The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-05-09
INVESTIGATING ELLIS.
THE BANK sUPRRINTENDENT's EXPLANATIONS
CONCERNING THE BOND STREET, PEOPLES
AND TRADES SAVINGS BANKS.

CONCERNING THE BOND STREET, PEOPLES
AND TRADES SAVINGS BANKS.
ALBANY. May 8. 1871
The Banking Committee OF the Senate met this morn
ing begin examination the series of charges
preferred by the Governor against Bank superintendent
Ellis. All the members were present, with Ellis, who
was attended by his counsel Mr.. o. w. Chapman.
Senator Coleman read the message OF tho Governor
upon tho subject, which includes the charges To the
first oil these charges, which referred to tho Bond
Street matter Mr.. Ellis made the usual formal denial,
and It's investigation proceeded.
JOHN MAcK's WRITTEN REPORT.
John Mack, who presented the charges TO the Gov
ernor present and called upon to subsantiate
them. II appeared upon discussion that no had none
OF his witnesses with hun, although ho had been moth
fled week ago have them ready. In heir absencc
he asked to put in proof documentary evidence which
proved 10 consist only OF the report Of Bank Examiner
George w. Rcid made on tho 18th OF March. 1879 OF
Bond Street Savings Bank, which states that there
was deficiency in tho income OF the bank that year
OF $20499, due to the small amount oil rent received
Tor aud old banking houses and the suspension
Of interest certain town bonds then in htiga-
ton. Tho charge Of allowing the bank - make
investments not authorized by law proposed TO
DO shown by statement In the report that loan Of
$4,000 had been 10 tho New York and Osweeo
Midland Railroad on sos, 600 Of New Jersey town
bonds which IT Is shown by the report had boon bid
Ia at U.s. and have since appreciated TO SIS and 3d. tho
arrangement Tor tho payment Of interest on them
being nearly completed Tnc Same examination also
shows the surplus in the bank ut that imo 10 have
been Sli5, 73l o.. The report was admitted by tho
committee, ana counsel Tor Mr. Ellis admitted that
receiver had been appointed IN 1876 general dis
cussIon ensuod upon the expediency oi putting ~
evidence all the previous reports and examinations
the bank But the COMMITTEES declined 70 go beyond
limits OF tho charges set forth ny tho Governor
ELLIS EXPLANATIONS.
Mr.. Ellis testified that the bank had been originally
chartered under the name OF The Atlantic Savings
Bank chapter $50, OF The Laws oil 1860. and changed
some years ago to It's present name; the securities
held by oil such rs the law authorized; the
$50 900 transaction in Midland Railroad stock was
not Investment, but loan; inc general law rela-
oais WAS not applicable 10 this bank; ~ was
working under lis SPECIAL charter: the law Of
1850 granting cnaricr TO this bank contains pro.
max ing II the duty Of tho trustees 10 invest
all received by them beyond certain
amount, but this latter amount may be kept
on deposit or used us the trustees might direct;
under this clause they entlcd 70 make the loan
Us out OF the worst PROVISIONS that
could have been inserted ia charter but ~ was tno
law and counsel Of all kinds have interpreted II 10
permit them to make loans thcy chose; the law OF
1875 prohibits such loans hereafter, but allows banks
10 hold such securities us they then had; The examin-
crs report oil 1876 shows surplus OF over $4,000,
and could not have put the bank INTO the hands OF
receiver while u was showing such surplus IL was
large surplus for bank OF the SIZE, and the Attorney
General could have had no standing In court upon
application Tor u receiver.
DIFFICULT RECEIVER.
There Is any quantity oil precedents on record
against the pose bhty Of closing up bank with such
u showing; Mr. Howell tried u with tho Third
A, and lost; us to the deficiency OF income. that
not interfere with its right ~ declare dividend
to cposors under tho law OF 1875 the trustees could
declare dividend even II they had hot earned it
during The dividend period. Tho question sharply
the committee OF the Legislature OF 1875, and
IL decided 10 put Il III that way when tho
application Tor the appointment OF u recover was
presented TO the Attorney Genera the bank actually
had u surplus the value OF tho real estate beng
turned than COST bat this banK was closed
up with their consent after consultation with The
trustees ana myself as matter vi expectancy and III
the interest Of deposlt0rs dstrus was very general
deposits being withdrawn from this and other
savings banks, and they believed that the withdrawal
IRON them would be 50 rapid that they could not
realize in time upon their real estate to meet the
demands upon thom; there Is nothing In the law re.
curing tho superintendent To repor: deficiency Of
income to the Attorney General; tho income varies
yearly; the deficiency reported IN thus case is csti-
paying atcrward became paying bonds; interest
upon them suspended simply because Of litigation
HAD any other SPECIAL examination OF this
bank made other than That ny Mr.. Red
no would recolicct II there mad been any such the
recover had told him within a week that lie had paid
nny-hvo cents on tue dollar and would very likely DO
able to pay IN fu the receiver has not yet sold tho
real realized upon number o. other assets
recess was here taken until hall past three +. NJ
TIKI PEOPLES BANK.
On rcasscmblng tho cbargc relative to the Peoples
Bank taken up, 10 the elect that Mr. Ellis had
been informed in November, 1915, by Examiner Rod
that Peoples Bank had large deficiency Of assets
and $40 900 deficiency in actual income; NO recover
was appointed until 1876.
Mr.. Ellis beng sworn testified that he had received
the report OF the examiner the day alter II was made
reported the matter 10 the Attorney General with
n recommendation TO close UP the bank on tue same
day thirteen days aerward the order to close up tho
bank had been issued, and nineteen days aftcrward
l. " French appointed receiver; II the reports us
received believed to represent tar Valuations
The superintendent either sends them back Tor cor.
rcction sends examiner 10 inquire INTO the actual
condition OF the bank the Pcop.cs Bank, he believes
]
closed up.
THE TRADES SAVINGS BANK.
Tho charge re alive the Trades Savings Bank was
next taken up. The reports OF the bank Tor January
1876 and OF the examiner on January IL, 1876 wero
admitted as evidence Henry L. Limb. Deputy Super
intcadent OF tho Banking Department., testified that
there no examination made after tho date OF the
one in evidence until August MIR. Ellis was absent
IN August when Reid forwarded another report OF the
banks condition, upon which he adjudeeu II was M
solvent aud three days aftcrward he reported II to the
Attorney General
Adjourned until ten A. NJ. tomorrow.
CKEEDMODE