Merchants National Bank, Rutland, VT (Charter 3311)

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1882 Brown Back $5 proof
1882 Brown Back $5 proof approved March 19, 1885. Courtesy of the Smithsonian Institution Archives

Merchants National Bank, Rutland, VT (Chartered 1885 - Receivership 1900)

Town History

An 1892 advertisement for the Merchants National Bank
An 1892 advertisement for the Merchants National Bank of Rutland, Vermont.[1]

Rutland is the only city in and the seat of Rutland County, Vermont. It is located approximately 65 miles north of the Massachusetts state line, 35 miles west of New Hampshire state line, and 20 miles east of the New York state line. Rutland is the third largest city in the state of Vermont after Burlington and South Burlington. Rutland City is completely surrounded by Rutland Town, which is a separate municipality. As of the 2020 census, the city had a total population of 15,807. In 1880 the population was 7,502, growing to 17,315 by 1930.

The town of Rutland was chartered in 1761 and named after John Manners, 3rd Duke of Rutland. It was settled in 1770 and served as one of the capitals of the Republic of Vermont. In the early 19th century, small high-quality marble deposits were discovered in Rutland, and in the 1830s a large deposit of nearly solid marble was found in what is now West Rutland. By the 1840s, small firms had begun excavations, but marble quarries proved profitable only after the railroad arrived in 1851. Rutland eventually became one of the world's leading marble producers. A large number of Italians with experience in the industry immigrated and brought their families to Rutland.

Rutland had seven National Banks chartered during the Bank Note Era, and six of those banks issued National Bank Notes.

Bank History

Sketch of C.W. Mussey
Sketch of C.W. Mussey, ex-Cashier of the Merchants National Bank.
An 1880 advertisement for the McClure Brothers Music Store
An 1880 advertisement for the McClure Brothers Music Store at 25 Merchants Row, Rutland, Vermont.
  • Organized February 10, 1885
  • Chartered February 25, 1885
  • Succeeded 1450 (National Bank, Rutland, VT)
  • Receivership March 26, 1900

On February 25, 1885, the comptroller of the currency authorized the Merchants National Bank of Rutland with capital of $100,000 to begin business.[2] There were now three Merchants banks in Vermont including St. Johnsbury and Burlington. The report of condition as of the close of business on May 6, 1885, showed total resources of $123,140.05 with capital stock paid in $75,000, undivided profits $1,752.20, circulation $22,500 and deposits of over $21,700. Chas W. Mussey was cashier and the directors attesting to the correctness of the report were John A. Sheldon, N.P. Kingsley, and R. Barrett.[3]

The annual elections were held Wednesday, January 9, 1889, and the results for the Merchants National Bank were as follows: J.N. Baxter, J.A. Sheldon, N.P. Kingsley, H.H. Brown, E.C. Tuttle, W.H. Smith, E. Pierpoint, S.L. Griffith, C.S. Colburn, E. Martindale, H.F. Button, directors. The officers elected were J.N. Baxter, president; J.A. Sheldon, vice president; C.W. Mussey, cashier; and C.H. West, teller.[4]

On Tuesday, January 8, 1895, the following directors were elected: John N. Baxter, John A. Sheldon, Nahum P. Kingsley, Egbert C. Tuttle, Evelyn Pierpoint, Henry H. Brown, Silas L. Griffith, George J. Wardwell, and S.K. Burbank. The officers were J.N. Baxter, president; J.A. Sheldon, president; C.W. Mussey, cashier; C.H. West, teller, and B.H. Burt, bookkeeper.[5]

In May 1896, at the directors' meeting, Dr. John A. Mead was elected vice president in place of John A. Sheldon whose resignation was accepted a week ago. Dr. Mead was made director of the bank in place of Mr. Sheldon.[6] In September 1896, owing to ill health, John N. Baxter resigned as president of the Merchants National Bank. Dr. John A. Mead was elected to fill the vacancy and N.P. Kingsley was chosen vice president in place of Dr. Mead. Mr. Baxter had been the president of the bank since it was organized in 1885.[7]

