Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1876-03-15
The Bank of the State Of New York
Closes its Doors by Order Of the
Clearinghouse Review OF
Causes.
The Capital Impaired Fully One Million
Five Hundred Thousand Dollars
The Facts as Reported by the
Government Examiner.

Bank of the State OF New York closed
its doors to day by reason OF its having
been thrown cut OF the clearinghouse.
This action OF the clearinghouse COM
mittee was taken after the investigation
suggested by the bank examiner, Mr..
Meigs, who found the affairs of the bank
In bad condition, there having been
large overdrafts made by spectators.
The Clearinghouse will have a full
meeting at three o'clock to ratify or dis
approve the action of the clearinghouse
committee. The capital of the bank is
S2,OOO,000. By last Saturdays state
ment it hsd loans Of So, $50. O00-specie,
1925, 900; legal tenders, Sl95,OO circu-
latior, $250,000, and deposits, $2S5 600
At the clearinghouse it was debit this
morning $l04 000 which was paid. The
depositors in the bank will lose nothing;
neither will the note-hOlders. The total
loss will fall on the stockholders, and 1t
is thought that the capital is impaired
$1,500, 600. The examination OF the Of
fairs Of the bank was begun by Melgs
come days ago. He found that Irregular
loans had been made to produce dealers,
and that a great many bad debts were
the result. Among these debts are the
acoeptances of Duncan, Sherman u Co,
to the amount of $4,000. There are
other debts in sums varying from SlO,-
600 to $4,000. When these facts
were ascertained the bank examiner
reported to the Clearinghouse committee
and at meeting this morning, 1t was
decided that a receiver ought to be
asked for and the bank clOEe1. In ac-
cordance with this view Meigs at once
telegraphed the comptroller Of the cur
rency, John D. Knox, for the appoint
ment of receiver. The result OF the in
vestigstion of the banks account tends
to show that its failure will not affect
any othsr bsnkP, and it Is thought that
the failure will not be followed by other
financial disasters. Mr.. Patrick, vice.
president, underwent a long examina-
ton before the clearinghouse committee
this morning. The news OF the suspen-
stock exchange.
The Post, in its financial arti-
Gle, SAYS that the effect Of the
closing OF the Bank Of the State of New
York at the stock exchange, was to Gre
ate q wild excitement, during which
there was a sharp decline in prices, but
this continued for only short time and
when the facts became known prices re-
covered a part of the decline. In the
gold market the effect was to put the
price up to 115, from which it has since
fallen to 1143. The contemplated action
of the clearinghouse committee was so
secretly kept that many bank officers
not connected with the committee were
SO much surprised as was the street. Mr..
Meigs, who brought to light the I'M
soundness of this bank, is an officer
above reproach, and his whole time Is
devoted to examining the New York
banks. 1t is q proof of their soundness
that he has discovered that only this
one is weak.
The Express says the bank examiner
last week made thorough examination
OF the bank, and Saturday reported to
the Clearinghouse committee the unex-
pected fact thai In his opinion the insti-
| tuition was insolvent. Late that day the
conference committee was called to-
gether, and this morning they held an
| other meeting. Denning Duer and
Richard Patrick, president and vice.
president, were summoned, and their
| explanations not being satisfactory the
| committee resol we'd to suspend the bank
| from the privileges Of the clearing.
house, and called meeting of the asso-
cistion for this afternoon. The over
drafts are state d to amount to S00O, GOO
The name of one of the officers of the
bank is rumored to be connected with
them. A hops speculator is stRted to
have overdrswn, and SlsO some OF the
tea and coffee people who wanted the
duty placed on these articles.
Il is stated that the Bank Of the State
of New York permitted one concern tt
overdraw $447, 800, and accepted IS Sc
curity for the overdraft a patent abou
which little is known; and further, len
the same concern 1926, 500 on time, Sc
cured by malt to the value Of about one
half the loan. Another concern con
nected with the southwestern trade over
drew about $3.50, 600, and bad accepted
Ss security an assignment of book &C
counts. The vice-president owes thu
bank about $3.50, 900, secured by real ee
tate, part not transferred. An individ
ual check for $40, 600 drawn by the vice
president was counted as cash. 1t i
understood the bank has protested pape
to the amount of about $40, 900. DepOs
itors of the bank will lose nothing. Tn
whole loss is estimated at about one-hal
the capital, and will fall on the stock
holders.
1t is said that the vice.presi
dent OF the bank, Mr.. Patrick
owes to 1t the sum of two hundret
and thirty thousand dollars, secured b,
real estate which is alleged to be wortl
only half that amount. 1t is also SAT-
that check OF Mr.. PAtrick's for twent,
thousand dollars has been COUNTIES
among the banks casb. Overdrafts t
the amount of four hundred and fit,
thousand dollars have been permitted
h. n
patents of the United State
sttrition company and the lNe'
, York city mills attrition company
These patents are for new process {
manufacturing flour, the money valu
of which has not teen established. Th
company first named has patent-rigf
company was formed for th
: this method. The firm of Emit
& 4rvia, chop and malt merchant
No. 76 Broad street, are largely interes
ed In the matter, Mr.. Smith being pres
dent of one company and Dir. Girvi
=. of the other. In addition to this, it
q alleged that time loans have been mao
q to the amount of four hundred and fit
( thousand dollars, secured by Smith an
z Girvin by malt and hops, which a.
said to be Of but half the value.
q is further reported on excellent author
e ~ that overdrafts to the exteI
r Of about two hundred and fit
: thousand dollars were made on the ban
r by southwestern produce and commi
sion house, whose business Is largely
: Kentucky, and that these were secure
! only by an assignment Of their book a
b counts. A prominent member of II
;. stock exchange SAID this afternoon thI
= the failure would probably cause affai
q in Wall street to be unsettled Il
b 8 few days, but that any excitemeI
II occasioned by it would soon d
e away. He could not see any reason VIII
q 1t should cause any other failures.
d John Thompson, vice-president of Il
First national bank, said: 81 can onl
l. look upon it as failure that Will n
" strike dissstfously any persons exec
o the brokers who kept their sccoun
there and got their checks eertifit
Il there. In point Of reality, the failure
r OF 10 commercial or financial impor
Ia ance. It's entire effect will not be on
{. fourth OF that of the failure of Duuca
|. Sherman & Coz 1t was found that q
g vances to q considerable amount hs
n been made on grain ia transit, some
the bills OF lading ofwhich, still renal
= ing In the bank, bear dates two yes