New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-02-02
FIVE BANKS TO THE RESCUE.
THE DEPoSIToRs IN THE SIXTH NATIONAL;
TO BE PAID IN FULL
CHARLES II. LELAND GIVES HIS CHECK YOU
100000 TO INSURE THEM AGAINST LOSS
HE WILL ACT UNDER THE ADVICE or
FRIENDS IN REGARD TO THE MI.
NoRITY OBSERVATION-DISCLOSURES.
Sen HELD IN $4,000 BAIL
mo BONDsMEN FOR

immediate payment OF the depositors Of the Sixth
National Bank. A syndicate of National banks
agreed to pay the depositors at once, on the con-
dition, of course that the Controller Of the Cur.
rency shall approve the action and authorize tho
surrender Of the assets Of the bank to the syndi
cate. The banks which have undertaken thia
settlement are the Merchants. Chemical, Gallatin,
Commerce and American Exchange National
banks. While they guarantee the immediate pay
ment Of the deposits, they protected from loss
by Charles II. Leland, recently president Of tha
Sixth National, who yesterday sent his check for
$5Oo,OOO to President Tappen, of the Gallatin
National Bank. In behalf Of the syndicate banks
an application for the appointment of q received
for the Sixth National was sent to Washington.
The Controller of the Currency assented, In gem
eral terms, to the scheme, but it was not known
yesterday whether he would appoint receiver ol
merely authorize the bank examiner, who Is In
charge of the bank, to carry out the terms of tho
arrangement. II is understood that the syndicate
banks strongly prefer that the Controller should
appoint a receiver, although the reasons for this
course are not evident. In either event. how
ever the depositors are certain 20 regain their
money in few days, and the most serious conse-
quences of the suspension will thus be remediedl
The losses that may be suffered by holders of tha
stock or by other victims of the robbery dis
tributed in such way that Ghere will probably
| be no public inconvenience.
There seem to be two parties among the Clear
ing House banks in regard to the settlement. II
is an open secret that the bulk of the stock sold
| by Mr.. Leland to the Claassen gang is held a
security for loans by certain banks in this city,
| Four Of them are believed to be the Commercial.
| Third and Western National and the St Nicholaa
| banks, but other is said to have an INTEREST,"
| The amount loaned on the stock and the amount
| held by each bank are secrets which
| are carefully guarded. 1t is tolerably
| certain that considerably more than par
was loaned in every instance, but nothing nkd
the $3.50 a share obtained by Mr. Leland was adj
vanced. 1t is noticeable that none of these banks
is included in the syndicate which guarantees th4
payment Of the deposits.
1t was inferred in some quarters that the syndi.
cate banks were anxious simply to avert disaster
| and to protect their weaker associates in the
| Clearing House. Their desire that receiver bq
appointed and the statement of President King.
| of the Union Trust Company, in regard to Mr..
Leand's position, are accepted in other quarterd
as plain evidences that the syndicate banks ard
not acting from purely philanthropic motives.
| In President Kings statement, which follows tho
purpose of Mr.. Leland TO protect the depositora
| and the minority stockholders is admitted:
1 desire to state tl,it in my opinion, no one whd
knows Mr.. Leland could question his entire good faith
and honesty Of purpose In the matter Of the sale Of
the stock. OF course, far legal rights
ccrned, owner OF the stock, he felt that he had
right to dispose Of 1t at such times and for such prices
| as might suit his own views. He feels however,
| that error of judgment was committed by him in
not receiving sufficient assurances TO the standing
though at the time he did sell he had perfect faith
that they were represented TO him. and that there's
fore, through this want of possible care on his part m
nocent parties have been placed in position to sueS
loss. Hence as man of integrity and honor he feels
that ii proper for him TO do all in his power to save
| them from the consequences of his act.
| lie sent for me last evening and requested me q
do what could to assist him in efectng this object.
The first thing to be done is to pay depostors In fun
| and this is in process of arrangement Mr.. Leland
has handed blank check TO my order TO be nlled
out for such amount as deem necessary in order to
guarantee the payment i'm full of the depositors OF
has taken very kind and effective interest in this
matter. have filed 1t out for S3O0000 and have de-
guaranty syndicate which has been formed to taks
the assets of the bank and to provide for Immediate
payment OF the dcpositors as soon as the necsssarA
formalities at Washington can be gone through with.
| There remain then the minority stockholders to b
considered and l have said. Mr.. Leland desires "a
do and he has said he will be guided largely bI
the advice Of myself and other friends In relation ta
| this NATTER
The position of the stock Of the Sixth National
Bank, SO far as can be learned, is this The 1,035
| shares sold by Mr.. Leland held by five banks
as collateral security for loans. The 965 shares
which form the minority are held by the sand
| interests which owned them before the recent
change of control. The purpose OF the syndicate
| banks probably does not include any protection
| of other members of the Clearing House Assocfa-
| ton who have more direct pecuniary Interest,"
| In other words, the five banks which hold the
] bulk of the stock OF the Sixth National Bank
will be left TO recover whatever they from
| their borrowers. The syndicate has nothing u
| do with them, and it is considered evident that
Mr.. Leland's intentions TO right his mistakes ID
| not include them. The losses may be SMALL buu
| in them only the shareholders Of the banks con-
cerned have a lively interest. The public hai
been protected by the prompt action in the first
place. of the Clearing House Committee, and after
ward by the formation of the guarantee syndi
cate. That the Controller Of the Currency will
agree to the practical accomplishment Of the plsI
is assured, although it was not known yesterday
what process he might adopt for winding up tht
| affairs of the bank
| There was large crowd OF depositors and
among them many stockholders around the Sixth
National Bank at Broadway and Thirty-third-sA
yesterday morning when the notice wai
with Bank Examiner Hepburn suml
sufficient TO insure the depostors against
| loss Most of the depositors went away satisfied
| that justice would be done 10 them, and the NUM-
Der OF people who had been keeping a close watch
on the entrance materially decreased from the
moment when this last notice added 70 tho
others which had previously stared every one II
| the face.
There was q consultation at the bank early Ii
| the forenoon, which was attended by President
| Tappen, Of the Gaatin National Bank, Examiner
| Hepburn, and c. w. Wcimore, Mr.. Lelands legal
] representative. The result was the posting Of
| Mr. Lelands notice over the United States
| Examiners signature While this was goins
| on Lewis w. Parker, of the minority stock
holders in the bank, was trying to get up meetA
ing Of his associates in the minority list TO decide
| upon some action 20 be taken by them regarding
| their interests in the bank. meeting was called