On the afternoon before, Monday, while the Traders' Bank was in the
rush of closing hour, between two and three, Mr. Jacob Trautman,
President of the Pearl Brewing Company, came into the bank to lift a
loan. As security for the loan he had deposited some three hundred
International Steamship Company 5's, in total value three hundred
thousand dollars. Mr. Trautman went to the loan clerk and, after
certain formalities had been gone through, the loan clerk went to the
vault. Mr. Trautman, who was a large and genial German, waited for a
time, whistling under his breath. The loan clerk did not come back.
After an interval, Mr. Trautman saw the loan clerk emerge from the
vault and go to the assistant cashier: the two went hurriedly to the
vault. A lapse of another ten minutes, and the assistant cashier came
out and approached Mr. Trautman. He was noticeably white and
trembling. Mr. Trautman was told that through an oversight the bonds
had been misplaced, and was asked to return the following morning, when
everything would be made all right.
Mr. Trautman, however, was a shrewd business man, and he did not like
the appearance of things. He left the bank apparently satisfied, and
within thirty minutes he had called up three different members of the
Traders' Board of Directors. At three-thirty there was a hastily
convened board meeting, with some stormy scenes, and late in the
afternoon a national bank examiner was in possession of the books. The
bank had not opened for business on Tuesday.
At twelve-thirty o'clock the Saturday before, as soon as the business
of the day was closed, Mr. John Bailey, the cashier of the defunct
bank, had taken his hat and departed. During the afternoon he had
called up Mr. Aronson, a member of the board, and said he was ill, and
might not be at the bank for a day or two. As Bailey was highly
thought of, Mr. Aronson merely expressed a regret. From that time
until Monday night, when Mr. Bailey had surrendered to the police,
little was known of his movements. Some time after one on Saturday he
had entered the Western Union office at Cherry and White Streets and
had sent two telegrams. He was at the Greenwood Country Club on
Saturday night, and appeared unlike himself. It was reported that he
would be released under enormous bond, some time that day, Tuesday.
The article closed by saying that while the officers of the bank
refused to talk until the examiner had finished his work, it was known
that securities aggregating a million and a quarter were missing. Then
there was a diatribe on the possibility of such an occurrence; on the
folly of a one-man bank, and of a Board of Directors that met only to
lunch together and to listen to a brief report from the cashier, and on
the poor policy of a government that arranges a three or four-day
examination twice a year. The mystery, it insinuated, had not been
cleared by the arrest of the cashier. Before now minor officials had
been used to cloak the misdeeds of men higher up. Inseparable as the
words "speculation" and "peculation" have grown to be, John Bailey was
not known to be in the stock market. His only words, after his
surrender, had been "Send for Mr. Armstrong at once." The telegraph
message which had finally reached the President of the Traders' Bank,
in an interior town in California, had been responded to by a telegram
from Doctor Walker, the young physician who was traveling with the
Armstrong family, saying that Paul Armstrong was very ill and unable to
travel.