New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-10-25

favors there on political grounds who could not
have obtained them personal grounds and on
the securities which they presented?
NO DOUBT THAT THERE WAS COLLISION.
That there was coluson somewhere is not
doubted for an instant by those who have looked
into affairs of the bank since the trouble arose.
and If the cases now before the District-Attorney
are pressed with vigor and candor this may De
proved absolutely. Mr.. Cntermyer, the attorney
for the receivers gave out yesterday additional
! statement one which obtained at his nome
! late on Monday night. In this statement MI
! Untermyer sad
The provisions OF law under which the directors have
been indicted for fraudulent conspiracy supply mucn
needed want in criminal Jurisprudence In tnis s|'c
A director loans power OF his name and reputa-
corporation thereby induces people 70 pue he"
money at disposal OF this corporaton ana IL hn !"
more Accountability than heretof're lie can no
longer loan his then about his business 'gho
inc his trust III he does nc does 1t at his peril III
in his the board meetings acts are q ne III
violation Of law he must his protest within SIX
months thereafter or be deemed to have assented
b, such Illegal acts and he will be held accountsoe'
The law provides director OF stock corpora
tlon Is deemed to have such knowledge I" i's a"ar 80
to enable him to determine whether any act oil i,' u
rectors is violation Il duty. IL being his business "
know what Is DONE he Is charged WIN hho"P"so
whether he knows II or not unless he dIsscns from the
act within six mnths.'' The charge here being one OF
fraudulent insolvency the law now presunes thac inc "
fraudulent unless lts apl'"i "P'"
ycstcation have been administered fairy ana esaS
and with the same care diligence that agents receiving
compensation for their services are bund by isw % oo
serve.
In the present instance be doubt that
the Insolvency fraudulent In such case 10 hahc
rho director, liable IL will necessary TO prove TINT
those who charged did act as directors expressly
forbidden by law wfully omitted to perform uu'y
imposed upon them by law One OF the acts IN Vlo.'o
OF law is receiving OF any note or other e'aehco
OF debt I'm pa,Innt Of lnstament o. capital stock Win
intent to provide the II making such payment
Another the payment OF any note or other
evidence OF with intent to enable any soeHhoi'
t, withdraw any part OF the money paid in by him Oh
BOTH PROVISIONS VIOLATED.
Tho directors not only violated both Of those provisions
but OF them, at least benefited directly oy s"'n
violation. The result TO the bank was that hs'eau VI
having its 800 Of stock actually paid In In cash. a
it, statement. and the fank Examiner supp~'u'
f.. h,l loaned a large part OF the money with whieh 10
make those purchases The diec'ors also knew' Ut Hr
have known when Cryder resigned aid Blaut look hi'
lacc that CryGer had not paid the balance OF Dis o'
49, collateral to which the old stock OF the D"hA "a'
! ,tu thor. lie owed about $4,000 o It, When BlalS
| ,....nt.d n note of a named Thompson, VINO was
worthless and a clerk in the Office OF one oil 0ne
| for this $1,000. they must have uhuer-'ooo '''' ~
vas TO get control the Cryder stock without paying
/ for It. l., u,,,
Tho directors also cupably negligent IN ano"'
Ilaut who was IN b. financially fr.sponso'e' "
/ $50 5000 Collateral anu W sh''' '"'
brother who has since failed with no sups'a".'A' Csc
. ,ru 40 600 without any security This Is only eN'
nainabe OH the theory that those oil the oreo'or' ~
! took active part in the Management were .he"'ecN
pndent on the bank for avors, and that ue o'"e "'
loaned their name, Institution were paying ITO az
,,n ~ it, Affairs, IL il dinicult which OF the
two onence, is the greater. The directors "e' ' ~
culpably negligent in allowing Blaut 70 u'io"a o
hank 100 600 OF these Prescott and Arizona oohos 'oi
.s7 500 which he bought previously Tor S'oooV anu
| linI
many fact. OF this kind which would appear 10 more 'a'
sustain the allegations fraudulent inso ency anu eu'p'e
neglect the part oil the board
Speaking the claim Of Mr. McDonaWd Wr 'na, dn,er e
nver exhibited the following letter shoWihs ,ar t.
