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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

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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

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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

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.

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—

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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

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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.

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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

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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."

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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

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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

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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

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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

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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.

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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.

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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,

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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

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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

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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.

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- 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

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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

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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

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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.

•

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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.

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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).

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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

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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

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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

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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 basis
of our examination.
Under date of November 1, 1869,the balances were transferred to a new ledger (D),
and the examination of each account was then continued throughout that ledger. The
first error of importance which attracted our attention was under date of May 31,
1870 (ledger D), wherein the account of the "Educational Fund" received a credit i