The select committee appointed by the House of Delegates on the 13th ultimo, to examine into the condition of the Farmers and Millers Bank of Hagerstown, beg leave to report:

That in pursuance of the direction of the order of the House of Delegates, they proceeded to Hagerstown, and there summoned before them such of the late officers of the bank and other persons as they deemed necessary, who were supposed to be able to testify to facts, which would enable the committee to understand the present condition of the bank, and the history of its origin and management. The testimony of these witnesses is now presented to the House, so that it may be able to judge of the correctness of the conclusions to which the committee have arrived.

The act incorporating the Farmers and Millers bank of Hagerstown, was passed at December session, 1835. The capital stock authorised by the second section of the act of incorporation is three hundred thousand dollars; and by the 10th article of the 13th section, it is provided that "until the sum of seventy-five thousand dollars in gold and silver coin, shall be in the possession of the president and directors of said bank, as part of its capital stock, and the same shall have been certified to the Treasurer of the Western Shore of Maryland, by such persons as he shall appoint to ascertain and report sach facts," that is, the fact of the bank being in the actual possession of seventy-five thousand dollars in gold and silver coin, as part of its capital stock, "it shall not be lawful for the said president and directors to issue any note of said corporation, &c."

In pursuance of this part of the charter, the Treasurer of the Western Shore, on the 18th day of August, 1840, appointed George R. Beall, George Kealhoffer and Otho H. Williams, of Hagerstown, to ascertain and report to him "if seventy-five thousand dollars in gold and silver coin, be in possession of the president and directors of the said bank, as part of its capital stock." On the 26th day of the same month, these commissioners reported to the Treasurer of the Western Shore, "that seventy-five thousand dollars, in gold and silver coin, have been paid to, and are in possession of the president and directors of the Farmers and Millers Bank of Hagerstown, as part of its capital stock." On the statement of this report of the commissioners, the Treasurer

gave the necessary certificate, and the bank went into operation. An examination of the testimony will show beyond all question, that the Treasurer was deceived as to the true condition of the bank, by this unfounded report of the commissioners; but no blame is attached to the Treasurer, however, for he did but his duty; and your committee are assured that had he had knowledge of the true state of the case, that he never would have recognized the legal existence of the bank. Gen. O. H. Williams, one of the commissioners, in his testimony, before the committee acknowledges that at the time he signed the certificate, that there was not seventy-five thousand dollars in gold and silver coin in the possession of the president and directors. He says "there were placed in the hands of the commissioners, two specie certificates of deposite, amounting to about sixty thousand dollars-the balance of the seventy-five thousand dollars, necessary for the bank to hold before going into operation, was counted in specie, in the bank. He hesitated about the certificates as representing specie, but upon advisement and consultation with legal gentlemen we agreed to count the certificates as such, and so certified the amount to the Treasurer." "I presume," continues General Williams, "the bank did not realize the specie for the certificates; as I understand they were cancelled by Weed, who gave a draft on some institution in New York."

From this statement of Gen. Williams, it is apparent that the bank was never legally organised, as contemplated by the charter, and that he, although a public officer of the State, connected intımately with the due execution of the laws, as clerk of Washington county court, aided in the fraud, which was practised to get the bank into operation. The committee think that his, as also the conduct of his associates, G. R. Beall and G. Kealhoffer, in this particular transaction, demands the severest condemnation.

To the mind of your committee they have no excuse or palliation for their participation in the fraud, and they are equally clear, that the due execution of the laws, as well as public morals require that they should not go unpunished. The honorable post which one of these commissioners holds in an office of the State, presupposes him to have been sufficiently intelligent to have faithfully performed his duty in the execution of this commission, and the security of the public demands, that an example should be made of him and his associates. If the agents of the Treasurer of the State, the object of whose appointment is, to ensure that the will of the Legislature shall be faithfully carried out, be allowed with impunity, fraudulently to impose upon the Treasurer, and as a consequence, upon the State, there will be no safety for the public treasure, or certainty of the honest execution of the laws. The committee submit the matter to the determination of the House, who will doubtless take such action as the public interest may require.

