New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-12-18

National Trust Company, viii pay, by order OF inc
Court 80 per cent TO depositors Nevertheless 'he
Trust Company has been thoroughly rotten and cor
mint in its management. Mr.. Best VIII make re-
port within two or three days showing the most
scaudalous and criminal acknowledgement OF the
funds
START. ING DISCLOSURES TO BE MADE.
A DIsGRACEFUL TRANSACTION IL RAILROAD BONDS
MR.. BEST BEFORE TIE GRAND JURY
Some readers of The TRIBUNE yesterday may
inferred from one of Its articles that not
only the capital but also the securities OF the National
Trust Company were impaired to the amount of 100000
Mr. Best the receiver stated yesterday that such an IN
ference would he erroneous The capital was impaired TO
the amount named. but S16ooo00 OF deposits were
amply secured with at least 100000 OF the capital 10
snare With these securities including the sum TO be
raised from rustees it proposed to paw depoetor
IN full He had no hesitation saying that the manage
neut OF the National Trust Company rotten ana IN
famous beyond any description, but the penalty OF
misdong both financially and criminay would faiI on
Others than the deposors Mr. Best had been ana was
st under subpoena TO go before the Grahd jury! ana ue
clined TO be more explicit.
Mr. Bests attention was called to two three items OF
the Indebtedness Of the National Trust Company which
ne had not mentioned in his preliminary report, already
published Among other things IL was stated 10 MN
that in 1873 the National Trust Company had advanced
$500 900 upon 500 bonds OF the Chicago, Danye ana
'
had been sold to the Trust Company by
W. b. shattuck & Co. who figure in the
last report Of the Committee OF Investigation OF the com
pany as agents for the sale of the bonds This com
pany deauted upon its interest in 1873 and proposed
funding scheme for benefit OF the railroad company
Among those who opposed the funding scheme was the
National Trust Company Suddenly this opposition by
the National Trust Company ceased ana II was not un
I'll after receiver had been appointed for the railroad
in the Spring Of 1875 that the true cause Of the WITH
drawal Of this opposition was made known ana TINS
revelation was only through the publication Of private
letter OF the receiver Of the road from which the follow
ing is an extract:
We have a negotiation pending with the National
Trust Company Ghe concern 10 which shattuck sod 500
bonds who are the chief leaders in opposition TO our
funding PLAN for selling the 800 bonds ~ costSaY
$4,000, payable 10000 March - l-l3i S'UUU Uo
September D 1873; 10000 March H. 1876; 100000
September Il. 1876 with interest quarterly al
per ceet, currency, the coupons duc october
bonds themselves 10 be held by them collateral and
mortgage for $4,000 onreal estate, owned oy - a
- jointly, rs additional secuFy., non NE H az
about 100000 q the bonds. additional, owned by hd
vidual members Of the Trust Company on which we are
t. pay the coupons they mature. II the trade is
closed they to drop their opposition saving to lu-
qurcrs, if any merely that they have sold their bonds
aud have no further interest M the matte.
When Nj Bes,'s attention was called TO This state
nent he said that IL not included In his preliminary
report for the simple that he did not then fully
understand It, His preliminary report had been sent to
MI Lamb to secure al once the appointment Of a re-
celyer Of the Trust Company close its affairs Hc
had declined repeatedly to be rcccvcrani did not finally
consent until SIR John A stewart, ana others who were
Of the trustees who wanted thc establishment closed mp
honestly urged him. as duty TO take tho rcceiyersip
Uo said that the Transaction 10 which THE TRIBUNE re-
porter had called his attention into which he had
further inquired since the preliminary report had been
made II was utterly scaudal0us and viaiuous. These
bonds had apparently been sold but they had been sold
10 person utterly unknown, and lie believed person
who did not exist.
the similar character
which be had discovered and Mr. Best had no hesitation
III saving that the management of the National Trust
had been the infamous and scandaOus that he had
ever examined. At the same time the deposors were
secure. They would be paid 80 per cent on Monday
next II Court under whose orders he had accepted
the receivershp ordered and this be had the
money necessary to pay so per cent deposited in the
Uutcd states Trust Company.
NJ Best ha. been twice called before the Grand Jury
in relation % the affairs OF the Trust Company. What
occurred relative to indctng any persons connected
with the Trust Company IT, OF course. secret Of the
Grand Jury. MI Best asked great many ques
ions relative the operations Of the various leading
members Of the Trust Company directory, but his
answers are not yet made public. During the examine
zion one Of the members of the Grand jury, gray
hairai man. well known iu financial circles as most
careful investor Of his funds, said, very trcmuous
voice:
81 wish to ask Mr. Best question that this Grand
Jury has nothing to DO with. and yet 1 would Like to
have an answer 10 it,"
The Grand Jury gave their consent, and he made tins
statement:
Mr. Best, have large amount Of trust funds in my
casefunds Of widows and orphans and friends II have
been very much troubled in my mind what DO with
these sums. Some OF the trusts that very impOr
taDt, have taken away from Savings banks and hidden
and they are producing nothing. Is there bank or a
trust company ia New-YCrk city in which ! safely
deposit sacred funds Of this characjerl"
Mr. Best replied, holding up his fingers is he named
and counted eleven Ncw-YoFk institutions:
"YOu may deposit your funds TO any extent which
these companies will receive, and be that you Will
ger dollar for dollar II viii require something like
financial earthquake to destroy these Institutions
The Of these institutions Il impossible 20
learn from the members Of the Grand Jury.