Samuel Jaudon

Samuel Jaudon (1796-1874) was a 19th-century banker and businessman who, as an employee and agent of the Bank of the United States, helped cause or worsen the Panic of 1837.^[1]

Jaudon was born in 1796, the eldest son of Daniel and Anna (McNeal) Jaudon.^[1]

In 1837-1838, Jaudon served as a director of the Wilmington and Susquehanna Railroad, one of the four companies that created the first rail link from Philadelphia to Baltimore. (The main line survives today as part of Amtrak's Northeast Corridor.) When the W&S merged into the Philadelphia, Wilmington, and Baltimore Railroad, Jaudon stayed on as a director.^[2] His service as a railroad executive is noted on the 1839 Newkirk Viaduct Monument in Philadelphia.

Jaudon resigned from the railroad's board in 1838, and traveled to London to try to sell various U.S. securities on behalf of the second Bank of the United States. He had served as its cashier under Nicholas Biddle in 1835, when the bank was still an authorized national bank at the heart of the Bank War between Biddle and U.S. president Andrew Jackson. During these years, the bank was "plagued with  allegations of poor management and fraud" including improper investments made by Jaudon and others, and election fraud in the form of preferential loans to political allies.^[3]

The bank lost its national charter but stayed in business with a state charter. In 1838, Jaudon went to London as an agent for the now-private financial organization.^[4] Among his endeavors, he sought in March to secure a $400,000 loan for the PW&B-connected Harrisburg, Portsmouth, Mountjoy & Lancaster Railroad. In May, he told railroad officials that the bond market was glutted, but they pressed him to lower his price.

In August, PW&B officials authorized he and William Strickland to negotiate a loan for their railroad.^[2] He ultimately succeeded in 1840 in obtaining a loan of $113,000 by using United State Bank bonds as collateral.^[5]

Jaudon was noted as a skilled "financial diplomat" who managed to keep European capital flowing to the Bank amid the Panic of 1837, his efforts to abet U.S. cotton speculation, and dubious bond sales, but could not ultimately keep the bank afloat. It suspended payments in late 1839, and closed in 1841.^[6]

On December 10, 1841, Jaudon, along with Biddle and John Andrews, were indicted by a grand jury on charges of defrauding the bank's stockholders of $400,000 in 1836 and trying to cover it up through fraudulent recordkeeping in 1841.^[7]

By 1844, Jaudon was married and keeping a residence in New York City.^[8]

Jaudon had taken over the management of the family funds of his sister-in-law, Mary T. Bainbridge, daughter of Commodore William Bainbridge, who had left Pennsylvania state bonds to his several daughters. In 1835, Jaudon sold the bonds and invested the money in the Delaware and Raritan Canal Company. In 1865, Jaudon took out a loan from the National City Bank of New York to finance coal speculation, and gave as collateral 47 shares of his sister-in-law's stock without her knowledge, and later the remaining 70 shares. In December 1867, when the loan came due, he sold Mary's stock to cover his own debt. Mary sued Jaudon, who sued his bank, who countersued in a case that was ultimately decided by the Supreme Court. The Jaudons lost the money.^[9]

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