238
WRITINGS OF SAM HOUSTON, 1859
and has resided during the past and present s_essions of Con- gress in this city, where he has been actively defending Judge \Vatrous. Of Messrs. Lake and Klemm, and of their mode of transact- ing business, we find some curious accounts in one of the num- bers of DeBow's Review, in the year 1848. (See October and November numbers, pp. 262, 263, treating of the connection of these gentlemen with the bubble banking system.) The article tells us that- "Mr. J. S. Lake was formerly canal commissioner, and became the largest stockholder in the bank of Wooster, [Ohio] an institution never in good repute, and which was on the point of failing three years ago, together with the Norwalk and Sandusky banks, in con" nection with the exploited bubble, called the Bank of St. Clair, Michigan. The capital of the Wooster Bank was $249,450; of that there stood in Mr. Lake's name $171,900. Mr. Lake then moved to New York, and com- menced business as a broker, under the firm of J. S. · Lake & Co., in Wall-street. The Co. was his son-in-law, 0. Klemm, who was doing business in Cleveland under the firm of 0. Klemm & Co., the Co. being J. S. Lake, in New York. Klemm was also cashier of the bank. These gentlemen performed all the business of the bank; that is to say, Mr. Klemm purchased with its means eastern drafts, and sent them to Lake for collection; Lake making his returns occasionally, the other direc- tors knowing but little of the transactions. ·with the large amount of means derived from the Wooster Bank, Lake & Co. speculated in produce, on which they ac- knowledged a loss of $150,000, and they started three other Ohio banks, besides buying the Mineral Bank of Maryland and a bank in Texas. . . . Here, then, Lake & Co. had borrowed of the public on small notes through four banking machines, one laying the foundation of the other, $936,398." Mr. Lake's banking operations were extended to Texas, under circumstances which make it evident that they were particu- larly designed to further the gigantic land conspiracy conducted there by Judge Watrous, and to furnish additional resources of power in the execution of their plans. We find this confederate of Judge Watrous securing the only bank charter in Texas. 'fhe mother bank was established at Galveston, Judge Watrous's home; and its president was Samuel M. Williams, whose name has been prominently brought forward in the late investigation into Judge Watrous's conduct in connection with the La Vega
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