THE COLLAPSE OF THE BANK 37 
him in ignorance of what was going on. He found 
that confidential correspondence was carried on 
in a cipher to which he was not given a key. 
When he inquired about this he was made to 
understand that it was some one else’s business. 
Sperry, however, who was one of the “reform” 
leaders, stated to the Bruce Committee that the 
cipher was used to prevent hostile newspapers 
from getting news of the condition of the bank; 
that telegraph operators would give information 
to reporters if telegrams were not in cipher code.? 
THE COMPTROLLER’S REPORT 
Without full knowledge of the real situation 
Douglass had continued to be somewhat hopeful 
until the publication of the full report of the 
Comptroller of the Currency. This report was 
based on the investigation made by a national 
bank examiner® and it showed that the Freed- 
men’s Bank faced a large deficit, that it was 
loaded with poor securities, and that its business 
was practically at a standstill. Douglass was now 
convinced that the institution was beyond re- 
demption. He had already discovered that it 
needed money badly.” One day Stickney, and 
Alvord the ex-president, who, it seems, hovered 
near to help run things, told Douglass that in 
order to prevent the bank from closing at once 
* Bruce Report, pp. 237, 244, and Appendix, pp. 47-49. 
9 See p. 151, 
? A report made on October 9, 1875, by the officer in charge of the 
accounts of the defunct Freedmen’s Bureau indicates that the authorities 
of the Bureau had at times made loans of their funds to the bank. This 
action he thought was illegal and had resulted in the large deficits shown 
in the accounts of the Bureau, When the Bureau was a the 
bank missed the use of these large sums.—Ho. Ex. Doc. No. 144, 44 
Cong., 1 Sess. 
*