New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-05-25
DELAY SAVES DEP0SlI0RS
so INSISTS MR. KILBURN.
.Saus Merchants Trust COmpony
VII Pay IN Full.

otto r Barnard, president OF the NeW-YoEk
Trust Company one of the receivers of the Mer
chants Trust Company. expressed yesterday the
belief that the customers of the failed institution
would receive full amount of their deposits al
though probably not fer a considerable time. In
addition to the assets in realizing some OF which
there might be necessary n good deal of delay,
there was the stockholders 100 per cent liability,
amounting to 100000 The loans on the Hudson
Valley Railway and Rutland Street Railway prop
critics are regarded by competent judges good,
although slow.
W. b. Ellison. counsel for the Merchants Trust
Company, declined yesterday to make any state
ment as to the alleged conspiracy among the di-
rectors but it is understood that the situation IS
about follows:
The Merchants Trust Company was interested
TO the extent of 81 2GOCO in the Hudson Valley Rail
way Company and was in receipt Of standing
offer for its interest of $5OO The directors were.
however convinced that they would within six
months be in a position to get S1,S300l) for this
collateral and therefore determined to hold on.
The trolley company, it is declared. is in flourish
ing condition and the reason its accounts do
rot make i better showing is that certain eE-
pcnditures that might have been charged to CAPT
tai met out OF income.
HUDSON VALLEY COMPANY MAY BE SOLD
It is thought to be not unlikely, too. that the
Hudson Valley Railway Company, the line Of which
crosses the Delaware and Hudsons tracks at five
different points. may be taken over by that COM
pany just as the New-York Central. the New
Haven and other important steam railways have
acquired trolley systems paralleling and competing
with them.
Two weeks ago. it is alleged the whole condition
of the Merchants Trust Company laid before
Superintendent Kilburn. with the request for
authorization OF the increase of the capital stock
from &O0O00 to 100000. Mr.. Kiburn assented. it
is said on condition that the interests of the de-
postors should be protected Two Of the directors
Of the trust company however, said to have
gone into Wall Street last week trying to raise
heavy loans a step which gave rise to rumors
which resulted in the suspension of the company.
It is asserted that if the additional capital had been
secured there would have been no reason to close
the doors of the trust company
The New-York Trust Company yesterday, as re-
cever, took possession of the Merchants Trust
Company, William V King, third vice-prcsident OF
the former company. being assigned to take charge
of the main office of the concern. and \. s Webb
jr. second vice-president to the branch office at
Broadway and 59th-st a conference of directors OF
the Merchants Trust Company was held yesterday
morning at the main Office, but it was SAID AFTER
ward that no action had been taken. EX-Presldeht
Iangdon held conferences with some of these
directors but subsequently refused to make any
statement
State Bank Examiner Judson WIS asked yester-
day afternoon about a statement made by a lawyer
that proceedings might be brought against certain
of the directors under section Of the banking act
which provides that no corporation of like KIND
or the employees of such corporation. shall loan
more than % per cent of It's capital stock and sur
plus to any one person or corporation. In reply
Mr.. Judson said:
This section does not apply to any loan made by
the Merchants Trust Company. II reIers 10 ot ms
made without collateral Moreover, many OF tne
derwritings, to which twenty or thirty names were
appended, and in ease has more than the leg1 i
that the law has been Violated in any way
When asked about the action of the State Scper-
intendent Of Banks in allowing the Merchants
Trust Company TO continue for two years after ne
had discovered its condition was unsatisfactory
Mr. Judson said:
interests the depositors. If the trGSt company
had been thrown into the hands or reGeTe5
90 cents on the dollar The securities would ma We
been Slaughtered as securities always are when
they are thrown on the market Now, | think the
depostors wifi realize 100 cents on the dollar
HAS the letter of the law been complied with?'
Mr. Judson asked
81 cannot criticse Mr.. Kiiburn. He has been In
dorsed by three Governors and that means that he
is a pretty good man. He acted solely in the in
terest of depositors and his reason tor actins
now was simply to PTeN@nt i g4 5 o when
took charge Yesterday
MR. KILBURN's STATEMENT
Albany May "a (speciaD,-F. D. Kilburn, state
Superintendent OF Banks to-day discussed the ar
fairs Of the Merchants Trust Company and de-
cIared that his firm belief that the depositors
would be paid in fun. Mr. Kilburn said;
When discovered the condition of the COMPANY
about two years ago I exercised my best Juog-
ment, and instead of closing the COMPANY tnoIgnl
il best to relieve il of securities which II forCea
TO sale that time, would in all proba onty
have Melted the company less than was finally
raised upon them For example. s2.267,o0 invested
in Richmond properties was collected. and in ad-
dition to this the company was relieved Of other
,.lebtedncss and especially of a liability in the
SPape of guarantee of $4,000. 1t is my firm con
vction that there never has been q time since the
{ discovery OF ehe condition of the company when
the present time, which could not have been done
if the company had been put into the hands Of the
receiver at the beginning,