The New York herald., 1879-02-08
NATIONAL TRUST COMPANY.
PRELIMINARY REPORT OF RECEIVER BEST ON
THE STATUS OF THE COMPANY WHEN IT WENT

PRELIMINARY REPORT OF RECEIVER BEST ON
THE STATUS OF THE COMPANY WHEN IT WENT
INTO HIS HANDS.
Mr.. william J. Best receiver. has made prelmi-
nary statement to the stockholders the National
Trust Company concerning its condition when it
went into his hands, together with the loans and in
vestnents made by its managers Since his receiver
ship the deposiors have been paid in full, and the
prospect for the stockholders is shown in the report
The balance sheet of December 10, 1877, showed in
assets the amount of s1903,459 49, and in liabilities
S2,6747O4 30. leaving deficiency of s77l,2i5 H.
According to Mr. Best only small frac-
tion of the nominal capital OF sl,o0o.000
invested according to the provision of law which
requires that the capital shall be invested in bonds
and mortgages on unencumbered real estate within
the State of New York worth double the amount
thereon loaned or in the of the United
or of this State in the stocks or bonds of the in
corporated cities Of this State authorized to be issued
by the Legislature. To confirm this statement the
receiver refers to the character of the securities held
by the company at the daSe of its failure
He quotes section Is of the charter in which the
trustees allowed discretionary power of loan
ing or otherwise investing the moneys received by
then III plolc stocks OF the United staes or OF any
State on interest-paying bonds or dvidend-paying
stocks of any corporation or company or on bonds
and mortgages on unencumbered real estate within
the State OF New York, and then he proceeds
to say that this plainly gave to the trustees
tho discretion to loan or otherwise invest
the moneys by them on deposit ..in interest
paying bonds or dividend-paying stocks of any
corporation or company" yet in violation OF
this provision the late management made large in
vestments in the bonds and stocks OF the Chicago,
Danvlle and Nincenncs Railroad in the bonds of the
Waikiki Valley Railroad Company and in the stock of
the Davis Sewing Machine Company. According to
the loan ledger the aggregate OF loans December l5
1877, was Sl0S9,4i0 81. OF this sum S532.3l4 80
I oans w ane G on Der
cembcr 30, 1876 Adrian II. Muller made
sale of Chicago, Danve and Vincennes Railroad
bonds and certificates of indebtedness which realized
$1329s7 60. On December 23, three days after this
SALE fictitious loan was placed by President Mangam
i'll the name of L. w. Huidekoper
MR.. MANGAMs TRANSACTIONS.
Mr.. Best goes on to say:-"Nowhere in the records
of the Executive Committee or Of the Board of rus-
tees is there anything to show that President Man
gam consulted any of his associates in regard to this
transaction After its consulnation he reported to
the Executive Committee. adroly concealing its true
character He thus falsed the value of the companys
assets in this important item to the extent of
S3O9770 % upon collatcrals. whose market value
under strong competition was but S132,9S7 GO. This
is of several similar transactions manipulated
by him in order to postpone the collapse OF the cor
poration These operations were so shrewdly con-
ceived to misead the most vigiant of his asso-
ciates Each of these transactions will appear in its
true light when the history OF the company shall be
made public. Ny examination of the company first
revealed to the majority of the trustees that Presi-
dent Mangam freely used the company's funds to
purchase it's stock. Investigation has developed
that on May 30. 1876. he sold to the company fifty
placed to his credit on the books of the COM
pany."
In conclusion Mr.. Best addresses himself to certain
insinuations made to the stockholders by person
having pecuuiary interest i'll the company and
who is without individual responsibility. and Mr..
Best proceeds to demosn him by saying that the
balance sheet is sufficient answer to the statement
that the company had paid its debts and had large
surplus when it put in the hands OF receiver.
On the contrary, the company had not paid its
debts and there yet remains to be settled
large sum in the form of contested claims before
the court, while its stockholders S9O4.1 In
answer to other charges Mr. Best THE assets
ut the time Of the failure could not have been made
to pay twenty cents on the dollar to the share
holders. Indeed had the securities been disposed of
at auction the sum realized would have been insuf-
icient to pay the debts OF the company and
the stock would have been without value.
The assets of the company carefully
appraised by parties in every way competent. The
market value of securities not quoted at the Stock
Exchange was obtained from dealers familiar there
with. Further. when the capital Of the Trust Com
pany impaired there was no method provided
by law for making mp deficit or for scaling down
the capital The of the Legislature of the
sion of 1878, adopted upon the suggestion of the
Bank superintendent provides for such contingencies
that presented by this corporation at the time of
its failure In fact it was the failure Of the National
Trust Company that suggested the means for meet
ing future similar contingency