The best way to rob a bank is to own one. The saying that’s true today was just as true for Charles Manley Smith back in 1936.
If ever a man had a run of bad luck it was Vermont’s governor, Charles Manley Smith, in that year. His wife had died the year before, he had been injured in a car wreck and he was about to be arrested for a bank robbery he thought he’d gotten away with.
It was as if life had saved all the bumps in Smith’s road for the very end.
Charles Manley Smith wore many hats in his lifetime: farmer, brick maker, grain dealer, bank president and politician. The key to his successful career stemmed from his appointment in 1891, at only 21, as Redfield Proctor’s private secretary.
It’s hard to overstate the power of the Proctor political dynasty in Vermont. Redfield, a Civil War veteran, rose to head the U.S. War Department and serve three terms as a U.S. Senator. He dominated the Republican Party in Vermont. As founder of Vermont Marble Company, he bought and sold marble. He could direct which marble got sent to build giant federal projects and which didn’t. That meant he could make or break other quarry owners as his own company grew to one of the largest marble companies in the world.
But by most accounts Proctor did not seem inordinately greedy. He shared the wealth with his colleagues and all made money in banking, railroading and other business ventures. It made for a powerful foundation for a political dynasty. Two Vermont villages named themselves after the Proctors and three Proctors served as governor.
Charles Manley Smith
For Charles Manley Smith, affiliation with the Proctors turned into a wonderful career move. He rose steadily up the ranks of business and politics. He served in both houses of Vermont’s Legislature, and won election to the lieutenant governor’s office. Smith served as president of Rutland’s Marble Savings Bank. And in 1934 he won election to the governor’s office — the climax of a long political career.
But even the Proctors had their enemies, men such as Percival Clement. As owner of the Rutland Herald, Clement opposed the Proctor faction of the Republican Party for years. Eventually he made his peace with it. Others within Rutland politics chafed at the power the Proctors held, as well.
In 1935, as Smith’s term as governor rolled along, a former bank bookkeeper at the Marble Savings Bank, John Cocklin, had gotten the job of assistant city treasurer in Rutland. He put his name forward for the post of treasurer. Smith’s enemies had their moment.
Marble Savings Bank
Charles Manley Smith served as president of Marble Savings Bank. What had happened at the Marble Savings Bank in 1932? Cocklin was asked. Had there been any irregularities in the books that he and Treasurer Lathrop Baldwin maintained?
Of course, Cocklin’s enemies knew the answer even before they asked the question.
Lathrop Baldwin’s promotion to the post of treasurer at the Marble Savings Bank (from the Proctor Trust Company) had itself been somewhat fraught.
In 1915 the treasurer of the Marble Savings Bank disappeared. He hopped on a train to Troy, N.Y., and literally dropped out of sight. The scramble to find him touched off worries about the bank. Had the treasurer stolen money and run off? The auditors quickly tamped down any fears. He had identified no irregularities in the accounts.
When the runaway treasurer surfaced in New Orleans, he explained his departure as the result of mental strain he had experienced. He had simultaneously managed the bank and tried to manage the group of investors he represented who had purchased and refurbished the Hotel Bardwell in Rutland. He put himself under a doctor’s care. Skeptics doubted that they had the whole story, but nevertheless Lathrop Baldwin got promoted to treasurer at the bank.
Fast forward 15 years to 1932 and again the bank had a problem. This time, some $251,000 had gone missing. For an institution the size of Marble Savings Bank, $251,000 in 1932 represented a sizable amount of money. The bank chalked up the disappearance of the funds to bad investments. Cocklin left quietly. And the treasurer, Lathrop Baldwin, certified that no money had ever gone missing. Bank President Charles Manley Smith never signed the reports to the state banking commission, leaving the line for his signature blank.
Then the difficult year 1935 came around for Smith. His wife of more than 40 years passed away. And in 1936 he suffered injuries in a car accident. By mid 1936, the story of the shortage in funds began to leak out.
A zealous prosecutor had Cocklin arrested. And then he began gradually working his way up the ladder. He arrested the bank examiner who oversaw the books. Then Treasurer Baldwin. Then two bank directors and its lawyer. And then, on December 1, 1936, as Charles Manley Smith’s term as governor came to a close, the prosecutor had him arrested.
Smith reached out to his friends for help. Earle Kinsey, a Proctor man and Republican National Committeeman, put up $6,000 in bail. Smith explained to the press that he had covered up the theft simply to ensure the bank’s reputation remained intact. Divulging the theft, he said, might have put the bank in jeopardy of failing if customers rushed to take out their deposits.
The day after the arrest, Asa Bloomer, state’s attorney, under political pressure, directed that the charges be dropped against Smith. The superior court also dismissed charges against Cocklin and Baldwin. The judge said it did not have jurisdiction.
However, a feisty municipal court judge decided the case would not be broomed so quickly. Dec. 29, 1936 brought the shocking news that Smith and the others had been rearrested. This time Smith had prepared himself better. The case exceeded the statute of limitations, Smith and others argued. They took their appeal to the state’s Proctor-friendly Supreme Court.
The Supreme Court dismissed charges against Smith and the directors. The court convicted Cocklin and Baldwin, however. Cocklin went to jail. Baldwin was to pay a fine.
Baldwin would pursue his appeal. He had been convicted of perjury for filing false statements to the banking commission. His lawyer argued, successfully, that because the forms were not the annual reports mandated by the commission, but were special reports, the signature was not made under penalty of perjury. The line on the forms where Charles Manley Smith was to sign were left blank, the lawyers noted. Baldwin was cleared.
The aftermath of the case was short. Charles Manley Smith, cleared in April of 1937, died in August of 1937. He had been replaced in office. Republicans won only two states in the 1936 elections: Maine and Vermont. New Governor George Aiken had taken over for Smith. He had positioned himself as the common man’s Republican, not a Proctor Republican.
This story was updated in 2020.