company this of books the to At this date, according whereby their note was given whole matter was had with Messrs. Kilbourn and Evans,as follows,,viz:24 shares Amerfor $50,000, payable six months after date, and secured75 shares Metropolitan Paving ican Dredging Company, Philadelphia, Pa., S2,400; House stock,50 par value, Company stock, 100 par value, $7,500; 1,000 shares MarketCompany,$2,000; 150 bonds ce Insuran Life litan l Metropo Nationa shares 40 $50,000; $75,000; and payment by Maryland Mining and Manufacturing Company,$500 each, y of $1,785.73 on account the Maryland Freestone Mining and Manufacturing Compan National Bank, signed by of interest. This payment was made by check on the First C. W. Hayden, Treasurer. Very respectfully, G. W. STICKNEY,Actuary. A true copy. Attest: A. M. SPERRY, Agent. to the matQ. Have you anything to add to that statement in regard tion up transac that to regard in know I that all ter 1—A. Well, that is the actuary and to the time that we were informed of the agreement of the finance committee with Messrs. Kilbourn and Evans. president of the Q. Under date of January 2, 1872, John L. Kidwell, twenty thousand bank the from sed purcha ny, Compa one Sandst Seneca one Company. dollars of the first-mortgage bonds of the Seneca Sandst of the $20,585 Now, did the the Freedman's Bank receive the benefitthe proceeds of paid for these bonds f—A. It did not. So far as'I know, he fifty-thounote—t that amount were part of the fifty-thousand-dollarwhich, with the securiEvans, and rn Kilbou . Messrs of note sand-dollar of the Maryland ties of that note, took up all the securities—the loans that time held by at ny, Compa g cturin Manufa and Mining one Freest the bank. amount—A. Q. Well, does any credit appear on the books for that t of these paymen the be would ed appear that entries only No, sir; the d on charge dollars nd thousa fifty the and loans on one side of the book, side. other the THE AGREEMENT WITH KILBOURN & EVANS. rn and Q. There is a loan appearing on the books as made to Kilbou that not Evans, January 2, 1872, of fifty thousand dollars. Was or was t with accoun an actual loan to them, or was it simply a transfer of this Simply a the Seneca Sandstone Company to the other account °1—A. one COMSandst Seneca the by bank the to due t amoun the transfer of 142 FREEDMAN'S SAVINGS AND TRUST COMPANY. pany. The only money that I knew of as passing in the transaction was $1,785; and that was paid by the Maryland Freestone Mining and Manufacturing Company to the bank—the difference between fifty thousand dollars and the amount due with interest. Q. What became of this amount, as charged to Kilbourn and Evans; did they pay it ?—A. They did not. Under an agreement all the securities mentioned in the note, and the note, were returned to Messrs. Ku. bourn and Evans with the exception of the seventy-five thousand dollars bonds of the Maryland Mining and Manufacturing Comsecond-mortgage' pany. Q. It amounted, then, in substance, to the purchase of these seventyfive thousand dollars second-mortgage bonds?—A. Well,the agreement says, "Said note is payable six months after date, with ten per cent. in. ; and in case said Evans and Kilbourn's note shall not be paid as it becomes due, then it is fully agreed that the Freedman's Savings and Trust Company shall keep the seventy-five-thousand dollar bonds of the Maryland Freestone Manufacturing and Mining Company as full payment of said note and interest, and surrender to said Evans and Kilbourn the other securities above enumerated [save and except the $75,000 bonds of the Maryland Freestone Manufacturing and Mining Company] together with their note." Q. The bank bought these twenty thousand dollars of bonds in the first place, did it notl—A. Yes, sir. Q. And then the bank sold these same bonds to Kidwell for $.20,585 ? —A. I do not know whom the bonds were given to. Q. Were not the bonds sold by the bank for cash f—A. No, sir; I have no personal knowledge of that fact; but I think not. By Mr. WITHERS: Q. In that connection, I would ask your attention to this memorandum,[showing to witness an entry in the bond-book]. WITNESS [reading]: JANUARY 9, 1872, SENECA CO., 90. NOTE. Mr. John L. Kidwell, on the 9th January,repurchased these bonds, paying for them, in cash,90c,-=.$18,000. With interest on that amount at 10 per cent. from July 26, 1870, date -a purchase by this company, less the amount of coupons which had matured while the company held them. $18,000 Bonds 2,580 Interest, 10 per cent. 20,580 Less gold coupons. Mr. WITHERS. This is a memorandum, on this book, which is called the "bond-book" of the bank. Please look at that entry. Mr. STICKNEY. (Examining.) I have seen that entry. Q. Was not that entry right ?—A. The note (memorandum) was by Colonel Eaton. Q. The Colonel Eaton who was then actuary ?—A. Yes, sir; Colonel D. L. Eaton. By Mr. CAMERON: Q. Well, do the books of the bank show that that statement is true or false ?—A. They show that it is not true. Q. Well, if it is not true, it must be false. FREEDMAN'S SAVINGS AND TRUST COMPANY. 143 Mr. WITHERS. There cannot be two sides to that. By Mr. CAMERON: Q. Under date of January 9, 1872, Mr. Stickney, there is a receipt signed by John L. Kidwell, acknowledging to have received from Mr. Eaton, the then actuary, seventy-five thousand dollars bonds of the Seneca Sandstone Company; yet, as a fact, we find these bonds are still in possession of the commissioners; can you explain anything about that receipt f—A. I cannot; I never heard of it before, that I re., member. Q. In whose handwriting is that paper [showing receipt]f—A. In the handwriting of Colonel Eaton. Mr. LE1POLD. That receipt was found after the former investigation. Mr. STICKNEY. I do not know anything about that. Mr. GARLAND. Let it be established. You know, Mr. Stickney, that it is in the handwriting of Mr. Eaton 1—A. Yes, sir. Mr. CAMERON [reading]: FIRST NATIONAL BANK, WASHINGTON, D. C., June 9, 1872. Received of D. L. Eaton, actuary, $75,000 convertible bonds of Maryland Mining and Manufacturing Company, which are held as security for two notes of said company, one for $27,000, dated May 18, 1870, and one for $4,000, dated June 7, 1870. JOHN L. KIDWELL, President. By Mr. CAMERON: Q. In the statement you read, Mr. Stickney—the same one that you gave before the Douglas committee, was it not Mr. STICKNEY. Yes, sir. Mr. CAMERON [resuming]. The one addressed to Mr. J. M. Langston, and dated November 6, 1873, in giving a statement of the loans made to the Seneca Sandstone Company, you include among them a note dated July 25, 1870, for eighteen thousand dollars. This appears to be the amount paid by the bank in the purchase of these bonds. Now, if the bank purchased them, why did you include the amount, and class it with the loans to the Seneca Sandstone Company f—A. Because, while it showed there as a purchase, it virtually was a loan, under an agreement—a verbal agreement, as I understand it —with Kidwell, then president of the company, that they should pay six per cent. gold interest, and redeem them at par at the expiration of two years. Q. So that the books do not show truly what the transaction was.— A. No sir. Q. Well, what was the object in making that—perhaps I will call it erroneous, or we had better call it false—entry in the books f—A. I do not know. Q. Well, by whose direction was it made f—A. It was made by direction of Colonel Eaton, who was then actuary of the Freedman's Bank. By the CHAIRMAN: Q. Were you connected with the bank at that time f—A. I was. Q. In what capacity f—A. I was assistant actuary at that time. Q. And knew of this transaction at the time f—A. Yes, sir. I knew about the agreement afterward. I made the entry on the books at that time, as instructed by the actuary, as a purchase. I understood afterwards, that they were to be taken up at the end of two years at par. By Mr. CAMERON: Q. Mr. Stickney, in the same statement made by you to Mr. Langston, 144 FREEDMAN'S SAVINGS AND TRUST COMPANY. you give the whole indebtedness of the Seneca Sandstone Company on the 2d of January, 1872, to the bank, including the eighteen thousand dollars just referred to, as $517785.73. Now, that includes accrued interest; yet on the 9th of the same month, it appears that the eighteen thousand dollars were bought from the bank by the Seneca Sandstone Company. Now, state how it happens that Kilbourn & Evans assumed a debt of fifty thousand dollars, which, as is stated, was only an act of accommodation to the bank; and when the loan is again put back, in the name of the Seneca Sandstone Company,and Kilbourn & Evans's collaterals surrendered (excepting the $75,000 bonds), the Seneca Sandstone Company is charged with a loan of fifty thousand dollars, eighteen thousand of which has, in the mean time, been canceled.—A. Do I understand the question to lpe why, after the note had been surrendered to Kilbourn & Evans, it was charged to the Seneca Sandstone Company f Mr. CAMERON. Yes, sir. A. I put it back according to this agreement,that the bank should take the bonds, and it was simply charged as an amotint due from the company. Q. Do you know whether any of the other officers of the bank had any knowledge of the agreement made by Evans with the actuary, in -egard to this bond, at the time it was madef—A. I do not know. If the agreement was indorsed by three members of the finance committee, the majority of the finance committee indorsed that agreement. Q. It appears, Mr. Stickney, that the bank held as collaterals for this loan to the Seneca Sandstone Company fifty-nine thousand dollars of second-mortgage bonds, exclusive of the twenty thousand dollars first. mortgage bondsf—A. Yes, sir. Q. These were first-mortgage bonds—the twenty thousand dollars. Now state how the balance of sixteen thousand dollars of second-mortgage bonds (which go to make up the seventy-five thousand dollars now held by the commissioners) came into the possession of the bank. Where did they come from f—A. All I know about it is that they appear there as collateral for the note of Kilbourn & Evans of fifty thousand dollars. The first I saw of any seventy-five thousand dollars, we had it previous to that fifty-nine thousand dollars. Q. Well, were these second-mortgage bonds slipped into the bank as security in the place of the twenty thousand dollars first-mortgage bonds that had slipped out in some way f—A. The seventy-five thousand dollars, under the agreement, was slipped in for all that Maryland Freestone Mining and Manufacturing Company loan in place of the twentythousand dollars first-mortgage bonds. As I understood it, by that agreement, as it was carried out, the bank received, for the fifty-nine thousand dollars second-mortgage bonds, seventy-five thousand dollars second-mortgage bonds; and the bank lost by the transaction the difference in value between the sixteen thousand dollars second-mortgage bonds and the twenty thousand dollars first-mortgage bonds. Q. Can you state whether Kilbourn & Evans, or Kilbourn & Latta, or any one of them, was ever employed by the bank in appraising the property of the bank, upon which it was proposed to make loans f—A. Kilbourn & Latta were designated by the finance committee to appraise all property on which loans would be made. Under an amendment to the charter of May, 1870, they acted in that capacity about a year, I think. ot. Q. I find under date May 9, 1870, of the finance committee's record, that Messrs. Kill:ourn & Latta, real estate agents, were nominated for FREEDMAN'S SAVINGS AND TRUST COMPANY. 145, appraisers; were they at that time indebted to the bank Y—A. I think not. Q. Can you state about what sums they received as appraisers of the bank 1—A. The parties applying for loans to the appraisers °I I said that I thought the appraisers were not indebted to the bank; but on the same page there appear to be a good many loans; I will take that back. Q. I asked the question because they had a good many dealings with the bank ?—A.. After you asked the question, it came to my remembrance that prior to May, 1870, the bank was not allowed to loan on real estate, but there were considerable many loans made, and Kilbourn & Latta gave their demand note, secured by real estate security, and got money on 4 in that way,and made the loan in that way. By the CHAIRMAN: Q. Well, had they not already loaned eighty thousand dollars on real estate, prior to the passage of the act you have just referred to l—A. Yes, sir; they were made on what was called the "available fund." They were all demand loans. By Mr. CAMERON: Q. On real-estate security—A. Yes, sir. The real-estate note would for be given for a certain length of time, but would be used as collateral the demand note. COMMISSIONS RECEIVED BY OFFICERS OF THE BANK. Q. Do you know, as a matter of fact, whether any of the officers of the bank, at any time, received coinmissions upon loans made by the bask Y—A. I do not; no, sir. Q. Do you know whether Mr. Eaton, when actuary, did or did not receive such commissions—A. I did not, while he was acting as actuary, know that he received commissions in any way. There was one witness, in the last investigation, who testified to some commissions on loans; but I never knew anything about it. Q. Do you know whether Kilbourn & Evans, or Kilbourn & Latta, bank were employed by the bank to appraise the property where the sir. were, They f—A. buildino, now stands Q. D you know what they were paid by the bank for their services in that matter—A. I think they were paid twenty-five dollars, although I am not sure. PURCOMMISSIONS PAID TO KILBOITRN & LATTA ,FOR CHASE OF REAL ESTATE. By Mr. CAMERON: Q. Look at that [handing witness a receipt]. State what paper that purports to be.—A. It is a receipt of Kilbourn & Latta for two thousand and sixty dollars. Q. What was the consideration in the case ? Was it compensation to them as appraisers of the bank property 3—A. No,sir; this was not for appraising the property of the bank; it is the commission paid to them for purchasing the ground on which the bank building now stands, on. Fifteenth-and-a-half street and the avenue. Q. That is, it is the commission paid to them for a real-estate transaction—a purchase for the bank f—A. Yes, ; they'were employed to purchase that property for the bank. 10 F 146 • FREEDMAN'S SAVINGS AND TRUST COMPANY. FEES TO W. H. WARD FOR EXAMINING TITLE. By Mr. GARLAND: Q: There is an item in the receipt, of.sixty dollars paid to W. H. Ward for examining the title; what is that—A.,Mr. Ward examined the title for the bank. Q. As a lawyer—A. Yes, sir; be is an examiner here—an examiner Gf titles; and we supposed at that time that he was the best examiner in the city. By the CHAIRMAN: Q. The bank proposed to purchase - the property, and paid the sixty dollars for this examination ?—A. Yes, sir; they did. Q. Is it not usual for the seller to furnish the abstract of titles?—A. Generally, here, the buyer. By Mr. GARLAND: Q. I want now to call your attention to the evidence of Hallet Ku. bourn given before the Douglas committee. He was asked this question, speaking of the purchase of this property to which we are now referring: "How was the compensation allowed you by the agents of the bank assessed and paid '1" He replied: "The bank never allowed us anything, and never paid us anything." Is that correctf—A. No, sir; they did pay this commission and this fee. Q. It appears from this paper that they paid them $2,000.—A. Yes,, sir; that is what they paid them. Q. Well, have you any recollection of the transaction—any knowledge of it?—A. Yes, sir. Q. Does your knowledge of what was paid correspond with the amottit stated in that receipt—A. It would appear to be a commission of two and a half per cent., or two thousand dollars on the purchase—a purchase of eighty thousand dollars. Q. Did you see that sum paid to them ?—A. No, sir; I did not see the money put into their hands. Q. But you know that the money was paid to them f—A. Yes, sir. Q. And you were at that time assistant actuary of the bank l—A. Yes, sir (looking at receipt). It is dated September 16, 1869; I was assistant actuary at that time. LOANS MADE BY PERSONAL APPLICATION AND THROUGH BROKERS. By Mr. CAMERON: Q. Now, to pass from that subject: were applications for loans ordinarily made by the persons applying for the loans, or were they made through agents or brokersf—A. Sometimes they were made by the parties applying in person, and sometimes through agents. Q. Well, what would you say in this respect as to the majority of the applications f—A. Along the first two or three years, I think the majority of the applications were made through brokers; but after the first year or so—alter 1871 or the first of 1872—one of the trustees made a motion (and I think it was passed by the board) that after that date no applications for loans should be rec3ived through brokers, and that ran along for a while and was then rescinded. Q. What was the immediate occasion for that action of the board FREEDMAN'S SAVINGS AND TRUST COMPANY. 147, A. The resolution was passed, I think, on account of some one of the trustees who did not wish Messrs. Kilbourn & Latta to get loans from the bank. Q. Have you any recollection or did you at any time have knowledge of any employe of the bank receiving commissions for any loan or loans made f—A. I have not, sir; I do not know that they ever did. THE J. C. KENNEDY LOAN. Q. Do you know anything of a loan made to J. C. Kennedy of twelve thousand dollars, on March 26, 1872 I—A. Yes, sir.. Q. On what security was that loan made I—A. That loan was made on a twenty thousand dollar second-mortgage bond of the Maryland Mining and Manufacturing Company. Q. Now, it appears that the transactions of which we have been speaking—those of Messrs. Kilbourn & Evans—in which the second. mortgage bonds of the company were substituted for first-mortgage bonds, and so on, were made in January, 1872. Can you explain why it was that so soon after that another loan of twelve thousand dollars was made on the same security I—A. I cannot, unless it was— Q. Was it not suspected at that time that these second-mortgage bonds were good I—A. Yes, sir; and Mr. Kennedy was supposed to be very good. Q. What was Mr. Kennedy's business I—A. He bad no business that I know of. He was a gentleman who lived here and whom I supposed to be wealthy. Q. Has that loan to Kennedy ever been paid I—A. Not to my knowledge. It is in court, I think, yet. I have here the record-book of the finance committee, referring to the making of that loan. Q. Well, you may refer to that. Who were present, and who passed upon that loan I-4.. (Witness reading.) "The conimittee met on special call. Present, Messrs. Alvord, Kelly and Langston. Mr. J. C. Kennedy offered a loan, or a request for a loan on his own note, for twelve thousand dollars, with collateral security for the same of twenty thousand dollars of Seneca bonds. After'discussion and consideration it was authorized." Q. Your understanding now is, therefore, that the loan was really made on the strength of Mr. Kennedy's personal responsibility, rather than upon the aoodness of the collateral I—A. Yes, sir. Q. Do you understand, Mr. Stickney, that the company was authorized at that time to make such loans without collateral securityI—A. I suppose they thought that they had sufficient collateral security in Mr. Kennedy,authorizing them to make the loan to him. (Witness smiling.) Q. Well, they might then, if that was their method, call anything collateral, whether it had any value or not I—A. L believe that Mr. Kennedy's executor declines to pay that loan, because he, Mr. Kennedy, did not get the money; it was made for the Seneca Sandstone Company; that is his defense. By Mr. GARLAND: Q. Tell us in that connection, Mr. Stickney, what you know about the attempt to collect it. You say it is still in court I—A. Yes, sir; it is. still in court. Q. How long has it beet( there I—A. Mr. Kennedy died the latter part of 1873 or the first of 1874. Before the bank failed I filed .a claim in the orphan's court against it, and since that time it has been in court, Q. And the executor contests it on the ground that the loan* was 148 FREEDMAN'S SAVINGS AND TRUST COMPANY. made to the Seneca Company, and Mr. Kennedy did not get the money t —A. Yes, sir. Q. What is the attitude of the case now f—A. Mr. Leipold can tell you. Mr. LEIPoLD. It is in the Supreme Court, and will be reached this term, I think. Q. Who is the appellant f—A. The executor. Q. Who gained it in the court below f—A. We gained it. Mr. CAMERON. I cannot quite see on what grounds they could contest it. THE HALLET KILBOURN LOANS. By Mr. CAMERON: Q. Under date of October 2, 1871, Mr. Stickney, a loan appears to Hallet Kilbourn of ten thousand dollars. The collateral for this loan was a note of Kilbourn, Evans & Clephane, indorsed by William S. Huntington, on ninety days' time; on the 24th of October of the same year another loan was made to Kilbourn on the same collateral, for the same time and amount. The first loan is recorded paid, as of January 3, 1872, and the second on July 2, 1873; but on the 3d of January,1872, the day the first loan was paid, the collateral for the second loan is changed for a note of Hallet Kilbourn in favor of Clephane, dated January 3, 1872, for ninety days, for ten thousand dollars. Now what I want to get at is, whether these were separate transactions and distinct loans, or was it simply an extension of the first loan f—A. I think it was a renewal or extension of the first loan. Q. Well,it appears that the entries on the books,do not show that it was an extension of the first loan f—A. Well, I think that the first loan was paid in money, and then the other was given the same day, or one or two days afterwards. Q. Then the first loan was probably paid with the understanding that either on that day,or very soon thereafter, another kian would be made to him ?—A.- Yes, sir. Q. Can you state whether Huntington and Clephane were were or not, at that time, members of the finance committeel—A. What is the date ? Q. The different dates begin with October 2,1871, and run on .to July 26, 1873.—A. In 1871 Mr. Huntington and Mr. Clephane were both members of the finance committee. Q. How was it in 1872?—A. Mr. Huntington resigned on February 8, 1872. Q. Did Clephane still remain a member?—A. I have not the date of Mr. Clephane's service. The records will show (turning over the minutebook of the finance committee). Q. Well, you need not now examine that further. The records will show whether these gentlemen were members of the finance committee or not.—A. I think Mr. Clephane was not; I do not see that he was at any of the meetings—yes, I see here that he was at the meeting of March 11, 1872. He was therefore a member at that time. Q. There is another loan to Kilbourn,of three thousand dollars, which remains unpaid. The collateral was Kilbourn's own note as president of some bogus railroad company, as I understand it. Do you recall anything about that?—A. It was a railroad company incorporated but not built (smiling). Q. Can you state why that collateral was accepted, and why the loan was not collected ? State any facts you may have in reference to that,— FREEDMAN'S SAVINGS AND TRUST COMPANY. 149 took the note, and I carA. All I know about that- is, that the actuary standing that it would be ried it in cash for a long while, with the under I think that after I became paid from time to time, and it was not; and . losses the actuary I charged it up, among which you regarded as a Q. Can you state about what time that loan, the first of 1872. , about think I ?—A. sort of call loan, was made It was carried as cash ?—A. cash as ed carri it was long how And Q. s. some six or seven month of any value at that Q. Well, was the collateral, as a matter of fact, not. The company think I but sure, am I , know not do I time?—A. called, if I remember right, got a charter through Congress, and it was run from the Baltimore and the National Junction Railway. It was to to have a union depot. A Ohio road around to Georgetown, and it was ess and was passed, but bill authorizing its construction was in Congrit is of any value now, unse suppo not do I and done, nothing was ever less the franchise might be. in regard to that loan?—A. Q. Is that all the information you have that. It is all I know about on ,of the loan was ever Q. Do you know whether or not any portiof it was paid, excepting on porti any er wheth know not paid ?—A. I do —something of that kind, but I some one or two hundred dollars, I think -am not sure. THE JOSEPH B. STEWART LOAN. made to Joseph B. StewQ. Let me call your attention now to a loan of the Union Pacific bonds in rs dolla and thous five on 0, art, of $3,25 were not held by bonds these that show books Railroad Company. The n. The amount perso other some the bank, but were left in the hands of how it happened that the bank in expla you Can id. .of that loan is.unpa in its possession, and which it made loans on a collateral which was not t. canno I &. of?-1 ol contr had appears it never fact of a loan, and I know Q. Do you know the fact?—A. I know themade on Mr. Huntington's was the facts of the case since. I think it finance committee, and said it request. He was then a member of the days. was all right; it would be paid in a few on $5,000 as collateral?—A. Q. Well, it purports to have been made bonds was a matter in suit. these of ssion As I understand it, the posse dollars, and I think Mr. Fant Mr. Stewart claimed some fifty thousand in his hands to be turned put were They r. was trustee in the matte 'over when the suit was decided. ? —A. Well, the suit has never Q. And were never in fact turned over been decided yet. By Mr. WITHERS: made nominally on the se-. Q. I understand you that this loan was possession of the bank, but the in not were which enrity of these bonds, Stewart?—A. They may have were in possession of the trustee of Mr. er them unless the decision deliv not could he but been in his possession so. do of the court authorized him to ,and is being adjudicated? Q. The ownership is still a matter of doubt or to some one else; that rt, Stewa Mr. to g --A. Yes; they either belon is a matter of doubt. By Mr. CAMERON: ut any security whatever? Q. So that the loan was really made witho —A. Yes, sir. 150 FREEDMAN'S SAVINGS AND TRUST COMPANY. THE WILLIAM M. PUMPHREY AND OTHER LOANS. Q. On the loan ledger, Mr. Stickney, in the account of William M. Pumphrey, there is a pencil memorandum as follows: "Note missing and fraudulently released by G. W.Stickney." There appears a balance on account of this loan of $705.03. The same applies in the cases of Francis Wright, with an unpaid balance of $174.94; Margaret Hetzel, an unpaid balance of $757.50; George H. Simonds, and others. Now I will ask you why the securities on these loans were released. Give any explanation you can of these transactions. THE MARGARET HETZEL LOAN. The WITNESS. In the Margaret Hetzel loan I remember that I released that through an error; that is, I released it and took an order for it, • which was not paid afterwards. Q. You took an order on somebody else ?—A. Yes, sir; I took an order which was not paid. • Q. Do you remember on whom the order was?—A. On William J. Cook. Q. Was it accepted l—A. No, it was not accepted. Mr. Cook told me it was all right; that it would be paid; and I had always a great deal• of confidence in him. Q. Then you released the security upon receiving an order fro& Margaret Hetzel on Mr. Cook ?—A. Yes, sir. Q. And it was an unaccepted order ?—A. It was. Q. And the order was never paid ?—A. It was never paid. • Q. Are there any other circumstances you call to mind in reference to that transaction ?—A. There were some circumstances connected with that matter that I remember influenced me in releasing that order, but I cannot now call to mind what they were; but 1 remember that there were some things connected with it that led me to release it. By the CHAIRMAN: Q. You gave the release without any security whatever ?—A. Yes, sir; there was no security but the order which was not paid—was not, accepted. THE WILLIAM M. PUMPHREY LOAN. Q. How was it in the matter of William M. Pumphrey ?—A. The William M. Pumphrey and the Hetzel loans were the only ones I ever released while I was an officer and actuary of the bank. The Pumphrey loan I intended to pay myself, and I think I have paid that. Q. Do you mean that you assumed the responsibility of that?—A. Yes, sir; that, with my commission on sales and witness attendance fees, I think, has been paid, and something over. Q. Well, if the bank became indebted to you afterwards, you did not. release that loan with the expectation of paying it in that way, did you? —A. No, sir; I released it with the expectation of being able to pay it. I supposed I should be able to pay it. Q. Well, let us know all aboutit.—A. As to taking the note up, I will say that I did not take it up; I never took up any note from the bank. Q. Was there any entry made on the books of the bank showing that you had assuMed the indebtedness?—A. I think there was an entry on theoote. , Q. The note has disappeared ?—A. I do not know anything about that. ANY. FREEDMAN'S SAVINGS AND TRUST COMP 151 Mr. Nyman,the loan clerk. Q. Who had the custody of the notes °I—A.the only ones who had the• were f Mr. Nyman, the president, and mysel custody of the notes. ?—A. I do not; no, sir. Q. Do you know what became of the note d ?—A. I never directed ndere Q. Did you ever direct it to be surre the note to .be surrendered 5 no, sir. elf?—A. Yes,sir; I did. Q. And you assumed the indebtedness yourshis note to be surrendered — t Q. Would not the maker of the note expec not think he would. I do . I do to him, as a business transaction ?—A or not, for the property did not know that he knew whether it was paidreleased. was note the time the at not belong to him . I. suppose, on account of Q. You assumed the indebtedness then, . I did. ?—A some indebtedness of Pumphrey to you the property it was secured on. Q. Well, state how it was.—A. I took By Mr. WITHERS: ity ?—A. It was real estate— Q. What was the character of the secur a house. sir. Q. A mortgage on real estate ?—A. Yes, sir. The mortgage was in Yes, . ?—A gage mort the took you Q. And property and released it, expecting the bank at the time, and I took the found I was not able, and it ran I to be able to pay in a few days, but along. By Mr. CAMERON: the property as security for Q. The bank then held the mortgage on the loan l—A. Yes, sir. rty to you?—A. Yes, sir.. Q. And Mr. Pumphrey conveyed the prope sir. Yes, . ?—A Q. You agreeing to pay this loan that arrangement with you, Q. Did not Mr. Pumphrey, when he madeNo, sir; because he did,not . `I—A him ask you to give up his note to in one year or in ten years, know whether the note would be paid ?—A. Yes, sir. debt the med assu Q. That is, when you when he made the arrangeQ. He expected to be released from it assumed it, was for one first I when note, The . ment with you ?—A dollars or thereabouts,. red hund four thousand dollars. I paid on it I think. • By Mr. WITHERS: interest makes the think I . ?—A rs Q. You paid three hundred dolla up the balance. Mr..LEIPOLD. Yes, sir. ars The WITNESS. I paid four hundred.doll By Mr. CAMERON: t this private transaction beQ. The bank then knew nothing abou sir. tween you and Pumphrey 1—A. No, By Mr. WITHERS: . He had none. The bank Q. What security had Mr. Pumphrey ?—A sed the note, and I did relea had I that osed supp held his note, but he release it. By the CHAIRMAN: ry, or the assistant actuary— Q. This was while you were the actua think—near the last of my I ry, actua was I which ?—A. It was while he would not expect to take up. this: is say I What ry. actua as ce servi 152 FREEDMAN'S SAVINGS AND TRUST COMPANY. the note, for when I took the property, I had no .agreement to pay in otie year or in ten years, so far as Pumpbrey was concerned. By Mr. WITHERS: Q. The bank, you say, knew nothing about the matter l—A. No, sir. :Mr. LE1P0LD. The security was a deed of trust, with Mr. Stickney as trustee, and having assumed the payment of the note he subsequently — acquired the legal title to the property. He then released the deed of trust and sold the property,I suppose. Q. Leaving the note for which the trust had been executed still unpaid Mr. LEIPOLD. Part of it. THE FRANCIS WRIGHT LOAN. By Mr. CAMERON: Q. What explanation do you desire to give in regard to the account of Francis Wright ? There is an unpaid balance on this account of $474.24.—A. That is an account,I think, in which a commission was involved. There were some properties to be sold, and I sold them, and got the money,and kept it. We had a dispute as to whether I was entitled to the commission or not. I told the commissioners that I did not propose to settle until the matter of the commissions to trustees was settled. We had a meeting at the time, and it wqs settled; and they acknowledged that I was entitled to so much, which was made up at the time, and they allowed that one-half of the regular fees should be -entered to my credit. The only two matters that happened while I was an officer of the bank were the Pumphrey matter and the Hetzel note; the others were afterward. Q. There was a deed of trust to the bank in the Wright case, and' you were a trustee named in the deed of trust, and you released the note which was held by the bank as security ?—A. No, sir; I sold the property under the deed of trust. Q. By what authority l—A. Under the instructions of the commissioners. Q And you declined to pay over the money to the commissioners until your account was settled; was that it l—A. Yes,sir; I suppose Mr. Leipold has the agreement which was made when we settled this account. ACTUARY'S CLAIM TO FEES AND COMMISSIONS. Mr. LEIPOLD.. The papers are in the bank. At a certain time, when some of these things made their appearance, we called on Mr. Stickney to explain them, and he acknowledged that he owed the bank certain moneys,in a number of cases. -We wrote out a statement, showing the amount due in these cases, and Mr. Stickney then acknowledged that he owed that money. He then reasserted his claim to commissions. That was after be left the employment of the bank. He had no further connection with the bank at that time. We found that he was trustee in most of the deeds of trust covering the loans then held by the commissioners; and it was finally agreed that he should act under these deeds of trust, and sell the property, if necessary, and that we would allow one-half the stipulated commission—that is, the commission as stipulated in the deed of trust—and that we would credit him the amount of FREEIiMAN'S SAVINGS AND TRUST COMPANY. 153 these commissions as against this debt that he acknowledged that he. • owed. I witwas for cases; bank in witness as fees Mr. STICKNEY. Also the ness almost every other day. d Mr. LEIPOLD. Yes, sir; most of the time Mr. Stickney was occupie also was it and courts; the in in the interests of the bank, as a witness he understood that he was to be credited with whatever witness tees extent. some to done been has that and bank; was entitled to from the Mr. STICKNEY. We have had a settlement. Mr. LEIPOLD. We had a partial settlement then. Mr. STICKNEY. But not since then. . Mr. LEIPOLD. I have asked you several times to make Up the account enwas I that fees the of t accoun an Mr. STICKNEY. I have not kept titled to as witness. • ON: By Mr. CAMER 's, Q. Well,your understanding of the matter agrees with Mr. Leipold does it l—A. Yes, sir. of Q. How did it happen that your name was inserted in these deeds all on trustee .inade was actuary nt trust ?—A. The actuary or assista •" deeds of trust given to the bank. THE LOAN TO DAVIS AND BALLOCH. & Balloch Q. Under date of .April 5, 1872, a loan was made to Davis States fiveUnited of dollars nd thousa two on , dollars nd thousa two of (1872), these twenty bonds. On the 18th of December, of the same year urgh railroad bonds were withdrawn, and eighteen shares of Fitchb why that was alstock substituted in their stead. Can you explain that. about ng lowed ?—A. I do not remember anythi I do not Q. The register shows that that was the transaction 1—A. that and , Balloch & Davis of note a er remember about it. I rememb tances conpart of it was unpaid; but I cannot recall any other circums nected with it, at this. time. anything Q. What was this Fitchburgh railroad stock; do you know the road, about knew I that. about er rememb not do I ?—A. about that rg anythi er rememb not do I but road; and also supposed it to be a-good that. to regard in further By Mr. WITHERS: States five. Q. You have, no knowledge of the exchange of United dge of it at knowle had have may I ?—A. stock that for bonds twenty now. it of dge knowle any the time; but I do not have LOANS TO ALEXANDER, PIKE, AND SAMMIS. By 11/r. CAMERON: on to— Q. There are several small loans that I would call your attenti ; $101,85 ot Pike, T. J. to ; dollars fifty of a loan to C. M. Alexander, y was taken, and to E. C. Samtnis, of ten dollars—for which no securit ng about but the amount was carried as cash. Do you know anythifor any of these transactions?—A. No, sir. You say no note was taken them? der we Q. It seenAs not.—A. Certainly. In the case of C. M. Alexan nd five hundred had a lien on his place for six thousand or six thousa , and I took dollars. When he came to pay it, he was short fifty dollars • 154 FREEDMAN'S SAVINGS AND TRUST COMPANY. his note. He got some money to pay it, and I took it; for I thought that if his place had to be sold we would not begin to get as much money as was paid, which was the fact; for it has been sold since for only four or five thousand dollars. Mr. LEIPOLD. Well, it does not appear that any note was taken. Mr. STICKNEY. A note was taken, certainly. Mr. CAMERON. And carried as cash, probably on•a slip, and put intoa, drawer. Mr. STICKNEY. We had some correspondence about it; I remember a note with Mr...Alexander's letter appended to it, refusing to pay it, or something of that kind. Mr. LEIPOLD (to Mr. Stickney). Mr. Alexander claims that R. M. Hall Was to pay that note. Mr. STICKNEY. I do not remember about that; I know that B. M. Hall was the man that made that transaction. , • By Mr. WITHERS: Q. Well, you carried the slip as cash, and loaned the money ?—A. The 'cashier loaned the money, and put the slip in the cash drawer, and he, it seems to me, is responsible for it. Mr. STICKNEV. In referenee to that $101.85, that was a check which went to protest—a check for one hundred dollars, and the $1.85 was the protest fee. Mr. LEIPOLD. Yes, sir; it was a check. THE EVAN LYONS LOAN. By Mr. CAMERON: • Q. The witnesses who have been examined before you this morning have explained something in regard to the Lyons loan.. Is it your recollection of that transaction that it was similar to the others ?—A. Yes, sir; they made several applications; they wished the bank to take three or four deeds of trust, because there were several deeds of trust in that matter, and to give the bank a first deed of trust. . By Mr. WITHERS: Q. How were the older deeds lifted from the property ?—A. With the proceeds ot the last note; a note for five thousand dollars. I think Mr. Herr, of Georgetown, had some eight or ten thousand dollars in these deeds of trusts; he received the money, and took a deed of trust for his claim, which was thirty-four thousand dollars. He wanted forty thousanddollars, which we did not allow. I examined the property and told him that I did not think it was worth the loan of thirty-four thousand dollars which was made. By Mr. CAMERON: Q. Do you know whether the loan made to Lyons, or any portion of it, was actually used in taking up the prior loans f—A. It was all used for that, I think; 1 am very sure that every cent of it was so used. Q. You think it was all cleaned up ?—A. Yes,sir; and that Mr. Herr took the balance; that is, the balance due after paying all the mortgages but'his; and then he took a new deed of trust for the balance of five thousand dollars. By Mr. WITHERS: Q. He received a portion in cash, and took a second-mortgage for the residue f—A. Yes, sir. FREEDMAN'S SAVINGS AND TRUST COMPANY. 15,5 THE RUDOLPH LOBSIGER LOAN. By Mr. CAMERON: Idan made to a man Q. One of the witnesses has been asked about a Yes, sir; I do. ?—A. an the.m know you Do ger: Lobsi ph named Rudol know whether not do I l—A. s reside now Q. Do you know where he nsburg. I Blade d towar he is in this city now,or not. He did live down lived in he that nie 1 ( tolc he when ago, s month saw him two or three this city somewhere. nt, there is a balQ. Now, on ledger A, page 350, of Lobsiger's accou 0; and in pencil $1,55 of bank the to d ance shown to be due and unpai paid before the bank these words appear: "Mr. Stickney says this was ed with the paycredit nt accou the not was why failed." If this is so, cannot explain I been. have d ment, and closed l—A. Well, it 'shoul I was in'New that is loan that of e branc remem My not. why it was n the loan Nyma Mr. from ram teleg a York, in 1873, and I received y (for the bank;; that he mone of need in much very was he that clerk, I knew about that was received $3,000 for that note, and a certain note back,"Yes ;" and I him d raphe there, to make up the balance. I teleg way.. that in d settle was thing whole supposed that the paid l—A. Yes, sir Q. Then your understanding of it was that it was ce on another note balan the and cash, in paid was 0 $3,00 for the note was held in the bank. By Mr. WITHERS: loan was for was the amount of the original debt f—A. The What Q. and to forty-five thous four that more more was never $5,000, but there hundred dollars advanced on it. showing that payQ. I cannot see that there is any entry in the books know why it is not do I not, is it If there. ment.—A. It ought,to be not. I have no personal knowledge of it. was it ?—A. Yes, sir; Q. It was paid while you were in New York, take the $3,000," and , "Yes g: sayin I telegra•phed back to Mr. Nyman, I supposed it was paid. regard to it ?—A. I alQ. Is that all the knowledge you have with my attention to it. called ways supposed it was paid till Mr. Leipold By Mr. WITHERS: yourself, the deed that was execute.d for the Q. You never have seen, d over to the loan clerk, and balance?—A. No, sir; they were all turne it. about I know nothing By the CHAIRMAN: loan clerk, did you ?—A. Q. You did it through Mr. Nyman, the Yes sir. Post-Office Department,in . Where is Mr. Nyman now ?—A. In the the Superintendent's office: By Mr. LEIPOLD: ing to do with it I Q. Had the George H. Simon's note anyth all. at Mr. STICKNEY. Nothing 4 • By Mr. CAMERON: had been made?—A. I Q. Did you ever inquire whether payment my attention to it, Mr. called ld Leipo Mr. when , never did; for I think ssioners; I am not sure. Nyman was then an employe of the commi called my attention to it what that here, state, will I LD. Mr. LEIPO 156 FREEDMAN'S SAVINGS AND TRUST COMPANY. was this: in checking off the balances which were brought to the commissioners' books from the bank's books, at the time we took charge of the office, I found that there was a balance that had not been brought forward; and I asked Mr. Stickney about it. He said that that loan was paid, and bad been paid before the bank closed. I found, of course, a great many transactions with this man Lobsiger. There were two or three amounts that were transierred in his !Time. Thnt is all the explanation I have ever been able to get about it. By the CHAIRMAN. There is no record showing that anything had ever been paid.—A. It was originally $4,500; and $3,000 was paid; this is the balance. By Mi.. WITHERS: Q. I presume that the balance really represents the amount of the second note and mortgage which was executed.—A. That is my remembrance of the way in which the three thousand dollars was paid. Mr. LEIPOLD. Did you not think that the security given for the other three thousand dollar loan of Lobsiger's was sufficient to cover that ? Mr. STICKNE Y. I think not; for I think that had already been advanced. That seems to,be my impression, from the explanation that was given at that time. By Mr. CAMERON: Q. There is still a balance due, on loan No. 1337, made to Mr. Lobsiger, under date of January 7, 1871; the loan was for $2,300, and .the balance due is $1,437. The books show that the security was held by George W. Stickney—"G-. W. S.," it reads. What was the security, if there was any, and what does that memorandum mean?—A. I do not know anything about that; I will have to look that up before I can answer. Q. Do you know whether you have any security in your possession for that?—A. I do not; I do not remember ever having had any. Q. Well, there is such an entry here, and I wish you would look it up.—A. I only know that I did pay seven or eight hundred dollars myself on Lobsiger's notes, and took them up. Q. What relation existed between you and Lobsiger?—A. None whatever. Q. What was his business at the time?—A. He was a builder at the time. Q. You had no interest in these loans?—A. I had no interest in them whatever. Q. Nor in his business1—A. No, sir; nor in anybody's business that ever got any money from the bank. THE LOAN TO L. DEAN. Q. Now there is another loan to which I want to call your attention— one made December 30, 1870, and numbered 180—made to L.Dean for $1,750. The books show that you assumed one-half of this loan ?—A. Yes, sir; and I paid it. Q. And it was considered to belong to you, and payment on it was to be m-ade in your name I—A. Yes, sir; and I did pay it; I think the books show that the half of it that I assumed was paid by me in a very short time. Q. How did it happen that you assumed so many of these claims ?— A. That makes only two—the only two that I did assume. I took one • FREEDMAN'S SAVINGS AND TRUST COMPANY. 157 half in a very house of Mr. Dean as security in trade; and I paid that short time—in two or three months, I think. in regard Q. It is said that the commissioners have a letter from you such an arrangeto this Dean loan, in which you deny that you made it?—A. No5 ment about this loan. Do you remember anything about loan. the is that think sir; I do not. I do not f—A. Very Q. You think the letter had reference to some other loan likely, sir. bank for Mr. LEIPoLD. Mr.Dean, besides that loan, is indebted to the get him to effort our In . dollars nd thousa a than more of ft an verdra ted certain seto pay that overdraft, he wrote to us that he had deposi the payment curity with Mr. Stickney, part of which was to be used in nt of this in payme used be to was which of part of the $1,750 loan, and ey about overdraft. After I received that letter 1 wrote to Mr. Stickn it-(Mr. STICKNEY. Yes, sir.) ey had as• Mr. LEIPOLD. And Mr. Dean also claimed that Mr. Stickn I wrote to it. to attend would and due, e balanc the sumed pay went of among and cases, certain ning Mr. Stickney about the matter, mentio He wrote d. assume had he which of nt payme the loan, them the Dean the of nt the payme e assum to aken undert back, saying that he had not r. anothe ned mentio also and note; Dean the books will Mr. STICKNEY. It was not about that one, because brance is My remem ard. afterw show that that was paid a short time came that notes the ed assum and Dean, Mr. of house that I took the the I paid and ed, collect were They due monthly and turned them in. note. whole is not yet paid. Mr. LEIPOLD. You mean your part of it; some of it half of it. The Mr. STICKNEY. I do not know anything about that ed by Mr. Stickney, memorandum shows that one-half of it was assum and he paid it. order of the trusQ. Do you remember when the bank was closed, by 1874. June, teesf—A. On the 29th of sir. Q. Were you the actuary up to that date f—A. Yes, THE JUAN BOYLE LOAN. that under date of Q. Now, it appears from the books of the bank, one of twenty-nine Boyle, Juan June 30, 1874, two loans were made to these loans were actually: thousand dollars, and one of $4,366.66. If ?—A. We were enclosed bank the made, why were they made after running along been had that s matter up fixing in date gaged at that 6. May dated were for some time. The notes I cannot say more. Q. Well, what is your explanation of it then f—A. time I was before the at ; before ned exami was I time than I did at. the ent of that case. the Douglas committee I gave a complete statem not?—A. Yes, sir. you can brief, in now it give can Q. Well, you occurred ?—A. Q. Was it in fixing up the old indebtedness that this employed in Boyle was Mr. s; matter old up fixing were we sir; Yes, president did. I supmatters of the bank. I did not employ him; thethese loans. All I can for ty securi posed at the time that I had good and knew what I did say is, that if I were put in the same place again, with the experience it do not would I thing. then, I should do the same I could to raise money what do to trying was I since. had have I that to get the bank through. ?—A. No, sir. Q. Did you try to raise money after the bank closed 158 FREEDMAN'S SAVINGS AND TRUST COMPANY. You see this is dated May 6th. All along through April and the first • of May,the whole transaction occurred. I was very busy, working day and night, and the thing was not entered up until that time. Q. Then your explanation of the reason why the Juan Boyle loans were made before the bank closed, but were not entered on the books until afterwards, is that you were busy fixing up the old matters of the bank l—A. Yes, sir. Q. How did it happen that you entered it as a loan made at that time?—A. Because I entered it on the books of the bank of that date. Q. The books, then, ought to show the real transaction l—A. The notes will show the date on which they were given, and that was the date of the transaction. It was a matter that we wanted to straighten out to show where we were, and these matters were simply lying on my desk. I did not have time to enter them at the time; we entered them in afterwards. Q. Who made the settlement with Boyle, you or the finance committeel—A. I did. Q. Upon your own responsibility l—A. Yes, sir. Q. Was or was it not submitted to the finance committee l—A. I do not think it was submitted to them. The finance committee had meet. ings all along, and the committee told me to do my best to get the bank through, and that was what I was trying to do. Q. Then you show that Boyle was indebted to the bank, and you took such securities as you could get, and some of them were notes that were overdue?—A. Yes, sir. Q. There is one note of.ten thousand dollars that you took; it seems to have been five months overdue at that time. That was one of the collaterals, as I understand it?—A. That was a second deed of trust OD some property on Pennsylvania avenue. Mr. LEIPOLD. That was an indorsed note. The note was not protested, and not filed in the bank until after its maturity. Mr. STICKNEY Yes, sir; I believe that that is the case. Mr. LEIPOLD. The note is indorsed by the president and board of diTectors of the Georgetown College. By Mr. CAMERON: Q. On what security or securities was the loan to Boyle made in the first place? Can you state whether in fixing it up you were able only to get a second deed of trust on some real estate?—A. If I had the books here I could give you the whole transaction, but I do not remeniber now. Q. Well, is it your recollection that you retained all .these securities and took additional securities is that it I—A. There were a good many transactions at that time, and some of the securities We gave up to Mr. Boyle and only took a part in cash. I took these securities to make up the balance. Q. What was Boyle's business at that time I—A. He was a real estate broker. Q. Did or did you not employ him for the purpose of raising money to aid the bank I—A. Mr. Alvord employed him first, and afterwards I continued to do it, more or less. Q. Well, is not this the fact, that you, or Alvord, or somebody else connected with the bank, placed good securities in Boyle's hands for the purpose of raising money on them, and that he took these securities and raised money on them,and did not pay the money over to the bank; and, finally, when he came to settle with the bank you took his COMPANY. FREEDMAN'S SAVINGS AND TRUST 159 be worthless, in payment note and these securities, which turned out to transaction 1—A. I would that of out g arisin bank the of what he owed like to examine the not like to say that that is true exactly. I would have seen the books I after books to see exactly whether that is so; be more satisfactory, at, then I can give you an explanation that would least, to myself. Mr. CAMERON. You had better do that. that the notes that were Mr. LEIPOLD. You remember, Mr. Stickney, of the bank as of June given by Mr. Boyle, and entered on the books 's? Boyle Juan of notes n .30, 1874, balance certai Mr. STICKNEY.. Yes, sir. ? Mr. LEIPOLD. Also the note of Dr. Groot Mr. STXCKNEY. Yes, sir. Wyck ? Mr. LEIPOLD. Also the note of Mrs. Van sir. Mr. STICKNEY. Yes, to pay these notes. How Mr. LEIPOLD. The Boyle notes were .given ? notes these of hold get (lid Mr. Boyle ne these records, then I Mr. STICKNEY. As I said, I want to exami ning to end; I could begin will be able to give you the whole thing from not do it without. THE ROBERT I. FLEMING LOANS. to Robert I. Fleming --A. Q. How is it in regard to the loans made matters that were held old some up fix to made were Fleming's loans made no new loans to We ry. actua . made in the bank at the time I was Mr. Fleming after that time that I remember. He was a contractor of Q. What was Vandenburgh's business f—A. the board of public works. a builder. Q. What was Fleming's business f—A. He was S. THE J. V. W. VANDEN_BURGH LOAN .By Mr. CAMERON: made to J. V. W. VandenQ. A good deal has been said about loans a large amount, some on to were loans the that seem burgh. It would and in some cases on ties, securi ut witho securities and in some cases committee whatever the give very insufficient securities. Will you enburgh loans ? Vand these to d regar in give to explanation you are able had a great any Comp ng Pavi tt —A, Mr. Vandenburgh and the Abbo we supposed that made were they when and bank, many loans at the ity went down in price and left we had sufficient security, but the secur For instance, some were certifithe bank without sufficient security. were never less than ninety that , works c publi cates of the board of 1873; then they went down mber, cents on the dollar until after Septe settle at the rate of about to had we and , cents fifty to forty-five and that the securities were all was That . sixty-five cents on the dollar . then worth By Mr. WITHERS: to Vandenburgh were Q. I understood you to say that these loans ut reference to the witho ry, actua as you by and , ently frequ made very Yes, sir; and alI—A. ttee commi ce finan the board of trustees or to ttee. commi ce most every time referred to the finan the finance committee who Q. I think that some of the members of act upon these loans I—A. not did they have testified here stated that show. will ttee commi the of es Well, the minut 160 FREEDMAN'S SAVINGS AND TRUST COMPANY. sQ. I see here one or two loans in small sums—one of eighty-five dollars, one of eighty-one dollars, and another of fifty-four dollars ;\ making two hundred and twenty dollars in all. What were these loansf—A. These were consolidations of old loans put into one note on the,first of December, 1872 I think, or 1873. After that date there were very few loans made to Vandenburgh. Q. After 1872 or 1873 f—A. Yes, sir. Q. These large notes which subsequently appear were then merely old loans consolidated ?—A. Yes, sir; the old loans consolidated. I tried in the last of 1872 or in 1873 to get the treasurer of the board of public works to pay the amount we held. He always promised to do so, but we never could get but twenty-two thousand dollars. They always promised to pay the whole, but they never did, and we never got any more money. Q. I want to call your attention to the testimony of Dr. C. B. Purvis, given before the Douglas committee. He was asked: Q. Was there not another loan made on the representations of Mr. Alexander R. Shepherd (Referring to these Vandenburgh loans, and his answer is): A. It appears in the report of the commissioners that Mr. Vandenburkh owes a large amount. These loans never came directly before the board of trustees, or, at least, a very few of them did. The actuary, in reading his report to the board, would say, "City securities (naming the class), so much invested.' Some members of the finance committee, including Moses Kelly, the sinking-fund commissioner, were very earnest in the defense of these securities, and Mr. Kelly invested largely in that kind of security for his own bank (the National Bank of the Metropolis). I was very much opposed to it, as I was opposed to everything connected with the board of public w9rks. Stickney staid at my house, and, talking with me one day, he said that he had never done a wrong thing in the bank except letting Vandenburgh have a large sum of money one night. I asked him how much. I think he said $30,000. That perfectly astOnished me, so I "went into" him, and questioned him very closely, thinking I would have occasion to recollect it and use it. He said that Vandenburgh came to him wanting some money to pay off his hands that night, and that Shepherd said,"Vandenburgh's accounts are approved, but look what a crowd. (This was on Saturday night.) I will pay you on Monday if you let him have the money." Stickney said that he would let him have the money, and he did let him have it. Afterward he went day after day to see Mr. Shepherd and could not see him. When he did see him, Shepherd was more forcible than polite, and told him 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. This is what Mr. Stickney says about the matter, and I presume he is to be believed on that point. • Mr. CAMERON. That is what Dr. Purvis says, and I presume he is to be believed on that point. Mr. STICKNEY. He is not to be believed if he ever said that. Q. It is a fact, is it not, that you let Mr. Vandenburgh, have the money in that way f—A. No, sir; I never let him have any such sum at any one time, or in that way. Q. Did you ever let him have money ?—A. Never any sum in that. way; and I don't know w,here Dr. Purvis got that, I am sure, for I don't remember; and in my testimony before the Douglas committee I said that I didn't remember ever telling Dr. Purvis any such story as that. The only thing that can be made out of it is that I was away from here, and Mr..Shepherd and Governor Cooke, I think, came to the. bank, and Mr. Alvord let them have fifty thousand dollars on a thirtythousand-dollar certificate of the board of public works, and a check of the treasurer for twenty thousand dollars on the First National Bank. The funds were not there, but were to be put there, and it took me four or five months to get that fifty thousand dollars back ; but so far as. FREEDMAN'S SAVINGS AND TRUS r COMPANY. 161 Mr. Vandenburgh was concerned, I never let him have a cent in that way. THE R. P. DODGE LOAN. Q. Do you know one R. P. Dodge l—A.'Yes, sir. Q. There appears to have been a loan of $13,186.50 made to him. Do you retnember anything about that loan ?—A. I remember that such a loan was made by the bank in the last of 1870, or the first of 1871. Q. Was it not January 24, 1870f—A. It may have been. -My remembrance is that Mr. Huntington, who was one of the finance committee, got the bank to carry that loan for Mr. Dodge; that was the understanding. And he was to pay six per cent interest on it. He said that he could take it up any time he wanted to; that he was living in Mr. Dodge's house, and if he got it carried for six per cent. it would make a less rent for him than the rent of the. house. It was carried that. way, _and as long as Mr. Huntington lived the interest- was paid. After his death I went to Mr. Dodge to get him to reduce or pay the notes. He said,"I have nothing to do with that. That was Mr. Huntington's;" and I filled out a deed to Mr. Huntington. That deed was effected to give to Mr. Huntington. He said he wanted to go to Russia, and did not want it fixed till he came back. I did not know whom he wanted to deed it to. Q. Was the application for the loan submitted to the finance committee and approved by them ?—A. I do not know, I am sure; it Was before I was actuary. I do not think it was, though I am not sure. Q. You say Mr. Huntington was a trustee ?—A. Yes, sir; and one of the finance committee; and he was in the habit when he wanted anything to get it. If he wanted to have anything done, it was done. Q. It seems, Mr. Stickney, from the exhibit of the expert of this committee, that there never was any interest paid on these Dodge 'loans ? Mr. LEIPOLD. No interest was paid after their transfer to the Freedman's Bank. You knew they were overdue when they were transferred to the Bank. The interest had been previously paid when they were held by the First National Bank. Q. The amount of the loan includes the face of the note and interest for one year ?—A. Yes, sir; that is, up to January 19, 1870. Q. .Now, were, or were not, the notes overdue when they were transferred to the Freedman's Bank f—A. They were just due, either the day before they were transferred or the day after. Q. Do you remember, as a matter of fact, whether there were any indorsers on these notes f—A. They were drawn to somebOdy's order, but J don't remember who it was. Q. Do you remember whether they had .ever been protested f—A. No.sir. Q. So that no indorser, if there were any, was held upon the notes ?— A. No, sir. Q. Then it is your recollection, is it, that the loan was made because it was applied for by Mr. Huntington,'and that it was made without being at least formally passed upon by the finance committee ?—A. I do not think it ever was. It gives here, in tabulated form a list of loans made under section 6th of the charter, that woukl be "Available Fund Loans"; but it does not appear in that list at all. Q. Quite a large nutntaer of notes appear on the collection registry in your name. Now,I want to know whether these loans were balms 11 F B 162 FREEDMAN'S SAVINGS AND TRUST COMPANY. made by you—your own money—or whether it was the business of the bank ?—A. There was nothing on the collection list that was not my own private notes. Q. Well, were you engaged in loaning your own money at that time? —A. No, sir; I was not; but I had property, and sometimes sold it my elf and put these notes in there for collection. Q. Did you, or not,loan any of the funds of the bank in your own name f—A. I never loaned one cent in that way. ACTUARY'S NAME ON THE DEEDS OF TRUST. Q. I asked you before how it happened that you and Mr. Eaton were named as trustees in most of the real-estate loans made by the bank where the security was a deed of trust ?—A. I do not know that there was any particular reason for it. The deeds of trust were made out and our names were printed in. Q. By whose authority were they printed in these deeds of trust ?— A. They were submitted to the board of trustees. By Mr. WITHERS: Q. Your names were authorized to be placed upon these deeds of trust ?—A. Yes, sir; everybody knew it; it was by the authority of the finance committee, given to us. Q. In these eases did you receive the usual fees paid to trustees ?— A. No,sir; I received no fees. I may in some cases have received fees, but I do not remember. Q. In the event of a sale or foreclosure of the property, or whatever you call it, who would receive the fees ?—A. Nobady. I would say that I did receive fees if the property brought more than enough to pay the indebtedness to the bank; but if it did not bring enough to do this, I did not receive any fee that.I remember. Q. You charged no commission fee, then, unless the property sold for more than the amount of indebteduess ?—A. No, sir; I do not remember receiving any fees. OVERDRAFTS IN THE ACTUARY'S ACCOUNT. By Mr. CAMERON: Q. There are quite a number of overdrafts appearing upon the books of the bank, and it seems that some of them had run for a considerable time. Can you explain how it happened that these overdrafts were allowed ?—A. Well, it would make some difference as to who were allowed them. Most of them, I believe, were errors in bookkeeping; some few were allowed. Q. Do you remember the names of those who were allowed to overdraw, and to what amounts ?—A. I think that most of those that were allowed were settled up; there was one on the Vandenburgh account, I believe, that was allowed. There may have been three or four others, but I don't remember their names now. Q. There was, I believe, a Washington branch bank ?—A. Yes, sir; there was. Q. You were the actuary of the whole concern, were you not l—A. Yes, sir; I was. Q. Who was the cashier of the Washington branch ?—A. William J. Wilson was cashier and paying teller part of the time; Thomas Boston was also paying teller, and the last two years, I think, Mr. C. A. Fleetwood was. FREEDMAN'S SAVINGS AND TRUST COMPANY. 1G3 Q. Was it your custom to balance the cash account in the Washington branch ?—A. I used to try do so every Saturday night. Q. How did you succeed ?—A. Sometimes I succeeded and sometimes not. When Mr. Wilson was cashier it was pretty hard work to verify his accounts. After Mr. Fleetwood came as paying teller the cash account was generally kept very straight. Q. Well, during Mr. Wilson's term of office, or at any other time, when the cash was short, upon your attempt.to verify what was done, did the cashier make it good or did he charge it to profit and loss ?--A. He charged it to profit and loss, I think. Q. What amount was charged in that way; was it considerable or not ?—A. I think there were very few cases and that the amounts were not large. Mr. Wilson used to have the faculty of being "over" more than "short"[laughing]. Mr. CAMERON. Well, that was better. Mr. STICKNEY. But they generally turned up. A good deal of the in time when the account was "over," I took the money out and put it an envelope till I found the error, and then would replace the money. By Mr. WITHERS: Q. Until you found there was an error in the bookkeeping ?—A. Yes; the error would generally turn up in a short time. By Mr. CAMERON.: Q. Now, the books shOw that on the 11th of July, 1874, some days after the bank had been closed by vote of the trustees, you drew from the bank $7,823.74, and on the 10th of July twenty-seven hundred dollars ?