A Forgotten Landmark: Chadwick's Folly

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Historic Nantucket

THE FORGOTTEN LANDMARK Chad wick's Folly 1885

by ©Robert F. Mooney

all rights reserved

On January 1, 1885, Albert G. Brock, assistant cashier of the Pacific National Bank of Nantucket, detected puzzling figures in the accounts of the bank and hastened to inform the president, Frederick C. Sanford. The directors were called together and the books of the hank were audited. They indicated that the cashier, William H. Chadwick, had overdrawn his personal account by a small amount, but Chadwick's explanation of other discrepancies in the books did not satisfy the directors, and he was asked to resign.

The resignation of the hank cashier soon became public knowledge and the town was swept with rumors and anxiety about the condition of the hank. The Honorable Joseph Mitchell, together with fellow directors Whitney and Calder, publicly stated their confidence in the soundness of the bank, based upon their personal examination of the books. The public, wondering about the visible signs of Chadwick's recent activities, had its doubts.

William H. Chadwick, at 38, had been cashier of the Pacific National Bank for six years. He was a genial and popular local figure, possessed of many friends and enjoyingd the confidence of the community. His father, William S. Chadwick, was a man of hard-earned wealth and his mother came from a long line of Nantucket Coffins. For the past few years, the bank cashier had been a principal figure in extensive real estate operations on the island that had aroused local curiosity. There was nothing wrong with a local banker dabbling in real estate, hut the size of his personal expenditures had caused the directors to become uneasy and they kept a daily watch upon his personal transactions. Despite that vigilance, shortages in the accounts were discovered forcing the conclusion that the bank had been the victim of deliberate swindling. The amount missing was estimated at $10,000 to $15,000, a huge amount in those days.

Local rumors held that many other people had been victimized by the bank cashier, but the Inquirer and Mirror calmly suppressed their names, adding, "It appears to be the old, old story, and comment is unnecessary. No arrest has been made."

The object of Chadwick's attentions in recent years had been a choice parcel of real estate on the eastern end of Nantucket known

as Squam Head. There, on an estate of 150 acres, he had commenced extensive building operations on a high bluff overlooking the Atlantic Ocean. The project included an immense brick stable and a giant dwelling three stories high and topped by an enormous cupola, visible for miles around. The town could only wonder how Chadwick was building this on his bank salary, but it was generally believed he was operating on behalf of "parties abroad." This seemed to alleviate the local anxiety while preserving the mystery of who was behind the project. Local gossips traded opinions that it was to become a summer hotel, a country club, or even a gambling casino for the yachting crowd from Newport and New York.

These were the years when Nantucket had just started to realize the potential of the tourist economy, and grandiose construction was the symbol of the era. Charles O'Conor, the retired lawyer, had finished his mansion on the Cliff, complete with Italian marble fireplaces and his 18,000 book law library. The Hotel Nantucket, sprawling 260 feet in length, had been constructed on Brant Point. The Riverside Hotel had been floated down the Providence River and rebuilt at Surfside, while other projects were planned for building on the barren shores of Coatue and Tuckernuck. Anything was possible on Nantucket in those years, but the Chadwick estate at remote Squam Head was destined to outbuild and outlast them all.

Chadwick had assembled his estate at Squam Head over years at an estimated cost of $100,000. The lumber for the project was shipped to Nantucket on schooners, then hauled over the rutted roads by teams of horses to the eastern headland where teams of craftsmen were engaged in the construction. The bricks for the great stable were salvaged from the Citizens Bank on Main Street, which was torn down in 1884. Hundreds of curious natives made the long trek to the site to witness the great production. Uppermost in everyone's mind were the cost of the project and where all the money was coming from.

The Pacific National Bank, founded in 1804, was the leading commercial bank on the island, with a capital of $100,000 and a surplus of $35,000. Its president, Frederick C. Sanford, was the outstanding citizen of the island, noted for his integrity and philanthropy. The Pacific had been founded in the days when most of the islanders' money had been earned in the Pacific Ocean, and the name had endured while several other banks had failed.

