New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-10-27
MISMANAGING THE BANKS.
DISASTROUS RESULTS OF DEMOCRATIC AID
MINISTRATION.
CONFIDENCE IN THE STATE BANKING DEPART
MENT DESTROYED BY THE POLITICAL
MACHINAT1oNs OF GOVERNOR
Hill. AND HIS APPOINTEEs.
HILL AND HIS APPoINTEEs.

Jnc UlSConuucJ ana lnemcleNcy Ol pIcocuV ~
mocratio State officials Mr. Fassetts auditors
loudly applauded what he had said concerning the
maadministration of their departments by the
Democratic officials.
One of the officials criticised by Mr.. Fassctt
was Mr.. Charles NJ. Preston, of Kingston, the Super
intendent of the Banking Department. Mr.. Pres
toms administration Of the Banking Department
has been notable for its failure to detect the
insolvency of banking institutions over which
he has supervision, and consequent loss OF
several hundred thousands of dollars to citizens
of this State. Two great banking institutions
have suffered enormous losses in the course of
his administration of the Banking Department.
and the detection of these losses came so late
by the Banking Department that they were far
greater than they should have been.
One of the two institutions referred to is the
American Loan and Trust Company of New-York.
which, upon October 30, 1890, was reported to
the public by the Banking Department to have
surplus amounting to S13j,s7S As, and yet which.
in February 1891, or only four months later, was
found to have a deficiency of $65O,000. The
second institution referred TO is the Ulster County
Savings Bank Of Kingston, which was examined
by the Banking Department upon January "a,
1890 and was reported to have q surplus OF S261-
sol 80, and yet which upon October b 1871,
it was solemnly announced to the public by the
same Mr.. Preston as head of the Banking Depart
ment, had deficiency of 100000. There in these
two institutions is a deficiency amounting to ST.
100 900. Between thom these two institutions
had an alleged surplus of S4O3,769 81. the diff
ference between the actual and the real condition
Of these banking institutions was the trhng
amount Of 81, SOB 764 81. Perhaps it was tritlng
error Of the Banking Department. but then the de-
positors in the bankrupt institutions are not of
that opinion. As taxpayers they paid Mr. Preston
yearly salary Of $4,000 to secure accurate re-
ports of the financial accounts of all the banking
institutions of the State. and then to make them
public.
Mr. Preston was appointed Superintendent OF
the Banking Department by Governor Hill upon
December %, 1889; so that it is obvious that all
thc misleading reports concerning the banks in
question were published after he assumed Office;
that concerning the American Loan and Trust
Company having been made upon October 20,
! 800. or nearly year after Mr.. Preston assumed
office; and that concerning the Ulster County
Savings Bank having been made upon January
"a. 1890. month after he assumed Office.
Mr. PreSton's conduct respecting the Ulster
County Savings Bank has especially excited pub
lio comment. One criticism made is that living
at Kingston as he does where the bank itself
is located, be ought to have considered 1t espe-
cially under his personal supervision. Mr.. Henry
C.. Covell former Examiner of the Bank De-
partnent saws that he informed Superintendent
Preston as long ago as January, 1890, that the
books of the savings bank were kept in the most
slovenly manner of any bank with which he was
acquainted the book containing a record Of the
mortgages, for instance, being kept in lead pen
Gil, and therefore easily modified. Mr.. Preston
denies that Mr.. Covell made this statement to
him; but Mr.. Preston cannot deny that he
neglected to have the bank examined by the
examiners Of the Bank Department when it was
known to have suffered loss through the mis-
deeds of of it's employees amounting to $75, 900
1t positively known in Kingston upon
September = last that there was defalcation in
the Ulster County Savings Bank amounting to
S75;OO0 and the trustees Of the bank removed it's
treasurer. Mr. Preston then in Kingston
Why did he not at once order the examiners of
the Bank Department to come to that city from
Albany and institute an examination of the bank
Did he dislike to hurtthe feelings of several per
sonal friends of his who were trustees in the
bank? But Mr.. Preston turned his attention to
politics. lie here upon September 24, at
tending a Democratic Judiciary Convention as a
delegate to that convention. In that con antion
he assumed hostile attitude toward the nomna-
ton of ID. Cady Eerrick for Supreme Court Judge
and led n movement which ended in the eN, ulsion
of a Herrick delegate from the WITH Assembly
District of Albany County. While Superintendent
Preston was thus turning his attention to political
canvasses, most serious affair had taken place
in Kingston in relation to the Ulster County Say
ings Bank. The trustees of the bank had
after making hasty examination of the bank. an
nOunced that only $4,000 had been stolen. Then
one of the banks trustees had denounced those
dcpositors who had drawn out their money as
bank wreckers7 and had urged them TO return
their money to the bank. These efforts Of the
trustees had their desired effect: for over 5000
600 which had been taken out Of the bank was
returned TO it. Then the evil effect of Super
lntendent PreStons action in not ordering his
own bank examiners to examine the bank became
apparent. Mr.. Preston had waited ten DAYS. that
is, from September Il to September %, before
setting his own examiners to work upon the
books of the Ulster County Savings Bank These
examiners were Albert c. Judson and Mark
Eustace. 1t oddly happened that Eustace was
The man who examined the bank with Covell in
1890, and, according TO Preston, failed TO dis
cover any defalcation. But now Judson and
Eustace quickly found that the dcfalcation in
the bank instead of amounting to only $4,000
did amount to S46O,OOO The result of this dis
covery was that the bank closed It's doors upon
October 3
But what of the savings bank depositors who
from the failure of Mr. Preston to make an
examination of the bank had faith in the asSe
tions Of the trustees and put back in the bank
100000? They it is said, will lose 80 per
cent of their deposits. In other words, they will
lose 100000 because the Banking Department
of the State did not uDon September IS the day
after the defacation was discovered in the Ulster
County Bank, send Air Judson and Mr. Eustace
to Kingston and Immediately have an eXamina-
ton of the bank made. But what can be. eX-
pected Of Bank Superintendent like Mr. Preston,
who pays close attention 70 politics, ami hnds
time 70 attond judicial convention at a moment
when "a great savings bank in ho own city is in
u IL. rr.ri. nh