The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-01-30
HOW TO BREAK. A BANK.
EXTRAORDINARY METHOD OF DOING BUSINESS
IN TROY BANK--BoRRowING MONEY WITH
OUT LyzsAL sEcURIrY-ARREsT OF THE VICE
PRESIDENT.

PRESIDENT.
lBY TELEGRAPH TO THE HERALD
TROY N. Y, Jan. %, 1879.
Six weeks ago the Merchants and Mechanics Bank
of this city, closed by order of the Attorney
General Subsequent developments afford ground
for believing that the most fragrant criminal acts
enacted in the shape of reckless investments OF
the depositors' funds. Daniel Robinson, president,
and ID. Thomas Vail. treasurer. OF the Troy and
Boston Railroad Company, we're president and wee
president of the bank. also executive managers OF
corporation called the Schaghticoke Woollen Com
pany, with mandatory near this city The funds
OF the bank used to supply money
to the railroad. 1t is alleged that the wooilen
company. with capital Of 100000. was permitted
to borrow 100000 without any security except tho
endorsement of Robinson and Vail. controlling
officers of an three concerns. is also alleged that
the Troy and Boston road borrowed 100000 from
the bank or two and half times the capital stock Of
the bank And it is further alleged that these loans
were secured on notes signed by young men not
worth a dollar. who were employed by the
railroad company. 1t is stated also that
Robinson would indorse these notes and Mt
maturity he would leave them in the bank hav-
ing them entered in the published statements Of the
condition of the bank and to claims against
tho note makers. II is claimed by this process the
railroad became indebted the bank for the sum Of
100000. and was SO indebted at the time the bank
failed and that tho notes are missing
After experts had taken charge OF the bank ac-
counts it is stated that Daniel Robinson attempted
to tamper with the examiners. Among the many
damaging statements made against Robinson is that
he induced tho Troy Savings Bank (of which he was
a trustee) to deposit funds with tho Merchants and
Mechanics Bank to an extent greatly exceeding the
amount allowed by law. The savings bank, 1t ap-
pears now. loses considerable. because Daniel Robin
sons methods leaves it without the claim Of pre-
fcrred depositor The savings bank is entirely
solvent. however
Robinson. it il said, secured loan of 100000 in
one instance from the defunct bank. and released
himself as indorser and guarantor from the paper,
then made the bank the loser OF more than its
capital stock ono batch of paper One note
broken bank, with Adolplf~ Pfciffer indorser.
The latter gentleman pronounces the note forgery
The cashier calel Robnsons attention to the condi
ton Of the bank last spring. when the latter stated
that Vail was personally responsible for theindebt
edness which Walls relatives would pay II he could
not Robinson refused to help the bank because he
claimed .hat he had his little family to look after
The Bank Examiner from Washington AYERS that
after the condition of the bank was made known at
that it would be closed, and before legal notice of
Injunction to stop it's business could be served
these caused further loan OF SO OUto be made
to the woollen company and drew $4,000 out which
the railroad had there on deposit, and completely
stripped the bank of funds. Hence it was compelled
TO ignore depositors' demands and was closed
on the last day of business the railroad paper was
discounted for $4,000, although no discounts had
been made for two months before. One note for
100000 made by a minor at the request of Robinson.
was discounted at the dictation of the latter
D. Thomas Vail. late president of the bank and the
woolen company, and now president OF the Troy and
Boston company, under arrest for Illegal completely
in the bank management. having been indicted by
the last Grand Jury.
1t is thought that Robinson will be arrested very
soon if it can be done. Vail airms that he is the
victim. as he committed the errors at Robinson S
dctation Vail Ia very low from mental prostration
and confined to his house. guarded by officers There
is intense feeling in this vicinity over the treatment
of depostors and hagitious use OF the funds