It appears that in pursuance of this report of the commissioners, the bank went into operation on the 10th day of September, 1840,

and that in the following month of October, the Millington Bank, one of the institutions which had issued one of the certificates, purporting to represent so much specie, failed, causing great loss and suffering to all who had trusted in its solvency or its credit.By the testimony, it will also appear that William Weed, who was the principal agent in putting in motion the Farmers and Millers bank, was the president of the famous Millington institution, the failure of which caused the most wide spread ruin and distress, and that he forwarded to the bank in Hagerstown, locks and other articles of furniture to enable it to go into operation. It must be apparent to every one that the Farmers and Millers Bank, was in its creation the mere offspring of the Millington concern, and that it was forced into existence by the most base and fraudulent pretences-and that it has maintained an existence by the extraordinary exertions and ingenuity of J. T. Guthrie, who now stands indicted in Washington county court, for embezzelment of the funds of the bank. It is unnecessary however for the committee to say one word about Guthrie, the testimony of witnesses of undoubted and unimpeachable integrity, fully prove his utter destitution of character; yet notwithstanding his numerous derelictions of duty and want of integrity, we find him the master spirit in the bank, managing, indeed, its whole machinery. It is a deep reflection upon the honor of the State that such men as Guthrie and the Messrs. Weed, should be permitted to control the affairs of any of her incorporated institutions. It will be observed that the committee, as an act of comity to the bank, permitted Guthrie to appear before them as a witness. By his statement, it will be seen that he contradicts several witnesses. It is due to the several gentlemen whose integrity he impugns, to say that the committee make some allowance for Mr. Guthrie, and that they place in their testimony the most implicit faith and credence.

It must be manifest to every one that Weed was fully aware of the near approach of the failure of the Millington bank, and availed himself of its then existence, to have issued the certificate mentioned in General Williams' testimony, to enable him, with the assistance of others of similar morals, to put in operation, in another part of the State, another institution, which would enable them to plunder the people in its neighborhood, as they had robbed those in the vicinity of Millington. By the device of these certificates, the bank was put in operation, and as the testimony fully discloses, continued to carry on business by all kinds of tricks and mal-practices.

It appears from the testimony of William V. Heard, formerly teller of the bank, that the return made to the Treasurer in January, 1842, was made upon the faith of certain specie and notes, amounting to upwards of thirteen thousand dollars, placed by A. J. Jones, of Harrisburg, Pennsylvania, in the Farmers and Millers Bank of Hagerstown, which monies (i. e. specie and notes,) were removed the same evening after the statement was made out.

The money was handed over to Mr. Jones, after the proper entries had been made by the order and direction of General Eyster, the

cashier!!

Andrew Kershner, Esquire, late president of the bank, fully corroborates Mr. Heard's statement, in reference to the imposisition practiced on the Treasurer, with regard to the amount of specie in the bank in January, 1842, and shows that as soon as the statement for the Treasurer was made out, that Eyster paid or returned to Mr. Jones the specie and paper money which had been placed in the bank a short time previously.

Mr. George Fechtig, a highly respectable gentleman, and of undoubted integrity, also establishes this fraudulent transaction.

It will be seen by the statement of Mr. Thomas N. Davis, that Guthrie informed him, in the year 1841, that "his bank, the Farmers and Millers Bank, was doing well, but when the Millington Bank had failed, the money came in on them very rapidly, but all was now over, and the prospect was good, and he had another bank charter in view, and wanted to put her in operation as soon as possible; and solicited me (him) to join him (Guthrie.) This was a Virginia bank, chartered at Kanahway, a salt manufactory, and said his object was to keep the Farmers and Millers Bank good, and that this, and it only wanted some little specie, and the rest would be the Farmers and Millers Bank money, which would do to start with, and when she got rightly under way, she could be broke, and it was away from home." &c.

This statement of Davis is sustained by a letter from Guthrie to him, dated 11th August, 1841. The same witness, as do others, testify to facts, showing that it was the purpose and design of the principal agents of the bank to perpetrate a most stupendous fraud upon all who should be credulous enough to trust them.

From an examination made by your committee into the condition of the bank on the 18th instant, there was the following amount of specie, viz:

All of which was by the charter payable in specie on

demand, showing a deficiency of specie means by $12,578 04

But there was also shown to your committee notes of

specie paying banks, amounting to

$285 00