Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1838-03-15
ProoeedaHgs or the Legislative CemmAatee
for the Investigation Of certain charges
against the Phenix Bank.


FIRST DAY.
MONDAY, March IL, 1888.
The Committee, Mr.. Lawrence, Of Onendaga,
chairman; Mr.. Sibey ofMonroe; Mr. Wardwell, OF
Jefferson; met a, 10 o'clock in the City Hotel
On entering the room, recognized Mr. Sibley,
and inquired of that gentleman whether this was an
open court, and whether there would be any objection
10 the proceedings being reported He stated that il
was an open court and there could be no objection or
opposition TO report of what transpired being given
TO the community. He then asked whether the wri-
ter of this attended for the public press to which the
latter replied in the affirmative. At this time, and up
10 one O'Clock no other reporter was present
The Chairman expressed his anxiety TO expedite the
matter as much possible consistent with the inter
ests of all parties. There important business be-
fore the Legislature and the Commissioners were
anxious to return 10 their legislative duties.
Mr.. Delafield, of the Phenx Bank, and Mr.. Jay as
Counsel, attended fer that institution.
Mr.. Foote assisted by committee of the Board of
Trade, attended for the petitioners
The memorial of the petitioners against the bank
was agreed to be entered upon the minutes as read.
Mr.. Jay stated that the bank had been refused CON-
munlcaton of the afiidavlts.
The first witness called and sworn was Mr.. Ateris
s. Baker. Is a resident and citizen OF New DIRK and
merchant in the clothing business, and of the firm Of
Baker, Johnston e. Co. Has been in business for
about years; kept account with the Phenix Bank
or years past.
Question-Has your firm within the last IL or Is
months hac any notes discounted at the Phenix Bank
Tor the proceeds of which, you received bills In
mercla paper which under par at the time IN this
clty2 If yea, stale the times and number of such
discounts the paper you received the proceeds and
the amount at which II was under par al the time it
was so ret eved.
Answer.-We have had notes discounted at the
Phenx Bank for which we received notes and COM
mercial paper which at the time under par the
city of New York. We never received bank bills.
cannot answer specifically to the dates and HUM
Der; 1t would require particular investigation; but
believe have in nay mind pretty much all that ever
took place. Since | was summoned here / have
looked into my books The first notice was on the
3lst October 1886. The witness read from paper
"Soid the Phenx Bank sundry notes payable in
Georgia, Alabama, and Mississippi amounting in all
TO Sic, 7Sl 55-l00." We were charged the discount
on these by the Bank, $500 27le0 which was the in
terest, beng per cent on the whole-but cannot
say positively; II might be per cent-the Exchange
was 1894 2sl00-about 4 80. For the proceeds of
that paper, we took cheque on New Orleans for
Sl5 1000, on account of the paper We had credit for
the paper and were charged with the amount of the
cheque the Bank for Sl5 900 and taking draft on
New Orleans in exchange for the same amount.
To make the matter more specific, Mr. Foote ask
ed
Was the exchange of 3-s per cent the market
price at that time =
Answer think 3 s per cent was less than the
market pnce at that time. We usually had exchange
from the bank rather less than the market price
these transactions generally. call market price the
lowest IT could be done for; net what this or that
bank charged but what could GET il done for.
Question-Hew much was 3.8 per cent less than
the market price Hsw much was the exchange on
Georgia and Alabama less than the market prce2
About ID per cent less. We generally calcala-
ted what the exchange would cost TO get the draft
and then what the loss would be on selling it, that is,
what the loss the draft would be; if the whole
pense enabled us 10 dispose of our exchange at the
best rate we could do it in market, we stood It.
Qnestion-What the discount on New Orleans
on the paper you receveda
Answers per cent-that is, it was per ce mt un-
der par in New York.
Question-Was it a condition of the banks nego-
caon that the proceeds should be received IN drafts
on New Orleans
Answer-I can't answer The negotiation was
made by my partner, VIM W. Johnson, who is now
in Alabama.
Question-Did you not lose on that paper three per
cent?
Questionable not Mr. Johnson consult with his
partners whetaer they had not better enter into the
transaction2
Answer should think he did-in all such nego.
remember this particular instance. l never knew OF
an instance in which Mr.. Johnson did not con-
suit met
Question. Mention the next transaction of the
bank.
Answer-I, was en- Dec 81, 1885, Sold the Ph9-
nix Bank notes payable in mississippi, amount
ing to s597I60 The discount charged for interest
was $40 80; that at the rate OF cent al 60
DAYS. and per cent when il that time II
was the regular discount. The exchange were
charged was per cent amounting to Sl79l3. re-
ceived on account chesue on Savannah (Geo) for
5000 from the bank for the two notes.
Qnestion-What was that checque worth less than
par at that time3
Answers Ia per cent.
Question-By whom was this checque and the for
MIR one on New Orleans, signed
Answer-By Mr.. Delafeld, | think l did not see
the checque; but | suppose so.
Mr.. jaw stated Of course the cheques were issued
by the authority OF the bank.
Question-what was the rate Of exchange Of Mis-
sissippi at that time, on good business parcri
Answer-A fair rate Of exchange on Mississippi,
as IL going IN the street, on good business pa
per- was 10 per cent | name this pnce, from
what il could be done at in the market AT this same
time another bank would say the rate OF exchange
was per cent, but they were not taking IL a. any
price.
Question-whut was the next transaction
Answer remember to have had three other trans
actions with the bank but corae mol prepared to give
the transactions. One on the 10th January,
Ia37-another on the 18th Of the same month and
another SINCE bat have not the date. They were