New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-08-10
DANFORTH'S PRIVATE LOAN.
4 APECULIAR STATE TREASURER.
HE GETS $4,000 FROM TIE MADISON
SQUARE BANK WITHOUT SECURITY.
| IN THE SAME BANK WAS DEPOSITED s25ooo0 OF
THE STATES MONEY-CoMMENTS OF BANK.
ERS on THIS PROCEEDING.

The discovery yesterday of the State
Trcasurer's unsecured personal indcb:el-
ness of $4,000 to the Madison Square
Bank gave rise to much comment among
downtown bankers which of such nature
that Mr.. Danforths ears must have tingled, even
in far-ol Albany That the custodian Of the
States funds should allow himself to borrow
money on his personal account from bank which
he had favored by large deposits oil puDllc money
an Indictment so severe thtt most bankers
refused at first to believe it, The proof was in
dubitabe, however, and bad to he accepted
1t WIS then recalled that Mr.. Danforti h'd State
money in the Canal Street Bank when II failed
few weeks ago, and the questions naturally arose
"On what principle can this official act in making
selection of the institutions to which public iund
are intrusted 80 Where is the rest OF the States
y?" NO banker could be found who would
try to answer them further than with s'rng oi
the shoulders and suggestion that they wouid
bc good questions to put TO ME- Danlor'h dh"
some other of the State officers
Many interesting and curious facts concerning
the sudden closing of the Madison Square Bank
came 10 the light yesterday a. the state lahN FIX
amincr and others looked closely into tn" banks
affairs Not the least curious Of these dScov'r."-'
and certainly something which is as interesting as
any marrow escape" story that has been chron-
cled lately is the rescue of S?j0.00o of tie states
funds which were on deposit in the Madison Square
Bank last Tuesday and which but for its inme-
datc withdrawal would have gone toward lessen
ing the Madison Square Banks indebtedness 10 the
ST. Nicholas Bank.
In the books Of the Madison Square Bank when
they closed Tor the day on Tuesday afternoon WAS
an entry oc $2jo,000 1t was money belonging 10
the Slate OF Ncw-lork which had been deposited
by State Treasurer Danforth. An hour after the
bank closed, and when the Clearing House COM
n ittce was making It's investigation of the banks
affairs Mr. Danforth in the Fifth Avenue
Hotel. While there he learned through some prl-
vnte source that the St. Nicholas Bank had refused
10 clear longer for the Madison square. 10 him
that meant an unsound state of affairs IN the BANK
that had loaned him personally $4,000 and had
asked no security. incidentally it meant also
that the $3.50, 900 States money deposited in the
hank was in danger.
/, is not likely, Of course, that Mr.. Dantorth
was slow in doing what he could 10 save the
State funds-cvcn though il should be a seeming
iurrati,ndc for fnvors accorded Mr. Danforth by
the bank in which the Stat" money was deposited
That he even hceitatcd to think is improbable but
the connection between I'll" S2j0,000 stat" money
deposited and the $4,000 private money drawn
out without security must have suggested II
self to him If not to him then it surely will
now 70 those who hear OF il.
Whether Mr. Danforth went Immediately to
Albany himself or whether he telcgraphed to tho
Tteasmscr's oncc is ninatcrial Sufficient II is
~ Knog thai No secured an official check on the
Madison Square Bank for the amount OF th"
states deposit therein, and at | 0 o'clock Yesterday
had passed il through the Clearing House ~
ano,her bank After that. of course, it was
duly honor,d BY the -. Nicholas Bank. Ani IN"
state was saved.
So much for the story Of the "scap" ol th'
>,o,e's funds OF the $4,000 loan which Mr
nanfortb holds without security we'll that Is a
little private matter which some personal friends
Of Mr. Danforth believe lie will be able to ra>'
before long. After having withdrawn the Sta'"
funds he surely will not feel like keeping the
banks kind loan Of Sj0,0o0; al least not without
Offering some good security.
Tb. present instance of official incompctcnry-
or something worsc-is particularly aggravated pN
thc fact that the State Bank Examiner, Mr fr'N-
,on. made thorough examination into III" aifaIr'
of fine Madison S1uarc Bank on July - and found
,hat tbc capal stock was then npalr"i 10
thc extent Of nearly $4,000. 1t was mar"
for ,ractical bankers 10 conceive OF healthy
condi,ion of arlIrs in which one STAT" officer
could make a report showing the insolvency OF
hank in which State money was held, ana another
Stote officer allow that money 10 remain ln'r"
until after the very honf oi 'ne r"''tPS'. i"'n
comments were in keeping with I'll" lniefrnc" -
nlainIv 10 he drawn and would not maxi" pleasant
reading for Mr. Danforth or the STATE "oNe'n-
ment generally.