New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-09-08
THE DIRECTORS CONDEMNED.
STRONG WORDS FROM THE DEPOSTTORS OF
The SUSPENDED COMMERCIAL BANK.

INSOLVENCY DECLARED no BE DUE TO FRArDU-
LENT ADMINIsTRATI N-aEpoRT OF THE
COMMITTEE APPOINTED I'd INVESTIGATE
THE AFF,IHs OF THE INSTITUTION.
Strong language in condemnation OF the directors
was used by the depositors Of the suspended Com
mercial Bank at their adjourned meeting last even
ing in Haviland Hall. Brooklyn. to hear the report
Of the committee appointed at the first meeting on
Monday evening to consult with the receiver and
bank officials. Owing TO the shower the attend
ance was smaller than al the first meeting. The
chairman &. A. Iav.and. called for the report
Of the committee and it read by Richard
Drant IL embodied the facts already published in
regard to the conferences held with Receiver Dyk-
man and President Kesney and set forth that the
plan OF resumption was no further advanced man
il was the day the bank suspended. The receiver
was trying TO get the securities sent 10 the Bank
Of New-York to the amount OF SliVN FOR a loan oi
SlS 40 The list was receipted for the day before
the suspension and was made up Of the earliest
maturing paper The directors names were on the
paper for $4,000 what tho leavings would amount
o after the Bank Of N-w-York got its $4,000 could
not be conectured. but the committee was not san
sune in the matter The cashier Mr. Vail. owed
the bank In notes AlSJ. and f. G. Grsning sl02,225
The Receiver had $1,000 in cash on hand.
After hearing the report Colonel D. 7. Lynch
moved that the committee be discharged. ~ 1t had
done all I, had been instructed to do. The con-
d!tion of the bank. as disclosed to the committee
awful rotten" he said. The case Of General
Claassen ooting his bank in Newton was nothing
to this 1t far beyond anything that had
, ever before happened In Brooklyn. The depositors
had nothing.
The chairman, Mr.. Haviland. said that the COM
mittee had not yet consulted with the Attorney
General of the State to ask him to proceed either
criminally or civilly against the bank officials.
Horace Graves. one OF the three lawyers repre-
nte1 fta we'd hat he
mttee be continued and made statement OF the
law bearing upon the matter. He said that any
expert examination of the books would show that
the bank had been nsolvent for three years The
Bank Superintendent. Mr.. Preston had criticised
IT for that period. but had accepted the assurances
OF the directors in regard to worthless securities
This chronic insolvency had resulted from the
former management The directors had known
Of IL. and had charged 1t to the cashier. But IL
had been plainly neglect OF duty on the part Of the
directors and on the part OF the Superintendent ~
Banks that business was continued. There had also
been suspicious manipulation OF assets. Mr.
Graves said he did not credit the statement that
the cashier had transferred bonds belonging to
President Keeney security without authority,
hut he thought this was put forward 80 mat they
might be preference over the claims OF
depositors The directors had not exercised ordin-
airy care in the discharge OF their duties but had
shown gross inattenton to neglect Of reasonable
supervision of the affairs OF the bank. The con-
tinuance Of business after insolvency was fraud.
for they had taken money with no prospect OF
repayment They had intensified their liability by
declaring dividends when there were no profits and
these could be recovered. 1t was question whether
the Superintendent OF Banking was not liable for
by reason OF neglect OF duty. 1t was the
duty OF the receiver to push all claims with dill
gence But the stimulation OF secrecy and collision
IN his appointment made 1t highly desirable TO
have associate receiver.
The chairman said he was convinced that tho
direct violation OF law. He read the law to show
that they had disregarded their duty IN declaring
oans snh dss e 70 an amount three mes the
capital stock and with $OS,oW capital the sum OF
The amount to be loaned the directors only
one-thrd Of the capital but more than this had
10 sign false statement OF the AFFAIRS OF the bank
as had been done. The Insolvency was due to
saw this and longer msled by specious
counsel. they would pay the deposItors in full.
ms nf IN" 80, sharcs the directors hold s
The largest Stockholders are the estate of lanes
son GIN 100 President Keeney has sixty shares
deSe 10 10 secure s S snI
of an associate reoeN"r TO deltay the expenses
Of the committee lnnas ws t rais.d ana j. A.
Eye w wsek maze treasurer Inc meeting ADJOURNED
~ an order was secured from Judge Pratt in the
supreme Court. Brooklyn. yesterday. by W. y
Dvkman. receiver OF III, uspsLded bank. requiring
The sv he SHOULD aS be- pan nneT to e
turn 10 the owners certain notes and checks left
With the bank. They include notes for collection
10 the amount Of A09i, notes for collec ion not
due. amounting 10 sl3.@i 10. and deposits made
after the bank suspended. ag?regating tll3 20 the
order il returnabe on Mon lay.
considerable comment was caused yesterday by
the disclosure OF the fact that there were notes OF
John j. Vail. the cashier. amounting about
5000. among the discounted paper OF Ia, hank
ilr Vail said b, did not regard II unusual for
cashier to borrow from the hnnk he served. and
his notes were well indorsed and would he paid.
Ebert Snedeker, one OF the directors. has dis
counts OF oyer $1,000. secured by n012 shares OF
brooklyn Elevated stock. worth :90 a share. Mr.
snedeker says he incurred his Indebtedness 10 the
ba NIX while trying TO prevent loss to the bank and
that IL IL amply secured There Is discounted
paper for Robinson ON another director. which Is
Partially secured by collateral amounting 10 $685.
sJO Mr.. GIL Is a wealthy nan.