On March 26, 1900, the comptroller of the currency placed the Merchants National Bank of Rutland in the hands of D.D. Muir as temporary receiver. The report of condition as of February 16th showed Capital $100,000, surplus and profits $3,383, due to depositors, bank and bankers $351,549, circulation $21,870, with total resources of $476,802.73.[8] Chas. W. Mussey, cashier of the bank was under arrest, charged with misappropriation of funds of the bank. The shortage was $145,000. He had left the state and was arrested at Albany, New York. The loss was largely through notes signed by Marvin A. McClure and H.O. Edson. McClure was a music dealer and prominent Odd Fellow and said he lost the money in his business. The officers of the bank were J.A. Mead, president; Charles W. Mussey, cashier; J.A. Mead, E.C. Tuttle, N.P. Kingsley, S.L. Griffith, H.H. Brown, S.K. Burbank, F.C. Partridge, and W.R. Page, directors.[9] 

Around 1882, M.A. McClure whose note had been refused discount at the bank came to Mussey and asked him to discount his note for $3,500.  After deliberation he consented and the note was discounted. That was the beginning. Mr. Mussey said that other notes came from McClure and were discounted or renewed, but he had never received a dollar. Between 1892 and 1897 the notes discounted amounted to $80,000. Then there was startling increased over the next three years with Mr. McClure being loaned money on notes aggregating $115,000. Neither Mr. Mussey nor Mr. McClure explained the reason for the remarkable increase. Mr. McClure said the money went into his piano and organ business.[10]

In April 1900, C.W. Mussey, formerly cashier of the Merchants National Bank at Rutland, waived examination before U.S. Commissioner Merrill on a charge of embezzlement and misappropriation of the funds of the bank and was held for the May term of the grand jury at Windsor on $50,000.[11] On Wednesday, May 16th, the grand jury was discharged after reporting seven true bills and two not found. Two bills were against Charles W. Mussey for embezzlement and three against Marvin A. McClure for aiding and abetting Mussey in the embezzlement.[12] On May 25th, Charles W. Mussey pleaded guilty before United States Judge Hoyt H. Wheeler at a special session of the United States Circuit and District courts in Rutland. He was sentenced to serve seven years, no labor in the house of correction. John C. Farrar, the defaulting cashier of the Waterbury National Bank, pleaded guilty to abstracting $30,000 from the bank of which he was an officer and was sentenced to serve six years in the house of correction. The case of Marvin A. McClure, who was charged with aiding Cashier Mussey in defrauding the Merchants bank was continued to the October term of the United States Court. Bail was fixed at $20,000, which McClure was unable to furnish.[13]

On December 24, 1900, D.D. Muir, receiver of the Merchants National Bank announced a 25% dividend to depositors. Muir had already paid a 50% dividend and it was thought the losses to the stockholders would not be as heavy as first feared. The bank was wrecked through the operations of Cashier Mussey who made a loan of $145,000 in violation of the national banking laws and without the knowledge of the directors.[14]

On February 9, 1901, in United States Court at Rutland, a jury returned a verdict of guilty against M.A. McClure for aiding Cashier Mussey in wrecking the Merchants National.[15] Cashier Mussey was the star witness. He said the loans to McClure had been going on for years and that he told McClure how it was necessary to falsify the bank accounts to cover up the transactions. Receiver Muir stated that the total shortage in the accounts was between $230,000 and $240,000.[16] On the 13th, Judge Hoyt H. Wheeler handed down a sentence of seven years in the House of Correction.[17]

