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A NATIONAL BANK FAILS. THE DISASTER DUE TO IRREGULAR LOANS. THE UNITED STATES BANK EXAMINER TAKES CHARGE OF THE BANK IN MIDDLETOWN. IBY TELEGRAPH TO THE TRIBUNG) MIDDLETOWN, Nov. 28.-The Middletown Na. tional Bank suspended to-day. The bank examiner, George I. May, arrived from Washington at noon to-day and took possession of the bank until an examination of its affairs can be made. It is impossible now to tell the amount of the deficit. The president, Thomas King, takes the entire responsibility for the failure, fully exonerating the directors and officers. King had been accepting drafts irregularly from Benjamin D. Brown, a grain operator who formerly did business here and latterly was interested in large elevators in Indianapolis and in Burlington, Iowa. King kept an account of these transactions, which caused the failure of the bank, in a memorandum. of which the cashier and directors had no knowledge until a week ago. The directors tried to tide over the trouble, but the amount of the indebtedness was found to be too large. On Wednesday afternoon they decided that they must suspend, and telegraphed to the Controller of the Currency. It is believed that the deficit will use up the entire capital of $200,000 and surplus of $115,000, with possibly an assessment upon the shareholders, too. Several months ago the directors found that King had lent about $70,000 to Brown, and directed that the debt should be reduced. The Department in Washington also found fault with the excessive oan. King was instructed to lend no more of the bank's money to Brown. In spite of these instructions, King continued to advance money, not in the shape of loans, but by accepting drafts without adequate surety in large numbers, carefully concealing the transactions from the directors and cashier. Many believe that King and Brown were partners in grain speculations, as otherwise they cannot account for the influence which Brown had over him. King is completely prostrated and is unable to give a satisfactory explanation of the matter. Brown and King have both made assignments to the bank. Houston and Conklin, grain dealers who endorsed Brown's paper made an assignment to-day as did c. c. V. Ketcham, Krain doaler, for the same reason. A slight run occurred at the Middletown Savings Bank to-day. $20,000 was drawn. This bank is sound and able to meet all demands. The Treasurer of the village kept his accounts with the suspended bank, where were deposited also the funds of the Board of Education. These funds will be locked up for the present. The directors of the bank have unanimously recommended to the Conptroller of the Currency the name of the person whom they desire to be appointed receiver. The failure caused great astou. ishment and considerable excitement, as the bank is widely known, and was considered one of the soundest in this part of the State. Brown is severely denounced and King 18 greatly blamed. Some embarrassment will follow the suspension, but it is hoped that no more failures will occur. King was the last person who would have been onepeeted of such irregular transactions. as he has been considered remarkably cantious and conservative. The Board of Directors of the bank have unanimously petitioned the Conptroller of the Currency to appoint Moses D. Stivers receiver. Mr. Stivers is the senior editor of The Press and for fourteen years was collector of internal revenue in the Xith District, New-York. Brown's method was to draw time-drafts on different parties with whom he was doing business at various points in the East. Accompanying them were bitts of lading. These were sent to the Middletown Bank, with instructions that the bills should not be delivered until the drafts were paid. King was in the habit of allowing Brown to take bills of lading to collect. The latter did not turn over the money collected. and when the drafts were due the bank had to provide for them. When King made his confession to the directors, Brown was summoned and promised to make the bank secure. but failed. Brown's indebteducss is not positively known. It is thought to be over $50,000. The directors say that all depositors and creditors, except stockholders, will be paid in full.
