VERMONT: Rutland Fidelity

In May 1932 Charles Manley Smith, president of Marble Savings Bank of small Rutland, Vt., learned that John J. Cocklin, a bookkeeper, had embezzled $251,000 from the bank’s savings deposits, lost most of it in the stockmarket. A descendant of pioneer Vermont settlers, Banker Smith quickly reasoned that $250,000 would seem an almost astronomical figure to frugal Rutland depositors, that publication of the loss might cause a ruinous run on his bank. With this in mind he gently eased the defaulting bookkeeper out hushed up the fraud, charged the loss to surplus & undivided profits. Consequently the bank pursued a serene, solvent course as did Banker Smith and the discharged bookkeeper. Later that year Banker Smith was elected Lieutenant Governor. In 1934 Vermonters made him Governor. Bookkeeper Cocklin continued as an active member of the Rutland Elks and a power in the American Legion. In July 1935 he was named assistant city treasurer of Rutland, began to think of running for treasurer in the next election.

But the Marble Savings Bank’s secret could not keep forever. Finally State’s Attorney Asa Bloomer of Rutland heard of it. Last June he broke the case wide open by ordering the arrest of former Bookkeeper Cocklin for grand larceny making public the details of the fraud for the first time. He began to intimate that Governor Smith was guilty of at least poor judgment when he failed to hand Bookkeeper Cocklin over to authorities immediately after the fraud was discovered. Vermonters began to wonder if their Governor was not guilty of another error when he failed to raise his voice against Embezzler Cocklin at the time he was appointed Rutland’s assistant city treasurer. With the Governor’s errors the chief topic of conversation in the Green Mountain State, State’s Attorney Bloomer dug deeper into the defalcation. In the months that followed, Lathrop H. Baldwin, treasurer of the bank, and two other officers were arrested for the part State’s Attorney Bloomer said they played in hushing up the crime. Subsequently, charges against all but Bookkeeper Cocklin and Treasurer Baldwin were dropped on technicalities. Last month a jury pronounced Treasurer Baldwin guilty of perjury by falsifying bank statements to cover up the defalcation. Fortnight later Bookkeeper Cocklin was found guilty of grand larceny on 70 counts, is awaiting sentence.

Last week State’s Attorney Bloomer was ready to claim that Governor Smith was guilty of more than merely bad judgment. He had him formally charged with misprision of felony (a misdemeanor) for failing to report Bookkeeper Cocklin’s crime. While harried Governor Smith was posting a $3,000 bond in Rutland’s municipal court, Treasurer Baldwin was over in the county court being sentenced for his part in concealing the crime. Tear-choked County Judge Buttles imposed a fine of $400 against his old friend Lathrop Baldwin, gave him a suspended sentence of from six months to a year. First U. S. State executive to get so near jail since North Dakota’s Langer was tried for levying on relief pay checks, Charles Smith pausing in his gubernatorial duties, said: “At the proper time and place I expect to make it clear that I acted with fidelity to my duties as a citizen as well as to my duties as an officer of a mutual savings bank.”