Mcdonald. with Uhlmann had charge Q. me me latter
~ the hank in Blauts absence. This Is the 'e''ei
Never 4 seln,an 80 Nss>au-ss.. August 1898
NV dear MIR Thompson: | hai ntorsiow with my
hrother.in.law Mr. Fred Uhln'ann and Mr. Mcdonald
They both advise stay in Long Brahch ui iou"'
to get ;:le relief from the strain OF the a'' ~esA .,
two 1 gladly accept their advice. They promiseo INC
70 ook ont for the bank Please at under their ad'ce
and guidance and do all they ask you u DO Inc, oO"
hay, good judgment. They know the SITUATION nope
they will lead out OF the pre'cnt dir~ness 7" n."'
| " ,,.o,olv JOSEPH +. BLAUT.
rA,. ,o,,or ,,os nrobobv written while Blaut was
at Long Branch the week preceding the GO COLLAPSE, %
~ tho time Mcdonald wrote on the $oO:w notes
that they not negotiable MI o"'e'i"'
Continued
Tho ch,rgc AGAINST MIR. NJ, Donald Is not by any means
technical one. bought 100 shares of the bank stock
II ei5O share agsIcgatinc S3OocO elry IN 1871 anu
borrowed the money from the ianA to pay Tor le S'ocN
In, Board OF Directors supposed aud tn minutes s"o"c
,b,, no o, three notes OF $50 900 each secured by 2oo
Now orleans electric lcht boid,. These notes were
lndorscd by Fort Wayns El'ctsc Light 'on'"s' o "
which he va, the Treasurer werc neSo'iaoe anu !"
,, ou, WAS negotiated the failure "hch
the bank failed 1t was iouid' however w
tlrnon,ld had made secret sslce"r" ,, ".
u IN the officers Of the bank by which the p"us oo ~
le sold unless they realized 50 cents OH a doar' p
,.ion viii n had the effect Of making the loan pcpeu
1bt agreement was not the directors. ~ wa
hut A few day, before the bank failed e"u ai'e' n
had lo.n sent away Long Branch ana McDoha'h an"
rhlnann ooh charge OF the BANK 'ha' N'D ~ ~
,ruc.l he cashier t. take out the two remaining po'
orv ootc OF $50 600 ndor, by the Fort wayne
tl,rtrir Light Company AID write upon theh 'ln' my
,,,. not NEGOTIABLE. This done under Mepohuiu
in tructlons thus the entire character :" ne scV"
was god. -, ~
The directors would have dared to lend him any
money on nOncgotiable notes and the eharge aH'S' %
,h,,or (. that having got the money, and HAVING ne"
+, over two years, he took advantage OF MS po'o" ~
the bank on the Of the failure {" chansr '''es ~
character Of the security In the sbence OF thae cnas'
,hc dire, tor, might possibly raised money OH u'
,s far ,ucht that appears. with which 10 carry on the
hank I cannot conceive that such an offence can D'
,acd technical. lie knew that without this iliorS'"o
rho uot., were negotiable and that ina-much as th'
director, ignorant d the secret "ecco"'' '' ""
therefor. never ratlhcd IT,
FITZGERALD \ HEAVY STOCkHol'Dr'H'
Mr. Fitzgerald. the former State Treasurer Is
heavy stockholder OF the bank. He came TO New
York on Monday with his partner. Hugh Duny
who IL now the Democratic candidate for state
Treasurer. to succeed Elliot Danforth Mr.. fitz
gerald is not one of those arrested because ne re-
tired from the banks directory long ehougn az AZ.
to escape immediate responsibility in connection
with the management which wrecked H. NJ
Fitzgerald formerly an active memper OF tht
,,oar of Directors but he retired after Blaui
was elected president OF the institution
or the other stockholders, number OF trem art
not,,,nert pemocrotic politicians. Governor
Flower is among them. and 1t Is said that franR
Rice Elliot Danforth and some other weli-knowi
state officials own stock. These statements couio
not to be verified last night ,
Frederic Uhlmann. who is one OF the directors
under arrest is indignant at the proceedings whcf
have been taken Mr.. Uhlmann Is well known
hisiness man he has a large fortune, Is AT the head
of the East River Bridge Company, and Is IA iarg
owner OF BROOKLYN Elevated Railroad stock lie Is
- brother-in-law of President Blaut. and It Is nc
| 1nllLt that MhateYer cOnncCtOn ne mds nst.