New-York tribune., 1893-12-22
ST. NICHOLAS BANK CLOSED.
ACTION BY SUPT. PRESTON.
THE SURPLUS WIPED OUT AND THE
CAPITAL IMPAIRED TO THE EXTENT
OF slso,OO0.
FAD JUDGMENT BLAMED FOR THE Los>Es-CoN
NECTION WITH THE MADISON SQUARE BANK
president GRAVES DECLARES TINT
TIE sUPERINTENDENT's EXAMI-
NATION WAS FAULTY AND HIS
NATION WAS FAULTY AND HIS

THE st-PERINTENDENT's EXAMI-
NATION WAS FAULTY AND HIS
STEP Due TO POLITICS.
Charles NJ Preston. the Superintendent OF '"e
state Banking Department. closed the 81 Nlcho-
las Bank. in the Mills Building. yesterday morn
ing The action of the Superintendent was
surprise TO Wall Street. But no one in an
street was more surprised than the officers OF
the bank professed to be. superintendent rreS-
tons announcement was posted at the Broad-st
entrance before the hour OF beginning business
1t was follows:
This bank is closed pending examination
Charles NJ Preston superintendent
The ST Nicholas Bank is n state institution
II has been matter Of common talk for some
months that the bank was not In a good CON
dition and il was not considered unlikely That
the State Banking Department would take some
step I'm reference to the institution NO such
sudden action that taken by Mr. Preston was
expected however. Only few members OF the
| Clearing House Committee were in position
to know what was going to happen. Even the
bank officers themselves were ignorant Of Mi
Prestons plans
EAD JUDGMENT TO BLAME
| Neither Mr. Preston nor the members Of the
| Clearing House Committee believe that the
| trouble of the bank has been brought about by
/ dishonesty. The administration Of the bank
they say. has simply been marked by bad 1udg-
mcnt in making loans. In this way the bank
capital was impaired. and to such an extent
that Mr. Preston considered It best TO close the
bank at once without giving sixty days notice
which he is In such cases authorized by law 10
give The closing OF the bank was In no way
due to any action OF the Clearing House; 1t
was wholly the action Of the Superintendent ot
the State banking Department.
Arthur y. Graves the president. and william
| J. Gardner the cashier. arrived at the bank
few minutes before 10 o'clock Up 70 that time
! they knew nothing OF the action taken by MT
Preston. When they saw his announcement on
the door they surprised and angry They
| entered the bank. where they had "A consultation
| with Superintendent Preston. Bank Examiner
Judson. l.. G. Lathrop. the vice-president of the
bank and Frederick u. Tappen. chairman of the
Clearing House Committee Later Mr.. Preston
made a statement At the end Of the consulta-
ton in the morning. he simply said that he had
closed the bank because. as a result OF an IN
| ycstlgation made by the state Banking Depart
ment Il had been found that the capital was I'M
paired There was nothing else 70 be done under
the circumstances. he said.
PRESIDENT GRAVES ANGRY
President Graves told Mr.. Preston that his
! action was an outrage and that Il was "n'iTeN
unwarranted lie denounced the superint'hdeh'
course az the mos, high handed thing he haH
ever heard o. and he added significantly 'h"'
noIitics had considerable TO do with the acuoh
| of the superintendent. The other officers were
equally vigorous in dcnouncing the closing OF thc
bank. Mr. Lathrop. the vice-prcsdcn'. voiced
his sentiments on the floor ~ me '"''"" IN
change. Of which he IS member
NJ
had something to do with the closing of the bank
e =, interest for the closing ~ the 81. Nicholas
Is generally believed to be due In great part To
,he Nadlson Square Bank disaster Of last Au-
oue, The last quarterly report OF the ~.
Nicholas Rank contains an Interesting item IN
connection with this. The report was made on
November 2s The item referred to Is me state
ment that the largest aggregate of loans 20 any
one individual. firm or corporation was |l'o'ooo
,o the Madison Square Bank. The sum men
TONED was divided into three loans
Tho most serious rumors concerning the con-
d,,ion Of the 81. Nicholas Bank that nave peeh
current have been circulated since the fallure o'
~ u,dison Snuare Bank Members Of the
Clearing House Committee did not hesita'c 10 w!
yesterday that the trouble in the 81. Nicholas
Bank was due largely II not eh'T'N ~ "'o IAN
IRE Of the Madison Square.
FUNDS IN TIE HAM
state Treasurer Elliot f. Danforth' VINO
figured prominently and unplcasanty III '"c
Madison Square Banks affairs. also deposited
state money in the ST. Nicholas BANK. oii
c1...or,hor % he had on deposit there 100000;
ON November 2S his deposit was S'oooo' no" il
, g. u,,le more than $4,000. on the morning
ofter the failure OF the Madison Square BANK th'
{, Nicholas Bank was compelled 10 pay -four
,,,s ,,.ore drawn by state Treasurer Danforth
1,ho amounted to s25OOO0 Another check was
1ou, bv simon Uhlmann Frederick Uhnann
brother for the Glen Ridge Mining Company
T, was for 81 700 The other check was ioi
) $40 600. II was drawn by Frederick IhlInahh iol
, the East River Bridge Company Samuei 'n'er'
,over Of GugEenhcimer & tntermycr' couhSe
for the Madison Square Bank receivers refused
I ., talk Yesterday about the relations betwcot
e tho Madison Square Bank ana the ~. Nlchold'
d, ponk The Madison Square Bank receivers say
) that the St Nicholas Bank is creditor Tor ohiS
$40 600 against which is held S3ooooo OF securi
j | tics on the other hand. the St Nicholas barF
! s :, &, q creditor Of the Madison Square tf
sSs shs oxtent of more than 100000, which In
n ciudes the amount paid on checks the day aftei
] | the failure last August. The Madison oqua!,'
4 panl, was more fortunate In Its relations WIZ
= the State Banking Department thah the 81 .,
!, | Nicholas Bank. The former. when IL wa
[ | iearned that it's capital was impaired. got IN,
. | "a, ~ sixty days notice, but the crasf
came before the expiration Of the days OF grace
DrrOsITOHS SAID TO BE SECURED
n n Rank Examiner Judson made this brief state
n | -, yesterday afternoon: "An examination o
i ,ho hooks Of the ST Nicholas Bank was begun
-, December H. The examination was finished
Yesterday. and now we are at work on re
var,,ro,ion In few days we will probabl!
:, hove statement to give out believe tina
9 al the depositors viii be paid in full. ! AN an
. ar. an ,,orr,,,ne ar" about those who deposited yes
q no. They will have to wait like all tn
h others. Mr. Judson added that the state na, 1a
r about $4,000 in the bank ne refused 10 ,;,h Sa;