The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-12-13
"A BANK CRIPPLED.
The Newark Savings Insti-
tuition in Distress.
CLAMoRoUs DEPosIToRs.
An Order Granting That Only Eighteen
Per Cent Be Faid on Demand.


Newark Savings Institution of the oldest and most
popular financial institutions OF the city were not
an entirely sound condition. Gradually depositors
got VIVA OF this matter and began steady drain
the cashier Generally those who drew their money
had large amounts on deposit and OF the richer
class OF people. The officers of the bank, ms they
state, began to be alarmed lest o regular ght
be made on II and its $4,000 depositors demand their
cash. In tho interest of the poorer class Of depostors
u IS stated tho officers finally after deIibera-
ton, resolved to apply tho Chancellor for relief.
Yesterd-y, accordingly, they did SO in Tho form OF
long petition setting forth general condition
bank and its emergencies.
THE PETITION THE BANK.
Tho document, which was signed by the counscllors
and officers, goes on to state that tho bank cstab
shcd by act OF the Legislature thirty years ago.
charter being date Of February 20 ls47 and that in
the discharge Of the duties OF keeping large vol
OF deposits invested ms to gain large
rate OF interest ''the managers OF said ins,itu-
ton were led by their long experience
keep about ono-thrd of tho deposits IN the
form OF bonds and mortgages which could not be
speedily converted into cash, and the remainder
mainly in government anu other municipal stocks,
wnich could readily DO turned into money, and
that thus before the panic 1878 IN they had 80
largo an amount OF bonds aud cash that II became uf-
hcut to issue the usual rate OF interest tho depostors
had become accustomed TO expect. Still further tho
petitioners state that tho cour OF the government
regarding the funding OF bonds the oncrous tax
alton by the state, they paying some years as
high as sl00, 000 caused them to look about Tor
moro profitable Investments. They accordingly
invested "bctwcen 81 90 600 and So 600 600
posts In certain railroad bonds aud secured
by such bonds, which were then deemed abundantly
aud yielding larger rate of in tcrest,
which securities sought for AS Investments by
many OF the most sagacous prudent apd conservative
investors In tho city OF New York and elsewhere.
Soon AFTER however, a sudden and widespread nnan-
ciai panic occurred which has continued with In
creasng severity throughout tho whole country aud
the civilized world and has involved individuals and
moneyed institutions ~ a common disaster, and has
In marked degree affected the railroad interests OF
Tho country causing an almost universal depreciation
OF their securities, and IN many total suspen-
sion OF tue payment OF interest" lhese unforeseen
circumstances" the petitioners go on to say, shave
greatly affected the situation Ot the said institution
and have deprecated tho present value
OF its that the question whether any part
large accumulated surplus Will remain must depend
upon the value OF railroad securities and
iis ability to realize in iull the large amount of mort
boon made, and which have been affected, though Ia
less degree. by tue great fall in the value OF
state."
| In conclusion it Is claimed that during tho SIX
months from July l 10 December CT this year
S25 600 s'has been actually paid to III, institution
for interest," which VIII be idoraby increased
during tho month OF December ut the end Of
which month Will 30 be due ovor 100000 in gou
| interest which Will then be earned and pay ble on
government bonds belonging to the institution that
the total amount Of deposits Is now reduced
/ TO about $40, 500. 900, white tho OF
assets, including the deprecated securities, -
about Sl2,OoOOOo besides large sum amount
ing TO some hundreds OF Thousands OF dollars
for accrued and unpaid on the Investments
not including the amounts due on the deprecated
cur,tics above mentionedn and that The institution
has In its possession Than So 00O 600 gov
eminent securities and also a large amount OF other
ayailabie securities ana could tor a long time con.
INV tn de or htu
might eventually work injury ana injustice to those
least able to bear loss
! WHAT THEY ASK.
