New-York tribune., 1877-07-10
A TRUST COMPANY SUSPENDING.

CLOSING OF A PATERSON CORPORATION.
A RECEIVER WANTED FOR THE MERCHANTS LOAN
AND TRUsT COMPANY-THE ONLY LOSS TO FALL
UrON TnE STOCKHOLDERS.
Considerable excitement was caused in
Paterson yesterday, when the Merchants Loan and
Trust Company Market and IIote-ss failed to open
its doors the regular transaction OF business. Early
III the morning notice was placed on the doors an
nouncng tha ON account of unexpected financial re-
verses, the Directors decided 10 suspend business.
satisfied that that course would insure full payment to
the depostors and large proportion, if not the whole
TO stockholders.r The notice signed by the
treasurer, j. f. Preston for the Board of Directors.
The company began business in December 1872
having been chartered February Of that year. with
pad up capital Of $4,000. IL had all the privileges OF
an ordinary bank except that OF issuing notes IL
the idea OF the corpOraOrs that would be useful to have
an institution which coud loan money to manufacturers
and merchants, taking goods, II desirable as collateral
The business of the company ran smoothly until it
became complicated in tax fraud business which
made public about ago, and resulted in the Ddic
mcnt and subsequent acquittal OF two of the
leading members OF the company, and the sentence
to prison Of James Hand, VITO collected tie tax
The public confidence much shaken b. this and
many deposits aftcrward withdrawn Anotnor
cause OF gre Il loss 10 the bank acceptance Of
considerable real Just outside OF tic citys limits
as collateral security Tor loans. The general depression
in business and depreciation in the value Of property
left the land on its hands at great loss Tie people have
lad knowledge Of these facts for year, that The
company have enjoyed the best credit during that per
od The direct 81 the suspension said to be due TO
two exchange checks for $1,000 and the ohcr for
SO 200 which given by the Company to the First
National Bank Of Paterson. To make these checks good
securities were the Fourth National Bank Of this
city TIE officers OF the latter bink on looking over the
securities found bond Of "a Western city, and of the
coupons had not been signed. This thrown out
which made the banks account about $1,000 snort and
the check sent by the First National Bank not
lonocd. On Saturday, bills were demanded for the
checks but bcng payday, there not sufficient on
hand 10 pay the demand, ana "A protest the conse
quencr.
The total amount OF liabilities between S1ij O00and
SIlSCUO including the amount Of capital stock and
about SIS deposit OF this there about = OOJ
in separate savings bank department drawing mteret
T. is stated that in tis dcpartIn very ev
il any deposors iull statements In pre- and
VIII probably be published to-day The Board of Direct
oIs cons SIS OF DAVID Htmy' :; Lmuyi M D. =, Lrt,to
Howard, j. \. Fuller, L. X Rose George l. H'li aud
J. F. Preston, the Treasurer and General Manager of
the company, stated 10 TRIBUNE reporter last evening
that there cause FOR amy alarm Whatever. The
directors had been preparing for time Ia wind up
the business, because 1t had not been paying DURING
re last SIX months they were only able 10 make eN
penses The company had met with disastrous allure
In s real estate transactions and cloud hal hung over
~ the tax fraud exposures. Tor which Hey were iOt
culphic He assured the reporter that every dO-r would
pad tae deposit Ois, and tlc Only must loss he
sustained by the Stockholders and would not exceed
twenty per ccut. and might be considerably less. He
fuitaer declared that tie ock was held almost wholly
in Paterson Among ui The principal II c,, dcs
were Mr. Preston, so 600; Robert NcCuOck, Sl,-O6;
Jaue. Peel. j. e. Todd and David Henry, $1,000 each;
Mr. Lambert $1,000 mere were also four per-ohS ia
New York and Brooklyn who hold stock. Mr.. Preston
declined to then, stating that the puocity might
iuue heir business, but salt that Toe largest mOuntle
hy duy them would not exceed $1,000 There were
about sixty stockholders altOgo er and the loss OF each
would be very small. SIR Preston unpreparcd to
give positive statement Of the assets, nut sid iHey
included bids receivable to the amount of S6oOOO when
were secured 10y bank stocks aud prOperty which
APPRAISED year ago at $4,000 hui which mad -icc
deprecated considerably. Robert McCullot h. of tine
largest depositOS. requested yesterday apply To
the Chancellor for receiver, who would probably be
pointed ON Friday. Among the names mentioned were
C. Lambert, President of the Bank, J. G. Todd and john
Hopper.