Nantucket banks had a curious history in the early years of commerce on the island. The first chartered bank, the Nantucket Bank, opened for business in 1795 and within two weeks was looted of

East view of the Chadwick's Folly Main House c. 1953.

its entire cash assets, leading to the dissolution of the bank and the bitter controversy over the Nantucket Bank Robbery. Then followed the Quaker-inspired Phoenix Bank, which was chartered in 1812 and failed in 1825. This was succeeded in the same year by the Manufacturers and Mechanics Bank, which collapsed in the wake of the Barker Burnell scandal of 1845 and was demolished in the Great Fire of 1846. A second Nantucket Bank was chartered in 1831 but never started business. This was followed by the Citizens Bank in a brick building on Main Street, which ceased business after the Great Fire. In 1834, the Nantucket Institution for Savings was incorporated and with the Pacific National Bank,somehow survived as the two Nantucket banks for the past century and a half. It is no wonder that a visitor to Nantucket remarked in 1847: "A strange fatality seems to have attended all their banking operations and their losses by such institutions have been serious."

The Nantucketers of 1885 had long memories of the robbery of 1795 and the embezzlement of 1845, which caused them to harbor deep suspicions of the leading citizens who ran the Pacific bank. Many claimed the directors had gone out of their way to cover up for the cashier and keep the public in the dark. Wild stories of shortages and swindling swept the town and angry depositors marched up the steps of the bank on Main Street to demand their deposits

The Chadwick's Folly Barn (pictured above) was later cut in half to make two houses. The cupola was also made into a small house.

in hard currency. The directors continued to repeat their assurances that the bank was still in good condition. Cashier Chadwick had strong forces on his side, for the family was respected and his father was known to be wealthy. As the weeks passed, it seemed that Chadwick might be able to survive further legal difficulty. Conditions did not improve, however, when the state bank examiner, Colonel Needham, arrived on the island to examine the books of the bank. On January 30, a letter was circulated in Nantucket by J.B. Tibbets, of Troy, New York, a summer resident who owned many acres near the Chadwick property in Squam. Tibbets publicly announced his willingness to put up all his land in Nantucket, consisting of some 400 acres with buildings and improvements, as security for all of Chadwick's debts on Nantucket. He offered to pledge his property provided "a certain party in town" would pay off all those debts, beyond Chadwick's personal assets of $12,500. Tibbets also offered to raise the required sum himself to pay the debts, if the "certain party" mentioned would offer his own property as security for the payment. He placed the propositions in the hands of Doctor J.S. Sanborn of Nantucket to show to anyone kindly disposed toward Chadwick, and they were printed in the Mirror in April. Tibbets's letter added that he was not actuated by any desire to shield Chadwick from the consequences of his misdeeds, hut rather from

a hope of saving him through these means for a higher end than he has hitherto set for himself in dealing with "Mammon."

This interesting letter indicated that the writer knew a great deal about the Chadwick property and the extent of the debts involved. The curious reference to "a certain party in town" may have been an effort to provoke a response from other parties who were morally or legally obliged to come to Chadwick's rescue, or may have suggested to the public that Chadwick was not, as widely rumored, an agent for "parties abroad." As a friend and neighbor, Tibbets was in a good position to know more of the truth than had come to light at that time and the names of the parties involved. The effort was not successful and events took a turn for the worse for William H. Chadwick.

In April 1885, a federal marshal came to Nantucket and arrested former cashier Chadwick and transported him to Boston on the Saturday afternoon steamer. He was charged with embezzlement and alterations of the books of the Pacific National Bank and held on $10,000 bail. Unable to raise the bail, he was committed to the East Cambridge Jail.

The arrest of the local cashier caused a sensation in the town, where it was widely believed he would avoid criminal charges upon his promises to make good his debts to the bank and many island creditors. The Mirror commented: . .. "it had come to the general opinion that the unfortunate man would escape arrest on a criminal charge, and there was speculation as to who instigated the arrest."

The defendant was now forced to appear in a federal court in Boston, which had jurisdiction because the Pacific National Bank was a federally chartered institution. This effectively removed him from trial in the state court in Nantucket, where a local jury might have reflected the sentiment expressed by the local newspaper. It also avoided the embarrassment a local trial might have caused for certain parties in town.

Chadwick's problems were now increased by his many creditors on the island who now reached in desperation for his assets. Within a month, multiple attachments were placed on his property in Squam, and dozens of civil actions were filed against him in local courts. The massive estate at Squam Head was almost complete, but the empty mansion was nothing but a monument to guilt and greed and was soon given the enduring name of "Chadwick's Folly."