—A. I ? (smiling). Q. Yes; the books show that; that is what I am speaking of. State whether it was a fact that you drew these sums. If not, how do these entries happen to be made in the book ?--A. I don't remember any such thing as that. That is not on private account, is it? If you will give me the dates and items I may be able to recall something about it. I remember one, I think, of forty-five hundred dollars that I drew. That was a special deposit. I had traded for a house before that, and there was a loan on it of four thousand dollars. I borrowed of the Massachusetts Mutual Life Insurance Company forty-five hundred dollars, and I could not take. up the - first note for a while, and the agent who had charge of it turned over the money to me without having it released, and I deposited it in the bank, and the bank used it. Q. It ought to appear on the books of the bank that you made it as a "special deposit," ought it not?—A. Well, all deposits made after a. certain date were made "special." Mr. CRESWELL. Ye; after the bank closed. Mr. STICKNEY. It was after the act of Congress of June 20 that all deposits made thereafter should be "special deposits." By the CHAIRMAN: Q. What was the exact date ?—A. The 20th of June, 1874. By Mr. CAMERON: Q. The act of Congress approved June 20, 1874, hi section :eight, provides (reading): That from and after the passage of this act and until the first day of July, eighteen be held hundred and seventy-five, all the deposits made in said Trust Company shall of said made by the trustees of said company as special deposits, and any investments only; and it deposits shall be made and held for the use and benefit of said depositors July, eighteen hundred shall be the duty of said trustees on or before the first day of the assets and liabiliand seventy-five, to make a full and complete statement of all 16 4," FREEDMAN'S -SAVINGS AND TRUST COMPANY. before the Secretary of the Treasury, and if ties of said company and lay the samethat time after investigating the condition of at said Secretary and the trustees shall solvent then the trustees and.said Secretary shall said company believe the same to be er all deposits shall be general; but said order issue an order declaring that thereaft , unless said depositors shall in writing conshall in bowise affect the special deposits general deposits.. But if the Secretary become shall deposits special sent that said on the first day of July, eighteen hundred and shall y compan said of trustees and doubt the propriety of making the deseventy-five, after the examination aforesaid shall still be special until the first day posits thereafter general then the deposits made six, or until the said Secretary and trustees of July, eighteen hundred and seventydeem it prudent to make said deposits general. I simply Mr. STICKNY. That was the way I came by the money. s were amount other the and it; use could bank the that so there put it that in out s drawn amount any and y, my accounts as trustee and actuar The way sere applied on loans by the bank. No money was taken out. the books, in trustee as t accoun my to ed deposit up g trustees in settlin was due the and checked out the amounts for expenses, and whatever a check, and I gave bank the due were r sums hateve V for bank, and office. al princip the to transferred them from the branch made, Q. Well, the experts will look and see when these deposits were the at deposit of t amoun that make not did you and if we find that ation. time you drew them Out; then we may want a further explan TBE OVERDRAFT BY R. W. TOMPKINS. bank Q. Who was R. W.Tompkins f—A. He was a bookkeeper in the for a while.„ of July, Q. It seems that he drew one thousand dollars on the 11th sir. Yes, f--A. that about 1874. Do you know anything case Q. What are the facts in -regard to that f—A. The facts of that Mr. to wrote or aphed telegr and away was ns are, that Mr. - Tompki trouble Fleetwood that he. was short of money, and as there was some t stay amoun in the bank, I saki that. if Mr. Tompkins would let that .money, as I there, I would see that he should get his money. It was t since, supposed,that was deposited there. I have examined his accoun short. was it that ent statem eper's anti find from the bookke ns's account,it seems there is an overdraft Q. Upo,n examining Tompki f—A. I know nothing about that. dollars d hundre n of about thirtee of that whatever f—A. I cannot; no, tion Q. Can you give no explana He was bookQ. What position did Tompkins •hold in the bank f--7•-A. spring of 1874, keeper tor a. ‘N bile-, and in the fall of 1873, and in the which one. was acting cashier at one of the brahches-1 forget drawn by hini you did not know, was d dollars housan I this NVIlen Q. v—A„ No, sir. The as a matter of fact, t Lai his account was overdrawn. a balance- there he.had , credithis to that as here ledger showed that t was drawn of one or two hundred dollars left after the thousand dollarsdy else, and somebo to ed belong dollars nd th..tisa the that out. Ile said him in that, be wanted to 'office it. I said to him that 1 %1 ould protect up. locked be not should it and money 1114• !tax,shoulo and he THE MiSsING PAGE FROM THE LEDGER,. of Tomp.;•t 1),,,Ut. of the ledger contaiiiing a part Q. It appeals lieen torn out. Do you have to seems it ; s a. in: is i accoul, kins's •.,i 1—A. No, sir. 1 -kne% nothing about it until know a nythil:g i im 411( ion -to it a month or so ago. Mr. Leipold ‘1 FREEDMAN'S SAVINGS AND TRUST COMPANY. 165 Q. Tompkins, being bookkeeper, posted his own account, did he? A. Yes, sir. Q. Was it his duty to do so? Did no one examine the account to see whether it was correct or not?—A. Well, the understanding or rule was that they should post from the deposit slips and checks to the ledger, and then to the journals, and back from the ledgers to the journals, to show that all the entries were made correctly. Q. How many bookkeepers were there ?—A. Two. Q. Who were they ?—A. Mr. Augusta and Mr. Tompkins. Q. So that Tompkins could not make false entries in his account without the fact being known by his associate bookkeeper ?—A. Well, he might, if his associate called it back that is, this appears to have been done. I do not know anything about it more than the appearance. Mr. Tompkins posted one hundred and fifty or two hundred dollars to his account without its going to the ledger. He could post that, and, in calling off to the ledger from the journals, it would not show; he could simply check it, and it would appear as a check. the collector's office, City Q. Where is Mr. Tompkins now Hall. He came to my house to see me one night and said he could not make any explanation, only he thought that there were some collections there that should have gone to his credit. I knew nothing until Mr. Leipold said that he had examined the collection registry and all had gone to his credit that should go there. By Mr. WITHERS: Q. If I understand you, Mr. Stickney, Tompkins telegraphed after he left the service of the bank ?—A. It was when he was still in the service of the bank, after he had left Washington to take charge of a branch in the South. Mr. LEIPOLD. it was the Charleston branch. Mr. STICKNEY. No, I think not. It is immaterial what branch. Q. What, was the time when this telegram was sent 1—A. I think .it was after the report was made to Congress. I think that the report was made April 25, 1874. We had a run on the bank and he telegraphed right away after that. Q. At what time was the bank closed by order of the trustees 1—A. On the 29th of June. On the 29th of June, 1874 1—A. Yes, sir. Q. And subsequent to that time this money wrs drawn by you for Tompkins•1—A: Yes, sir. Q. Did you consider that after the bank was closed by the trustees you had a right to draw the money 1—A. I thought I had, after I had promised Mr. Tompkins that I would protect him; or if I did not say that, I said that I would see him protected. Q. I'want to know whether you conceived it to be within the purview of your powers to draw out money after the official closing of , the bank by the trustees 1—A. And,furthermore, Jam not sure but I turned over to Mr. Fleetwood some security for that thousand dollars in some way, and that this security was returned and the thousand dollars was paid; that is my remembrance of it. By Mr. CAMERON: Q. Well, were you. assistant actuary, or actuary, at that time 1—A. I was actuary. Q. Did the bank do a discount business 1—A. It did; but a very small one. Q. Well, did you understand that it was authorized by the charter to 166 FREEDMAN'S SAVINGS AND TRUST COMPANY. do a discount business?—A. That ,was a decision of the finance committee—that it was authorized, under the "available fund" act. THE AVAILABLE FUND MATTER. Q. What was this "available fund" business I—A. It turned out to be very unavailable (laughing). It allowed that one-third of the amount of the deposits should be invested by the trustees in an "available fund." exactly.—A. That was the decision of the finance committee— Q. Yes;, that they had the authority to do that. Q. The bank discounted a good many pay-vouchers—government vouchers and vouchers of the District of Columbia, belonging to the clerks and employs of the.government and of the District, did it not?— A. Yes, sir. Q. That was out of this "available fund," was it I—A. Yes, sir. Q. Can you state what rate was usually charged, or whether there was a uniform rate for discounting these pay-vouchers I—A. I think that in the District vouchers they used qo charge one per cent, per month; and for the clerks in the department I think it was generally one or two per cent.—I forget now which—two per cent. I think it was for a while. Q. About how much of that kind of paper remained in the bank at the time of the failure I—A. About a thousand dollars or so of the clerks' vouchers. By Mr. WITHERS: Q. What was done with that amount I Was it collected or charged up to profit or loss ? What became of it I—A. Mr. Leipold can answer that. Q. It was not charged to profit and loss at the time of your official connection with the bank I—A. I took them out of profit and loss, and I had them charged into another account after it wase paid. I wanted to get rid of that and to secure it; there was considerable of it—some five or six hundred dollars I think it was—and I think some of that has been paid since. THE HELEN M. B. UPSON AND LAURA BARNARD AC— COUNTS. Q. On the same day there are two charges, one against Helen M. B. Upson of $295, and another against Laura Barnard of $322; were not these two purchases made to offset the loss on the pay-vouchers /—A. I think most of these vouchers have been paid since. I took them out and left them in an envelope to be collected. • Q. is it not a fact that the bank held these two notes for Upson and Barnard for fourteen hundred dollars each, which had been discounted, and were not the two sums of $295 and $322 charged against them, thus making it appear that $1,695 and $1,722,respectively,had been loaned I— A. Yes, sir. Q. Well, now, was that a real and correct entry; had these amounts been loaned I—A. The loan account shows this. I charged that up and took out the pay-vouchers in the envelope to be collected, and put it to profit and loss. THE LOAN TO A. C. BRADLEY. Q. There was a large loan made to A. C. Bradley on the 19th of June, 1873, amounting to *18,5001—A. Yes, sir. FREEDMAN'S SAVINGS AND TRUST COMPANY. 167 Q. What do you know about that loan ?—A. That was not a loan. The original amount was $17,500. Mr. LEIPOLD. Fifteen hundred dollars was paid in cash. Mr. STICKNEY. It was not a loan. By Mr. WITHERS: Q. What was that transaction ?—A. The transaction was that we made a loan On the property of T. McGhan, 915 E street, of ten thousand dollars. That was sold out. They did not pay any interest on the loan. The property was sold by D. L. Eaton who was trustee under that loan. It was bought by the bank, and the deed was given by the trustees to the bank, and the bank became owner of the property; and then we fixed it up, spending twenty-five hundred dollars in repairs on the property to put it in salable condition. We sold the property for eighteen thousand-five hundred dollars to Bradley, who gave fifteen hundred dollars in cash and his notes for the balance. Q. That was the transaction ?—A. Yes, sir; that was the transaction. THE LOAN TO S. TAYLOR SUIT. Q. There was a loan of twenty-five thousand dollars made to S. Taylor Suit that had not been collected when the bank suspended. Why was not that loan forced to a settlement before that time ?—A. Well, the interest had been paid promply on that loan. Q. What was the security on the loan ?—A. Some four hundred acres of land in Prince George's County, Maryland, together with Mr. Suit's house, &c. We supposed it to be ample security. I knew that if we should make an effort to Orce the loan, and sell the property to get the cash, that it would not bring the amount of the loan, and if Mr. Suit kept his interest up promptly, I thought that we would let it rest. Q. That loan, I believe, has not been paid ?—A. The property has been sold. In the mean time the house burned down, and there was no insurance in the bank for it. Mr. WITHERS. No insurance? Did not the bank effect an insurance on the property ?—A. There was no insurance on the buildings. When the property was sold it was bought in by the commissioners, and they have since sold it. Q. Well, did you think that the land, aside from the buildings, was security for this large amount?—A. No, sir. Q. How did it. happen that they did not take an insurance policy as collateral ?—A. I supposed that that was done. Q. Well, the policy ought to have been taken out and transferred to the bank ?—A. We though tit wasso transferred. I did not make the loan at the time. I thought the loan clerk ought to have kept it up. THE D. A. CONNOLLY LOAN. Q. There was a loan of five thousand dollars made to D. A. Connolly? —A. Yes, sir. Q. It does not appear that there was any security given in that case? —A. The security given was a power of attorney to me to collect what was due Mr. Connolly at the board of public works, and I collected $5,568 in certificates of the board of public works. At the time the order was given that would have been ample security, but in the mean- • 168 FREEDMAN'S SAVINGS AND TRUST COMPANY. time the board had stopped paying cash and we had to take eight per cent. certificates and sell them, I think, at seventy-four and seventy-five cents on the dollar. The amount indorsed on the Connolly notes was some forty-three or forty-four hundred dollars, leaving a balance of five or six hundred dollars due, besides the interest unpaid. THE AMERICAN SEAL-LOCK COMPANY. Q. The stock of a company called the American Seal-Lock Company was taken by the bank as collateral in a number of cases. Were any of the trustees or members of the finance committee, or officers or employes of the bank, officers or stockholders in that company l—A. None that I know of, unless Mr.Huntington was. That loan was taken,I think, on his recommendation, and at the time the stock was worth seventy-five cents on the dollar.; at least it was so stated by Lewis Johnson & Co. That loan was first made, I think, in 1870 or 1871, and I think in 1872 or 1873 I was ordered to collect it if possible, and found that I could not,so I reported to the board, and a five thousand dollar note was made, with a year's interest added to it, making it fifty-five hundred dollars. Q. Did you have an account with the Washington branch f—A. Yes, sir; I did. Q. Have you the pass-book ?—A. I have riot; no, sir. Q. You had one at the time, of course; what became of it °I—A. I do not know whether I kept it or not. Q. I wish you would look and see. It appears that your account is overdrawn, and the expert wants to verify it by your pass-book, and will do so if you will hand it to him.—A. I do not know whether I have it or not; I thought my account was closed out squarely, and I do not know whether I kept it or not. Q. What was the amount ? Mr. FITZPATRICK [the expert]. Our examination of the books shows an overdraft in your account. By Mr. CAMERON: Q. Did you want to give any further explanation of any of your transactions with the bank, or for the bank ?—A. No,sir; except the Boyle matter, and one or two others, THE KILBOURN & EVANS MATTER. Mr. CRESWELL. Mr. Stickney, you said that for the twenty thousand dollars first-mortgage bonds that the bank held at the time of the substitution of the Evans & Kilbourn note the company received nothing except sixteen thousand dollars of second-mortgage bonds? Mr. STICKNEY. I said after the agreement was, made and was carried out, that was the practical result. • Mr. CRESWELL. Now can you tell us the difference in value between the sixteen thousand dollars second-mortgage bonds and the twenty thousand dollar first-mortgage bonds ? Mr. STICKNEY. What was the time? Mr. CRESWELL. It was the 30th of December, 1871. Mr. STICKNEY. At that time I did not think the second-mortgage bonds really had any value; they had no market value at all. Mr. CRESWELL. Had the first-mortgage bonds? Mr. STICKNEY. I think they were worth about seventy-five. They were considered to be worth par by the parties, but there were really none on the market, so that you could not tell what they were worth. 169 TRUST COMPANY. FREEDMAN'S SAVINGS AND e the difference fifteen thousand dolMr. CRESWELL. That would mak ? lars would it not Mr. STICKNEY. Yes, sir. fit of that? Mr. CRESWELL. Who got the benestone Company,I think—not KilSand eca Sen Mr. STICKNEY. The rest think Kilbourn & Evans had any inte bourn & Evans. I do not that of ds bon or ks stoc held w that they in it whatever. I never kne -company. ation did the Seneca Sandstone Com Mr. CRESWELL. What consider first-mortgage twenty thousand dolthose pany give for the surrender of ds? lar bon do you mean? Mr. STICKNEY. To the bank, k Mr. CRESWELL. Yes, sir. I know that the only thing the ban Mr. STICKNEY. I do not know. ars doll sand thou fifty difference between got was $1,785 in cash; the to the bank was paid by check on the ness bted inde of unt amo pany, and the by the treasurer of the Seneca Com First National Bank for $1,785, Mr. C. W. Hayden. simply paying the interest on the Mr. CRESWELL., Well, that was loan? een Mr. STICKNEY. Yes, sir. a clear loss to the bank of fift Mr. CRESWELL. Then there was interest which they received in the of unt ars t thousand dollars, less the amo l loss over thirteen thousand doll h wort nk, which would make the tota not e wer ds bon ose that these Mr. STICKNEY. Yes, sir; I supp . that if ar, more than fifty cents on the doll the amount of these first mortgage Mr. CRESWELL. Do you know bonds? hundred thousand dollars. Mr. STICKNEY. I think it was one amount of the second-mortgage the w kno you Mr. CRESWELL. Do bonds? hundred thousand dollars, or it Mr. STICKNEY. I think it was one . sand may have been ninety-five thou seventy-five thousand dollars secondMr. CRESWELL. Were these ary? on of the company or the actu were in mortgage bonds kept in possessi that es riti secu the with in ed Mr. STICKNEY. They were turn possession of the bank. Mr. CRESWELL. At the time ? dollars Mr. STICKNEY. Yes, sir. ce did the sixteen thousand Mr. CRESWELL. From wfrat sour second-mortgage.bonds come? Mr. STICKNEY. I do not know. ished by Mr. Huntington ? Mr. CRESWELL. Were they furn re they came from. Mr. STICKNEY. I do not know whe conversation with Mr. Cooke, Mr.. a e hav Mr. CRESWELL. Did you that transaction? Huntington, or Mr. Eaton about ion with Kilbourn; and when it was sact tran no had Mr. STICKNEY. I ioned by Mr. Eaton. first made, the matter was not ment tington or Mr. Cooke ? Hun Mr. ut abo How LL. w Mr. CRESWE dead. Mr. Cooke said he kne Mr. STICKNEY. Mr. Huntington wasarrangements, and that the whole ing nothing about it, that he was mak ; and that is the reason that Kilthing should be taken up and paid a year before it was given up. bourn & Evans' note ran for nearly know of the existence of that Mr. CRESWELL. When did you first it was note of Kilbourn & Evans? ut the first of 1873. I know Mr. STICKNEY. I think it was abo 170 FREEDMAN'S SAVINGS AND TRUST COMPANY. a short time before Colonel Eaton died; I think in the middle of February, 1873. Mr. CRESWELL. Did you not know of the existence of the note ? Mr. STICKNEY. The note? Mr. CRESWELL. Yes, sir; the note of Kilbourn & Evans was always inthe bank with all the securities. When did you first know of it? Mr. STICKNEY. On January 7th or 9th of that year it was brought into the bank and entered on the bank's books. • Mr. CRESWELL. And filed with the loans? Mr. STICKNEY. Yes; that was the first time that I knew of this agreement to deliver up the security. Mr. CRESWELL. Was this agreement made in the ordinary course of the bank's operations? Mr. STICKNEY. No sir it was a private agreement. Mr. CRESWELL. When was the agreement filed? Mr. STICKNEY. The first I knew of it was when Kilbourn & Evans demanded the note under the agreement. Mr. Kilbourn called at the office and showed me the agreewillt and asked for the note. _I knew nothing about it. I told him I had never heard of it before. By Mr. WITHERS: Q. Mr. Eaton never mentioned it to you No, sir. STATEMENT OF MR. CRESWELL, COMMISSIONER, AS TO THE SENECA STONE COMPANY. Mr. CRESWELL. I have a letter prepared in reference to this matter, which I desired to offer at the last meeting of this committee. I would like to read it now. The CHAIRMAN. Certainly Mr. Creswell. [The letter is as follows:] WASHINGTON, D. C., January 22, 1880. MY DEAR SIR: When my attention was first called to the letter of Mr. Leipold, bearing date July 21, 1876, and of which a copy was presented to your committee on Tuesday last, I gave the subject-matter thereof my best thought and consideration, and deliberately came to the conclusion that it would be a waste of the funds of the depositors to expend them in prosecuting legal proceedings against the trustees or the finance committee for the recovery of the unpaid loans which it is charged they improvidently made to the Maryland Freestone Mining & Manufacturing Company, commonly called the Seneca Stone Company. Cooke had long been a bankrupt, and the other principal actors, to wit, Eaton, Huntington,and Kennedy, were all dead, having left but little, if any, estate behind them. The note and colla:terals of Evans & Kilbourn had been voluntarily surrendered, by order of the board of trustees, on the 15th of November, 1873, after a speulal investigation and report by their finance committee. There were, in fact, no solvent survivors of those who had been personally concerned either in making the original loans or in substituting the note of Evans & Kilbourn therefor, except Tuttle & Clephane; and all that they were charged with doing improperly was their approval of the agreement of January 30, 1871, which, by the surrender above mentioned, the trustees had virtually ratified, so far as Evans & Kilbourn were concerned, and which, according to the sworn statements of Tuttle & Clephane, they had both signed without knowledge of its contents, and only upon their implicit faith in the assurances of Cooke and Huntington and Eaton of its correctness. In the face of these facts, I could not avoid the conviction that any litigation we might institute in the expectation of establishing either corruption or gross negligence against the management of the company in respect of these claims, would be protracted, expensive, and altogether fruitless. And so I took no further action on Mr. Leipold's letter after my indorsement thereon of July 26, 1876. Since the meeting of your committee, on Tuesday last, I have very carefully re-examined the whole subject. I have read and considered all the papers and other evidence in the possession of the commissioners in connection with the report of Mr. Douglas's committee, and the testimony adduced before it, and I now unhesitatingly say that I remain unshaken FREEDMAN'S SAVINGS AND TRUST COMPANY. 171 in my opinion. I believe that any proceeding of the kind suggested by Mr. would subject the depositors of the company to much useless expense andLeipold delay, and would,in the end,prove to be nothing more than(to use a familiar but expressive phrase)"throwing good money after bad." I doubt very much whether a decree for any part of these bad loans could be obtained against the parties now alive; and if such a decree could be obtained, I have still greater doubts whether anything could be realized thereon. In this opinion I am wholly uninfluenced by any disposition to protect the persons implicated. I consider the case from a practical stand-point, without favor or resentment,and with regard only to the best interests of the depositors. But if a majority of your honorable committee shall entertain a different opinion from mine, as herein expressed, I am willing, upon an intimation from them, to join my colleagues, or either of them, in referring all the questions involved to the competent and efficient counsel of the commissioners, and to abide his recommendations, whatever they may be, with the distinct understanding, however, in case proceedings in the courts shall be resolved upon, that I shall not be held responsible for the consequences if delay and failure ensue, as, on the other hand,I shall certainly claim no credit if a favorable result shall be reached. The lapse of time has not impaired the rights of the commissioners as they stood at the date of Mr. Leipold's note. I have the honor-to be, very respectfully, yours, JNO. A. J. CRESWELL. I subscribe to the above as an argument and answer to the communication of Mr. Leipold. Hon. B. K. BRUCE, Chairman of the Senate Select Committee on the Freedman's Savings and Trust Company. ROBT. PURVIS. Mr. CRESWELL. This will show to the committee the position that I then took and that I now hold as to the propriety of instituting legal proceedings for the recovery of these lost moneys. Something has been said to the effect that I held that no action would lie against any of the trustees or the finance committee for their acts in relation to the Seneca Sandstone loan. This is incorrect. My position was that we could make nothing by a proceeding of that sort, and that it was unwise to enter upon a protracted and expensive litigation with no ,prospect of a favorable result. Adjourned to January 29, 1880. COMMITTEE Room OF THE SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, D. C., January 29, 1880. The Select Committee of the Senate on the Freedman's Savings and Trust Company held their meeting this day in the committee-room of the Senate Committee on Manufactures. Present, Messrs. B. K. Bruce (chairman), Angus Cameron, A. H. Garland, and J. E. Withers. TESTIMONY OF GEORGE W. STICKNEY—Conttnued. GEORGE W. STICKNEY recalled. By Mr. CAMERON: Question. Mr. Stickney, on Saturday last there were two or three matters that you were requested to look up so that you might be able to explain them more fully than you did at that time. One was the Juan Boyle loans. If you have looked that matter up, and are able to give any further explanation, you may do so. 172 FREEDMAN'S SAVINGS AND TRUST COMPANY. THE JUAN BOYLE LOANS. Answer. I have looked it over, but am not able to give as full an explanation as I would like. I looked over the. books yesterday, but I would like to have further time. I found that the balance was not quite correct, and if the committee will call me again I will try to give that matter in full. Q. I think the other matter was in regard to your own account with the bank?—A. Yes, sir. DRAFTS ON THE ACTUARY'S ACCOUNT. Q. The.first was the drawing, I think, on your account on the 11th Of July, after the bank had closed. What have you to say with reference to that1---A. I looked that up, but I find no checks on my personal account at all; they were simply collections made by me as actuary—part of them—and one trustee check, I think, and transferred from the Washington branch to a loan that had been made by the bank. The. one, for six thousand dollars was on account of a loan to R. I. Fleming. The twenty-seven hundred dollars was the part received from Boyle that was credited on this loan account. Q. What did you say that this six thousand dollars was I—A. It was money that had been paid in on account of notes to R. I. Fleming, and simply put into the actuary's account till it was settled, and then transferred. I used to do that so as to keep the account myself. Q. Was it actually drawn out1—A. No, it was simply transferred from the Washington branch, to the principal office. The Washington branch was separate from the principal office. It would seem as if the money was deposited in the branch to my credit as actuary at the principal office, and I would simply give a check and transfer it to the loan where it belonged. No money was drawn out at all. Q. Well, do the books of the principal office, or of the Washington branch, show that transaction just as it occurred 1—A. Yes, sir. Q. There was another sum of four thousand dollars that you drew out? —A. That had nothing to do with:this at all, and was drawn out long before that; and I thought, when it was spoken of, that this was what was meant. It was drawn out some time in June, and it never was to my credit any way. Q. I will ask you if any of that sum of $10,523.74, which appears to have been drawn out by you in July subsequent to the closing of the bank Was appropriated by you to your own use1—A. I think not—not to any amount any way.. I do not know what checks are there, but I do not remember any. Mr. FITZPA.TRICK [expert]. Some of the checks that appear.on the draft-journal at that time appear in your name personally. Mr. STICKNEY. Well, whether they do or not, none of them are my .personal account. There was one of eight hundred dollars, I think, which was part payment on a sale I made as trustee. I turned that over to the bank on account of the Hutchins' sale. THE R. W. TOMPKINS OVERDRAFT. • Q. Now, in regard to the thousand dollars which you allowed Tompkins to draw out after the closing of the bank. I think your explanation of that was this in substance: That Tompkins, as you understood it, had this amount to his credit 1—A. Yes, sir; that is what the book .showed. ST COMPANY. FREEDMAN'S SAVINGS AND TRU 173 trouble, you told him to let the money Q. And when the bank got in should not suffer loss, and in pursuhe that see remain, and you would him to draw it out alter the closwed allo ance of that agreement, you sir. ing of the bank f—A. Yes, l—A. I do that was a stretch of authority d many that k thin not you Do Q. goo a had we that say ed it. I will the bank not know that I so consider mittee thought,and the offic,Ars of deposits,and the finance corn rstood by everybody, that they would be unde 'so understood, and it was despecial deposits. the books of the bank as special Q. Well, did they appear on d— di m the of (lid; most posits f—A. Part of them sited before this not f—A. No, because it was depo did s ns' pki Tom agreement until Q. such any e mak ilot did agreement was made. We a heavy run on. had we n whe l, I think, along about the 25th of Apri ent. eem the bank and made that agr gram was received before that time f—A.. Q. But Mr.Tompkins's tele the unmarked special deposit; that was No, sir; and it was simply not derstanding with him. By Mr. GARLAND: ked e called "special deposits" you mar Q. When you received what wer did you not, or put something upon " sit, upon the back "special depo ch it was inclosed to indicate its charwhi the back of the envelope in it separate, but it was understood that it . A great acter f—A. We did not keep be subject to the sixty-day rule should be made special and not er the sixty-day rule to depositors. und many of them did not come indicate that a deposit was special.—A. to did you t wha e Stat book, Q. marked "special" on the depositWhen a deposit was made it was t that was the instruction; I do not t leas and also on the journal—a not. or e wer all r the know whe By Mr. CAMERON: rt, ation now being made by the expe Q. It appears, from the examin w this thousand dollars there were dre ns pki nal charged . that at the time Mr. Tom n a thousand dollars on the jour drafts amounting to more tha transferred to his ledger account, so that not nd dolup to him, but they were overdrawn upwards of one thousa , sir. ally actu was he e tim you tell can At that I n tha e mor T—A. That is sit lars. How did that happen books will show that there was a depo t— The it. ut abo ing noth w tha g like hin I kno met —so 900 $1, me $1,000—so I think, of more than this the bank closed. re made in March, 1874, befo rt]. In the books of the bank f there of Mr. FITZPATRICK [the expe k so; I think there is a deposit Mr. ST1CKNEY. Yes, I thin the bank. of March 14, before the closing sit does not affect the overdraft. Mr. FITZPATRICK. That depo By Mr. CAMERON: nst e drafts were not charged up agai Q. Well, how was it that thes Whose duty was it to do that f—A. up? ng him ? Who did the chargi bookkeepers, and young Mr. Augusta was Mr. Tompkins was one of the time whose duty it was to post up all the another. We had two at that fy checks. of the officers of the bank to veri Q. Well, was it not the customkkeepers did their duty, or did they boo the books to see whether the epers f—A. Well, it was impossible for kke trust it entirely to the boo ck up all the work there, to see if it watEi che to k ban the of cer offi _any 174 FREEDMAN'S SAVINGS AND TRUST COMPANY. all correct or not. They had to trust to the bookkeepers just as any other bank does. Q. Trust the bookkeeper with his own account?—A. Well, we had the other man; he did not hax e the writing of the accounts in the journal, as a general thing, nor in the ledger; at least was not supposed to have • that was the duty of.the paying teller and the receiving teller. Q. I have here your deposit-book "B 12." It commences with December 15, 1873. The first entry in it is December 15, "To balance," to your credit, "*564.20." Now, on examining the books, it seems that at that time your account was overdrawn $235.70. Can you explain the discrepancy between the entry on your pass-book and the account as it now appears on the ledger ?—A. I cannot, any more than what was found on the books there. There was a deposit on the ledger of $400. On the draft-book it appears as a draft of four hundred dollars. I do not think that is correct, though. Q. It seems, then, that on August 18, 1873, you drew a draft of four hundred dollars on the bank, which was paid, but it was posted as a deposit, making a difference of $800 in your favor—A. I do think I ever drew any such draft. I cannot find that I did. I cannot find my deposit-book. I hunted faithfully for it, but have not given up the search. I was very careful in my own accounts. If I find that, it will show it exactly. Q. Are you able, from any private account that you kept, to determine whether you deposited four hundred dollars on that day or not l—A. Well, it was deposited before. Q. Well, before I have not, looked at that. Since I was last before the committee I have been trying to find my deposit-book, but have not succeeded. If I find that I could tell. Q. Well, will you look at that [showing witness the account in an old deposit-book]f—A. I see that there are two or three other drafts here; one for fifty dollars and one for one hundred and fifty dollars. I cannot find that there are any such drafts in my personal and private account. By Mr. GARLAND: Q. Then you have searched for that ?—A. Yes, sir; I broke the Sabbath on that. Q. How did you find that it was entered ?—A. It is entered in that pass-book, but not in the ledger. That balance as brought forward there was taken, not from the ledger but from an old deposit-book. ,That I know because I had the deposit' -book at the time. By Mr. CAMERON: Q. This deposit-book shows an overdraft on the final writing up of it of $57.22?—A. Yes; that was paid. Q. The experts find that the overdraft at that time was actually as appears from the books whether it was so or not, of course I do not know; the amount is $1,041.12?—A. $1,057.12. Mr. FITZPATRICK [the expert]. Yes; it is $1,057.12. Sixteen dollars is to be added to the $1,041.12. Mr. STICKNEY. You gave me a credit of sixteen dollars, which I did not accept. Mr. FITZPATRICK. Yes, sir. By Mr. CAMERON: Q. Well, you are not able at this time to explain that any further ?— A. No, sir; I am not; all I can say is that I do not think that is the FREEDMAN'S SAVINGS AND TRUST COMPANY. 175 fact., because I was very careful of my own deposit account, for I knew any in my acthat mistakes were sometimes made, and I did not want d and fifty count. The only way that I can account for the one hundre of my check any find cannot I this: is dollars fifty the and dollars own my sign and s t charge differen the for slips own; I used to send in somename for them—not for myself personally, but for the bank—and slip. times they were charged up on my books, with my name on the Q. If these mistakes were made by the bookkeeper and'others, what closed would be the state of the cash account at night when the bank " "over. be would it Well, its books for the day ?-4. Q. Well, now, in the banks that I have known something about, when until they they find a mistake of that kind on the books' they never rest do in have hunted it up and found out where it. was. How did you that that; do to tried always we Well, ?—A. case a such in your bank find to tried ly certain I most me, to d reporte is, I suppose so. If it was out all about it. Q. If it were a fact that on one day you drew four hundred dollars , (I do not say that it is a fact, but if you drew four hundred dollars) you, to d credite be would it you, to d charge being its of and, instead would there would be a discrepancy in the cash account that night, there not f—A. Yes, sir. Q. And it would appear whenever the teller, or whoever had charge, wrote up his account for the day ?—A. Yes, sir. as it Q. It seems to me that that was a matter to correct at the time, a little done were things afraid am I . was rather a glaring mistake there, Mr. Stickneyl—A. Well, I do not deny that at all loosely there had Mr. Sperry there for a long while trying to find [laughing]. used to be out discrepancies, and also a gentleman, Mr. Weygant, who had him we failed, that after Bank; l Nationa First the in a bookkeeper did not check employed for a month or two upon these matters. They [alluding to done have men gentle those as r, howeve ly, careful off as ions that correct made think, I Sperry, Mr. ]. the committee's experts I think, and amotmted to seven or eight thousand dollars altogether, Mr. Weygant to some seven or eight thousand dollars. t was as it Q. Now, a depositor might honestly think that his accoun makes me What ?—A. not was it fact in when ledger, the on ed appear na memora kept always I that is, correct think that my account was but at that time, dum of what I did. I did not keep books all along, money in my as administrator of my uncle's estate, I had considerable keep that acand that, from nts charge, and I had to make up stateme • count straight. ed the other Q. Were you present when Mr. Richards was examin day?—A. Yes, sir. THE LOANS TO A. PANNELL. were it Q. He was asked in regard to the Pannell loans, which seems Do you know lost. were least at them of some hatis, bank—t the to lost were made ?—A. anything about these loans and through whom they s. Mr. Pannell Yes, sir; they were made at the request of Mr. Richard e, and gave Whippl Fort at s barrack the g buildin for had the contract ds was one me power of attorney to cbllect the money, and Mr. Richar I collected a think I and on, went They en. bondsm 's Pannell of Mr. authorities good deal of money; but he got into some dispute with the last part of the and did not go on, and they did not pay him for the deal more than work. There was more due him, and he claimed a good 116 FREEDMAN'S SAVINGS AND TRUST COMPANY. enough to pay these notes. He brought suit in the Court of Claims, and I think the suit is there yet—I do not know whether it has been decided or not. Q. That is all you know in regard to these loans /—A. Yes, sir; that is all I know. I will say that Mr.Pannell wanted the commissioners of the bank to advance him money to carry the suit up, and they did not think they had the authority to,do it, and they got somebody else to do it; that is, to pay the expense of the suit. THE WILKES LOAN. Q. I want to call your attention, Mr Stickney,to a loan known as the Wilkes loan, on which it is probable the bank will lose a large sum. It seems that the loan was first made in 1870, but it was transferred to the bank in 1872; and it appears upon examination that the title to the .property that was given to secure the loan was defective at that time. Now, if you know anything about that loan and the manner in which it came to be transferred to the bank, will you explain f—A. I think the loan was made by General Balloch in 1870, and when the loan was first made the notes were in his own name. Q. In Balloch'sf—A. Yes, sir; in 1872 he made application to the bank to take it off his hands. It was passed by the finance committee and the money was paid him. Q. What connection did Balloch have with the bank at that time T— A. He was one of the finance committee and one of the directors. So far as the title being bad, that was a matter which was corrected by the court, and I advertised the property for sale, and part of it was sold; one lawyer here passed the title as being good, and having confidenee in the lawyer who had passed it, he bought it on his abstract; but some other attorneys who were examining for other parties pronounced it a defective title. Yes, Q. But the loan was originally made by Balloch himself sir; he deposited his own money on it. Q. He carried it some two years f—A. Yes, sir; but the interest was paid promptly on it, and he supposed that it would be paid, and it was taken by the bank. I will say further that when,in 1874,I think it was, I advertised the property for sale, the .prices at which property was then selling would have enabled the bank to get out with very little loss, but parties would not take the property on account of its defective title. • THE LOAN TO JAMES T. PIKE. Q. In 1872, Mr. Stickney, there was a loan made to James T. Pike of four thousand dollars on property situated on Capitol Hill. In 1873 there was an additional loan made to Pike of sixty-five hundred dollars, secured on • this property, and also on some property in 'Maryland. The Maryland property has since been sold by the bank under a foreclosure &Ile for about two hundred and fifty dollars. Now,can you explain how that additional loan of sixty-five hundred dollars happened to be made to bun'1—A. I,think that additional loan was simply a fiiing up of a lot of other things on some securities, and we were trying to get more security at the time than we felt we then had. Q. Well, the only _security it appears the bank held at that time was this Capitol Hill property, and that was security for $4,000; do you know whether the bank held other securities for that—personal or other FREEDMAN'S SAVINGS AND TRUST COMPANY. 177 securities f—A. They held a note for five thousand dollars of James. T. Pike's, which appears in that. All the securities that are held appear in the note. Q. Who was Pike—what was his business f—A. He was a clerk in the Second Comptroller's office and a real estate operator. THE LOAN TO SAMUEL C. POMEROY. Q. In November 21, 1872, the bank made a loan of .six thousand dollars to Samuel C.Pomeroy,who gave 100 shares of stock of the Second National Bank of Leavenworth,Kansas. These shares were subsequently withdrawn and six notes of Aaron G. Underhill,of one thousand dollars each, and a policy of insurance, were substituted for the Leavenworth bank stock. There is a large deficit on that claim; can you explain bow it happened that the bank allowed him to withdraw the Leaven worth bank stock and substitute these notes of Underhill?—A. I cannot just at present. Q. Perhaps you can refresh your recollection in some way so as to be able-to.answer. THE LOAN TO. PERRY H. CARSON. On April 9, 1874, there was a loan of one thousand dollars made to Perry H. Carson, and secured on part of lot 6, square 582, of this city. When the commissioners insisted upon payment, Carson said that the loan was made for the. benefit of John M. Langston, Which, I believe, Langston denies. Can you give us any light in regard to that loan ?— A. 1 think Mr. Carson had the loan there of five hundred dollars, or something like that, before Mr. Langston came in with him,and he said If I would let him have an additional loan and take this note for it he would,see that it was paid. Q. He, Langston f—A. Yes, sir. Q. But he did not obligate himself in writing in any way to pay A. No,sir. Q. And he gave no additional securityl—A. No, sir; well, this was additional security, for I did not think there was any security for the first five hundred dollars. Q. It was a second mortgage on the property, was it f—A. It was supposed to be a'first mortgage at the time. Q. It turns out, however, to have been a second mortgage f—A. Yes, sir; 'a second mortgage. TESTIMONY OF DR. CHARLES' B. PURVIS. WASHINGTON, D. C., January 29, 1880. Dr. CHARLES B. PURVIS sworn and examined. By the CHAIRMAN: Question. Doctor, will you state what was your connection with the Freedman's Bank, and how long, a time it covered f—Answer. I was elected trustee of the bank-in 1868. I remained a trustee until it failed; until it was closed up, in 1874. I was a member of the agency committee just a little while before the bank closed; I acted as chairman 12 F B 178 FREEDMAN'S SAVINGS AND TRUST COMPANY. of that committee—the chairman, General Whittlesey, having resigned as trustee. I was also elected vice-president of the bank; first vicepresident. I think I served in that capacity about a year; possibly a little longer. I was on the finance committee, I think, ten days or two weeks. We accepted the resignation of Mr: Cooke, Mr. Huntington,and Mr. Broadhead, I think, all in one day; and then we substituted two or three others—myself and Mr. Richards were put on; I do not remember who the other person was. I served in that capacity about ten days or two weeks, then I 'resigned, and Mr. Langston was substituted for me. I do not think any business was done while I was a member of the finance committee. The committee was then making what is known as the Hall loan—a loan on a farm owned in the country by Mr. Hall. It was made while I was on that committee; and I think that was the only business transacted of importance while I was on that committee. I only met with them once. Q. You mean the board of trustees ?—A. No, the finance committee. Q. That is the only loan that was made while you were a member of the finance committee ?—A. Yes, sir. It was on some real estate here across the river. I was not an active member of the board of trustees for the first year or two. I was acting assistant surgeon in the Army, and was not alwa-ys on hand; but after that I took part in all the meetings; not all of them, but most of them, I should think—I do not remember exactly. I know, however, that during the latter part of the •years of the bank I was pretty regular in my attendance on its meetings. • Q. Did you observe any irregularity'in the management of the bank, so far as the making of loans was concerned, the receiving of improper securities, Sze l—A. Well, I suppose I may as well state what I know 'about it. "IRREGULARITIES" IN THE MANAGEMENT. Q. Yes, it is our purpose to get at the facts.—A. I said just now that I did not take a very active part when I was first elected. There were some very prominent men in the bank when I was elected. There.was Mr. Cooke, Mr. Huntington, Mr. Broadhead, and Mr. Clephane ; and then we had, connected with it, a Mr. Whipple, who was connected with the American Missionary Association of New York; then we had Mr.Ketcham,a very prominent lawyer; and I cannot pretend to give the names of all the prominent men. But I remember that these gentlemen were there; Mr. Ketcham occasionally attended the meetings, and he was quite rigid at times in his examination of the reports of the actuary, Mr. Eaton. I do not remember having my attention called to any irregularities. I heard Mr. Stewart, who was the attorney of the bank, mention some things that he thought were wrong; but my attention was not called to anything directly until Mr. Ketcham called the attention of the board of trustees to the investment in the Seneca Sandstone bonds. He made a little speech, and said that if,the bank should take such securities he would resign—he would not be identified with it; and then went on to give his experience, for he had had a great deal of experience as an attorney with savings banks and such institutions in the State of New York; and he said that all such securities were unsafe; and that it was in violation of the charter, which he read to us on that occasion. I think:that was in the fall of 1871, or the spring of 1872, I do not remember exactly which, it has been so long ago. He was very emphatic—I remember that; and the actuary said that while it appeared in the nature of a purchase, it was really a loan; that the FREEDMAN'S SAVINGS AND TRUST COMPANY. 179 worth more than they company would take it back; that the stock wasoffered a resolution, I had given for it; and he, Mr. Ketcham, then to take back these sted reque be any comp the that ting direc , think committee, I had always bonds; and, as I testified before the Douglas returned to the Seneca supposed that the loan, or these bonds, had been our money in return ved recei had we that and any, Sandstone Comp ary until it came very for them. I did not know anything to the contr we found that that when ution, instit the up close to us for nearly time securities for poor good ped swap had they t had not been done—tha bogus s)curiwere urn Kilbo securities, and that the notes of Evans & ties. NCE COMMITTEE. TRANSACTIONS OF THE BOARD AND FINA the board of trustThis is the way we used to conduct our business; read the minutes of would ry actua The . month a once meet would ees the statement off the minthe previous meeting; he would then read he would then state the ttee; commi utes, or the report of the finance almost invariably he , and month the g durin made been loans that had ; and in reading that ties securi many would then read over the s mentioned; alway was s Evan over this list the loan of Kilbourn & was made to loan the that e, cours of red, appea it and on the face of it say this may I e, cours rds's Richa Mr. them on ample security. As to duced the resoluintro ney, attor as rt, Stewa or he, either also: I think to take back their bonds. tion which caused Jay Cooke and Company some of the funds of the used They had given us a guarantee, and had as five hundred thousand corporation. They had been using as high was deposited in their Which y, mone dollars of our money—our own them. I had a talk at nant indig was ry actua the mber bank. I reme y lying idle in Jay mone to ence refer in with him, on the street-car, and dollars. My thous ed hundr Cooke's bank. I think it was five or six dollars. They and thous ed hundr five least at impression is it was t we were whils it, on m annu per allowed us at the rate of five per cent, our bonds—at of some sold he then and est; inter paying six per cent. y in United States bonds, and any rate he invested some of that monefew thousand dollars by that those bonds went up, and we made a time, that they were very transaction of his; and he told me, at thatof indignation on the part deal indignant.. Now, that caused a good ttee. The chairman of the of some of the members of the finance commihere the other day, and an was who , committee was Governor Cooke ; Mr. Coke also was a memactive member of it was Mr. Huntington e member. That was one activ an and ttee, ber .of the finance commi the whole, I think there On one. irregularity, and a rather good-sized t that one, and this is excep bank the in es lariti irregu were not many to what was brought and here, g' ionin news to me, listening to the quest from what I learn and ion, tigat out by the previous committee on inves Many loans, at least many made We from the commissioners. not know anything about. I loans were made, which the trustees did the other day when he said ken mista was rds Richa think my friend Mr. subject to the approval ttee commi ce that loans were made by the finan It is true, the trustees ke. mista a is That es. truste of of the board the loans were made but ttee, commi ce finan approved the report of the eolored churches, upon s Loan . - before they reached us, almost invariably here, and many applications river the s acros rties and those little prope were always submitted to the for loans from the South—these loans e to making loansto those board of trustees. As a rule, we were avers 180 FREEDMAN'S SAVINGS AND TRUST COMPANY. sections of the country. I remember that loans were made in your State, Mr. Garland—in Arkansas. Applications were made to us, and we opposed all these loans. The only irregularity—and that seems to have been an error of judgment—was the loaning of money without authority. We were explicit enough in requiring the utmost care on the part of the finance committee in matters of loans; we had implicit faith in our finance committee; and I think I can state without the lead hesitation, that the finance committee that existed after the resignation of Mr. Cooke and Mr. Huntington was made up of honest men in every particular—men who attempted, and no doubt desired, to serve the interests of the bank. There was one man on the finance committee—Mr. Balloch—who did the bank wonderful service. In his capacity as treasurer of the bureau—of the Freedmen's Bureau—he had his agents employed throughout the country to pay off the bounties to soldiers, and they had their offices, and these offices were used in the beginning by us; and we thus saved the rent of offices, and saved the salary of a cashier in many instances, when we were establishing banks—and they did not cost the government a cent; yet he did the, people a great service by enabling them to establish these banks in various sections of the country. These two or three little loans that have been mentioned here are mere bagatelles, and I do not know anything about theth'. The only objection that I had was to the loaning of money without authority. I would criticise our actuary, here, for doing that, though his motive, evidently, was the best. In the South we had irregularities over which we had no control. Many cashiers there were dishonest men. We had one great trouble, and that was in attempting to investigate those branches. We had several inspectors, who were sent to the different banks. Mr. Sperry, an excellent man, was one of them; and there was another whose name I cannot remember, but who was afterward cashier of the' branch in New York. .(Turning to Mr.Stickney.) Do you know his name, Mr. Stickney? Mr. STICKNEY. Harris? Dr. PURVIS. Yes, Harris. These inspectors were sent down to the banks but they did not detect the frauds that were perpetrated there. Another trouble was to enforce the bonds; when we did detect frauds, we could not do anything about them. CAUSE OF THE BANK'S FAILURE. Since I am here as a witness, I would like to state this fact. There seems to be a prevailing opinion that the failure of the bank was the result of fraud on the part of the officers—on the part of the cashiers, and chiefly on the part of the trustees. There never was a greater fallacy so far as the trustees are concerned; because no one can show (the present board of trustees, I mean, for I will not attempt to account for the others that are out), no one can show that any one of them ever used the funds in any way whatever for their own purposes. The bank failed, in my opinion, from natural causes. Any one knows—almost any one who knows anything about business—that in order to start a savings bank anywhere it takes at least ten years before that bank can become a paying institution. We established a branch in Washington. At first it was not a paying institution. In a very little while, however, owing to the popularity of the branch, it not only paid all its expenses, but there was a profit which went large;y toward defraying the expenses of the other branches. Now, when the bank closed, we had about TRITST COMPANY. FREEDMAN'S SAVINGS AND 181 not sure which; but we had fifteen, fifteen or sixteen branches, I am by any means. They were new nses expe pay certainly, that did not ying to us from all sections of appl branches. People were all the time tlfat they might save their money. so ch, bran a m the m. the South to give thousands of dollars to sustain the These branches cost a good many no longer had the benefit of the They had to pay office rent. Weexpenses, and it is not necessary to r Bureau. The office rent and othe we found, by nioe.calculation, that it and vy; hea were m, the enumerate ions of dollars for us to pay our inrequired a deposit of over five mill . Now, we had three runs on our nses terest and meet our current expe hed that point, and these runs took bank when we had just about reac and three-quarters of money, and took n from us very nearly a million could sustain our institution. Whe from us our profits out of which wethy condition. We had,in bonds and. heal Jay Cooke failed we were in a million of dollars, and we were reducing a of ters quar e thre ly near , , cash n the first run came we stood that our expenses very rapidly. Whe all our bonds, and even hypotheand cash ce on and we disbursed all our s. Then we put a sixty-day noti cated many of our real estate note us a notice of sixty days before they give the people, requiring them to Then we had no money and could not . sits depo r thei out w dra d s, coul ey was invested in real estate loan raise any. The bulk of our mon we owned. To realize upon that was h whic and in real estate property the law passed e was no other alternative under the institution. e impossible; and ther clos itution but to one, giving us the right to close the inst e loan, and I call that 'a very badfraudston Sand ca Sene the ng taki But the and , mbia Colu of District and other bad loans made in theAlabama, Arkansas, Florida,and other in iers cash the of gs doin t yet ulen ed us of a great deal of money, places, although these men robb could have swung clear. if it had not been for the panic we THE JUAN BOYLE LOAN. e what you remember about a loan mad loan Q. Can you tell the committee this re secu To ? thousand dollars to Boyle in 1874, of twenty-ninein bonds of the Selma, Marion and Memars doll sand thou t eigh e circumwe hav was that loan made ? State the board phis Railroad Company. How e and itte comm nce fina the by oved stances, and whether it was appr could not onal knowledge of that loan. I of trustees ?—A. I have no pers from information, anything about that. e's state of my own knowledge, or upon us, after the failure of Cook mina When we were having the run deno e larg a of were bonds. They bank, we undertook to sell our I think; most of them currency sixes, , each ars doll sand thou ne many n—o tio correctly, although it has been so er emb rem I if , were to I think they med see and k, thin a broker here,I years ago. Mr. Boyle, who was and gave us the benefit of his services. be a friend of the bank, came i k. I do not think the truster s ever He was not employed by the banthat he was ever.brought before them; had anything to do with him, or and president to sell real-estate notes . but we authorized our actuaryr own way of selling them. The presiand bonds, and they took thei e,and Mr. Boyle was employed,I uns. dent went to New York to sell som Baltimore to sell some of the bond derstand, by the actuary, to go to I learned from Mr. Leipold, when we er All that I know about this matt bank, and Boyle was making a settle,had a meeting of trustees at thely was that the actuary loaned him the Boyle ment there. My idea original of Mr. Leipold, I found that Mr.unt of money; but after the statement amo full the k ban return to the every time he sold bonds did not 182 FREEDMAN'S .SAVINGS AND TRUST COMPANY. money; he kept a little; so that, in the aggregate, it amounted to the thirty-six thousand dollars you mention. Then, to secure the bank, his note was taken, and these securities, such as they are. I have no personal knowledge about it, only as I gathered it from Mr. Leipold, hearing his statement at the meeting of the trustees of the bank on one occasion. I know he was selling the bonds, however. Once or twice he was in the bank,.and I heard one of the officers say that he was an agent of the bank. Q. Was be authorized to sell by action of the trustees? Who authorized him to sell bonds al—A. That I do not know, unless it was the officers of the bank. He had no authority from the committee. The CHAIRMAN. Referring to this loan, doctor, I find that in your testimony before the Douglas committee you said: The president went to New York to sell some of the bonds, and it seems that, without any authority whatever, Mr. Stickney sent Mr. Boyle to Baltimore to sell some of these bonds. This I have only got from our inspector, Mr. Sperry. It was hard to sell these bonds, because they were of a thousand dollar denomination; if they had been one hundred dollar bonds we could have sold them readily. Afterwards my father asked me in regard to a loan to Boyle, and I told him that we had never made any such loan. On inquiring into it,I found that Mr. Stickney,even when we were in such a state in the bank that we had sold every bond except five hundred dollars, simply on the pretext that Boyle had done the bank good service, loaned him twentyone thousand dollars, on which we had no security. On the strength of that,I called the trustees together for the purpose of asking them to remove Mr. Stickney from the trusteeship which he had acquired under the law of June,1870. I there mentioned the matter, and Mr. Leipold contradicted my statement that Stickney had loaned the money in the way I have mentioned, but he made this extraordinary statement: that Mr. Boyle had sold bonds for the bank at different times, and that every time he had retained some of the money,so that in the aggregate he owed the bank the amount of $21,000, and that then,to cover up the transaction, Stickney took this note from him, but put it in the shape of a loan. Boyle has never rendered any account to the bank of the amount of bonds that were put into his hands by Stickney. Of that transaction, however,none of the bank officers proper,except Stickney, had any knowledge. I read that, doctor, to refresh your memory on this point. Dr.PURVIS. Well, that is correct. After talking with various trustees of the bank they thought we had better call a meeting. Mr. Douglass was president of the bank at that time. A meeting was called to do lust as is there stated—not to dictate to the commissioners, as has been suggested, but really to tell them what we knew about it, as I said there. AS TO REMOVING MR. STICKNEY, AS TRUSTEE. About removing Mr. Stickney as trustee, I will explain that. Mr. Stewart, Who was then solicitor of the bank, brought to the attention of the board of trustees this fact: That in all our real-estate loans our actuary and assistant actuary, Mr. Eaton and Mr. Stickney, appeared as trustees. He said, under the law of the District of Columbia—though I do not know anything about it—that they could get five per cent. whenever they were forced to sell a piece of property, unless there had been an agreement between the parties, and then that would be binding. Now, Mr. Stewart said they might force a good deal of property into the market on the expiration of the loans and for the sake of making this fee; he therefore brought it to the attention of the trilstees. He came to my house with Mr.President Alvord, and brought a resolution which they desired I should introduce,—I think that was the one, and that either I or Mr. Stewart introduced it—in reference to that. The object was either to change our trustees or these deeds of trust, or to get some expression from him so that if any, profit should arise out of TRUST COMPANY. FREEDMAN'S SAVINGS AND. 183 Eaton got up and said that lethese fees it should go to the bank. Mr.but that he never had any idea , fees e thes to tled enti be d gally be woul to the profit and lass account of claiming them,and that they should go nding we allowed his money rsta of the bank. With that distinct unde s had been appointed I understood to remain. After the commissioner these fees, and as we had lost ming clai that Mr. Stickuey thought of , at least, in making some loans,I some money by. his errors ofjudgment the bank. The trustees were to go ld shou thought that these profits Douglass, though I presided at Mr. of ance inst the at ther called toge to say to the commissioners her, anot at lass Doug one meeting and Mr. ved from these deeds of remo be to t that we thought Mr. Stickney ough And that was the dicy. mone trust, or that he should turn over that rred to the other day, and upon refe old Leip tation that we did that Mr. . That was the reason we called that point I have a statement to make only say the actuary loaned him the trustees there. As to Boyle, I canhe did the best he could, but the the money. After Boyle got into him Boyle kept some of the money. Mr. statement I think is correct that I do not doubt; he did the bank Now, Mr. Boyle was an active man,of the bonds, but, as it turned out, y service in disposing of a good man • the was a rascal. By Mr. WITHERS: on on the sale of bonds in addiQ. Did Mr. Boyle charge a commissi sir; if he did that and received . No, tion- to retaining most of them f—A d have been proper; the actuary his pay it was right enough—it woul under the authority of the board would have had a right to pay him that ed it, because we were doing the ider of trustees. I should have so cons we could; but he was not employed that time that at bank the for best by the bank. by somebody, otherwise he could Q. He must have been employed bonds?