The Phantom Wheat That Fooled Seattle's Banks
A forger sold bankers on warehouse certificates for Ritzville wheat—and walked away with tens of thousands before the paper trail caught up with him.
SEATTLE — Although the National Bank of Commerce of this city declines to state the amount of money it lost through the operations of J. M. Bennington, now under arrest at Spokane charged with forgery, the bank's loss is said to be $25,000. The Seattle bank swore out the warrant against Bennington and he was arrested. Other banks are said to have lost $25,000 more.
Bennington came to Seattle about a year ago and approached several banks with a request for a loan upon securities which he represented to be warehouse certificates for wheat at Ritzville, Wash. Bennington told the bankers whom he approached that the farmers around Ritzville were dissatisfied with the prices they had been getting for their wheat and had decided to handle their own output. He described an association that had been organized at Ritzville for the purpose of carrying the wheat and asserted that warehouses had been built and that these contained the grain of all farmers in the association. It was upon warehouse certificates issued by this alleged association that he made the loan.
“It was upon warehouse certificates issued by this alleged association that he made the loan.”
Warehouse receipts were the era's version of a collateral promise: paper that stood for grain no one could see. The case shows how a trusted city bank—and the farmers whose wheat it claimed to store—could be drawn into a forgery that traveled from Ritzville to Seattle. Modern commodity and loan frauds still depend on documents that look official.
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