The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-08-09
SUPERINTENDENT ELLIS TRIAL.
CONTINUATION OF ELLIS TESTIMONY EXPLAIN
ING HIS OFFICIAL ACTIONS.


CONTINUATION OF ELLIS TESTIMONY EXPLAIN
ING HIS OFFICIAL ACTIONS.
SARATOGA. N ". August s, 1917
AT the opening Of she session to-day Superintendent
Ellis said in his judgment the closing VI the Third
Avenue Savings Bank at the time he consulted Mr..
Cisco John A. Dix and others, after the failure OF
Duncan, Sherman q Co.. would have been very disas
trous 10 the city of New York.
Cross-exumined The mischief would have been
C,her banks and moneyed institutions; 1t was
about August !, 1875, when he consulted the nnan-
cers; there more or less IN the fall OF 1872
closing six banks in which there Deficiencies and
putting them the hands OF receivers the deposit
tors cannot get their money back ne had some faith
that the trustees would help some banks; it hurts q
bank 10 stop payment, and depositors would
suffer; when they and cannot pay at once de-
positors certain 10 suffer; therhird Avenue Banks
estate realized only twenty per cent on It's COST
the banking house sold tor thirty per cent on us
cost; II was anerward sold for privately; fore
saw this result forced 70 put II IN the hands
Of receiver; all the depositors In tho
banks named suffered II the depositors OF
the Bond Street Bank had not lost conf
dence aud the bank had kept OH until real estate be-
came better, they would not have lost SO much; IN
the Of the German and Security banks 1t would
have been for the depositors II receivers had
not been appointed felt bound to take into considera
ton the interests OF all depositors he might find
bank with q deficiency Of assets and not hand
1t over to the Attorney General; again,
he might deem it advisable to do so at once;
be was influenced by the advice OF 1nancicrs and
formed opinions OF his own; lie was preparing COM
municaton TO the Attorney General about the Third
Avenue Bank when the committee called 10 sec him;
the Recommendation to the Attorney General was
based all facts IN his possession; when, IN 1870
the report Of the Third Avenue Bank came TO the de-
partment he mad u conversation with Deputy Lamb;
agreed tia; closing that bank would close number oil
smaller banks; favored the law oil 1873, when
allowed smaller banks to consolidate with larger
ana stronger oncs: lnanciers he consulted
agreed with HIN ana others diu not; he visited inc
Trades SAVINGS Bank several times III regard
port OF November, 1875, and called the aen lion OF
tile secretary 10 the mortgages and deiiciencie and
told him the do1cicncy must be made up; the secre-
ary SAID the trustees proposed paying in the money!
Reid the money had not been paid and the
books such condiuon that he could not hna
out ABOUT the bank; he reason for closing the
bank until he gave the nna orders; he went TO the
Peoples Savings Bank with Reid IN the tail oil 1874
and Reid examined IT, but he did not know he made
written report until II was produced the trial. from
conversation with the ohicers formed an idea That the
reports made by tho bank were correct was aware IN
1874 that the Of the Loancrs' Bank required
report the Department. the president claimed
that his bank had made statement every year; never
saw any reports; sent them blanks to fill up;
when lie went into Office hc tried to inform himself
about ali the laws relating to banks also examined re-
.porls and consulted clerks found 1875 savings banks
with deposits OF $3.50, 900 900; the expenses allowed
by the Legislature Tor his department were about
$4,000
about bogus checks Ia the Abingdon Square Bank
July 10, 1876, he lett tho papers on the table with
Deputy Lamb and went out Of town GU vacation;
cannot remember giving any directions regarding IT.
To Senator Gerard-Reiused to receive personal Sc
curly from the trustees Of the German Savings Bank
OF Morrsania because he did not consider IT exped-
en; the personal securities OF the Third Avenue Bank
were received by his predecessor; the law of 1870
made change regarding such securities did not ana
crucd interest OF interest running Tor the current
year dead interest overdue: had not wound up any
banks before September, 1876 had no experience
To senator Neutrality-suspicious. made general order
to the Clerks OF the department 20 report all question
able items ia statements OF banks
TO Senator Starbuck-DO not regard banks which
report deficiency OF assets us sale to continue bust
and receive deposits as banks which have full
amount OF assets; the reports dated January 1872
come IN from January Is to early in February; then
they taken the clerks and abulated Tor tho
ports of The department. knew the condition OF the
Third Avenue Bank by the report OF Reid
10 Senator BradIey-Went Two or three times TO
New York after the Legislature OF 1879 adjourned to
try and get the small banks 70 merge and turn over
their assets 10 larger bank nothing was DONE how
ever.
TO Senator ST. John--Found some large banks APP
parenty willing to take the assets OF smaller banks
and assume their responsibilities.
To Senator Prncclf q large bank had taken and
held the securities until better times they might have
paid doposors OF the small banks ia full The de-
lay from March in acting on the Third Avenue Bank
caused by waiting Tor the passage OF general aw
if tho times had grown better IN 1874 and 1872 many
DankS COuu nave Deen saved many private
lost by real estate IN those years
10 SENATOR ST. John-In the report Of January,
1875 the real estate in Tarrytown increased to the
value of $50, 600
To Senator Observation-Disclosures ho saw the
papers shown by Smith, his clerk, yet he could not
say that he had never had conversation with Smith
about the Third Avenue Bank; is positive that he
heard Of the statements until Smith pro-
duced thcn for the trial.
10 Mr.. Chapman this own counsel-- Rcld's
letter. calling for report OF the Third Avenue Bank,
January !, 1875 it resolved close up Tho bank
,,lxrr Ol.lnd tnf Inn hast ttna
TO Mr. McGurc-Hc has remembrance of Smiths
coming into his private office and explaining the state
ments, as Smith testified
10 Senator Blxby--He did not regard The Third
Avenue Savings Bauk safe for depostors; did
create much excitement when 1t closed in July the
public had got used TO ailures
To Mr.. MEG uire-When Senator ST. John was Super
intendent OF the Bank Department mortgages OF broken
banks sometimes sold Tor twenty cents ON tho dol
lar.
To Senator Gerard-He considered Reid an expert,
and took his reports as correct.
10 Senator Woodin--Ii banks used depositors money
illegally he could only order them TO discontinue or
hand the bank to the Attorney Genera for viola
tion OF It's charter.
TO Mr.. McGure-Absracts Of the reports of banks
showing their assets made for the Legislature
every year; when any question OF doubt TO the
strucon o p.s ~ arises II always goes TO the Al
torncy General for advice; he thought II the law
ducng the interest to be paid by banks from six I've
cent had been passed earlier OF these banks
coulo have gone