New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-05-26
JEROME PROBES FAILURE.
THE CAUSE IN DISPUTE.
Merchants Trust Stockholders in
Protective Association.

District Attorney Jerome announced last evening
that he had ordered an investigation Of the col
1spse Of the Merchants Trust Company. He said
- had directed Mr.. Iselin one OF his deputy as
s.stsnts TO begin the inquiry Immediately. The OBJ
,sct o. the investigation. he said would be TO
..rrn.ne 81 a crime had been committed or not.
y hsve evidence in the case yet" Mr.. Jerome
ss6 The investigation is merely a precautionary
measure
there were few developments yesterday in the
@sirs Of the Merchants Trust Company, which
esrier in the week was placed IN the hands of
eo.,rers. Rumors OF civil suits were current but
:, could not be learned that the reports had any
-o,,usl basis A lawyer who is prominently identi-
6ed with the affairs of the trust company gave out
& statement of the Of the disaster. He said
The Merchants Trust Company was interested
10 the extent OF S, 10000 in the Hudson Valley
Raoa0 ms b T WAS 99Veed y tne s nt
these companies, am not certain which one, went
s 20 h SAID We have got to have your interest In
The Eudso1 valley line There is $4,000 down for
sidered the offer and decided not to accept IT, as
The railway company that was refused then sent
representatives through Wall Street, spreading
This caused the collapse of the trust company.
President Phillips. when asked about the fore
going statement, answered:
road company or from a syndicate which had un-
deraken 70 ooy out our interests IN order to sell
indefinite talk about it. but there has been no def:
100000 made a good many months ago.
A representative of the Phillips faction said yes
terday that. II such offer had been made. con-
sidering the circumstances Of the company, and
considering that the loan took up so per Of
the companys capital and had been carried for
three years and was quite unmarketable. il was
very unwise not to accept it He understood that
two directors had tried TO borrow money on these
securities. but had failed That he said. caused
the closing Of the bank.
Thomas L. Feitner. one of the directors said
yesterday morning: There was no attempt to
raise a loan for the company on the Street but
there was committee of directors commissioned
10 secure underwriting for that portion Of the
100000 additional capital which the stockholders
would not take up" Mr. Feitner on Wednesday
sent invitations TO about forty Of the 10 stockhod-
ers Of the company to attend a conference that
evening at the Hotel Savoy. with view to form
ing stockholders protective committee. Fourteen
men accepted the invitation. The situation was
discussed in detail, and it decided TO hold an
other conference Thursday evening Of next
week.
CONFERENCE OF DIRECTORS.
\ long conference was held yesterday afternoon
at the Office Of ". B. Ellison No. II Broadway
who IS counsel for the trust company At this con-
ference Duncan MacIntyre, who Is associated with
M Ellison, represented the old board OF directors
OF the company. and Samuel Untermyer appeared
for President Phillips Others present were DR..
John P. Mum and George c. Clarke Of the board
Of directors At the close of the conference it
was announced by Mt. Ellison that no statement
would be given out concerning its deliberations or
the conclusions reached
Mr.. Unter1nyer declined 10 make any statement
yesterday, further than say that he regarded the
criticism the action OF the Superintendent Of
Banks as most unjust and undeserved. The atti-
tuoe Of the Superintendent in this case seemed
70 him 10 have been wise and entitled TO the high
est commendation- II the Superintendent had
ciosed the institution the time his critics now
say he should have closed il, with 100000 in al
most worthless securities the depositors would
have received only 80 to - cents on the dollar.
The result of his course Mr.. Untermyer added
has indicated Superintendent Kilburn's judgment;
he forced responsible directors to take large guam
tides of worthless securities out Of the company
and 10 put the money in their place
STATEMENT FOR FRANK J. GOULD.
George Gordon Battle, of the law firm Of Battle &
Marshall. yesterday issued a statement concerning
the alleged responsibility Of Frank Jay Gould FOR
the trust company's troubles in part follows
3r. Could has never been directly or indirectly in
teresJed in the Hudson Valley Railway. have
any members OF his family had any direct or
Indirect interest in that concern. At the time the
Merchants Trust Company acquired the securities
neither Mr.. Gould any member of his family
Pr1er f-ompany nor was Mr. Gould at that time
director of the Merchants Trust Company. nor
win the purchase by the Merchants Trust Com
pauy Of these securities Mr.. Gould became in
any after the securities of that company had been
purchased by the Merchants Trust Company. He
was not then director OF the Merchants Trust
Company. He. together with his sister, Miss Helen
N Gould. purchased at the par value and accrued
interest Of such securities certain loans which the
trust company had made on these securities. 1t Is
clear that this transaction. so FAR from being in
furious 10 the trust company, was highly beneficial
70 It's interests