—A. They were given to not have obtained possession of the a question I really cannot answer him by the officers of the bank. It is he got possession of the bonds. correctly, because I do not know how trustees. the Certainly he was not employed by By the CHAIRMAN: y by which he could be employed, Q. Well, there was no other authoritBut we were having a panic, and sir. s was there f—A. Not legally; no, trustee that went to the actuary' I may say this, that I was the onlyNew York,and I was the one who assistance. The president was in sixty-day notice, and I do not doubt authorized the actuary to write thewithout consulting the trustees, beat times he was compelled to act ptly even when he summoned them ver, cause they did not always come prom had to be done. I might say, howe on s during the panic;-and something bond e thes ling pedd e Boyl Mr. that Mr. Sperry told me that he met away from him; that is, some of them the streets of Baltimore and took er testimony. The taking of that them; and I think that is in my form could be done to get out of a bad security I presume waS dm best that job. POMEROY. THE LOANS TO SAMUEL C. By the CHAIRMAN: made to Samuel C. Pomeroy on Q. It appears that there was a loan onal Bank stock of Leavenworth, one hundred shares of Second Natiwithdrawn, and six notes of Aaron Kansas. Subsequently these were ars each, secured by a deed of G. Underhill, of one thousand doll 184 FREEDMAN'S SAVINGS AND TRUST COMPANY. trust and policy of insurance, substituted for them. That is, this six thousand-dollar loan was made upon one hundred shares of Second National Bank stock, and this security, it seems, was afterwards given up and Mr. Underhill's notes substituted. Can you give us any information as to how that was done and by whom ?—A. No, I do not know; I have not the least idea. Of course I could not remember all that was done, but I am pretty sure that that never came under the notice of the board of trustees. Whether the committee did it or not, I am not prepared to say; it never came under our notice; ,I am sure of that. We would not yield up a good security for a poor one. By Mr. WITHERS: Q. That seems to have been done in several instances in the history of the bank?—A. Yes. As to the loan of Mr. Richards, though it was A small matter, as was said a moment ago, Mr. Richards may have received these two or three hundred dollars, whichever it was, but never applied to the trustees for it. By Mr. GARLAND: Q. Is that the matter Mr. Stickney was speaking of just now ?—A. Yes, sir; and it never came under our notice. He was a very honorable, upright man---=-a most exemplary man. THE ACTUARY'S BOND. By Mr. WITHERS: Q. Can you explain why it is that the actuary of the bank was never required to give any bond ?—A. Well, that is a mistake; he was required to give bond. When Mr. Stickney was elected actuary in the place of his deceased uncle, his bond was fixed at twenty-five thousand dollars. Q. Was the bond given ?—A. No, sir; it was to have been given. It was fixed at twenty-five thousand dollars, and his salary fixed at three thousand, I think at that meeting; the former actuary had always given a bond, and we supposed as a matter of course that the other actuary had given a bond. I knew that the president had given his bond, and of course we supposed that the president had seen to it that the actuary had also given bond. When he called upon the actuary for his bond, the actuary said that he was busy, and the president not having reminded him of it, he had not attended to it, but that he would fix his bond up. That was only a little while, however, before we went into liquidation. That bond never was fixed up. Q. The actuary never refused to give bond, did he ?—A. Yes; Mr. Langston was the first one to call attention to the fact of the actuary's bond and to ask him about it, and then he made the explanation I have just given you. When Mr. Langston, a few days subsequently, asked him about that bond, he said he had not given a bond and he would not do so, but would resign if it was insisted on. Now,I must confess that while the actuary was my personal friend, I felt badly about that, because I did not see why he should not give a bond to cover his own acts. He was not responsible for anybody else's. It was one of these surprises. Q. The board did not compel him ?—A. No,it was too late; I think we went into liquidation three days afterwards. He would not give a bond then, and there was no need of insisting upon it at such a time, for certainly it was less than a week after that that the commissioners were appointed. 185 ST COMPANY. FREEDMAN'S SAVINGS AND TRU PURVIS. THE USE OF FUNDS BY DR. I would like to state this to the And just here, while I think of it, said about myself using the funds g thin some been has e ,00mmittee. Ther not the infinitesimal part of truth of the corporation. Why there wasuse I never directly or indirectly in in that charge, not the least; beca of the funds of the bank. I did buy. the remotest manner used any er part of April or the first of May from the bank during April, the latt g our loans and selling our bonds; I It was when we were hypothecatin en thousand dollars' worth of-real; fifte think we sold to Mr. Corcoran to raise money in all directions to meet ,estate notes, and we were trying had loaned the batik ten thousand lass Doug Mr. this run 011 the bank. s as security, and I think the note dollars, and had taken real-estate sure about that, but I think I am too commissioners found—I won't be found quite a number of notes and s oner issi comm the k thin I ect— I corr came into the bank at that time. they and , ated thec securities hypo father; at my for note ar doll sand thou two a bought among other notes anhim, one for ten thousand, dollars, least I bought several notes for take to ing will was ,I only other note other for sixty-five hundred. The thousand dollars. I had taken some two for rs Pete Mr. of note this was to jeopardize any more of my money. other notes, and I was not willingars in money of my own, and I had a doll verI finally added two hundred red dollars,a note of the Howard 'Uni note given to me for three hund better security than anyI took; because sity,that was ten thousand times ars May possibly be realized on,if the the one I took for two thousand doll, but there is no certainty about that. property is put under the hammer the bank, not a dollar of its money, of I merely took a real estate note red dollars of my own money and hund n ntee seve k ban , and gave the which I had to indorse upon the back another note drawn to my order statement was made here the other so that it could be collected. The There is a little difference between day that I discounted that note. it)' and indorsing a note. It would discounting (as Mr. Leipold statedinterest, or other consideration, I got look as if for some accumulated truth is, I was some five hundred dolsome money from the bank. The ey was refunded to me by my father. lars out of pocket until that mon paid at maturity. I asked Mr. Johnnot The note indorsed by me was w him to k wanted it to run along and allo ed to it, ban the that said he and :son call was n ntio atte my whenever suit, pay the interest. At any rate, e was no difficulty about it, no w sho it was paid, interest and all. Ther to t wan I it. t abou is e ther t is all or anything of that kind. Tha idea that-I was using the money of the that there was not the remotest was helping it to the best of my ability. k took corporation; on the contrary, I notice twenty days after the ban The bank put up the sixty-day sand dollar note in the latter part of thou the 22d the note. I took that two first interest I got on it was on so ber; April or the first of May. The Octo of 13th was due on the . So far of October, although the interest note that on rest inte the me ng that there was a delay in payi ly loaned the bank some money. as I was concerned, I have real WEEN DR. PURVIS AND COMMIS MATTERS PERSONAL BET SIONER LEIPOLD. Dr. PURVIS: that I wanted to correct a statebelieve I stated here the other day old madein reference to my Leip Mr. that ment, for it is necessary, that was an entire niistake of his. insulting him. I want to say that I 186 FREEDMAN'S SAVINGS AND TRUST COMPANY. It is true, as he stated, that I went before the commissioners on one occasion and took in some papers of Mr. John H.Cook and Mr. Worm. ley, one applying for the position of attorney and the other applying to be auctioneer for the bank, as they would have a great deal of property to sell. My motive was then, as it always has been while I have. been connected with the bank, to serve its interests and to assist young colored men. I had no other object. I took in their applications and presented them to the commissioners. Mr. Leipold got angry. It is. true that I said to him just what he said I said. He said this: "I don't see why I should not make up some of these deeds of releases and deeds.; of trust myself at home, and make that little money. I did not come here solely forthe position that you gave me." It is true, I repeat it again, that I said to him,"What time have you to do any law business ?" Now, that was not intended as any insult to Mr. Leipold, and I don't think he took it as such, for he was very polite and friendly afterwards, and has been at my house since, and I to his. He took me to Mr. Vanderbilt, who' s a pretty honest man, and was trying to get Mr. Wilson, cashier of the bank, a position. Our trouble don't date from that. I was instrumental in putting Mr. Leipold in the bank. I voted for him. Mr.Ela recommended him, and Mr. Tuttle recommended him because he was an excellent accountant. Mr. Ela told him that, at the meeting of the board of trustees last spring. There was no other reason under the sun for electing him. I had no feeling against him then; I have no feeling against him now. So I make that statement to correct or disabuse the impression that I insulted him, because I said that we should not have elected Mr. Leipold only because he was a good accountant; and I think he is a most excellent accountant. There were some irregularities that he has ferreted out and corrected, and some. cases that I discovered afterwards that took place in the bank. PRIOR SELECTION OF COMMISSIONERS BY THE TRUSTEES I wish also to say to the committee that Mr. Leipold is correct about our first selecting three men before the present commissioners were. elected. That dues not seem to have been stated clearly to this committee. That is true. We selected my father, Mr. Langston's brother, and Mr. Richards's brother. Mr. Richards's brother was nominated by me. He was a man well thought of in this community, though I don't know anything about it. Mr. Langston's brother lived in Greensboro. Mr. Tuttle did not quite like the appointment. We first, however, elected Mr. Swain,cashier of the Second National Bank, and afterwards changed our votes. THE BILL APPOINTING THE COMMISSIONERS. I wanted further to state that the bill appointing the commissioners was gotten up by ourselves. I believe that our actuary and inspector were instrumental in drawing up that bill. We desired to continue the bank if possible, or wanted the power to wind it up when we found we could not continue it. The bill that passed Congress required all deposits to be made special deposits, and although we had money in the bank at the time of its failure, we could not use it; and that was the reason why we closed our doors. That bill gave us the right to appoint commissioners, and when the board of trustees called a meeting subsequently, we got permission of the commissioners to use their apartments. for the purpose I have just stated. T COMPANY. FREEDMAN'S SAVINGS AND TRUS 187 N. THE SENECA SANDSTONE LOA ca Sandstone loan. My You asked me a question about the Sene I think, must be in the e, itte comm las Doug last the e testimony befor ence to consulting Mr. refer in and that, main correct in reference to me that, and I think told e Cooke, and consulting Mr. Tuttle. Mr. Tuttl fine man,and one whose a as e Tuttl Mr. upon ed that is correct. I look word could be relied upon. THE VANDENBURGH LOANS. ence to the loan of VandenIn my former testimony I testified in refer testimony somewhere. In ed burgh. You will find it there in the print at my house in June, made staid he when ry, actua it I stated that the closing of the bank. That that loan, or part of it, at night after the in talking with him the But then. it t abou had I ssion was the impre t it. I did not want abou aken mist ely entir other day he said that I am dent that made that presi the to do him any injustice. He said it was still of the impression I was am I him. with er loan. I argued the matt I would like to give him the at the time I made that testimony; butd not under Any consideration benefit of all doubt on that point; I woul all these things—the transacdo him any injustice. It is hard to carry use the bank handled sixty tions of that bank—in one's head; beca existence. in was it years few millions of dollars in the NERS' LABORS. APPORTIONING THE COMMISSIO By Mr. GARLAND: trustees elected Mr. Leipold Q. You stated, doctor, that you and the knew him to be such f—A. you and nt, unta acco because he was a good er spoke to me about him Warn Mr. He was recommended to be such. s. in very high term of whom Mr. Leipold is one, Q. In selecting the three commissioners, by the trustees, as to apsaid hing was there any understanding, or anyt We found a good many sir. No, . ?—A them g portioning the work amon nce, our actuary could insta For irregularities creeping into our bank. They were clerical errors. not make his balance sheet up correctly. was'a great deficit there, there ch bran We found that in the Washington over and over again tried We a deficit of some thousands of dollars. and could not succeed. We tried ry actua to straighten it out. The particularly there was stealing found that down in the various branches t that. And,therefore, when abou going on; there could be no question oners we.wanted an experienced the trustees appointed these commissi ularities. Mr. Ela spoke very accountant who could detect these irreg a man to ferret out these things. highly indeed of Mr. Leipold as being was the recommendation. We did not apportion their work, but that ely; and, as I once said entir ston Lang Mr. by ted Mr. Creswell was selec afterwards Senator was e ers—h offic afterwards to one of the Cabinet this moment— at his name from Massachusetts; I cannot recollect ? Mr. LEIPOLD. Mr. Boutwell king about the bank he asked Dr. Pumas. Yes; Mr. Boutwell. Spea t Mr. Creswell as commisselec you did y "Wh me that very question, seemed to have some perwho man, sioner?" And so did Senator Sher to him that we selected him sonal feeling against Mr. Creswell. I said d him the most practical foun We r. because he was a Cabinet office very good, theoretically, but Republican we had met; the others were 188 FREEDMAN'S SAVINGS AND TRUST COMPANY. he was the most practical Republican we had, and that was why we selected him. I forgot, at the time, that I was speaking to a Cabinet officer and a Republican! When Mr. Creswell came into the bank, he said about this: he objected to taking hold because Mr.Whipper,of the Philadelphia bank, had an insane idea that the bank would be continued ; and so did Dr. Augusta. Dr. Augusta said this: he thought the depositors ought to be consulted and the bank continued, though he took the precaution to take his own money out then. Mr. Creswell Objected to serve and would not serve. To use his own words,"I will not serve unless I can have the moral support of the trustees." As to my father, he was the president of the under-ground railroad, an antislavery man, and a man of standing in this country. He also declined. ALLEGED A1TZiVIPT TO ABDLISH THE COMMISSION. If there is any difference in feeling about Mr. Leipold and myself it is this: An attempt was made to abolish the commission; something was said about getting rid of two commissioners, and having but one, and a bill to this effect was introduced, I think, by Mr. Sherman or his committee. Mr. Sherthan happened to be a connection is now a connection, of Mr. Leipold's, as I have understood since, and he said that I had not any business to go to Congress to see about these matters. My impression is this; that the,bill provided flair the appoinment by the Treasury Department of one commissioner who should have the right to .sell the property of the bank and to compound and compromise claims subject to the approval of one of the departments. There was a grand opportunity for doing a large business, and I frustrated that. In the first place, we who constituted the board of trustees had more at stake than anybody else. We had our reputations at stake; and we wanted commissioners that we believed would see that the most was gotten out of the assets that was possible to get out of them. Therefore I opposed the appointment of only one commissioner. I opposed it then, and I succeeded very handsomely, I assure you; for when the bill providing for the appointment of but one commissioner was brought up in the House of Representatives there were but twelve men who voted for it. That is the only reason for his ill .feeling against me. I succeeded and he did not. Mr. LEIPOLD. Did I understand you to say that you succeeded and I did not? Dr. PURVIS. Yes, sir. Mr. LEIPOLD. Do you mean to say that I originated that matter? Dr. PURVIS. I don't know what you originated, but you were an active man and an aspirant for the place, undoubtedly. Mr. LEIPOLD. Did you ever hear me say anything about it ? Dr. PURVIS. No; but your friends were working for you, and the man from Kentucky, Mr. Durham, I believe, was at your office very frequently, at the bank, holding private whispering conversations with you, and I know that he was actively furthering the measure; and really, though he had been friendly to me before, he was at that time quite offish toward me, and he was the only man that had any praises to bestow on you. I don't know any,other reason why Mr. Leipold should have any ill feeling towards me, except the letter which he wrote in "The Republican" in reference to my testimony in the former committee, which was perfectly correct. He said that I got angry at him because I applied to him for positions for clerks. The truth is, I never applied to a commissioner for a single clerk. I did - make appli- 1$9 ST COMPANY. FREEDMAN'S SAVINGS AND 'TRU one I ever made. Then I suppose cation for Mr. Cook; that is the only to speak of him as being a that in referring to him once I happened ened so many years ago happ it and all; is that "little Bismarck"; about it. I have no illmore ing that it has worn off, and I care noth have in the first place. It was feeling against him now. I never did in reference to the question as part merely a matter of judgment on my issioners or one. I believed that comm e thre have ld shou we to whether g of the commission. we should not make a personal thin w of the commissioners that yoti kno Mr. GARLAND. As far as you given their attention and time to the appointed at that time, have they , l do to business as you expected them it they have t abou hing anyt w kno Dr. PuRyis. Yes, sir; as far as I one of them, y ever n leme gent e thes that eve beli and as far as I know I that they but t doub t don' I . fully have done their duty well and faith ous than they anticipated. I'don't all found the duties far more ardut doubt that,they have made a great doubt that in the least; and I don' natural that the debtors of the bank many enemies, because it was very were opposed to the work of the comshould feel that their interests pay back anything if we could help it, mission. We did not propose to examination Af every claim that was and without the most searching result was that every man who was. the made against the bank; and , I suppose. It was an unthankful forced felt himself to be insulted the newspapers have been abusing n Eve e. position taken as a whol ging the commissioners, as well as them, and everybody has been char . the trustees, with robbing them PURVIS. MR. LEIPOLD'S REPLY TO DR. Mr. LE1POLD: h require some -explanation, in There are two or three matters whicDr. Purvis—aplanations that I by reference to the statement just made ice to myself. In the matter of just in e mak must I n, leme gent k, thin the other day, I simply want to state the discount, to which I referred s of the bank exactly as the loan of book the s of that that loan appears on Balloch. This appears on the bookr of Dexter does,indorsed by General sure trea son, John a note of J. B. the bank as having been made on drawer; that it was deposited there. the g bein he ty, ersi Univ s Howard rser. The tragsaction on the book by Dr. Purvis, he being the indo there and it was regularly cashed, note the stands as if he had brought gentlemen have questioned the trustees. just as these other loans that you the Balloch matter. Then there was.about in the Richards matter and Purvis's father in the bank with refDr. a certain conversation held by slation—the conversation took place beerence to some pending legi , Mr. Storatn—and Mr. Purvis obtween him and one of the trusteeslation and to .any legislation which, med jected to the character of the legis trustees as still existing, and clai I . did not recognize the board of made be t migh that ge chan any that they should be consulted in this loan or discount except what I then, knowing nothing more about I did not think that the trustees. had seen upon the books, Said thatd in view of some developments that. were men that ought to be consulte , that some of then), at least, had we had made. I stated, moreover spoke up and said, "Who violateds violated the charter. Mr. Purvis son is one of them." And some word the charter l" and I said, "Your denied that, and I showed him our.. he , Well anypassed between us then. ars. He evidently did not know report where this transaction appe case; but the next day he.came and, thing about the particulars of the 190 FREEDMAN'S SAVINGS AND TRUST 'COMPANY. made a statement similar to that you have listened to this morning and I said to him,"Well, Mr. Purvis, I only stated the naked fact, that it appears that your son got a loan on this note." That is all about that. It largely increased the ill feeling existing between Mr. Purvis and myself. The loan was not paid at maturity. I reiterate that; and I wrote a letter to Dr. Purvis about it at the time. He may not have gotten that letter I don't know whether he did or not. This letter (presenting a letter) I addressed to him about that loan. It was written on the " 2.1st of April, 1875, and shows simply that the note was not paid at maturity, and that it was not allowed to remain there for the purpose of collecting interest on it, as stated. Dr. PURVI§. Did I reply to that letter? Mr. LEIPOLD. I think you came to the bank. Dr. PURVIS. I never saw that letter, Mr. Leipold. Mr. Stickney,- by the way, says to me just now that you did not know the real facts of the case, and how this note of mine came into the bank, and therefore I take back all I have said against you in the matter. Mr. LEIPOLD. I knew no fact but what the books showed. Inasmuch as the doctor says that he did not get that letter, I will state that it was copied in the press copy-book in regular order, and presumably mafiosi at the time. Now, with reference to statements that had been made affecting Dr. PURVIS (interrupting). Excuse me, Mr. Leipold if the chairman will allow, I should like to have that letter read. Mr. LEIPOLD. Certainly(reading letter): OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington,D. C., April 21, 1875. SIR: As we have received an intimation that the note of $275.40, given by Howard University in your favor April 21, 1874, payable one year from its date, and by you indorsed, is not likely to be paid at maturity, this is to notify you that in the event of non-payment we shall be compelled to protest the same,unless protest is waived in the mean time. Respectfully, R. H. T. LEIPOLD, Dr. CHAS. B. PURVIS, Of the Commissioners. Washington, D. C. Mr. GARLAND. How long after that was written did the note fall due? Was it not written before the note fell due I Mr. PURVIS. Previous to that time, sir. ' Mr. GARLAND. What was the interval of time between the writing of that letter and the date when the note would be due? Mr. LEIPOLD. It was a few days before the note was due, and the note was paid soon after maturity. This report of December 14, 1874, will show when it matured. Mr. CAMERON. Do you remember whether the note was protested or not? Mr. LEIPOLD. The protest was waived upon it, I think. That is my recollection. Mr. CAMERON. But you have no distinct recollection, so as to state positively? Mr. LEIPOLD. No, sir. Mr. LEIPOLD (continuing). At the time of the investigation of the • affairs of the bank known as the Douglas investigation, when this matter of the application of John H. Cook and Mr. Wormley came up, the original letters had been mislaid. I afterwards made dilligent search T /COMPANY. FREEDMAN'S SAVJNGS AND TRUS 191 it refreshed my memory confor them, and finally found the letters, and ed this unpleasantness becaus that r lette this siderably. I will read instance (reading): first the in lf myse and is Purv Dr. n twee ORNEY. LETTER FROM JOHN H. COOK, ATT WASHINGTON, D. C., October 22, 1874! MAN'S SAVINGS AND TRUST Co.: lo the COMMISSIONERS OF .THE FREED a suggestion of others, I consented to addressthe the at GENTLEMEN: Some time past, named as attorney to I be that sting reque ers ssion commi communication to the of the bank, either at.a salary or with fees. commissioners and given the legal work but I was led to believe that the legal reply, to scend conde not did The commissioners me. given be would _ work of the bank lerk of the bank uses his position to secure Having occasion to know that the loan-c paid into the bank, and feeling that loans tf cases in es releas g makin te the work of request that the commissioners take some defini this is trifling with me,I respectfullyinform me of the same, that I may know'what to and ion nicat commu my upon action ' ,depend upon. Very respectfully, JNO. H. COOK. says: "I was led to believe that Mr. LEIPOLD. You will observe that he rne.'i sI took exception to that, n give be d woul bank the of the legal work of the commissioners had a right for I had no idea that anybody outsideI took exception, also, to the form to make Mr. Cook any such promise. it myself to any one gentleman of the letter. I was not willing to commconcern. As to these releases the of and employ him as the lawyer of the Freedman's Bank, grown up that he speaks of, it was the custom make out the releases. The loans d shoul k in the bank,that the loan-cler ally secured by deeds of trust. gener were Bank 's dman Free the made by is that when the loan shall trust of s deed the of One of the provisions be released at the cost of to is trust have been paid, then the deed of the loan -clerk would make out the the borrower. As a loan was paid, sum,I think some three dollars in certa a required release and charge mber which, to these parties. That or live dollars, I do not now reme in the bank, and it was a custom up n grow was the.custom that had loan-clerk had a great deal of work that we allowed to continue. The we saw nothing in it that we Could and , small was y to do and his salar not have to pay the money—it was take exception to. The bank did it to continue, and I was not willpaid by the borrower; so we allowedin that matter. In course of the k -cler loan the ing to interfere with something like this: "Suppose / conversation I remember that I said 1 could make them out at night for should make out these releases? rsation took place, to which refeLconve that matter ?" Then the other reference to these releases, the cost ence has been made. But it was in the Freedman's Bank, but was upon fell case no of preparing which in n of the original deed of trust, latio borne by the borrower under the stipu with him; and to this I referred that Mr.Cook charged us With "trifling" out myself?" them make ld when I said, "Suppose I shou had the right to charge for out them made ver Whoe AND: Mr. GARL his services? Mr. LEIPOLD. Yes, sir. r -refers to which needs an exThere is one other matter that the docto nt Secretary of the Treasprese the iates planation, and that is, he assoc him in a manner responhold to ury's name with a measure, and seeks the number of commissioners. ase decre to ht sible for a bill which soug He is entirely mistaken about that. with him in his room, and he told Dr. PURVIS, I had a conversation me that was the case. 192. FREEDMAN'S SAVINGS AND .TRUST COMPANY. Mr. LEIPOLD. He may have done that, but I have Secretary Sherman's bill here and that is the best evidence. The trouble about that bill lies in the 12th section. It is due to me that I should read that. The bill does not seek arbitrarily to decrease the number of commissioners at all. It is true I had somethina to do in the preparation of that 6 wrote, and which I propose to bill, as appears from the letters whichI read to the committee. I was sent for by the Finance Committee of the Senate to make suggestions about the propriety of compromising and compounding claims and assigning deposit accounts and to explain to them all the difficulties we had to encounter and deal with in the transaction of the business. Mr. Sherman added the 12th section to the bill, which I will read (reading): SEC. 12. That the compensation of said comMissioners shall not exceed the sum of nine thousand dollars per annum and shall be apportioned among them by the Secretary of the Treasury according to the services rendered and time given by each, but 110 commissioner shall at any time receive more,than five thousand dollars. This was the feature of the bill which was distasteful to the other commissioners, and you can readily see why. By examining the bill it will be seen that it did not seek to interfere with the number of commissioners, except that it provided for their voluntary resignation and survivorship—a provision that Mr. Purvis. seemed as anxious to have in the bill as the other commissioners. When this bill was printed and published, Mr. Creswell came to me and ob.. jected to the form of the 12th section. He said, "That is a reflection upon me, and you ought not to allow it to go in." I then wrote to Mr: Sherman this letter (producing the letter). • Mr. GARLAND. What is its date? Mr. LEIPOLD. January 10, 1876. This bill was introduced January5, 1876. (Reading the letter): MR. LEIPOLD TO THE HON. JOHN SFIERMA.N. WASHINGTON, D. C., January 10, 1876. DEAR SIR: I regret exceedingly that you have annexed to Senate bill No. 141 the. 12th section. I was in hopes that after our conversation on that subject you would have abandoned that provision of the bill, or at least postponed it until some later day. It is true I wrote the section, but, I said in the memoranda attached to it, I did it wholly at your suggestion, and not because I desired it to become a law. It will undoubtedly be productive of feeling and mischief, aud,introduced as it was as a p4rt of a bill with the preparation of which the other commissioners knew I had something to do, I will be looked upon, if not as its author, at least as its instigator. Without this additional provision I think the bill would pass; with it I doubt its passage very much. Under these circumstances,and rather than jeopardize legislation so necessary, while at the same time its tendency is to impair the harmony existing among the present commissioners,and which is so essential to the satisfactory execution of our trust, would it not be better either to abandon the 12th section altogether, or at least have it amended so as to make its provisions applicable only in case of a change in the present commissioners by resignation or otherwise? I have the honor to be, very respectfully, &c., HOD. JOHN SHERMAN, United States Senate. R. H. T. LEIPOLD. Mr. LEIPOLD. I will say, however, that this bill does provide that the commissioners or any one of them may resign if he wishes to, and the survivor or survivors in case of such resignation shall act. • Mr. PURVIS That is the point, Mr. Leipold. The commissioners had resigned; all of them. They had some reason for that. And now this. bill, anticipating that the commissioners were in earnest, provides in. FREEDMAN'S SAVINGS AND TRUST COMPANY. 193 then two, and if the beginning that in case of the resignation of one, ? so that not Is aet. shall one two, then the remaining Mr. LEIPOLD. Certainly. we would have Mr. PURVIS. Now, if the other two should resign, ence; but confid had we whom in men liked to fill the places again with d is related Leipol Mr. whom with an, Sherm Mr. by uced introd the bill their desires in by marriage, prevents, the trustees from carrying out that respect. cy that might Mr. GARLAND. Was there any provision to fill the vacan be made by resignation ? ors shall Mr. LEIPOLD. No, sir; it simply says the survivor,or surviv act in that case. resigned. Mr. PURVIS. Two were anxious to get out; the three had 1880. 31, ry Janua Adjourned to COMMITTEE Room OF THE SELECT COMMITTEE ON THE FREEDMAN'S BANK, " Washington, D. C., January 31, 1880. man's Savings and The Select Committee of the Senate on the Freed the Senate Comof room tteecommi the in day this met* Trust Company mittee on Manufactures at ten o'clock a. in. Cameron, and A. H.. Present, Messrs. B. K. Bruce (chairman), Angus Garland. MR. LEIPOLD'S STATEMENT CONTINUED. made at the last Mr. LEIPOLD. In continuation of the statement I t from the reply extrac an uce introd to session of the committee, I want r to the letter that I that I received from Senator Sherman in answe Senator Sherman's to reply my also ng; meeti read here at the last ttee. letter. I will leave these letters with the commi section of the Sher12th the to nce refere in was That Mr. CAMERON. man bill, was it ? Mr. LEIPOLD. Yes, sir. The letters follow: HON. JOHN SHERMAN TO MR. LEIPOLD. [Extract.] . COMMITTEE ON FINANCE, UNITED STATES SENATE Washington, D. C., January 12, 1876. d. I stated distinctly to the committee DEAR SIR: Your note of the 10th is receive was disapproved by the commissioners; and me, by ed prepar was section 12th the that right that no one would complain of it, but they thought it was so manifestly just and if you think it will embarrass the bill, and it was not objected to by any one. Still,ically that you had nothing to do with I will ask them to strike it out,saying emphat entirely,and I Opposition to it, and that it was my work it; that you expressed *your * * think it clearly right. Very truly, yours, JOHN SHERMAN. R. H. T.• LEIPOLD, Esq., Cominiesioner. 13 F B 194 FREEDMAN'S SAVINGS AND TRUST COMPANY MR. LEIPOLD TO HON. JOHN SHERMAN. OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington, D. C., January 11, 1876. SIR: As I anticipated, Messrs. Creswell and Purvis deem the nth section of the inclosed bill an unjust reflection upon them, and I do hope you will consent to its withdrawal, or at least to its amendment as suggested in my note of yesterday. There are annoyancesenough attendant upon this business without having a divided commission. I have the honor to be, &c., your obedient servant, It. H. T. LEIPOLD. Hon. JOHN SHERMAN, United States Senate. PROVISIONS OF THE SHERMAN BILL. Mr. LEIPOLD: Dr. Purvis, in giving his testimony before the committee, referring to this bill—the Sherman bill—spoke of the provision authorizing the commissioners or commissioner,as the case may be, to compromise and compound claims against the bank,or claims of the bank. He spoke of that provision as opening up a wild field of speculation which he was not willing to entrust in the hands of any one person. I simply want to say, in -reply to that, that that provision is almost identical with a provision contained in the bill which this committee has prepared and introduced. It did not authorize the commissioners or commissioner to do these things .of their own accord, but subjected such action to the approval of the Secretary of the Treasury. The ultimate and real power was lodged with the Secretary of the Treasury as it is lodged with him in the pending bill. That provision met the approval Of all the three commissioners. Ever since we have been,in charge of the affairs of that bank we have tried to have that provision incorporated in some legislation. Withoutia do not believe the concern can be closed. If the Sherman bill had become a law it is my opinion that the affairs of the bank would have been closed by this time and a good deal of money would have been saved for these people. Had we had the right to compromise we might have saved large sums in many cases where, in insisting upon a full pa3 ment, we lost the whole. The Sherman bill, with the exception .of the 12th section, to which I referred at the. last meeting, and the '7th section, which made provision for the assignment of depositors' accounts, met the approval of the three commissioners, as I then under:stood it, and Dr. Purvis is entitled, I suppose, to all the credit he claims of defeating that bill; and as the present bill is almost the same bill, he may consider it his duty to defeat that too. I don't know how that .may be. In the Sherman bill provision was made for the resignation of the ,commissioners and in case of the resignation of either one or more of the commissioners, for the survivors to act, and in case of the resignation of all the commissioners, it lodged the appointment of a single commissioner tin the Secretary of the Treasury. The bill introduced by this committee contemplates making the Comptroller of the Currency the commissioner. It, like the Sherman bill, has the approval., as I understand it, of all the commissioners. It remains to be seen whether it will also be defeated as the other was, by the friends of. Commissioner Purvis. I believe that is all I have to say on that point. FREEDMAN'S SAVINGS AND TRUST COMPANY. 195 WINDING TIP THE AFFAIRS OF THE COMPANY. By Mr. GARLAND: Q. As to the matter of the winding up of the affairs of this institution, I believe last May you thought that the bill looking to that, which we reported from the committee, but. which has been recommitted to us, would answer the purpose of closing up this institution ?—A. I think it would, sir. Q. Does your subsequent reflection confirm you in that ?—A. It does, with the exception that I do not coincide in the necessity of the provision that would make the passage of this bill, or the appointment of the Comptroller of the Currency as a commissioner, subject to the approval of the board of trustees. Q. You don't approve of that?—A. I don't coincide in the necessity of it, and inasmuch as you have heard one of the trustees, the sou of one of the commissionersi say that be was The cause of defeating a former bill which is almost identical with this bill, I don't think it safe—if you really want the bill to pass—to make its execution dependent upon the will ,of the trustees. In other words, suppose you pass this bill and a majority of the board of trustees don't choose to consent to the appointment of the Comptroller of the Currency as commissioner, where are you? I also want to suggest, in connection with this bill, that the coinmissioneys have rented the lower floor of the bank building to the Court of Claims, and they have already had it fitted up for their use, so that no further provision for this purpose is necessary to be included in the bill. THE WILLIAM H. BENNETT LANDLORD AND TENANT CASE. One other point. You will remember, Mr. Chairman and gentlemen of the committee, that when Mr. Robert Purvis was giving his testimony,' or making a statement, before the committee the other day, he referred to one transaction which he characterized in very extravagant language as an act of infamy unparallele4, and for which he consigned me to the penitentiary. I was considerably surprised at the statement, for the matter had never been mentioned to me until that day. I was certainly taken by surprise. When I returned to the bank I at once went to work to hunt up what there was in the charge ,or insinuation, and I found, in the first place, that he referred to the case of the commissioners against William H. Bennett—a landlord and tenant case. Mr. Bennett was in possession of part of the bank property. We sought to obtain possession. The case was intrusted to John H. Cook, a young colored man .and an attorney, and be brought suit. The suit in landlord and tenant cases is based upon certain printedblanks. It was the custom of attorneys to whom we intrusted these cases to send blanks to the Freedman's Bank, that the facts of the case might be inserted in their appropriate blanks; that is, the names of the parties, description of the property, &c. THE 44 INTE RLINEATION" MATTER.• I next went to the court-house to hunt up the original papers in the case. I found that the original papers in that case had been abstracted. They were not on tile. I then went to the justice of the peace who tried the case, and he told me that he thought Mr. Cook withdrew those papers; and from the fact that they were shown to Mr. Purvis subsequently, I suppose that is true. The papers containing the alleged in. ' FREEDMAN S SAVINGS AND TRUST COMPANY. • 196 terlineation cannot be found. I made diligent search for them. I found, however, some of' the papers in the case; that is, I found the original notice, the thirty-day notice sent to Mr. Bennett; and, Upon conversation with Mr. Bennett, who was the defendant in the case, he referred to the informality of that notice as being one of the causes for having the case dismissed. He said that there were two or three reasons; one reason was that the suit was not properly brought. Here is the original notice sent by Mr. Cook (exhibiting notice). The names of the commissioners should have been signed to it instead of the name of "John H. Cook, agent." That is one of the inforinalities. There is no interlineation in that; nor do I remember making any interlineation in any of the original papers when the suit Was brought. Mr. DonaldSon's recollection—the justice who tried the case—is, that the interlineation was made in the handwriting of .William J. Wilson, before whom the suit was originally brought. Mr. Stickney's recollection is to the same effect. The case was originally brought before Wilson and was carried by the defendant to Donaldson, another justice. But suppose Mr. Cook did sehd these papers to me to have me fill in the blanks, as he may have done, and I filled the blanks, I had to return them to Mr. Cook before he could bring the suit, and the interlineation, whatever it may have been, if there was one, was in the papers when the suit was brought in the justice's office. It was Mr. Cook's duty, as the paid attorney of the bank, if I had interlined anything in any of these_ papers that was improper, to correet it before bringing the suit; even if I made such an interlineation and he overlooked it, the fault is still his. But, in any event, I cannot see how the charge of forgery, or anything like it, could apply to any such transaction. It is a trifling matter, and shows to what straits this man is reduced in his efforts to break the force of my statement. Not being able to find the the original papers, I am not in position to prove that I did not make any interlineation at all. The case having been dismissed, there was a new suit brought, and we employed Colonel Totten to bring that suit, the papers of which I have in my hands; and from the fact that Colonel Totten wrote the names of the commissioners in this paper in his own handwriting—all the other writing being in the handwriting of the justice of the peace—I infer that that is where the main trouble came in in the first suit; that the first suit was not brought in the names of the right parties. In other words, that it was brought in the name of the commissioners of the Freedman's Bank,and not in the names of John A. J. Creswell, Robert Purvis, and R. H.T. Leipold, commissioners, &c. It was decided that the Commissioners were not a corporation, and that they must sue in their own names. This view of the case is strengthened from the fact that the first twenty or thirty conveyances made to the commissioners were made in the name of the commissioners of the Freedman's Sdvings and Trust Company. It was decided in the court that these conveyances did not amount to anything; that we were trustees, and that the properties must be deeded over again in the individual names of Robert Purvis, John A. J. Creswell, and R. H. T. Leipold. That is all there is in that transaction. ALLEGED PREJUDICE AGAINST MR. COOK. Mr. PURVIS. Mr. Leipold evades the point under consideration. That which I wished to say was simply this, that he entertained a prejudice against Mr. Cook's being employed at all. When I called at the bank the next day, after we were obliged to submit to a non- FREEDMAN'S SAVINGS AND TRUST COMPANY. 19,7 s of the suit, Mr. suit, and I made inquiry in regard to the result up a good deal of gets soon he (for r manne his y Leipold, as is usuall feelings of hostility zeal and ardor), wished to justify himself in his competent counget d shoul "We that me to g sayin by to Mr. Cook, ," said, he, "Why ?" r matte the is sel in this matter." Said I,"What consequence of an in t nonsui a to t submi to d oblige been have "we the magistrate." interlineation in the notice that was served upon exact copy, and an not ,was "It "What was it ?" I asked. He said, the whole work has they took advantage of that fact and urged it, and ish in this, as establ d to wishe he point to be done over again " The petent. I felt incom was Cook Mr. that was ling, ill-fee his for e an. excus lawyer by saying sorry about it, and endeavored to excuse the young iately on Mr. immed called I and that it was probably an oversight', he was sure kind, the of ng nothi done had he that said Cook. Mr. Cook rate's. magist the to over sent he and about it; it would be impossible; will bear me others and , glance a at saw I But . notice the get office to handwriting of Mr. out in the statement, if necessary, that it was in the not require an does it ar; peculi Leipold himself. His handwriting is "Why you see said,' Cook Mr. and sion; conclu that to expert to come replied. But to make whose handwriting this is." "Certainly I do," I. there saw Mr. Sperry, and bank the to went I sure, y doubl assurance he at once said,"Why it at ng *looki Oa him. to and presented the paper iting." handwr d's a blind man could see that that is Mr. Leipol °I it about me ask you Mr. LEIPOLD. Did to come in contact Mr. PURVIS. No, sir; not at all. I did not want I did then. Well, as just now, it e believ I and it; ed believ I with you. use he saw this illMr: Cook afterwards followed this matter up (beca So he infOrmed office. 's Totten feeling so unjustified against him),-to Mr. man who young a or , clerks his of one er, howev me. The young man, know "1 , to,me —said which know was reading law in his office, I don't the original canthat sorry am I er, Howev it." do did d that Mr. Leipol it whatever. The imnot be found. There can be no mistake about that the object of it ed pression on my mind is very clear, and I believ against one of the best was simply to justify Mr.Leipold in his prejudice the original papers that men I think that has ever lived. -I am sorry. cannot be found paper contained an inMr. LEIPOLD. So am I sorry,'but even if that the only reason why the was terlineation, it does not go to prove that that I have papers here before me suit was dismissed. On the contrary, ction. transa which show the informality Of • the made a blunder, and that you you that s prove it sir; No, Mr. PURVIS. d your opposition to him on groun and er wished to charge it upon anoth that fact. • blunders. The lawyer who Mr. CAMERON. Well, every lawyer makes ss-. busine does not make blunders has not much competent, that is true. Mr. LEIPOLD. I did not consider Mr. Cook He lacked experience. KNEY. TESTIMONY OF GEORGE W. STIC WASHINTON D. C., January 31, 1880. ned. GEORGE W. STICKNEY recalled and exami . E LOAN THE JUAN BOYL By Mr. GARLAND: stand, a question was Question. The other day, when you were on the 198 FREEDMAN'S SAVINGS AND TRUST COMPANY. asked you in reference to the loan made to Juan Boyle. You were'not then clear in your recollection about it; wilr you state now,since you have had time to examine, what your recollection is about that ? That is, there were two loans, one of $29,000, and one of $4,326, made on the 30th of June 1874, after the bank was closod by order of the trustees °i' —Answer. Made on the 24th of June, 1874? Q. Made on the 30th of June, 1874; that is the memorandum ?—A. Well, it was not -made after the bank closed; it was made before, but not entered on the books. I had entered it up,as I had entered up other things which had been lying.,over. Q. Have you Made an examination since you were last here f—A. Yes, sir. Q. And you know that to be thelact?—A. Well, I know that to be the fact. Q. That the loan was consummated before, but not put upon the record till after ?—A. Yes, sir; it was a matter of fixing up a good many things, and I was busy at the time, and did not enter it up in the books, although the loan was consummated. Q. Do you recollect if other loans have been made in that, way—that is, perfected on A certain day,and not entered up till afterwardsf—A. I cannot now recollect. This loan was made—at least part of it—on my own responsibility; and there was a fixing up of some things of Mr. Boyle's that laid over and we were working night and day, then, and the only reason, it was not entered up, was because we were so very busy at the time... I supposed, when we made that loan, that the security I took would be ample to make it good; and•I think it would have been, if Mr. Boyle and his partner had not got into trouble, and his partner sued *him, &c. OVERDRAFT IN THE ACTUARY'S ACCOUNT. Q. You were asked, in your examination the other day, as to your own account—the overdraft?—A. Yes, sir. Q.• Have you examined that matter, so as to explain it to the committee—A. I cannot explain it any further thau I did the -other day. Q. Do the books you have examined bear any information on that subject ?—A. I cannot find anything ;'that is, no other draft of that date—only the books tell that it was made on that day, as I understand it. Q. It seems that all your drafts have been accounted for, except the thousand dollars which you drew as actuary f—A. Yes, sir; but that has nothing to do with my personal account. The thousand dollars that was drawn on the actuary's account was deposited in the bank on July 3d, and noted on the check-book I had:"Warner note." It was all done after the bank had closed. What it was for I have not been able to find out. I know I went,directly to the bank, and went through the loan-clerk's account,and found that no money was drawn out of the bank after that. Q. And you do not know the consideration for which it was given, except that it is indorsed the"Warner note?"—A. No, sir. Q. Have you kept any memorandum or books in your own possession that have reference to that matter—A. The only thing I had was the check-book; and I had torn the leaves out, and put them away; and that wag the only thing I kept that on. There is a memorandum in the book of deposits: "July 3, Warner note": (exhibiting the memorandum.) NY. FREEDMAN'S SAVINGS AND TRUST COMPA 199 your account of July 3, - Q. It seems that that bank-book shows in last amount drawn out. the was that sir; Yes, . 1"—A .39 $1,652 "balance was, however, after the that loss; and profit It was put to the credit of bank. the of g closin y, has gone into that Q. You think that this draft of yours, as actuar out, and there is drew I that draft Warner account f—A. There is the draft as follows): the read who nd, Garla Mr. to it ing (show the stamp h pay to the order "Washington, D. C., July 11, 1874. Washington branc W.Stickney." George 0). s ($1,00 dollar and thous one note, r Warne of ating); this is the Mr. STICKNEY. This is the entry of July 3 (indic deposit (indicating).. Yes, sir; July Q. Well, July 11, 1874, is the date of the draft?—A. 11., 1874. Q. On account of that note ?—A. Yes, sir. THE JUAN BOYLE MATTER. By Mr. CAMERON: other day,.stated, Q. Mr. Stickney, Dr. Purvis, in his testimony the bonds and other ed receiv who , if I remember correctly, that Juan Boyle g money for raisin of se purpo the for sold be to bank, securities from the proceeds of the of out ts amoun ed the bank, from time to time retain owe the bank, at to red appea he t that amoun this that and such sales, in whole or in part the time you have mentioned, was made up either understanding of the from the amounts he had retained; is that your , but in part. matter ?—A. Yes, sir; part of it was—not in whole tedness was made indeb his of t Q. Are you able to state what amoun ?—A. I think there were up in that way, or approximately what amount There was a $4,326 way. that in up made s about ten thousand dollar as far as I could to, came note, and about $4,360 in bonds, I think it figure it up. explanation, you can Q. If you are prepared to make any additional explanation to make. r furthe any have I that know not do do so.—A. I S. TESTIMONY OF FREDERICK G. BARBADOE WASHING-TON, D. C., January 31, 1880. ned. FREDERICK G. BARBADOES sworn and exami By the CHAIRMAN: t-account in the WashQuestion. Mr. Barbadoes, did you have a deposi Company ?—Answer. Trust and gs Savin man's Freed ington branch of the Yes, sir. name on the books Q. It appears that there are two accounts in your your account as other the and nt, accou of the batik; one your personal sir. Yes, e ?—A. truste been Overdrawn ?— Q. The books show both of these accounts to have A. Both of them? be overdrawn; Q. Yes, sir; the books show both of your accounts toconnection with in ing anyth us tell or can you explain these overdrafts, afts. I cannot unthem ?—A. I have no knowledge of any such overdr My practice was place. taken have could afts derstand how any overdr , and have the check the t to carry my book to the bank, and presen — any had never I and book, amount entered in the 200 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. The balances on the book were correctf—A. Yes, sir. I presume the balances on the book are correct. I never thought of the possibility of such a thing before. Q. You refer to both accounts, do you—your account as trustee and your individual account.?—A. Yes, sir; both accounts. It is a very singular thing. I was a depositor for something like seven years, I think, in that bank; and it is a very singular thing that this has just been discovered. Q. Have you a pass-book ?—A. No; I have not; the old pass-books are at the bank. I saw the one in which one of the accounts that are referred to is recorded, and I received a note from you to come to this committee morn, and to bring such books, and papers, and drafts as I had; and I called there at the bank, presenting the only book I had in my possession which had the least thing in it, and my attention was drawn to what was supposed to be an overdraft. The pass-book showed that there had been a draft for four dollars, I think, and eleven cents. My account, as posted,showed that it had been originally so posted, but afterwards changed—scratched out—and four hundred and eleven dollars made of four dollars and oleven cents. That was the first knowledge that ever I had of any such thing having been thought of; and that is all I knody about it. This error was in the personal account. At that time I had a very small amount there, and was using it only as I wanted it, from time to time—a few dollars at a time. I think there was nothing more than about twenty or thirty dollars as a balance at the time this was said to have occurred; but it is evidently an error, as the condition of the books showed. The pass-book is entered right, and if I could have found the check, if that had been in existence, it would have shown the same, I am sure; but as the account was posted, it is very evident that it was entered -right at first; but scratched out—for what purpose I do not know-43(A erased, and carried over to the left side of the column. By Mr. CAMERON: Q. Your account as trustee is overdrawn, as it appears from the books, only two dollars. Now, it would seem that four hundred and .eleven dollars was paid out September 6, 1871; and if yOu state that you did not get the money, somebody else must have got it. That amount, as appears from the books of the bank, went out of the bank, whoever got it. All that you pretend to say is, that you did not get it yourself. Is that your knowledge. of the matter ?—A.. Well, the only entry in. the pass-book that the bank had in possession at that date was for four dollars and eleven cents. Mr. CAMERON. Yes, sir. . The. WITNESS.. The amount in the ledger as posted in my account was evidently entered right originally, but the proof of its having been altered is on its face, because that particular entry has been erased, and made four, hundred and eleven dollars instead of four dollars and eleven cents. That is evident. I.have seen both the pass-book and the ledger. Q. It is entered as four hundred and eleven dollars in the journal and the blotter. The first entry, as I understand the.matter, would be made in the blotter and carried from that into the journal. In these two books it appears as Jinx hundred and cleven dollars. In your passbook, as you state, it was cnly four dollars and eleven cents. There is a discrepancy, but I suppose it is impossible at this late day to explain it?—A. As to the trustee account having been overdrawn, there was a balance to my favor when the bank collapsed. I had two hundred dol-. T COMPANY. FREEDMAN'S SAVINGS AND TRUS 201 cannot understand that there lars to my credit in the bank, and I a balance in the institution still is would be an overdraft, when there that. nd rsta unde ot cann I . in my favor By the CHAIRMAN: ee account T—A. Yes, sir. Q. Was that two hundred dollars the trust trustee account of two the on t draf The Senator said there was an over dollars. By Mr. CAMERON: ing over that. You seem to Q. Well,that is an error, I see, in look sir; my impression from Yes, have been overcredited two dollars.—A. business was done in the bank h whic in er mann my knowledge of the blotter, and I think the accounts is, that there was one book called the drafts, so that I do not think were entered against individuals by their had some knowledge of the I . time that at that the first book was used r saw such a book in use neve way bookkeeping was carried on, and I . office the of there in the front part ?—A. Yes, sir; very freQ. You were about the bank frequentlytime was a member of the one quently. I was there very often, and at advisory board of the bank. s. The CHAIRMAN. That is all, Mr. Barbadoe TESTIMONY OF JOHN 0. EVANS. WASHING-TON D. C., Janua4 31, 1880. . JOHN 0. EVANS, sworn and examined By Mr. GARLAND: reside ?—Ansiver. I reside in Question. Mr. Evans, where do you . Washington, in the District of Columbia 2d of January, 1872?—A. I the Q. What was your occupation about acting. was in the lumber business and contr Well, I was doing business as —A. any? comp a Q. Alone, or one of ess of my own besides. busin one of the company, and had some ?—A. I think the style of the any comp the of style the Q. What was firm was Evans Brothers. Q. Evans Brothers?—A. Yes, sir. PANY LOAN. THE SENECA SANDSTONE COM relations with- the Freedman's Q. Well, did you have any business character and history:of that the state Bank at the time? If you did, k that the first transaction thin I . relation, as far as you can recollect.—A came about in this wise: Colonel Bank 's dman that I had with the Free bank, came to see me one day and Eaton, who was then actuary of the a loan to the Seneca Sandstone represented that the bank had made and that they bad as security sev Company of fifty thousand dollars, may -not be exactly right about I enty-five thousand dollars. Now, thousand dollars of the bonds of ve that, but I think it was seventy-fi perfectly good; but that the affairs that company, which he said were gotten a good deal mixed, and the of the company seemed to have on account of the loan ; and it was bank newspapers were berating the change it, to put it in another discrediting the bank and he wished to which they held as collateral s bond of ose form, until they could disp 202 FREEDMAN'S SAVINGS AND TRUST COMPANY. for this loan, and wanted me to give a note—in other words; to make the loan myself, with Mr. Kilbourn. He said Mr. Kilbourn had talked with him,,and was willing to do it, and it would be of great service to the bank to pay it in that way, because the bank was being discredited on account of this loan. He said there could not possibly be any risk about it, because the bonds were amply secured, and that the management would protect the transaction. Well, after consideration, we agreed to do it, and changed the form of the then loan. In fact, I do not know what the form was. I never saw it, and knew nothing of it, except from his representation. So we took from the finance committee and from Mr. Eaton, as actuary, an agreenient that in case the bonds did not realize in time to pay the note when it should become due, that we should be held harmless and the note returned anyhow. That arrangement was signed toy Mr. Eaton, as actuary, and by a majority of the finance committee. I think there were three members of the finance committee who signed it. The note was not paid by the sale of the bonds. Q. It was not al—A. It was not; and when the transaction culminated, or when the note was finally due, I went to the then manager of the bank(I think Colonel Eaton had been retired), and asked for my note; and I had a good deal of difficulty in getting it; but after a while, after I had made my statement to the trustees and they had looked into the matter, the note was returned. No money ever passed to Mr. Kilbourn and myself in the transaction in an, way. Q. Neither of you got any money ?—A. No, sir; not a dollar; at least, I speak for myself; and, so far as I know, Mr. Kilbourn did not get a dollar. I am sure there was no consideration paid for this thing. We did not get a dollar-in any shape or manner. Q. Well, now, what relation in business, or otherwise,had there been between you and Mr. Kilbourn ?—A. Mr. Kilbourn and I were engaged in some contracts here. Q. Under the firm-name ?—A. No, sir; I was doing the business. Q. And you state that no money was received by yourself out of these transactions?—A. Not a dollar. Q. And you do not think that Mr. Kilbourn received any money ?— A. I do not think he did. Q. The papers show a mark that would indicate that it was paid.—A. I do not know about that. Q. The accounts in the bank show that it appears to have been paid on the 12th of February, 1874.—A. I have no doubt at all but that is correct. SURRENDER OF KILBOURN & EVANS NOTE. Q. I wanted to know if it was paid in cash, or simply by the surrender of this note ?—A. There was no cash passed in the transaction; I never paid a dollar or received a dollar in any manner. Q. You said that you had some difficulty in getting your note surrendered.?—A. Well, I believe that Colonel Eaton had died in the mean time; and the transaction was examined, and the trustees, or the then management, made some question about the form of the note, saying that they did not understand it; but after an investigation, I believe, they concluded that the statement I made at the time was correct, and returned the note. Q. You had to take no legal steps to cancel that arrangement, or to get your note returned ?—A. No, sir. TRUST COMPANY. FREEDMAN'S SAVINGS AND 203 transaction; what was the secQ. Well, you said that was the first t. I had transactions with the llec reco not ond, or the next?—A. I do and they were always paid with bank, regular transactions, loans, &c., interest. ions with Mr. Kilbourn f—A. Not Q. Did you have any other transact with regard to the bank. k whatever f—A. No,sir, I think not. Q. No transactions with the ban I do not recollect any now. ence before the Douglas commitQ. (Referring to Mr. Kilbourn's evid . No, sir; I have not. ?—A tee.) Have you ever examined that says "The note of Kilbourn & Q. In that testimony, Mr. Kilbourn n to' the bank, by allowing the tio oda Evans was given as an accomm ead of in the name of the Seneca Sandloan to appear in their name inst stone Company."—A. Yes, sir. testimony f—A. Yes, sir; I believe Q. Well, do you corroborate that that is correct. , is it ?—A. Yes, sir. Q. That is true, as a matter of fact an accommodation transaction on ly pure was it s, word r it Q. In othe at the time, was it ?—A. Yes, sir; your part, and was so understoodmatter, and was so understood by the was purely an accommodation s. officers of the bank and by ourselve r to as being made with the finance Q. This agreement that you refe presence, Mr. Evans f—A. Yes, sir; committee was that made in yourmy presence, and signed it in my presI think Colonel Eaton made it in thing was complete before the note e ence and I think that the whol the note called attention to the agreewas helivered ; and the face of ment. eement was made f—A.. I do not Q. Who was present when the agr recollect; it has been so long ago.saction whether you or Mr. Kilbourn Q. Do you recollect in that tran Sandstone Company °I—A.. No, sir; ca deposited any bonds of the Sene r saw any of the bonds of that comneve I ds; bon any e hav not we did ? pany. bonds or stock of that company Q. You had nothing to do with the ar's worth of stock in that coma doll —A. I will say that I never had had not any relations with them at I pany, in any shape or manner. . I do all at that time. Kilburn had deposited any f—A Q. Do you know whether Mr. k Mr. Eaton's statement was that he not think that he had, sir; I thinfive thousand dollars of the bonds of had the bonds—I think seventywere the company. by yourself—A. No, sir; they Q. But they were not put there Kilnot. am quite sure not, because Mr. n, Q. Nor by Mr. Kilbourn f—A. I Eato nel Colo with ther toge matter, he bourn and myself discussed this bonds in their possession, and that and he said that they had the . loan the for considered them ample security rstand you, no consideration whatever, Q. There was, then, if I unde transourn for the part you took in the passing over to you and Mr.Kilb tion on your part?