The evening world., 1893-09-27
PRESTON'S ANSWER
Saws the Commercial Bank Was
All Right Up to Aug. IL.
The Brooklyn Institution Properly
Examined Once a Year.
Valuation Of the Bank Property
Almost Doubled In 1891.

ALBANY. Sept. 27.-Thc following is
the answer of Supt. Preston. OF the
State Banking Department, to the
charges filed with Gov. Flower by the
depositors Of the Commercial Bank, Of
Brooklyn, y. v:
To His Excelicncy. lion. Roswell r Flower. Gov
crnor Of the state Of New York:
State OF New York
city and County OF Albsny.-ss,
Charles u. Preston. being duly sworn, deposcs
and sayn;
That no is superintendent Of Banks OF the state
n Sew York. and has been siucc Dec. IS, 1859, aud
that, as such Superintendent, has caused the Com
mercisl Bank. OF Brooklyn, to be examined at
least as often as once in each wear, and has re-
auirei from tsid bank four reports a year. one in
each three months, which reports SGT forth the
condition Of the bank in detail, and arc verified
by the President and Cashier Of the bank, that at
no time prior to Aug. IL. 1892. has the CONNER
cial Bank. OF BROOKLYN. been unable to pay all OF
It's debts and liabilities. as shown By the various
examinations and reports made 10 this Depart
inent: that the first examination Of said bank after
he became Superintendent OF hanks, made on
June 30, 1890. showed the bank to have a clear
surplus OF $50. ssl. I, over and above al its liabiii.
ties. including it's capital stock.
A SPECIAL EXAMINATlON.
The next examination was a special one. made
Dcc. f. lSto. at the time OF tho panic ot that
wear, and lisrIoaed the fact that after disallow
ing the entire amount Of past due paper.
amounting to $sA,t5j.lt. 10y tho examiner. the
bank showed Al impairment Of its capital to the
amount OF $40 81. AZ soon AZ the report OF
the examination VAS received by depononi. and
on tn, sh day Of december, 1870, he addressed
an order to the crnccrs OF the Commercial Bank,
of Brooklyn, requiring that this impairment be
made good at once.
The Banking law. section II Of chs rter i"9 Of
the laws OF 1882 which was the law in force
at that time. provided that:
Wherever II shall appear from any report Of
any banking association or individual banker, or
the Superintendent shall have reason to believe
that the capital Of such bank is reduced by i'm
pairmont or otherwise below the amount re-
quired by Law or by It's certificate or articles oi
association. It shall be the da'y OF the %Suprrin.
banking association or Individual banker 10 make
good the denciencyso appearing. and to give effect
examine or cause TO he examined any such hank
to ascertain the amount OF such impairment or
reduction Of capital, and whether the de,
his regulation, and II any such banking associa
ton or individual banker shall neglect for sixty
days after such requisition has been made &c
make good the deficiency so appearing or found
to exist, II shall be the duty Of the Superinten'
dent to refer the same to the Attorney-General
whose duty It shall then become to institute such
proceedings against such banking association or
individual banker as are now authorized In the
case OF insolvent corporations.
AN IMPAIRMENT MADE GOOD.
1t was 10 pursuance OF the above quoted law
that he addressed The communication above re
terrcd to 10 this bank. within :hree days from
the timc OF making this rcquisition there wal
oaJd int tho hank Ia fagn f3i ga SO and with
in sixty days after making the requisition there
was paid n the additional sum OF $40. $50. SO
making = total of $42. o45. Il. all Of which wal
realized within sixty days from the past du'
paper. which had been dissllowed In the exam
nation as worthless.
While these payments were being made th'
bank waS under an almost continuous examina
tion, the Examiner going there rs often as one
or twice a week until the Department was abun
dainty satisfied that the impairment had beer
made good and that tho Sanx was in the posses
sion Of q substantial surplus Of not less thai
SIS, 900 over all its obligations, including capita
stock.
The next regular examination was made oil
Sept. 10, 1891. In this examination 1t was est
mated that. sss, oll.St OF II. paper of the banl
was una available and worthless. and that amour
was deducted from tho bills or notes discounted
NlA'l buhihb -" ANseS''' 49, ~''''S ="
banking house and lot, which was estimated
worth 500, 900, at 81, 900, 1t appeared that tn
bank had an impairment OF ISL, lis
Upon receipt OF tho report Of the Examiner
showing this conditi IN, depo1ent Immediately pro
cocded 10 visit personally the Commercial Bank
OF brooklyn. for the purpose OF requiring tina
this sum be made good, or take possession O
the bank. as might he considered necessary.
He personally examined each promissory not
which had been disallowed by the Examiner, an
learned from what were regarded as reiiabl
sources that the real estate which the Examine
had allowed at 81. 900 was worth 500, 900. an
that the bank had received at least three offer
OF 800, 90 for the property.
VALUATION OF PROPERTY IN
CREASED.
In rcvsluing tho assets at that time he con
sen,ei that the valuation Of the banking hous
and lot should he increased from 4 1000 to 81, 0Ot
peponcnt says that he has conferred with
good many men In BROOKLYN who are familia
with the value OF real estate, including member
OF this Committee Of Depositors OF the bank, an
has never heard anybody put a value upon tn
property OF less than s75. 900.
Within three days from the date OF the eIami
nation OF Sept, 10, there Was paid into the baa
in cash SIS. 7i3, IS, all OF which had been pal
TO take UP paper WhlCh EEu OCen ulfallONcl D
the Examiner as doubtful and worthless, an
within sixty days from the date OF the eSam!natio
there had been paid In SEA, oas. So from the sam
source, 20 that instead OF the bank being i'm
paired II had it's capital intact and a surplus {
not les than u, sra within three DAYS from IN
date Of the examination OF Sept. Ii. and With
sixty days q surplus Of over 3I3, 800 over all Il
obligations, including its capital stock.
During all this time, the bank WAS under n
continuous watch Of The Department. up to an
until II was cOnvlusively demonstrated that
Was more than solvent.
The next regular examination OF the ban
was made oct 4 1889. This examination shoW,
the bank to have aN valuable assets sufficient To pa
a surplus OF 81 Gss 80, and this result W.
raac he'd after throwing out as doubtful an
WORTHLESS q heral shIount n paper which ha
IN the mean time been asccriained TO be unco
lertihlc.
All paper which was believed TO he unayaiisbI
waH counted out OF the ss1rtS, and it vas co!
,ider-d that the result OF the examination di
closed beyond question that ,hr assets which HI
been allowed as good were Rbundartiy good, .
great rarc had bean exercised in separating u
good notes from uncollectIbls ones.
ArcompBI! Ing this affidavit Will be found n
examinations above referred 10 In order that 80
may personally examine the same and all the d
tails thereof In verihcatlon of the statenen
above made.