The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-01-11
CALLED 1T OVERCEUTIFYING.
LAUNDRY TERN FOR CITY Ma
TIONAL BANKS LOANS.
That's How Munroe Described IL. Accord
Ing 10 Cameron Spear. Who Helped
on the Wash Sales or VI. g. II. Mining
stock-Got $50. 900 TO Use Daily.

bankruptcy proceedings against Munroe d
NIunroe that George II. Munroe head 9th,
collapsed laundry brokerage firm, haC
told him that he had arranged with The
National City Bank for the overcertihca
ton Of the firms checks to the extent OF
10000.
Spears testimony IL taken as showing
what construction prevailed in tho laundry
of the banks loan Of 100000 n day FOR
eight davs on the firms unsecured and
unendorsed demand notes. The bank ga w
II was not overcert ifcation, which il an
JFence becting a national bank to -the
liabilities and proceedings on the part OF
the Comptroller as provided in Section
s. PA The latter section provides for
winding up a bank Lawyers say also
that section 200 applies to the cert ihca =
ton Of checks in excess Of deposits IL
proWdes hat any officer or clerk Of a bank
who wiifully misapplies any Of the funds
OF ne association shall be deemed guilty
Of misdemeanor and shall be imprisoned
DOT ess than five years nor more than ten
Nhoiher or not the creation Of deposit
In excess of the amount certified by the
acceptance Of depositors unindorsed and
unsecured note would be an evasion of the
Federal statute il the point on which bank
ers appear 10 disagree. One side saws that
the bank simply makes a loan Of lawful
amount. which in it's Judgment il deems n
good loan pays the money into the borrow
er's account and certifes his checks against
1t But banker quoted in THE Sun a day
or two ago said of this one day note tran
saction.
II is just as much a violation OF the
National Banking law a. when bank GER
rifles a clients check for an amount larger
than he has on deposit, trusting to get the
money back in the afternoon The law
does not include the depoeitor's note AZ
deposit against which he can draw and
have the bank certify his check No legal
authority ! am sure. could or ever would
try 70 maintain that such transaction
came within the law Some very eminent
legal minds have given their opinions to
the contrary
James Stillman. president Of the CITY
Bank and II S Whitson one Of the banks
vice. presidents, as well as second vice-presi-
dent Archibald G LOOMS the man through
whose influence the Munroes came into re.
lationshp 10 the City Bank. have all de-
clared since the present scandal became
public. that the bank did no overceriifving
The officers OF the bank when they were
gppr1Sed OF Spears testimony in the bank
ruptcy proceedings, refused to say anything
for publication
Spear admitted to begin with. that
George II. Munroe used Vice President
Loomls's name in connection with the
Montreal and Boston mining stock deal
when he first approached him in regard 10
coming into the underwriting syndicate
Munroe had he said, also used the name OF
the City Bank
What asked Mr. Untermyer. did he
hOilt the National ifity RAJ nj
He said. replied the witness that Mr.
Lcomis. vice-president Of the bank was
interested in the enterprise
@. Did he say anything about The bank
from the bank? A understood hat we
were TO have their support
Q; would TX TO know Whit was said Of
the bank that made YOU infer his 4 Why,
Mr Munroe said hat Mr. LOOMS vas vice
president Of he bank and he would assist
Ms Ard strengthen matters BY his connection
=. on had no right 10 infer that The !
bank had anvhing % do with The undertak- |
inc; \ We chose o draw hat inference
Q Was anything said M thar time when |
"ou had this tails with Munroe as 10 any
.'commoodat, ION promised the Munroes by
Q When did YOU first know that the !
4Auk was extending accommodatio 10
MInroe ln the venture. :. Possibly three !
week~ l'lorc the failure.
Q From whom did you learn this9 4 ,
Mr Munroe He said that h. had arranged 7
There for generalization 10 the extent OF /
nd Won have my evidence hat this
Vs. so Nothing more than Mnnroes
y Did ne toll Won how he was going to
Use he eVfension Of credit by way Of over
cerlfcation' No
Here Mr. Unermyer switched the witness
m TO an account of his own transactions
with Munroe 4 Munroe in Mon treal and
Boston. apparently with view of ea cav,
ing the details OF the Munroes' transac-
tons with the City Bank to George H.
Nlunroe, who will probably be examined
10 day
II is to be noted that Spear in his testi-
mony says that the first he knew Of the 40
commodations extended to the haberdash-
cry concern by the National CITY Bank was
possibly three weeks before the failure
The unlndorsed notes on which the firm
borrowed $4,000 from the bank covered
n period Of only about ten days. and con-
curiosity was expressed yester-
d7y a. 10 what the nature Of the acCommo-
cations extended before that period may
have been
spear admitted that in three weeks.
from Nov. Il 10 Dec. :. he had sold for
tho MunroeS Montreal and Boston stock
representing about 81 100000. More than
pi per cent. of this stock had been sod
10 j. Bache Co, and although tine
account was IN his name. or rather in the
name OF his sister. 4. L. Spear. he had
each day merely carried the stock to Bache
4 Co, received a check and turned it in
10 the Munroes
Although Spear AYERS that F. p Ward
4 Co. in accordance with an agreement
which they had with the Munroes. were
buying NJ h. from the Munroes at 81
share when II was selling on the curb
At $3.50. counsel for the receiver produced
before Commissioner Alexander exhibits
" reports made each day TO the Munroes
BY Ward co. as 70 the amount Of stock
disposed Of and the price which il brought.
spear said that these reports were sent 10
he Munroes because they lust asked for
hem Counsel for the receiver asserted
hat Spear appeared on Munroe & Munroe's
ooks as owing the firm 81 OOo
That the National City Bank means 10
stand by Vice-Presdent LOOMS was evi-
lent yesterday when Mr.. LOOMS az a
meeting Of the directors Of the bank was
reflected That anything else would he
iOne under the circumstances was how
'ver hardly expected in Wall Street. az
he resignation Of LOOMS would be con
'trGed as n tscit admission on the part Of
he bank hat irregular practices had been
yning on IN the institution 1t Is hardly
kelly that any acicn will be taken by y,
he federal authorities on the evidence
Ivailahle now. The initiative would
ave 10 come from the Comptroller Of
1.