—A. There was action; it was purely an accommodaa dollar in any way. And I will say no consideration of any kind; not m the Freedman's Bank that I did fro further, that I never got a dollar , and a pretty good interest, at that. not pay back in full, with interest m that bank that I did not pay for I-never had an accommodation fro at a large rate of interest. • 204 FREEDMAN'S SAVINGS AND TRUST COMPANY. KILBOURN & EVANS NOTE AN ACCOMMODATION TO THE BANK. By the CHAIRMAN: Q. You say that you gave your note as an accommodation. To whom, I will ask you; to the hoard of trustees f—A. To the board of trustees , as I understand it. This transaction was honest and carried through with the actuary and the finance committee. This agreement made by Colonel Eaton with ug was approved by the finance committee,in writing, before the note was delivered, and before the transaction was consummdted. We required that, for our protection. Q. It 'Was 'stated by one or more members of the board of trustees, that they knew nothing about the transaction; that they were not consulted, and knew nothing of the tranisaction ; hence I asked you if this agreement was made by the board of trustees as well as by the of the bank ?—A. Whether the board of trustees were consulted officers or not, I do not know. I never met them as a board; individually T saw several of them, and they had a knowledge of the transaction. I do not recollect now, by name, what members of the board I saw, but the matter was discussed by the officers of the bank openly. Q. Can you stftte wifat members of the finance committee you conversed with touching this matter ?—A. I suppose that I must have had conversation with members of the finance committee. Q. The members of the committee who signed the agreement and'approved of it ?—A. Yes, sir. Q. And you cannot recall their names?—A. Well, I think, my recollection is now, that Mr. Clephane was one.; Mr. Tuttle another and , Mr. Huntington the third. I think that those three gentlemen approve d it in writing; that is my recollection, but I may be wrong about it; but I think that is it. • By Mr. CAMERON: Q. Do you know, Mr. Evans, as a matter of fact, whether Mr. Kilbourn had had transactions with the Freedman's Bank, prior to the transaction of which you have been speaking f—A. No, sir; I do not, whether he had or not. I have no knowledge of that. He did not have any in which I was interested in any way, or that I could have had any knowledge of. Q. This obligation, then, you say, was assumed by you without any consideration whatever, merely to accommodate Mr. Eaton l—A..Yes, sir; and as I understand it, it.was put very plainly, that it was for the accommodation of the bank, to give them time to turn these securities, and to protect their credit. That was the idea I had of it at the time. By Mr. CRESWELL: Q. Mr. Evans,do you know anything about the other collaterals that were given at the time—that is, other than the seventy-five thousand dollar bond f—A. Yes, sir; there were other collaterals. Q. Who furnished these collaterals f—A. I furnished a portion, and Mr. Kilbourn furnished a portion. Q. What became of these collaterals ?—A.-They were returned with the note, according to the agreement. Q. Well,the books of the company show that at the time of this secret agreement, the twenty thousand dollars first-mortgage bonds of the Seneca Sandstone Company disappeared, and that in lieu of them, $16,000 of the second-mortgage bonds were placed with the company, in care of Mr. Eaton. Do you know what became of these l—A. No, 205 ST COMPANY. FREEDMAN'S SAVINGS AND TRU Sandstone Company in my life, sir; I never saw a bond of the Seneca of that part of it, at all. Mr. e ledg know no have I that I recollect. it is so stated in the agreement. Eaton said they had the bonds, and By Mr. GARLAND: collaterals—individual notes?— Q. What was the character of theseg of that kind; I have forgotten A. No, sir; some stocks, or somethin just what they were. the note, under that agreement, Q. They were all withdrawn with withdrawn under that agreement. all were were they 7—A. Yes, sir; they • L. TESTIMONY OF JOHN L. KiDWEL . WASHINGTON, D. C., January 31, 1880 . ined KIDWELL sworn and exam JOHN L. By Mr. CAMERON: ell ?--A. Georgetown. Q. Where do you now reside, MT. Kidws 1870, 1871, and 1872 7—A. In Q. Where did you reside in the year Georgetown, sir. time 31—A. Druggist, sir. Q. What was your occupation at that at that time, or at any time, ain sust you did any, if Q. What relation, facturing-Company, comManu and ng to the Maryland Free Stone Mini pany 7—A. What particular date do monly called the Seneca Stone Com you refer to? 2.—A. I was the president of it at Q. The years 1870, 1871, and 187 that time, sir. COMPANY. THE SENECA SANDSTONE company was organized for, and Q. State, if you please, what that the corporation at that time; genby what property, if any, was owned you to go into particulars.—A. The erally, of course, I do not expect stone Company was bought by me property known as the Seneca Sand it to Mr. Dodge and Mr. Cooke after individually. I sold an interest in money besides the purchase of the of wards. We spent quite a sum then inp,de an organization of it into property in its development. We it on a large scale, and spent a very work to d a company, and proceede large sum of money on it. Sandstone Company, as it is comQ. It appears that the Seneca s from the Freedman's Bank. Will loan of monly called, made a number made by the Seneca Sandstone Com on you please state what loans were and can, you as were made,as near pany from that bank; when they vote l matters of the company, by a ingncia fina The . 7—A es riti what secu Hunt and e Cook rs. hands of Mess of the directors, were placed in the of the money matters. The firstton; they had all the management us as part of the purchase-money. mortgage bonds, $100,000, were paid the hands of Messrs. Cooke and The second-mortgage bonds went into we made loans of the First National Huntington, and from time to time my understanding was, that these Bank; and my impression was, red thousand dollars were held by second-mortgage bonds of one hund e time afterwards it came to my s them as collateral for that loan. Som t National Bank making these loan knowledge that instead of the Firs had transferred the loans over to that Messrs. Cooke and Huntington the Freedman's Bank. 206 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Right there, what connection did Cooke and Huntington have with the First National Bank at that time, if any Well, I think they were trustees of the bank at that time, sir; and in my official capacity as president of the Seneca Sandstone Company I thought that loans were being made by the First National Bank, but appears that they were made by the First National Bank, the loan being transferred afterwards to the Freedman's Bank. Mr. Huntington being financial agent of the company had the whole hundred thousand dollars of the second-mortgage bonds and when the transaction came to my knowledge that the bank itself had made the loan, I found that the bonds wcre deposited there as collateral.. Q. Did you''have any personal knowledge, at the time, of the loan of $4,000 made to your company by the Freedman's Bank on the 18th of May, 1870?—A.. I never had any transaction with the Freedman's Bank during my term of the presidency that had any reference at all to the freestone quarry. I . never had, nor did I know of, any transaction with them on any private account. I did find after Mr. Huntington's - death a little due bill which I gave him, which I will explain to the committee, if they desire, which was in the hands of the Freedman's Bank, which I paid afterwards. Q. Well, did yoti at that time have any knowledge of these transactions made by Mr. Huntington and Mr. Cooke with the Freedman's Bank and your company ?—A. No, sir; I had no knowledge of them. As I tell you,all the financial transactions were made through Mr. Cooke and Mr. Huntington and I thought the accommodations the company was getting—these ' bonds being in the hands of Mr. Huntington—were made by the First National Bank. I was getting no pay,and Mr. Cooke's brother-in-law was superintendent of affairs, and was getting very handsome pay while I was getting none; and the transaction was carried on without my knoWledge, and certainly it would have been without my consent if I had known it at the time. Q. It appears that the Freedman's Bank, on the 25th of July, 1870, purchased twenty thousand dollars of the first-mortgage bonds of the Seneca Sandstone Company. What, if anything, do you know of that transaction? And first, what did you know of the transaction at the time it occurred, and what information have you since l—A. Well, my recollection is, that that is an entire mistake. I cannot understand, if Mr. Huntington or Mr.Cooke made that transaction with the Freedman's Bank—I cannot understand from what source the twenty thousand dollars of first-mortage bonds came. Now, there is a possibility that Mr. Cooke may have been the holder of twenty thousand dollars of bonds. He might have used his own private bond to have deposited there as collateral. It is possible Mr. Huntington may have held $20,000 from some source,'and they might have been deposited there as collateral, as the property of the coin pany. Q. The books of the bank show that it was an actual purchase by the bank of that amount of;the first-mortgage bonds f—A. I cannot give you the particulars; I have no knowledge of the transaction; I think it is an error. Yet I am not positive, because Cooke and Huntington might have conducted the transaction without my knowledge. REPURCHASE OF THE SENECA BONDS FROM THE BANK. Q. It appears from the books of the bank that these bonds were purchased by you cf—A. By me? FREEDMAN'S SAVINGS AND TRUST COMPANY. 207 Q. Yes; that appears from the books of the bank; that you repurchased these bonds of the Freedman's Bank al—A. Repurchased them? Gave what for them? Q. Repurchased them from the bank I—A. That is an error, sir. Q. This entry appear& on the bond book of the Freedman's Bank, January 9, 1872: NOTE. • -. Mr. John L. Kidwell, on the 9th of January,repurchased these bonds, paying for them, in cash, 90 cents on the dollar, $18,000. With interest on that amount at ten per cent. from July 26, 1870, date of purchase from this company,less the amount of coupons which had matured while the company held them. Bonds . $18,000 Interest 2,580 Total 20,580 Less gold coupons. Mr. KIDWELL. I have no knowledge of that transaction at all; there must be some mistake about it. It is possible that Mr,. Cooke and Mr. Huntington may have had the transaction and used my money,as I was president of the company. It appears as if they had .used it in my private capacity, but I had no knowledge of it. Q. Did you have a knowledge that any person was making that transaction for you I—A. I did not know the bonds were deposited there; I cannot say whose bonds they were. By Mr. GARLAND: Q. Did these gentlemen have any authority, written or otherwise, to use your name in that way ?—A. No, sir; certainly not. If they had used it there in a private capacity, they had not. I had no transaction with the bank by which I deposited twenty thousand dollars of firstmortgage bonds. By Mr. CAMERON; Q. it would seem from this entry in the handwriting of Mr. Eaton, actuary of the bank at that time, that you,on the date named, paid to him $20,580; did you pay him that amount or any other amount?—A. No, sir. Q. It seems from an entry or entries on the books of the bank that on the 9th of January, 1872, the same date of the other transactions to which I have referred, that you received from Mr. Eaton seventy-five thousand dollars of the second-mortgage bonds of the Seneca Sandstone Company. What information, if any, can you give us in regard to tit at?—A. Although president of the company, and sighing the bonds, I never had any of the second-mortgage bonds in my possession, or handled them at all. WITNESS' RECEIPT OF BONDS FROM THE BANK. Q. Well, did you receive the seventy-five thousand dollars, according to your recollection, individually, or in your capacity as presidentI—A. Neither, sir. Q. Will you please look at that paper [exhibiting receipt]. 208 FREEDMAN'S SAVINGS AND TRUST COMPANY. FIRST NATIONAL BANK. H. D. COOKE,Presq. W. S. HUNTINGTON, Cadet.. H. C. SWAIN, A88't Ca8h'r. WAsniNdrox,D. C., January 9, 1872. Received of D. L. Eaton, actuary, seventy-five thousand convertible bonds of the Maryland Mining and Manufacturing Company, which were held as security for two certain notes of said company; one for $27,000, dated May 18,1870, and one for $4,000, dated June 7, 1870. JNO. L. KIDWELL,Pres. A. [Witness after reading it.] That is my writing, sir, and I presume that is Mr. Huntington's writing; and I presume he brought it to me and had me sign it in some transaction with him. Q. That is your signature, sir ?—A. Yes, sir. Q. Well, what is your explanation of it ?—A. I presume he carried through the transaction and brought it to me for my signature. Q. Were you in the habit of signing any papers that Mr. Huntington asked you to sign, without knowing what they were?—A. It appears that I signed that,sir. I do not deny my own signature. He may have given me some reason at the time that induced me to sign it. I was never brought in contact with the bank in any way. If I,in my official capacity, signed any note that was used by the bank, it was for Mr. Huntington that it was done. I had no connection with the bank in any way, in any of its transactions. Q. Now, it appears from that receipt that you received, in your capacity as president, seventy-five thousand dollars second-mortgage bonds of the Seneca Sandstone Company. That would seem to charge you with these bonds. Now, that is a considerable amount, and would you not hesitate to sign it without having the bonds and without knowing how you were going to rid yourself of the responsibility?—A. All I know is, sir, that I think that is my signature. I had no idea of the transactions in any way, shape, or form; yet I think it is my signature. I cannot explain it to you in any way at all. By Mr. GARLAND: Q. Was there any explanation given to you by Mr. Huntington or the person who brought that paper to you to sign ?—A. There is a possibility of that, sir; but .1 have no recollection about it. Q. You cannot call it to mind at all ?—A. No, sir. Such a paper was never presented to me before; it has been a long time since. Q. It is written on a letter-sheet with the printed heading: "First National Bank ?"—A. It evidently has been done in the First National • Bank, by Mr. Huntington, cashier. Q. Had all recollection of signing that passed out of your mind till this morping?—A. Entirely, sir; I never heard of it before; yet it looks like my signature; I cannot imagine why such a paper should have been signed. The bonds were never out of the possession of the Freedman's Bank,that I know of. By Mr. CAMERON: Q. In whose writing is the body of the receipt, Mr. Kidwell?—A. That I am not able to say; it is possibly Mr. Huntington's. Q. Are you familiar with Mr.Eaton's handwriting ?—A No; I am not familiar with his handwriting at all. All I know is that it looks like my signature. TRUST COMPANY. FREEDMAN'S SAVINGS AND 209 N TO MESSRS. KIDWELL & TRANSFER OF THE SENECA LOA EVANS. the Freedman's Bank to the SenQ. It seems that the loan made by to the account of Kilbourn & red sfer tran was y, pan Com e eca Sandston if anything, do you know in t, Wha . 1872, Evans on the 2d of January, no knowledge of it at the time ; I regard to that transfer f—A. I had d, and my idea is that Messrs. lete comp was it .heard afterwards that mmodate General Eaton; I to acco it Kilbourn & Evans simply did ation for the transaction. do not think they got any consider bonds referred to in that receipt, or Q. Did you at any time have the . Never. Mr. Huntington was cusI—A any of them,in your possession never had them in my possession. todian of all these bonds. I have e, you say, attended to the financial Cook Q. Mr. Huntington and Mr. , sir. affairs of the bank I—A. Entirely that time and had no personal Q. You were president during all ; is that what you say I—A.No, ions knowledge of these financial transact a great deal to do with the sale of the I do not say that, sir. I say,I had I hada great deal to do with the colstone and things of that kind; r, who was Mr. Cooke's brother-in-law, lection of money; but the treasure to them, and when accommodations all ers would carry his money matt m through 'Mr. Huntington and Mr. were to be procured, procured thesand dollars a year, and I was getting thou five ing Cooke. He was gett business, and I left everything to nothing. I was engaged in active them. continue to do business, as near as Q. How long did the company I—A. Well, I think perhaps four time you can remember the length of about dates. years; I am not exactly positive . No, sir; well, it is in existI—A e tene exis in still y pan com Q. Is the ence. . Never dissolved. There is some Q. It never has been dissolved I—A s. gage suit at court to foreclose the mort property; yes, sir. Q. On the property I—A. On the ask whether the books of the comMr. KIDWELL. I would like to her transactions I Was this received furt any , pany show, about that date given at that particular time I and redeposited and another note is the date when the note of KilMr. LEIPOLD. [Answering.] Thatbank; and in the agreement which bourn & Evans was taken in the was transferred to the bank; that e was executed at the time, that note consummated. There is mention mad was the date the transaction was thousand dollars second-mortgage in the agreement of seventy-five bonds. Mr. KIDWELL. Yes. e bonds that you receipted for. Mr. LEIPOLD. Presumably the sam ipted for. Well, at that date, rece I that Mr. KIDWELL. Yes, sir; of bonds yet on deposit with ars doll were not the seventy-five thousand the Freedman's Bank Mr. LEIPOLD. That I do not know. SESSION OF MR.' KIDWELL. THE BONDS NEVER IN POS lemen,that I did not receive these Mr. KIDWELL. I want to show,gent which I have no knowledge. Mr. of bonds to complete this transaction, that to complete some transaction I n. Huntington might have said to me, that they would be redeposited agai had to receipt for these bonds andthe committee that I never received I want to make it clear before 14 F B 210 FREEDMAN'S SAVINGS AND TRUST COMPANY. these bonds. Now,in this transaction, of which I had no knowledge— the transaction of Kilbourn & Evans—the bank says they have the bonds on deposit. Well, if they have the bonds on deposit, I have them not. By Mr. CAMERON: Q. You mean that they could not be in both places? Mr. KIDWELL. Yes, sir. Mr. LEIPOLD. No, you are mistaken about that. The agreement says that Kilbourn & Evans had deposited these bonds; the impression being that you received them and turned them over to them, and that you gave them to Mr. Huntington and they went into their hands. Mr. KIDWELL. No, sir; I never had these bonds in my possession. I do not believe they were ever out of the hands of the actuary of the bank. In that connection there may have been some reason why I signed that paper. I do not know. It is certain I never received those bonds. By 1VIr. GARLAND: Q. Mr. Leipold, you knew Mr.Eaton in his lifetime; did you ever see him write? Mr. LEIPOLD. I think not. Mr. GARLAND. Have you had opportunities of knowing his handwriting ? Mr. LEIPOLD. Yes, sir. Mr. GARLAND. You would know it from having received letters written by him, would you? Mr. LEIPOLD. Yes, sir; and from his handwriting on the books of the bank. Mr. CAMERON. I have no doubt that Mr. Stickney is familiar with Mr. Eaton's handwriting. Mr. STICKNEY. We are all familiar with it. Mr. CAMERON. Mr. Leipold, you recognize that as Colonel Eaton's handwriting, do you not? [Showing receipt as above.] [Mr. Stickney, Mr. Purvis, and Mr. Leipold all recognized the handwriting to be that of Colonel Eaton.] Mr. GARLAND. Colonel Eaton was then actuary of the bank on the 9th of January, 1872? Mr. STICKNEY. Yes, Sir; he was actuary until August, 1872. Mr. LEIPOLD. Yes, sir; he was actuary at that time. Mr. CAMERON. If you desire to make any further statement, Mr. Kidwell, in regard to the transactions of the Seneca Sandstone Company with the Freedman's Bank, you are at liberty to do so. Mr. KIDWELL. I have no other statements to make. If the trustees of the bank desire to ask me any questions I am here, gentlemen, to answer in regard to anything I have any knowledge of. Adjourned to February 5, 1880. COMMITTEE Room OF THE SENATE SELECT COMMITTEE OF THE FREEDMAN'S BANK, Washington, D. C., February 5, 1880. The Select Committee of the Senate on the Freedman's Savings and Trust Company met this day in the committee-room of the Senate Committee on Manufactures, at 10 o'clock a. m. FREEDMAN'S SAVINGS AND TRUST COMPANY. 211 Present, Messrs. B. K. Bruce,(chairman), Angus Cameron, and A. H. Garland. TESTIMONY OF C. A. FLEETWOOD. CHRISTIAN A. FLEETWOOD sworn and examined. By the CHAIRMAN: Question. Mr. Fleetwood, what have been your relations to the Freedman's Bank; when did they begin and when end I—Answer. I entered the service of the bank on the first day of July, 1871, and have continued in its service up to the present time. Q. You mean to say you were continued in the service of the Freedmen's Bank up to the time of its closel—A. Yes, sir; up to the time of its suspension. Q. You have not been connected with that institution since its suspension, have you 7—A. Yes, sir; since that time I have been in the employ of the commissioners. Q. Did you balance the pass-books of depositors with the books of the bank in all cases?—A. I beg pardon, I did not hear the question. Q. Did you balance the depositors' pass-books with the books of the bank in every case "I—A. No, sir. I will explain further that I was there as bookkeeper for a portion of the time; I do not remember exactly how long, but I first entered the Washington branch as its bookkeeper. I served in :that capacity, I think, until the latter part of the year 1872, when I was appointed paying-teller. While I was bookkeeper it was generally my duty to balance the pass books, but there was always 'a large part of that time when books were being transferred; that was done under the supervision of Mr. Sperry, the inspector; and there were also occasional books balanced by some other gentlemen connected with the bank; but while I was bookkeeper that was generally my duty—that is between July 1, 1871, and say January 1, 1873—the time 1 do not remember exactly. THE R. W. TOMPKINS ACCOUNT. Q. Do you know anything of the account of R. W. Tompkinsf—A. I do not, except generally; I knew of the existence of that account. Q. Will you state what position Mr. Tompkins held in the bank ?—A. He was one of the bookkepers, the principal bookkeeper, after I was made paying-teller. He came there first as an assistant. Q. Was he assistant bookkeeper during the time that you were bookkeeper?—A. Yes, sir. Q. But when you became paying-teller he became principal bookkeeper ?—A. Yes, sir. Q. Have you personally ever examined his account or ever made any entries therein, whether of deposits or drafts f—A. It is very likely that I have; I can scarcely answer that question positively now, but it is very likely that I have done so. My recollection is—well,thefact is I have not looked at the account at all for some time. My attention was called to it by one of the gentlemen connected with the examination of the books, but I do not at this moment remember whether my handwriting appears in that part of the book or not. I should rather think though that I had made some entries in it. Q. But you have not had occasion to examine it since you severed your connection with the bank ?—A. I have looked over the account recently. 212 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. You say that you have recently examined the account?—A. Yes, sir; but just at this moment I cannot say about the entries. All my impression is that a number of them will be found in my own handwriting. Q. Do you know anything of an overdraft in Mr.Tompkins's account? —A. I do not; that is, I know nothing of it myself. I have been told of the existence of that overdraft, but 1 do not know of it of my own personal knowledge. Q. You say that you were employed by the commissioners after the suspension of the bank cl—A. Yes, sir. Q. Do you know what was the condition of Mr. Tompkins's account at the time the commissioners took charge of the affairs of the Freedman's Bank ?—A. The condition of his account at that time, so far as I know from the books, was that there was a balance in his favor of some, as near as I can remember, some twelve hundred dollars, about twelve hundred dollars,somewhere in that neighborhood—over a thousand dollars I am certain, and I think under thirteen hundred; it was somewhere in that neighborhood. Q. Please make that statement again. Mr. FLEETWOOD. I say, there was an apparent balance in Mr. 'Tompkins's favor at that time of about twelve hundred dollars. I am not positive, however,for I have not refreshed my memory at all on that matter. Q. Some of the entries appear to have been made in your handwrit• ing?—A. That is very likely, sir. Q. When the commissioners took charge of the affairs of the bank, did they find this account closed f—A. No, sir. Q. It was not closed °I—A. No,sir; there was a small balance remaining. Q. An apparent balance, you say f—A. Yes, sir. Q. Had Mr. Tompkins a balance to his credit f—A. An apparent balance, yes, sir. Q. There appears, Mr. Fleetwood, a large number of drafts made by depositors, wherein you filled up the checks and signed the names of the depositors; do you remember having done this in any case f—A. Yes, sir. Q. Will you state the circumstances under which you did this f—A. It was the practice of the bank, where parties could not write their own names, to have a form of receipt prepared and the paying teller, or whoever paid the drafts, signed the name of the depositor in such cases, and entered the draft at the same time on the pass-book. Q. Well, who attested the signature, or the mark, of these persons who could not themselves write their names did anybody attest these signatures f—A. It was simply to write the name of a depositor there. The entry on the pass-book was considered the safeguard of the company, the voucher of the company; the depositor retained his passbook and the teller, or whoever paid the check, if the party could not write, signed the name and the receipt, and that was filed in the bank. THE ACCOUNT OF D. W. ANDERSON. Q. Will you state what you know of the account of D. W. Anderson in which there is an over-draft of six hundred and thirty-two dollars; whether the account was made up by you; what connection you had with it, and all the circumstances f—A. That account was balanced by me; the book was made up, I do not know just at what time—at any TRUST COMPANY. FREEDMAN'S SAVINGS AND 213 lst:of January, 1872. In transrate, the account was balanced to the a new book, instead of deductto book old the ferring the account from been made prior to that time, ing the drafts on the account that had into the new book, and a note ied the sum total of the deposits was carr e six hundred and thirty-two doldraft on the account was made of som had been drawn at that time— lars—that was the amount of drafts that the balance to the new account, but by some error instead of carrying into the new book, and I supied the footings of the deposits were carr rush and haste of business that pose that the error was made in the prevailed at that time. . That was done by me; yes, sir. Q. Was this error made by you v—A of so large an amount be made and kind that Q. Could an error of ing up your balance f—A. There without its being discovered in mak system of checking accounts in no were no balances made; there was any,that is with the force that was the bank. It was impossil3le to have employed. h you by mistake did not charge Q. This, then, is an account in whic depositor, but credited him with a by the amount which had been drawn sir. all he had deposited —A. Yes, hundred and thirty-two dolQ. And in this way the bank lost six lars v—A. Yes, sir. had drawn, was it v—A. Yes, Q. That was the amount Mr. Anderson sir. NG OCCURRED. HOW ERRORS IN BOOKKEEPI and gentlemen of the committee, I would like to state, Mr. Chairman but few errors that have been are e in reference to these errors. Ther —that is, speaking of the accounts brought to my attention—only a fewdue to me. At the time I went into are of the Washington branch, that number of depositors to be some seven the wed sho s book the branch the that time there were over twelve thousand odd. Within a year fromthese accounts were,of course,active thousand depositors. The most of ch. They were contained in stven accounts on the books of the bran assistance in posting these accounts, different books—ledgers. I had no the entries all along there are made that as I think the books will shoW business of the branch made it im-entirely in my handwriting. The unts during office hours. All the it possible for me to post these acco after office hours in the bank, and posting in the ledgers was made work kept ent curr the use beca day, the it was was impossible to do it through It was to be expected, in fact under me busy during the whole day. books the into t crep have ld shou rs unavoidable, that some erro d it. It who. is born could have prevente ing morn those circumstances. No man the in t eigh e from half past was my custom to work at the offic to carry ly uent freq and t, nigh at ock until nine, ten, and twelve o'cl and matters of that kind, to write up. work home with me—pass-books, any one can perceive that with only k Under these circumstances, I thinthan might have been expected. e mor any not was it a few errors, By Mr. CAMERON: have as bookkeeper before you Q. How much experience did you had any actual experience in not had no went into the branch f—A. I the branch, since 1863. I had had t abou bookkeeping before going into or re Befo since that time. practical experience in bookkeeping I was keeping books for a find in war the of reak outb the of stment the time them up to the time of my enli Baltimore, and I remained with 214 FREEDMAN'S SAVINGS AND TRUST COMPANY. in 1863. I went into the Army and Was mustered out in 1866. I was employed at the time I went into the bank in the City Hall here as cashier of licenses, but of course there was no practical bookkeeping in that. I had only my office bookkeeping at that time; still I understood the system—there is no doubt about that. It was only from the fact that there was so much work to do,and with no system of checks it was impossible for any human being to prevent making errors. Q. Did you represent to the officers of the bank that there was more work in your department than you could attend to f—A. Well, I could not say that there was more work than I could attend to. Q. Well, more than you could properly attend to Yes, sir. I frequently stated to the officers of the bank that I thought I ought to have more assistance. Q. Why did they not furnish you more assistance; what reason, if any, did they give for not doing so f—A. They said they could not afford it. Q. They thought that they could afford to have these mistakes made better than they could afford to employ sufficient clerical force f—A. Well, I suppose mistakes are made in any institution. I learned of an occurrence the other day in one of the best-appointed companies in the country, I think, where the bookkeeper in balancing an account transferred it and made precisely the same error that I made under the rush of business. CONDUCT OF COMMISSIONERS TOWARD DEPOSITORS. Mr. LEIPOLD. I would like permission to ask Mr. Fleetwood a question or two. The CHAIRMAN. Certainly, Mr. Leipold. Mr. LEIPOLD. You have been in the employ of the commissioners since the transfer of the affairs of the bank to them ? Mr. FLEETWOOD. Yes, sir. Mr. LEIPOLD. Can you tell, from your own personal knowledge, upon whom the great bulk of the labors arising from the settlement of the affairs has rested since you have been there ? Mr. FLEETWOOD. Yes, sir. Mr. LEIPOLD. Will you state that for the information of the committee, if you please ? Mr. FLEETWOOD. I will state that they were upon you, Mr. Leipold. Mr. LEIPOLD. Did you ever know -me, in the discharge of my duties at the bank, to show any discourtesy to any of the depositors of the bank ? Mr. FLEETWOOD. No, sir; I cannot remember any instances of discourtesy to depositors. I can remember sometimes you have been a little rough on people who owed us money—the debtors of the bank. I cannot, at present, recall any instance of discourtesy on your part to depositors. Mr. LEIPOLD. I do not deny that I have had a good deal of trouble with that class of visitors. You would be likely to know if I had been uniformly discourteous to depositors in answering the questions made to me at the bank, would you not ? Mr. FLEETWOOD. Well, I was about all the time, and I am pretty sure that I would be very likely to remember it if it had occurred; but I do not remember any such instance at present, sir. Mr. LEIPOLD. That is all. TRUST COMPANY. FREEDMAN'S SAVINGS AND 215 By Mr. GARLAND: place; from whom did you get your Q. Who appointed you to this ly first entering the bank ?—A. I real appointment as book-keeper on appointed cashier was had y the m who r epe kke cannot tell, sir. The boo was came to see me and told me he of the branch at Lynchburg. He send in an application for his place, to and going away and said that I ought e; so I sent in the application, plac the get d coul I t ugh tho he intthat appo the m who by but I went in; in when he left to go to Lynchburg say. I think that that matter was , ment was made I am not able to tees trus of rd boa the of or , tees trus charge of some committee of the ers. matt y and that they acted upon these g by the commissioners after the alon d inue cont e wer you And Q. sir. A. Yes, took charge of the institution ?-Mr. PURVIS. He is still there. By Mr. GARLAND: k?— of the commissioners at the ban Q. You are still in the employ A. Yes, sir. PKINS. TESTIMONY OF R. W. TOM 5, 1880. WASHINGTON, D. C., February TOMPKINS sworn and examined. R. W. By Mr. GARLAND: 900 E Mr. Tompkins ?—Answer. At Question. Where do you reside, street, southwest. Q. In this city ?—A. Yes, sir. in Washington ?—A. Nearly thirtyQ. How long have you resided . , in fact clerk three years I was born here ?—A.I am at present temporary Q. What is your business now s. taxe in the office of the collector of . Yes, sir; for the District of Columbia. ?—A here rict Dist k ?—A. Q. For the you hold in the Freedmen's Ban gton hin Q. What position, if any, did Was the in r epe kke boo t assistan promotion I first held the position of k, and after Mr. Fleetwood's branch of the Freedman's BanI was made principal bookkeeper. er ce, to the position of paying tell the Washington branch commen 2— 187 Q. When did your connection with ry, rua Feb ced .I think it commen and how long did it continue ?—A of my entrance—and I continued to be date the ut abo was I disrememI think that 1873—October or November, bookkeeper up to October, r ?—A. I ber which. e you principal bookkeepe Q. What part of the time wer e— se me ks wholly—well, let think I took charge of the boo ember; I don't expect you to be strictly rem can you as Q. As near to mind, I . Well, as near as I can call accurate; about what time ?—A ng of 1873—I do not know the month. spri think it was some time in the November of that year ?—A. Yes, sir;. l unti d inue cont Q. And you somewhere in that vicinity. PAL BOOKKEEPER. DUTIES OF THE PRINCI were?— duties as principal bookkeeper Q. State generally what your examine the accounts of depositors. to A. Well, my duties were, first, d for payment the paying-teller would ente pres be ld wou ek account. When a che state as to the condition of the refer it to me or my assistant to 216 FREEDMAN'S SAVINGS AND TRUST COMPANY. I always had it as a part of my duty to balance the pass-books. It was also my duty to write up what we called the journal-ledger—the journal which contained the entries of all checks paid—it was a record, rather, of all checks paid. Q. You had then the supervision and control of the books of the bank during the time you were the principal bookkeeper I—A. Well, I had the control to some extent—not the entire control. Q. Subject to the actuary I—A. I was under the instructions of the actuary and the cashier, both. Q. Did you yourself have a deposit account with the bank I—A. Yes, sir. Q. About when did your account with the bank commence I—A. It commenced, I think, in the year 1870. I made the first deposit with the bank that year. Q. How did your deposit account appear at the time of the failure of the bank—as to whether you were a creditor or a debtor of the bank at that time I—A. It appeared that I was a creditor of the bank. Q. Did you examine and balance your own account previous to the time that the present commissioners assumed control of affairs I—A. No, sir. I do not think I ever balanced my own account. Q. Who had charge of your accountI—A. No one especially, but Mr. Augusta, who was assistant bookkeeper at the time. The first time it was balanced it was balanced by Mr. Fleetwood. Q. Well, who balanced it prior to transferring the books and business of the bank to the commissioners I—A. I have been under the impression, recently, that Mr. Hill, one of the gentlemen employed by the commissioners to assist them in their work, balanced it—that he was the man; but from a recent letter received from Mr. Augusta, he states that he (Mr. Augusta) balanced the account. Q. When the account was balanced were the checks or other vouchers returned to you; was that the practice of the bank I—A. Yes, sir; that was the practice of the bank. Q. Do you remember, as a matter of fact, that in your own case they were returned to you or not I—A. Well, I really cannot say; my passbook had been running along for a good while without being balanced. I had made a great many deposits in the bank and drew out a good deal, and my book was turned in, and it was balanced so that I knew about what my balance was; and in _balancing it, it was closed out, the entries having been filled in with the deposits and checks which had accumulated during the interval of the last balance, and a new book was issued to me by the bank showing only the balance that was •due. However, I examined the old book, as was always allowed and was the custom; and after examining and satisfying myself of its correctness, it was surrendered to the bank and a new book given to me in lieu of it. -Q. What did the new book show that the state of the account was at that time I—A. The new book showed a balance to my credit of between one and two hundred dollars; the exact figures I cannot remember. Q. That is at the time your book was finally balanced up I—A. Yes, sir. ADDITIONAL TESTIMONY BY MR. FLEETWOOD. C. A. FLEETWOOD recalled. The CHAIRMAN. Mr. Fleetwood is on the grand jury, and has asked permission to add a word to his testimony. FREEDMAN'S SAVINGS AND TRUST COMPANY. 217 The CHAIRMAN. You are at liberty, Mr. Fleetwood, to make any additional statement you desire to make. Mr. FLEETWOOD. I merely wish to say in connection with my reply to the questions just put to'me, that it would seem as if my signing checks of deposit had application to the Anderson account; all the checks on that account were signed by Mr. Anderson; none of them by me. By Mr. CAMERON: Q. Mr. Anderson was able himself to write, was he not f—A. Yes, sir; and the filling up of the checks in that case, at least several of them, was done by different parties. There was one check filled up by me for twenty dollars, and all the checks on that account were signed by Mr. Anderson himself, but none by any other party. It was only in cases where depositors could not write that the signing of checks was done by the teller. By the CHAIRMAN: Q. In Mr. Tompkins's account you were not aware of any irregularity, you say, until it was discovered recently by the experts; do I so understand you f—A. No sir. Q. Well, have you had occasion since that time to examine the account ?—A. I have looked over the account; there is a sheet missing from the ledger; I have looked over the account, the parts that are there, since that time, and I have noticed two or three discrepancies that are marked by the gentlemen who have made the examination of that account. TESTIMONY OF R. W. TOMPKINS. WASHINGTON, D. C., February 5, 1880. R. W. TOMPKINS (resuming his testimony). By Mr. CAMERON: Question. Your account has been examined by the experts employed by this committee, and as they make it out, this is a statement of the account (handing statement to witness). Will you please look at it ?— Answer. What is the question you ask me in connection with this ? Q. I simply asked you to look at it; I will ask you now in regard to it. It appears from the statement of that account that your account is overdrawn $1,307.05; can you explain that overdraft l How it occurred f—A. No, sir. According to my knowledge and recollection of my account the balance as shown when the new book was issued to me was correct with one single exception; that was this: there was an item of interest which I claimed was due me from the bank from July, 1873, to January,.1874—or during that period—interest which had been allowed me. With that exception the account is correct. Q. Did you examine the account to see if it was correct; did you compare the account with the books, the account on the books .with the account in the pass-book f—A. 0, ; I had no access to the account. I kept a memorandum of my balance and the checks I drew and deposits I made. Q. You say it appears from that memorandum that you had a balance to your credit of one hundred odd dollars at the time the bank closed? —A. Yes, sir. 218 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Well, how did this discrepancy happen to appear in the books; can you give any light on that?—A. I cannot give any light on that. Mr. Leipold, one of the commissioners, a short time ago called my attention to a discrepancy in my account; that there were drafts drawn for which there seemed to be no deposits to draw against; and this was especially true along about May or June 1873, he said. At that time I think I was bookkeeper of the bank. Air. Augusta was my assistant. I am also informed that a page of the ledger—I do not know whether one or two pages of the ledger—is missing. Q. One leaf?—A. Yes; two pages. Q. Yes?—A. And he also called my attention to this apparent draft, as shown by the books. Still, the only version or explanation I can possibly give of that is that there are deposits—as' was frequently true in other cases—that in my case did not find their way to the journal. It was a fact that the receiving teller often reported "over" cash, as we termed it, and sometimes it wasfor quite large sums; that is, large sums of that kind. I remember one circumstance where he reported some three hundred odd dollars, and it would afterwards be discovered that there were deposits made and the deposit slips had not been entered in the journal. Sometimes deposits were made and no slips made for them; but his cash would show "over" on that day, which would be turned over to the paying teller, and by him to the principal office, and there held to the credit of the Washington branch. There is one deposit I remember distinctly making of $596 and some cents. Why I remember so distinctly making it is, that I made it because I expected in a few days to draw very heavily against it. Is think I had a balance of somewhere between three or four hundred dollars in the bank at that time, and through a gentleman on the outside I was doing a little speculating. I held some securities of some kind; I do not remember what they were, but I passed them over to Mr. Stickney, the actuary. He took them off of my hands and allowed me credit for them in the bank. I do not remember just exactly what they were now, for it has been some time and my memory is not fresh on the subject. Why I am so particularly reminded of that deposit was this circumstance, that I expected to draw against it; and also another circumstance connected with it. It was this: Mr. Augusta, who was assistant bookkeeper, as I have said, and myself did the posting; all the posting and all the balancing of the books,Sm.; everything,in fact, in connection with the bookkeeping of the branch we did at that time. When I made this deposit it was posted to my account in the morning from the "principal office slip," as we called them. I posted it to my credit from the slip. By the way, permit me to interject just here the statement, that we did not, as was the custom generally, post from the journals; we posted from the checks and from the deposit slips, and we did this sometimes after they were entered on the journals, and sometimes before, but all depended on the press of work. We were very heavily worked—in fact overrun with work, at that time; and, as Mr. Fleetwood has stated, we were frequently occupied until late at night in getting through with the work of the day. METHOD OF POSTING. We posted from the slips. I found that was the'custom in the bank, to post from the slips, and I followed it. Q. Do you really think it wasa judicious custom f—A. No,sir; I do not. This deposit of which I speak 1 posted in the morning. A short time T COMPANY. FREEDMAN'S SAVINGS AND TRUS 219 noon, there had been some one or two checks afterwards, in the afternoon posted also, and he made a remark Mr. unt. acco made on the kins, your balance is sWelling Tomp . "Mr to me something like this: ly, what he meant. "Why," out considerably." I asked him, laughing thousands, I see." Said I, the into up gone has unt said he,"your acco it, and I found he had posted "No." He then called my attention to of course charged back. Now, this deposit a second time; and it was the journal. Mr. Fleetwood On ar appe not that deposit I am told does I looked into the journal and looked, and I asked Mr. Leipold to look,h of May, for it was just prior mont the t abou was it for that. I knew rs that I drew. The check, I think, to the check for four hundred dolla Johnson, I think was the name;. was drawn to the order of George D. I am not certain. slip for that check of five Q. I will ask you if you had the deposit sir. No, . f—A rs hundred odd dolla because the posting was made , Q. Wassuch a slip made f—A. 0, yes; from the slip. and Mr. Augusta did the Q. You posted from the slip ?—A. Yes same. ; it was not a deposit of . Q. Did you actually deposit money ?—A ities, I think, which secur of er numb a money. It was like this: I held him the circumtold I kney. I sold to the principal office, to Mr. Stic my hands. The off them took he nd do—a stances—what I wanted to dollars and y-six ninet and red amount allowed for them was five hund mber. reme now not do I h some odd cents, whic off your hands individuQ. Did you understand that he took them my understanding of it. , was ally, or for the bank ?--A. :For the bank s of the bank in that way? Q. Did the transaction appear on the book use my name was not on beca —A. No; it would not appear in any case, . mber reme can I as any of the cases so far amount of the deposit of five Q. Now, were you credited with the hundred and odd dollars—A. Yes, sir. or some account of the bank Q. When money was deposited somebody would appear, naturally, on , it ought to be charged with it f—A. Well the principal office books. her or not it does appear ?-Q. Do you know as a matter of fact whet A. I do not. bank there ought be something Q. If so much money went out of the not ? If your securities were coming in at the same time, ought therenot an expert in these matters, am I h houg (alt purchased by the bank ought to appear on sotne of the yet common sense would teach me) theybank got for this money. Is not accounts of the bank showing what the need not necessarily appear in my that so f—A. That is very true, but it name. you know whether it appears in Q. 0,no; I do not claim that; but do to your credit on the ledger ? pt any way on the books of the bank, exce —A. I do not. slip to the ledger ?—A. Yes, sir. Q. And you posted from the deposit does it appear in the pass-book ? Q. It does not appear on the ledger; k. -boo —A. 0, yes; it appears in the pass y 1—A.. It was entered at the time entr the of date the was t Wha Q. my book was balanced. Q. Not until then ?—A. No, sir. yourself with the amount ?— Q. How long was that after you credited A. About one year. transaction it appeared nowhere Q. Then until about one year after the 220 FREEDMAN'S SAVINGS AND TRUST COMPANY. except on the bank ledger; is that the fact ?—A. It seems not. I supposed it was on the journal. Q. Who made the deposit-slip f—A. Mr. Stickney. Q. I am told that no such deposit-slip can anywhere be found among the papers of the bank; do you know what was done with it ?—A. I do not. Q. What, according to the course of business iii the bank, would be done with it ?—A. They were made up into packages,I think—the slips of every month, I think, were made up. I think the packages were made up once a month,or, perhaps, weekly. I do not remember TIOW what the practice was, whether they were made weekly or monthly; but they were put up in packages and filed away. Q. What did you do with the slip after you .posted the amount to your creditf—A. Put it on the receiving teller's file. Q. Well,it seems from the statement you made a little while ago, that your assistant afterwards, and on the same day,again posted the amount to your credit—A. Yes, sir. Q. How did that happen Should there not have been something on the slip to show that it had been deposited by you ?—A. We would usually put a checkmark upon the slips. Q. To show that they were posted f—A. Yes sir. Q. Do you know, as a matter of fact, whether you made the checkmark on that slip ?—A. I could not possibly say; it may have been omitted. Q. Well, if the checkmark were made upon it by you, according to your usual custom would your assistant have been likely to have reposted it to your credit f—A. Not likely, though it is possible; yes, it is possible that he may have done it. Q. Though he is not likely to have done it f—A. No, sir. Mr. FITZPATRICK (expert of committee.) Q. At what time was the deposit made ? Mr. TOMPKINS. I think in May or June, 1873. You can inform yourself, however, by reference to this check of which I speak. Mr. FITZPATRICK. I do not remember ever having seen it. Mr. TOMPKINS. No; this deposit was made because I expected to draw heavily against it. By Mr. CAMERON: Q. Mr. Fitzpatrick, the expert, says that he does not remember seeing any duplicate credit to your account f—A. Possibly that may have appeared on the missing page. Mr. FITZPATRICK. Yes, possibly it is on the missing page. THE MISSING LEDGER PAGE. Q. (To Mr. Tompkins.) What explanation, if any, can you give of that missing page—A. None at all; I do not remember anything about it; because I had no connection with the Washington branch, nor have I looked at a book there, since May of 1874, until the other day. I have had, as I stated, no connection with the bank, nor have I looked into a book, to my knowledge, nor had anything to do with the books, since May of 1874. I went into the bank then, and looked over several books, and I looked at my own account for one. Q. When did you last examine your account on the ledger of the bank ?—A. The last time I looked at it was in 1874, to the best of my knowledge. FREEDMAN'S SAVINGS AND TRUST COMPANY. 221 Q. Was that page, which now appears to be missing, in the book at that time, or had it been cut or torn out prior to that time ?—A. Well, I could not say of my own knowledge, because the account had been carried forward to another page, and I am unable to state whether it wasthere or not; my impression is, however, that it was. Q. Well, have you any distinct recollection about it ?—A. No,I have. not. Q. Have you your pass-book ?—A. I have. I have the one that was issued to me showing the balance only. Q. Have you the next prior one ?—k. No, sir; that was turned over. to the bank at the time the new one was issued. Q. I am told that no such pass-book can be found ?—A. So I am told also. Q. To whom did you turn it over?—A. I do not remember. Q. What was the usual course of business I think it was Mr. Hill—when we issued a new book showing a balance only,it was the custom to hand the depositor the old book and the new, and to allow him, to satisfy himself of the correctness of the balance shown—the old book and the new book, with the checks drawn—and, after satisfying himself of the correctness of the balance shown, he was required to surrender the old book to the bank. OVERDRAFTS IN WITNESS' ACCOUNT. Under the dates of June 4, June 11, June 13, and June 21, Q. 1873, it appears by the journal that you made drafts amounting in the aggregate to one thousand and sixty-five dollars; the journal entries appear to be in your handwriting °I—A. Yes, sir. Q. And these drafts do not appear to be charged to you in your ledger accomnt; now can you explain as to that °I—A. No, sir. Q, Whose duty was it at that time to do the posting T—A. If I wrote the journal he did the posting; if I did the posting he wrote the journal. We used to divide the work between us in that way. Q. Is it a fact that you made drafts on those dates, or about those dates, amounting in the aggregate to one thousand and sixty-five dollars—A. Well, as far as I can call to mind now, I think it is. I know I drew two large checks about that time. Q. Have you any of the checks that you drew about that time on the ?—A. I do not think I have. Q. When did you first ascertain that the bank-book showed that your. account was overdrawn ?—A. About a month ago, I think. Q. Your attention was called to it then ?—A. Yes, sir. I think it wasabout the middle of December last. Q. There are several drafts and deposits appearing on the journals in your name for which no corresponding entry can be found on the ledger;; can you explain that discrepancy ?—A. No,sir, I cannot, except in theway I stated, that the posting was made from deposit-slips, and these slips may have been misplaced and not have found their way to theledgers. I will state in connection with that, that it was a thing that did occur. I know that in balancing books I have not unfrequently found deposits entered on the pass-book for which there appeared norecord on the ledger, and reference to the journal would show that they were not on the journal, but there were the entries made on the passbook by the proper officer. When we would refer to the slips we would in some cases find them—the slips filed away marked "posted"—but no, journal entries for them. That was something that was not of unfrequent occurrence. 222 FREEDMAN'S SAVINGS AND TRUST COMPANY. DRAFT MADE AFTER THE FAILURE OF BANK. Q. How much appeared to your credit at time of the suspension of the bank f—A. I had an individual deposit somewhere in the neighborhood of eight or nine hundred dollars, and a thousand dollars that was held in trust for a gentleman. Q. Have you received dividends on these amounts—A. On what amounts ? Q. Or have you drawn them out ?—A. I drew out a thousand dollars by special agreement. Q. This thousand dollars was a trust fund, and was drawn out by special agreement, was it?—A. Yes, sir. Q. That was drawn out after the bank failed, I believe; Mr. Stickney has been examined about that f—A. Yes, sir. Q. What were the facts in reference to that ? How did it happen that that sum was drawn after the bank had failed f—A. Because it was put in by special stipulation. When Jay Cooke and Company failed, and the panic of 1873, with which you are all familiar, came on, several trustees withdrew their accounts. Dr. Augusta, I think, withdrew his; Mr. Wormley,I remember, withdrew his; and several of their friends withdrew their accounts, at their instigation. Mr. Fleetwood suggested to me that I had better do the same, since they were all withdrawing; that they had just come from a meeting of the finance committee, and he thought that everything was not right by seeing them pursue that course; so I withdrew that money, and Mr. Stickney asked me to leave the currency in the hands of the bank. I told him that one thousand dollars of that belonged to a gentleman who had left it with me for specific purposes, and if I left it I should like to be able to draw it out at any time. He said he did not require me to deposit it, but let the bank use the currency. So I consented, and he placed in my possession four realestate notes for six hundred dollars each, amounting to twenty-four hundred dollars, which I held as security for that money. In 1874, in March of that year, I think, the Comptroller of the Currency ordered an examination of the bank and I surrendered these securities to the bank, and the sum that bank held was passed to my credit with this stipulation: that no matter what occurred I should be allowed to draw out that thousand dollars; and so I didr Mr. CAIVIEBON. That is all. The WITNESS. I wish to state, gentlemen of the committee, that I have written to Mr. Augusta about his recollection of that deposit, and I have a letter here from him which I Would like to have read. By Mr. CAMERON. Q. Where is he now f—A. He is at Norristown, Pa., and I expected he would have been here to-day. The CHAIRMAN. He has been summoned. We cannot reach him before Saturday. Mr. CAMERON. If he is to be a witness, Mr. Tompkins, you can keep your letter until then. The WITNESS. Well, I was going to say that he has a distinct recollection of this deposit, although he is not sure as to the amount. He says, however, that he knows it was several hundred dollars. He remembers it by reason of the conversation that transpired between us. By Mr. GARLAND: Q. Who gave you your appointment, Mr. Tompkins ?—A. Well, I could not say. PANY. FREEDMAN'S SAVINGS AND TRUST COM 223 Q. The trustees?—A. I presume so. issioners when they came in?— Q. Were you continued by the comm ember, 1873. A. I was there from July, 1872, to Nov ng 1872f—A. A portion of that duri , then per, -kee Q. You were book year, I was. k I entered in February, 1872, Q. How much of the year `1—A. I thin of 1873—November it is. er, emb Nov or ber and I remained until Octo the time you commenced in FebQ. You were there all of 1872, from sir. ruary ?—A. Yes, Mr. GARLAND That is all. e any other statement you can Mr. CAIVIERON. If you desire to mak klo so. a statement that I have partially The WITNESS. I only want to make g-teller's account frequently showed made before. It is this: The receivin : that there were deposits made way •an over, aqd it occurred in this journal. Either the slips were miswhich did not find their way to his out the slips, which sometimes ocplaced or there was a failure to make selves. When the pass-books them curred. These things discovered would be corrected then. This. was were presented, of course the error e often, as compared with the numquit , something that occurred, well reference to my pass-book,that ber of deposits made. I will state, withleft there; Why it was not left. was It . it ought to be with the bank say. I wish, for my sake—for my there, if it is not now there,I cannotk could be found. I sincerely wish reputation's sake—that the pass-boo to be thoroughly investigated. it,for I feel that this matter is going By Mr. CAMERON: missing page from the ledger Q. I suppose you wish, also, that that also in that connection. How that -could be restored ?—A. Yes; I wish as ignorant as a child. am I , when or red, ppea disa that leaf a deed there. Mr. LEIPOLD (interrupting). There is The WITNESS. A deed ? erty. It is a deed of property Mr. LEIPOLD. Yes, a deed to some prop large sum of money, showthat out drew you to you just about the time purpose. It was for some this for ing that you used that trust moneysays it has since been sold under a property up town. Mr. Fleetwood deed of trust. under a deed of trust. I will The WITNESS. Yes, it has been sold looked at the books of the not have I state further gentlemen, that principal office books with the at y. I would like to look ' bank carefull spoke. reference to this deposit of which Iduring business hours any day. that do can You N. ERO CAM Mr. A LARGE DEPOSIT. WITNESS' EXPLANATION OF I shall be able to find something, The WITNESS. I am quite certain recollect. There were so many not does ral though Mr. Stickney says he hands every day,- and we had seve transactions passing through his llect anything of that kind. Now, reco transactions and he does not er making: I do not know just what emb rem I sit depo her I there is anot was the largest I ever had there. time it was that I made it, but it how the money came into my posseswill tell you the circumstance and ress passed an act authorizing the sion. In 1869, or 1870 perhaps, Cong of bonds, which were called the ,000 $500 e bore District of Columbia to issu you have heard of them. They s "Emery"bonds. I have no doubt taxe for le ivab rece e They were mad seven and three-tenths interest. 224 FREEDMAN'S SAVINGS AND TRUST COMPANY. for one-fifth of the amount of taxes due. If, for instance, two hundred and fifty dollars was to be- paid in taxes, fifty dollars of that amount could be paid by a fifty-dollar bond. I was at that time clerk in the office of the collector of taxes, the same office in which I am now, under Mr. F. A. Boswell. It was the custom of tax-payers who did not care to wait in line to hand their bills in. For example, you would come and hand in your bill instead of waiting in the line, and say,"You pay this, and I will call to-morrow for the receipt;"or I would say,"I will mail it to you.". We used to buy these bonds and pay the taxes in that way. Q. You mean the gentlemen, the clerks in the office l—A. Yes, sir. For example: we had two hundred and fifty dollars, and could buy a fifty dollar bond at a discount of about thirty per cent.; and I would do it, and pay the taxes in that way. It was a perfectly legitimate transaction, and an honest penny gained. These bonds were made receivable for the taxes of 1870, I think,just about that time, or the following year perhaps. Then the old corporations were abolished and this District Government, of which the board of public works was a creature, was created, and they made no provision for the receiving of these bonds for taxes, and the consequence was they went down to a very low figure. Mr. Boswell was afterwards elected a member of the legislature, and he introduced a measure, I think, looking to the carrying out of the act of Congress allowing one.fifth of the taxes to be paid with these bonds, and he bought up some seven or eight thousand dollars ofithem, and I went in with him and gave him all the money I had at that tithe—that was in 1871—and he bought up as many of the bonds. ashe could get. Or I will say that just before the tax expired ih 1873, on the first of July,I think,it was talked around at that time, although nothing definite was known about it, that these bonds were to be received as partial payment of the taxes, and then they went up, and while they were up Mr. Boswell sold off some eight thousand dollars of' them; and as I went in with him, about seven hundred dollars and som& odd of that money came to me, as my portion of the profits in the speculation. He brought the money to me to the Freedman's Bank, and that money I immediately put in the bank. That deposit does not appear. It was the largest deposit that I ever made, and in that way I remember about it—by these circumstances under which the money came into my possession. That deposit, I understand, is not on the journal. I have not had time to look at the books, though I propose to go up to morrow and take a good careful look, if the commissioners will allow me to do so, over the books containing the accounts at that time.. The CHAIRNIA.N. Certainly they will allow you to do that; and if you make any discoveries that will enable you to explain any of the discrepancies to which your attention has been called, you can come here on Saaturdy, and we will hear such explanation as you may have to give. The WITNESS. Yes, sir • it was very strange to me that my paSs-book should have been balance in July of 1874, after the institution closed,, and these irregularities which are said to exist did not discover themselves. Mr. LEIPOLD. I want to say here that the marks on the ledger do not indicate that the pass-book was examined. The letters here,"H. T," show that there was a comparison with the ledger and journal, and not with the pass-book. The WITNESS. So you told me; but the fact is there was a pass-book, and Mr. Augusta, who I trust will be here, will testify to that. So I think you will agree with me that it seemed strange. Mr,IJEIPoLD. Irequested Mr.Fleetwood to write a letter to Mr.Hill ask-- FREEDMAN'S SAVINGS AND TRUST COMPANY. 225 not remember that ing him if he remembered anything about it. He didwas an examination there that bered remem He ok. there was a Pa ss.bo then missing. was r page ledge the of the account, and he did not think since this mater, wheth you ask will I s, Purvi Mr. . RMAN CHAI By the ssioners made any ter has been discovered, if you or any of the commi larity irregu this to as ry inqui Mr. Tompkins had Mr. PURVIS. Yes, sir. Having understood that hundred dollars seven of bank the stated that he had made a deposit in that Mr. Stickand n, latio specu some in ned obtai had be of money that and he said ney, Stick Mr. of ry inqui made ney was cognizant of it, I n. actio trans such any of edge knowl no had he that I aid speak The WITNESS. I will state, in connection with that, not be there; might or might it that to Mr. Stiekney about it, and he said ago. long so been had time the that it, or ection he had no recoll me. to said he what Mr. PURVIS. I can only state • The CHAIRMAN. It is substantially the same. occurred. have not might or might it e, cours Mr. CAMERON. Of . Mr. GARLAND. It is the same thing . TESTIMONY OF CHARLES W. HAYDEN WASHINGTON, D. C., February 5, 1880. CHARLES W. HAYDEN sworn and examined. By Mr. CAMERON: l—Answer. I reside in Question. Where do you reside, Mr. Hayden Washington, District of Columbia. I am not engaged in busiQ. What is your present occupation f—A. ness at all, at this time, sir. Y LOAN. THE SENECA SANDSTONE COMPAN wise had you with the wise, Q. What connection, if any, official or other commonly ing actur Manuf Maryland Freestone Mining and the time, during at was I f—A. any Comp tone Sands a called the Senec and 1873, secretary or treas-arer the years 1868, 1869, 1870, 1871, 1872, and general manager of the company. m'an's Bank, that this SenQ. It appears, from the books of the Freedwith the Freedman's Bank. n actio eca Sandstone Company had a trans to this transaction. Now,as Various witnesses have testified in regard company, will you give the the of er manag you state you were general ns between the Seneca Sandcommittee a statement of the transactio, so far as you recollect f—A. Bank man's Freed stone Company and the I will try to do so, sir. —A. Of course,so long a time Q. You can give them in your own way. the details of the transacinto go to able be has passed that I would not tions of that company. know about them, and we Q. Well, you can state generally what you can state generally, now, I . ls.