Unable to raise his bail money and inundated with creditors, William H. Chadwick pleaded guilty to charges of embezzlement and making false entries in the books of the bank. Without a trial, Judge Colt in the federal court sentenced him to five years in jail,

but permitted him to serve them in Nantucket. He was brought home by the U.S. Marshal and lodged in the jail on Vestal Street to await his many civil trials.

Four civil cases involving the Pacific National Bank and William H. Chadwick were finally heard before the Supreme Judicial Court sitting in Taunton in April 1886, with Justice Oliver Wendell Holmes, Jr., presiding. Captain William T. Swain was sued by the bank on a note, requested by Cashier Chadwick, given to cover Swain's overdrafts at the bank. He counterclaimed that the bank was guilty of fraud and conspiracy for covering up the actions which had caused the overdrafts. Chadwick was at the time heavily indebted to Swain for lumber used in the Squam Head property and promised to take care of the debt by paying off Swain's notes at the bank. Chadwick had actually paid off most of Swain's note but in the meantime Swain brought suit and attached Chadwick's land at Squam. Then Swain received his bank passbook and found several items omitted and interlined, at which point he sued the hank to find out what was going on.

The trials at Taunton brought out much of the local reaction about the confusion in the bank and the sentiment about Cashier Chadwick. It was shown that the bank took a note for $8,000.00 from Chadwick to cover his deficiencies, but only after Chadwick had paid the father of Albert G. Brock, the current cashier, his personal debt of $1,800.00 in cash. Swain claimed the bank's notes were part of a scheme to relieve Chadwick of any criminal responsibility. The Honorable Frederick C. Sanford, president of the bank, took the stand to deny this allegation. He said Chadwick had admitted owing the bank about $10,000.00, at which time Sanford gave his own note to the bank to cover the shortage until Chadwick made it good, which he promised to do within a few days. He stated that, although he knew Chadwick had done wrong, he could not bear the thought of his being "cast adrift with the stain of criminal prosecution." Moreover, he was moved by thoughts of Chadwick's invalid wife, his small children, and his aged parents and knew the situation might provoke a run on the bank that might prove disastrous. During the portions of his testimony about Chadwick and his family, Sanford was visibly emotional and on the verge of tears.

When William H. Chadwick took the stand he testified that he had worked for the bank about ten years. He admitted to various entries made in Captain Swain's account, without notice to Swain, to cover overdrafts for the benefit of the hank examiners, and to hide overdrafts from the directors. He also freely admitted he had taken about $12,400.00 and was now serving his sentence in the

Nantucket jail.

Chadwick was strongly pressed by counsel to tell the court where the money went: "Don't you remember any other parties to whom a portion of that money went?" "No, sir, I have got no one else to name." "Did you not keep a memorandum of your transactions?" "Yes, sir." "Where is it?" "Destroyed." "Why did you destroy it?" "Because it was a record of my private business with parties who did not care to be known."

The results of the other cases are not as important as this testimony. In fact, the Taunton jury threw out all the plaintiffs' cases and sent the Nantucketers home to straighten out their own affairs. But William H. Chadwick, facing five years in jail and the loss of his reputation and all his property, would never mention the names of those "parties abroad" who had brought him to ruin.

Chadwick returned to his lonely jail cell where he served until his release on good behavior. His father eventually put up some money to satisfy the claims of the Pacific National Bank, but his creditors did not fare so well. The old estate could not shake the curse nor Chadwick's Folly nor the mystery of the man who built it.

The great empty estate at Squam Head stood brooding over the mystery for several years. Like many of the grandiose schemes of the real estate boosters, it was wildly out of contact with reality, and, in addition, the property never overcame the curse of Chadwick's Folly." It was sold at auction in 1894, and subsequent owners parcelled it out into various waterfront lots. The great old mansion was gradually dismantled, the huge cupola proving large enough to become a summer cottage. The last remnants of the estate were levelled in 1956 and modern homes now stand on the site of the cashier's dreams.

William H. Chadwick did not live to see his dream disappear. A broken and lonely man, he would never discuss his problems nor name the associates who had led him into the schemes and left him to bear the full burden of his folly. He died in Nantucket on April 1, 1893, at the age of 46, and the Nantucket Town Clerk listed his occupation as "bank cashier."