New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1901-07-10
BURNETT MAY PROSECUTE.
POSSIBLE CRIMINAL PROCEEDINGS IN
SEVENTH NATIONAL CASE.
UNITED STATES ATTORNEY SAYS THAT RE
ORGANIZATION WILL. NOT MAKE ANY
DIFFERENCE-KNOTTY PROB
LENS IN BANKS BOOKS.

enth National Bank given yesterday by
General Eenry L. Burnett the United States
Attorney for the Southern District Of New-York.
He said his attention had been called to discov-
cries in the books of the bank that required ex-
animation by an expert accountant, and he had
asked for permission to employ E. p. Moxey
accountant of the Treasury Department, in the
investigation Of the books. If It is found that
there has been generalization Of checks by off,
cials of the bank In violation Of the statutes.
General Burnett said. criminal proceedings will
be begun Immediately.
General Burnett had long conference yester-
day morning In his Office in the Federal Build
ing with Captain W. S. Ball, his assistant, who
was directed recently to consult with Forrest
Raynor, the bank examiner in charge of the in
vestigation of the Seventh National Banks af-
fairs. Assistant United States District Attorney
Houghton was called into the conference before
its close. After the conference over Cen
eral Burnett said to newspaper men:
Captain Ball has brought to my attention
some discoveries that made in the books
of the Seventh National Bank I do not to
say at present that anything of a criminal nat
ure has been discovered. but closer examina-
ton of the books is made necessary, and have
written to the Department of Justice in Wash
ington asking for permission to employ Mr..
Moxey in the investigation. Captain Ball will
continue to work with Mr.. Raynor until the in
vestigation has been completed. Nothing will
be done in the way of beginning criminal prose
cutions until the investigation is finished
General Burnett asked If he intended to
attend the meeting of the direcsors of the Sew
enth National Bank, which had been called for
10 a. m. yesterday, and he replied that he had no
thought of attending such meeting. He
told that the directors considering plans
for reorganizing the bank and paying the de-
positors In full, and was asked If such a reor-
ganization would prevent criminal proceedings
if irregularities were discovered.
NO HINDRANCE IN REORGANIZATION.
"A decision by the directors to reorganize the
bank" General Burnett replied. would have no
effect effort to ascertain If there has been
a violation of the United States statutes in the
past management of the bank II we find that
there was overcertihcation of checks by the
banks officers. contrary to the statutes.
all proceed against them whether rot they
have squared themselves with their creditors
do you mean 10 say" General Burnett
asked that IL 1t is discovered that there
overcertfcation Of checks by the officials of
the bank. contrary to the United States statutes.
You will proceed against the officials responsible
f,ll such overcertihcation?"
- do.;' was the reply and the only effect that
a reorganization OF the bank might nave would
be possibly 70 prevent some OF the depositors
from appearing as witnesses for the govern
ment"
When asked how soon any developments might
he expected in the case General Burnett said:
"AU can say is that you TO keep your
eyes open
Forrest Rayuor the National Bank Examiner
now in charge OF the Seventh NATIONAL Bank.
said yesterday to Tribune reporter that his
investigation OF the banks affairs was nearing
It's close but he could not state when his report
10 the Controller OF the Currency would be
ready The report. he said would be made pub
lie first in Washington Mr.. Raynor said he
could not speak Of any discoveries made in the
books Of the bank until he had sent in his report
The intention 10 employ Mr.. Moxey. the
countant sometimes called ''Moxey the Silent
was said by some bank officials in the city yes
tarday to Indicate that there were some diff
cult riddles TO be read in the books OF the Sew
enth National Bank. Mr.. Moxey has been In the
employ Of the Treasury Department for years,
and investigates intricate and important cases.
THINKS THERE ARE NO IRREGULARITIES
Frank Sullivan Smith. the assignee of the firm
~ Henrv Marquand & Co. said yesterday that
he did not know Of any irregularities in the Sew
enth National Bank II the understanding
at the time of the banks failure that overcertih-
cation Of Henry Marquand & Co.'S checks by the
bank was a cause of the failure The firm went
under on the day after the bank closed its doors.
Directors of the Seventh National Bank who
were seen yesterday declined to talk about the
reports that Irregularities had been discovered
and that criminal prosecutions would be begun
by General Burnett. William Nelson Cromwell
the special counsel for the bank in its present
trouble refused to discuss the subject. although
the directors referred newspaper men to him and
said he was the only person who would talk
about the banks affairs.
A meeting OF the banks directors was held in
Mr. CromweIrs law office, at No 10 Wau-st at
10 a. m. Among the directors who present
or were represented by proxies at the meeting
were r K Thomas, who became president of
the bank the day before the failure; William
H Kimball the former president; Perry S
Heath, Fletcher Heath, James +. Sullivan Alex
ander Mcdonald. General Orr and Guy G. Major
Great pains taken TO prevent newspaper
men from obtaining information of the proceed
ings the meeting until late in the afternoon
When the directors left MIR. Cromwels office
they would not talk. referring reporters 70 Mr.
Cromwell the only fount of information. One
director who departed earlier than the rest sa Id
the feeling at the meeting seemed TO be in favor
OF reorGanizing the bank. but decision had
been reached. "Of course" he said, such a plan
carries with IL the payment of all the creditors
in fun"
MR. CRoMWELL'S STATEMENT
After the meeting Mr. Cromwell would not
allow himself TO answer inquiries, but he die
tated the following statement declaring that it
was all that could be said about the meeting OF
the directors
MI MT Cromwell stated that the board of directors
havlng before them for the first time since the
status Of the BANK and thet the board thf had @s6
considerable progress in considering possible plans
1I IeorSanization, but that no conclusion had vet
been reached, and in the nature of the case could