The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-07-15
is ANYBODY SAFE?
An Example of the Protection Az
fOrded by the Bank Department.
THE TEUTONIA MANAGEMENT
FIattering Tributes to Its Honesty from
Especial Examiners"


system Of bank supervision IN this State and OF the
unreliabiity IN instances OF the reports OF the
examiners employed BY the department at Albany, is
in following repubications from the HERALD
regarding the failure OF the Teutonia Savings Bank
Tho quotations require comment but the contrast
between the report or the examiners less than
months ago aud the condition OF affairs revealed by
the within tow days will prove interesting,
not only TO the depositsrs OF this particular bank but
to all whose funds left In the keeping of institu-
lions similarly governed.
The first quotation 10 from the HERALD OF yester-
day, In which the confession OF Secretary Hahn
clodsd as iollows:-
From the Herald July a. 1878.
PECULIAR BOOKKEEPING.
The total amount OF the differences between the
purchase prco actually paid for said bonds and the
amount charged on The books OF the bank is IS $50 49,
In addition to this amount there a number OF
other purchases OF securities made oy behalf
OF said bank at various times between July !, 1872
and the lime OF the appointment OF the receiver OF
the bank, which securities were entered on the books
Of said bank having been paid Tor IN a larger
amount than was actually the case The difference be-
s sss1 soo eSs p M a yss ana ~ o.
oh'cA money pds taken by me from the funds of SAID
bank.
Au the trustees that the securities had been
bought BY me and charged on me books Of Me bank at
In this way accumulated several thousand dollars In
the differences between the purchase price OF the
securities LIDO price charged the books OF
bank divtded the amount equally among the trustees
paying inc share Of Zach IN CASH The payments were
made by placing the money IN an envelope. sealing 1t
and directing u to each trustee and handing 1t TO him.
In this way tho following payments were made
In july, 1873, paid each trustee the sum OF $3.50;
1874 $s4s; July, 1874. $3.50; January, 1874 s2oa
do not remember positively whether this last amount
whether It used tor the trustees their account
TO pay certain coupons belonging 70 The bank the pay
ment Of which they had agreed 10 assume.
Until they were reduced in 1876 the salaries OF the
president treasurer and myself were divided into two
parts one part was retained by those officers and my
seI and the other part Uas dtrded among TIE trustees
IN addition to the above named moneys.
The trustees kRcs0 that charging commissions
for the purchase Of bonds tor the bank and they also
kneW that ne moneys they reeeiced as aforesaid acere
Charging tie bank al higher rats for the securities a
purchased than they actually cost
Al the time OF Inc first payments TO the trustees as
aforesaid l submitted to them a statement OF the
amount had Tor them and now It was made up, and
asked them to examine IL. They said It all right
had book containing account of all these trans
actions, which was always oren 10 The Inspection of
ali the trustees until after tho various pay
made, as Aforesaid, after which payment tue mem
orauda were destroyed.
The HERALD Of the date contained an interview
with Receiver Fish, from which the following Is re-
WHAT RECEIVES FISH SAYS.
Receiver Fish, wnon called upon yesterday by q
HxRALp reporter, said that Ms bookkeepcr ,ohom he
discover dtscrepaacies in the entries utmost msdiitely
after commencing his snvestgati0ns For the parlicu
lar. Of these irrssaIart'ss no referred 20 his affidavit
was issued. He said It would seem by the records
iha. ne prdctice Of making mustdtemels the books
OF the bank had commenced si1 years ago Two
or three weeks ago ne WAS ABOUT to cause the arrest
OF Hahn, supposing that he alone was TO blame tor
the over charges whom Hahn told him frankly that
tie steal JOINT among all the members Of the
| Board Of Trustees According 10 Hahn the trustees
received share and share alike Of the psrceatages
| nv
| cbascs Of bonds on account OF the bank
| PER CONTRA.
