The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-05-02
A SAG HARBOR BANK CLOSES.
CASHIER PALMER BORROWS ITS
MONEY AND SPECULATES.

Owes $40 900 and Turns Into II Property
Real and Personal valued by Him at
S33 SOO-DirectOrs Raise q Fund OF
$40 900 and Hope TO Reopen Thursday.
SAG HABBoR, L. l., May The Peconic
Bank State chartered institution, closed
it's doors this morning after Francis II.
Palmer, its cashier, bad confessed to the
directors that he had taken $4,000 of the
banks funds and lost the money in Wall
Street. The directors Immediately sent for
Examiner Hutchins Of the State Banking
Department, who arrived this morning
and is at work on the books.
The bank has a capital Of $500 and a
surplus Of $4,000. There Is some doubt az
TO whether it can resume, although the
hank officials profess 70 believe that it can.
They base their hopes on the fact that the
cashier has turned over to them security
upon which no places a value Of sc. 900,
and to this the officials have pledged them
selves to add $4,000 in the belief that il
will make up the shortage. Whether or OF
it can resume will not be determined until
the examiner has finished his work.
Cashier Palmer founded the bank and
practically ran it. He has lived in Sag
Harbor for eighteen years and is one Of the
big men Of the town. He is also connected
with the Peconic Savings Bank, which is in
no way involved in the Peconio banks
trouble the glass works and the local
electric lighting company. de is a Mason
and a prominent member Of the Presby-
terrain church.
According to the president Of the bank,
John W. Hidreth, a local grocer, Palmer
confessed 70 what he had been doing on
Saturday. after he had made trip to New
York and consulted with friends there.
They say that he has been specializing in
stocks for years and at times borrowed
inom the bank, but always on good security.
According 70 one report, he at one time
owed the bank as high as $4,000. Under
the law a State bank is forbidden to lend
more than 10 per cent. Of It's capital and
surplus. Palmer learned on Saturday, It is
said, that he had been wiped out in the
mar set and II was then that he called the
directors together. The property which
he turned over to them, It Is learned, oon-
sisted Of a mortgage on a piece OF property
here, some stock In local corporations and
a lie insurance policy. In a statement
which he had prepared he had the real estate
valued at $4,000 and the personal property
turned over 70 the bank at So 800, still leav-
ing a shortage OF SO, 100, which he said he
was unable 70 make up. Il was then that
the directors, pledged themselves TO. raise
$40. 900, Of which 50, 100 was to be imme-
diatey available, in the belief that the bank
would be able 10 resume at once.
Although the UanK officers are inclined
TO believe that Palmer put very low est
mate on the stun he has turned owe! 70
them, il is known that the feeling Of the
banking officials is contrary TO this, and
that $40 900 Is the figure they believe II
will realize, in which case the bank will
have 20 stand a loss Of $4,000, Unless the
deficiency is made good it will have to re-
main closed. The stock and real estate
Is capable OF different valuations.
II was not until after banking hours to-
day that II became. generally known that
the bank had closed Very little business
is done on Monday. and the few who
called were taken into President Hildreth's
private Office and the matter explained TO
them. There was nothing like a run on
the bank. small crowd gathered out Of
curiosity in the afternoon.
President Hildreth announced this after
noon that every depositor would be raid in
full, that the bank was sound, and that Il
was hoped Il wo I'D begin business again on
Thursday. The bank, he said had de-
posts Of 100000.
I'VE expect 20 be able 10 stand any run
that may come" he said. "Our loans are
all good and well secured. Mr.. Palmer
did not write up his books on Saturday,
but did so this morning The estimates
on his property are low, and II there Is no
forced sale Of real estate there will be a
up, we think"
The officers Of the bank. besides Mr. Hill
dreth, are Henry F. Cook vice-president,
and j j. Harrison, Olin NJ. Edwards, William
+. Dennison and Cleveland F. Stillwell,
directors.