—A will examine you further as to detai large transactions in money that the company and the'bank had quite nt of money from time to amou large a wed matters. The company borro as security the mortgave they time of the Freedman's Bank, for which actions besides. trans other were there and any; gage bonds of the comp man's Bank Freed the 1870, May, Q. It appears that on the 18th of 15 F B 226 FREEDMAN'S SAVINGS AND TRUST COMPANY. made a loan to your company; and again on the 17th of July, 1871, two loans were made—one of four thousand dollars and one of twenty-seven thousand dollars. Do you emember the fact of these loans having been made, and can you state whether or not any security, and if any what' security, was given by the Seneca Sandstone Company to the bank A. The four thousand dollars, I think, was a loan for which bonds were . given as security. Q. What bonds f—A. The bonds of the company. Q. Were they first or second-mortgage bonds ?—A. Second-mortgage bonds, sir. Q. What was the market value of these bonds at that time ?—A. I considered these bonds at that time to be about par. . Q. Do you remember whether there was any,actual sale of-those bonds at or about that time ?—A. No, sir; I do not. I was not engaged in any business here; I would know of no sales particularly excepting from the company. The company made no sales that I knew of. I think the only sale the company made of those second-mortgage bonds was five thousand dollars, altogether. Q. When did that sale take place ?—A. I do not remember when that sale took place. Q. Do you remember at what price they were sold ?—A. The company sold them at par. Q. Was it an actual sale, or the settling up of some old transactions ? —A. No ; it was an actual sale. Q. Did they receive money for them ?—A. Yes, sir. Q. Well, you say- that the four thousand dollars you think, was an actual Joan ; What was the twenty-seven thousand dollars ?—A. It was a combination of other loans, in settling up. Q. Loans made prior to that time, aggregatiug in all some twentyseven thousand dollars?—A. Yes, sir; though I do not remember exactly, and cannot tell precisely without referring to the books; my. recollection is, however, that the twenty-seven thousand dollars was -simply a combination of previous loans. Q. It appears from the books of the bank that on the 27th of July, 1870, the bank purchased of the Seneca Sandstone Company twenty thousand dollars of its first-mortgage bonds. Can you give us any information in regard to that transaction ?-1. To my knowledge the bank .never purchased any first-mortgage bonds. Q. Were there first-mortgage bonds?—A. Yes, sir. Q. What amount?—A. One hundred thousand dollars. Q. What was done by the company with those bonds ?—A. They were -all sold previously to the issuing of the second-mortgage bonds. Q. Then you have no information or knowledge that the bank par-chased those twenty thousand dollars first-mortgage bonds 1—A. No, -sir. I will say that I made a mistake a moment ago in saying that we sold only five thousand dollars of bonds. The company did sell twenty thousand dollars second-mortgage bonds to the Freedman's'Bank at 90 per cent. Q. Twenty thousand dollars of second-mortgage bonds?—A. Yes, sir. Q. When was that sale made?—A. I do not remember; I cannot tell without referring to the books and papers. The company afterward purchased them back again. • Q. Did they receive money from the bank in the sale of that twentythousand dollars f—A.-Yes, sir. Q. That would be eighteen thousand dollars?—A. Yes, sir. FREEDMAN'S SAVINGS AND TRUST COMPANY. 227 paid Q. Well, when they purchased the bonds back, was money gave notes for A. No, they gave notes; they bought them back and • them. in my posQ. What became of those notes f—A. I think I have them now. n sessio consolidated Q. Were they paid /—A. I think they were taken up and in other settlements. for these Q. What I want to get at is, whether the bank ever, paid exists. still debt The T—A. exists still debt the bonds in money, or whether we are now Q. Did you niake that operation with the bank to which referring f—A. No, sir. He was oft Q. Who did I—A. I think that Mr. Huntington did. Company— tone Sands a the Senec of agent ial financ —the financial agent I delivered the and I think he made that arrangement; at any rate, do. to what to as him from ctions instru ed receiv and bonds THE TRANSFER TO KILBOURN & EVANS. the 2d day of JanQ It seems, from the books of the bank, that on ny—that is, the Compa tone Sands a Senec the of nt accou the 1872, uary, to the acerred transf —was bank the to ny compa indebtedness of the t, sir; I canno I-A. that n explai count of Kilbourn & Evans; can you ction. transa that of edge knowl any I never had d upon the books Q. Was the transaction reported to you, or entere sir. No, I—A. ny compa of your a Sandstone ComQ. About what is the indebtedness of the Senec ing interest f—A. count not time, pany to the Freedman's Bank at this in one note, and I think The books show about fifty thousand dollars hing over fifty thousand somet all, in another note of fifteen hundred; s. dollar sir. Q. About fifty-one thousand dollars f—A. Yes, the note issued for Q. And you say the note was consolidated, and time f—A. I canat that fifty thousand dollars, and some money paid thousand dollars. fifty not tell the date, but a note was issued for excepting one note for fifQ. And that settled all previous accounts teen hundred dollars I—A. Yes sir. chasing those twenty Q. What was the object of the company in repur it had sold to the which bonds tgage d-mor secon of thousand dollars fully. I understood from bank at ninety cents f—A. I don't know, sir,they were sold to the bank when that time the at think, I some one, the bank wished it. the company agreed to repurchase them, ifequivalent to the payment of Q. The bank paid money, or what was to the Seneca Sandstone money, for the bonds; it then resold them I—A. Yes, sir; and held ny compa the Company, and took the note of them as collateral security. time, upon the aggreQ. Well, now,about that: it seems that, at oneCompany to the bank, tone gation of the debts of the Seneca Sands bonds in some way slipped these twenty thousand dollars first-mortgage d-mortgage bonds were secon and bank, out of the possession of the know nothing about. The substituted for them I—A. That is a matter I any first-mortgage bonds; Bank man's Freed company never gave the gave any first-mortgage that is, the Seneca Sandstone Company never Bank. man's bonds to the Freed sell the bank twenty Q.- I think you said that, at one time, they did sir; second-mortNo, thousand dollars of first-mortgage bonds I—A. gage bonds. 228 FREEDMAN'S SAVINGS AND IRITST COMPANY. Q. Well, second-mortgage bonds. What did the property of the Seneca Sandstone Company consist of?—A. It consisted of six hundred acres of quarry land, mills, saw-mills, derricks, boats, mules, tools, and a great variety of property. Q. The quarry,I understand, is in Montgomery County, Maryland ?— A. Yes sir; in Montgomery County, Maryland. were the persons mainly interested in thA Seneca Sandstone Q. Company at the times these loans were made I—A. Well, there were a good many stockholders; it had been- distributed a good deal. .Q. Who were the managers of it?—A. The directors, I think, were John L. Kidwell, H. H. Dodge, Henry D. Cooke, William S. Huntington, John A. Wills, James C. Kennedy, and others. VALUE OF THE SENECA PROPERTY. Q. What was the property of the Seneca Sandstone Company valued at when the second-mortgage bonds were issued I—A. I do not think I can state that with any precision. Q. Well, about what? Of course I do not expect you to be exactly accurate.—A. I do not remember distinctly, but I think it was valued at some three hundred thousand dollars when the second-mortgage bonds were issued. Q. One hundred thousand dollars of first-mortgage bonds had been already issued I—A. Yes, sir. Q. And then .a hundred thousand dollars of second-mortgage bonds were issued /—A. Yes sir. the property was valued t about three hundred Q. And you think ' thousand dollars I—A. Yes, sir. Q. To whom did the real estate of the company belong?—A. Do you mean before we came into possession of it Q. I mean the real estate that afterward belonged to the company at the time the company was organized; who put the real estate in, and what was it put in at, if you remember ?—A. The property was purchased in the first place by Kidwell, Dodge, and Cooke. Q. Do you know what it was purchased for I—A. According to my recollection I think they purchased the farm for sixty-five thousand dollars cash; about sixty-five thousand dollars. Q. What improvements, if any, did they make upon the property at the time the company was organized and the farm was put in as stock? —A. They had built a stone saw-mill; they had erected a dwellinghouse and workshops, and a variety of other buildings necessary to go on with the work of developing the property. I do not remember now just how much in value was spent upon these improvements, but I think it was some forty or fifty thousand dollars---ain the neighborhood of that. Q. As a matter of fact, the stone is really a very superior stone, is it notI—A. Yes, sir; the stone from that quarry is a very nice stone, a very valuable stone; it has received the highest commendations for its many superior qualities. Q. I suppose there is no doubt that if it were economically worked something could be made out of it yetI—A. I think so; yes, sir. Q. What has become of it ? In whose possession is it now ?—A. It is in the hands of trustees, in the court of Montgomery County, Maryland. Q. Mortgage bonds have been foreclosed on it ?—A. Yes, sir; and a decree of sale is in existence, and the property is in the hands of trustees. The case has been appealed to the court of appeals in Maryland. Q. Is the quarry being worked now at all?—A. No, sir. Adjourned to Saturday, February 7, 1880. Who 229 TRUST COMPANY. FREEDMAN'S SAVINGS AND SELECT COMMITTEE COMMITTEE-ROOM OF SENATE THE FREEDMAN'S BANK, ON 0, Washington, _D. C., February 7, 188 s and ing Sav s ate on the Freedman' The Select Committee of the Sen committee-room of the Senate Comthe in day this met Trust Company o'clock a. m. to Febmittee on Manufactures at 10 ed not being present, adjourned min exa be to s esse The witn ruary 12, 1880. ATE SELECT COMMITTEE COMMITTEE-ROOM OF THE SEN ON THE FREEDMAN'S BANK, 1880. Washington, D. C., February 12, s and ing Sav s an' edm ate on the Fre The Select Committee of the Sen committee-room of the Senate Comthe Trust Company met this day ino'clock a. m. mittee on Manufactures at 10 (chairman) and R. E. Withers. Present, Messrs. B. K. Bruce ry 14, 1880. Adjourned to Saturday, Februa ATE SELECT COMMITTEE COMMITTEE-ROOM OF THE SEN ON THE FREEDMAN'S BANK, 1880. Washington, D. C., February 14, s and ing Sav s an' edm Senate on the Fre The Select Committee of the the committee room of the Senate Comin Trust Company met this day 0 o'clock a. m. mittee on Manufactures at 10.3(chairman), Angus Cameron, A. H. GarPresent, Messrs. B. K. Bruce land, and R. E. Withers. PKINS. TESTIMONY OF R. W. TOM R. W. TOMPKINS recalled. By the CHAIRMAN: Tompcommittee the other day, Mr. Q. When you were before this an opportunity to examine the books red kins, you stated that you desi a view of refreshing your memory touchwith k Ban s an' edm Fre f—A. Yes, of the institution. Have you done so ing your own account with the desired to sir; I have. make the statement which you Q. Are you now prepared to make because you had not had an oppormake at that time, but did notaccount ?—A. Yes, sir; I am. So far as tunity to examine into your will be glad to make it. I that statement can be made, NS. DEPOSIT OF R. W. TOMPKI r own pkins, and you can do so in you Q. Proceed to make it, Mr. Tome examined the books with 'reference to I hav there way.—A. I wish to say that when on the stand last week, but bank. rred refe I ch whi to sit the of ks that depo boo the of any on t deposit seems to be no evidence of tha be of material benefit to me must be conThe only evidence that would in the missing pass-book. tained in that missing page and to ? Please give us specifically the de . I refer , Q. What deposit do you allu mining you the other day f—A exa e wer we ch whi ut abo deposit 230 FREEDMAN'S SAVINGS AND TRUST COMPANY. to the deposit of five hundred and ninety-six dollars, which was credited to my account. Q. Well, what have you to Say about that deposit I—A. That is the deposit which Mr. Stickney, the actuary, collected for me and passed to my credit, by what we call the "principal office,slip." That deposit, as has been stated, does not appear on the journals. It was posted on the missing page of the ledger. The date along about the time that that deposit was made occurs upon this page which is missing. THE MISSING PAGE IN THE LEDGER. Now,I wish to say with reference to that missing page that since I have examined that ledger, the surprise to me is not that that page is missing, but that more of the pages are not missing. The ledger in which that missing page ought to be found is almost totally mutilated. In the front part of it there are perhaps one hundred or one hundred and fifty pages that are hanging perfectly loose, that are not bound or connected with the book in any way, shape, or form. The leaves are loose. Some of the edges of the leaves are broken and torn. Some of the pages are torn in half. I noticed one leaf on which one-half of the page is simply worn away and does not appear there; and there is ne telling how many other pages may be missing from that same ledger. It is perfectly loose, and has been in that condition, I am told, for several years; and it is a surprise to me, as I have just stated, that more of that ledger is not missing. I just wish (if it is not asking too much), that some of the gentlemen of the committee would look at that book, and inform themselves as to its mutilated condition. MUTILATED CONDITION OF THE TYDGER. Q. What was the condition of the ledger when you left the bank ?— A. it wa.s partly mutilated then; some of the leaves are lost. Q. The leaves were not lost at that time, when you left the bank, were they f—A. Not that I knew of at the time. Q. Were you not using the ledger at the time you left the bank I—A. 0, yes • I was using the ledger at the time I left the bank. Q. Atwhat time did you sever your connection from the Washington branch I—A. I left that branch in October of 1873. Q. When did your connection with that branch begin I—A. I think it was, if I am not mistaken, in February or March of 1871; but I am not quite certain as to that. Q. Can you state when your account was balanced I—A. The ledgers. show that my account.was balanced on the 11th day of July, 1874. Q. And you left in October of 1873 I—A. Yes, sir; I left the preceding October—the October of 1873. Q. If any part of the ledger had been missing, could your account have been balanced at the time it was balanced I—A. No,sir; that would have been utterliimpossible ; it could not have been balanced if any part of that ledger had been-missing at the time. Q. What connection have you had with the bank since you withdrew in October, 1873 I—A. Do you mean from the Washington. branch I Q. Yes, sir.—A. None whatever. Q. You say you deposited five hundred and ninety-odd dollars I—A.. Yes, sir; five hundred and ninety-six dollars. . Q. And you are unable to find any record of it I—A. I say there is Zo record of it on the ledger; and I wish to state further; in, connection, TRTTST COMPANY. FREEDMAN'S SAVINGS ANT) 231: sit journal, I find that in the rewith that, that on examining the depo r reports an "over"about that telle g ivin ceiving teller's cash the rece dollars. time of nine hundred and sixty-seven rt). Six hundred and sixty-seven expe ee's mitt Mr. FITZPATRICK (com dollars. sixty-seven dollars it is,I beg parThe WITNESS. No; nine hundred and y-seyen dollars, but the actual sixt and red don. It is put down six hund red and sixty-seven dollars and footings of the journal show nine hund fifty cents. By Mr.CAMERON: the other day,'when you r attention, Mr. Tompkins, was called ain leaf of the ledger You Q. that a cert were before the committee, to the fact ion of your account, had been port which contained your account, or a ved from the book. You are be• cut off, or torn out, or in some way remoI wish to be specific as to the missbut see, I , hug examined upon that now t it. It is found on examinaing pages, and will ask you further aboucut out from Ledger "E." Can tion that pages 193, 194, 195,and 196 are the cutting out of those pages?— you give any explanation in regard to A. No, sir; they should be in there. ledger are also cut off?—A. Of Q. Pages 394 and 395 of the same Ledger G or Ledger E, do you mean 'I know anything about that. I Q. Ledger E.—A. No, sir; I did not called to it by Mr. Fitzpatrick, knew nothing of it till my attention was .up examining the books at the expert of your committee, when I was re you came in, Senator, that befo ng sayi was bank the other day. I no• the missing page of my aini cont since examining Ledger G, the one 6 leaves and pages are not of the account, the surprise to me is that more missing. hundred and fifty pages of the Q. Why so °I—A. Because about one e; there is no binding of them loos y ectl perf • first part of the ledger are in the perfectly loose, lying around whatever. The leaves are laid in rs on pape e loos of pile nting to a covers as loose as.those papers are (poi is likely to fall out; and I know es the table), and any one of those leav ition for a year—at least,I am inthat that ledger has been in a bad cond y formed 80. you were bookkeeper ?—A. Onl Q. Was it in that condition when one , fact In . here left loose when I partly so; some of the leaves were pages of it are loose—not bound— red hund two or fifty and red torn hund a mutilated condition—pieces and some half of those pages are in others—well, one leaf I remember and , in off the corners of some of them ars to be missing; it may be has half of it worn off, and half appe some other part of the book. unt appears to have been cut Q. But the leaf containing your acco at-10—A. No; not cut out. DESCRIBED. CONDITION OF THE LEDGER all worn at the back, along theQ. It does not°I—A. No; it is simply by the folded edge of a sheet of back where it was stitched in (indicating blank paper). without two coming out at theQ. Well, could one leaf be cut out ain same time?—A. 0, yes, sir. were they not f—A. I will expl Q. How so; they were bound in, it, if I can, if you will allow me. The CHA IRMAN. Certainly. 232 FREEDMAN'S SAVINGS AND TRUST COMPANY. By Mr. WITHERS: Q. The leaves are stitched together before they are bound 7—A. Yes, sir; the leaves are bound and put together in double pages. For example(indicating by a number of folded sheets of paper): These leaves are broken here (at the folded edges), and are lying lbose at the fore part of the ledger. Mr. FITZPATRICK (expert). They are all in regular order there. • The WITNESS. Yes • but,as I stated to you the other day, the surprise to me is that more o the leaves and pages are not missing; they are lying loose, and it is the easiest thing in the world for a leaf to be missing under such circumstances. By Mr. WITHERS: Q. In other words, you think it would be the easiest thing in the world for a man who wanted to do so to take one of the leaves outt—A. Yes, sir. • Q. These leaves are in folds and it depends upon the size of the sheet entirely how they are folded; that is, how many folds are in them. After they are folded they are stitched; that is, they are stitched before they are bound into the covers. Therefore, a mere breaking of the binding would not liberate them, because the .stitching would keep them together, unless the stitching was .cut also.—A. I beg your pardon, Senator, but the stitching is not cut; the leaves are entirely worn away at the edges here (indicating) where they were folded. Q. You mean at the base here, where the folding and stitching were done l—A. Yes, sir these leaves are entirely worn away at the edges where they were folded. It shows from continuous use and handling that they have been worn and broken at the stitching.. CUSTODIAN OF THE MUTILATED LEDGER. Q. Was this book in your custody, Mr. Tompkins 7—A. At what time do you mean Q. At the time, of course, that you were in the bank as bookkeeper. Was not this ledger at that time in your own custody—A. Well, all the books of the bank were in my custody—that is, partly in my custody. All the deposit ledgers were, in part, in my custody; but, as I have testified, this leaf was in the book eight months after I left the bank, when my account was balanced. My account was balanced after severed my connection with the bank, and this leaf was there then; it has been lost since. Q. You are certain that they have been lost since l—A. Yes, sir; since I withdrew from the bank, and since my'account was balanced. By Mr. GARLAND: Q. Who was the custodian of that book eight months after you went outI—A. That is impossible for me to say; I do not know positively. Q. To whom did you turn the book over, when you went out; he must have been the custodian of the book at that time I—A. I did not turn the book over to any one, specially, when I went out. Mr. Augusta, who was assistant bookkeeper with me, had charge of the book after that, I believe; in fact while I was there we had joint charge of the books. By Mr. WITHERS: Q. You were principal bookkeeper, were you not 7—A. At that time I was; yes, sir. ANY. T FREEDMAN'S SAVINGS AND TRUS COMP 233 the time I severed my conQ. Up to the time you leftl—A. Up to sir. nection with the bank; yes, .The CHAIRMAN. That is all. Sperry has just informed me The WITNESS. I wish to say this. Mr. s. I did not know of that time ral seve that these books fell off the desk ition, I think, very easily. In fact before. It accounts for their cond into the mutilated condition ght brou were s that way no doubt the book in which they are now. bank). With your permission, A. M. SPERRY..(former inspector of the I think I could help Mr. that , word a Mr. Chairman, I wish to say, in of these books. I do not know Tompkins to explain the bad condition ss's account that are now in witne the to rd anything of the facts in rega d explain to the committee coul I examination before the committee, but of these account books, if they n itio cond bad the ng some facts concerni desire it. AUGUSTA. • TESTIMONY OF WILLIAM E. . WASHINGTON, D. C., February 14, 1880 ined. WILLIAM E. AUGUSTA sworn and exam By the CHAIRMAN: d the testimony of Mr. TompQuestion. Mr. Augusta, you have hear and at the last sitting, have day, kins, given before the committee to testimony here this morning, but I you f—Answer. I have heard the have not been here before. py in this institution f—A. I Q. What position, if any, did you occuand assistant bookkeeper while left, kins was bookkeeper after Mr. Tomp . he was there. with him at the time.he left, were Q. You were assistant bookkeeper before. I was runner part of time you f—A. Yes, sir; and apart of the the time. tant bookkeeper f—A. Well, I Q. How long a time were you assis last part of 1873, when Mr. the think from the last part of 1872 until Tompkins went away. kins f—A. No, sir; I remained • Q. Did you go out with Mr. Tomp here. By Mr. WITHERS: bookkeeper, did you f—A. Yes, Q. You succeeded him as principal sir. GER. AS TO THE MUTILATED LED • By Mr. GARLAND: • 's statement in reference to the conQ. You. have heard Mr. Tompkins know about that, and particularly you dition of this ledger; tell us What mis3ing •leaf containing his account? what you know in regard to this a very bad condition, I know, andof. —A. Well, these ledgers were in Philadelphia to be fixed—both know that they had to be taken to the G ledgers. adelphia to be rebound f—A. Yes, Q. They had to be carried to Phil es be rebound; that is,. some of the leav sir; they had to be sent there to und. rebo be wereloose, and they needed to ition when you went in as assistant Q. Were these leaves in that cond 234 FREEDMAN'S SAVINGS AND TRUST COMPANY. bookkeeper?—A. Well., when I went there they were in a pretty fair condition. Q. They were in a pretty fair condition when you first had anything to do with them ?—A. Yes, sir. Q. When you left, then, they were in a pretty bad condition, werethey ?—A. When I left there? Q. Yes, sir; when you left the bank f—A. Well, they were not in the. best order when I left. Q. Now can you give any explanation about how they came to be in that condition; have you thought of the matter or looked into it with reference to this missing leaf concerning which Mr. Tompkins has testified f—A. Well, I have not thought particularly of that matter, but I do know that some of the leaves were missing, that is, some of theleaves were loose in the. books, and the books had to be sent to Philadelphia to be fixed. Q. Do you know of any other leaves besides those containing Mr. Tompkins's account being missing f—A. I know of none other, though I have not looked into the matter at all. Q. Would you not have been apt to know if any leaves were missing before you left the bank f—A. Yes, sir; I should have been very likely to know of the fact if there had been any leaves missing. Q. The fixing of the books was done at Philadelphia, you say. Were they rebound or restitched, or what was done to them to 'fix them, as you term it ?—A. I think they were both rebound and restitched. One thing I know particularly about it is that in transferring an accountfrom one page to another, sometimes an account would be worn down at the edge of the page, at the edge where it is stitched, and when the books came back from Philadelphia that part of the account on the edge was cut off. WHEN THE LEDGERS WERE REBOUND. Q. About what time were these books taken to Philadelphia to be rebound or restitched f—A. Well, there were two or three occasions, I think, when this was done. I think one of the occasions was—let me. see—I think one time was about Christmas of 1873 or 1872. Q. Christmas of 1872f—A. Christmas of 1873 I guess it was, rather. Q. Do you recollect about the last time they were carried there for that purpose ?—A. No,I do not recollect when the last time was. Q. Was it before or after Mr. Tompkins went out of the employ of the bank f—A. Well, I am not positive about that. Q. You cannot recollectf—A. No, sir; I have no distinct recollection on that.. Q. You have no explanation, then, at all to give to the committee about this missing leaf of which we have heard so much here f—A. Nothing except what I have said. I know that the books are in bad condition now. Q. Were they lying around loose for the inspection and examination of anybody who chose to look over them f—A. No, sir. Q. When anybody who had been inspecting the accounts got,throngh, were the books put back in any particular place, or was there any particular place for them f—A. They had a particular place where they were kept. Q. Were they put back on the shelves where they belonged ?—A. Yes, sir. FREEDMAN'S SAVINGS AND TRUST COMPANY. 235, • By Mr. WITHERS: Q. Did I understand you to say that at the time these books were sent to Philadelphia you were the principal bookkeeper, and that the books were in your charge I—A. No, sir. RESPONSIBILITY FOR THE MUTILATED LEDGERS. Q. At the time they were sent there for repair you were not principal bookkeeper and they were not in your charge—A. I do not know whether I conveyed that impression or not; I did not say so. Q. You do not know,then, whether they were in your charge or not —A. I do not. Q. Do you know by whose instructions or orders they were sent to Philadelphia l—A. By the instructions of the actuary. Q. Do you know whether at the time they were sent there there were any missing leaves I—A. I do not. Q. You were assistant bookkeeper or bookkeeper at the time, were you not l—A. Yes, sir; one of the two positions. Q. Do you know whether any leaves were missing after the books came back f—A. I do not think they were. I know some of the leaves were loose. Q. Loose when they came back I—A. 0,no! They were loose before they were sent. Q. I say after they came back. Do you know whether any of the leaves were missing or not f--A. I do not believe there were any missing then. Q. You do not believe after the books came back from being repaired that any of the leaves were missing I—A. No, sir; I do not. Q. Well, if the leaves were missing, it must have been- then after the books were returned from Philadelphia I—A. Yes, sir. Q. The books.were in your charge from that time until you leftI—A. Yes, sir; from some time in 1873 they were in my charge. Q. They were not, as I understand you, open to the inspection of the public, or accessible to anybody who might choose to examine them7 but were entirely under your control and in your keeping I—A.. They were not accessible to the public and they were in my charge. Q. After you were done using them, you put them back in the places appropriated for them; was that your habit I—A. Yes, sir. Q. And so far as you know, no one else had access to them I—A. No one else but those inside of the bank. Q. Exactly; the officials of the bank I—A. Yes, sir; the officials of the bank. Mr. WITHERS. I have no further questions to ask the witness, Mr.. Chairman. OVERDRAFT IN R. W. TOMPKINS'S ACCOUNT. By the CHAIRMAN: Q. On examination of the books, it is shown that Mr. Tompkins has overdrawn hiS account; that is, the books show that, so far as the experts' labors have revealed it. I want to know if you can tell us anything about that; whether that was the case when you had charge of the books I—A. I do not remember; if Mr. Tompkins' account was overdrawn, I have no recollection of the fact. Q. Have you any knowledge whatever of an overdraft by Mr. Tomp• 236 FREEDMAN'S SAVINGS AND TRUST COMPANY. kinsf—A. I have no knowledge of any overdraft of his account; none whatever. Q. Do you remember anything at all about his account f—A. Yes, I remember—well, I have seen the account. I know that he kept a large balance there, and he was making deposits feom time to time in the account. I knew that at the time. Q. But you have no more than a general knowledge of his account; you cannot tell us anything specifically concerning it f—A. Well, yes; I .do know about one deposit he made. I cannot recollect the amount, but I know it was .several hundred dollars, and I know that that did not show on the journal. I looked the other day. That was sometime in July, I think, of 1873. It was a claim against the colored school board that Mr. Tompkins had, and it was collected for Mr.Tompkins by Mr. Stickney. Q. How much did you say it was f—A. I do not remember, exactly, but I think it was somewhere between five and six htindred dollars. Q. How (lid you know iewas deposited, then f—A. I remember when the amount was collected seeing a slip in the branch bank. The reason that I remember it is because there was .a little claim of my own that was collected at the same. time. The CHAIRMAN. That will do Mr. Augusta. TESTIMONY OF FREDERICK DOUGLASS. WASHINGTON, D. C., February 14, 1880. FREDERICK DOUGLASS sworn and examined. By the CHAIRMAN: Question. Mr.Douglass, will you state your connection with the FreedMan's Bank; what position you held in that institution, when you were ,elected to that position,and how long you remained in itf—Atiswer. I was for a short time president of the Freedman's Bank. I was elected to that position about the middle of March,1874, but hesitated about taking the office until about the first of April. I tnen,under persuasion of different members of the board of trustees, accepted the office, as they said it would help to inspire confidence in the soundness of the bank. I remained in that position until the bank was handed over or the institution was put in the hands of the present commissioners. All told, I was in the institution about three months. Q. As president f—A. Yes, sir; as president. 'CONDITION OF THE BANK WHEN PRESIDENT DOUGLASS TOOK CHARGE. Q. In what condition, Mr. Douglass, did you find the institution as to its solvency, when you entered upon your duties as president f—A.Well, it is difficult to tell. I was there a number of weeks, and the first four -or five weeks, of course, I was ignorant of the actual condition of the bank and of its management. It was not easy,stepping into an institution like that, to be instantly made acquainted with its condition. Mr. WITHERS. No; that was impossible. The WITNESS. There were thirty-four branches of the bank in constant communication with the main office here, and these communications were usually in cipher; and for a considerable length of time I TRUST COMPANY. FREEDMAN'S SAVINGS AND 237 er communications between the was kept entirely ignorant of the ciph at the different branches. ts actuary of the bank here and the agen CE. THE CIPHER CORRESPONDEN By the CHAIRMAN: between the actuary and the Q. You say that the communicationsf—A. Yes, sir. er ciph branch banks were conducted in ed with the character of the corQ. And you were not made acquaint gradually got some light on the I . first at respondence f—A. No; not ary and the agents. I found actu meaning of the cipher between the g business, receiving deposits, and doin everything in motion, you know, try, and I received assurances from coun the over all rs sito depo ng payi and from a number of others that we the actuary that all was right; there had been a run on the bank. that w could go on; although I kne sed that,we were in an unsound conI gradually got my suspicions arous of our unsoundness or insolvency view my ated dition, and communic Senate, consisting then in part of the. to the Banking Committee of the and Senator Scott of Pennsylvania. present Secretary of the Treasury e—five or six weeks—I became quite In about five weeks after I was ther k was insolvent. I began to dissatisfied and convinced that the ban Mr. Knox (Comptroller of the Curtrust it after reading the report of even by his figures—and they were rency). I found that it was unable eve, than ninety cents on the dollar.. most favorable—to pay more, I beli , whether you were furnished a key Q. I want to ask you, Mr. Douglass was not. to that cipher ?—A. No, sir; I by the actuary, Mr. Stickney, I believe. Q. The cipher was furnished kney or was it Mr. Eaton ?--A. Mr. Stic He was then actuary, was he not, ry was the traveling agent. was then the actuary and Mr. Sper you as president were not acquainted h Q. And they used a cipher whic sir. Yes, . ?—A nd rsta unde with; do I er?—A. No, sir. Q. And you had no key to the ciph By Mr. WITHERS: to the cipher?—A. I did you ask to be furnished with a keythat came, and when I did Did Q. dispatches ask the meaning of two or three that that was none of my business. me told that look a cted dete I I so nded for you to know—A. Yes; Q. You mean that it was not inteshould know that cipher, and that I believed it was not intended that undness of things about that bank. unso the of n icio susp my d increase By the CHAIRMAN: ? actuary have a key to that cipher Q. Well, did any one besides the , who was the actuary, assured me, kney Stic r —A. I do not know. Mr. he would do everything in his powe if I would take the position, that real state of affairs there, and assist to make me acquainted with the duties might be devolved upon me. me in the discharge of whatever with was usually very much pressed But Mr. Stickney at that time or doing something else—and Iseldom erty was business—either selling prop minutes at a time with him; he could get more than five or six so that it was six weeks I was there running in and out all the while; d of the state of the bank. After finding out and becoming convince bank in the eyes of the Banking of that, after I began to discredit the my time mostly in doing that sort Committee of the Senate, I spent business. 238 FREEDMAN'S SAVINGS AND TRUST COMPANY. CIRCULARS WRITTEN BY PRESIDENT DOUG-LASS. Q. Did you not write and publish one or more circulars expressing your belief in the soundness of the bank f--A. Well,I wrote two circulars almost immediately upon going into the bank, upon representations that were made to me by those that I supposed knew the true condition of the bank, asking depositors and others to hold on, and expressing the belief that we could weather the crisis and pay dollar for dollar in the end. Nevertheless, I expressed myself in some parts of these circulars so doubtfully that I was charged before the trustees with having -destroyed the credit of the bank by these very circulars. Q. You believed, then, in the solvency of the bank at the time you issued those circulars, and your belief was based upon information,if I understand you correctly,from others ?--A. Yes; I could not know anything about it any more than the fact that I had confidence in the officers of the bank. Q. Were these gentlemen officers of the bank ?--A. Yes sir; Mr. Stickney was actuary and Mr. Sperry agent of the bank, and I had a great deal of confidence in my friend Wilson, who was nominally cashier of the bank, and he assured me it was all right. I had confidence also in several other gentlemen connected with the bank, and I got from them assurances of the same sort; and it was upon assurances of that kind that I signed those circulars. DOUBTS AS TO SOUNDNESS OF THE BANK. Q. What caused you, Mr. Douglass, to doubt the solvency of the bank, at last?--A. I found that it was in want of money,for one thing— very much in want of money; and on one occasion the actuary came into the bank and stated that we must have ten thousand dollars that day, or the bank would have to close; and the question went around what we should do. They said that they just wanted that amount to tide them over for that day; and several trustees that were present were asked if they could raise that amount, and one after another said he could not, till at length Mr. Alvord, formerly president of the bank, turned to me and said, "Mr. Douglass, you have ten thousand dollars here that might be used for this purpose, in United States bonds, and if we could have these for a few days if would help us through, and it will all be right in a few days." "Well," said I, "you can take this ten thousand dollars." So I loaned the bank ten thousand dollars; and as week after week went on and I found it impossible to get back my ten thousand dollars, I naturally enough began to doubt the soundness of the bank; most people would under such circumstances (smiling); though I did at last obtain my ten thousand dollars. TRUSTEES' PRACTICAL DISBELIEF SOUNDNESS. IN THE BANK'S Another reason induced me to disbelieve in the bank. I found that I was the only trustee of the bank that deposited any money in it. I went up before this Banking Committee,at the other end of the Capitol, and stated my belief in the insolvency of the bank, and forthwith a number of trustees were brought together—they came before that com mittee—and they contradicted all that I had said concerning the insolvency of the bank. They said that we could go on. Well, I was left -out in the cold. However, it was very soon believed by the committee FREEDMAN'S SAVINGS A.ND TRUST COMPANY. 239 that we were insolvent,and legislation was enacted which finally brought us, or very speedily brought us, to a close. that you beQ. Did you, when you went before that committee, state to them stated I and did; I ?—A. ent insolv be to tion lieved the institu with people or s, friend my of any that I could not conscientiously ask But at.the tion. institu that in t money deposi to ied, identif whom I was and dollars in the -same time I was a depositor there. I had two thous up, since I had closed be to was it found I when and time, the at bank inspiring confidence . been partly instrumental, through my circulars, in a preferred credmyself make not in the institution, I thought I would same chance of the had I gh althou there, in money my itor, and left had. taking it out that others deposit their Q. And the trustees were not depositors? Did they not I was the that e I believ No; ?-A. knew you money there, so far :as only trustee that had .a dollar deposited there. WHAT THE TRUSTEES WANTED. of trustees Q. Mr. Douglass, please tell us whether or not the board when it betors deposi the secure to effort your in co-operated with you I found this to 1.), the cube apparent that the bank was insolvent bank desired to have the of s officer the and es truste the case, sir_that ular way. They partic a in closed it d the bank closed, but they wante ement of settling up manag the have to bank the of es truste d the wante to the Banking its affairs. To that view I was opposed, and I stated ng the bank bringi in hand any Committee that all of us who had had ng up or mansettli from ed exclud be to ought ion condit t into its presen into thoroughly aging its assets in any way,so that they might be looked s. person udiced unprej ly entire by and on the present Q. I presume, Mr. Douglass, you have kept an eye with the bank in ted connec • management of the institution, having been been satisfied with other days; will you please tell us whether you havethe present commissince bank the of the management of the assets present commissioners sioners have been in charge ?—A. I think the judiciously and honway every in bank that of have managed the assets them. of -orably. I believe in them—in every man By Mr. GARLAND: examination as to Q. Mr. Douglass, had you kiven the institution any to be president 1 upon called were you the conduct of its business, before —A. Not at all, sir; I had no business there. consenting to become Q. You took the matter under advisement of some two or three sir; No, president, some five, or six weeks ?—A. weeks only. in consequence of Q. Yes; some two or three weeks. Now, was that that you didn't care or ution, instit the of ty stabili the to as your doubt ground was that to take the responsibility; or what was it ?—A. One able to myself profit more make it would occupy my time, which I could elsewhere. Yes, sir; by occupying my Q. In other business, do you mean no banking experience; had had I again Then ss. busine time in other a theoretical one rather been had life my ng; I knew nothing about banki ted about it until I hesita I than a practical one—on the stump—and y generally had countr the of people d colore the as •was persuaded that run had been the after bank the then confidence in me, I might streng on of its presmade upon its reserve by consenting to occupy the positi ident. • 240 FREEDMAN'S SAVINGS AND TRUST COMPANY. PRESIDENT DOUGLASS'S CIRCULARS. Q. Have you copies of those two circulars that you wrote f—A. I have them somewhere believe, though not with me. make a search for them, and at some time furnish ' Q. Will you please them to the committee f—A. Yes, sir; I will do so with pleasure. The CHAIRMAN. Well, copies of those circulars ought to be about the bank somewhere. Mr. DOUGLASS. Yes, sir; I have no doubt that some copies can be found there. Mr. SPERRY. I tried to find a copy in the bank, but I did not succeed. Mr. DOUGLASS. Well, they were published at the time very generally in the papers; but I will endeavor to get a copy and have it transmitted to the committee., By Mr. WITHERS: Q. You stated that you yielded finally to the solicitations of others and accepted the presidency of the bank; have you any objections to stating who appeared to be most solicitous, who most influenced you in coming to that conclusion f—A. Well, I will say that Mr. Wilson, the cashier of the bank, was the most solicitous that I should take that position, and after I was elected Mr. Alvord was very anxious that I should come forward and assume the position, and expressed the belief that if I would do so, that would strengthen the bank and make it all right. Indeed, nearly all the trustees that spoke to me on the subject were anxious to have me accept the presidency, believing that it would be for the best interests of the institution. WITNESS'S OPINION AS TO CAUSES OF THE BANK'S FAILURE. By Mr. GARLAND: Q. What is your judgment, Mr. Douglass, in general and from your information of the bank and the way business was conducted there—its relations to the country; the operations of the business of the country upon it, and it upon the business of the country; all things considered—what is your judgment as to the causes of the failure of that institution to accomplish the purposes you had in view in its organization l—A. Well,. I think that there is one general objection to the institution, and that, is that it collected money at the extremities and invested it at the center. It borrowed money in Mississippi and invested it here in Washington. These branch banks furnished no business facilities in the quarters where the money was collected. Then there was in the very nature eff the institution'the seeds of ruin. It invited, as I think, all that was .inimical to the race in the interest of whom the institution was established to conspire against it. Then, too, of course, I am aware that bad loans and the breaking down of the banking institutions all around it had much to do With bringing it to its insolvency. I was out West, that winter when there was a run upon the bank,just previous to my election to the office of president, and the fact that it survived the run upon it at that time was one element of my confidence in it. I do not think any separate institution of that sort is advisable. The idea or setting apart a bank for one particular class of people in the country, makes it liable to have any'and all hostile influences brought to bear against it. The bad loans, though, were the secret, I think, of its failure. FREEDMAN'S SAVINGS AND TRUST COMPANY. 241 Q. You have never, then, had revealed to you the full items of this cipher dispatch business ?—A. No, sir; and (smiling) the difficulty of getting any information on that point was one of the elements of my distrust of.the Whole thing. WITNESS'S HIGH OPINION OF THE PRESENT COMMISSIONERS. By the CHAIRMAN: Q. Mr. Douglass, have you any opinion as to the reduction of the number of the commissioners who now have charge of that institution, and consequently the reduction of expenses ?—A. Well;I have the fullest confidence in the present commissioners, and think that they are giving their time and services very reasonably to the bank. From the statements that I have heard made as to the expense of managing the assets of the bank,I do think that they could he reduced and ought to be reduced in the present number. I think that'one man could now perform the duties of getting rid of the property and paying the depositors, if there is ever anything to pay,just as well as three men. By Mr. GARLAND: Q. I.will just here enlarge the question of the chairman, Mr. Douglass. Have you examined the bill I ha4 reported from the committee last May, but which I had recommitted to the committee, with a view of closing up this business f—A. I have seen the bill, I think. Q. It was recommitted in view of the fact that this investigation was going on, and there might be- some additional facts brought out. I would be glad to have you examine that bill and to get your opinion upon it; the commissioners have expressed their opinion, and r would be glad to have yours.—A. (Clerk handing a copy of the bill to Mr. Douglass). I will, with a great deal of pleasure, Senator, examine this bill and give you an expression of my opinion upon it. By the CHAIRMAN: Q. Mr. Douglass, if there is any further statement that you desire to make, we will be glad to hear it.—A. I will say that I did take some part in getting the present commissioners appointed. My motive in regard to one at least of the appointments was to assure the colored people, especially the colored depositors, that they would have a faith.ful and honest friend who would protect their rights in the bank, in the person of Mr.Purvis. Indeed, I was in favor of all three of the commissioners from the first, and I have had no cause to change my preference for them since. The most valuable.serviee that would be rendered by one of the commissioners would be his knowledge of the law and his ability to advise us legally (referring to Mr. Creswell). I was also equally strongly impressed with the importance of having the business ability of Mr. Leipold on the commission as one of the commissioners, as his acquaintance with accounts and his industry as shown by his clerkship in the Treasury Department,I thought admirably fitted him for his place on the commission. By Mr. GARLAND: Q. And you have seen nothing to change your mind as to either of these gentlemen ?—A. Not at all; not anything at all; they have got about as much out of the bank as I expected them to get by this time. 16 F B 242 FREEDMAN'S SAVINGS AND TRUST COMPANY. ADDITIONAL TESTIMONY OF C. A. FLEETWOOD. WASHINGTON, D. C., February 14, 1880. The CHAIRMAN. Mr. Fleetwood, who testified the other day, desires to submit to the committee in writing some corrections and explanations in addition to the testimony he then gave. I will ask the clerk to read the letter he has addressed to the committee. Mr. FITZPATRICK (expert of the committee) then read the letter as follows: OFFICE OF THE COMMISSIONERS OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, . Washington, D. C., February 13, 1880. Hon. B. K. BRUCE, Chairman Senate Commiike on the Freedman's Sayings and Trust Company: Sin: I have the honor to ask that I may be permitted to supplement the evidence given by me before your committee on the 5th instant, by the corrections and additions following. On account of lapses of memory mostly, having no idea what would be the drift of my examination, I could not, of course, prepare for it by refreshing my recollection where needed: 1st. My service with the company began June 1, 1871, and not July 1, 1871, as testiel. fied. 2d. My testimony was to the effect that I was made paying-teller in the latter part of 1872. There are no means I can remember of definitely fixing the time of my change of duties, but from the handwritings in the books of the branch, it looks as if I acted as teller for one or two months only in the autumn of 1872, and I seem to have taken up the duties regularly about the 1st of March,1874. 3d. In relation to my duties I do not wish to be understood as testifying that there were no other assistants in the office, and that I did all the work of the office while I was bookkeeper. I only wish to say that my portion of the work was entirely too much for any one man to do at all, not only to do well, but to do; and that in the absence of any checks, and of any time to apply them if existing, some errors, of course, must be made. For the first year of my service the posting was done almost exclusively and entirely by myself. In that time the number of accounts went up from about seven thousand seven hundred to about twelve thousand eight hundred, and the deposits and drafts for the year, by a rough estimate, reached sixty thousand items, giving an average of two hundred entries per diem for the year. Not having seen the report of the experts I do not know how many errors were found chargeable to me, but would respectfully submit that, working at top speed for an average of fourteen hours per diem (if Sunday's time be included) without review, while errors never should be made, I do not think my percentage can be a large one, or discreditable to any one similarly situated. 4th. I had kept books for a company in Ohio for aperiod of about six months shortly After my muster-out from the army. My testimony was to the effect that I had no practical experience between 1863 and the time of entering the bank. As I stated, however, that nothing was claimed by me on the grounds of inexperience, I only make this statement in order to be exact. 5th. As to any knowledge concerning the alleged overdraft in the account of R. W. 'Tompkins, I wish to add that when I assumed the duties of paying-teller, all supervision of the accounts in tile ledgers ceased for me, and as I took no part in the settlement of the accounts after the incoming of the commissioners,I have had no occasion to overlook them except in a very few individual instances from said March, 1873, down to the present day. In examining the accounts I find entries thereon in my handwriting from June, 1871, through July, 1872, after which last date my handwriting does not appear. 6t1,. In the matter of writing the names of depo sitors who could not write I succeeded to the practice of the paying-teller (or cashier)from the beginning, as can be evidenced by examination of the check files now in this office. In fact it was at one time his custom to do so in all savings-account cases, whether the depositor could or could not write. I have the honor to be, very respectfully, your obedient servant, C. A. FLEETWOOD. By Mr. GARLAND: Q. You wrote that letter, Mr. Fleetwood f—A. Yes, sir letter. that is my FREEDMAN'S SAVINGS AND TRUST COMPANY. 243 .0 swear to it as in your handwriting, and that you offer it Q1And yo on to your former testimonyl—A. Yes, sir, I do. additi an here its TESTIMONY OF ANSON M. SPERRY. WASHINGTON, D. C. February 14, 1880. examined. and ANSON M. SPERRY sworn By the CHAIRMAN: Savings and Question. What position did you hold in the Freedman's r. I held nswe oy—A empl its in you were long Trust Company and how its employ from, say, different positions at different times. I was in is to say, from its September, 1865, until the institution closed; that practical beginnings until its clOse. time °I—A. For Q. Were you not examiner for the greater part of that of "inspector that ed entitl was which office the part of that time I held y, but it included exof the branches." It was not "examiner"exactlity at the home office, author no had I es. branch the at aminer's duties no status there. OF THE LEDGERS. AS TO THE MUTILATED CONDITION a few moments ago— Q. Some of the Witnesses—and Mr. Tompkins of the books; if so, ion condit the say that you knew something about ment on that point.—A. we would, be glad to have you make any state drift of Mr. Tompkins's the saw I as y memor my Yes; the matter came to al knowledge that examination. It happened to be within my person the desks. They g from fallin by ed damag y greatl these ledgers were narrow.for these very large were sloping desks without a ledge, and too day, and one of the ledgone h branc ngton Washi the in was books. I upon the binding and nearly ers lying on the desk slid off and struck book weighing forty or fifty a was' It . pieces to book the ed knock no binding,under heaven could pounds and it fell four or five feet; and l such falls. One or two gat severa stand such usage as that. They had to Philadelphia to have them send to had we that ion in such a condit to Mr. Tompkins as he due as ment state them rebound. I make this that fact. He said about ing anyth know not did he that me informed They were simion. condit that in got books the he did not know how ply in a shocking condition. them rebound f—A. Yes; Q. You sent them to Philadelphia and had in charge of a special them put I ched. they were rebound and restit day, and the messingle a messenger, for we could not spare them for on Sunday, and nd rebou were they night, day Satur senger went over op we could go that so ng, morni y Monda brought back on Sunday night or work. s bank' on with the More than once. There Q. How often did you have that to do ?—A. in this way, and some of nd rebou be to had that books two least were at to be rebound. the other books were injured, but not sent It was a standing desk, Q. How high was the desk, Mr. Sperry f—A. floor to the edge of the the from feet four least at been and it must have weight necessarily that of book A fell. ledge from which the book ing in the world could stitch or ng bindi no oyed— destr t almos must be a bearing upon the absence of stand it. Of course this does not have ned by itself; but it shows explai be the leaf; that fact is one that must 244 FREEDMAeS SAVINGS AND TRUST COMPANY. how the leaves of the book were loosened, however. It does not necessarily imply that they were cut out. I took more interest in that, because the books were made under my direction, and I know they were very carefully and thoroughly made. Q. I believe you stated that you had not seen the books when you severed your connection with the bank, and that you would be unable to testify as to the transactions there until you had,had an opportunity of looking at these matters, and you had had a chance to examine the books °1—A. I should like, Mr. Chairman, to .have the opportunity, before my examination, to look over these matters generally. THE CIPHER DISPATCHES EXPLAINED. By Mr. GARLAND: Q. We would like to have you tell us about the cipher that was used in the bank.—A. Yes, sir; I can do that now, for that happens to be fresh in my memory. With reference to the cipher used by the bank, I will say that I prepared that myself. All the correspondence of the bank was carried on in good plain English writing, and is upon the letter-books of the company. We found, however, that we could not Vrust the telegraph agents; and in all matters relating to telegraphic transfers of money or dispatches relating to money and to the general condition of the institution, we had, of course, to protect ourselves. To this end, therefore, I drafted and prepared a cipher which should cover sums of money to be ordered, and which would cover certain phrases which we used, in relation to the condition of the institution, as a blind kr the offices of the telegraph company. Our matters did leak out, and at a time when the newspapers were on the qui vive for anything by which they could possibly start a run on the bank. That is the whole story of this cipher. I know nothing of the fact that Mr. Douglass states as to the cipher not having been communicated to him. I know that copies of that cipher were in the office. I kept a copy myself, the actuary had a copy, and each of the cashiers of the branches kept a copy. There were two or three spare copies lying in the vaults of the bank. Q. Besides yourself and the actuary, who held the key to that cipher? —A. The president—that is,the former president—Mr.Alvord,certainly had a key to that cipher. Each of the cashiers, to my own knowledge, had a key, for which he was held personally responsible. I had a key, and Mr. Stipkney, the actuary, bad a key, and I know that two or three separate copies lay in the vault. The sole object of this cipher was to protect the bank from the leakages in the telegraphic companies' offices in the South. We could not transmit necessary news with reference to money transactions without their somehow or other getting out, and we did it for self-protection. It is no more than any other moneyed institution does. Q. Is it your opinion that two or three copies were in the vault, or do you know it to be a fact f—A. I know it to be a fact, because I placed these copies there myself. I think Mr.. Gibson printed it for me, and until the institution closed,I knew where every copy was. Since then, of course,I know nothing about it. There was no concealment and no intention of concealment of the cipher, or of the key to it, that I am aware of, from anybody who had any business to know it. It was very natural that Mr. Douglass should not understand the drift or force of the thing; but that was really the sole object in it(addressing Mr. Douglass). So far as I know, there was no other possible object. There was no design to conceal anything from Mr.Douglass. It was simply to pro- FREEDMAN'S SAVINGS AND TRUST COMPANY. 245 tect ourselves from outsiders. It was a very proper and just precaution, and, in our opinion,the best to be pursued to effect the purpose. [See appendix for copy of the telegraphic cipher.] Q. State what you know about the condition of the bank as to its solvency.—A. At what time, sir? Q. When did it become insolvent I—A. I could not say positively, without looking at the published reports. I know that the institution was solvent when I took charge of its inspection, for I made a persona I examination of it. Q. Well, you will have an opportunity to come before the committee again. By Mr. GARLAND: • • Q. You were examined before what is called the Douglas committee, were you not I—A. Yes, sir. • Q. I see that you had quite a full examination before that committee, and we would like you to post yourself as fully as possible upon the points that you were there questioned on, for we may interrogate you upon those points.—A. I want simply to say here, that I have not thought of this matter for three years, and you can readily understand that I need to refresh my memory upon the whole suSject. Adjourned to Thursday, February 19, 1880. COMMITTEE Roam OF THE SENATE SELECT COMMITTEE ON THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington, D. C., February 19, 1880. The Select Committee on the Freedman's Savings and Trust Company met this day in the committee-room of the Senate Committee on Territories, by invitation of A. H. Garland, chairman of that committee, at 10 o'clock a: m. Present, Mr. B. K. Bruce (chairman), Angus Cameron, and A. H. Garland. TESTIMONY OF ANSON M. SPERRY. • ANSON M. SPERRY recalled. By Mr. CAMERON: Question. Where do you reside I—Answer. In Dodge County, Minnesota. Q. How long have you resided there—A. Three years, sir. Q. What is your present occupation I—A. I am a farmer and teacher, both. Q. Where did you reside prior to going to Minnesota I—A.. I spent a year in Boston prior to going to Minnesota. I could hardly be said to have had a residence during my connection with the Freedman's Savings and Trust Company, because I was in the field all the time. Q. I will ask you if you were at any time connected with the Freedman's Bank,so-called; when that connection began and when it terminated I—A. I had before stated that my engagement commenced with the beginnings of the bank, and closed with its failure. I find, by referring to the records, that I made the engagement with the bank on the 18th of September, 1865. 246 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. In what capacity were you engaged by the Freedman's Bank A. As a general field-agent, assigned to the Department of the Gulf, tooperate in the Twenty-fifth Army Corps. ORIGIN OF THE FREEDMAN'S BANKING SYSTEM. Q. You may state generally what your duties were.—A. That you may understand what these duties were, I ought to state, as preliminary, that before the Chartering of.this institution I had been in conference with friends with reference to saving the money of the colored soldiers. The allotment system of some of the States had worked admirably. And in conference, especially with my friend Mr. Fay, who, was allotment commissioner for the State of Massachusetts, we had devised a system of allotments for colored soldiers which we hoped to.put in operation, acting under a commission from the President. At the same time General Saxton, at Beaufort, and General Butler, at Norfolk, had been trying to solve the same problem as to what should be done. with the soldiers' money. As we were about applying to the President for permission to go South with this corporation we learned of the chartering of this bank in March, and came to the conclusion that it Wasa better thing altogether; and after we bad obtained the promise of the deposits in General Saxton's and General Butler's banks, we came to the conclusion that we would direct our efforts in that direction. I applied for the appointment, and was so appointed. I may say that we acted under the approval of the President of the United States, and were commended to the courtesy of the officers of the Army by the Secretary of War. I had also a permit from General Brice to be present at the pay-tables. My duties were to receive from colored soldiers deposits of money,. primarily for this institution, secondarily to send to their friends at home, or to make any other disposition of it they chose. As a matter' of fact, I will state that I went with the Twenty-fifth Army Corps to. the Mexican border and remained with it; and while I was connected with that corps I received some hundred and twenty thousand dollars forthe bank, besides sums which I sent home. I believe that that covers generally the outline of my connection with the Freedman's Bank. Q. You state that you were a general field-agent for the bank; did . you inspect the various branches of the bank; if so, what ones did you inspect:f—A. The branches grew into importance after this. They were rather the outgrowth of the question as to what disposition should be made of the soldiers' money. I failed in health and came borne; was, on nominal duty for some time, in fact doing what was asked-of me to be done and was, in 1870 perhaps, made an inspector. I think it was 1870. ' [Turning to Mr. Stickney.] Mr. Stickney, do you know ? Mr. STICKNEY. You were made assistant inspector then. The WITNESS. 0, yes; I was made assistant inspector, I think in 1870, and assigned to ,the examination of branches in the South, Mr... Harris, of New York,. then being inspector. Afterwards—I do not, remember the date, but at th.e time of the enlargement of our New York' office—I was made inspector. Q. It has been stated by some one here that the bank never was solvent; now, as you were connected with it from the beginning., what is, your opinion about that, if you have any facts?—A. Well, I can show you that at one time it was solvent. I said to the actuary, when I came North, that I wanted to know whether it was solvent or not. More than, FREEDMAN'S SAVINGS AND TRUST COMPANY. 