The FIRST OF the closing OF tho bank was pub
lished in tho HERALD Of April Is, 1873. From that
| port reproduced below the report of the exam.
iners, Robsrt b. Kirkland and NJ ST. John Super
| iutendent Lamb, and the subsequent letter OF the
Superintendent to Attorney General schoonmaxsr adj
vsing I'M to take suitable action Tor the winding up
| OF the concern.
From the Herald, April %, 1881
| BANK DErARrMxsr ALBANY, April 20, 1878.
| AUGUSTUS ScnooAhAKEK, Jr. Attorney Geueral:-
reuion,a savings Bank Of the CITY OF New York,
which nlsd In this department the 10Th
$l4s 4O4 So exists This deficiency arises IRON the
investment Of funds In the bonds Ut certain IN
Of the town OF springport, Csyusa county, upon
when Interest 10 IN default since september 1872
There rs prospect tina. these bonds may
msnt OF them enforced. But the institution
also owns $l0s, 900 Of the bonus vi the towns Of
SouthAsla and Middleton Staten Island, on which in-
tsrsst has not been paid Tor several years. 1 have
taken some pains 10 ascertain By inquiry 10 well 10
formed quarters the present and prospective value OF
these bonds. am forced to accept the conclusion
that they worthless The apparent de-
Ultimately See 10 W good ins nas,.e, %ose be
struggling wilt ne harden ioh,cA las dejatn Of inter
est large Of the stock nocstnens has imposed
The decline IN dep ,sits has oeen rapid The
since January l. 1878, has boen $500 700. the
tai decline In Two years nearly onehsif OF the then
sum OF deposits TIC trustees hare reduced the
penses and hare paid the in,erea on tie Springport
bonds Al present there rs excess ri income out
tho clear prospect Is that there must DO eventual loss
do not feet that s expedisnt or safs as respects
new depostors, TO permit IN. savings bank 10
tinus transact business solvent institution and
| rs q proper depository OF trust funds Therefore
present tho fact TO you In companes with section A.
chapter 37l Laws of 1875, for such measures The
case may require Respectfully yours,
henry L. LAMB, Acting supsrintendent
rHE ExAMSKR's REroar
NEW YokK, April 10. 1878
HENRY L. LAxB, Acting superintendent BANK DO
sIR-rne undersigned, under and by virtue Of your
appointment aud direction 70 examine the affairs
Of the Tsutons Savings Bank beg leave 10 report that
We commenced such examination on the Sth day OF
APRIL 1878. and continued ON subsequent aays,
and that we found bonds and mortgages
Tor s59d,soo; that the same are accomps-
mortgagcd, and that the interest the been
coec,ea NJ seven per cent; That the assurances have
been Kept up that In few instances Iney exceed nifty
per cent OF the amount leaned which Is owing to the
shrinkage In value Of tue property since the loans
made Their loans this class oil security exceed
sixty per cent OF tue deposits We IND their invest
mcnts In securities, at present market value, amount
10 1882 TO- The real estate owned by the bank
SOS os4 o. no same has Just been appraised at tho
SUN OF $63, 900, per certificate attached No
liabilities sol depositors amount to ss79.ST6 o.
We IND that since the LIST OF January last their depos.
Ia have decreased $500 900, anu IN two years neary
ene-half From these isc,s appears to us That tho
ability OF the bank to redeem or relieve these
| pledged securities BY an increase OF deposits n
| lar from nstlernr. 1he present management Of the
bank goJd TIE books kept IA PLAIN and ,nt,iig,n
manner ad noo balance The cHeers are crerc'siug me
sfrctea economy AT their ssIe,seS IN, salaries ~
others ete,ks hdve been largely reduced and he
| hare no help than n,c>ssary Epery precdutio,
seems 10 be takn guard against iosses IN making
drgts for money requires three sgDnures Au Of dtu
Is commemorate. Our sta,ement OF as cts and iiabitei
SHOWS deficiency OF assets OF sl4s, 404 g. the 10
como shows excess OF So 092 TO Respectfully sub
m'''ed. ASLsEEl b INV KaliEiLANp' Examiner.
AII or A SB NISA QREIGI