St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-12-22
BANK FORCED TO CLOSE.
RATHER SUMMARY PROCEEDINGS By
A BANK EXAMINER.
ST. NICHOLAS, NEW YORK.

ConnecCion with the DetunCt
Madison Square Bank the III
rect Cause-No Charge of Dis
honesty, but General Misman-
agementand Poor Investments
Help to Wind up Affairs.
NEW YORK, Dec. 2l.-There was
much excitement in Wall street today
when it became known that the state
Superintendent of banking had sum-
marily closed the st. Nicholas bank.
This proceeding not only caused great
Inconvenience to.the many brokers who
were depositors, but affected the entire
financial world, for it gave the bears
much desired inning, which they
worked vigorously. News could not be
obtained until after the close of the
days business. Then the bank exam
iner gave audience to an Associated
Press reporter, and, while not throwing
much light on the position of the bank,
let in a searchlight on his reasons for
taking the step he did. Mr.. Judson, the
assistant superintendent, who has for
the past ten days been examining the
of the bank, were present. Mr.. Pres
ton said:
1.-The situation is just as you see. As
result of the investigation | have com
municated with the attorney general,
and expect he will be here tomorrow. l
think the bank will be closed. There
is an impairment of the capital, and l
shall advise the appointment of re-
celver. Opinions differ on the question
CT how much the capital has been i'm
paired. 1t is not unusual to give bank
notice of suspension, but in this case
NO NOTICE WAS GIVEN.
"My examination was not concluded
until yesterday. because the examiner
has been engaged in trying to ascertain
the value of certain assets of the bank.
l met the clearing house committee yes
terday, and, after having consulted
with it, decided on taking the course OF
action l have adopted. l do not consid-
er the bank is in fit position to 90 on
transacting business"
Then the Madison bank business had
| nothing to do with the suspensions"
"Well," said Mr. Preston. II won't
say that. The paper may be good for
| its face value, or 1t may not. 1t is an
exceedingly hard thing to tell how it
will turn out"
1.-The state treasurer had deposit
some time ago of $50, 000?"
Yes. He is credited at present for
$4,000, of which he has been the de-
poSitor. He has money in a great
many banks of New York"
MI. Graves, president of the bank,
| said: ''Air. Preston does not think we
| can 90 on with the surplus at our dis
posal, which amounts to about 100000.
Now that our credit has been seriously
| damaged, it will be impossible for us to
on. A receiver will be appointed. This
| has been an outrageous proceeding.
| Why, the extent to which our capital is
| said to be impaired is calculated by
| placing valuable stocks and securities
of ours at low figure. Why, as spec
! men of the way we were treated. a
check for $4,000 was received here to-
! day, but the examiner would not treat
| it as an asset, though from perfectly
solvent and rich concern. l have
NOTHING MORE TO SAY.
! on the matter" Persons conyersant
| with the banks condition say there has
| been absolutely nothing like dishonesty
| in the management OF the bank, though
there has been bad judgment shown in
| the conduct of its business. Its losses
extend over long period. Bankers
| consider it a case of dry rot" The
last quarterly report made, Nov. 2S, was
| received at the banking department,
| chaNS
consisting of loans and discounts, less
! amounts due from directors, S1,595,
| 5O1.O9; liability of directors as per
| schedule, $50, 464.19; due from trust
companies, state and national banks,
1899, 565.S1; real estate, S21, 1853;
| bonds and mortgages, S9,S4S. Id;
| stocks and bonds. s201, 596 %;
| specie, S142, AS. Is. United States legal
| teuder notes and circulating notes of
! national banks, S5l4,207; cash items
(bills, checks, etc., SS25, 203.5S; current
| Liabilities-Capital stock paid in in
cash, S500,000; undivided profits, S42,
963O2; due depositors, 81. 5S2. 590.S5; due
trust companies, state and national
| banks, 1859, 1921; due treasurer of state
| of New York, $4,000; other amounts
| due for unpaid dividends, state taxes,
etc., 3,294.73. Total, 50, T53, 1886. 81. The
officers of the bank display great indig-
nation at what they call the summary
proceedings Of the state banking de-
partment. and are also bitter against
the clearing house committee. George
P. Sheldon, one of the directors, said:
sit all arises from our COMPREHENSIVE
the failure of the Madison Square bank.
1t owed the St. Nicholas $3.50, 1000 on Sc
cured collateral amounting to S350,000.
which partially secured us. Our coun-
sci decided we are entitled also to the
dividend of % per cent declared by the
receivers upon the entire amount of
S4SO.OO0. This they recognized on the
| advice of their attorneys, and would
have been paid in few days. That
will about make up the difference be-
tween the collateral and the original in
debtedness. We will lose nothing
through the Madison Square bank, and
neither depositors or stockholders will
lose one penny by the closing of our
bank. | do not regard it as failure.
but more in the light of a liquidation"