New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-12-16
NO CHECK ON VALENTINE
HE APPEARS TO HAVE HAD FULL OPPOH
TUNITY TO WRECK THE BANK.

TESTIMONY TAKEN BY THE RECEIVER OF THE
MIDDLEsEx COUNTY BANK SHOWS HOW
THE INSTITUTION WAS MANAGED.
Edward s. Campbell receiver for the wrecked
Middlesex County Bank. at Perth Amboy. took
testimony at Newark yesterday in the matter OF
the preferred claims of several creditors who
had deposited ir the bank after the directors
are alleged TO have known II was insolvent.
These include the Essex County National Bank,
so, $50: Newark National Banking Company.
5.264; Lehigh Valley Railroad Company.
S1.193: Raritan Hollow and Porous Brick Com
pany, S3629; j. NJ. Fox OF Passaic $lO2O;
Crosby & Hill, of Perth Amboy SLOT; George
c. Brown. sos and John Hsdorf $1,000 The
last named creditor said that on JUDY IL he
borrowed 81 400 from the savings institution
and the check for that amount was credited TO
him by President Watson. OF the Middlesex
County Bank. The following day the bank was
closed. John Littlejohn. OF Crosby Hill, made
deposits on July 10 II. ~ and i3, the last date
after bank hours. Joseph w Fox deposited on
July II check for $1,000 He was unable to
stop payment on the following day. when the
bank closed.
Deputy State Banking Commissioner Thomas
X. Johnson testified that he received letter on
July l3 from President Uriah b. watson, or
the bank, stating that the cashier had disap-
peared. and requesting an examination OF the
bank and Of the Perth Amboy Savings Bank.
to Mr.. Watson directing his attention to tho
large loans made TO directors on questionable
securities such as second mortgages and de-
preCiated stocks, and criticising the loans TO
the cashier which amounted at that time to
S122IJ Mr.. JohnGOn's comment in his letter
that 1t difficult to see what the money
needed for unless it for stock specula-
ton. He advised the directors to compel tho
cashier to pay his indebtedness 10 the bank
and adopt regulation 10 prevent such practices
in the future. In another letter to Mr. Watson
Mr. TOh n had sal haf no n
ing such large sums TO the cashier should not
be tolerated in any reputable bank
Urah B. Watson, president Of the bank, tes-
titled that the last meeting Of the directors be-
fore the bank closed held Friday, July Z.
Nothing then said about the banks diff
cultes Mr.. Watson was questioned about the
loans, and said they generally good. When
asked about a loan OF $4,000 TO Henry n. Yard,
he acknowledged that interest had not been
paid in three or four years. The loan was Sc
cured by some property at Ocean Beach. Tho
witness told of another loan on which no In
terest had been paid In six years. The sum
OF S11 300 was loaned TO Valentine, and the Sc.
curty placed In the safe TO which Nalen-
tine had access.
'Then what you did" President Watson was
asked. was to make loan and give the secur-'
ity into the hands of the borrower"
Yes, sir" said President Watson.
President Watson and the other directors de-
MED that they knew the bank was insolvent
when they were taking deposits just before the
bank closed its doors.
President Watson said in reply TO questions
that the cashier had charge of the check books;
that he, Mr.. Watson, never saw them, but
sometimes saw the stubs. He had not consid-
cred II necessary 10 compare the checks ana
stubs He had sometimes examined the secur-
tiles.
Thomas X. Johnson. Deputy State Banking
Commissioner was asked If he had inquired or
the directors or Mr.. Watson why they had made
no inquiries at the National Park Bank as 10
the bank balances there as soon as valentine
disappeared. He did not think he made SUCH
inquiry.
When asked when the bank was first tnsoi-
vent Mr. Johnson replied that he could answer
that question better II he had been allowed to
continue his examination of the bank but re-
ceyer was appointed, and he was compelled TO
stop. .,,
The last draft by Valentine on the Natlonal
Park Bank was on June 2S. When asked IL ne
now thought the MiddleseX County Bank was
insolvent at that time, Mr.. Johnson said: /
should think so; yes 49,
The witness said In reply 10 question tnat
there was nothing to make him believe that the
directors knew the bank was insolYent Derore
the doors were closed. They had, however the
same facilities to learn the actual condition OF
the bank as he had and If they had so desired
they could have found out.
Patrick COnvery. of the bank, said examina-
lions were made quarterly 10y the BOARD by re,-
erence TO the statement book This was mace
nm nv the cashier The cashier called on ngures
from his own private account ana one OF the
BOARD would check them off on the statement
book which the cashier had This was the quar-
tery examination. ,
The hearing was postponed to next WedneS