AN AMERICAN BANK FAILURE.

Temuka Leader, Issue 903, 12 January 1882, Page 3

AN AMERICAN BANK FAILURE.

The Daily Lews’ New York correspondent, telegraphing on Ist November, says I ; The .City was startled yesterday by the-news'of an extraordinary bank defalcation in Newark, a large manufacturing town of New Jersey, Oscar L. Baldwin, cashier of the Mechanics’ National Bank, confessed he had stolen, 2,000,000 dols, equivalent to five-sixths of the whole amount of the deposits. For eight years he had carried on an elaborate system of false entries, false reports, and false correspondence without detection. As late as 6th October he made a report which purported to show that the Bank had 1,400,000 dols on deposit in a New York B ink. was one of the most respected men in Newark, and was vestryman of the oldest Episcopal Church in the city, a prominent director of the second largest insurance company in the country, and had the, reputa ion of being the best financier of the State. The directors of the bank, all eminent citizens engaged in their own business affairs, had implicit confidence in Baldwin, who was to all intents and purposes the bank, which was considered one of the soundest in the country, the stock standing at 180 at the time of the failure. The is 86 years old. He bad perfect confidence in Baldwin, and only visited the bank every other week or two. Baldwin says he has not used the money in speculation, but lent it all to Nugent and Co., morocco manufacturers, of Newark. They kept an account at the Bank, and Baldwin made them heavy Joans without security. Having once begun he could not stop for fear of exposure. Nugent and Co. promised repeatedly to pay the money back, but failed to do so. Baldwin declared he had S.O interest in the business, and derived no profit from their loans. He received a salary from the bank of 7000 dols, lived modestly, and without extravagance. Nugent’s store in this city was attached yesterday by the bank for 100,000 dols. The stock is valued at 25,000 dols. The factory at Newark is the largest establishment of the kind in the country. The heaviest depositors of the bank were large firms, charitable institutions, insurance companies, and the city government and various boards of public works. The shareholders are liable for the par value of the stock, which was 500,000 dols. It is believed now that the depositors will get not over 40 per cent on the dollar, it was arranged in the bank that the President should retire next January, and that Baldwin was to he elected in his place. The exposure was caused by an official visit of the district bank examiner.” Telegraphing on 2nd November, the same correspondent says : —“ The investigation into Newark Bank defalcations show that Baldwin had an arrari einent with Nugent and Company to receive 1 per cent all loans to them.

The examiner estimates the sum stolen at 2,246,000 d ols. The district attorney has demanded the surrender of all Nugent’s stock and property .as soon as a receiver of the bank is appointed. The books show that Nugent overdrew his account

this year alone 515,000 dots. The President of the Bank has been sued by a depositor for 25,000 do Is damages, charging neglect of duty. Some of the Directors do not believe that Nugent had all the money. The public sentiment strongly condemns the negligence of the Directors and the President.”