The evening world., 1894-06-19
s316,0O0 IS INVOLVED.
Madison Square VS.. st. Nicholas,
Both Defunct Banks.
Hearing Continued in the Compli-
Gated Clearing House Case.

Thomas Ryan, expert accountant for
the receivers Of the Madison Square
Bank. was the first witness before Ref
cree William G. 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
son Square.
The question between the two banks
is purely ClearingHo one, and Is
to decide which is liable for the amount
Of the checks. The Madison Square did
not open it's doors the morning of Aug.
g. and the checks in question were
dated the day before. but were not
Mr. Ryan testified that on Aug; the
aggregate liabilities of the Madison
Square Bank We're 81, ,462, ,933. and the face
John Waterbury. President of the
Manhattan Trust Company, then tesu;.
fed that the Chase and Continental
Banks were their clearinghouse agents.
The Manhattan Trust Company had q
State deposit credited to Court Fund"
but no general fund. on Aug. 8, he
was introduced to Elliott S. Danforth.
then State Treasurer. at the Chase
Bank.
President Cannon introduced him and
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-
tan would accept 1t. He said II would.
and fifteen minutes later Mr. Danforth
clearing of checks received by mail:
He was informed that checks received
before 10 4. N. were cleared that day;
! Mr. Danforth said that he would mail
! OO0 and wished to know II Mr.. Water.
bury, would be there to countersign the
check. He was informed that he could
their clearing house agents-the Chase
or Continental National Banks. Nc
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 tn,
called. He said the Gailatin was &
member OF the Clearing House Asso
citation. He remembered the discussion
OF the standing of the Madison Square
Bank in the Committee meeting OF thu
rumors affecting the standing OF tn,
bank for several years, which had be
come far more more pronounced just prio
dent Graves, OF the St. Nicholas Bank
had called at the committee rooms anC
stated that he was in doubt whether th
ST. Nicholas would continue as Clearing
House agents for the Madison square
There was so muh talk that he wa
becoming frightened. He was advised
10 go at once to the Madison Squar
Bank and obtain additional securitie
for the clearinSs OF that and the follow
ing day. lie said he would do so, bu
did not, That afternoon, the Clearing
House Committee visited the Madison
Square Bank and made an examination
of its securities.
The Committe requests additional se
curitie3 for the st. Nicholas. which wer
turned over 10 them. The question cam
W during their visit. as to whether
Few heavy checks might n5t come Il
: the following day. The outcome OF tn
: visit was that the Committee decide
the credit OF the bank was impaired. an
J It should close.
on ton Mr.. Tape
said the st. Nicholas Bank had dc
rived no bcneft whatever from the ad
ditional securities obtained by the Con
mittee from the Madison Square. Thes
: securities were subsequently returne
to the receivers OF the bank.
Expert Accountant Ryan, recalled, te:
tilted that IL n balance sheet had bee
. struck off from the books OF the Madiso
Square Bank Aug. 8. the figures, ha
they been correct. would have shown a
; excess OF assets OF $G99 900 over liabil
ties. exclusive OF capital stock and SUI
: plus.