Security Bank (Watertown, NY)

Episode Information

Episode UID
4071410090901
Episode Type
Suspension โ†’ Closure
Bank Type
state
Bank ID
407141009 hash
Start Date
January 1, 1875*
Location
Watertown, New York (43.975, -75.911)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
82cca2f21850245a

Response Measures

None

Description

OCR errors in Article 1 corrected (dates and phrasing).

Events (3)

1. January 1, 1875* Other
Newspaper Excerpt
The loan to the Watertown Bank was made in 1875, and soon after the bank failed. No effort has been made to realize on the collaterals, which were insufficient as security.
Source
newspapers
2. January 1, 1875* Receivership
Newspaper Excerpt
the loan to the Watertown Bank was made in 1875, and soon after the bank failed
Source
newspapers
3. April 17, 1876 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank reported substantial liabilities (~$100,000) and later sources describe insufficient/poor collaterals and loan losses indicating insolvency
Newspaper Excerpt
The Watertown (N.Y.) Security bank has suspended with liabilities amounting to $100,000
Source
newspapers

Newspaper Articles (2)

Article from The Weston Democrat, April 17, 1876

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Article Text

R. I., was starting up, four of the sixteen boiler boilers exploded, utterly wrecking the house, but damaging the main mill very little. Thomas Fay and Bartholomew Coffin, who A were in the boiler room, were killed. The in fire loss is estimated at 20,000 New Rochelle. N. Y., destroyed six houses, of causing a loss of $20,000 The owners the property destroyed by the bursting of that the dam of the Worcester water works, claim the city of Worcester is responsible for daminasmuch as the officials know the dam and to age, be in an unsafe condition. The Boston Albany railroad company will institute the initial suit The Missouri State lottery been soized by the police of St. Louis for has fraudulent drawing The European grain trade is languid The volcanoes of Kilauea and Moknaweoweo, in the Sandwich islands, tion are reported to be in an active state of erupThe income tax in Cuba has been increased to thirty per cent. gold. Isaac Page, of Searls Milks, Mo., murdered his wife and cut his own throat, from bankers the effects of which he will die French have decided to financially assist the khedive of Egypt The United States express pany's office at Akron, Ohio, was robbed reDuring the contly of e25,000 or $30,000 recent heavy gale the thick glass windows in the White Island light tower, off Maesachusetts, sixty feet above high water mark, were broken by thewares. The Watertown liaN.Y.) Security bank has suspended with Sixteen bilities amounting to $100,000 employees of the Boeton custom house York were discharged to reduce expenses New total indebledness April 1st was 8119,The Mexican city's 164,908.29 authorities in Mata- domanded forced loans from Americans and on one old man refusing to pay he on top of the moras, was placed fortifications event between armies, 80 that in the of he would be exposed to two the an attack opposing extended fires. Our consul received him, and his protection to other countrymen. A United States gunboat has gone to the scene of action. South Hadley, Mass, lost a hotel, store, two D. S. houses and two barns by firo Conover, United States Senator from Florida, was arreated at Tallahaesse on a charge of ombezzling $40,000 The public debt statement for March shows a reduction for the month of $4,240,867; for the nine months of $17,969,286. The Egyptians are fortifying strong positions in Abyssinia The Democracy of Connecticut re-elected Gov. Ingersoll and secured working majority in both branches of the Legislature. This will give a Democratic United States Senator The have found an indictment exChicago grand against jury in in Congreesman J. D. Ward for complicity revenue frauds. A duel was fought near Richmond, Va., by Lieut. Thaxton T. Robinof the United States army, a United States gauger, to Mitchell, son, and sottle Jesse Robinson was killed and Mitchell will die. Both were young old probably foud. and head highly connected. Gen. Porfirio Diaz, the of in Mexico, has with a blow being moras the revolutionists scarcely struck. taken Mata- The included 530 men, seventeen pieces of and 712 stand of arms. artillery, capture As the government general Toledo has taken service under Diaz, it is probable he betrayed the town to the insurgents The French Senate unanimously adopted the bill raising the state of elege. The nomination of Richard H. Dana, Jr. WAS rejected by the Senate, as minister England The estimates for the River and bill were cut down in the congresfrom to 000 Harbor sional committee $14,301,000 reported e5,873, A break fifty feet wide is the Milliken Bend levee, a few miles above Vicksburg, Miss A barge containing ten bushels of corn unmanage able above St. Louis and struck thousand just became the bridge with such force as to break in two, drowning crow of six colored men N. a well-known Bcethe Cummings, outire merchant of Bradley committed suicido while temporarily inhimself in a of saue ton. by drowning shallow pool water. The steamer Agrigenti, from Pineus Italian collided with Castle off the cost of steamer for Hylton ports, south the English the Morea. The Agrigenti immediately tunk, and nine of the crew and twenty passengers were drowned Reports from Newfoundthat the fishing season and that a number of vessels favorable, land state realing has been were crushed and sunk by the ice. Destitution The prevaile in many parts of Green Bay schooner Helen J. Holway went a-hore Dear Fire island, off Long Island, and six lives were lost A seventeen-year-old sou of Patrick in Columbus, Ohio, having aseoclated with forbidden companions, Pickering, down the father, while intoxicated, made him go upon his knees and promise not to do 80 again. While the youth was in this position the father dieat him, killing him instantly charged consequence gun Tracy and In of Thomas wife being unable to live happily together, near Carlineville, IU., the woman concluded to leave her husband, and was carrying out her intentions when he shot and killed her, and then beat out the brains of their six-year-o!d daughter. Subacquently he committed suicide by cutting his throat. CONGRESS


