New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1874-03-29


y and which were held as follows:
. BY the Citizens Bank, Gig, 400: bv the ca
nal bank OF New Orleans, $780, By the State
National Bank of New Orleans, ESQ. OOO nv
Eugene Kelly & Co., e35 900; by Edward G
Palmer, 10000; by Mr.. A. Carriere. $4,000
Dy duncan, Sherman & Co., $4,000; and
. other bills held by other persons. So that
K at the time Of the failure Of the house OF
Llzardi & Co. there were bills out
standing drawn by the Crescent CITY Bank
on Llzardl d Co. to the amount OF
ell, 600
The failure Of the house of L;zardi s. Co,
the drawees and acceptors Of these bills,
LOOK place on the fourteenth of February,
1913, before the maturity OF any of the bills,
: and was positively known to Sumner, the
president of the Crescent City Bank, On the
| sixteenth instant.
By the transfer of notes. bills, and other
evidences of debt, on the twenty-sixJh Of
February, by the Crescent City Bank to the
Citizens Bank, the latter was fully secured
for the bills held by it drawn on Lizard &
Co. by the Crescent City Bank to the
amount of SIS, 400. On the thirteenth of
March, in consequence of the failure CT Ii
zardi & Co., the Crescent City Bank went
to protest on its circulation, and has since
been put in liquidation.
The Citizens Bank lost nothing by the
failure of the Crescent City Bank, having
been fully secured by the bills held by it on
Lizardi. The Canal Bank, Eugene Kelly
d. Co., Palmer and Carriere received no
security on or payment Of the bills held by
them, amounting TO t5i 800. The cipital
stock of the Crescent City Bank was
100000.
These facts show the commission of an
act OF insolvency by the Crescent City
| Bank-the insolvency OF the bank, the
transfer Of notes, bonds etc, and the pre-.
ference of one creditor to another
These facts alone DO not. however, make
the transfer void. 1t is necessary to the
| cOmplalnants case to establish two addi-
| tional facts:
1. That the transfer was made in contem-
platiOn OF the insolvency Of the Crescent
City Bank; and ?. That it was made with a |
view to give preference to the Citizens
Bank over other creditors, and to prevent |
the application OF said assets in the manner |
provided by the currency act.
Ii the complainant has established these |
facts IN addition to those already stated, he |
has made out the case annexed 10 his bill.
In passing upon the first point IL is OBJ
vlous to inquire, was the Crescent City
Bank really insolvent at the time of the
transfer OF the notes, bills etc, to the Cti
Zens' Bank, On the twenty-sixth Of Zebra
ray, 1873!
we have IN evidence report of the con. |
dltion OF the bank on the fourteenth of Feb
ruary. 1873, the very day that Lizard a. Co..
Of London, failed.
On that day the resources are stated at
VI ,34o,o5l 81, in which is included an item
of SOL 1853 oil under tie head of "otber cash |
assets" This item is shown by the testi.
mOny OF John Davis, the bOok-heeper Of the
bank, Ito consist OF class of bonds, stocks |
etc., which bonds amount to ninety per cent |
OF the capital, which is 500, 900. Tue bonds
are S500,OoO; SO that on account Of $50, 900 |
there Were $500 900 bonds
| ia ~.
item of $56l,95S Oh consisted mainly Of
the bonds of the United States to Sc
cure the circulation of the bank | r
With the premium thereon. 1t was not | I
therefore cash item it was not available I
or the payment Of the liabilities of the r
1ank. The exhibit in which this item u
occurs, and the same item is found IN the q
Exhibit made on February "a, February % a
md March Z, was not a fair statement of the Y
condition of this bank. This is made appar- i,
nj by the fact that among the liabilities of
he bank the capital stock is not set down
IS a liability. to offset the bonds deposited \
0 secure circulation, with the premium | =
hereon. l.
The item, therefore, of $J6l ,9jS OIL should VI
e stricken from the statement of the re.
ources Of tue bank. This leaves the re-
ources at S9S3,S9G 30 on February IA. On
ne same day the liabi lites of the bank are e,
Lated at S913,303 l., showing an excess of
tut on the fourteenth OF February Lizardi
Co., OF London, failed. On that dav, as pc
lown by the evidence OF Mr.. John Davis, the
Schange clerk of the Crescent CITY Bank.
he amount of the bills outstanding, drawn ;.
the Crescent City Bank on Lizard & Co., ia
London was ell ,000 which reduced to
Dliars at the current rate of exchange at
lat time would be about $60i000 The Gt
,nk had sent forward about $6e6,OOO to fin
,ver these drafts. These remittances were s.
appropriated by Lizard s. CO., and
me of the S604, 600 of exchange drawn bv ca
e crescent City Bank on Lizard a. Co.
as paid by them
Here, then, i. a bank which on February
SHOWS resources over liabilities to the |
Mount OF only Sl0,J93, and on that day by Nil
@ failure or L'zardi & Co. has withdrawn
,m Its available resources Tor al indeii-
to period the sum of 100000, with the Ba
aspect OF losing in the end large por- san
N thereof. This statement makes per- l. Ma
lily clear the inability" of the Crescent cd,
ty Bank ''to pay its debts in the ordinary
lrse OF buslness"-in other words makes 7
n of asoats h. e., f nIs Ios' VI suepeE- dec
was greater than the available re- To-
urces OF the bank. added to its capital ~
,ummo,orr ~ en"m so1'ovo' THU
y Bank. must have known Of this CON ~
ION OF affairs before the twenty-sixth of Tns.
oruary. In fact he must have known it; mo-,
,s 80, ~ -, iroV nave huowu cOu
di g. Co. olon
lr. Keynes testfes that on the fifteenth mn mn
february he received despatch from Ie2s
sens Kelly. of New York, who held bills Ua,
the Crescent City Bank ON Lizard & iian,
to the amount of $4,000; that the ac- Of =
tances were due that day and that ali,
were unpaid: and that such dishonor al h
virtually the failure of the bank: and ~ ~ =
he expected no preferred payments. ~ .
mes showed the telegram to Summers, ;nd i"
president of the Crescent City Bank, 5na;,
insisted on bis acting according to it, NV
i, P,nI- .o'.ie o'''ioi y, t'e crescent shou
he +Lo 1T o tno re .uaHceS | to az
ted and ,hsretoro ' th WI, wTre nisappro tryir
hen we found tie remittances were baI
appropriated We thought it would break ~ ~
bank iii"I y
one OF the directors thought that if the ! to be
ttances had been properl " appropriated he te
"ou,u come out all right, but if they agar
not been properly appropriated they hear
v the bank had gone under They said | ticn I
IS soon as we were ADVISED OF the inisap- fore,
an VI lhe reMlltances MADE by LZarOl | same
, VI LONDON, every olllcer OF the bank jectet
' that it was broken" no Ie
orge Jonas. the president of the Canal Wifbf
(, testlfles that as soon as it was known no OF
inc house OF Lizard 81 Co., of London, place
tailed, the credit of the Crescent CITY that
was materially impaired; its business pugp;
diminished; there was urgency and | cases
Ivy among lis creditors to obtain secu with
AS soon as 1t was known that LIZARD ! other
:, ;.a en- iall19 every creator wanted Sc ton;