New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-03-01
THE GRAND JURY ON BANKS.
CLEARER AND sTRICTER STATE LAWS
RECOMMENDED.
c. II. LFLAND,s SALE OF THE CONTROLLING
INTEREST IN THE SIXTH NATIONAL
CONDEMNED.

The Grand Jury finished its investigation In the
bank cases yesterday. No additional arrests were
made, and it reported that no new indictments
had been found. Foreman j. Lawrence McKeever and
the other Grand Jurymen entered Judge Marines
courtroom in the afternoon. and the foreman read a
prcsentmcnt relating to the frauds exposed in the In
vcstigaon. The presentment says
The Grand Jury devoted much time to the consid-
relative certain transactions which
resulted the suspension OF the Sixth National Lenox
I'M Equitable banks Of this city In January. ana
the consequent mperng Of the interests OF large num-
bcr khodcrs and dcpostors in those banks Whie
would BE- manlfcsy prcudcal to the interests OF pubic
justice dvulGc startling facts proved In the III
vestigation which resulted In the finding OF indict
against Of the guilty parties, yet the "rahu
Jury fecs duty by this presentment to call the at'e
OF the OF the evils which IN us opinion
made the disaster POSSIBLE.
clear had existed proper provision OF
law prohibiting a transfer OF majority OF the capital
stock institution, except upon due notice 10
the minority stockholders and also to the deposit
and other persons dealing with the institution the
caamtous results following transfer OF the controlling
Sixth National Bank would not have been
the Grand jury condemns the action o.
the president in selling ont at enormous
profits by negotiations conducted In secret manner and
In most unbusinesskc ard unusual way. his controlling
interest therein to parties as to whose financial stahuns
or business Responsibility he had sufficient knowledge
40 less censurabc the like action by the stock
holders Of the Ienox m Bank In heretofore giving over
to the representatives combination the man.
agcnent bank In this latter transaction IL mas
further appeared that upon application to them Tor ING
sale Of majority Of the capital stock Of the enoN m
Bank the president and viceprcdent respectively formed
so-cacd syndicate. and its agents obtained from .
khodcrs authority to sell their stock az s''ea
figure and so, having the transaction entirety III
their hands obtained a nearly double price 'of
the syndicate stock and retained the difference
and the Grand Jury regrets that owing
TO the sweeping authority and lack OF specnc dreclo'
attending the negotiations these bank omciais ha'e
escaped criminal prosecution Tor thcir uiono"o~oo w
fraudulen, acts. -
so startling audacous were tie acts Of the persons
who destroyed the time being the standne anu u''
ulness banks above mentioned that IL II ui"0"'
~ attribute the result 10 any character OF opera
ton but IN addition the obtaining controi uereoi "o
subsequent GENERALIZATION Of checks al inc erection anu
for the benefit OF the combination was he approNns''
ond-by reason Of the discovery OF their methods-me
actual cause. , g..
Tho holiness recklessness with which checks ior
amounts in OF the entire capital stock OF inc oN
mn AMI Equitable banks were ccruhed against circuits
,cprcscu,lng paltry OF money needs no comment
unless IL be the surprising that under the laws OF
this state such OF GENERALIZATION constitute no
criminal offence ,., -.
Under the laws enacted ~ for the regulation OF
National banking Institutions II Is unlawful for any
r,, cork or agent OF any such association TO certify
any check drawn upon association unless inc pefso
or company the check has on deposit WIN INV
association az the Is certified an amount
Of money equal the amount specified IN such chech
The Grand Jury urges upon the court the necessity OF
Immediate enactment Of tho state Legislature pro'ung
FOR tho punishment reckless cerhcstlon by officers anu
clerks Of state banking institutions
The Grand Jury OF The opinion tst ~ ehc pros'"'
finn. the statutes Of deficient In respect u
The management supervision OF state banks particularly
In providing proper criminal remedy against ir"uuu'ns
Injurious acts Operating |" inc uAiaHe Vi N'o o"
and depo-itors
The statute. OF The United States, on the contrary
nx r more clearly the criminal remedies against 'Ae
act. affecting h,rkn2 associations formed uhue' '''
Itdrrli laws.
We therefore recommend that 50 far as applicable 70
Stat, insituons tie laws Congress be adopteisby our
legislature addition We rcc'rmend t"a' laws D.
ta...d TO prevent Of the statute requiring pi'"
Of The payment capital stock OF banking corporations
re,ore the Of business and also to prevent 'n
evasion Of the statute requiring directors 70 D. the actua
owner shares Of n" capital stock Also 70 ''i"
directors 10 qualify Immediately upon ueH election oy
nlnr a Irop~r oath o Office"
The Grand Jury also recommends that statute Dc
pas.d hy the Legislature providing mat whenever III.
uon,ys. funds or property OF any BARKING or "o'.s
cor,raon are di.lo-sd ~ onccr or a, Ms d''oh
in manner contrary the ordinary methoi, OF business
or TIA, al, resulting IN any disposition Of 's
moneys, funds or r.opriy shall not BE- a, once regularly
ent,r,d IA IT, books. such officer sha DC p''""." sv
II criminal ni-apIioyIlaon OF -uch H'n''s' ''".H "
rropr,v within the meaning of Section % oil the f'"a'
cole and that burden shall hcteupon rest upon S"'
officer r,bu;tng such prescriptions
Mr.. McKccvcr the foreman. added that the Grahd
Juror, desired to thank Assistant Dstri't N'"'"',
Davis for the carcfuncss and SIKH Win ""''" 0 '''
aided them IN the nvc,tigntlon
Judge MARITIME thanked the Grand Jurors ior 'hclr
industry and DISCHARGED them. lie said that lie would
scnd copics Of the prcscnlmcnt to tie Governor an"
OH branches Of the Legislature. ,,,
george H. pcll did not leave the Tombs YESTERDAY,
several of h,. friends at the District ATTORNEY
u0ic. and two or three time, bond Tor r-oooo va
almost completed. some difficulty always aIo'c' ho"
over and inc security required was not gwen
>icmund f. Never. the wealthy real estate ii"H'F
wln.c sons aided cashing most OF the checks r..
rrv,d from The sale 81 the bonds taken from the
siyth National Bank. visited the reporters room yes
tr,,nv in a .tatc 81 great excitement lie mas berl
cs. in the case of Claasscn and before the Grand
Jury and some Of tie checks for the securities Wce
Jravp to the order Of his firm. bnt he SAID tlat nv
was annnvcd al the publication OF statement that ne
ia with p.U at the District Attorneys once NC
dcnoun,rd the reporter who wrote the article ana
hook the table with blows from his INST whlic ne
formed M newspapers and reporters III general lie
,n,c ca bn.tcro,is as to disturb the proceedings III
fudpc Cnwing's court, and was finally remover iroH
n he room by several Of the reporters
TESTIMONY IN THE CLAAsSEN HEARING |
fvrrn ny