The 'Dummy' Notes That Toppled a Bank
A financial scandal in Whatcom County exposes a web of fake assets and political maneuvering between rival cities.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The serious complication of Whatcom County financial affairs brought to light by the closing of the Bank of Fairhaven and C.W. Waldron's retirement from the Whatcom County Bank continues to be the absorbing topic of public interest. There is friction between the residents of the 'bay cities' (Whatcom and Fairhaven). When the affair became public, indignation was high; rumors of mob violence circulated on street corners. It was known that the treasurer was short in his accounts, using tax receipts and notes to cover missing cash. When a grand jury convened, the treasurer secured certificates of deposit from four banks to make his accounts look balanced. Waldron, a chairman of the board of commissioners, admitted these certificates were merely 'dummies' meant to mislead the grand jury. When he tried to withdraw them, the shortage was revealed, precipitating a banking crisis.
“They were given merely as 'accommodation paper' or as 'dummies' for the purpose of making a showing satisfactory to the grand jury.”
This 1892 financial scandal highlights the era's 'Wild West' banking practices, where public officials often treated tax dollars as personal liquidity. It mirrors modern concerns regarding municipal budget transparency and the cozy, often corrupt relationships between local government commissioners and their local banking institutions.
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