Colchester was the center of one of the largest financial scandals of the 1800’s

Sometimes a great story gets lost over time.  Print media get lost in library stacks and people pass away.  This story is one of that needs to be revived.

Bank of Colchester balance sheet

Bank of Colchester balance sheet

 

The bank’s beginning:

Colchester bank started in 1856 under the leadership of Isaac B. Buell.  It reflected Colchester’s importance to the local economy of Southeastern Connecticut.  Its initial cashier was Samuel F. Jones.  Per the May Session 1857 Bank Commissioner’s report to the Connecticut General Assembly, the bank had $103,946 in resources.  This was about $2.7 million in 2016 dollars.

It’s interesting to note that the bank was no longer listed after 1857.  Upon further research reading old articles from the Hartford Courant (via the website iconn.org), an interesting tale of greed and scandal unfolded.

Colchester Bank $2 note circa 1857

Colchester Bank $2 note circa 1857

The crime:

In the December 10, 1857 edition of the Hartford Daily Courant, Mr. Jones was arrested for embezzling $75,000 from the bank.  This was the equivalent of $2.0 million in 2016 dollars.

In the December 22, 1857 edition of the Hartford Daily Courant, Mr. Jones was also found to have illegally printed $101,000 in draft notes ($2.4 million in 2016 dollars), for his own personal use in 1857.  He convinced the bank president, Isaac Buell to sign the draft notes without knowledge the bank did not have the resources to cover the notes.  It was this act the drove the final nail into the bank’s coffin.  Once the financial mess was discovered, the bank was put into receivership by state banking officials.  Eventually, all holders of the bank draft notes were given about 25 cents on the dollar.

The escape, chase and eventual capture:

Original Hartford Daily Courant article

Original Hartford Daily Courant article

In the December 10, 1857 edition of the Hartford Daily Courant, Mr. Jones was arrested in New York City and confined to a hotel until local banking officials arrived.  In the interim, Mr. Jones’ lawyers succeeded in getting him released.  Once local banking officials arrived they found out that Mr. Jones was nowhere to be found.

In the February 16, 1859 edition of the Hartford Daily Courant, it was revealed that New York City Police Commissioner was personally embarrassed that Mr. Jones escaped custody in 1857. In 1859, detectives got a break by locating and following Mr. Jones’ wife to his hiding place at the Metropolitan Hotel.  It was rumored that Mr. Jones used his ill gotten wealth to invest with the owner of the Metropolitan Hotel. A scuffle ensued to arrest Mr. Jones and bring him to justice in Connecticut.

The article went on to state however, that more intrigue was involved.  While under armed escort back to Connecticut, Mr. Jones’ train was stopped in Harlem.  It turned out that the wrong writ was issued and the New York City officials refused to let Mr. Jones leave the city.  Connecticut officials seemed to have been baffled by the legal wrangling.  This eventually escalated to the Governors of New York and Connecticut exchanging harsh words.  It also caught the attention of national newspapers.  The papers started to call it the financial scandal of the century.

In the February 21, 1857 edition of the Hartford Daily Courant, the final chapter in the Jones saga was told.  Mr. Jones was placed under an armed police escort back to Connecticut.  Unbeknownst to Connecticut policemen, Mr. Jones’ friends mounted a large group of armed Pinkerton detectives intending to rescue Mr. Jones.  The article details the chase through Connecticut’s back roads.  Eventually, Mr. Jones arrived safely to Norwich and brought to justice.  This ended the saga of one of the nation’s largest banking scandals of the 1800s.

 

 

 

 

 

 

 

 

 

 

 

 

Current News!


Steps-logo

The Colchester Historical Society is proud to announce the successful completion of StEPS-CT, or Standards and Excellence Program for History Organizations (StEPs).

The Colchester Historical Society was one of 23 small cultural and heritage organizations which recently completed this intensive 2-year program.  CHS received support and training via curriculum-based workshops; coaching from a dedicated mentor; and access to a Connecticut Humanities grant fund earmarked for initiatives related to achieving StEPs-CT program standards.

Over the course of the program, the Colchester Historical Society achieved bronze and silver certificates in six areas of museum practice.  Through continued work on a self-study basis, CHS plans to continue to strive for gold certification in all StEPS Units.  “This is just the beginning,” said CHS Co-President Gigi Liverant, “we are so grateful for StEPS-CT for all that we’ve learned, and we plan to continue developing procedures and policies that establish Colchester Historical Society as the premier steward of Colchester’s history and heritage.”

“Our experience with StEPS-CT has been invaluable,” Angela George, Co-President of CHS added. “From improved signage that has increased visitation to the museum, to implementing current policies that guide our volunteers through daily operations, StEPS-CT has improved our organization.  We can now provide better programs to our community, and we are now better able to tell our audiences our local histories and preserve our heritage through our unique collections and images.”

StEPs-CT is a program of Connecticut Humanities and the Connecticut League of History Organizations, in partnership with Connecticut Historical Society, based on a curriculum of best practices developed by the American Association for State and Local History.  

Connecticut’s program was the first to integrate the national StEPs curriculum and is viewed as a model for similar programs across the country, according to Scott Wands, manager of grants and programs at Connecticut Humanities.

Connecticut Humanities, a nonprofit affiliate of the National Endowment for the Humanities, provides opportunities to explore the history, literature and the vibrant culture that make our state, cities and towns attractive places to live and work. Learn more by visiting www.cthumanities.org.

The Connecticut League of History Organizations (CLHO) builds connections among those who preserve and share the stories and objects of our past. Learn more by visiting www.clho.org

 

 

 

Connect with Us