In January 1902, the prison life of David Henry Lewis, ex-cashier of the looted Farmers National Bank of Vergennes and that of Marvin A. McClure, the Rutland man convicted of aiding ex-Cashier Charles W. Mussey wreck the Merchants National showed a marked contrast. Both men were in the house of correction. McClure worked each day in the marble yard while Lewis refused to labor. Lewis was in the hospital connected with the prison and was the only occupant. He was placed there on account of the crowded condition of the main buildings.[18] Charles W. Mussey was on an extended hunting trip in the Adirondacks. He was sentenced to serve seven years, but in the past summer was pardoned by President McKinley because, as was represented to the President, he was on his death bed with no possible chance of recovery. He made a remarkable recovery after receipt of the pardon. The pastor of Local Congregational Church, Rev. George W. Phillips, was requested to resign. Phillips was induced by Mussey's friends to sign the pardon application, Mussey having served as treasurer of his church. Phillips had been pastor for 20 years and was one of the foremost clergymen of Vermont.[19]

Official Bank Title

1: The Merchants National Bank of Rutland, VT

Bank Note Types Issued

A total of $128,220 in National Bank Notes was issued by this bank between 1885 and 1900. This consisted of a total of 21,084 notes (21,084 large size and No small size notes).

This bank issued the following Types and Denominations of bank notes:

Series/Type Sheet/Denoms Serial#s Sheet Comments
1882 Brown Back 4x5 1 - 4511
1882 Brown Back 3x10-20 1 - 760

Bank Presidents and Cashiers

Bank Presidents and Cashiers during the National Bank Note Era (1885 - 1900):

Presidents:

Cashiers:

Other Known Bank Note Signers

  • No other known bank note signers for this bank

Bank Note History Links

Sources

  • Rutland, VT, on Wikipedia
  • Don C. Kelly, National Bank Notes, A Guide with Prices. 6th Edition (Oxford, OH: The Paper Money Institute, 2008).
  • Dean Oakes and John Hickman, Standard Catalog of National Bank Notes. 2nd Edition (Iola, WI: Krause Publications, 1990).
  • Banks & Bankers Historical Database (1782-1935), https://spmc.org/bank-note-history-project
  1. ↑ The Poultney Journal, Poultney, VT, Fri., Apr. 29, 1892.
  2. ↑ St. Albans Daily Messenger, Saint Albans, VT, Thu., Feb. 26, 1885.
  3. ↑ Rutland Daily Herald, Rutland, VT, Mon., May 11, 1885.
  4. ↑ Rutland Weekly Herald, Rutland, VT, Thu., Jan. 10, 1889.
  5. ↑ Rutland Daily Herald, Rutland, VT, Wed., Jan. 9, 1895.
  6. ↑ Rutland Daily Herald, Rutland, VT, Wed., May 20, 1896.
  7. ↑ Rutland Daily Herald, Rutland, VT, Tue., Sep. 8, 1896.
  8. ↑ Transcript-Telegram, Holyoke, MA, Mon., Mar. 26, 1900.
  9. ↑ Barre Evening Telegram, Barre, VT, Mon., Mar. 26, 1900.
  10. ↑ The Fair Haven Era, Fair Haven, VT, Thu., Mar. 29, 1900.
  11. ↑ The Boston Globe, Boston, MA, Sat., Apr. 7, 1909.
  12. ↑ Vermont Journal, Windsor, VT, Sat., May 19, 1900.
  13. ↑ Spirit of the Age, Woodstock, VT, Sat., May 26, 1900.
  14. ↑ The Boston Globe, Boston, MA, Mon., Dec. 24, 1900.
  15. ↑ Barre Evening Telegram, Barre, VT, Sat., Feb. 9, 1901.
  16. ↑ The St. Johnsbury Caledonian, St. Johnsbury, VT, Wed., Feb. 13, 1901.
  17. ↑ The Daily Journal, Montpelier, VT, Thu., Feb. 14, 1901.
  18. ↑ Herald and News, Randolph, VT, Thu., Jan. 30, 1902.
  19. ↑ Fort Smith Times, Fort Smith, AR, Fri., Jan. 10, 1902.
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