For these and other reasons set forth the petition
ers pray the Chancellor
/ /. TEat AN order may be madc requiring that only
dividend shall be pad to dep0sitors tho LIST
day Of January next ~ SHAH DO authorized w the or
| 2 THAT au order may DO made restraining tho in.
stuuton from paying TO any deposllor, and any de-
postor from aemanane more .nan egn.een per cent
which amount may DO required and paid at any time
thereafter demand.
| g. That the Institution be required by tho order OF
the Court TO abstain from dsposng OF OF lis as
sets beyond tho said eighteen per cent. except with
the approval Of the Court or some Master desIg
mated tor that purpose.
| 4. That order may be made permitting tho SAID
Institution to provide that all deposits hereafter
made and until further order of the Court snail b,
treated as special deposits, and invested only tho
bonds OF TIM State or city OF Newark or Of "a. Uoited
States, anu that separate thereof DO Kept
aud the actual interest received from such invest
ments, deducting necessary expenses be paid d.v
be subject 10 any restriction to pay cx-
cept such as are imposed bv the bylaws heretofore
adopted.
g. That the future administration OF the said trust
shall DO under the control OF the Court SO long US
shall DC deemed necessary 10 promote tile
insure the pcrnancncy and prosperity OF the inst
tuition.
q That concurrently therewii hin this honorable
Court viii cause such examination to be made
unaifs OF SAID institution ana the situation nature
OF It's assets as Your Honor may deem necessary
basis Tor the future action ol The Court.
THE cHANCELLok's ORDER.
4 Chancellor Ruuyon ut ouce considered the petition
and rendered an opinon virtually approving tue step
| taken by the managers OF ,hls institution
and granted an order suggested tho
4 urayers The Chancellor directed also that mo
deposits made hereafter shall be kept separate from
those heretofore made anu IN order That the OK
condition OF the institution may be satisfactorily
accrtained, an examination vi assets lauili-
ties Viii be made forthwith by compcteut persons
/ 10 appointed by me-" la closing, the Chancellor
Tine course now takon regard ths nsti-
futon without precedent IN TINS CourG In the
case Of tho hoboSen Bank tor savings ASA like
measures were token by me under similar circufn-
stances WITH sanitary effect and most beneficial results
! to the uepositors."
AS VIII sccn the position OF the bank is that It
is virtually IN tho hands OF receiver. the latter
being collectively the OLD Board of Managers anu OH
GERS follows :Pfesdent Daniel Doad; Vice Presi-
dent, Ira NJ. Harrison Secretary ana Treasurer, Will
lam ID. Carter; Managers, Daniel Dodd William Pier
son, Ira NJ Harrlson DANIEL Price, Francis Maok'n.
A. ) lluJUc!, icnry q. Darcy William T. Mercer,
4 John Kennedy, and Zenas s. crane
DErosiTogs' RAID
i During yesterday forenoon II began to be hintcd
connection with the BANK. DepOsltors by degrees
pot wIud Of tne brewing lrouoe and about ono o,uock
b, gan "A TIE Institution. Gradually lie crowd
saeiled untIl ~ tarec O'Clock tile bank crowded
4 likewise the sidewalk IN front, the rcn pushing
win tne poor, eager 10 get their eighteen per cent
\ between four and ave o'cock the bank closcd and
Will to-day ana continue TO pay out tae percent
age Orucfcd Wy tDo Chancellor. During the uay tho
Dask issued circular 10 scpositors suninarzn9 tue
pcttlon 10 the Chancellor abd bis order In tuis
Clam that government bonus have deprecated
.witbn lew montns IRON 10 fifteen per cent, y
and that 'they nave very laree amount OF sccuri-
ties which eau be <urneu INTO cash once, but a
much larger amount IN bonds aud mortgages and
other securities which cannot be converted INTO
money without much delay rncy nope that under
restrictions aud careful management tho assets
will prove ample 10 pay all depositors ia iuil. But
they are satisfied that tue prevailing distrust may
cause such withdrawal OF funds will exhaust the
cash assets Tor the benehi oil those who shall nrs an.
ply, and eayc the other securities tor VINO
reluctant or unable TO demand payment they fee u
to TO their duty 10 prevent this Injustice
IN their power 10 secure perfect equaty pro-
mote conf ianco In the ultimate safety OF the funds ia
4 their CHARGE