Article from New-York Tribune, January 3, 1878

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Article Text

Total amount $1,770.902 98 From this should be deducted the following, fictitiously so carried, viz: C. H. Peirce $52,452 25 C. Ralston 11,356 52 A. H. Doughty 154,810 74 Security Bank of Watertown 24,831 50 F. H. Jones 2,000 00 Rollins Bros, & Co 18 000 00 F. W. Huedekoper 354,470 28 620,524 29 Actual amount of loans $1,150,378 69 According to Mangam's testimony, Pierce had failed in 1873, and all that had been collected since was the interest and dividends on the collaterals. These collaterals were $52,800 of first mortgage bonds of the Wabash, Decatur and East St. Louis Railroad, and $9,100 of funded coupon certificates of the same road, worth altogether about $43,000. The collaterals to the Ralston loan were forged bonds. In proceedings against the forgers, something was recovered which has been credited; whether the bank will recover more or have to return what had already been obtained, depends on a decision of the Court of Appeals, not yet made. Of the collaterals to the Jones and Rollins Brothers loans, $145,000 are first go'd mortgage bonds of the New-Jersey and New-York Railroad Company, claimed by the receiver of that company, and $9,000 to the New-York Central Railroad Real Estate bonds, apparently forgeries. Mr. Mangam says he has been so informed, but does not know it, and has made no inquiries, though he admits it was his duty, the person obtaining the loan having failed. He considered that loan of no value until the reconstruction of the New-Jersey and New-York Company. He believed Jones was not wealthy. The loan to the Watertown Bank was made in 1875, and soon after the bank failed. No effort has been made to realize on the collaterals, which were insufficient as security. They embrace $10,000 of mortgage bonds of the Davis Sewing Machine Company of Watertown. The Sewing Machine Company claims these, and seven of the bonds, $7,000, never received the signature of the president of the company. ### ILLUSTRATING THE PRESIDENT'S METHODS. The Doughty loan illustrates the president's methods. It grew out of a series of loans made to Theodore Berdell, between November 15, 1871, and November 7, 1872. Berdell failed in 1873. The collaterals were inadequate, and the company had nothing to do but to realize what it could and charge the deficiency to profit and loss. Instead, it carried the securities to June 2, 1874, and then made a nominal sale to A. H. Doughty, at twice their market value. Berdell then owed, with interest, nominally, $151.695. This sum was then ostensibly loaned to Doughty, on Berdell's securities. Mr. Best quotes Mr. Mangam's testimony to show that this was only a sham transaction, the bank being obliged to insure Mr. Doughty, who is Mr. Mangam's brother-in-law, from an loss in the transaction, as it was done for the benefit of the company. The securities were Walkill Valley Railroad, and Mr. Mangam expresses a belief that at some time in the future they will bring their face value. With regard to the F. W. Huedekoper loan, Mr. Best makes Mr. Mangam's testimony show that it is purely fictitious, and is remarkable chiefly on account of the large amount involved, $354.476 28, and the widespread deception which it reveals. The bonds appearing as collaterals were bought by Huedekoper preparatory to a foreclosure. He was not to be held bound for any deficiency or ize loan. Part of the collaterals were bonds a Indiana division of the Chicago, Danville et Vincennes Railroad. They were turned in, and an assessment on them was paid by the Trust Company on the reorganization of the railroad company. The assessment was charged to Huedekoper as a loan. The origin of the loan was a sale by W. B. Shattnek, agent of the railroad company, of 300,000 of the first mortgage bonds of that company to the National Trust Company, at 85. Mr. Shattuck was then a trustee of the Trust Company. The prices he paid for the bonds ranged from 77ยฝ to 80 per cent. Default was made on the bonds in 1873. In 1874 the railroad company agreed to take back the bonds at cost and interest, if the Trust Company would loan it the money on them as collateral. The railroad company offered the Bloomfield mortgage as further collateral. The railroad company failed to keep its promise, and the Trust Company sold the collaterals and bought them, and then this transfer was made, so as to give it the form of a loan. This amount was, December 4, $354,470 28. Charges have been mode since which increase it to $356,020 23, against which the Trust Company has collaterals worth probably $158,956 23, showing a loss of $197,064 05, of which President Mangam was well informed, for he had made sales of the same class of securities only a few weeks before. Mr. Best says: "The foregoing fictions, classified under the head of loans, make up a chapter of financial history which, it is to be hoped, is without parallel. The culpable nature of the acts, taken in connection with the deceptions which they comprehended, is apparent, and it is unnecessary that I should write one word either in condonement or in condemnation." ### LOANS LEGITIMATE BUT REPREHENSIBLE Mr. Best next calls attention to several transactions which may be legitimately called loans, yet, in their character and bearing, they are nearly as reprehensible as those before mentioned. In 1871, loans aggregating $12,000 were made to two persons. In July, 1874, the balance of principal unpaid was $6,335 20, the arrears of interest amounting to $1,355 23, in all $7,890 48. The collateral to this was 125 shares of Jefferson Iron Company stock, having then no market value. These loans were closed Jul. 3, 1874, the stock having been apparently sold for $2,000, but it was immediately made to do duty as collateral for a new loan for $7,890 48. In August, 1876, a loan was made to J. J. Gray, of $132,000. Other loans and credits were made to him, but the credits were charged to other persons. A trustee insisted on calling in this loan. The President simply charged $59,303 to James Brady, trustee, leaving $85,308 still in the name of Gray. After copious extracts from Mr. Mangam's testimony as to this loan, Mr. Best says: "The duplicity of Mr. Mangam in these transactions is made painfully prominent by his own testimony. He loaned $144,606 on collaterals of the nominal value of $206,900, of which $33,900 was represented by old stock of the Mis-ouri Pacific Railroad, worth little more than waste paper. Of the remainder, there were $175,000 of the third mortgage bonds of the same road, which Mr. Mangam admits were not paying interest. Indeed, of all the securities only $23,-