During Mr. Ridgely's administration eighty-three national banks were placed in the hands of receivers.
The most sensational of these failures was that of The Citizens National Bank of Oberlin, Ohio, which suspended November 28, 1904. This was not a large bank. Its capital stock was only sixty thousand dollars, and its deposits a little over four hundred thousand dollars, but for absolute imbecility of management it perhaps has no parallel in the history of national bank failures. This bank was wrecked by a woman, the celebrated Cassie A. Chad-wick, a female Napoleon of finance, who succeeded in completely deceiving not only the officers of the bank as to her financial worth but every one else with whom she had any business dealings.
The wrecking of this institution and the pathetic end of its aged president was due to his having violated the law to a small extent in the first instance by making a loan of $13,000 to this woman, which was $7,000 in excess of the limit of a loan that this bank could lawfully make. This loan was negotiated for her by two individuals whom the president of the bank knew, who represented to him that they were engaged in a deal with Mrs. Chad-wick, involving the sum of thirty thousand dollars, and that they had in their possession gilt-edged collateral to amply secure the loan. Relying upon their representations, and without seeing or obtaining possession of the securities, the president of the bank made the loan. This loan was paid at maturity and its prompt payment paved the way to the greater extension of credit which followed. This woman had more or less business dealings with the president of the bank and the cashier personally from that time on until about August, 1903, when she applied for a loan of eighty thousand dollars. In the meantime she appeared to have satisfied the president that she was the owner in equity of five million dollars of United States Steel five per cent. gold bonds, with the right of the income therefrom. She produced documentary evidence showing that she was the owner of bonds, stocks and other securities in the hands of a prominent and wealthy citizen of Pittsburg, no less a personage than Mr. Andrew Carnegie, as trustee, to the amount of over ten millions of dollars. These documents were in legal form, neatly prepared and bore every evidence of being genuine, even to the signature of Mr. Carnegie and others.
This loan of eighty thousand dollars was made and was subsequently increased to ninety-three thousand dollars to cover interest and charges, solely upon the confidence of the president of the bank in the truth of Mrs. Chadwick's representations.
When the president of the bank found that the loan was liable to run for some time he bethought himself of security, and obtained from Mrs. Chadwick an assignment of two hundred and thirty thousand dollars of the steel bonds, with power of attorney attached and a statement from a prominent banker in a nearby city that he held in trust for her securities to the amount of three million dollars free of any lien whatever. She also exhibited to the president of the bank a will which she had prepared, making him the executor of her estate, in which all her securities were listed and described.
Subsequently she obtained additional loans from the bank, ranging in amount from four to thirty-five thousand dollars, which she claimed was necessary for her to have temporarily to satisfy pressing creditors, pending a settlement of her liabilities in full. Finally she made an assignment of her alleged five millions of securities in the hands of her trustees to the president of the bank, individually, canceling the previous assignment to the bank of two hundred and fifty thousand dollars, which latter assignment was surrendered to her.
The next move of this supposedly wealthy adventuress was to send by mail to her dupe, the president of the Oberlin bank, a check on a trust company in New York City for eleven thousand dollars, with a request for a New York draft in exchange. Her request was promptly honored, but the check proved to be worthless.
Assignment of the $500,000 Forged Carnegie Note.
BOGUS TRUST AGREEMENT Used by Cassie Chadwick in her borrowing operations.
BOGUS TRUST AGREEMENT Continuation, showing signature of Andrew Carnegie forged by Cassie Chadwick.
Assignment of the $250,000 Forged Carnegie Note.
Her next deal with the Oberlin bank was to submit an offer to the president of a note purporting to have been signed by Mr. Andrew Carnegie for five hundred thousand dollars in exchange for the assignment of the five millions of securities which the bank held. The president of the bank readily accepted this proposition, surrendered the assignment and received the Carnegie note, which he accepted without question as being genuine, relying upon his familiarity with the signature of Mr. Carnegie, which he said he had seen on other papers.
When questioned as to how she became possessed of so much wealth and why Mr. Carnegie gave her his note for so large a sum of money, she stated that she was the illegitimate child of Mr. Carnegie, and that he had settled on her the securities before mentioned, amounting to over ten millions of dollars, for the purpose of righting the wrong occasioned by her birth.