The evening world., 1894-06-19
s3l6,000 IS INVOLVED.
Madison Square VS.. St Nicholas,
Both Defunct Banks
Hearing Continued in the Compli-
Gated Clearinghouse Case.

Thomas Ryan. expert accountant for
the receivers OF the Madison Square
Bank. was the first witness before Ref
cree William @. Choate to-day. in the
suit of the receivers OF the Madison
Square Bank against the st. Nicholas
Bank to recover $4,000. the amount of
checks passed through the Clearing
House and paid by the st. Nicholas
Bank as the Madison Square clearing
agents. The st. Nicholas was protected
by securities turned over by the Madi-
son Square.
The question between the two banks
Is purely Clearing House one. and Is
to decide which is liable for the amount
of the checks; The Madison square did
o, and the checks In question were
dated the day before. but were not
cleared until Aug. 0.
Mr.. Ryan testified that on Aug the
aggregate liabilities of the Madison
Square Bank were 81 l62 933, and the face
value of the assets, s.. 1858.
John Waterbury, President OF the
ned that the Chase and Continental
Banks were their clearing house agents.
The Manhattan Trust Company had q
State deposit credited to Court Fund" "
was introduced to Elliott s. Danforth.
then State Treasurer. at the Chase
Bank.
stated that Mr. Danforth wanted to
open another State account which the
Chase National had refused to accept.
and he wished to know II The Manhat- ,,,t
and fifteen minutes minute later N DanfSpth Sa,i
clearing of checks received. by mail;
before 10 A. NJ. were cleared that day;
Mr.. Danforth said that he would mall
check from Albany for $3.50, 900 to $780,
bury. would be there to countersisn the
check. He was informed that he could
make the check payable to either of
their clearinghouse asents-the Chase
or Continental National Banks. No
mention was made of the Madison
Square Bank.
on cross examination the witness said
there was nothing unusual in the trans
action.
Frederick d. Tappen, President of the
called. ~ said the Gallatin was a
member the Clearing III MoGfs ,so,;ss;on AssU
of the standing of the Madison Square
Bank In the Committee meeting of the
Clearing House. They had heard
rumors affecting the standing ,d OF the the
come far more pronounced just prior
to August, 1893.
on the mprning OF Aug. 8, 1893, Presi-
dent Gmves, OF the St. Nicholas Bank,
had called at the committee rooms and
stated that he was in doubt whether the
ST. Nicholas would continue as Clearing
House agents for the Madison Square.
There was so muh talk that he was
becoming frightened. He was advised
TO go at once to the Madison Square
Bank and obtain additional securities
for the clearings of that and the follow
ing day He said he would do so. but
did not. That afternoon the Clearing
House Committee visited the Madison
Square Bank and made an examination
of Its securities.
The Committe requests additional Sc
curities for the St. Nicholas. which were
turned over to them. The question came
up during their visit. as to whether n
few heavy checks might not come in
the following day. The outcome OF the
visit was that the Committee decided
the credit OF the bank was impaired. and
II should close.
On cross-examination Mr.. Tappen
said the st. Nicholas Bank had de-
rived no benefit whatever from the ad-
dltional securities obtained by the Com.
mittee from the Madison Square. These
securities were subsequently returned
to the receivers of the bank.
Expert Accountant Ryan. recalled, tes-
| titled that II r. balance sheet had been
struck off from the books of the Madison
Square Bank Aug. 3. the figures had
! they been correct, would have shown an
excess OF assets of S69900O over liabli-
ties. exclusive of capital stock and sur
plus.