24T, that, I wanted to see the securities. At this time the bank had been investing wholly in government securities, and was just beginning its real-estate loans. I went over the securities myself, which were lying in the vaults. Q. At what time was that, Mr. Sperry °I—A. I will tell you directly. [Looking over memorandum book.] It was in the fall of 1870. Q. Very well; now go on with your statement.—A. I went over the securities myself; helped to cut the coupons which had matured; made a list of them—which list is now in the archives of the company. I satisfied myself that the thing was honest, straight, and square, and that thq company, at that time, was solvent. Subsequently,to wit, in March, 1872, I helped make up the annual statement of the board of trustees showing the condition of the company, and I have a cOpy of that before me here, a copy which I had filed in the hank. It shows a nominal surplus of more than eleven thousand dollars at the time. The bongs, were there, I know. The real-estate loans were there as recorded on the books. Of course I did not go throtigh the loans item by item. If the committee wish, I will read a table which I prepared of the assets and liabilities of the bank, or I will file it, that it may go into the record. Q. That is an .official statement, I understand yqu ?—A. Yes, sir, I know that to be so, because I compiled it with the assistance of the clerks in the office. There is a good deal of useful information, by the bye, contained in it, and I think it would be well to put it in the present record. Q. You may go on, Mr. Sperry, and give consecutively the result of your examination of the different branches. That is a matter we have not gone into to any great extent.—A. When I entered upon my duties as inspector no funds were kept at the branches at all, and mio loans were made there. The officer in charge of the branch office, known as the cashier, had his small cash balance on hand to meet current payments, and as that balance accumulated he remitted here. If, on the other hand, there was a balance against him, he had the right to draw on the parent office for funds through the regular channels of exchange. So that my duties with reference to the assets of the company at its branches were at that time merely nominal. It was to watch over the business of the branches, and encourage deposits, and to see that the books of the company were kept upon a uniform system. As time and opportunity allowed,it was my -duty and my practice to take off the ledger balances and to verify the cashier's weekly and monthly reports which were made to the principal office. The work was very arduous. It had to be done at branches which were separated by long distances, requiring a great deal of travel; so that there were some of the branches which I did not reach for a long time—more was the pity! DISHONESTY AT THE BEAUFORT BANK. I see by some of the testimony that has been given here by the commissioners that the matter at Beaufort was not clearly in their minds; that is to say,the origin of the difficulty there. .I may state that I did not reach that branch until, I guess, a couple of years after my appointment. The management had the utmost confidence in the cashier. There had been an exception made in favor of the Beaufort branch, and the cashier was doing a peculiar business of his own. Q. What was the nature of the business he was doing?—A. Well, the nature of the business that he should have done, under the instructions ' SAVINGS FREEDMAN AND TRUST COMPANY. S t 48 of the board, was a general banking business. The citizens of B?.aufort were very anxious to have a national bank. The matter was brought before the finance committee of the Freedman's Bank, composed, I believe, of Messrs. Clephane, Huntington, and Cooke, and they decided, whether formally or not I am not sure—but informally at any rate, I am certain—that Mr. Scovel should go ahead and do what was necessary to start a national bank at Beaufort. Under these instructions they were to buy and sell exchange, and make such accommodations to factors down there as he thought necessary. Under that he acquired considerable balances. I. have nothing to say about it, except that it was 'wholly unwarranted by anything in the charter of the company. The parties to it are now beyond the reach of censure. The fact is, it -amounted to a grand steal at that branch. Your experts, Mr. Chairman, have not got at it yet,and it always beat me. When I discovered it it was too late. I do not know to-day how the books of that branch stand. I know that the money is gone, and that is all I have to say concerning it. I had hoped that your examiners would have got at it to see If we could not get some light on the subject. The primary difficulty there was, however, the exceeding of the limits of the company's franchise. THE FREEDMAN'S BANK BECOMING UNWIELDY. The thing was getting unwieldy, sir. I was continually busy trying to devise checks upon the institution. With the limited force we had at hand we could not employ a sufficient corps of examiners, as.the thing stood at last, because the expenses were all very heavy. I had devised a system of checks by the transference of cashiers, and in that way we struck some irregularities. In fact, we had pretty nearly touched bottom in our difficulties, and were devising remedies for them before the failure of the institution. Q. What, in your opinion, was the cause of the failure of the bank 7 You may give opinions or facts, as we have taken both from witnesses. —A. Suppose I give you some facts first al MARVELOUS GROWTH OF THE BANK. Q. Very well; proceed.—A. These facts will show that we were justified in fighting for the concern; anyhow,.the growth of the institution was simply marvelous to those who knew what we were dealing with. I will refer to a few of the figures upon this statement: At the end of the year 1866 the company had received on deposit over $305,000, and it had a balance due depositors of only $199,000. At the end of the 'wit year they had only $366,000- due depositors, with a balance of $1,320,000. I give you the round numbers. At the end of the next year the balance due depositors was $638,000 and the next year $1,073,000. In 1870 there was due depositors $1,657,000, in 1871 nearly $2,500,000, and so on with an increase from year to year, until in 1873 there was $4,200,000 balance due to depositors. An institution that was capable of such a growth and development as that had certainly a reason for being. The total amount of money received as deposits the first year—that is in 186C—was only $305,000.. In 1872 it had received on deposit over thirty-one millions of dollars; and in 1874, when the bank closed, we had received $55,600,000 on deposit. During all this time we had to pay expenses, and in the aggregate we had to pay depositors over $262,000 in interest. FREEDMAN'S SAVINGS AND TRUST COMPANY. 249 These are facts which underlay the institution as its solid basis. We had gained the unqualified confidence of the colored people for whom the institution was created. I knew that we were so intimately associated with them that our prosperity was their prosperity. In fact, we were here; we had to go on; that is the reason we stuck to the concern. WHY THE BANK FAILED. Now, why should such an institution fail? In answering this question,I will say that a savings bank is a peculiar institution. The virtue of a savings bank is very mudh like a woman's virtue; it only has to have an intimation that it is not right, and it is gone. The thing began here in Washington. We could have defied the world, the flesh, and the devil, it we had kept ourselves clear from—well, as I believe I called it when I gave my testimony before the Douglass committee, "unsavory complications." There were multitudes of causes working against us. We were ready to fight these—expected to fight them. The thing we could not stand up under was the operations here in Washington. You gentlemen know as much about that as I do. I know, at least, that I would have fought the thing even then, and would have beat, tob! We tried to get the interference of Congress under the charter, that we might clean the thing up and begin over again; but it came too late. If Congress had done for this institution what the State of Massachusetts did for its savings banks, the bank would have been going on to-day. But Congress was an unwieldy body, that could not spring a stay-law in half a day, as they did in Massachusetts, so the concern had to go—and it went, and I am glad of it now. THE CHIEF TROUBLES AT THE WASHINGTON OFFICE. Q. Was it your duty at any time or place to examine the ledger accounts I—A. Not at the principal office, sir; but I may say that one of the reasons why I could not get around to the outlying branches was the difficulty we had in keeping things straight here in Washington. The business was simply overwhelming. The force was inadequate and inexperienced; and these books have been the conundrum of your experts, as they were mine. I spent months in trying to straighten these out, and will say, if I catch the drift of your question, that the books at the principal office—the records of loans and these things—I had nothing to do with; they were not in my department at all. The only examinations made outside of the office here were by bank examiners, under the appointment of Mr. Knox. Q. Had you had any experience as a bookkeeper prior to your connection with the Freedman's Bank I—A. No, sir; except theoretically. If I had had experience as a bookkeeper and a banker, and if I had been forty years old when I went into it, I should probably have done differently; I should have known more and had less enthusiasm. Q. It was really your enthusiasm, then, that commended you to the persons in charge of the bank rather than your experience as a bookkeeper or banker I—A. My enthusiasm, sir, was backed up by some business qualifications. Q. I have no doubt of that at all.—A. And I had some very good backing, indeed. If I had not done my duty, I should not have staid as I did. I think, Mr. Senator, I got the worst of it! (Laughing.) 250 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. You say that the business at the parent office at Washington was overwhelming. Why could not sufficient force be hired to do the work? That is usually the way with business men. As their business increases they increase their force. I do not know whether you have"any information as to the failure to employ sufficient force, but if you have, I should like to know what the reasOns were ?—A. There was great necessity upon the institution to keep, its expenses down; that was one thing. Q. But that is not really judicious economy, is it ?—A. No, sir; and we were continually bringing inexperienced persons into the service of the company; that was another reason why the books of the Washington branch especially got so profoundly mixed. There were some things peculiar to the institution. We could probably have taken the same amount of money that we paid in salaries to these gentlemen and have got much better service for it. By the CHAIRMAN: Q. You say that taking inexperienced persons into the bank was one of the reasons why the business, was not properly done °I—A. Yes, sir; one of the reasons why it was not more systematically managed. Q. Well,can you tell me why you employed inexperienced persons? Taking banking houses as a rule the best men are selected for these places, are they not?—A. You must remember, Mr. Chairman,that this was an institution chartered for colored people and that the trustees always felt bound to give the preference to colored employes. We had able young colored men, but they were not bankers, to begin with, and they had to learn the business. We were gradually getting around us a corps of able young -men; but they all came in as apprentices in the work. Perhaps the intimation I have given is sufficient. Q. I am not seeking "intimations," but direct answers to my questions.—A. Yes, sir.. THE CUSTOM IN EXAMINING LEDGER ACCOUNTS. By Mr. CAMERON: Q. When you examined the ledger accounts did you certify to their correctness; or what was your custom in regard to such accounts?—A. I kept a book of ledger balances for my own information. I took off these balances, footed them, and made the statement upon my copy of these balances and informed the principal office of the facts. That was all that was necessary. Having in my possession the balances at certain dates, I had the bases of comparison with future balances which I might take; and there was nothing at the branch offices with the exception of Beaufort and afterwards at Jacksonville (which I forgot to mention) with the exception of the ledger balances and a small amount of cash, say of one, two, three, or five thousand dollars—just enough to carry on the current business. Jacksonville was swamped the same as Beaufort was swamped by exceeding the functions of the company. There they went into general banking,saw-milling, and—well,anything else that anybody wanted done that no prudent banker would under- • take. Q. The experts who have examined the books find that some of the ledger balances certified to as correct by you are not correct, in fact ?— A. I presume that is so. (Laughing.) Q. Well, did you examine them critically before making certificates? —A. There is usually appended to a bookkeeper's account" E. & 0. E.", you know, which means,"errors and omissions excepted." (Laugh. lug.) TRUST COMPANY. FREEDMAN'S SAVINGS AND 251 nces that I certified to were Q. 0!—A. By that I mean that these bala belief at the time. If you and e correct to the best of my knowledg ged to do our work, especially, could have seen the way that we were obli mine, traveling by night and do to d elle at least, the way I was comp ing out of hours, because work e working by day—the Washington offic s—I -think that you would not hour in work to time they could not get come across blunders, even comwonder if your able experts should myself! But nobody will follow mitted by so exemplary a person as their trail, perhaps. (Laughing.) nobody will follow them f—A. Q. You think that their safety is that n." huma is err "to that Well, I simply mean TON'S ACCOUNT. OVERDRAFT OF S. WILBUR SAX an, but quite common in this Q. It seems to have been not only hum of these accounts. There is one to n ntio atte your call bank. Now I will in the name of S. Wilbur ch bran on ingt a deposit account in the Wash ledger page of this acthe On Saxton, which is overdrawn $219.30:m in your handwriting as follows: ndu ora mem a account there appears be relied on: It is my opinion, "I do not think that this balance can no overdraft exists." From the after talking with Major Saxton, that the experts of this committee the examination of the books made by against $296, which is my figure. overdraft shows as $219.3O—A. As the overdraft/ Do their figures and mine agree as to ars just exactly what the overQ. No; I do not know that it appe Senator. My memorandum is •Mr. draft was.—A. You read it there, s 'I I met Major Saxton in the $296. Do my figures agree with your randum,and by his memorandum . bank. He had his own private memooverdrawn. It was one of those be to ar his account did not appe There is no error there. The fact isthings I never could explain, sir. .Major Saxtem's account is over as I hav-e stated it. I do not believe drawn. in the bank f—A..Yes, sir; the Q. You think, then, it.was an error s. error, I think, is in the book overdraft was made.—A. \Veil, I Q. The entries there show that the orandum in his possession at the know that Major Saxton had a .mem were somehow mistaken. s time that satisfied me that the book AFT. TEE R. W. TOMPKINS OVERDR Sperry, about the account of Mr. Q. A good deal has been said, Mr. the bank; do you know anything of Tompkins, one of the bookkeepers no other fellow does! That is one and about that account f—A. No,sir, of the things past finding out. Well, I can find it out Q. You think, then, that no "fellow" n of itio cond the t other day abou did say a word for Tompkins .the ice to him. I was cognizant of just that book, because I wanted to do ked to pieces; but 1 was particuthe fact that that book was all knoc about the missing leaf. I have hing anyt w lar to add that I did not kno simply incomprehensible to me how looked at the book since, and it is the bank. I simply give it up. As a big leaf like that could get out of am beat. I an expert, as you call it, I believe UP THE WASHINGTON ACEFFORTS TO STRAIGHTEN NTS. COU ry, in connection with the Wash. Q. What were your duties, Mr. Sper 252 FREEDMAN'S SAVINGS AND TRUST COMPANY. ington branch f—A. I was put in there at various times, if possible to straighten out the accounts, to organize the business, and I did my best to do so. I had various persons to help me. The blunders simply ran over me; that is all there is about it. I stopped the business once and opened a new set of books. The new set of books was worse than the old set. I am reflecting upon nobody, sir; I am simply stating the facts. Q. The blunders, you say, simply overwhelmed you f—A. Yes. sir; they just overwhelmed me. Why you could not settle .the cash any night. Sometimes they were from five thousand dollars to five cents one way, and sometimes they were Vother way. Everybody felt like going out and having a special oyster supper if the thing came out even. Q. It was an exception, you mean to have it come out even ?—A. That is what I mean, sir. Put the actuary on the stand and ask him if he don't remember those times. Q. When the account of cash was over or under,, what did the officers or employes of the bank do about it f—A. 0, they did the best they could—opened a debit and credit account with the branch, and profit and loss on the books of the principal office. If the cash was "over" we took possession of it. When it was short we made it,up. We always waited for something to turn up. Q. That is, you transferred from one side of the account to the other? —A. That is to say, we would start the teller right in the morning anyhow, and keep an account of the errors and omissions that might occur from time to time. Things were continually coming up. "Overs"were accounted for, generally, by some deposit turning up that had not been properly entered on the _deposit journal. Then these things were so numerous that they have furnished your experts legitimate occupation for some months,I understand, and they have not yet got the profit and loss account cleared up, I see. ALLEGED DIVIDING OF COUNSEL FEES. By the CHAIRMAN: Q. In your testimony before the Douglas committee page 161, you say that Mr. Leipold consulted you as to the propriety o? his accepting part of a fee, of dividing seven hundred dollars that Mr. Totten had received from the bank as its counsel and your advising him not to accept it; have you any statement to make on that pointI—A. None whatever. Q. Have you read the letter addressed to the chairman of this committee by Mr. Leipold, January 14, 1880, concerning the distribution of the duties and labors of the commission I—A. I have not; that is to. say, Mr. Chairman, I think I glanced at it, but I do not know anything about its contents, for on second thought I concluded that I would not read any of these things. Q. Will you state whether you have ever known of any secret purpose or attempt on the part of Commissioner Leipold to secure counsel fees?— A. I could not know of any secret purpose of his. Q. Well, of any attempt I—A. I have known of no attempt, other than what I stated before the Douglas committee upon that point which is substantially as I remember the facts. • • Q. •Will you recite them briefly I—A. I stated that Mr. Leipold, in my presence, either said that Colonel Totten had offered to share the fees with him, or that he could share in these fees, he supposed, or that he thought he could, and that they amounted to some round sum of forty FREEDMAN'S SAVINGS AND TRUST COMPANY. 253 or fifty thousand,dollars ; but there was never anything definite on that. point, and subsequently when I heard Colonel. Totten deny that there was any such arrangement, I let it pass as current gossip. Mr. LEIPOLD. Allow me to ask you right there, Mr. Sperry. These were stated as separate matters by you before the Douglas committee. Was this the conversation in which the amount of forty thousand dollars was named, or did that conversation take place at the same time that you claimed the conversation about the division of fees with Colonel Totten took place ? Mr. SPERRY. Well, it is very likely not, Mr. Leipold. I could not say positively. They are Connected now in my mind, because we were speaking of the matter as it came before the Douglas committee. I repeat, I presume it was not at the same time. Mr. LEIPOLD. Can you state to this committee the circumstances under which I made that remark about the probable expense for legal fees—that it would reach the sum of forty or fifty thousand, dollars ? Mr. SPERRY. Well, I think it. was in connection with some regrets which you expressed with reference to the expenses in which the commission would necessarily be plunged; perhaps in connection with some prosecutions we had on hand, some criminal prosecutions, I think. I do not remember distinctly. Mr. LEIPOLD.• Could you refresh your memory by referring to the former testimony on this subject? Mr. SPERRY. Well, what 1 said then is worth a good deal more than what I might say now, because we were much.nearer the event at that time. What I stated then was substantially as I understood it at that time. Mr. LEIPOLD. Suppose you look at your testimony on that subject, and see whether you can refresh your memory on it. Mr. SPERRY. I may say here that I do not see how I can differ from that testimony, except through lapses of memory .(looking at the testimony given by himself before the Douglascom mittee). Well,that is what I would say over again. It is substantially what I have said how. Mr. LEIPOLD. If that is your recollection, will you not state it over again, and mention the circumstances under which that remark of mine was made ? Mr. SPERRY. The question I was asked was: "Did Mr. Leipold tell you,or did he not, that the suits that Colonel Totten had would involve fees amounting to forty or fifty thousand dollars ?" And my answer was: "He did not tell me any more than he told other persons. It was in conversation with Mr. Wheeler, and catne up incidentally. It is due to Mr. Leipold to say that. that came up when he was regretting the very large expense into which the bank was plunged by reason of the many complications around it." That is undoubtedly the fact, Mr. Chairman. Further on, I answered more definitely that the conversation 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. In a general way, Mr. Leipold, you were regretting the expense to which the bank would necessarily, be put by prosecuting thee cases. Mr. LEIPOLD. You understood me as opposing that criminal prosecution on account of the expense ? Mr. SPERRY. Yes; on the ground, too, that you had no right to spend the bank's money for such purposes. You recollect, too, Mr. Leipold, that in the matter of Cory, at Atlanta, it was settled that you really had no moral right to put any more money in that prosecution. 251 • FREEDMAN'S SAVINGS AND TRUST COMPANY. AMENDING THE CHARTER IN JUNE, 1874. By Mr. GARLAND: Q. With reference to the passage of the amendment to the charter in June, 1874, who, if you know, was, chiefly instrumental in having that done; and what,if you recollect, were the reasons mainly assigned for it? Mr. SPERRY. That is the act under which the bank was finally closed, • is it not? Mr. GARLAND. Yes, that is the act. Mr. SPERRY. Several persons had a hand in that, sir. As finally passed, it combined the suggestions of many people. I think I moved in that matter as early as any one. I endeavored earlier than that to get an investigation into the affairs of the company, and when it became apparent that we were simply getting deeper and deeper into the difficulty we naturally turned to Congress for help. I remember going to Mr. Maynard, chairman of the House Banking and Currency Committee,and stating our difficulties to him and asking for help. Mr. Samuel M. Arnell, of Columbia, Tenn., who had been in Congress and was personally my friend, was up.here about that time, and I engaged him to get the facts before Members of Congress without itference to politics at all—going to both sides with equal freedom—to ask their assistance and co-operation. 1 drafted a bill myself(and I think Dr. Purvis was in this, too), which was placed, I suppose,in the proper channels to reach the committee and be acted upon. That bill embodies some of the provisions of the act that finally passed, and differs in some respects. 1 never knew what became of it. The whole object, sir, was to get the responsible parties, the Congress of the United States, to take hold of the affairs of the institution, until a better state of things could be inaugurated, and to give the responsible parties all the light upon the matter that they could possibly ask. We had Mr.Meigs, the government examiner, with us, and he made as careful and thorough an examination as it was possible for any man to make. We simply asked what we had a right to ask—the interference and help of the government in the midst of our difficulties. If the government had done its duty, and kept that watch-care over us that I always supposed it would, we would either have been closed sooner, or else we would have been helped out of our difficulties—one of the two. PERSONAL FEELING BETWEEN THE PRESIDENT AND ACTUARY. Q. Do you know anything, of your own knowledge, of the feeling of the then actuary towards Mr, Douglass when he became president of the institution 1—A. I had always supposed that they were entirely friendly, sir; I had no especial means of knowing,,however. 1 was never in the confidence of either of those .gentlemen, on that point; because the matter to which I infer you allude, as I was present and heard it at the last meeting of the committee, never occurred at that time. Q. There was nothing then that occurred that ever brought that matter to your attention I—A. As to any special ilk-feeling between those gentlemen, no, of course not, for I had no reason to suppose that any existed. My personal feeling towards Mr. Douglass was that due to him as a gentleman,and I think I consulted him very freely. Dr. PURVIS. I would like, with your permission, Mr.Chairman,to ask Mr. Sperry some questions. The CHAIRMAN. Certainly. T COMPANY. FREEDMAN'S SAVINGS AND TRUS 255 THE BANK'S FAILURE. CONVERSATION AS TO CAUSES OF Sperry, a word about the Dr. ft-1ms. I first wanted to ask you, Mr. s of the failure clear in cause the make not do You failure of the bank. required for us to was it y mone my mind. 1)0 you know how much an amount necved reser we that ed grant for it g takin have on deposit, g institution payin a bank die make to ses, essary to meet current expen ? itors at the rate of interest we were paying to depos and dollars on deposit, Mr. SPERRY. When we had forty-two thous we were paying then. required, taking it for Dr. PURVIS. When we closed, how much was interest? pay d woul owed borr granted that every One who all good, do you mean ? Mr. SPERRY. Provided that the assets weremean, that they were all I ed, grant for it g Dr. PURVIS. Yes; takin good. think, than five millions of Mr. SPERRY. Something less, I should dollars. how much we paid out in the Dr. PURVIS. Do you know, Mr. Sperry, three runs? nesA what the amount was. Mr. SPERRY. I cannot now say with exactquestion as to the amount the d aske I why n reaso Dr. PURVIS. The going as a paying institurequired, when we closed, to keep the bank down from forty-two thoution, is that, as you know, our balance went bank closed. It took less than sand dollars to the amount at which the the bank in a paying condikeep to three millions of dollars, I think, sixteen hundred thousand tion. Before we closed we paid out some they not? were , same dollars. Our expenses were the reducing them wherever ally gradu were we that know I RY. Mr. SPER we could. had we that did not pay their Dr. Puny's. Well, how many branches • expenses? es I have in a paper right Mr. SPERRY. I can tell you by the figur memorandum of that with me, here (searching). I thought I had a ver, that less. than ten of the howe say, d shoul I but I find I have not. time. that brandies were not paying expenses at, n branches that were not payfiftee least at were e Dr. PURVIS. Ther the fact that we had so many ing expenses. Were not the runs, andthe failure? branches that did not pay, the cause of Mr. SPERRY. Not necessarily. Dr. PuRv-ts. We Were not solvent. but might have become :401Mr. SPERRY. We were not solvent then, vent then. money did we. pay out,if you Dr. PURVIS. On the last run, how much can remember? now, but I remember it was a Mr. SPERRY. I cannot tell you exactly out here in Washington, too, very large sum. It was principally paid I know. when we put on the sixtyDr. PURVIS. You remember, do you not, day notice Mr. SPERRY. Yes, sir. -day notice expired, did we Dr. PURVIS. Well, then, after the sixtythe depositors that came in of nds have any money to meet the dema upon us? Kr. SPERRY. No. her there was any proDr. PURVIS. Do you remember or not whet 256 FREEDMAN'S SAVINGS AND TRUST COMPANY. vision in the bill• requiring all deposits to be made "special" after a certain day? Mr. SPERRY. Yes ; there was. Dr. Puny's. Did you not, then, attribute our failure to these two causes I have named? Mr. SPERRY. No; that was "the day after the fair." Help came too late; that was all. The great catastrophe catne at that time, and in consequence of that. We could not get the help we ought to have had from Congress at the time we needed it. 01`11E HIGH FINANCIAL CREDIT OF THE BANK. Dr. PURVIS. Were we not in a flourishing condition up to the year 1873? Mr. SPERRY. Yes, sir; up to that time it was the best institution of the kind this country ever saw. We had managed our credit so carefully that Dunn, Barlow & Company reported us "A 1, A 1, A 1," in June, 1874; and that was the very highest commercial credit. Dr. PuRvis. In this statement that you submitted you have the real estate property marked at $447,777. Was that the cash value of that property, or was it not marked up by outside appraisement ? Mr. SPERRY. Well,it was a fair valuation for us, at the figures I have given. Dr. Pm/xis. Do you remember, Mr. Sperry, when the finance committee, consisting of Messrs. Huntington, Cooke, and Clephane, resigned? Mr. SPERRY. No; I do not. Dr. PuRvis. How long after we went into liquidation was it, do you remember? Mr. SPERRY. Well, it was long enough, I remember,for these gentlemen to escape their responsibility; I remember that, but I cannot tell just how long after we went into liquidation that was. Dr. PURVIS. Do you remember who drew up the bill winding up the bank? Mr. SPERRY. I do not know who drew up the bill which finally passed. I drew up the bill, which embodied some of its provisions, which did pass; that I remember. Dr. PURVIS. Do you mean before that was submitted to the House of Representatives? Mr. SPERRY. No, sir; I did not draw that bill; I drew another. Dr.PURVIS. Do you know who did draw it? Mr. SPERRY. No; I do not. I drew another and a better bill than that. AS TO THE INTEGRITY OF THE TRUSTEES. Dr. Putty's. My reason for asking this question is that I wanted to show that the trustees took an active part,and that we had conferences with Mr. Maynard at his house, and with Mr.Durham and others, about winding up the affairs of the bank. The newspapers throughout the country have charged that the trustees, as a rule, have been dishonest. As inspector of the bank,I would like to know what you found as to the integrity of the present board of trustees. Mr. SPERRY. I do not know that it is necessary for me to say anything on that subject. I think that if the trustees had been dishonest these Congressional committees would have found it out before this time. FREEDMAN'S SAVINGS AND TRUSP COMPANY. 257 I want to say here and now, doctor, and to have it go on the record, that you were faithful trustees; you stuck by us when we had very few friends. I want that to go on the reeord. 'Dr. PURVIS. I only asked you the question because the charge is that the trustees had caused the institution to fail by all sorts of blunders and had management. Mr. SPERRY. 0, yes; they have charged. that the institution was adrag-net, from the beginning, to scoop in the savings of the poor colored people. In fact, the institution and its trials have be,en first-class opportunities for newspaper writers to gossip about. By Mr. GARLAND: " Q.'I understood you to say, Mr. Sperry, that in your examination of the books and the conduct of the business of the bank you did not find any case of dishonesty on the part of the trustees °1—A. 0,no,sir ;there were no cases of dishonesty. I never had the slightest reason to guppose that there were any acts of dishonesty or any collusion with dishonesty on the part of the trustees. I do not believe it. The charge is. made out of the wh.ole cloth. The trustees, I will say, did not all do their duty. The New York trustees did not attend to the affairs of the bank. Dr. PURVIS (addressing Mr. Sperry). Did not we -4ave frequent conferences as trustees with the finance committee to devise means by which to help the bank out of its dilemma; and did the trustees attempt to keep back any information as to the condition of the bank at any time, or from time to time,from that committee? Mr. SPERRY. Not from .that committee, or from any other committee or persons whose business it was to make inquiry. THE TELEGRAPHIC CIPHER. I want here, Mr. Chairman, to file this telegraphic cipher to which Mr. Douglass referred, simply to show that it was a perfectly innocent contrivance which every banking company makes use of in its business transactions by telegraph. I know this copy to be genuine because it was made by myself. Mr. LEIPOLD. I found that cipher in this envelope (producing envelope containing the cipher),just as it was in the bank when we came there as commissioners.. [For a reprint of the telegraphic cipher see\ appendix.] By Mr. GARLAND: Q. I will ask you, Mr. Sperry, whether the trustees generally helped the officers of the bank when the runs were made upon it, or did any of them ?—A. No,sir; I think as a general rule they did not. I think if there had been a personal responsibility behind the trustees, they would perhaps have saved the institution. MR. DOUGLA.SS'S EXAMINATION OF SENATOR GARLA.ND'S BILL. -Mr. GARLAND. In response to my suggestion, Mr. Chairman, Mr. Frederick Douglass has examined the bill reported from this committee in June last amending the charter of the Freedman's Saving and Trust Company, and for other purposes, and recommitted to the committee pending the present investigation, and he has taken the pains to present 17 F B 258 FREEDMAN'S SAVINGS AND TRUST COMPANY. in .Writing his views upon it, which I have to_request shall go into the record. [For 'copy of Mr. Douglass's letter and Senator Garland's bill see appendix.] TESTIMONY OF FREDERICK DOUGLASS. WASHINGTON, D. C., February 19, 1880. FREDERICK DOUGLASS recalled. THE CIRCULARS ISSUED BY PRESIDENT DOUGLASS. Mr. Chairman and gentlemen of the committee there were some questions put to me the other day as to whether I had ' uttered, while presi•dent of the Freedman's Bank,certain circulars commending the bank to favor, and I believe, Senator (addressing Mr. Garland), you asked me if those circulars were still in existence. I have been able to find two of them. I believe there was a third, which I do not find. One is that which I issued immediately on going into the bank, and the other was published a few weeks subsequently in the columns of the New York Herald. The third I do not find.. Mr.SPERRY. I beg pardon, Mr. Douglass, but I think you issued only the two. Mr. DOUGLASS. I issued, I think, three, but I have not found the other; at any rate, I otter the two to the committee. Mr. SPERRY. I do not think you ever issued any besides the two you have here presented. • Mr. DOUGLASS. Well, I issued one that was published in the New York Herald, commending its justice in defending the bank. [For reprint of these circulars see appendix.] I will say that I wrote these circulars after the legislation by which the bank was brought to a close, requiring that the new deposits should be put by themselves, and should not be used in liquidation of the debts due to old depositors. Then, again, there was a hope that the bank might go on; and I gathered, from my inquiries among the officers of the bank, that it might possibly go on, and it was thought that I might possibly inspire confidence by writing a circular, and I wrote these circulars which I have brought here, under the hope—hoping against hope— that we might be able to resuscitate the bank. I was anxious, of course, if the bank could go on, to have it go on, and all the officers of the bank, the clerks and the actuary and all parties, were, of course, desirous to see the bank go on. And I, especially, under the influence of my old friend, Wilson, whom I had known many years before, had more faith perhaps than some others in the possibility of the going on of the bank and the ultimate success of it, and was, from these considerations, induced to write the circulars. They will speak for themselves. They do not show any overweening confidence in the success of the institution, though I based my hope of its success upon the statements of others. PERSONAL FEELING BETWEEN THE PRESIDENT AND ACTUARY. In respect to the personal feeling existing between Mr. Stickney and myself, I have to say that there has never been anything personal be- FREEDMAN'S SAVINGS AND TRUST COMPANY. 259 tween us of a hostile or unfriendly sort. Whatever feeling I entertained towards Mr. Stickney arose out of our relations to each other in business. When I stepped on the deck of the bank it was in full running trim, like a ship at sea, with all its halyards and all its spars in their places, or out of their places. They were coisiderably mixed. I found. the same trouble when I went into the bank that has been found by the experts. Indeed, experts were even then engaged—I knew but very little about it myself—in trying to ascertain a difference on the books of some torty thousand 'dollars, when I stepped in there. Dr. Puavrs. Do you refer to the Washington branch ?Mr. DOUGLASS. Yes; sir I refer to the Washington branch. And 'me a good deal, and caused me to limp a • that fact of itself disturbed little along. But my friends here said, "Stand by your gulls," and my old friend Whipper, of Philadelphia, who had charge of the branch bank there, was writing to me continually to"stand by my guns.". There was no feeling as against Mr. Stickney personally at all, and when Falluded the other day to the fact that this cipher in the hands of the actuary was not explained to m6, I stated the reason—at least the o.5tensib1e reason—why they were not explained. The fact is, Mr. Stickney, as I said the other day, was at the time a very busy man. He was very much engaged out and in and was scarcely half an hour at a time in the bank that he was not fully engaged, and I suppose he might have made satisfactory explanations if I had followed the matter up. However, they were not explained to me, and I had some reason, perhaps, at one time, for thinking that there was, some design in not explaining that Cipher to me. It was when I made an inquiry, on a certain occasion, concerning the meaning of some word or phrase in the telegraphic correspondence in question, that I observed a look between Mr. Stickney and a young Mr. Wormley who was in our employ, that it was "something for us to know and not for him to know." I told Mr. Stickney of it at the time, or soon afterwards; at any rate I told him of it in the board of trustees. So that there is no personal feeling at all in the matter. I'desire to see that young gentleman flourish. I have no sort of personal antipathy against him whatever. TESTIMONY OF MR. SPERRY CONTINUED. WASHINGTON, D. C., February 19, 1880. Mr. SPER,RY. I desire, Mr. Chairman, to limit the remark I made a few moments ago to the board of trustees who were in charge of the bank at the time it closed. By the CHAIRMAN: Q. Do you remember the amount of money that was stolen at the Atlanta branch 7—A. The Atlanta branch Q. Yes, sir; at the Atlanta branch.—A.. I remember that there was some money lost there; it was a considerable sum, too, but I do not remember just how much it was. THE "CLEAN STEAL" AT ATLANTA BRANCH. Q. Do you remember the name of the cashier at that branch 1—A. Cory; Philip D. Cory. Q. Will you state the circumstances connected with that branch ?— A. Well, it was a clean steal, and I had Cory .arrested and brought before the proper court there for trial. 260 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. How long after Cory had stolen this money was it before the facts became known to you ?—A. Well, I had been dissatisfied with him for some time, because he had not been properly attending to the business there. Be had the matter so carefully concealed, however, upon the pass-books, which would not come in for some time, that when I made the last examination he appeared to be all right. I had relieved him before, however, on general principles, for the reason that he was not properly attending to his duties there, and I had put another man, a successor, in his place. Almost immediately after I had done this there came up the matter which was discover(' in the depositors' pass-book, by the presentation of that book, which alarmed the new cashier and he advised me of it at once. Q. You had him put out then f—A. We put him out—just superseded him; and as good hick would have it, almost immediately when one of the pass-books which would have betrayed him came in,I was in Washington, and I telegraphed Mr. Johnson, the cashier whom I had placed in charge over Cory, to have him arrested at once. He was arrested, and a preliminary examination held for his appearance at court. I then went down, had the books thoroughly overhauled, and found him to be a thief to a considerable amount. We brought him ter trial before the proper State court sitting at Atlanta, and had a mistrial. We tried him again, and had him.sentenced for four years in the penitentiary. He was taken on an appeal by a writ of. error in the transcript of the lower court to the Supreme court, and the matter was then dropped. I do not think the man got his desei ts. I heat.% e he went scot tree. Q. You put him out because 3 on found that he was stealing ?—A. No, on general principles—for neglecting his business, and attending, instead, to private affairs—speculating—and I came to the conclusion that such a man was not a safe one to keep in charge. Q. When did you learn this in regard to his general neglect of business and his speculations?—A. I had in fact been looking for some months to find a successor to him. Q. Because he did not attend to his business ?—A. No; I repeat, on general principles, because he neglected his duties, and wasnot considered a proper man to be in charge. He was a Congregational minister, and we seemed to have a good many of the connection in the bank. He was an exemplary young man, we thought,connected with the American Missionary Association, and speculating, we found, in real estate, and as I knew him to be poor, I came to the conclusion that he must be speculating with other people's money than his own. Q. I desire to call your attention to this letter, Mr. Sperry, and ask you if you recognize the handwriting. It purports to have been written by you.—A. (Examining the letter.) Yes; that letter I wrote, most certainly. The CHAIRMAN. The clerk will please read that letter. - The CLERK (reading). SUPERSEDING CASHIER CORY, OF ATLANTA. PRINCIPAL OFFICE OF THE FREEDMAN'S SAVINGS AND TRUST COMPANY, Washington, D. C., January 20, 1874. D. CORY,Esq., Cashier: DEAR SIR: In view of the past history and present prospects of the Atlanta branch the board of trustees are disposed to order it closed. Out such an order should be made only when every means to prevent the necessity for it has been tried in vain. I PpILIP TRUST COMPANY. FREEDMAN'S SAVINGS AND 261 experiment. I shall send to take charge of have therefore decided to make one more r of success or failure upon the colored peomatte the rest and man, d colore a h the branc ge I wish made by the 1st proximo. ple of your city and vicinity. This chan sary to this plan. This in kind, if not in Your retirement from the branch is necescan; for I do not doubt your good intenyou as to say degree, I am sure I regret as much ge is one of necessity, and I have only tions toward your work. But this chanable to you. If you choose to offer your resigagree most ns given we will make it in.the way or we will make the change for the reaso nation I will see that it is accepted, tant above. sionally is Mr. C. S. Johnson,our assis nd The gentleman sent to take charge provi before the 1st of Februaryia days some city your in be will He cashier at Augusta. I commend him to your courtesy. aslly, and with the best wishes for your future, I With full confidence in you peron am, Yours, Very truly, A. M. SPERRY, Inspector. THE COLOR QUESTION.. By the CHAIRMAN you mean by saying "I shall Q. Can you tell me, Mr. Sperry, what ed ?thin, and rest the matter of color send to take charge of the branch a people of your city and vicinity ." red colo the upon re failu or ss succ meant that he had lost the confiWhat did you mean by that-7—A. I a white man, and had lost the was He • dence of the colored people. that was why I wrote that. I cannot confidence of the colored people; tion, Mr. Chairman. ques your of say that I see the point to you. Witen you st tte that you Q. Possibly I can make it clearer success iorfailure of the bank upon intended to rest the matter of the its vicinity, and that you intended and the colored people of Atlanta , and you go on to tell him how he at the same time to relieve this man those things concerning which it is of one is it k is to be relieved, I thin ish to this committee some explananot hnproper that you should furn of that branch. tion.—A. I referred to the success rested in all the branches? I supinte lly Q. Well, were you not equa all.—A. Most certainly, but the posed that your duty reached to them out for general .business, had hing reac been point was this, that he had had been discriminating in er rath been seeking white depositors, or the prominent colored people of the his effort) in that direction, so that against him.- There was a continual city had had good reason to complain these branches in the hands of colpressure, I will say, upon us to put inually, and we wanted to see the cont ored men. We were doing it be in the hands of colored men. ld shou g thin e whol the time when afterwards to be a thief, you say? Q. Well, this man Cory turned out son's arrival there he struck a John Mr. —A. Yes, sir; immediately on alarmed me. Johnson advised me of discrepancy in the accounts that ordered Cory's arrest at once, and he carthe facts, as I have stated, and I the penitentiary, which was not and did get a sentence of four years in e ledg know my of that to the best ried out, however; and I will say with the Freedman's Bank who ever d belief he is the only man connecte the institution. I got punished at all for defrauding the institution after this?—A. with d ecte Q. He was never conn ishould think not. time afterwards held any prom Q. Do you know whether he at any r knew what became of him. I neve I nent position any wherel—A. They sentenced to the penitentiary. know I got him convicted and point of law some upon t cour r, lowe the of ngs error took exception to the ruli eme court, and there being an and had him carried up to the supr 262 FREEDMAN'S SAVINGS AND TRUST COMPANY. in the transcript of the-record as it went up, I was informed that ceedings would have to. be gone over again de novo, and we droppe prod it, and I suppose the man went scot free. . Q. Did you not write strong letters recommending him for the place? --A. Very likely; but—[reflecting] no; 1(10 not think I (lid; but for aught I knew 'about him when he went into the bank I should have ..-done so; he was a young man very respectably connected, as I said. Q. You think it is probable, then, that you did commend him ?—A. I do not recollect anything about it. I do not seem to recollec t he was appointed, or by whom he was appointed, cashier of that when branch. There was never any objection made to him when he was appoin ted; never any made that I ever heard of. I do not think, howeve had had any acquaintance with him: My impreSsion is that r, that I a party to his appointment. I think that Mr. Harris, of New I was not [Reflecting.] Yes, Harris established the Atlanta branch York, was. , and I think appointed Cory cashier. Q. You had confidence, in him, you say ?—A. Yes, I reposed confidence in him. It is because you have confidence in men that they are put in places of trust and responsibility. But with regard to this question of color, Mr. Chairman, I think .my friends will bear me out that I stood fast on the color question every time. Q. It has been asserted again,and again that more than once, when it was found that the institution was about to fail, or had got in serious trouble, that some colored man was called forwar d to take the helm at that critical time; I will not say for what cause. I do not make the assertion, but ask you for the facts in the case.—A. That was not true; there is no truth in the statement or in the intimat hold out. We were continually calling colored men more ion it would and more into the service of the bank. When we began there were but few colored men outside of cities in the North who were fitted for these places by knowledge and experience in the banking line. Other things equal, we always gave the preference to colored men in filling being these places, as was only right and just. So far as I had anythi ng to do with it, that was my preference and course.' I do not think— let me see [pondering]—I do not think that we ever had a colored man at any of the branches that ever was in default. Do you call any to mind, Dr. Purvis? Dr. PURVIS. Not one. Mr. LEIPOLD. You forget Hunter. Mr.SPERRY Well,.he was a mere subordinate working at ten dollars a week, and he did not steal more than twenty-five dollars , I believe. That was a petty case. [Mr. Leipold referred the witness to. instances in the Washington branch, to which Mr. Sperry replied that he wished to file an excepti on to his remark as to the Washington branch.] TESTIMONY OF GEORGE W. STICKNEY, CONTINUED. WASHINGTON,D. C., Fe5ruary 19,1880. GEORGE W. STICKNEY recalled. Mr. CHAIRMAN. I wish to say one or two words in regard to the testimony of Mr. Douglass in one or two of its particulars. When Mr. Douglass came into the bank I had nothing but the kind- FREEDMAN'S SAVINGS AND TRUST COMPANY. 263 est feelings toward him, and I have not had since. In regard to the cipher dispatch, Mr. Sperry and I got that up so that the correspondence between the principal office And the branches might be kept strictly private and to ourselves. When Mr. Douglass was made president I gave to him one of the-keys to the cipher; I think it wa ti.the first or second day after he became president of the bank, and so far As I knew and supposed he had it all the time. In reference to the instance he brings forward, I will explain that. Mr.Wormley was standing at my desk on the day and occasion in question, when a telegram came in from one of the branches in relation to a run that was being made upon it. I opened the telegram and took it in and handed it to Mr. Douglass in his little room. It was in cipher. He brought it out to me and said that he did not understand One of the phrases. I do not remember the remark I made, but the look Which he says I. gave was not intended for Mr. Douglass at all, but my meaning in it was. that I did not want Mr. Wormley to know anything about it, for Mr. WOrtnley was an outsider, and had no business to know the nature of the dispatch; as it was in regard to one of the runs upon one of the branches. So far from any information being withheld from Mr. Douglass, when. ever he asked for any information" always endeavored to give it. It is true that at that time I was very busy night and hay trying to raise money for the bank, and I might not have,consulted him as much as he desired, or as -much as I might have wished, but any information he wanted I always tried to furnish. Mr. SPERRY. Mr. Leipold has refreshed my memory, Mr. Chairman, upon -certain matters in the statement I made concerning the responsibility of colored cashiers. I wish to add that perhaps later facts will show that the colored man has the same right to be an American citizen in that direction as any others. There are several cases Of apparent default that I had forgotten. It is not pertinent except as qualifying the too general statement, perhaps, that I Ma(le. Adjourned to Saturday, February 28,.1880. COMMITTEE Room OF SENATE SELECT COMMITTEE ON THE FREEDMAN'S BANK, Washington, 1). C., March 6, 1880, The Select Committee of the Senate on the Freedman's Savings and Trust Company met this day in the committee room of the Senate Commit tee on Territories at 10 o'clock a. m. Present, Messrs. B. K. Bruce (chairman) and A. H. Garland. TESTIMONY OF MAJ. GEN. 0. 0. HOWARD, Maj. Gen. OLIVER OTIS HOWARD sworn and examined. By Mr. GARLAND: Question. General, were you ever a trustee of the Freedman' Savings and Trust Company ?—Answer. I was elected a trustee, and I tendered my resignation immediately as soon as I was informed of the fact of my election. I do not think I ever acted as trustee at all. I may have voted at one meeting. Q. You do not recollect serving beyond the one meeting, if that °I—A. I was present at one meeting, and gave in my resignation at that meeting. 264 FREEDMAN'S SAVINGS AND TRIfST COMPANY. Q. When were you elected a trustee,'general ?—A. I think it was in the year 1872; the month I could not tell at this moment; it did not .make a very strong impression upon me, because I never intended to .serve. Q. Was there any question ever raisecl.by the board as to the legality ,of'your election as trustee f—A. Not that I know of. Q. What was the cause of your resignation, general, if you have no objection to stating it I—A. I had already very heavy responsibilities .resting upon me, and I thought that would increase them; and I had at the time, I think, a small loan at the bank,and if I remember rightly could not serve, under the law, as a trustee, while I had that loan. Q. Were you not afterwards elected as honorary trustee /—A. Yes, sir; I think I was. I believe I was put on as an honorary trustee, a position that involved no responsibility. Q. That did not obligate you to attend to any of the business of the institution, did it I7-A. I did not consider that it did. In fact, it was .done without any consultation; it was probably done simply for the use .of my name. Q. Were you connected with the management of the affairs of the institution in any way I—A. I never had anything to do with the man- • agement whatever. Q. Did you know anything about the management in reference to the deposits and loans, Or anything of the minutiw of the business transactions I—A. I knew the percentage that the bank paid to depositors, and I remember that itwas changed from five per cent, to a larger per cent.—to six per cent.-; but I had no specific knowledge; that is, I did not know who were on the committee on loans, or anything about the division of their work or labors. I only knew, in a general way, what any depositor might know. I was a depositor in the bank. Q. You were a depositor I—A. Yes, sir. Q. Did you know anything of any of the individual loans other than your own that were made by the bank; I mean by that, the amounts of' such loans, securities on which they were made, value of the securities, &c. N6t in a single case, sir; I never knew of one case. Q. There was a loan made on the 6th of April,1873, to R. M. Hall, of $8,658; did you know anything about that I—A. No,sir; I never heard of it until this minute; I never knew anything about it. Q. You were connected in some official way with the Young Men's Christian -Association in the year 1871, were you notI—A. Yes, sir. LOAN TO THE YOUNG MEN'S CHRISTIAN ASSOCIATION. Q. It, appears that under the date of April 18, 1871, a loan was made to yourself and Mr. Henry D. Cooke,of $33,000, the security for which consisted of real estate belonging to the Young Men's Christian Association; do you recollect anything of that, general I—A. I remember something in reference to that; I think it was the "Young Men's Christian Association Company," and not the Young Men's Christian Association proper; it was what used to be called the Building Company of the -Young Men's Christian Association; that is, the company that owned the building. Q. The building company, and not the association proper I—A. Yes, sir. Mr. Salmon P. Chase was president, and I was vice-president, and Mr. Cooke and myself were a committee to negotiate the loan for the 'company, and we did. • Q. Was the loan, according to your recollection, negotiated upon am- FREEDMAN'S SAVINGS AND TRUST COMPANY. 265 pie security ?—A. I do not know; but I think it must have been. We submitted our proposition. So far as I was concerned with .Mr. Cooke, . we simply submitted the proposition to the cashier, or the actuary, and he laid it before the committee of the bank, and the loan was granted subsequently. Q. It was granted. in the usual way, you mean—passed the ordeal,of the trustees 1—A. Yes, sir; it went through the ordeal. It might have been in this way : that the loan was made at the discretion .of the actuary or ca-hier, whichever it was, under delegated instructions, or it, might have been made under direction of the committee; loans were made at that time, undoubtedly, under direction of the committee ; but , . this loan was not made immediately. We submitted it to the cashier . or actuary, and we got our answer through him. • Q. Was the loan ever paid, general?—A. I only know, as to that, by . hearsay. Mr. A. S. Pratt, the agent, told me that it was all paid. Q That it was all paid 1—A. Yes, sir ; that every dollar of it was THE LOAN TO 0. 0. HOWARD AND HENRY D. COOKE. of Q. It appears, general, that under date of April. 18, 1871, a loan I have one the Cooke— D. H. and . Howard 0. 0. $33,000 was made to upon been speaking of—secured by lots three and four, square 407, nnder . building tionAssocia an Christi Men's Young the which stands has been date of November 18, 1871, appears a payment of $700, which "Returned effect: this to register the on is ndum memora a and . erased, erasure, January 2, 1872." Do you know anything in reference to that to have and why the memorandum was placed there? It appears first underI 1—A. erased rds afterwa and this, upon $700 of t been a paymen stand your question, and am trying to recall the matter. No, sir; I Q. Cali you explain anything in connection with it?—A.. payment a t after paymen a of wal withdra a cannot. I never heard of t. had been made. I never heard of the withdrawal of any paymen ?--A. general now, until tion transac this of heard Q. Have you ever Never, until now. Yes, Q. This is the first time your attention has been called to it?—A.interbeen have would and it, ered sir; I should certainly have rememb ested in preserving the payment, if I had known of it. explanation Q. You have, then, no recollection of it, and can give no recollect it now to the committee in regard to it?—A. No, sir; cannot at all, or anything about it. COOK. LOAN TO E. S. FOWLER IN NAME OF JOHN H., 7., 1872, in Q. It appears, general, that a loan was made February ts were paymen the name of John H. Cook, for $13,000, upon which that time E. made at various times until the 9th of July, 1872. At. against account the and due, - S. Fowler assumed the balance then remainamount The closed. and , balance the with credited Cook was July 9, 1872, ing unpaid, it seems, was $12,394.15; and on that date, with $12,369.15, au account is. opened with E. S. Fowler, charging him on file being $25 less than the real amount. From the correspondence in appears loan the h althoug . in the commissioners' office we find that responas d regarde is Howard General Fowler, and Cook the name.of -I—A.Yes, sible for it. Can you give any explanation of that matter amount the sir, I think I can explain that fully. What, may I ask, was first loaned to Cook, Senator.? 266 FREEDMAN'S SAVINGS AND TRUST COMPANY. Q. Thirteen thousand dollars, general, on which payments were Made at various times.—A. Well, that was not the original loan. The original loan was made by myself, if I remember rightly; but, as I was going to Arizona., by direction of the President, and did go, and spent nearly a year amongst the Indians there, I could not attend to my private business here.- The loan was secured by notes—by quite a number of notes—and these notes were secured by mortgages upon propert y here, and it was too much for me to manage while away; so I concluded it would be better to pnt it into other hands. I was responsible that for it, although -Mr. Cook; who was my attorney, bad it directly. I came back in July, and at that time negotiated With Mr. E. S. Fowler for fer to him of the whole thing—for the sale of it to hi m- outright. the transMr. was then in the Treasury Department. • He was a friend of mine, Fowler a young man who had just studied law, and an active and accurate business Man in whom I had entire confidence. I negotiated for the sale and.transfer of it to him, and gave him all the collateral Security, .There were some conditions upon the collateral, by which he was to return to me some portion of any surplus when he should dispose of the matter; and it was arranged that he should use these notes, collect the amount s as they came due on the notes, and pay theta in, and so on. Then we it would. be better, and the bank thought it would be better, forthought him to assume the obligation entirely, and with the consent of the officers of the bank he did so. A portion of the Old note was paid. He gave his own note and took my collateral—all of it. All the notes were indorsed by me—every one ot them—so that he bad all the notes, with their curity, as collateral;. and ever after that, until my return to Washinsegton, he Managed it, and I intended that be should continue the management. But when I got back again to Washington, he was severing his connection here and Was going to New York, and about he that he wished I wOuld resume the whole matter; so that, withoutsaid any formal change at -all, I have continued the payments, or, at least, the bank has done so in the collection of these notes, until they have used all the collateral up, and now call upon me for the balance. The collateral was valued at the time at the bank's own valuation, of course, at more than double the amount of the loam. We estimated .at the time that it was worth about three times the face of the loan, but it did not fetch it after the .great shrinkage in property values in Washington.. It might be possible that the first time there might have .been something in reference to my being a trustee in the minds of these gentlemen (referring to the bank men), but in. reference to Mr. Fowler there was no such thing; for that was some time subsequent, and it would have been impossible for me to accept any loan whatever as trustee, according to the law, if I remember the law on that point rightly; but I think that the transaction of Mr. Fowler was entirely independent; it was a simple transfer for his convenience and mine, with the consent of the bank. LOAN TO W. P. DREW, TRUSTEE. Q. Well, I desire to call your attention to another loan, general made to W. P. Drew, trustee of the bank, and, as is claimed,in violatio , of section 12 of the charter of the institution. It was made Septem n ber 30,1870, for $500, and on your indorsement. What is your recollection as to that loan I—A. What was the indorsement, Mr. Senator I Q. It appears as an indorsement of a note of W. P. Drew by 0. 0. Howard I—A. I will state as to that, that Mr. Drew was a confidential FREEDMAN'S SAVINGS AND TRUST COMPANY. 267, clerk of the Freedman's Bureau, having charge of one of the divisions, and is now one of the trusted agents of the government," think, in Solicitor's department, on the examination of the national banks for the department. I always regarded Mr. Drew as good, and I indorsed the his note, but I never had anything to do with his violation of the charter of the bank. Q. Do you recollect indorsing this particular - note on this loan of five hundred dollars made on the 30th of September, 1870 l—A. I have an. indistinct recollection of having indorsed a note for him., but the loan I 'have no recollection about whatever. I remember having .simply in-dorsed his note. Q. Do you recollect the terms of the note that you indorsed for 'hitn.I —A. No, sir; I have no recollection of the matter further than the fact that I simply indorsed a note for him. Q. You think it was simply a note at large, to be negotiated anywhere I—A. Anywhere in the world, I suppose, where he could negotiate it. Q. You did not know .where he intended to. negotiate it l—A. Not at all. He was a gentleman whom I trusted, and he simply brought me a note - and asked me for My indorsement, which "gave hi in, believing .him to be perfectly good for it. LOANS FOR HOWARD UNIVERSITY. Q. General, did you obtain loans from the bank, at any time, for the - Howard University °? If you did, please state to the committee as near as you can recollect the amounts of these loans, the time, the purposes for Which they were obtained, and what securities were given f—A. I (10 not think I made anyloans for the university myself, ever. I think the treasurer of the university did make loans. The treasurer was George W. Bawl]. I think,that be made loans for the university. I was, at one time, trustee of the university, and was afterwards president of the university for several years. Q. You do not remember, then, that you ever yourself made anyloans from the bank for the university I—A. No, sir; I do not remember that I ever made such loans. Q. And you are not positive—that is, you cannot now say, whether the treasurer, Mr. Balloch, did or did not 'make such loans for the 'mi. versity I—A. 0. I believe he did; yes, indeed. Q. Have you any idea, general, how many he made I—A. No, sir; it Would not be a matter that'I would carry in my mind at all. I should not charge my mind with it. Q. I suppose not.