The sun. [volume] (New York [N.Y.]) 1833-1916, 1893-10-24
BANK DIRECTORS ARRESTED.
PERJURY, FORGERY, AND FRAUDULENT
BANKRUPTCY THE CHARGES.

Custody Mt His ITome-E. x. Stokes Gives
Bail for Director ACKNOWLEDGMENT tor.
KaiIscher and Uhimnnn Also Ready with
Baii-Ex-Cashier Thompson Locked Up
There Arc Complaints Also Against Dl-
rectors souinrd, Gutenberg. and seIover.
Four officers and directors Of tho Madison
Square Bank. which failed last summer were
arrested last night. one came himself and
offered bail. and the police were looking for
three others. Two OF those arrested. Presi-
dent Joseph +. Blaut and Director Ronald 4.
NJ. Mcdonald. are accused Of felonies perjury,
and forgery respectively. and the rest OF
fraudulent bankruptcy. which is INSIDE
meanor.
President Blauts alleged perjury was COM
mitted in swearing to statement in June last
that the directors OF the bank owed it only
100000. when they actually owed It $275.0OO
and that the bank had an actual undivided
surplus. McDonnld's alleged forgery has to
do with note for $40. S9a73 that he gave to
tho bank on June last as Treasurer OF the
Fort Wayne Electric Company. and which
he. as alleged. feloniously endorsed mot
negotiable only in accordance with con-
tract under which notes were made" Tho en-
dorsement had reference to private contract
made. as alleged, with Blaut that the stock of
the electric company. pledged as collateral for
tho note in question and other similar notes.
should not DO disposed OF until tho stock stood
ut an absurdly high figure in the open market.
Altering a note on which money has already
been raised is forgery in tho second degree.
punishable by ten years imprisonment
Lawyer Samuel Untermyer precpitated tho
landslide upon tho officers of tho bank. He
Is counsel for Receivers Miles O'Brien and
Joseph W. Cannon, Jr. He called yesterday
upon District Attorney Nco. and was
referred by Mr.. Nicol to Assistant Dis
trict Attorney Lindsay. He submitted
his proofs to the effect that certain
officers and directors Of the bank were charge
able with obtaining between 100000 and
100000 by means Of forged notes. Mr. Lind
say said that in his opinion the proof made
out a case OF forgery In the second degree as
to two of tho officers. and OF criminal neglect
OF duty as to certain. II not all. of the direo-
tors Mr.. Lindsay will submit the proof to the
Grand Jury tomorrow.
Mr.. Untermyer. 1t Is understood told Mr..
Lindsay that it would be well to act even in
advance OF the Grand Jury. for he had beard
that at least one OF the principal officers of
termeyr was understood to refer to President
Blaut
ton and belief. and went to Judge Marines
chambers. He obtained bench warrants and
About O'clock, Frederick rhlmnnn. Presi-
direct 10 or OF the bank. whp rssigned Shortly be.
fore the crash. came in with Lawyer Edgar NJ.
Johnson; and asked Nh Nieoll what balwoqld
him Mr. Nicoli replied that he supposed ' Hi
that $1,000 would be about the figure it is
SAT- oeosR Edwsad Az steFes came in to
give ball for Director Mcdonald. who had been
Donald is Big and fat. and he smok ed a thick
Jastie s' GRADY as his counsel. IsDonaia
was not at all impressed BY his surroundings.
and ae raSy Ia 70 %
to take OF his hat and throw away his cigar.
Tho affidavit o! District Attorney Ncoll was
Of tho city OF New York. lie ing a director OF the
Madison Square Bank. and having in his GUS
hs bs ssag "a the w1b anf tt S %
satsS June r. i$ 49, % W4, Sy ,h%If;s
pany. to the order OF the company. and paya.
BILE at the Madison Square Bank. and endorsed
fel oniously falsiiy and corruptly and unlaw-
fully alter the said paper BY writing above the
endorsements. Not ncgotlauie only IN accord
ance with tho contract under which notes
=. Mr., stokes then gave bail for Mcdonald in
estate Mt Far Rockaway and bonds OF the HoG-
man House
oath to his declaration he leaned on the table
without removing his cigar and held up his
right hand yndgs MsrtnSs iaGS GreT stern
Mr.. Stokes drew himself to his full height
and began aga In.
Take tho cigar out OF your mouth COM
manded the Judge. sharply.
Mr.. Stokes's face grew rcd as he obeyed the
81 commend the prisoner to your custody.
Have him in Part l.. General Sessions. at i L
o'clock to- orrow morning" was judge Mar
An elderly man, who said that he was DR.. W.
IL; Iutts, was meanwhile endeayorinE to pre-
locked up at Police Headquarters. But Judge
Marine said that there was no one present to
Atl1:l5 Detective Sergeant Slauson brought
MARITIME told Kalischer that he was charged
with fra1dulent h6anpkrgptcy, and that his tpil
Tei at STq Max s R9Hn%Ser gave tho
Mir. Gnternyor said that complaints for
frandnle9t, insolvency had also been brought
Sou lard. and G. L. Selover. and that they were
under surveillance.
PresideSs BsIt Tas arrested at his house
o'clock and the detective allowed him 70 stop
on his way down town at the Hoffman House.
ing on, He merely said few words to Mr.
Edward Lauterbach. his counsel. and then
went with the detective to Headquarters.
BY an arrangement made there he was al
lowed to return to his homo for the night in
the custody Of the officer.
Mr. McDonald was arrested in his room at
the Hoffman House at O'Clock, Just as he
WAS going down to attend the stockholders
meeting. Mr.. Stokes went down town with
him.
Tho stockholders committee at their m eet-
ns %s e. sayn s Frcss h
mann. James Leary. I. 5. Leyey and Lawyer
lauterbach. When the meeting ad journed at
b o'clock Mr.. lauterbach said that the same
men would meet at his oillco Thursday after
noon and formu ate final report
Mr.. samuel untermeyer; attorney fer the
receivers. was seen at his house later in the
evening. and he made tho following statement:
- 1t was impossible from the utterly worth
ess character of many Of tho largest securi-
lies OF the bank eyerto put It on its feet Every
statement made by the officials to the Bank
Examiner for years past has been absolutely
false in ono or more material particulars 1t
has taken weeks to unearth the depth
)f rascal lily Involved In these transactions.
They now know that when in 1891 the bank |
capital was increased from S2OO. 900 to $780, |
300, ana the additional 100000 said to havo |
been paid in cash at S15Oa share the funds Of |
the bank were used to lend many of the sub |
th..t xyttl isI,t