New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-04-25
THE ELLIS INQUIRY.
SECOND DAY OF THE INVESTIGATION.

SECOND DAY OF THE INVESTIGATION. =
SECURITIES OF THE MECHANICS AND TRADERS
ACKNOWLEDGEMENTS SOUTHERN BoSos-fEsri-
MoNY OF RECEIVER BEST, JAMES N. JACKSON.
AND FREDERICK p. BELLAMY.
The inquiry before tho Senate Committee
on Banks relative to the charges preferred against Bank
superintendent Ellis by william j. Best Receiver OF the
Mechanics and Traders Savings Institution, was con-
tnued yeseido y,nernng at the Sc Nicholas Hotel All
the members OF the committee present, as were
also Mcssrs Ellis and Best and their respective counsel
Owing the absence OF witnesses the examination ""s
ns< begun until late in the morning AT the opening VI
the session. Mr. Best handed to the chairman number
of comics of his report as receiver Of the bank which, IL
was remarked would be of interest in connection with
The testimony 10 he heard Tae receivers report shows
that in 1867 the Mechanics and Traders Savings inst
tstion owned 81 100000 in United States bondssmd
other securities Of recognized value. ana easily
convertible and besides these. SS3,lO0 in Southern
hands, In January last the trustees held
none Of the former securities, nor haa they
held them for several years previous, having OK
changed large number for state bonds OF North ana
South Carolina. Alabama and Tennessee large NUM-
her of New-York bonds similarly exchanged MI
Best states tina. Of these boads 9S0o0o purchased
of O. W Joslyn Co.. friends OF A. L. CoAkn PGcsieeit
Of the aad tat it through these purchases ana
loan to the Atlantic Mail Steamship Company tha inc
bank became insOlyent. loss OF 3OOooo was incurred
in the loan TO the steamship company
The first witness called yesterday morning was daes
NJ jackson. outside manager OF the Lorliard estate IN
this CITY, position that has held for the last 10 years.
and been indirectly connected with for lnuch longer
period He said he had visited the bank building IN the
Eowery and had estimated that IN September 1874 It's
value was about $4,000 lie was not present at the
sale having made apprasement recently at the re-
aRest OF william Mann
Mr.. Chapman objected 70 this testimony remafklhs
that there had been great depreciation IN the Vaue
real estate in this city since 1874 and it would be fouy
TO endeavor to hold Mr. Ellis responsible for this depf-
citation John McKeon claimed that 1t nevertheless went
20 show a greater negligence OF his duties Whlt the
Drone,1v was valued al by Mr.. Ellis years ago, under
favorable circumstances Mr. Chapman salo cou not De
taken into account now. Mr. hekeon claimed now
eyer that the building should have been closed then
and the the depreciation in value saved ana ar
Chapman replied that probably ii would have been eohld
this depreciation have been foreseen senator toehdh
ruled that testimony regarding the value Of property
after July or August, S74, was inadlnisSabe
Frederic Bellamy. lawyer, of Brooklyn, testified tha
in Seotcmber 1874 he retained by Ira. W. Gregory
and william Floyd of the trustee to look INTO the
affairs of tho institution, and take such steps as ShOuu
be necessary for the protection OF the trustees ana u
positors They brought him statements showing the
bank 70 be nsolyent, and he then prepared summons
ana COMPLIANT upon on application Tor the appointment
of n receiver The papers lie prepared were shown 10
Mr. Ellis The af6dayits aud schedules ann Xed were
sworn TO by MeSsFs. Gregory & Floyd Sept. 80 1874
Mr. McKeon proposed 70 read these papers, as giving
concise account affairs the bank at tina; time
and situation thoroughly brought to the notice OF Mr.
Ellis Mr. Chapman thought them of little importance
rs when shown to Ellis he Immediately came to TINS
city ard made an examination The papers wete offered
in evidence. In the affidavit OF Mr. Gregory u Is
eaimed that i'm the schedule OF assets items were ncO
rectly stated and extract from shows that while
the market value of stocks OF counties cities ana towns
WAS Sll 9O2 80 than their cost, and The market
value OF real S9092 20 more than its cost
the cost of stocks other States held by the bank was
s249430 - more than tIeir market Vaue' leaving
net loss 10 the bank through these transactions OF
s22S444 80
Mr.. BeIamy stated that he weat to Albany immedi-
aely after preparing tie complaint and told Mr. Ellis that
he had been asked to INN relative 10 the affairs OF ire
bank. upon the supposuiOn that it was mSoFeht' lie
showed him the statement prepared and together they
compared with the report Of tie bank 10 the depart
lnent He showed the quotations Of the stocks in the
bank of tho day previous and called attention to the
discrepancies these made manifest Mr. Ellis expressed
erprsc lie said he did not approve OF the appoint
ment OF receiver, but would Immediately examine the
affairs Of the bank. They returned 20 this city together
the same day and he had not met him since lie wrote
10 him two OF three times aferward making inquiries as
10 what wac being done in the matter but mad received
only one reply.
Mr. McKeOn next offered in evidence the charter OF the
dapk calling attention restrictions in the purchase and
sale OF bonds and loans upon bond securities, having
reference to the Southern bonds held by the bank.
Mr. Chapman objected arguing that the committee had
no right TO receive any proof except in support OF The
charges made. and in communication from the
Governor was there any allusOn Ia tins matter ASIDE
from this had learned that the AttointN d
gwen it as bis opinion 10 M Ellis That tAe nak could
invest i'm any securities deemed desirable. judge
McKeon clamPd that Mr. SIiliS must have Known ina
the bank held these securities ana had bON- IA, Sc
from whose purchase il restricted by Ito Garter
and that in permitting this he neglected his dhiHs "a
Sank Commissioner. -.
The committee decided 10 admit much OF this
evidence could be taken III support Of Tue charges ana
in proof that legal securities held y the bank
Manning, broker. testified th&t he Wuh familiar
with the value Of Southern bonds. IN OctOher lS|4,
there Were three classes of SOuth Carolina bonds Known
as the old :, nth Carolina, tie JaIuaIy and July bonds
and the no-fundable quoted respectively az 20 IL ana
g. North Carolina bonds OF the Issues cld ny NE dk
oct 2 1874 were quoted respectively "A 20Il, AZ, lJ 10
and I2i2 The witness said he bad known OF only one
sale of the Alabama bOE6s ised 10 The montgomery ana
Eufapla Railroad Company, and tins was shortly aftcr
they were issued in 1870 Tney then sold at 90. and
were now worth few cents on the dollar In'fc was
no sale them the Tennessee state bones o Inc
different issues, at the named were an quoted at
abO the same date, about 81. Mr.. Manning stated 70
Mn Chapman that when Nj. Best took charge ~ the
bank he requested him to give the value Of the ccrites
held by the bank. 80.
The report Of Mr.. Best submitted to the committee
gives the following facts regarding the southern bonds
'"o"'"s WV s'>' Toss, including
Slate. Par value. Cost interest
Narth Carolina llO6OO 7OS20 ltl,2JO 81
Alaiaua............ lGGe0O l57709 No value,
Tennessee 0o,OpO O''pt' "uff~P o.
Holm f. James, n dealer real estate OF No. 326 Scher
erhor-st Brooklyn, testified that &c was wei informed
a.. val a 20 sll 10 A