The sun. [volume] (New York [N.Y.]) 1833-1916, 1879-06-14
COMMISSIONER HAYTS CASE.
or WHAT rs a SAYINGS BANKS PAID
CAPITAL CONSTITUTED

Ex-Governor BedIe Making His Explanation
In Behalf Of the Indicted Onicers of the In-
ternationaI Trust Company OF Jersey city.
The story Of the prosecution in the Inter-
national Trust Company case. now on trial in
Jersey City before Judge Garreson is that
part OF the alleged paid-up capital consisted Of
stockhoders' notes; that the real estate OF tho
company had so far deprecated that the assets
In July 1877. were much less than the liabili-
ties. even counting in tho stock notes then out
standing tabout $40 OOOl. and that at about that
time the directors. including the throo defend
ants. President Ezra A. Hnyt. Secretary Frank
d. Karr. and Charles NJ. Field. published an
advertisement. on the backs Of 20 900 tape meas
urcs intended for distribution to the effect that
this company was the only savings bank in the
State having paid-up capital OF 100000
for the security Of depostors. Yesterday Mr.
Washington Is. Williams. the special Mas
ter in Chancery appointed by the Chancellor
to examine the affairs OF tho company. con-
sumSd most OF the day In teetifylng TO y" val
estate. and on tho bonds and mortgages. His
total valuation was s92.s7o.25 less than the total
OF tho values he had found in the books OF the
company. Most OF the real estate lies out Of
New Jersey and his testimony MS to value was
admitted under ex Gov Bedle's emphatic pro-
test that he was an incompetent expert as 10
values IN distant cities.
The Rev. Dr. wheeock II. Parmly Of the
First Baptist Church. Jersey City, u dcpositor.
testified That he got one OF the tape measures
In july or August. 1877. from n table in front Of
printed on its back to Secretary Karr. asked
him whether they meant absolute security.
hhrr. ne said, told him that they did. His tes-
ilmony closed the 'nsc " the State, which had
occupied nearly three days.
rooted 10 uclnit tho three defendants without
putting them on their defence. Re said that II
ANYTHING had been proved by the State It was
that there WIS no fraud. The books had been
kept with an accuracy that had cNtortci the
cOmmendatiun Of Mr.. williams. Every asset
referred to in the hooks had been found The
only issue Of fact was the valuation. The re-
WILSON'S 81 the timcs had upset mems iudg-
ments In ths matter oi valuations ~ renl estate.
But this difference ot valuation was not prop
erly in the case. II there was no fraud. tho
State had not made out rs case. and there was
no usN in going TO the Jury. II was n very grave
inutter. The punishment might be two years 81
.W.dp9risonmen, or SIN, nne not eScreing
man had bad heart before he could be prop
crly convicted under the statute. IL must he
shown That the prisoners not only knew that
that they bad calculated IL with intent 10 do
fraud. Mr.. B"dle repeated his argument OF
| Thursday that tho printed sentence on the tape
was not written statement or account"
was a doubt in the mind OF the Court. if two
construct ions OF the statute were POSSIBLE. then
It was well -settlcd rule Of law that tho one
most inyorano TO the prisoner must be taken:
y" alleged wrongful act was on the FIRST Of last
March. The State had como back year md
tuN mon MS anu iiAfti tue time IN july lNli.
Were The defendants being tried for an act that
WIS not in the mind Of the Grand jury?
In polnt Of fact. the Governor continued.
the Affirmation on the tape was true II had
paid up capitnl OF 5000 900 Tor the security OF
dcpositors. A. - thai part oi the capital con-
si-ting Of notes IL had proved to Dee the best
asset the bank had. All OF them had boon paid
except two which aggregated only about SO. 900.
and uf these. one was undoubtedly good and
the other probably good. Tho common law re-
qulrrd no more ~ the capital to bo pad la cGsl
than was necessary for the purposes qf the
| OF the company 20 modify tho common law in
this respect. Al the common law required WIS
that the capital should consist OF moneys
| WORTH and the proof tina; thea" notes were
| money : worth Is that they were convertible into
money when Il WIS needed for tho security q
| the stockholders. The capital was ia Truth paid
up. and alter capital had once been paid up the
law never asked what had become % H. This
| capital had boen Invested. aud the proceeds
| were yet In possession OF the company. or had
| stopuagc Of business In February 1878 Saw.
| ings banks do not usually have capital. The
| oniy security depos tors. in most savings
banks have WIS the ,gool faith aud good
| management Of the directors Ia this case
| tl97 600 OF capital had been actually sunk by
the stockholders for the security of depositors.
| forthcoming. The fact II. the .positors we're
| secured. aud would receive all their money Il
| they would wait until the officers. under the d.
rrruoh ~ we thanc,ilur, could dispose ut the
Assets IL the three defendants We're wrong in
| considering That good notes could righttully be
| cousldetrd a. cnplthi. hoy were wrong ~ COM
| puny with mon whose names and memories tho
| men Of NV Jersey delighted to honor. One "
| these notes WAS given by the late Chancellor
! Zthrskle, the highest legal authority ia the
state. Another was that 81 Horace F. Clark
| and a third that OF Blakely Wilson. They
thought IL wis right 10 xiv" their notes in lieu
| 90 cash. 10 make up the capital % this company
| rs To- me depreciation OF the real estate anl
! the loss OF some OF this capital In bus mess. Mr.
! B"dls said, AL men We're liable To- errors IN
| Judgment. and i could not Doe supposed that the
cap tai % q savings hank should lie idle IN IFS
| sa1's. The worry essence OF the Swings bank
| business was ne max ing money 10y the use of
! capital. II would. indeed. have been better a.
events turned out. IL 500 OOo moro 81 the com
! PAWS capital had been IA the shape % such
| notes rs tho ones That are complained ~. but IL
! ". the duty OF the directors 10 venture most Of
| their capital.
Judge Garrctson reserved his decision.