—A. So,.for that was not my business; it was the treasurer's business under the university trustees to attend to financial transactions of the university and not a matter-that belonged to me. GENERAL HOWARD AS A DEPOSITOR IN THE BANK. Q. Were you a depositor, general, in the Washington branch of the Freedman's Bank I—A. Yes, sir. Q. Were your deposits on your individual account, or on account of the university, or of any other institution, or association, or fund, with which you were connected I deposited in several different capacities. First, I was a depositor on my own individual account; next, as special treasurer of the Congregational Church here; and next, in behalf of a trust fund that was transferred to me, and was already in the • 268 FREEDMAN'S SAVINGS AND TRUST COMPANY. bank, and when I succeeded to the position of treasurer of the fund it came to me. On these three accounts I made deposits with the bank. And then I deposited very often in my personal account on a fund which I marked "B," meaning "Benevolent fund." Money was frequently sent to me for disbursement, and I would deposit it in that way in the bank. So that these different deposits in these several capacities amounted in the aggregate to a very large sum. Q. I understand, then, that you deposited to your own personal fund, and as trustee for the Congregational Church in this city, and as trustee for another fund l—A. Yes, sir. Q. Were there anyother funds, that you now recollect, general, of I might which yOu wer6 trustee, and on which you made deposits have deposited for the Young Men's Christian Association. I had three separate accounts, and I might havii deposited for the Young Men's Christian Association. I collected also a good deal of money for the Young Men's Christian Association, but whether I put it all in one, keeping my own accounts, or separated it, I have forgotten. Q. When you sent in your deposits, general, was it your habit to indicate on them in any way the particular fund to which they belonged ?—A. Yes, sir; invariably, I do not believe that I ever omitted to do that, or made any mistake in marking the particular fund to which the deposit belonged. I did not Q. So that you did not get the different funds mixed get the funds mixed at all. If they got mixed it was not through carelessness or error on my part. Q. Do you recolleet, general, the largest amount you had on deposit at any one time—taking your personal account and the different trust funds together f—A. I used to run it up sometimes to twenty or thirty thousand dollars on all the accounts. Perhaps altogether I deposited over $200,000 with the bank. In all the several years, with the sev•eral accounts I had, the amount may have reached as high as $250,000 in the aggregate. GENERAL HOWARD'S PERSONAL ACCOUNT. Q. When you closed your account with the institution, did you examine your pass-books, general ?—A. No, sir; I did not—not carefully. Q. Did you examine your pass-books at any time l—A. It was not my habit to do so. I may sometimes have done so, but a final settlement of all my accounts never was really had. Q. You mean your account has not been finally passed upon ?—A. Yes, sir; I found one of my pass-books here in Washington since my , arrival. Those I had with me we have -examined with a view to.discovering if there were discrepancies in the,account. Q. Did you find the account correct, so far as these books went?—A. At first the balances were so near to those I had, in keeping my own accounts, that I never went specifically through them in comparison; but as soon as it was intimated to me that there was something wrong in the books, I then instituted a very careful examination, and with the books that I had I found a great many mistakes, and some quite serious mistakes—in the deposit-books, I mean; but until then I had discovered but one. There was a disparity of about $1,000, and I had a correspondence in reference to it for a long while during the time that my- agent was living. My agent died,, and the correspondence ceased. FREEDMAN'S SAVINGS AND TRUST COMPANY. 269 Q. Who was your agent ?—A. John H. Cook, attorney-at-law, was my agent. THE PASS BOOKS IN GENERAL HOWARD'S ACCOUNT. Q. Did I understand you to say that all your pass-books were returned to you with the exception of one, which 3 on found when 'you. came here this time?—A. No, sir; there is one wanting still. Q. Still another—A. Yes, sir; I thought it was here, but I cannot find it. This one (exhibiting) we found since my arrival, but I have not been able to make any comparisons. But there is another still, which I have not been able- to find—the last account. Maybe there is no book. The credits to me were made probably from the payments of the notes, and there are very few disbursements, and there may not have been a Pass-book at all. I closed my account, or thought I closed my account, and transferred it to the Second National Bank of this city, and continued to do my business there. But I see now a good many credits on the books of the Freedman's Bank and some expenditures, but I have not the pass-book. ALLEGED OVERDRAFT IN GENERAL HOWARD'S ACCOUNT. • Q. The accountants of this committee,general,show that your personal account was apparently overdrawn $2,415.78. What is your recollection about that, if you have any recollection concerning it?—A. According to the pass book there was no instance of overdraft. At the settlement there was claimed to be some few dollars, about $30 or $40, I believe, against me, and I drew my check for the amount and paid it into the bank. Then the books were closed, so that, apparently, there was no overdraft; but on examination, first of the pass-book, I find that in my; draft of $31.60, if I remember the amount rightly, the figures had been pushed to the left and made $3,160, or three thousand and odd dollars, against me. There was another draft of quite-a large amount, some five thousand dollars odd, that were pushed the other way, on the pass-book, making 4t only fifty-three dollars and something. This was on the pass-book. The drafts themselves were correct, of course. And by noticing all these mistakes that had been made, I went to work to examine it as carefully as I could, and since I have been here I have found two or three things that have r3duced the amount of the apparent disparity very much, so that I am quite satisfied, if the mistakes were corrected, the account by the real balance would be just about square; that is, there is no essential overdraft. SPECIFIC ERRORS POINTED OUT. On January 7, 1867, I find on the ledger, and not on the journal, $102.50 and no draft. Q. That should be in your favor, you say ?—A. Yes, it would be in my favor, but there is no draft; I had drawn no draft; it is somebody else's, accidentally charged to me on the ledger, but it don't occur on the journal; and then there is no draft. July 27, 1871, there is a deposit and no credit given of $400. I have a receipt of the bank for that $400. Q. What is the date of that receipt?—A. It is dated July 27, 1871. June 3, 1872, there was a deposit of $458.33 and no credit given; the receipt is here; I had these deposit checks (exhibiting them). 270 FREEDMAN'S SAVINGS AND TRUST COMPANY. September 26, 1870, a deposit of *90, was. entered by mistake as a draft. It should have been entered on the other side of the account, and that would make a difference of $180 in my favor. Your expert had noted that error himself. February 4, 1870, a draft of $40 is carried out as $60 on the books, making a difference of $20 in my favor. October 17, 1871, a draft for $75 is entered as $750, and it seems as though a mistake had been made and the draft carried out as $750, as .on the same date $75 is in there, and 110 draft of $750 is drawn; so that there is a mistake there of $750 dollars in my favor. September 27, 1870, the deposit slip shows $9.0, that is not on the books, that should have, been credited as a deposit. I find the deposit, but no credit for it. March 12, 1872, an erased draft in the ledger is restored, and I stated that there was no draft at that date. The amount was $260.50. I supposed that that was an error, and that there was no such draft, until this 'morning, when your expert brings me a draft of $260.50 drawn by my wife, Mrs. Howard. I have no doubt that the draft is correct, so I shall have to pass that out. I do not know why it was erased on the ledger. Mr. FiTzPA.Tatcx (committee's expert). SJMO other items, you remember general, you transferred to the school fund. The WITNESS. 0, yes. On November 16, 1872, there is a deposit of $100 that is credited in the deposit-book and stricken out of the ledger. I find that $100 on my deposit-book now. The experts could not have known that, because I had the pass-book. It is in the pass-book, and I want it restored, and the $100 placed to my credit. There is another case in the same month. It seemed to be July 3, or July 4, as I read them, but I find I was mistaken, and that it is .July 21. There are two amounts for $200. For one of them I have a draft, and for the other I have not. I think that that is, a mistake against me, although I am not perfectly positive, of course, for the ,.draft might have been lost. Then there is a similar one of September 10,1868,for a small amount.$20. These two I feel very uncertain about; I could not swear to anything with regard to them; and I simply call attention to the fact. I have done the best I could with the books I have, but I find a great deal entered against me there,written in the books "notes," "notes." Well, the bank very often settled a note when it came due,if it was at the bank, And I did not bring my note-books with me; I have them at home. I never thought with reference to this of the notes being so entered, and if there is any further disparity, I think it must lie in these notes, in. ..some mistake in the charges on these notes. ACCOUNTANTS' STATEMENT OF THE ACCOUNT. Mr. GARLAND. Now, general, the accountants restate your account, and allow you the credit of $948.33, and deduct that from the overdraft of $2,415.78. This still leaves you indebted to the amount of $1,467.45. Now put in the three items you claim, of $100, November 16, 1872, and *260.50, March 12. 1872, and $750 paid October 17,1871, and that still leaves you some three hundred and fifty-odd dollars behind. The WITNESS. But the $90 is not allowed me. Mr. GARLAND. Yes; that is allowed. The accountants allow you the *90, and June 3, 1872, $450, and July 27, $400. The WITNESS. There is another $90, you remember. FREEDMAN'S SAVINGS AND TRUST COMPANY. 271 Mr. FITZPATRICK. That is accounted for in the original statement general. The WITNESS. No, but there is still another not accounted for. Mr. GARLAND. He gives you one item of $90 in September, 1872. CLERICAL ERRORS THE CAUSE OF THE DISCREPANCY. The WITNESS. That leaves MO $350. behind. You . will have to diminish that if you allow me the $250 where I have DO draft; that will diminish that still further, about$220 more. The rest of itI cannot account for now. It was a great while ago, you must bear in mind, and it will be exceedingly difficult for me to verify positively the actual facts, as I have no doubt they stand to my credit. Your accountants have already • discovered so many clerical errors in the books themselves, arising from the loose methods of keeping them, which makes them unreliable as evidence, that I am satisfied that my balance, according to the passbooks, would be found correct, if I could get at all the facts and figures exactly. I mean a true statement of the exact amounts that I put in and drew out. ATTENTION FIRST CALLED TO THE ALLEGED OVERDRAFT. Q. When was your attention first called specifically, general, to this overdraft of twenty-four hundred and odd dollars on your account ?—A. My agent here in Washington informed me of a discrepancy in the first instance. Mr. F. H. Smith, my agent, first called my attention to the alleged overdraft. He wrote to me and stated that he had been informed there was an overdraft, and I replied that it was impossible; and I wrote to Senator Bruce and Senator Hamlin, and asked that I might meet the committee if necessary, and state to them that there could be. no such thing, because I had my books, and they were balanced. Then, next, the chairman of your committee telegraphed me, and I instituted an examination. This was the first time that I found these several disparities that I have referred to. The CHAIRMAN. I suggested some time ago that General Howard's agent here might explain these matters, in the absence of the General, 'without the necessit3 of bringing General Howard here before the committee; and we called the attention of the agent to the account, but he could not explain it. When I found the draft of October 19, 1870, of $5360 on the ledger, charged against the account, and the entry on the pass-book charging the account with only $53.60, I telegraphed to you, general (addressing witness), to know.what draft you drew on that day, and you telegraphed me in reply $5360. That seemed only to complicate the matter more, and when at last we found it would be impossible to settle the account with only the data we had in hand, and without personal explanations, I thought it necessary, in the interests of the truth in this investigation, that you should be summoned to appear be. fore the committee, and especially as you had already asked to have the benefit of a personal explanation, if necessary.. By Mr. GARLAND: Q. You alluded to errors in the books, general. It seems that on the 19th of October, 1870, you are charged with a draft of $5360 on the ledger, as has just been stated, and that on your pass-book you were only charged with $53.60, being a large error in your favor; and also that on the 3d of January, 1671, you are charged on the ledger with a .272 FREEDMAN'S SAVINGS AND TRUST COMPANY. 'draft Of $31.61, which was paid, and on your pass-book you were charged with $3,161, befng a large error against you 1—A. Yes, sir. Q. Now, when did you first discover'. these- errors, general 1—A. Just as soon as I received this telegram from Senator Bruce, I got Capta)a Sladen, my senior aid, and a clerk to take these old returned drafts and go through them and compare them with my copy. I kept a copy of them. The books were here, so that I could not compare them with the drafts., but I compared them (the drafts) with my copy. Q. You had not discovered the errors, then, before this telegraphic correspondence between you and the chairman 1—A. No, sir; not until then; I had not known of the errors before. Q. You did not discover them from the Pass-books 1—A. No, sir; the 'pass-books that I had were balanced, and I never compared them. would have done it most likely if I had been here, but I was absent the whole of that year. In all probability I would- have examined the pass-books and discovered and corrected the errors at that time. The reason why I did not do it was because they were balanced all right, and I would throw them aside and go to something else. Q. Now these are very serious mistakes, and when put together they make the amount of your overdraft nearly twenty-two hundred dollars. These seem to be unusually glaring errors, involving .a large sum, to go uncorrected.—A. I see they do; but you nOtice also there are other mistakes on the books that bring the amount back again. Pat these in correctly, and put in the others, and the amount of the overdraft is brought back to within three hundred dollars and less; and if the two hundred dollars in doubt is an error, that will bring the draft to within two hundred dollars in round numbers. Q. General, have you examined the books or the institution with reference to the accounts of any other parties besides your own ?-3. ,No, sir: I have not. Q. Do you know, or have you heard of any mistakes of this sort occurring with reference to accounts of other persons with the ban'?—A. 1 do not recall the fact, if I have, at this moment. Q. I mean of this sort, where $5,360 is changed to $53.60, and $31.61 to $3,161—errors of that general character. Are errors of that kind common through the books, or have you any information on that1—A. I -never discovered any; did .not examine the books with reference to that, or with reference to any account but my own. I know, however, of a friend of mine, who was always very careful in his accounts, complaining of mistakes that had been made in his case. Q. Mistakes of the same character we have been speaking of?--A. Yes; but I never heard of any errors so large as these that have treen • made in thy own account. Q. But of the same order?—A. Yes,.of the same order; but I never examined his books. And there are in my own account a greaOnany other mistakes of small amounts that I have nqt brought to the_attention of the committee—mistakes of a few cents only. GENERAL HOWARD ACTING THROUGH HIS AGENT. Q. This matter, then, that we have been going over, so far as you are concerned, was mostly carried on by your agent 1—A.- Yes, sir; during 1872 I was absent from Washington altogether, and during 1873 I was absorbed in a very important investigation before the court of inquiry of which General Sherman was president—the Belknap court. In 1874 I was sent to the.wild Indians in Oregon, and I have since been so FREEDMAN'S SAVINGS AND TRUST COMPANY. 273 much absorbed with my duties and labors there as to be able very little attention to private business, and have had to conduct to pay everything here through an agent. WITNESS'S OPINION OF THE GARLAND BILL. Mr. GARLAND. General, have you examined the bill reported by this committee last spring, but recommitted in view of this investigation? If you have, I would like to have your ideas as to the theory and policy of that bill, as it looks to the winding up and closing out of this institution ? The WITNESS. Yes, Senator, I read the bill and I think it admirable in its provisions. I would like to see the institution closed up. If it were possible, leaving out my personal interest, of course, I wish that the depositors could lose nothing by the bank. The work was carried on virtually and practically under the guarantee of the United States. The president of the bank interested himself with Congress and got the charter from Congress, and almost all the depositors looked upon it as virtually a United States bank. We all felt very sure about it, and thought it was well backed up. I was solicited to become president of the bank a good many times, but I always declined. I had too many responsibilities already, and I really had nothing whatever to do with the management of the bank. I never used the bank in any other way than as depositor,except-that in the Southern States I used the branches sometimes in the payments to holders of bounties, those to whom bounties were due. I used it as an agency for this purpose where I could. I used also other local banks and every means I could, because I was obliged under law to pay in currency, and it was very convenient to use these branches. I was forbidden by law to pay in checks or drafts, and could take advantage of any bank in the immediate vicinity. These being used in that way, and assuming to have the backing of the Government of the United States, I think it would be reasonable and fair that the government should do its best to make good the losses to depositors. That is my opinion. The provisions of the bill looking to the winding up of the institution I like very much indeed. THE FREEDMAN'S BANK STARTING WELL. Q. The bank started under good auspices, you think f—A. Under the very best. The finest men we knew of were put in connection with it. At least, my attention was called to them when I came here in 1863, and I knew a good many of the men in New York who were connected with it then, and they were excellent men. Q. The- bank did very well for some time, did it not 1—A. Yes, sir; it did very well. CAUSES OF THE FAILURE. Q. Do you recollect up to what time it commenced receding ?—A. I cannot recall the time exactly, but I will state that there were two or three things that appeared to me to injure the bank early in its operations. One was the changing of its charter opening up the business of the bank to outside securities, instead of con fining it to United States securities. Real-estate securities would have been all right if they had been properly managed, although they would take some time to be realized upon and always involved the danger of shrinkage, as we have 18 F B 74 FREEDMAN'S SAVINGS AND TRUST COMPANY. ,Eeen since. Another thing was, endeavoring to please the people by paying too high a rate of interest. That was a great mistake. I heard ,of it and said so at the time. I was afraid they had not income enough to pay the great number of employes necessary throughout the United States. It was a very large concern, and I was very much afraid it would break after it began to do the business in the way I have indi,cated. And finally, the thing that caused its failure was, in my judgment, the failure of Jay Cooke & Co. and of the First National Bank, which rendered securities that would otherwise have been good—as good as could be—almost worthless. The CHAIRMAN. Mr. Fitzpatrick, the expert accountant of the committee, desires to make a statement here by way of explanation of the account of General Howard. Mr. FITZPATRICK. If the committee will allow me, I desire to say a word or two in reference to the statement of the account of General Howard. General HOWARD. There seems to be a very serious mistake—if the committee will allow me to speak of another matter before Mr. Fitzpatrick proceeds. Whether by gradual deposits or otherwise, there got into the educational fund nearly three thousand dollars that do not belong there. I drew a draft for that amount, and the draft is marked paid, yet I find it was not paid according to the books of the bank. It was a draft for $2,712, and the words "for transfer to other books"are marked on it. It was drawn on this trust fund, and should have been credited on the other, but it seems first to have been properly credited and then to have been scratched out. It was put back to the wrong fund. While it does not affect the entire trial balance, yet it does affect the accurate statement of my account, and while it may not be of material value to the committee, yet I noticed the mistake and am occasioned a heavy loss, as the trust fund was settled by the bank statement. It serves to show the unsettled condition of my account on the books Of the bank. STATEMENT OF THE EXPERT AS TO GENERAL HOWARD'S ACCOUNT. Mr. FITZPATRICK. (Resuming.) From our examination of the bank books we find that General Howard's account is overdrawn $2,415.78, which 'we explain as follows: Up to the 26th of May, 1870, we find the books all right—the balances correct and the account correct. I beg to submit to the committee the following, as a true statement of 'General Howard's account as appears from a careful and thorough examination of the books: Account correct to May 26, 1870. December 1, 1870. Balance due General Howard per our examination December 1, 1870. Balance due as stated on ledger $3,441 99 3,030 61 Being an increase to credit of Which is explained as follows: 1870. $9 00 6. Balance stated on ledger too little .June 200 00 17. Balance stated on ledger too little August 10 00 September 3. Balance stated on ledger too little 90 00 September 5. Balance stated on ledger too little September 26. Deposit this date $90, posted on ledger as a draft, 180 00 making a difference of _489 00 Total additional credit 411 38 FREEDMAN'S SAVINGS AND TRUST COMPA NY. May July August Total erroneous credit 1871. March 275 From which we deduct26. Deposit this date posted twice and making balance too much by $77 50 2. Balance stated on ledger too much 02 27. Balance stated on ledger too much 10 $77 62 Making increased credit as above. $411 38 6. Our examination shows a further increase in balance to General Howard's credit on this date. 20 00 Making a total balance to his credit to March 6, 1871, in excess of ledger balance 431 38 This increase of $20 is explained by a draft of $40 Februar y 4, 1871, posted as $60. Starting now with a balance to the credit of the accoun be correct to March 6, 1871, we bring it down to June t, as shown to 20, 1871: We have balance to credit March 6, 1871 To which we add total deposits to June WI, 1871 $2,028 60 2,258 64 Making total deposits to June 20, 1871. 4,286 64 From which we deduct all drafts from March 6, 1871, to June 20, 1871, amounting to 4,537 46 And we show the account overdrawn 250 82 Whereas the ledger has a credit balance to the account on June 20, 1871, of. 1,803 79 Making a difference of 2,054 61 To which we add draft March 12, 1872, not included in ledger additions $260 50 Deposit November 16, 1872, for which we find no corresponding entry on the journal, scratch book, or deposit slips 100 00 Draft July 8,1871, of $20 should be $21. 1 00 And deduct forSeptember 12, 1871, draft posted too much September 23, 1871, draft posted too much 361 50 ...... ...... 11 36 47 361 03 Add for an unexplained difference 2,415 64 14 Which makes the account overdrawn 2, 415 78 General Howard's total deposits were And his total drafts Overdrawn as stated $212,748 91 215, 164 69 2,415 78 Since General Howard's arrival in the city he has been at the bank three or four days. We have gone over the account very careful ly, and examined the books with the utmost scrutiny, and compar ed the account with the deposit slips, drafts, and books that the genera brought with him. As the result of this examination we have discov-l ered errors which give to his account additional credits to which undoubtedly entitled, because he has exhibited receipts of the bankit is for money for which the books do not give him credit. For example, General Howard claims credit for a deposit of $90, made September 26, 1871. For this deposit he presents the deposit slip signed by the receiving teller showing that the general did deposi t 276 FREEDMAN'S SAVINGS AND TRUST COMPANY. the money, but the books of the bank fail to give him credit therefor. And on June 3, 1872, he claims a deposit of $458.33, for which be presents the deposit slip, but there is nothing on the books showing that such deposit was made. At least there seems to have been an entry on the books of that amount or some other amount of that date, but for some reason it was erased. Why this was done it is impossible to say. General Howard has the slip for the amount, which entitles him to the credit for that deposit which he claims. Mr. GARLAND. You state,that there is nothing whatever on the books to explain the erasure ? Mr.FITZPATRICK. Nothing whatever. We find that General Howard was in the habit of depositing his salary every month, and the deposits appear regularly every month for four or five months, before and after the date of this slip, but this month it was left off the books entirely. Then again, on the 27th of July 1871, there was a deposit of $400, for which the books give no credit. These sums taken together make a total of $948.33 to which General Howard is entitled, but which the books do not credit him with. This sum we have deducted from the total amount of the overdraft as reported by us, leaving the account still overdrawn $1,467.45. Now, in addition to these credits, General Howard claims other credits which we do not allow. One is a deposit of $100, on the 16th of November, 1872. This amount we find to his credit on the ledger, but we cannot find any trace of it on the journal, nor any deposit slip for the amount, nor does the general present any slip for it. There is nothing there to show that the money was deposited at all. It appears, however, on the pass book, but the pass book appears to have been copied from the ledger; and if it was copied from the ledger, that of course would be but the copy of an error. We have consequently disallowed that claim. General HOWARD. The committee must bear in mind that the practice of giving a deposit slip was not uniform in the bank. I did not always get a deposit slip. They themselves may make it, but I have not all the deposit checks; did not receive them in every case. I have that hundred dollars on my pass-book. Mr. FITZPATRICK. (Resuming.) General Howard claimed also a draft of $260.50 of March 12, 1872. This was a draft drawn and charged against him on the ledger, journal, and scratch book. The general denied that in his examination of the account with the accountants, and did not think that he ever drew it, but since then the draft itself has been found, and he of course admits it. Another claim made by the general is of a draft for $750, paid on the 17th of October, 1871. This draft is properly charged on the scratchbook or blotter and on the journal and the ledger. It is entered also on the pass-book. These charges and entries show that the draft was drawn n that day, and I am quite sure that it is correct. General Howard hinks that it is an erroneous charge for a draft of $75, paid October 18, 1871, the day after. But this draft of $75 also appears on the day after. The CHAIRMAN. On what day ? , Mr. FITZPATRICK. On the 18th of October, 1871. Mr. GARLAND. On the day after the draft for $750, that the general claims was entered by error, should have been $75 instead of $750? Mr. FITZPATRICK. Yes, sir. General HOWARD. It is the same day as entered on the pass-book, and not the day after.. FREEDMAN'S SAVINGS AND TRUST COMPANY. 277 Mr. GARLAND. You explained that in your testimony, general, did you not? General HOWARD. I said in my testimony that it was on the same day. The accountant gives it as a different day, on the next day. Mr. GARLAND. What is your explanation of the difference in the dates of the transactions ? General HOWARD. The transactions I claim were all on the same day, the 17th of October—that is, both the draft for $750 and for $75, and for the $750 I had no draft. I am quite confident that that latter draft is a mistake in the entry. It is on the pass-book, you say (Addressing Mr. Fitzpatrick.) Mr. FITZPATRICK. Yes, sir. General HOWARD. Well, my theory about it is this: That it is a lniStake ; that it was entered $750 instead of $75 from the check, and that looking back afterwards (for you see the date is the same), they found the $75 had never been entered, though they had entered the $750. Mr. GARLAND. And did not change the other, according to your theory of it? General HOWARD. Yes, sir; did not change the other. They first entered the $750, and the $75 was entered afterwards, though they are both drawn on the same day. That is my theory about it; and from the many errors in the account, it is a very reasonable explanation, to my mind, in the case of this draft. Mr. FITZPATRICK. The date on which these drafts were paid, general, do not indicate that they were drawn on that day; sometimes they were not paid for two or three days or weeks after they were drawn; they are entered on the books the day they are paid, although they might have been drawn a mouth before. General HOWARD. I am only trying to account for the fact that the error was made, and how it was made. I do not see why it should have been made, unless it was intentional. Mr. FITZPATRICK. We have found the seven-hundred-and-fifty-dollar draft properly charged on the ledger, on the journal, and on the Scratch-book, and we have charged it, therefore, against the account, since we could not go behind the record in the absence of evidence to show that the record is erroneous. I think that the charge is a proper one. The general has no draft for it; still there are a good many other drafts that he did not dispute that are missing, and the fact that a draft was missing would not show that that draft was not drawn. Deducting, therefore, the amount of additional credit that We allow the general's account from the amount of the overdraft as reported, $2,415.78, we find that the account is still overdrawn $1,467.45. General HOWARD. Have you allowed the credit of the $400. Mr. FITZPATRICK. Yes, sir. General HOWARD. I will say to the committee that in any final seal& meat of the account with the bank, I am very anxious indeed that it should be exactly and absolutely correct. It is no fault of - mine, as I did not keep the books, that errors and discrepancies appear; and it is my desire that the account should be absolutely correct, and so far as I can I will try and make it so. If your bill should pass, I can settle easily with whoever shall be in charge. The present commissioners have not at this time any discretion in the matter; they cannot make a settlement. The CHAIRMAN. Of course, general, you did not make up your own account; the bank officera did that. General HOWARD. I had nothing to do with it, except that when I 278 FREEDMAN'S SAVINGS AND TRUST COMPANY. got my book I took off the balance on a separate sheet of paper, and I always thought that that balance was mine. The expert will admit, however, that I myself have discovered errors that were not discovered before, and that could not have been brought out but by the evidence in my possession. For example, that error of the four-hundreddollar deposit for which the books failed to give me credit. Mr. FITZPATRICK. The general has the deposit slip in that case, which puts that matter beyond doubt. GENERAL HOWARD'S DISTINCT STATEMENT AS TO OVERDRAFTS IN HIS ACCOUNT. General HOWARD. I would like right here, Mr. Chairman and gentlemen, to make one distinct and positive statement, and it is this: That in no case, in my dealings with the bank, did I ever willingly or knowingly make an overdraft. I never did—that is, unless at the same time I made a deposit of United States securities to cover it; and for two or three days it is possible that in that way I have made an apparent overdraft. Then of course the securities were returned to me as soon as the deposit was made. Never, in any other way, did I ever make an overdraft to my knowledge. I would in every case ask, "What is to my credit ?" and on being informed would make my draft. AS TO JOHN H. COOK, ATTORNEY AT LAW. Mr. ROBERT PURVIS: With your permission, Mr. Chairman, I should like to put a question to General Howard, an answer to Which will have sonic bearing upon a matter that has been before the committee. The CHAIRMAN. Certainly. 1VIr. PURVIS. You have intimated, general, that the late John H. Cook was your agent; would you be kind enough to give to the committee your estimate of him as a man and a scholar, and your opinion as to his general competency for business as a lawyer ? General HOWARD. I never in my life found a superior man in keeping accounts. He always managed my business well and to my thorough satisfaction. I trusted him fully, and was never deceived by him. He was a thoroughly worthy man, and he was a very fine scholar, a graduate of Oberlin. Mr. LEIPOLD. I desire, in a word, to say that during the past week the bank has succeeded in winning a case in the Supreme Court of the United States, in which Mr. John H. Cook was consulted. It involved the payment of a large judgment, and Mr. John H. Cook advised the Freedman's Bank— General HOWARD. (Interrupting.) Was the judgment against me? Mr. LEIPOLD. 0, no, sir; this matter has nothing at all to do with your present examination. General HOWARD. I beg pardon. Mr. LEIPOLD. (Resuming.) 11Ir. John H.Cook advised the Freedman's Savings and Trust Company—the commissioners—that there was no getting out of paying that judgment, involving, as it did, some five or six thousand dollars._ I was not willing to pay it, however, without consulting further counsel. I thereupon sent Mr. Stickney to Colonel FREEDMAN'S SAVINGS AND TRUST. COMPANY. 27D Totten, and Colonel Totten advised the non-payment Of the A suit was brought by the owner of the judgment, and thejudgment. won by the commissioners,and it has now been affirmed by the case was Supreme Court of the United States. I merely refer to this now,since the matter has again been brought before the committee, and it is in confirmat ion of former statements that I have made. I do not wish to reflect upon Mr. Cook's character as a man and scholar, but simply to show what I have before stated, that by reason of inexperience he was not as competent an attorney as some other gentlemen, that is all. WASHINGTON,D. C., March 6, 1880. TESTIMONY OF CAPT. J. A. SLADEN. Capt. JOSEPH A. SLADEN, senior aid to Major General Howard, sworn and examined. By the CHAIRMAN: Question. Have you had anything to do with the keeping of General Howard's accounts f—Answer. I had the keeping of General Howard's accounts during the whole time that he was a depositor in the Freedman's Bank. These accounts were not always perfectly accurate, for frequent transactions were had during my absences on military duty away from the general, and .on my return were frequently made from scraps and memoranda in the general's possession and from his memory. Q. Did you know that his deposit account in the Freedman's Bank was overdrawnl—A. I did not. Q. Did not his deposit book show it to be overdrawn ?—A. It did not; on the contrary, the,last book shows the account to be balanced. and closed. Q. Since your arrival at Washington, at this time, have you examined General Howard's accounts on the books of the Freedman's Bank, here f—A. Yes,sir. Q. Will you please give the committee a full statement from the examination you made, and state what result you have reached ?—A. I have examined the accounts of General Howard in the books of the Freedman's Bank since my arrival here. The errors therein are numerous, and the pass-books in the hands of General Howard are not true transcripts of the accounts as set forth in the books of the bank. The claims set forth in the accompanying statement of credits claimed by General Howard, which I submit as a part of my testimony, were ascertained by my examination, and I present that statement as an answer to this question. STATEMENT OF CREDITS CLAIMED BY GENERAL HOWARD. General Howard claims credits on his account as follows: For January 7,167.—Draft for This'draft is found upon the ledger, but no corresponding entry is in the journal. July 27, 1871.—Deposit, for which no credit has been given. For this deposit I hold the actual receipt of the bank. June 3,1872.—Deposit,for which no credit is given $102 50 400 00 458 33 280 FREEDMAN'S SAVINGS AND TRUST COMPANY. For this deposit I hold the actual receipt of the bank. September 26,1870.—Deposit of $90, entered as a draft, makingin the account a difference of $180 February 4, 1870.—A draft of $40, entered as $60, making a difference of 20 September 26, 1870.—Deposit of $90, not credited 90 For which I hold the actual receipt of the bank. October 17, 1871.—Draft erroneously entered 750 On this day, according to the pass-book, several drafts were paid. Among them, one for $75. All the drafts are found except one for $750, of which I have no evidence whatever. I believe the $75 was entered as $750, and again entered as for the proper amount, namely, $75. November 16, 1872.—Deposit in pass-book, or deposit book. 100 Stricken out by expert of committee. March 12,1872.—An erased draft in ledger restored by expert. 260 No draft found. January 3, 1871.—Draft of $31.61 entered as $3,161, making a difference against me of 3, 129 00 00 00 00 00 50 39 Total .5,489 89 This total is reduced by draft of January 7, 1867, being erroneous as to date simply; it should read January 7,1868. 102 50 And, by draft of March 12,1872, erased in ledger and restored by expert. A draft has since been found Deducting this From Leaves a credit which I claim of. 260 50 363 00 5,489 89 5,126 89 Of this amount the expert allows me on his balance-sheet, September 26, 1870.—Error by bank given above 180 00 February 4, 1870.—Increase of amount of draft given above. 20 00 January 3, 1871.—Increase of amount of draft given above. 3, 129 39 Total credits by expert Leaving a credit still due me of 3,329 39 1,797 50 0. 0. HOWARD. By the CHAIRMAN: Q. Have you had full access, Captain Sladen, to the books and account, and has every facility been extended to you for the making of a thorough examination v—A. The officers at the bank,and the committee's expert, Mr. Fitzpatrick, have afforded me every facility for the examina- • tion made by me. The examination is not yet concluded, and I believe that other errors favorable to General Howard's account will yet be found. FINAL STATEMENT BY COMMITTEE'S EXPERT. Mr. FITZPATRICK: I will add with your permission, Mr. Chairman, that the amount of $1,797.50 for which General Howard claims credit should be deducted FREEDMAN'S SAVINGS AND TRUST COMPANY. 281 from the overdraft reported by us, namely,$2,415.78. This would leave his. account still overdrawn $618.28. The deposit slips which he has in his possession clearly entitle him to a credit of $948.33, which reduces his overdraft to $1,467.45. As to the other credits which are claimed, I would say that the draft of $750 appears to be a correct charge. It appears properly entered on the scratch-book,journal, and ledger of October 17, 1871, and we have therefore treate4 it, in our examination, as so much money drawn. There are other drafts besides this, which are missing, so that the fact of its not being found is no evidence that it was not drawn. As to the deposit of $100, which is claimed, I have already explained why it was stricken out of the account. All the other credits noted will be found incorporated in our repor on this account before submitted, and do not affect the overdraft at all. Adjourned. 282 FREEDMAN'S SAVINGS AND TRUST COMPANY. REPORT OF ACCOUNTANTS. REPORT ON LOANS. WASHINGTON, D. C., December 2, 1879. Hon. B. K. BRUCE, Chairman Select Committee on Freedman's Savings and Trust company: DEAR SIR: In compliance with your instructions, we have made an examination of the loans made by the Washington office of the Freedman's Savings and Trust Company, and respectfully submit the following report of the result of such examination: Section 5 of the act approved March 3, 1865, entitled "An act to incorporate the Freedman's Savings and Trust Company," reads as follows: "That the general business and object of the corporation hereby created shall be to receive on deposit such sums of money as may, from time to time, be offered therefor, by or on behalf of persons heretofore held in slavery in the United States, or their descendants, and investing the same in the stocks, bonds, Treasury notes, or other securities of the United States." Section 12 of the same act forbids any officer, trustee, or servant of the company from borrowing, directly or indirectly, any funds of the corporation or its depositors, or in any manner use the same or any part thereof, &c. By an act of Congress approved on the 6th of May, 1870, section 5 of the foregoing act was amended so as to allow loans on real estate security in double the value of the loan. In the course of our examination we find that all of the above- quoted sections were often disregarded by the officers of the company. A large number of the loans made by the bank contrary to the provisions of the charter have been paid, but the books show that many of them were not paid at maturity; but ran considerably over time, causing expense to the bank in collecting; others were not paid at all previous to the failure of the bank, bat collected by the commissioners of the company after they assumed control of the affairs while many more remain unpaid at this date. We have prepared a schedule of loans, and submit it as a part of this report, showing amount of unpaid loans at this time, giving the original amount of loan in each case thereon stated; costs and accrued interest previous to failure of bank; paid on loans previous to failure; ledger balances transferred to commissioners(being amount due at time of failure); interest charged up against loan by commissioners; costs and expenses incurred by commissioners on account of loan; taxes paid by the commissioners on property securing loan; amount paid to commissioners and the balance now due, with a column of remarks showing the present status of each case. This schedule gives a correct statement of the unpaid loan accounts, which we find on the books of the bank as of September 17, 1879. It is impossible for us to state in this report the total amount of all the loans made by the bank, and the reason for not doing so is owing to the entering of credits so that it cannot be determined, without a long and tedious examination, what constitutes a cash payment, what a transfer of loan, or what an extension. We find, for instance, some loans credited on date of maturity with the balance due, without any explanatory reference or remark, which credit would at first appear to be a cash payment; but, upon further search, we find it either a transfer or an extension of the loan, and in order to arrive at the aggregate amount of all loans, it would have consumed more time than we considered it advisable to spare, if we were to give the committee a statement upon the other matters connected with the loan account in the time specified by you in your instructions to us. The charter and by-laws of the company required that all applications for loans should be approved by the finance committee and board of trustees. We find that loans were often made by the actuary before reporting the application and obtaining such approval, and in some cases he made loans, which, so far as we can ascertain from the records, were neither reported nor approved. The actuary, Mr. D.L.Eaton, and the assistant actuary, Mr. George W. Stickney, appear in several cases as the indorsers of notes upon which loans were obtaited by outside parties. The finance committee refused, in some instances, to approve applications for loans on insufficient or bad security, and then, on the other hand, we find their approval of loans on security equally as bad as that rejected in other cases. We call the attention of the committee to the following loans, in all of which the bank has suffered heavy loss, and we state the facts relating thereto as we find them on the books and records: On the 18th of May, 1870, the Maryland Mining and Manufacturing Company,commonly known as the Seneca Sandstone Company, obtained a loan of $4,000, for which FREEDMAN'S SAVINGS AND TRUST COMPANY. 283 they gave as security $10,000 of second-mortgage'bonds of the said mining facturing company, which loan we find properly charged and carried and manubooks. On the 27th of July, 1871, this same mining and manufacturing through the company obtained another loan of $27,000, the collaterals for which consisted of $49,000 of secondmortgage bonds of the mining company, and this loan is also properly charged and carried through the books making a total loan to the Maryland Mining and Manufacturing Company of $31,000, for which the bank held as security $59,000 of secondmortgage bonds of the mining company. On the 25th of July, 1870, the Freedman's Savings and Trust Company purchased of the Maryland Mining and Manufacturing Company $20,000 of first-mortgage bonds of said mining company, for which the savings company paid $18,000, being at 90 cents on the dollar, with, as appears from the minutes of the finance committee, under date of August 8, 1870, an understanding that the Seneca Company, so called, would redeem the bonds within two years at par. Under date of January 2, 1872, the two loans made to the so-called Seneca Sandstone Company are entered upon the books as paid. We find that they were not paid in cash, however, but by a transfer of the loan from the so-called Seneca Sandstone Company to Messrs. Kilbourn & Evans, with whom an account is opened on that date, charging them with a loan of $50,000. In connection with this we find that Messrs. Kilbourn & Evans entered into an agreement with the then actuary of the bank, Mr. D. L. Eaton, and three members of the finance committee, Messrs. L. Clephane, William S. Huntington, and L. R. Tuttle, which agreementviz, is dated December 30, 1871, and reads as follows: "The Freedman& savings and Trust Company has this day made a loan to John 0. Evans and Hallett Kilbourn of $50,000 upon the folloWing-described securities as collateral to their note: $2,400 stock American Dredging Company, Philadelphia; $2,000 Metropolitan Insurance Company stock, Washington, D.C.; $75,000 Maryland Freestone Manufacturing and Mining Company 6 per cent. gold bonds, Montgomery County, Maryland: $7,500 Metropolitan Paving Company stock, Washington, D. C.; $50,000 Washington Market House stock, Washington, D.C. Said note is payable six months after date, with 10 per cent. interest; and in case said Evans and Kilbourn's note shall not be paid as it becomes due, then it is fully agreed that the Freedman's Savings and Trust Company shall keep the $75,000;bonds of the Maryland Freestone Manufacturing and Mining Company as full payment of said note and interest, and surrender to said Evans and Kilbourn the other securities above enumerated (save and except the $75,000 bonds of the Maryland Freestone Manufacturing and Mining Company), together with their note. "D. L. EATON, Actuary. "Approved— "L CLEPHANE, "WM. S. HUNTINGTON, "L. R. TUTTLE, "Finance Committee." In accordance with this agreement, Evans and Kilbourn's note, and all the securities, excepting the $75,060 bonds of the Maryland Freestone Manufacturing and Mining Company, were returned to them on the 15th of November, 1873, and on the 12th of February, 1874, nearly three months after the notes and securities were returned to Evans and Kilbourn, their account is closed by a credit of $50,000; and on same date a new account is opened in the name of the Maryland Mining and Manufacturing Company, who are charged with a loan of $50,000, and $7,500 accrued interest, for which loan the $75,000 bonds above referred to were held as collateral. In a letter on this subject, written by Messrs. Kilbourn and Evans to Mr. J. M. Langston, chairman of a special committee appointed by the board of trustees to investigate this matter, they deny having received any money from the bank in this transaction, and stating their object'in giving their note to be a desire on their part to accommodate the actuary, Mr. Eaton, by having the loan appear in their namer instead of in the name of the Maryland Mining and Manufacturing Company. The above transactions between the bank and Messrs. Kilbourn and Evans occured previous to an examination of the affairs of the bank by the national bank examiner„ and after his investigation the account against Kilbourn and Evans was closed, and the amount involved again charged to the Maryland Freestone Manufacturing and Mining Company. Under date of January 9, 1872, we find a receipt signed by Mr. John L. Kidwell, then president of the Mining and Manufacturing Company, which reads as follows; "Rec'd of D. L. Eaton, actuary, seventy-five thousand convertable bonds of the Maryland Mining & Manufacturing Company, which were held as security for two certain notes of said co., one for $27,000, dated May 18, 1870, and one for $4,000, date June 7, 1870. "JNO. L. KIDWELL, Pres." 284 FREEDMAN'S SAVINGS AND TRUST COMPANY. It will be observed that this receipt is dated seven days after the date upon which the loan to Kilbourn and Evans is reported as having been made. Amona the col6 receipt, laterals for which loan these bonds are mentioned, and notwithstanding this which appears as evidence of the bonds having passed into the possession of the mintime of its possession of the failure, and bank at the the in ing company, they were are now under the control of the commissioners of the Freedman's Savings and Trust Company. Under date of November 6, 1873, we find a letter addressed to Mr. J. M. Langston, written by Mr. George W. Stickney, then actuary, who, in giving a statement as to the Freedman's Savings and Trust Company with the Marythe transactions had land Mining and Manufacturing Company and with Messrs. Kilbourn and Evans, says "That the Minina,and Manufacturing Company was, on the 2d of January, 1872, indebted to the Freedman's Savings and 'trust Company as fellows: 1st. Loan May 18, 1870 2d. Loan July 25, 1870, being amount paid for 20first-mortgage bonds ' 3d. Loan July 17, 1871 4th. Interest due on above loan December 1, '71 Total due Freedman's Savings and Trust Company $4,000 00 18,000 00 27,000 00 2,785 73 51,785 73" And then he adds: "At this date, according to the books of this compaA y[the Freedman's Savings and Trust Company], a transaction covering this whole matter was had with Messrs. Kilbourn and Evans, whereby their note was given for $50,000, payable six months after, and secured as follows—[here follows description of securities, the same as contained in the agreement before mentioned] and payment by'the Maryland Mining and Manufacturing Company of $1,785.73 on accrued interest. This payment was made by check on First National Bank, signed by C. W. Hayden, treasurer." It will be seen from the above that Mr. Stickney includes among the loans the $18,000 paid by the bank in the purchase of the $20,000 first-mortgage bonds. On what is called the "bond-book," under date of January 9, 1872, we find the following, in the handwriting of Mr. Eaton, the actuary: "NOTIi.—Mr. John L. Kidwell on the 9th of Jan'y repurchased these bonds [referring to the 20,000 first-mortgage], paying for them in cash 90=$18,000, with interest on that amount at ten per cent from July 26, 1870, date of purchase by this co., less the amount of coupons which had matured while the company held them. "Bonds, $18,000; int. 10 %,2,580=420,580, less gold coupons." Showing that the Maryland Mining and Manufacturing Company did repurchase the bonds as agreed, paying therefor $18,000, the amount paid for them by the bank, and $2,580 interest. This sum of $20,580 cannot be found carried to the credit of the bank on any of the bank books. It was entered on the actuary's "scratch" or blotter, under date of January 9, 1872, but has been erased, and the only entry of it that we can find is on -this bond-book. There is nothing, so far as we can find, to show that the bank ever received credit for the amount. Deducting the $18,000 from the loans as reported by Mr.Stickney, which should be done,inasmuch as this was a purchase and therefore bank property, it leaves the indebtedness of the so-called Seneca Sandstone Company $31,000, exclusive of interest. Yet for this amount Kilbourn and Evans put in their note for $50,000, and when the account with them is closed and new account opened with the so-called Seneca Sandstone Company,$50,000 is the amount with which the Sandstone Company is charged as principal and $7,500 accrued interest, with $75,000 of second mortgage bonds held by the bank as collateral. The only bonds given as collateral for the two loans of $4,000 and $27,000, respectively, were $10,000 and $49,000 of second mortgage, a total of $59,000. The $20,000 first mortgage bonds were disposed of as the note on the bond-book shows; but how the balance ($16,000) of second mortgage bonds came into the possession of the bank we are unable to discover. Under date of March 26, 1874,a little over one month from the time of the so-called Seneca Sandstone Company transactions, there appears a loan in the name of J. C. Kennedy of $12,000 with $20,000 second mortgage bonds of the so-called Seneca Sandstone Company as collateral. This loan remains unpaid and the amount now due, and its present condition will appear on the schedule. Under date of October 2, 1871, we find a loan in the name of Hallett Kilbourn of $10,000 (No. 676 available fund.) The collateral for this was a note of Kilbourn, Evans,and Clephane,$20,000 at 90 days,indorsed by Wm.S. Huntington, and $24,000 Metropolis Paving stock; this loan is entered paid under date of January 3, 1872. On the '24th of October, 1871, another loan appears in the name of Hallett Kilbourn of $10,000, and the loan gister states that the collateral for the firstloan is also security for the second ; but e is statement has been erased and the following substituted: FREEDMAN'S SAVINGS AND TRUST COMPANY. 285 "Note of H.Kilbourn, favor of L. Clephane, date January 3, 1872,[the same day the first loan is marked paid],90 days for $10,000." This loan appears to have been paid July 26,1873. Mr. W.S. Huntington,the indorser of the first note, was at the time a member of the finance committee,so also was Mr.L.Clephaue. 1, made Loan No.1401 available fund is also a loan to H.Kilbourn of $3,000, nt." March We can 1873, the collateral for which was Mr. Kilbourn's own note as "Presideis still unpaid, find no record of its approval by the finance committee, and the amount commissioners and the question of settlement is now in court on suit brought by upon such referagainst Kill3ourn ; it has been referred to special referee and stands ence awaiting further action. The colLoan No.394 available fund,Joseph B.Stewart,for $3,250, April 20, 1871. Railroad Comlateral for this loan consisted of $5,000 in bonds of the Union Pacific pany. held by C. The bonds, however, were not left in the custody of the bank, but were amount. HavenW. Havenner & Co., who are also indebted to the bank in a large possesin their were ner & Co., in a letter dated March 16, 1871, state that the bonds .this the sum of sion and that they would protect note of Stewart at maturity. Onat maturity, and ,250 was loaned to Stewart. Havenner & Co. did not protect note the amount, with interest, is still unpaid. al Home of Loan No. 1283, R. M. Hall, April 6, 1873, $8,658, collateral, notes dIndustri by finance comAssociation and note of 0. 0. Howard. This loan was not approve mittee, and a considerable amount is still due and unpaid. 5, 1872. The collateral Loan No. 994, A. F. to Davis and Balloch, $2,000, April 5.20 bonds. On the originally given for this loan consisted of $2,000 United StatesStates bonds and sub18th of December, 1872, Davis and Balloch withdrew the United remains due and stituted therefor 18 shares of Fitchburgh Railroad stock. Aabalance t against Davis judgmen have oners commissi The $492.28. of account this on unpaid $523.14. for Balloch and and H. D. Cooke Under date of April 18, 1871, appears loan No. 314 to 0. 0. Howard stands the Young Men's for $33,000. Security, lots 3 and 4, square 407, upon which r 18, 1871, appears a payment Christian Association building. Under date of Novembe appears on register "returned of $700, which has been erased, and a memorandum date of November 18, 1871, January 2, 1872." The daily scratch and journal, under signed by A. S. Pratt, agent, credit the loan with this amount. We find a receiptthe books or receipt of Pratt do for the $700, but why the amount is marked returned 0. Howard was vice-president, not show. At the time the loan was made General 0. Christian Association, and Mr. and Mr. H. D. Cooke treasurer of the Young Men's the bank. On the 13th of NoCooke was also a member of the finance committee of in the name of Howard and oners, commissi the with settled was loan this vember,1876, n Association of $33,831.74 Christia Men's Young the by cash in payment the by Cooke, ion of $500 each=$4,000, and an Associat n Christia Men's Young the of notes eight and paid and the account finally account opened in their name. These notes were all closed February 27, 1878. an examination of the minutes Loan No. 958, Evan Lyons, $34,000. It appears, from for a loan of $18,000 April 9, of the finance committee, that Mr. Lyons first applied on schedule for his loan of $34,000), 1872(the collateral offered being same as that noted same year, he again applied for which application was rejected. On the 23d of April, the 8th of May following he On a loan of same amount, which was also rejected. absolutely." On the 4th of June, same again made application, which was "rejected for $15,000, which was also rejected. year, he made another effort, this time applying committee approved a loan to him finance the that find we June, of Yet, on the 18th the 17th of July,1872, Mr. Lyons made of $11,000, which was subsequently paid. On on the 23d of July the finance committee and $40,000, of loan a for ion applicat another This last loan was never paid, and approved the application to the extent of $34,000. oners took charge of the affairs they adafter the failure of the bank and the commissi and bought it in for the bank at vertised and sold the property given as security $40,000, of this loan, including interest, costs, The total amount due the bank on account 7, and the balance remaining due and expenses, at the time of sale, was $46,310.7 with the $40,000, viz, $6,310.77 is charged thereon after sale and crediting the account to profit and loss. $1,750. On the loan register we Loan No. 180, L. Deane, December 30, 1870, for actuary, assumed one-half of' this assistant then , Stickney W. George find that Mr. ing to George W. Stickney, "Belong viz, thereon, appears ndum memora a loan, and in his name." and payments are to be indorsed on this loan collateral for this loan consisted of 450 Loan No. 908, S. Taylor Suit, $25,000. The d. The officers of the bank at the acres of land in Prince George County, Marylan e policies transferred to the bank time this loan was made, neglected to have insuranc a loan was made; subsequently, nearly all as was done in nearly every instance where d by fire. After the bank failed, and the the improvements on this land were destroye 286 FREEDMAN'S SAVINGS AND TRUST COMPANY. affairs were turned over to the commissioners, and the loan being then unpaid,the prop erty was sold under the deed of trust held by the bank and bought in by the commissioners for $8,300, leaving a balance due, including accrued interest, costs, and expenses of $25,252.20, as per report of the auditor of the court; included in which amount was an item of $498, allowed for extra fees to the trustee, which was abandoned by him, and reducing balance due from Suit to $24,754.20, for which amount the commissioners have judgment. Loans to Juan Boyle, and Juan Boyle & Co. Of the unpaid loans Nos.689,690, 1383, and 1546, we can find no record of their approval by tbe finance committee. The large loan, No. 1383,for $29,000, appears to have been made June 30, 1874(the trustees had by vote closed the bank on the 29th of June), and on s3rne day,that is June 30,there appears a credit on the loan of $1,000. No. 1586 for $4,366.66, also appears under date of June 30, 1874, with no collateral. The note of $10,000 referred to among the collaterals for the $29,000 loan, was an individual note of Juan Boyle, drawn to the order of the president and directors of Georgetown College and indorsed by them. The note is dated September 5, 1873, for four months, falling due on the 5th of January, 1874. The note was not paid, and it bears no evidence of having been protested for non-payment. It was five months overdue when the actuary accepted it as part security for this loan, it being represented as secured by first deed of trust, but it was afterwards ascertained that the note was not so secured, there being a prior lien upon the property, and under this prior lien the property was sold and the note turns out to be worthless. It is now in the possession of the commissioners. The other collaterals for the loan consisted of $8,000 in bonds of the Selma, Marion, and Memphis Railroad Company. It will be seen, therefore that had the securities been good they only aggregated $18,000 for a loan of $29,000: Loan No. 1264, A. C. Bradley, $17,000, is explained as follows: On the 24th of June, 1870, L. & F. McGhan obtained a loan from the bank of $10,000, for which they gave as collateral, deed of trust on lot 4, square 377, and .their note payable in one year. The note was not paid at maturity, and the property was sold under the deed of trust and bought in by the actuary, Mr. D. L. Eaton for the bank. On the 16th of June, 1873, the property was sold by the bank to A. d. Bradley for $18,000, $1,500 cash, and his notes (five) running for five years for the balance, viz, $17,000. The first note of Mr. Bradley was paid, but none of the others, leaving balance now due, including interest and costs, $15,333.20. Loan No. 906, E. S. Fowler. This loan was made February 7, 1872, in the name of John H. Cook, fc.r $13,000, upon which payments were made at various times until the 9th of July, 1872. At that date E. S. Fowler assumed the balance then due, and the account against Cook was credited with the balance and closed. The amount remaining unpaid on the 9th of July, 1872, was 812,394.15, and an account is opened on that day with E. S. Fowler, charging him with $12,369.15, being $25 less than correct amount. Mr. Cook, at the time the loan was made to him, was, we are informed, attorney for General 0. 0. Howard, and from correspondence on file in commissioner's office we find, although the loan appears in the names of Cook and Fowler. General Howard is regarded as responsible for it. In regard to the Vander burgh loans, the schedule shows the amonat remaining unpaid, with the securities therefor. Vandenburgh obtained large sums from the bank, and often, as appears from register, without collateral. It appears as if he got money to any amount he desired at any and all times. Under date of January 24, 1870, appears a loan to R. P. Dodge of $13,786.50. The collateral for this loan consisted of three real estate notes for $7,000, $4,000, and $2,000, respectively, drawn by Dodge to the order of Benjamin Darby, all dated January 19, 1869, and payable twelve months after date, thus falling due on the 19th of January, 1870, four days prior to the loan by the Freedman's Bank. These notes were taken by the bank at their face value and one year's accrued interest, a total of $13,786.50. The notes, upon examination, bear no evidence of having been protested for non-payment at other banks through which they had passed before reaching the Freedman's Bank. The notes are still in the hands of the commissioners, and we find the following in connection therewith: The note of $4,000 is indorsed, "without recourse, Benj. Darby," "D.F. Robinson,"and bears the follbwing banking brief: "754. R.P. Dodge, 4,000, 242. 19-22 Jan'y, '70." The note of $7,000 is indorsed,"Benj. Darby, N. Y., W.B.Todd," and bears bank indorsements, "3441. Robt. P. Dodge, 7,000, 423.50. 19 Jan'y, 1870," and is stamped "National Metropolitan Bank, D. C., Jan'y 24, 1870." The note for $2,000 is indorsed,"Benj. Darby, R.S. T. Cissel, R.S. T. Cissel, Treas.;" stamped, "For deposit in Chatham Nat'l Bank to the [illegible] of Simon [illegible], N. Y.' "Pay W.S. Huntington or order for collection for Chatham Nat'l Bank of New York, 0. H.Schriener, Cash.," indorsed "W.S. Huntington, Cash.," and also bears an erased indorsement, "Pay . Laird, Jr., Ass't C., or order, for account First National Bank of Washington, D. C. H.C.Swain, A. Cash." It will be noticed that the amount of this loan embraces the face value of the notes and twelve months'interest to January 19, 1870, and the attention of the committee FREEDMAN'S SAVINGS AND TRUST COMPANY. 287 is called to the fact that these notes bear evidence of having passed into the hands of other banking institutions, and to the fact that the loan collateral was made four days after the notes matured. for which they were given as also find a check drawn by D.L.Eaton, actuary FreedmanIn connection with this we 's Savings and Trust pany, in favor of [blank], date January 24, 1870, and payable out of the Comfunds of Freedman's Savings Company at the First National Bank was cashier) for $13,786.50, which is the exact amount charged(of which Huntington against Dodge. This loan appears to have been made January 24, 1870, but it was not approved by finance committee until February 10, 1870. February 15, 1873, a loan was made to J. E. Dexter which was his note payable in thirty days with George of $500; the collateral for W. Balloch, a trustee, as indorser. • The note was not paid at maturity ' and judgment was ter. To January 19, 1876, $200 had been credited on this note;obtained against Dexwas called upon by the commissioners to settle the balance, when at that date Balloch he again indorses the note, holding himself responsible for its payment, and depositin g with the commissioners a $1,000 bond of the Chesapeake and Ohio Coal and Lumber Company, as collateral. The note is being paid by installments, which began April 13, 1877, with $2.25 and runs through to payment of November 21, 1879, of hundred and eleven credits on the note,ranging from 25 cents 25 cents; there are one to $15. We also find several loans, the security for which was released by Mr. Stickney, actuary of the bank. On the ledger account of W. M. Pumphre y, we find the following: "Note missing and fraudulently released by G. W.S." Upon inquiry, we learn that this memoranda was made by the commissioners. Mr. Stickney case and released the property. The amount due on this loan is was trustee in this the account closed, and an account opened in the books of thecredited thereon and commissioners with Stickney, in which he has been charged with the amount due on viz, $705.33. Mr. Stickney is also charged on commissioners' books Pumphrey's loan, on loans as follows: Margaret Hetzel with a balance of $757.50;with balances dife Francis Wright, $174.94; George H. Simonds, and others. By the provisions of the of trust given as security for loans made by the bank Mr. Stickney is appointeddeeds trustee, for which service he is entitled to commissions, which commissions are by the commissi oners applied towards the liquidation of his indebtedness. These transacti ons figure in the books of the commissioners which we have not yet had an opportun ity to examine. When an examination is made there, these matters will be more fully explained. We find on Ledger B, page 7, the following loans made from the available fund (i. e. they are charged in that fund), with a memorandum applying "No note taken for this; takenfrom cash." C. M. Alexander,$50; J.to each case, viz:. E. C. Sammis, $10; Rudolph Lobsiger, $95. These amounts are still T. Pike,$101.85; unpaid. We also call your attention to a loan to Rudolph Lobsiger(page the balance due on which is $1,550. On the ledger account we find350, Ledger A), memorandum reading as follows: "Mr. Stickney says this loan was paid before the bank failed," and in view of this statement we have not included this loan among schedule. We can find no record of its payment, however, anywhere those on the on the books. We desire also to call your attention to Lobsiger's loan, No. 1337, for $2,300, January 7, 1874. On the same day the loan was made a credit appears thereon of $1,000, and a memorandum on loan register reads: "Security held by G. W.S." No other to security as to the kind or amount can be found. The balance remainin reference g unpaid is $1,437. We find that the bank did considerable discount business, prominent in composing the larger part, is pay vouchers of government and District which, and clerks and employs. The rate of discount varied, but generally it was of Columbia at 2 per cent. and 3 per cent. per month. A large portion of these pay vouchers remained unpaid at the time of the failure of the bank, but they have, with a few exception s, been since collected by the commissioners; most of the exceptions being in cases where the parties have either died or been removed from office. Under date of May 6, 1874, we find ten entzies of amounts aggregating $618.89. This sum was composed of pay vouchers of certain government clerks, which had been discounted by the bank, and which, upon maturity, were found to be worthless , and, although appearing charged to profit and loss we fail to discover such charge on the proper account. Upon examination of "scratch" or blotter entries under that date, we find these pay vouchers entered as paid,and on same date we find two charges, one against H. M. B. Upson, of $295, and the other against Laura Barnard, aggregate of these two amounts being almost exactly the same as the of $322. The pay vouchers, we called upon the commissioners for the notes, and the following facts in connection therewith were obtained: On this date the bank held two notes of H. M. B. Upson and Laura face value of them being $1,695 and $1,722, respectively, which the Barnard, the counted, and accepting same at $1,400 each; when the discrepancy in bank had disoccurred the discount on these notes, viz, $295 and $322, respectiv the pay vouchers ely, aggregating $617, was charged up against Upson and Barnard, thus making it appear by the books 288 FREEDMAN'S SAVINGS AND TRUST COMPANY. that the bank had advanced the full face value of the notes, which is not so, the charges against Upson and Barnard being made to offset loss in pay vouchers, which, as before stated, are entered on ledger,charged to profit and loss, and on scratch book or blotter, as paid. We find loans made to officers of the company,in violation of section 12 ofthe charter, as follows: W.P. Drew,trustee, on indorsement of 0.0.Howard, $500, September 30, 1870, paid February 10, 1871; D. L. Eaton, actuary, $225, July 25, 1872, paid October 26, 1872, no collateral; Wm.S. Huntington, member offinance committee, no collateral, $5,000, May 15, 1871, paid June 9,187]; Wm.S. Huntington indorsed note of C.F.Peck and W. E. Chandler, upon which they obtained loan of $11,000, May 15, 1871, paid August 16, 1871; Huntington also indorsed notes of H. Kilbourn, before mentioned; Geo. W.Balloch, treasurer, a trustee, obtained loans atsvarious times amounting to over $56,000 in the aggregate, besides indorsing notes upon which loans were obtained by outside parties; D.L.Eaton actuary, Geo. W.Stickney, assistant actuary and actuary, Z. Richards, trustee, W.P. Drew, trustee, have also indorsed notes upon which loanshave been obtained. The following amounts we find charged to profit and loss, by the commissioners, the amounts being balances due on loans, which are considered worthless: James Cooper, $1,045.58; B. M.Barker, $392.84;•J. T. Holly, $221.05; A. H.Parry, $418; I. N. Trooke, $2,077.89; R.L.Berry,$196.22; James Dent,$380.65; John Jackson,$89.14; I. B. Keith, $311.45; J. W. Van Hook, $10; Samuel Strong, $5; Daniel Sheahan, $161.97; Nelson Berry, $37.33; Elizabeth Mead, $814.68; Mary Nolan, $130.25; A. E. French, $12.50; Robert Gilmore, $99.26; B. F. Gilbert, $330.50; G. S. Reed,$22; Evan Lyons,$6,310.77; James Webster et al, $0.25; Ralph H.Darby,$119.88; B. F.Eaglin,$150; N. W.Evans, $36.14; Annetta Jordan, $2,518.01; W. A. Ballard, $261.86; C. H. Holden, $29; Geo. W. Nason, $1,016.06; Thomas Ewing, jr. $6.91; R. S. Eagleston, $320.88; Samuel Strong, $16.21; Geo. H. Simonds, $340.33; I. L. N. Bowen, $77.91; Laura M. Stewart, $76.08; Francis Wright, $626.29; I, G. Taylor, $0.50; Laura Barnard, $440; Geo. F. Muth,$2.50; John Spicer,$3,035.10; Horatio Nater,$250; Frank Trigg,$125.13; Henry Brown, $296; Henry Lacey,$40, two accounts,$20 on each; Charles R.Douglass, $50; Plato Lee, $100; M. F. Benjamin; $50; A. Lowry, $560.27; B. Frazier, $85.50; E. R. Knight, $600; and Geo. W. Van Hook, $2,024.30; making a total so charged of $26,322.19. We find that previous to may 6, 1870, the date of approval of the act amending the charter of the Freedman's Savings and Trust Company allowing loans upon real estate security, the sum of $84,340.67 appears to have been loaned upon such security; while previous to May 6,1870,the act of incorporation expressly forbid the investment of the bank funds in any but United States securities. We submit with this a statement showing quite a large sum which was due depositors at the time the bank failed, which we find credited by the commissioners on loan accounts of such depositors to the full amount of such balance, and in some instances the balance due a depositor has been credited on loan account appearing in the name of another person and other than those to whom such balance was due. We desire to can your attention to the eleventh section of the act of incorporation, which provides that all unclaimed deposits, after a period of five years, &c., shall be applied to an educational fund for the education and improvement of persons heretofore held in slavery, &c. So far as w,c7have been able to discover, no such fund was ever established, although there were large sums remaining unclaimed at some of the branches over and above the time specified. In conclusion we beg leave to state that in the matter of making loans, the requirements of the charter were not strictly followed, but on the contrary they were often utterly disregarded. In very many cases loans were made upon worthless security; others, upon security of less value than the loan, and others still, upon no security at all, the latter being frequently the case toward the close of the institution, when its condition must certainly have been known to the officers and others connected with it. The finance committee is entitled to the greater portion of blame for these proceedings, it being their duty to examine carefully all collaterals offered for loans, and to accept none but those known to be perfectly good. We have given such facts as we have been able to gather from our examination of the books and records, but we believe there are many other transactions in connection with this loan business that can be shown by testimony; transactions which, from their character, would not appear upon the books. Very respectfully, JAS. N. FITZPATRICK, JNO. C. HUNTER, Accountants. Security. ' ' 2 :.:4 a U r' b arn 0.2 . .2 f-,•-. ",•. 'eR' UPI CS 0,„, 4 ;-. ,„ .,„t 'acy PI 4 -,,, .-1 ".1" 1-4 Balance now due. Name of borrower. .r. oi r, a4 Credits on loan under commissioners. No. . ' 4' 4 a Taxes paid by commissioners. Date of loan. ;) gil its;* .7:; , r,, , F.,6 ff__. ,t, 04 g 0 gio Remarks. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Lot 6, sec. 9, Barry farm 800 00 288 25 665 00 169 20 496 70 Property sold and bong]tin 77 50 415 00 .• by commissioners for $395. balance unpaid. Mortgage on 7 acres of 4,000 00 803 33 4,000 00 236 96 433 51 1,827 68 2,842 79 Judgment. Compromiged by land m Davidson Co., acceptance by commisi ion. Tenn. . ers of $2,000 secured pa per, of which $1,500 and int(rest has been paid, and trax sfer of $790.72 due on sundr deposit accounts of Nash ille branch. Lots 26,27, and 28, sq.277 7,000 00 675 92 7,397 003,465 41 52 00 4, 104 41 6,810 00 do 4,000 00 172 28 4,200 00 2,400 00 . 00 4, 000 00 2,600 Chattel mortgage, pie- 2,000 00 1, 156 75 1,287 10 239 63 15 00 191 73 Being paid by installmen 1, 350 00 tures, &c.; and $2,000 life insurance. 800 00 Lot 20, sq.728 615 21 160 00 509 29 Balance due after sale o se807 50 240 00 77 00 curity ; suit to charge other . . property with balance due. Lot 29, sec. 2, Barry farm 175 00 14 00 29 75 200 00 Bill filed to substitute tru stee 180 25 25 00 8 75 and sale; trusteeappoir ted. Real-estate note of 4,000 00 4,126 48 126 48 4,000 00 Boughton Sr. Moore for $6,480. Real-estate 2,224 81 Bankrupts. note of 2,224 81 2, 224 81 Boughton & Moore for $4,000. Lot 11, sq. S.of sq. 516. 1, 309 84 123 70 Being paid by installmen ts. 1,000 00 215 00 1, 065 00 368 54 Lot 1, sq. 529 2,800 00 211 00 3, 288 48 In . . . g73 00 2,959 50' 1 539 98 litigation. do 2, 167 62 2,000 00 21 00 50 00 1,950 00' 196 62 38 acres land, Gaithers- 1,500 00 421 52 950 00 Suit to foreclose. 550 00 1,040 00 331 52 burg, Montgomery Co.. Md. t:1 ti Aug.30,'72 1013 Baptist Church,Fifth Apr. 21,'72 1260 .do Apr. 21,'71 326 Barlow,N.H July 2,'72 1018 Barrett, Elizabeth... May 27,72 964 Barton, Thomas July 11,'73 1480 Boughton & Moore.. Feb. 4,74 1533 .do Nov. 14,70 148 Bouldin, Albert May 4,71 360 Bowen, William May 8.'71 1355 do Feb. 6,'72 689 Boyle,Juan • W " 00 Ls.,1:, 812 Agriculturaland Mechanical Association, Nashville, Tenn. C71 o Mar. 21,'72 o 815 Arnold, W R CD 0 '40 o o Apr. 27,'72 o o tiJ Interest and expenses charged against loan previous to failure of ' bank c.c Amount of original loan. Schedule showing amount and condition of unpaid loans, as appear from ledger, under date of September 17, 1879. --- - - 00 Feb. 6,'72 June 30,'74 1383 Boyle & Co.,Juan June 16,73 1264 Bradley, A.C June 1,'74 1380 Bradford, John S.... Nov. 13,'71 604 Braxton, 'F., (Lox. ington, Ky.). Apr. 30,'74 1544 Brooks, Chase & Fitzhugh. Sept. 13,'71 532 Brooks, Joseph Oct. 25,'70 134 Brooks,et al., Joseph Feb. 8,'71 216 Browne, jr., Jerome. • Balance now due. Credits on loan under commissioners. Taxes paid by commissioners. Expenses (courtfees,advertising, &c.)incurred by the commissioners. Interest charged against loan by commissioners. Boyle, Juan Ledger balances transferred to commissioners of Freedmen's Savings and Trust Company. . 690 Security. Credits on loan previous to failure. Name of borrower. Interest and expenses charged against loan previous to failure of bank. No. Remarks. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Lot C, Holden's subdi- .2,000 00 675 001,633 88 1,041 12 247 69 94 12 812 09 700 00 1,495 02 Sold and bought in by coma vision lots 9 and 10, - missioners for $650 ; judgsq. 761. ment, law, No. 14083, lot • $1,253.33, with interest and costs. Real-estate note of Juan 29,000 00 1,000 0028,000 002,800 00 454 17 125 00 31,129 17 Judgmentfor commissioners, Boyle, $10,000; and law, No. 14085, for $28,000, $8;000 in bonds Selma, with interest at 10 per cent Marion and Memphis from May 6, 1874, and costs Railroad. Lot 4, Fig. 377 ' 17,000 001,467 203,867 2014,600 001,169 77 148 43 584 0015,334 20 In ligitation. to set aside sah ofcertain property; equity No.4260. Part lot 8, sq. 724 7,900 00 55 33 158 33 7, 797 002,180 27 130 65 110 62 5,788 11 4,430 43 Property sold and bought it by commissionersfor$3,600 Church property in Lox- 4,600 001,243 653,577 45 4, 266 20 426 62 25 00 450 00 4,267 82 In suit. ington, Ky. 3 real-estate notes of 625 00 625 00 625 00 Property sold under prio] Brooks et al., 1 for lien (see loan 134), Josepl $285 and 2 for $150 Brooks et al.; notice sen] each. John H.Cook, attorney, to] suit, June 17, 1876. Part lot 4, sec. 1, Barry 250 00 50 00 37 50 262 50 33 00 . 295 50 Bill filed to substitute trus farm. tee; J. H.Smith appointk trustee. Part lot 1, sq. 335 3,000 00 750 00 600 00 3,150 00 373 33 140 87 280 39 3, 078 50 866 09 Property sold and bought ii by commissionersfor$2,750 judgment for $891.34, No 16104; paid on judgment . $25.50; leaving balance nom due, $866.09. Lot 10, sq. 368 2, 500 00 764 40 764 40 2, 500 00 557 64 105 90 196 46 3, 225 00 135 00 Property sold and bought it by commissionersfor0,850 FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Amount of original loan. Schedule showing akount and condition of unpaid loans, as appear from ledger, under date of September 17, 1879-Continued. June 20,'70 54 Brown & Son, S.P... Lots 7, 8, 9, 53, 48, 49, 41, 10,000 001,352 462,897 16 8,455 30 60, 61, 66, 67, 73, 21, 22, 75, and west half of 29, Mount Pleasant. May 22,'74 1375 Burgess, George..... Part of Burgess's subdi- 3,938 36 3,938 36 vision of lots 5, 6, 7, 8, and 9, sq. 152. 975 Calvert, Eugene S.. _ Mortgage on farm in 6, 500 00 Prince George's Co., Md. Apr, 9,'74 1372 Carson.Perry H Part lot 6, sq,582 1, 000 00 Feb. 11,'73 1381a Carter,James B 8, 537 30 In litigation; Supreme Court of the United States. 750 45 95 22 6,500 001,820 00 247 24 362 30 2,339 55 2,806 78 Property sold and bought in by commissioners for $2,339.55; judgment, law, No. 16193, for $2,785.78, with interest and costs. 8,443 72 123 52 Property sold and bought in by commissioners fbr $8,443.72; suit for balance. 40 00 1,322 64 Judgment, No. 15693, for $1,000, with interest and costs. 237 63 375 49 Property sold and bought in by commissioners; judgment, No. 14490, for $350, with interest and costs. 21 00 9 00 Being paid by installments. 300 00 1,045 58 Property sold and bought in 28 93 by commissioners for $300. Balance, $1,045.58, charged to profit and loss. 2,834 23 89 51 This balance is difference between 10 per cent. and 8 per cent. after maturity of note. 312 06 3,940 00 297 48 Property sold and bought in by commissioners for $3,850. Judgment for $276.48 (No. 16204), with interest and costs. 3, 112 50 5,820 07 Property sold and bought in by commissioners for $2,500. Judgment, No. 16139, against Joseph Daniels, for $8,471.77, with interest and costs; and judgment against Horace White, No. 4149, for $4,661.70, interest and costs. 51 65 370 00 23 65 Property sold and bought in by commissioners for $350. 1,366 06 55 22 Being paid by installments. 3, 371 08 Suit pending on 119te, 2 50 1,002 50 293 89 66 25 522 12 70 00 21 00 25 00 850 00 5 00 379 90 86 75 Deed of trust and realestate note of Jacob Vanderlehr, $400. 350 00 172 12 Dec. 13,'71 Sept. 23,'70 628 Chunning, William.. Lot 9, sec. 3, Barry farm 111 Cooper,James Partlots 74 and 75 of old Georgetown. 50 00 850 00 12 50 Mar. 29,'71 265 Cornish, G. G Part lot 14, sq. 733 3, 000 00 300 00 600 00 2, 700 00 223 74 Oct. 31,'70 135 Crane, W.F.. Lot 9, sq. 398 3,25(1 00 650 00 650 00 3,250 00 497 43 June 17,'71 421 200 acres of land in 8,000 00 2,040 00 1,640 00 8,400 00 county of Washington. Apr. 22,'71 353 Davis, Henson Daniels,Joseph . D.c. 30,'70 180 Deane,L June • 9,74 1377 Dodge,A. T.C Part lot 19, sq. 540 37 50 177 99 532 57 200 00 64 00 44 00 220 00 47 50 74 50 Part lot 16, sq. 551 1,750 00 Note of C. H. Holden for 8,145 00 $2,500, secured by deed of trust on part lot 5 in sq. 763. 152 25 930 25 972 00 3,145 00 420 28 186 08 29 00 40 00 FREEDMAN'S SAVINGS AND TRUST COMPANY. May 26,'72 82 00 c-O Mar. 23,'71 Nov. 25,'72 1111 do Part lot 8, sq. 553 do 700 00 189 00 189 00 175 00 26 25 26 25 100 00 15 00 10 00 72 00 Deed.of trust,lots 14 and 1,800 00 and 23, sec. 8, and lots 3and 30, sec. 3,ofBarry farm. Property known as 3, 500 00 528 00 525 00 Oct. 12,'72 1121 Douglass,R. M Douglass plantation, in Rockingham County, North Carolina. Jan. 1,'72 675 Duvall, George W.._ Property in-Uniontown, 9,600 001,740 37 2, 091 00 D.C.,value$7,250, and , 76 acres of land valued at $150 per acre. Dec. 6,73 1344 Douglass, C.R Apr. 29,'72 1340 Jan. 8,'74 1339 Fleming,R.J .do Part lots 96 and 97, Mt. 4, 000 00 Pleasant,D.C. 100 002,000 00 130 shares Y. M. C. A. 26, 300 002,322 001,651 04 stock; bills against colored schools for building, $22,011.92, • and notes secured by deed oftrustfor$4,055. Balance now due. • Credits on loan under commissioners. Taxes paid by commissioners. Expenses (courtfees,advertising, &c.)incurred by the commissioners. Interest charged against loan by commissioners. Ledger balances trans. ferred to commissioners of Freedmen's Savings and Trust Company. Credits on loan previous to failure. Dollars. Dollars. Dollars. 10 00 Real-estate notes of 13, 786 50 Dodge for $13,000. 256 Donoho, Thomas .... Lot 91, subdivision of Mount Pleasant. Oct. 21,'72 1074 Dorsey,Ellen ...1 1t2J F., • 28. Dodge,R.P Security. Interest and expenses I charged against loan previous to failure of ' bank. Name of borrower. tsD 1.D -.3 I.-, CC CJI = o o o ao ot o o o o • o jam 1,9,'70 No. Remarks. Dollars. Dollars. Dollars. Dollars: Dollars. 8, 246 79 7, 386 47 Property sold and bought 1, 696 11 140 65 in by commissioners for $8,199.50. Judgment for balance. $210.55, ofcharges disallowed in auditor's report. 503 39 Property sold and bought 466 88 224 77 45 50 in by commissioners fof $321.88. 42 26 Property sold and bought iE 25875 45 62 43 15 37 24 by commissioners for $250. 100 CO Property sold uffder prim 10 00 5 00 trust. (See preceding loan.) 41 59 1, 830 41 Judgment,law, No. 14852, foi , $1,800, with interest• and . costs. 175 00 3,675 00 3 00 196 10 1, 184 37 7,673 63 5, 703 93 Portion of property sold and boughtin by commissioners for $7,584.43. Judgment, law, No. 16206,for $5,682.93, with interest and costs. 95 25 172 41 1,400 00 1,275 44 Security sold and bought in 307 78 by commissioners fof $1,400. 12, 91& 0916,286 33 Security wild and bought in 2, 190 46 43 00 by commissioners for $12,338.b3; suit against District of Columbia on part of security. 2,747 62 FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Amount of original loan, Schedule showing amount and condition of unpaid loans, as appearfrom ledger, 'tinder date of September 17, 1879-Continued. Jan. 8,'74 1341 761 900 Mar. 18,'72 July 9,'72 1051 Gaines, Samuel P 1000 Gray, W H 1047 Gwin,Henry 1096 Hall, Clara B Aug. 21,'71 504 Apr. 6,73 1283 Sept. 23,72 1239 , Mar. 31,71 285 Oct. Fry, Wesley Fowler,Ed.S 7,'72 1048 Apr. 8,'71 Apr. 7,'71 Apr. 7,'71 Apr. 13,'71 Apr. 14,'71 Apr. 13,'71 May 31,'71 Sept. 11,'72 707 24 acres land,corner old Soldiers' Home and 7th street. .do Harris, John Harper,James .do .do Herndon, Willis 2 R.E.notes,$100 each, Charles E.Bopp. S. lot 37 and N. 38., in sq.69. Lot 35, sec. 3, Barry farm Part lot D,sq. 133 Part lot 13, sq. 131 Part lot A,sq. 133 Part sq.90 do do do Deed of trust and note of Charles McEwen for $1,500. Deed of trust and note of C. W. Havenner for $1,500. East lot 4, sq. 154 259 42 15 96 430 24 59 31 8 92 100 00 1,060 00 68 75 44 75 367 50 35 00 26 06 440 96 8 85 66 50 2,000 00 900 00 1,40000 1,500 00 334 79 150 66 8,658 00 901 77 380 50 9,179 27 860 99 603 74 8 92 59 51 Lot 24, sec. 1, Barry farm 1,000 00 160 00 Sub. of lot 53, sq. 140. 13 50 100 00 Lot 16, sec. 2, Barry farm 52 50 350 00 Lot 20, block 17, Mend. • ian Hill. Hall, R. M 296 Havenner, C. W .do 297 .do 298 .do 308 .do 309 .do 310 .do 396 1222 Havenner & Co., C. W. Feb. 27,'73 1398 Oct. 1,'74 Jan. 16,'72 Hall,J. H.T 21,000 00 2,977 78 Lots 35 to 55, inclusive, 20, 000 00 1,000 00 sq. 193. 38 00 155 35 52 70 147 35 250 00 Lot 27, sec.8, Barryfarm 00 Sundry real-estate 12, 369 15 1,671 114,420 02 9,620 24 395 notes to the value of 99.48. . $26,0 175 00 175 00 32 60 63 40 906 4211,105 0314,038 59 Securitysold and boughtin by commissioners, $11,105.03. 152 85 Being paid by installments. 56 46 loan originally made to This 7,523 36 2, 922 12 John H. Cook February 7, 1872, upon which he paid $1,151.10. On the 9th of July, 1872, loan assumed by E. S. Fowler, who gave new note for $12,369.15 on same security; part of security sold and bought in by commissioners, balance being paid by installments. paid by installments. 86 Being 20 71 64 5 Balance due after sale of 227 78 1, 305 78 security. 1 94 Being paicl by installments. 75 66 234 90 Security sold and boughtin by 262 50 commissioners for $262.50; judgment, law, No. 16686, for $350,interest and costs. 701 77 1,308 70 Security sold and boughtin by 25 02 commissioners for $633.27; judgment for $1,325.30,law, No.5327. 870 83 8,018 00 3,496 83 Judgment, law, No.15694,for 4, with interest and t8. 3,819 c0 $ 39 00 145 00 69 00 Judgment. law, No.13523,for $175, costs and interest. 82 12 Being paid by installments. 190 00 45 70 89 28 146 42 42 03 4 00 110 33 95 27 14 28 16 76 92 79 18 85 43 00 81 19 200 00 308 07 136 52 8,259 70 1,801 49 1,20000 1 1,20000 1,20000 1,20000 2,353 85 1,337 25 9,416 60 1,20000 1,20000 1,20000 918 75 18 75 900 00 1,25000 800 00 150 00 27 00 87 00 73 45 Security sold and bought in by commissioners for $70. , Judgment,law,No.15707,for $8,400, with interest and costs. 18 75 • 900 00 Judgment, law, No.15705,for $900,interest, &c. 1,250 00 359 03 o 800 0 90 0° 21 09 186 06 54 19 1,125 00 88 53 724 28 Security sold and bought in by commissionersfor $1,125; judgment,No.15705,for bal ance. law, No. 15705. Judgment, 800 00 22 56 Being paid, by Installments. FREEDMAN'S SAVINGS AND TRUST COMPANY. Oct. 7,'72 Aug. 28,'72 Nov. 26,'72 Oct. 9,12 Nov. 5,'72 .do Schedule showing amount and condition of unpaid loans, as appearfrom ledger, under date of September 17, 1879-Continued. .41^,gz 4• e5 a eq.§ No. Name of borrower. Security. 8 -P 8 El bi)8 6.5 ct. 0 szl 1-1 6 41 Remarks. Dollars. boars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 22 32 42 32 150 00 130 00 30 82 44 61 131 75 73 68 Security sold and bought in by commissioners for $75. Sept. 27,'70 1244 Hogan,John Lot 22, sq.974 1,600 00 265 20 864 50 1,000 70 379 38 13 75 799 38 594 45 Being paid by installments. Jan. 17,71 225 Holden,C.H Lots 22 to 26, inclusive, 3,333 33 346 68 333 00 3, 347 01 1,005 00 127 00 304 22 2,933 41 1,849 82 Property sold and bought in sq. 867. by commissionersfor$2,900. Aug. 8,'71 490 .do Lots 12 and 13, sq. 734 1,500 00 210 00 150 00 1,560 00 346 25 133 50 114 30 1,625 00 529 05 Property sold and bought in commissionersfor$1,500. by Nov. 10,'73 1326 .do Lots 34 and 36, sq 867, 2,414 58 273 60 2,688 18 1,001 68 274 79 3,150 58 814 07 Being paid by installments. R.E. notes, for $2,57.5. Nov. 10,'70 1211 Holly,John Thomas. Lot 46,sq.302 250 00 62 50 62 50 250 00 38 89 80 78 155 64 304 26 221 05 SNurity sold and boughtin by commissioners for -$304.26; balance to profit and loss. Oct. 2,'72 1234 Holmes,Sophia Lot 23, sq. 338 3, 340 00 890 00 2,450 00 812 20 35 00 65 51 3,116 90 245 81 Security sold and boughtin by commissioners for $1,800. June 11,'72 884 Hulse, Charles E. Part of lot 10,sq.876 2,000 00 408 00 2,000 00 408 00 9 85 409 85 8 00 Jan. 21,'71 199 Jackson,Samuel Part sq. 309 550 00 166 24 154 24 66 28 143 75 562 00 410 75 361 28 Security sold and bought in by commissioners for $325. Auditor's report allows balance of $379.78, for which amount and interest judgment has been obtained, law No.5284. Jan. 25,'73 1288 Jenkins,Cornelius.. Deed of trust on prop5 00 100 00 9 12 90 00 15 00 99 12 In suit. erty in Fulton County, Ga. Aug. 15,73 1297 Johnson, Jos Lot 13, sec. 3, Barryfarm 90 10 00 180 00 179 00 76 49 177 49 78 00 Being paid by installments. Apr. 17,'71 1254 Kaiser, Catharine. Lot 13 and part 14, sq. 12,000 00 3,167 83,1672 28 12,000 00 1,200 00 489 25 265 0.0 13,424 25 /n suit to foreclose. 347, gtnd life insurance policy,$8,000. Oct. 25,'71 588 do N. lot 14, sq. 347 4, 000 00 1,000 00 865 00 4,135 00 35 00 4,100 00 Do. May 12,'71 366 Keith,John B Part lot 3, sq. 566 250 00 179 78 417 28 12 50 68 89 66 37 61 91 303 00 311 45 Security sold and bought in by commissioners for $300; balance to profit and loss. May 6,'72 Khight, B.R R.E.in Memphis, Tenn. 1,700 00 520 00 520 00 1,700 00 1,700 00 Suit to foreclose. Oct. 7,'72 1059 Hill, Amos Lot 9, sec. 2, Barry farm FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Balance now due. 0 4 . 426 92 Security sold and bought in by commissioners for $690. Judgment, law, No. 16192, for $405.92, with interest and costs. 244 61 Security sold and bought in 583 85 415 85 118 00 135 41 159 20 , 450 00 109 25 143 40 by commissioners for $500; 88 Lancaster,Hillary .. Part lot 10, sq.558 Aug. 3,'70 additional expense allowed by auditor, $65.20, making balance due per his report $309.81,for whichjudgm are, law, No. 5099, has been obtained. 5,093 60 4,876 07 Security sold and boughtin by 67 in Wash- 7,000 00 1,200 00 575 00 7,625 001,750 00 594 commissioners for $2,245; Apr. 1,'71 270 Lanckton,George M. 58 acres ofland subsequently resold,to Naington County, said tional Fair Grounds Assoto be worth $250 per ciation. acre. 21,940 80 3,522 78 In suit. 49 50 0021,000'004,414 08 006,285 001,785 25,500 notes R R and E. R. July 11,'73 1268 Langdon, A $3,421.70. 68 85 Security sold and boughtin by 3,127 80 2, 818 85 377 80 commissioners for $1,327.80. Lots 128 and 129, sub- 2,500 00 318 85 Oct. 16,'72 1065 Lane,John division of Georgesold and boughtin by town. SecUrity 2 01 43 00 196 01 1,679 00 75 00 1,200 00 242 00 2 and 3, and 1,100 00 175 00 commissioner's for $1,450. Oct. 1,'72 1231 Lannum,Benjamin.. Part lotssq.638. by installments. paid Being part 1, 95 00 ....... 1, 289 63 • 1,500 00 272 97 672 97 1,100 00 284 63 791 sold and bon°litin by Apr. 29, 72 827 Lemore,Charles A _ Part lot 3, sq. 790 00 237 71 196 86 3, 000 00 1, 388 57 Security oners for 3,000. 3,16400 68 240 68 404 00 3,000 commissi do Jan. 12,'72 650 Lobsiger,Rudolph 1,43700 7 00 1,000 00 1,300 00 130 00 2.300 00 No security 538 30 268 70 .do 00 7 Jan. 7,'74 1337 00 800 800 00 Chattel mortgage, horse .do Feb. 27,'74 1364 and buggy, piano, 2 and boughtin by sets of furniture, &c. 124 95 .250 20 1, 249 87 2,663 38 Security sold 19, sq. 2,500 00 328 69 343 60 2,485091,053 01 commissionerSfor $1,150.80. Oct. 16,'72 1238 Loomis,trustee,Silas Lots 16, 17, and law, No.5328,for t, Judgmen 652. L. $2,727.61, with interest and costs. by 2,288 50 1,007 55 Security sold and boughtin 296 05 commissionersfor $2,250. Two lots in Davidson 3,000 00 602 50 602 50 3,000 00 May 4,'72 931 Lowery,Peter County,and three parcels in Rutherford County, Tenn. 00 6,310 77 Security sold and boughtin by 6 0038,.188 375,515 55 926 88 1,679 9740,000 commissioners for $40,000; acres known asLyons 34,000 004,194 37 69 July 27,'72 958 Lyons,Evan balance, $6,310.77, to profit Millseat,in Washingand loss. ton County,D.C. 136 15 Being paid by installments. 528 57 544,10 120 62 in by 600 00 129 10 185 00 2, sq.716 40 6,421,69 489 88 Securitysold and bought 276 65 554 83 July 18,'72 941 McAnnally,J:T. . Lots 1 and 445 69 634 5, 45 453 14 5,000 001,088 commissioners for $6,200, Lot 7, sq.252 Aug. 12,'72 972 Mackall,B suit for balance; $22 a expenses to profit and loss. Mar. 25,'71 274 Kopp,Robert Lot.9, sq.140 800 00 158 97 208 97 750 00 152 29 58 09 194 04 727 50 FREEDMAN'S SAVINGS AND TRUST COMPANY. 578 Marshall. Charity A. Aug. 9,'72 1015 Mattingly, George .. Feb. 16,72 Meade, Elizabeth... 714 Nov. 2,'72 1093 Middleton. Jos Aug. 22,'72 Muirhead, William.. 994 . Oct. 7,'72 1052 Nelson, William ... Oct. 15,'73 1338 Nichols, Ortway ... Feb. 3,'72 701 Osborn, Thomas W.. • Apr. 18,'73 1246 Pandler, Joseph Nov. 11,'70 147 Parry, A.H Mar. 2,'72 743 Pike.James T lige) 'A Ld1 4, ... -8,-,-; '''/ti,ogl 060 ,sz ra• ••d g ••-• .P. 41 E.-1 qt 5 Balance now due. 51 A, D,el,lD, a ,.,.4,$ .- a,ai Credits on loan under commissioners. . . ., 2 .A,94 Interest charged against loan by commissioners. Credits on loan previous to failure. Security. Remarks. Dollars. Dollars. Dollars. Dollars. Dollars Dollars. Dollars. Dollars. Lots 12 and 13, Sq. 818 .. 150 00 26 82 76 82 100 00 5 00 88 00 5 00 188 00 Security sold and title pr( v. ing defective sale als ndoned. Lot 7, sq. 760 15, 000 001,955 37 581 8716,373 50 • 318 75 16,692 25 Property securing this is an sold under deed of tri st January 17, 1876, a nd bought in by the coma issioners for $14,900. Possession of the property I as been contested by Albert Grant, who claims a 1 en upon the property. G Se now in litigation. Lots 1, 33, and 34, sq. 168 2, 200 00 231 50 2,431 50 469 94 830 22 995 90 3,912 88 814 68 Security sold and boughtin by commissioners for $3,900; balance to profit and loa Lot A,subdivision lot 3, 550 00 81 53 86 50 26 48 545 03 47 12 405 00 213 63 Security sold and boughtin by sq. 791. commissioners for $405. Lots 35 and 36, sq. 740.. 1,50i) 00 225 00 225 00 1, 500 00 632 25 164 00 14 93 1, 540 52 770 66 Security sold and boughtin by commissioners for $1,300. ' Judgment,law,No.5283,for $782.71, with interest a nd , costs. Lot12, sec. 3,BarryFarm 56 70 8 51 59 54 5 67 17 08 125 92 108 50 94 04 Security sold and boughtin by commissioners for $100. Part lot 16, sq. 551 1,500 00 150 00 1, 350 CO 253 90 19 25 1,473 15 150 00 Being paid by installment 93acresEscambia Coun- 2, 500 00 503 96 253 96 2, 750 00 383 00 68 30 3, 201 30 In suit. ty,Fla. Chattel mortgage 250 00 15 50 165 50 100 00 4 51 55 64 48 87 Part lot 2, sq.821 650 00 303 09 426 48 - 526 61 63 36 72 11 30 92 275 00 418 00 Security sold and boughtin by commissioners for $21 5; balance to profit and ion Part lot 8,sq.724 4,000 00 214 00 4, 214 00 846 67 184 50 200 47 4,980 00 465 64 Securitysold andboug.htin by commissioners for $4,600 — Name of borrower. 1g Aug. 12,'71 No. 0 ctizi • A CND •CS') FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Amount of original loan. • Interest and expenses ' charged against loan previous to failure of bank. Schedule showing amount and condition of unpaid loans, as appearfrom ledger, under date of September 17, 1879 -Continued. Apr. 30,'73 1434 Apr. 22,'72 808 Sept. 25,'72 1037 .do Pindle,Isaac J Pindle, Aaron Pomeroy, Sam'l C. .do June 20,70 61 July 21,'71 1327 Prater, William Price, George R Dec. 11,'72 1237 Quarles,Frank Aug. 14,'73 1309 Dec. 3,'73 1365 Lot 10, sec. 2, Barry farm Lot 16, sq. 336 100 00 300 00 100 shares Second National Bank,Leavenworth,Kans., subsequently withdrawn, and six notes of c 6,000 00 Aaron G. 17nderhill, of $1,000 each, secured by policy of insurance, sub s tituted. Lot 6, sec. 3, Barry farm 200 00 Lot C,subdivision lot 3, 4, 250 00 sq.725. Deed of trust on property Atlanta, Ga. Randall,Margaret A Lot 21, sq.539 Reynolds, William .. Lot 16, sq. 551 330 00 6, 170 00 28 40 45 00 50 00 13 33 20 00 45 00 108 40 300 00 77 67 72 00 6,000 00 2, 513 34 271 65 200 00 43 92 50 00 65 00 4,198 33 1,812 92. 153 97 100 00 100 00 1,000 00 159 17 2 50 250 00 1,525 00 75 43 19 33 73 85 1,000 00 55 22 250 00 76 31 1,503 91 Richardson, Ander- Lot 27, sec. 9,Barry farm son. Robinson, William.. Part lot 31, sq. 557 115 00 20 30 59 25 76 05 32 18 38 65 800 00 150 10 299 35 650 75 161 74 79 00 Nov. 1,'73 1333 SaintJamesParish.. Lots 1, 2, 3, 4, and 5, sq. 915. 1,650 00 66 00 66 00 1,650 00 264 00 199 62 Sept. 24,'69 1236 Saint John's Chapel, Property in Norfolk, Va 2,500 00 Norfolk, Va. Schureman,J.H. A. Part lot 24, sq.728 1,200 00 377 09 377 09 2,500 00 900 04 238 73 86 33 1,352 40 446 00 93 73 600 00 1,600 00 249 90 400 00 200 00 120 00 1,729 90 118 41 172 89 25 00 105 65 109 00 10 00 105 06 30 25 46 62 June 5,'72 924 Mar. 15,'72 759 July 20,'70 143 Dec. 5,'72 1381 Apr. 24,'74 814 Smith,Henry Deed of trust Schureman,J. H. A . Part lot 24, sq.728 Apr. 21,73 1249 Smallwood,Patsey Lot K, subdivision of sq. 183. 5 00 1, 028 00 5, 560 40 Security sold and boughtin by commissioners for $1,000. Judgment, law, No. 16201, for $5,478.50, interest and costs. 108 40 Note lost. 238 17 Security sold and boughtin by 211 50 commissioners for $210. 418 40 615 05 2,833 31 6,566 73 I Security sold and bought in by commissioners for $2,800. Judgment, No. 1 14891, for $6,000, with interest and costs. • 243 92 509 74 2, 400 00 4,274 96 Security sold and boughtin by commissioners for $2,400; $40 additional due on balance for error in stating original loan. 692 78 Compromised by commission468 89 ers under advice of counsel. 15 25 Being paid by installments. 310 18 124 72 1,363 83 357 98 Security sold and boughtin by commissioners for $1,150. 113 65 33 23 Security sold and boughtin by commissioners for $75. 210 00 Security sold and boughtin by 128 51 810 00 commissioners for $750. Judgment, law, No. 16687, for $188.75, interest and costs. 42 53 550 75 1,60540 Security:sold and boughtin by commissioners for $349.50. Judgments, Nos. 16222, 16233, and 16919, for $1,650, interest and costs. 2,580 00 820 04 Being paid by installments. 600 00 1,607 96 Security sold and boughtin by commissioners for $600. Judgment,law,No.4624,for $1,299.06,interest and costs. 321 72 221 69 Being paid by installments. 1,953 74 54 70 Security sold and bought in by commissioners for$600. • 15 99 140 00 57 86 Security sold and bought in by commissioners for $130. 315 83 FREEDMAN'S SAVINGS AND TRUST COMPANY. Nov. 21,'72 1329 Apr. 27,'73 1717 R.E.notes,James Pike, 6, 500 001 $5,000, J. T. Pike, $2,000. .70 g 7 ,3 No. Name of borrower. Security. - lg 07-1 0 c. 00 o2 0 <1 Aug. 26,'71 Dec. 23,'73 Apr. 7,'73 Sept. 19,12 June 25,'73 June 29,'72 July 11.'73 July 21,'71 Oct 7,'71 0 a Tcna, tl,§ 41h trg Et1 '70 ce. beE E01 cat' E.2 14:^2 a 61 § A .3 a. aa 90 p.42 a Remarks. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 3,000 00 400 00 2,600 00 263 61 11 25 2,874 86 Judgment, No. 15708, for $3,000, with interest and costs. 156 Stanton, Frederick P East half lot 20, sq. 688, 10,500 00 675 50 6,45000 4,72550 25 60 1,275 00 3,476 10 Suit to foreclose. and about 200 acres of land in Montgomery County, Md. 513 Stewart, Alexander _ Lot9,sec. 1, Barryfarm _ 140 00 20 10 77 10 83 00 30 20 39 25 120 30 32 15 1378 Stewart,Laura M Part lot 7,sq.332 1,150 00 34 10 1,184 10 126 81 162 55 52 62 1,450 00 76 08 Security sold and bought in by connnissionersfor$1,450; balance to profit and loss. 1284 Stewart, Sophia Lot A,sq.68 200 00 10 00 5 00 205 00 43 69 86 63 82 57 ,220 00 197 89 Security sold and bought in by commissioners for $110. 1031 Stowell, George H _ Lot 25, subdivision sq. A,000 00 600 00 600 00 4,000 00 566 67 196 87 157 73 4,800 00 121 27 Security sold and bought in 420. by commissioners forS4,600. Judgment, law, No. 16202, for $100.27, interest and costs. 1311 Strong, Samuel South- part lot 34, sq. 1,900 00 34 60 665 75 1,26885 324 77 165 68 123 13 925 52 956 91 Security sold and bought in 732. by commissioners for $909.31. Judgment, law, No.5282,for$989.21, interest • and costs. 908 Suit, S. Taylor 450 acres of land in. 25,000 00 3,706 12 4,706 12 24, 000 00 7, 700 00 1,019 06 8,372 33 24,346 73 Security sold and bought in Prince George's Counby commissionersfor$8,300. ty, Md. Judgment, law, No. 17893, for $24,754.20. 1486 Talbett, Thomas H Real-estate notes of C. 1,500 -00 1,500 00 187 40 100 00 1,587 40 Suit to foreclose. H.Holden for $5,000. 456 Thomas,Ann C Part lot 15, sq.58 300 00 .66 67 121 67 245 00 102 90 325 60 22 30 Being paid by installments. 689a Thomas,C. N Lot 1, block 22, Miller 350 00 350 00 350 00 Judgment, law, No. 14722, estate. • . against George D. Johnson for $350. Nov. 4,'73 1330 Oct. 22,'70 04 clj 4. 24 an Smoot,Samuel S Deed of trust, sqs. 542, 546, and 547. FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. bo P=IP Balance now due. Schedule showing amount and condition of unpaid loans, as appearfrom ledger, under date of September 17, 1879 -Continued. 903 Tilson, Melvina. Jan. 19,'72 663 June 29,'71 May 13,'71 562 408 May 9,'71 369 Tucker & Sherman. •Lot F, Stott'a subdivision of lot 1, sq.694. Upson,Helen M.B.. Lot 24, sq. 366 Van Hook,J. W Lots 702and 703, Uniontown, D. C., about 9i acres of land. Vashon,George B., Lots 1 to 5, inclusive, and H.B. Taggart. sq. north of sq. 334. Walker,Armistead. Lot 16, block 16, Howard .University. Warner, Mary J Deed of trust, lot 29, Brown's subdivision of Mount Pleasant. Welch,Jane E Lots 1 and 2, sq. 1000 ... Aug.15,73 1287 Aug. 5;73 1321 Feb. 7,'72 700 Jan. 3,'70 25 Sept. 16,'70 946 West half lot 28, sq.878. 500 00 100 00 100 00 500 00 96 11 65 75 157 09 281 07 20 90 429 00 1, 950 00 424 24 220 00 2, 154 24 1,400 00 6,000 00 322 00 414 12 225 00 1,497 00 967 02 243 50 2, 746 66 150 00 6, 264 121,237 00 1, 333 181,200 00 8,010 00 1,500 00 441 00 405 00 1,536 00 175 00 8 75, 48 75 1,170 00 207 06 15 75 Williams, Robert ... Lots 21 and 22, sq. 562... 9,000 00 125 84 400 00 135 00 47 67 1,170 00 62 40 96 97 43 45 59 50 127 48 2,700 00 1,497 00 153 01 1,232 40 In suit. 59 55 123 77 2,500 00 6,500 001,716 00 454 684,212 09 8, 754 83 Wilkes, John Lots 28 to 38, inclusive, 10,000 002,242 00 1, 550 0010,692 002,061 11 sq.634. 328 934,234 2611,700 20 Aug.15,'72 1293 Wood,John A Property in Atlanta, Ga. July 27,'71 466 Wood,William P Aug.16,'72 1369 June 23,74 1379 .do Wright,Francis. Lots 1, 3, and 4, reservation D. Lot 9,reservation D Part lot 15, sq.870 - 749 00 749 00 5,000 001,050 001,050 00 5,000 001,000 00 2,000 00 772 76 22 50 3 50 500 00 1,522 50 776 26 300 00 253 76 Security sold and bought in by commissioners for $429. Judgment, law, No. 16198, for $233.32, interest and costs. 19 88 Security sold and bought in by commissionersfor$2,700. $39.14 overpaid. 2,02.4 30 Security sold and bought in by commissionersfor $8,-000; balance to profit and loss. 498.50 Security sold and bought in by commissioners for $525. 29 66 Being paid by installments. 105 24 • 22 75 24 97 5,000 00 30000 174 94 76 20 Security sold and bought in by commissioners for $123.77. 4,127 94 Security sold and bought in by commissioners for $8,754.83. Judgment, law, No.4118,for $4,143.74, interest and costs. 5, 616 10 Security sold and bought in by commissioners for $10,964.85. 749 00 In hands of attorney for collection. 1, 105 24 In process of collection by compromise. 1,545 25 626 29 Security sold and bought in by commissioners for $174.94; balance, $626.29, charged to profit and loss. Judgment, No. 16200, for $772.96, with interest and costs. } 315,68647 3914 Off, overpayment, H. M. B. Upson. 526,84503 58,4881679,12034506,2128580 06785 19,82895 22,475 34 312,937 66 315 64733 I FREEDMAN'S SAVINGS AND TRUST COMPANY. June 29,'72 Schedule showing amount and condition of unpaid loans, as appearfrom ledger, under date of September 17, 1879-Continued. , Balance now due. Credits on loan under commissioners. Taxes paid by commissioners. Expenses (courtfees, advertising, &c.)incurred by the commissioners. Interest charged against loan by commissioners. Security. Ledger balances transferredto commissioners of Freedmen's Savings and Trust Company. . Name of borrower. Credits on loan previous to failure. No. Remarks. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 600 00 600 00 600 00 48,8875931,329 23 Certificates audit o r 80,216 82 4 25 31, 333 48 1 , board of public works, In suit. $83,303.01. 6, 000 00 6, 000 00 Sept. 28,72 1246 ....do 6,000 00 1 do 3, 000 00 3, 000 00 July 26,73 3, 000 00 J 90.00 Apr. 2,74 Alden,Lew' 90 00 90 00 In slit. 2 R.E.notes for $2,000 -2, 000 00 12 00 May 7,73 1442 Benedict, J. T 2, 000 00 2,012 00 Judgment, law, No. 13521 I for $2,000 and interest. In • terest at 10 per cent. fron from May 1, 1873, for 61 days, and 6 per cent. after. Sept. 13,73 1512 Bowen, William .... Bill for improvements 1,660 92 23 75 1, 660 92 1,684 67 Judgment, law, No. 16197 against D. C. amount for $1,660.92 and interest. . to $2,428.30. June 30;74 1546 Boyle, Juan Note indorsed byFrank 4, 366 66 4, 366 66 . 4, 366 66 Judgment, law, No.13777,fol . Barnum. • $4,366.66, and interest at 1( per cent. for four monthE from May 6, 1874; after thai date,6 per cent. until paid Jan. 20,74 2651 Brooks, Chase & It. E.note, $300 --------394 00 . 394 00 394 00 In hands of attorney for suit Fitzhugh. Judgment, law, No. 14084 • for $586.68, and interest oi , Dec. 16,73 2574 Brooks, Joseph .. _.. No collateral 100 00 100 00 • 100 00 $486.68 from January 7 do 486 68 Jan. 17,74 Indorsement, Thomas 486 68 21 00 507 68 1871, and on $100 fron Chase. February 17, 1874. , 1420 Z Brooks and others, 125 sharesInternational Apr. 6,050 00 100 00 6,150 00 In suit. 1 1421 .5 F. W. S. S. and Railway Co. 5 '500 00 550 00 Mar. 20,'72 966 Brown, J. II $4,000 Detroit Car Loan 3,500 00 3,500 00 22 00 3,522 00 Judgment, law, No.16196,foi $4.425 and interest. Comuany stock. Sept. 25,'72 1242 Dec. 1.72 1350 18,72s Abboft Paving Co do FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Interest and expenses I charged against loan previous to failure of bank. _ Amount of original loan. AVAILABLE FUND. Mar. 7,'74 Bente'', F A July 10,'73 Clayton, Addison. Feb. 26,'74 Chase, T. W May 15,'74 Coburn, Mary E 2845 May 21,'742846 2847 Sept. 3,'72 1205 May 15,'74 Apr. 5,'72 994 1 Clarke, John E 80 00 80 001. 50 00 50 00' 50 00' 50 00 W. J. 100 00 100 00 360 69 360 69 21 00 23 00 Indorsement, Cooke. No security 4,256 91 1,528 72 743 09 93 33 471 28 500 00 200 00 300 00 2100 270 00 270 00 10 00 15 00 20 00 15 00 20 00 30 00 133 00 30 00 133 00 3,000 00 1,143 75 3, 000 00 141 52 1,002 23 1 89 04 60 96 Indorsement, G W Balloch. Pay-order on Treasury Department. Dexter, J. E Oct. 31,'73 2467 Douglass, C. R Mar. 1,'73 Feb. 24,'73 Ellis, William Fowler, A. It No security do May 17,'73 Oct. 17,'71 _do Finney, W.G do Life-insurance policy, $2,000. Jan. 8,'74 1531i Fleming,R.I. .do Apr. 20,'74 2781 May 13,'71 440 Flynn, Arthur Nov. 18,'73 2509 Gray, John A June 30,'74 2860 Jan. 31,'74 .do Gray, W Apr. 13,'74 Gibbs, Thomas Dec. 18,'72 1374 Gassaway, F. Mar. 24,'73 1351 Nov. 22,'73 50 00 Judgment, law, No. 15937, for $50. 50 00 Judgment, law, No. 15928, for $50. 100 00 5,000 00 do Connolly, D.A...... 93 33 do Dillon, L. C 2,000 00 R. urg Fitchb shares 18 Davis & Balloch R. stock. Feb. 15,'73 1503 581 80 00 Indorsement, W J. Cooke. Indorsem't, jno. Thos. Johnson. No security .do Hartigan, J. F No security do R.E. notes, J. T. &J. W.Rawlings,$327. No security do do 150 00 105 00 52 50 52 50 60 00 40 00 8 67 60 00 31 33 74 00 Indorsement, E. S. Savoy. 20 shares American Seal 2,250 00 Lock Company; 20 shares Capital Publishing Company; R. E. note, $2,250, secured by deed of trust on 20i acres in Prince George's County,Md. 60 shares Second Na- 2, 500 00 tional Bank stock. 50 00 JamesT.Pike'sindorsement. 25 00 35 00 21 00 262 30 280 00 Judgment, law, No.13522,for $270 and interest, and $13.50 costs. 00 15 20 00 Jndgment, law, No. 15931, for $50. 30 00 133 00 In hands of attorney for collection. (Judgment, law, No. 13696, 3, 010 00 ; for $4,002.23 and interest; 416 62 I $585.61 paid -since judg585 61 I ment. 110 04 Judgment,law,No.14088, for $111.54, costs and interest. 52 50 Sent to attorney for collection. 50 00 In attorney's hands. 10 00 31 33 Judgment, law, No. 15939, for $22.3:3. 74 00 Judgment, law, No. 15924, for $74. 266 50 3,006 40 1 } 10 00 • 21 00 74 00 2,250 00 (Judgment, law, No. 14086, for $360.66, costs and interest. 741 09 Judgment,law, No,15990. 58 33 In hands of attorney. 492 28 Judgment, law, No.16414,for $532.44, and interest,from December 4, 1873. 58 70 Being paid by installments. 381 69 744 30 259 43 19 17 Judgment, law, No. 13714, for $3,775.16, and interest at 10 per cent. 14 34 2,485 66' 50 00 21 00 2,506 66 50 00 Judgment, law, No. 15932, for $50.' C) Schedule showing amount and condition of unpaid loans, as appearfrom ledger, under date of September 17, 1879—Continued. c.4 Feb. 27,74 ..... Hubbell, A Apr. 13,'74 Hatton, Robert. Sept. 11,'73 2355 Haight, E.R Apr. 17,'74 2707 Hall, R. M Mar. 24,'71 3d1 }Tavenner &Co.,C.W Mar. 27,'71 364 .do Mar. 26,71 557 .do May 6,'71 425 .do Nov. 29,72 • Hayden,C.W.,prosident. July 13,'72 1129 Holtzclaw & Bruit .. Apr. 15,'72 1001 Hooper, W.R • Nov. 15,'72 1325 Howe, Frank T Feb. 21,'72 1547 May 12,'74 Huntington, estate of William S. Johannes, H. C July 12,'72 1173 Johnson, Edward ... . Balance now due. Credits on loan under commissioners. Taxes paid by commissioners. Expenses (courtfees, advertising, &c.)incurred by the commissioners. Interest charged against loan by commissioners. Ledger balances transferred to commissioners of Freedman's Savings and Trust Company. Credits on loan previous to failure. Interest and expenseE charged against loan previous to failure of bank. Security. 1 No. Name of borrower. Remarks. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 10 00 10 00 10 00 30 00 30 00 30 00 Judgment,law, No.15925, fm $30. do 375 00 164 00 111 00 25 00 236 00 Judgment,law, No.15331, fol $222.68 and interest - am costs. Indorsement, D.P.Hob 170 00 170 00 10 00 180 00 Judgment,law, No. 13523,fa loway. $175 and interest and costs 1,200 00 800 00 400 00 24 00 434 04 $10.04 overpaid. Notes of W.D.C. Mur- 1, 500 00 1, 500 00 2 10 203 90 1, 298 20 dock for $5,300. 700 00 700 00 101 07 598 93 1 Judgment, law, No. 15705. J 800 00 800 00 831 40 $31.40 overpaid. No security . 1,500 00 1, 500 00 , 1, 500 00 Judgment,law, No. 13351, fo $1,500 and interest am costs. $2,000 R. E. notes of M. 3,000 00 2, 051 69 948 31 263 35 178 91 191 22 1, 400 00 181 79 Security sold and bought h J. Wheeler. . by commissionersfor$1,400 . judgment for balance. Life insurance policies. 900 00 90 00 $10 0,0 204 95 11 25 700 00 326 20 Judgment,law, No. 16793, fo: $810; being paid by install ments. Note indorsed by Donn 200 00 200 00 10 00 210 00 Judgment, law, No. 13713 Piatt, and 5 shares against Donn Platt for $201 Capital Pdblishing _ and interest. Company. 70 shares of American 3,600 00 3, 600 00 3,600 00 In suit. Seal Lock Company. Indorsement, W J. 100 00 100 00 100 00 Cooke. • 28 shares Y. M. C. A. 550 00 550 00 21 00 571 00 stock. Pay voucher No security FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Amount of original loan. AVAILABLE FUND—Continued. Mar. 27,'72 Knowles, Elizabeth Indorsement, C. Kaiser ,50 00 977 Kennedy, James C.. $20,000 second mortgage 12,000 00 bonds Maryland Mining and Manufacturing Company. Mar. 1,'72 1401 Kilbourne, HaHet_ Note of Hallet Kil- 3,000 00 bourne, president. Feb. 27,74 1373 Lacy, Henry Indorsement, T. H. 115 00 Williams and George D. Johnson, and deed of trust, chattel. July 19,73 2103 Lamson, F. S Indorsement, Z. Rich300 00 ards. Apr. 12,'73 1678 .do do 400 00 Jan. 30,'74 2669 Latham, T. J Indorsement, C. F Van 1,800 00 Buren. Feb. 3,74 2286 Lay, J. C No security 300 00 Lucas, Thomas 25 00 23 00 300 00 22 00 400 00 1, 800 00 11 00 300 00 21 00 1,000 00 115 50 July 11,'74 1386 McCain, It H McIntosh, A Feb. 13,'73 Morris, It. K Feb. 28,'73 Miller, David Pay voucher 75 00 75 00 Mar. 17,'73 Juno 19,'74 2850 .do Miller, T. Wilde. 75 00 121 10 Aug. 31,'70 Mullett, A. B do 75 00 Indorsement, H. 0. 121 10 Gray and W.J.Cooke. 100 shares Morris Mill- 1,40000 ing Company, Colorado. No security 700 00 Sept. 13,'73 2374 Nelson, James A. Newman, George H. Indorsement, George D. Johnson. Mar. 18,'73 1605 .do No security Apr. 22,'73 1710 do do Dec. 2,'73 2554 ....do do 960 1, 100 00 150 00 20 00 Judgment,law, No.15926, for $26.28. 12,015 00 In suit; Supreme Court ofthe United States. 3,000 00 In suit. 115 00 Juno 20,74 2848 Sept. 26,'72 15 00 3,000 00 Indorsement of John 1,000 00 E. Cox. Deed of trust, property,. 1, 100 00 Memphis, Tenn. Indorsement, C. C. Nel150 00 son and T. W.Chase. No security 30 00 172 5 00 12,000 00 100 42 23 00 30 00 23 00 1,400 00 700 00 11 00 40 00 40 00 21 00' 100 00 50 00 100 00 100 00 50 00 100 00 138 00 Judgment,law, No. 14089, for $115; costs, $18.15, and interest from February 27, 1874. 322 00 Judgment, law,No.14090,for $700 and interest. 400 00 1,811 00 Judgment,law, No. 15778, for $1,800. 321 00 Judgment,law, No.15333, for $300 and interest. 1,115 50 Judgment,law, No. 13779, for $1,000 and interest. . 305 38 895 04 In suit. } 173 00 Judgment,law, No.15334,for $150 and interest. 30 00 Judgment,law, No. 15929, for $30. 74 60 40 Balance due deposit account of Charles R. Douglass applied to this account,Washington Branch. . 75 00 144 le Judgment,law, No.16411, for $121.10 and interest. 1, 400 00 Judgment, law, No. 9401, for $1,400, interest and costs. 7 55 713 45 Judgment,law, No. 14724, for $700 and interest. 61001 Embraced injudgment,law, 100 00 No. 14491, for $290 and in50 00 I terest. 100 00 SAVINGS AND TRUST COMPANY. Aug. 30,'73 2282 25 00 s‘mvwaaazia Apr. 8,'74 Schedule showing amount and condition of unpaid loans, as appear from ledger, under date of September 17, 1879—Continued. June 13,'73 June 27,73 Tilly 12,'73 Aug. 16,73 Aug. 23,73 Aug. 30,'73 Sept. 6,73 Sept. 13,73 Jan. 21,'74 Dec. 7,'72 Dec. 10,'72 1345 Dec. 18,'72 Aug. 21,'73 May 15,74 .... Jan. 30,74 _ ... May 29,74 .... Dec. 27,73 1530 Jan. 22,'72 1104 Balance now due. Credits on loan under commissioners. Taxes paid by commissioners. Expenses (courtfees,advertising, &c.)incurred by the commissioners. Interest charged against loan by commissioners. • Remarks. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 800 00 800 00 1 800 00 600 00 600 00 233 48 366 52 154 00 500 00 346 00 346 00 I 300 00 300 00 300 00 Judgment, law, No. 14992, 1 22 00 500 00 500 00 for $3,825 and into est. 500 00 700 00 700 00 700 00 1 500 00 500 00 500 00 200 00 200 00 222 00 120 00 120 00 23 00 143 00 Judgment,law, No.19 091, for $120 and interest, an d $16.25 costs. Pike, James T ' 340 00 110 00 450 00 No security • 110 00 Pannell, A Approved bill for work 309 24 309 24 . .. ......... 309 24 at Fort Whipple. do 481 25 No security 481 25 481 25 In suit. .do Bill for work at Fort 168 00 168 00 106 65 61 35 Whipple. do No security 297 68 . 297 68 297 68 J . Richardson, J. H. Indorsement of R. W 50 00 50 00 50 00 Tompkins. Robertson, Samuel.. Indorsement of F. A. 80 00 80 00 80 00 In hands of J. H. Cc oke for Beuter. collection. Stanton, E.H 'Pay voucher 33 33 33 33 33 33 Smith, George W... Inaorsement of T. H. . 68 75 68 75 62 18 6 57 Being paid by install ents. Wright. Searle, Henry R .... i interest in Washing923 00 923 00 21 00 944 00 Judgment, law, No.l' 401,for ton Building Block Co. $1,061.15. Sherman, C. A 3 shares First Co-opera- 2,000 00 930 75 1,069 25 30 15 960 90 Judgment, law, No. 15646, tive Building Associaagainst J. T. Rollelaw, for tion; 22 shares East $996.27, and in suit against CapitolBuilding Asso' Bruff. clarion; 4 shares Con71AM-id-tilt Railrnati Clil 1946 Newman &Middleton . 2003 .do 2088 .do Orders on the board 2234 .do of public works of 2247 .do the District of Co2281 ....do I lumbia. 2343 .do 2373 .do ) 2380 Orr, Moses Indorsement of Joseph Brooks. Feb. 24,'73 Nov. 23,'72 1330 Ledger balances transferredto commissioners of Freedman's Savings and Trust Company. • Credits on loan previous to failure. Security. Interest and expenses charged against loan previous to failure of bank. No. Name of borrower. c.* 4=.• FREEDMAN'S SAVINGS AND TRUST COMPANY. Date of loan. Amount of original loan. AVAILABLE FUND—Continued. Aug.22,'72 1189 Sherman,Franklin .. $1,100 first mort. bonds 900 00 C.and 0.Railroad Co. 2644 Jan. 14,'741 2645 }Simmons, Arthur.. No security 200 00 2646 Apr. 28,'73k 1728 Jj do Smolinski, 400 00 Dec. 23 '743 .do do 95 00 t Nov. 8,'73 2491 molinski & Lyle $1,400 real estate note. _ 1,478 47 8 Aug.10,'71 June 13,'71 Sept.21,'71 Oct. 26,'72 Nov. 9,'72 Nov.14,'72 Dec. 10,'72 Jan. 24,'73 Jan. 25,'73 Feb. 11,'73 Feb. 21,'73 Feb. 25,'73 Feb. 26,'73 Dec. 21,'72 Apr. 18,'73 Apr. 26,'73 May 9,'73 May 20,'73 June 14,'73 July 3,'73 Aug.15,'73 Aug.16,'73 394 Stewart, Joseph Acceptance C. W. Hav- 3,250 00 enner & Co. 484 Vandenburgh,J.V.W Order on chief engineer 5, 000 00 Washington Aqueduct for $5,000. 1234 _ ...do Certified bill for work on 4, 000 00 Virginia ay.,$4,250. 1242 ....do No security 2,550 00 1317 .do Certificate of auditor of 2,500 00 board of public works of District of Colum• bia,$2,550. 1177 ....do No security 1,000 00 1320 .do do 2, 700 00 1370 .do Certificate auditor ofthe 1, 000 00 board of public works Washington,D.C. 1428 .do No security 1, 500 00 1382 .do Certificate of board of 2, 000 00 public works,$4,016.40. 1391 .do Certificate board of pub- 1,200 00 lic works,$3,636.60. 1395 .do $3,000 Second National 2, 500 00 Bank stock. 1397 .do 6, 492 08 1296 _,..do 58,025 71 1424 .do 1, 300 00 1431 .do Certificate board of pub- 1, 000 00 lic worksfor $1,309.80. 1444 .do Transfer of interest in 40 1, 500 00 acres land and note, J. V. W. Vandenburgh, for $927.27. 1451 .do Order on J.M.Magruder, 1,200 00 treasurer board of public works, District of Columbia. 1472 Certificate board of pub- 4, 000 00 .do lic works,$4,027.95. 2049 .do 1, 500 00 2217 .do 3,000 00 2224 .do 1, 000 00 900 00 25 00 175 00 21 00 128 45 271 55 95 00 1,47847 26 81 20 00 3,250 00 2 20 3,848 50 1,151 50 196 00 Judgment,law, No.14093, for $176.01 and interest. 298 36 Judgment, law, No. 14778, 95 00 j for $495 and $17.80 costs. 644 59 853 88 Judgment,law, No.14779,for $1,034.49 after sale of security. 3, 252 20 In suit. 668 35 483 15 4, 000 00 3,094 01 905 99 2,550 00 2,500 00 1,224 66 1, 325 34 2,500 00 1, 000 00 2, 700 00 1, 000 00 1, 000 00 2, 700 00 1, 000 00 1,500 00 2,000 00 1, 500 00 2,000 00 1,200 00 1,200 00 2, 500 00 750 00 1, 750 00 6, 492 08 22,91815 35, 107 56 1, 300 00 1, 000 00 13 00 6,492 08 12,182 6222,937 94 1, 300 00 1,000 00 1, 500 00 1,500 00 1,200 00 1, 200 00 4, 000 00 4, 000 00 1, 500 00 3,000 00 1, 000 00 1, 500 00, 3,000 001 1,000 00; In suit. FREEDMAN'S SAVINGS AND TRUST COMPANY. td 900 00! C.) C.31 Schedule showing amount and condition of unpaid loans, as appearfrom ledger,-under date of September 17, 1879-Continued. July 24,'73 Sept. 23,'73 Oct. 8,'73 Apr. 18,'73 Mar.25,'73 Mar. 17,'74 Mar. 21,'74 Apr. 28,'74 May 15,'74 Oct. 18,'73 2116 Vandenburgh,J.V.W 2364 do 2424 do 1538 8 per cent. bonds, Disdo trict ofColumbia,$4,200. 1611 Van Hook,George W No security Waller,Washington. Indorsement, A. Mein tosh. Indorsement, Robert Wells, Richard Hatton. Indorsement,W.,T.Cooke White,Charles .do .-. _ Wilson, Charles C. No security 2443 Waters, R. W Balance now due. Credits on loan under commissioners. Taxes paid by commissioners. Expenses (courtfees, advertising, &c.)incurred by the commissioners. Interest charged against loan by commissioners. Dollars. Dollars. Dollars. Dollars. Dollars. Dollars. 4,483 05 I 4, 483 05 6, 500 00 J 6, 500 09 3, 623 48 In suit. 3,623 48 3, 075 00 I 3, 075 00 J 1 42 142 70 144 12 , 9 00 26 00 Judgment,law, No.15930,foi 33 00 $35. 30 00 Judgment,law, No.15927,foi 30 00 20 00 $31.28. 225 00 225 00 80 00 80 00 160 00 Judgment,law,No. 13524,foi 10 00 150 00 $150 and interest. law, No. 15335 75 00 126 00 / Judgment, 21 00 45 00 for $150 and interest. 75 00 j 144 12 35 00 50 00 225 00 80 00 150 00 2734 Washington, Isaiah. 2786 do 397 Welch, Daniel 1489 .do 2072 do 649 Welch & Co., Daniel. Ravin oua and Trii tat en Remarks. Dollars. Dollars. Dollars. 4, 483 05 6, 500 00 3, 623 48 . 3, 075 00 Z Order on board of pub- 5 75 00 S Sic works. ). 75 00 230 40 Indorsement,D.L.Eaton 50 00 No security 30 00 .do 250 00 Note W. G-. Matthew, secured by deed of trust, $306.92. 370 00 Indorsement, Lawrence Tan. 10,'74 2629 Williams, T H Scott. 50 00 Alexander, C. M .... No collateral 100 00 Check on National MetJune 4,'73 Pike, J. T ropolitan Bank,Washington, D. C., at two • days, indorsed i by G. G. Cornish. Check on Washington 10 00 Aug.22,'73 Sammie, E.C Branch Freedman's May 21,'74 Apr. 24,'74 Apr. 26 '71 Feb. 12,'73 July 10,'73 Sept.14,'71 Ledger balances transferred to commissioners of Freedman's Savings and Trust Company. Security. Credits on loan previous to failure. No. Name of borrower. Interest and expenses charged against loan previous to failure of I bank. Date of loan. Amount of original loan. I AVAILABLE FUND-Continued. 67 07 310 40 21 00 182 93 22 00 10 00 370 00 1 85 50 00 101 85 10 00 * 331 40 82 93 122 00 380 00 Judgment,law,No.13525, foi $370 and interest. 50 00 101 8" 1 ,72.f,i .4-,..;.F-I 10 00 This check is ini- a,''sr-:-1 tialed on its face 3E„," "G. W. S." Aug.12,'75 Berry, A Individual note 227 80 227 80 May 2,'75 Searle, H.11 No security 138 15 138 15 303,87546 551 8586,85232 217,57499 1, 313 021,43135 227 80 Partofthe assets ofthe branch at Natchez, Miss. 138 15 This amount is the difference between 6 per cent. and 10 per cent. interest on a note of Searle's after maturity. 196,17751 Original amount of loans on real estate unpaid at time of failure Interest and expenses charged against loans on ledger, previous to failure of bank $526,845 03 58,488 03 Paid on acCount of loans previous to failure,. 585, 333 19 79,120 34 Ledger balances on loans transferred to commissioners Interest charged up against loans by commissioners Expenses—court fees, advertising, &c., incurred by commissioners Taxes paid by commissioners on account of loans 506, 212 85 80,067 85 19,828 95 22,475 34 Credits on loans under commissioners, less overpayment 628,584 99 312,937 66 Balance now due on real estate loans as appear from ledger accounts 315,647 33 Original amount of loans made from available fund, unpaid at time of failure Interest and expenses charged against loans on ledger, previous to failure of bank $303,875 46 551 85 Paid on account of loans previous to failure 304, 427 31 86,852 32 Ledger balances transferred to commissioners Interest charged up by commissioners Expenses—court fees, advertising, &c., incurred by commissioners Taxes paid by commissioners 217,574 99 1, 313 02 1,431 35 210 39 i Credits on available fund loans under the commissioners. Balance now due as shown by ledger accounts Total due on account of loans as appear from loan ledger *This amount.is exclusive of accrued interest not yet charged on ledger 220,529 75 24, 352 24 _ 196,177 51 *511,824 84 FREEDMAN'S SAVINGS AND TRUST COMPANY. 210 3924, 352 24196,21895 4144 Less overpayments. No. 3.-Statement of balances due depositors, applied by Commissioners as oredits on loan accounts, as per balance schedules. Date. Nov. 28, 1874 Apr. 5, 1876 Nov. 11,1874 June 9, 1874 June 9, 1874 Sept. 25, 1875 Oct. 1, 1874 June 21,1875 Nov. 17, 1874 Apr. 24, 1879 Aug. 14,1875 Apr. 24,1879 Dec. 14,1874 Avery, William 0 Arrick, Clifford Burns, John Benevolent Association, Union Clarke, J. Wingate Church, Nineteenth Street Baptist Coulton, H. V Douglass, Charles R., treasurer Darby, Mrs. Annie 'do Darby, Ralph H Fiske, Harriet P., trustee French, Amanda E Hill, Amos Hartley Brothers Herr, A. H Jackson, Joseph H King, Mary and Edwin ' Martin, Reason T O'Donnell, William Pandler,Joseph Parker, Jackson Randall, A. W Rising Sons and Daughters of Liberty July 7,1875 Oct. 20, 1875 Sherman, Caroline A Tompkins, R W June 9,1879 Waters, J. G Oct. 27,1875 Marsh, W. L., administrator Oct. 27,1875 Marsh, W.L Jan. 16,1875 Fields, Robert Aug. 25, 1875 Bruce, Elisha A Oct. 31,1875 Swain, J. W Jan. 8, 1875 Hamilton, Thomas Feb. 6, 1879 Bennett & Co Feb. 6, 1879 Kendall, C. G Feb. 6, 1879 Pollitzer, Moritz. Jan. 15,1875 Dallas Street Sinking: Fund Jan. 15, 1875 Dallas Street Educational Fund Jan. 15, 1875 Caldwell, Charles. June 18,1875 Brown, Robert Mar. 4, 1876 Cardoza, Thomas W May 12,1875 Corprew, Rev.E G May 27. 1875 Elliott Joel Branch. Washington do do do do do do do do do do do do do do do do. do do do do do do do do. ds do Memphis, Tenn do do Jacksonville, Fla do Beaufort, S. C do do do Baltimore, Md .do do Vicksburg, Miss do Norfolk, -Pa do Amount. i Applied to- Schedule page. $585 32 Loan of H M. B. Upson, his wife 17 and 25 3,675 00 His loan account 30 and 33 6 58 7 16 23 59 105 83 John W Hunter et al.; loan 15 5 98 ... 74 60 Loan of David Miller 35 97 00 Loan of Ralph H. Darby 23 1, 655 00 do 23 05 do 23 2, 356 20 Loan of Leonidas Scott 17 32 33 His loan account 10 50 1, 200 00 Paid by credit to profit and loss; loan account of Evan Lyons. 21 600 00 do 21 9 22 His loan account 7 60 Their loan account 6 42 His loan account 89 70 do 1 13 do Th. 341 34 do 213 222 90 do 3: 118 95 Schedule page 61 22 87 Her loan account 145 11 $30 of balance applied to loan account of George H.Newman. (So informed.) 600 00 Paid by credit to profit and loss account Evan Lyons 21 703 68 His loan account 4:3 489 22 do 4;3 236 00 do C 125 59 "Applied in payment of Wornock's loan" 91 300 00 His loan account 413 212 18 do 41 76 07 do 41 1 05 do 41 10 76 do 41 628 01 Applied to loan to the Dallas Street Church 2(3 77 03 do . 26 400 00 do 26 519 34 His loan account 49 05 do 49L 309 06 "Payment of note" . 1::' 271 39 His loan occount 1, 00 FREEDMAN'S SAVINGS AND TRUST COMPANY. Apr. 14,1879 Mar. 21,1877 Oct. 18,1875 Sept. 8,1875 Oct. 1, 1874 Jan. 20, 1875 Apr. 20,1875 Jan. 30, 1879 Jan. 24, 1878 Jan. 24, 1878 Name of depositor. May 27,1875 Elliott, James Total do Nashville, Tenn do do do do do do Atlanta, Ga $153 08 do 135 96 550 35 344 Credited to loan account of Agricultural and Mechanical 59 Association, Nashville, Tenn. 4 23 14 75 81 40 68 89 His loan account 4 22 do 17,376 72 13 1.9 25 FREEDMAN'S SAVINGS AND TRUST COMPANY. Aug. 9,1878 Butler, W,B Aug. 9,1878 Harding, Henry Aug. 9,1878 Howard John Lucas Aug. 9,1S78 Keeble, W Aug. 9,1878 Lapsley, J. W Aug. 9,1878 Rhodes, H P Aug. 9,1878 Smith, Abram Nov. 5, 1875 Quarles, Frank May 23,1876 Brooks, L. W 310 FREEDMAN'S SAVINGS AND TRUST COMPANY. REPORT ON WASHINGTON BRANCH. WASHINGTON, D. C., December 5, 1879. Hon.B. K. BRUCE, Chairman Select Committee Freedman's Savings and Trust Company: DEAR SIR: In accordance with your instructions, we have the honor to submit the following report as the result of our examination of the individual or deposit ledgers of the Washington Branch of the Freedman's Savings and Trust Company. In submitting this report we have,to state that it is but a partial one. To furnish the committee a full report upon the Washington Branch from an actual examination of the books would require much more time than we have had at our disposal, owing to your instructions to proceed first with the examination of the loan accounts, a report upon which we have submitted. In the Washington Branch our examination has been completed to November, 1869, and we have so far discovered discrepancies in accounts which we consider of sufficient importance to furnish the committee in advance of a full and final report. The accounts in which these discrepancies appear we have followed through the different ledgers to the close, and fail to find them corrected. The result of their examination increases the overdrafts of depositors to a considerable extent. Our examination has been made by a careful comparison of the journal entries with those on the ledger. The pass-books in many cases we fail to find, they having been returned to the depositors, and we have therefore relied upon the journals as the basi