Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-05-24
WILL BE PAID IN FULL
DEPOSITORS IN WRECKED NEW
YORK BANK TO LOSE NOTHING.
Statement of Receiver Says There is
Money Enough to Settle
With All Creditors.

Special Dispatch to The Star.
NEW YORK, May 24.-The New York
Trust Company Is today in charge Of the
Merchants Trust Company Of 346 Broad
way as one of the receivers appointed yes
terday upon the application of the attorney
general to settle up the affairs OF the in
solvent concern. Otto T. Barnard, presi-
dent Of the New York Trust Company, went
into the main office of the Merchants Trust
Company this morning and found Bank Ex-
aminer A. c. Judson still in charge. Mr..
Judson promptly turned over the affairs of
the insolvent company to President Ban
nard. Mr.. Barnard assigned First Vice
President William v. King of the New York
Trust Company to take charge of the main
business of the Merchants Trust Company.
He then sent Second Vice President Alex
ander S. Webb, jr., to take charge of the
Merchants Trust Company's o9th street
branch. After a lengthy conference with
Bank Examiner Judson, President Barnard
said:
Douglas Robinson who was appointed CO.
receiver with the New York Trust Company,
would also have taken charge this morning,
but has not yet given his bond for $5oo,-
900. He will do that later in the day, or to-
morrow, and will then help the New York
Trust Company to settle up the affairs of
the Merchants Trust. Because the New
York Trust Company is organized under the
laws of this state for the purpose of acting
as receiver in such circumstances it was not
necessary for us to take out any special
bond for this particular case as is required,
of course, of an individual.
although | have not yet had chance to
delve deeply into the affairs of the Mer-
chants Trust Company, l think l have al
ready sufficiently acquainted myself with
its assets and liabilities to make good
guess that the depositors will be paid in
full Without levying any assessment what
tl,a -hnlI nre hnr IS n 1T1n
sufficient money to settle with the deposit
ors. But under the provisions of the bank
ing law each stakeholder may be assessed
to the full extent of lis holding. The cap
ital stock is 100000, and am safe in say
ing that it would not require much of an as
seSsment, if any, to settle with the deposit
ors in full. 1t will, of course, take several
weeks for US to make a thorough eXamina-
ton and a complete report The loans upon
the Hudson Valley Railway Company and
the Rutland street railway properties are
what are known as slow loans. They are
good, slow, but sure, and there is no occa-
sion for any alarm on the part of the de-
positors.
Bitter Feeling Between Directors.
An attempt was made to hold a meeting
of the directors this morning at $50 o'clock
al the trust company's offices, 346 Broad
way but although President Phillips and
several other new directors were present,
there were not enough of the old direc-
tors in attendance to make a quorum. 1t
was ascertained that there was a very bit
ter feeling between the old and the new dl-
rectors on account of the loans made by
the old regime, which brought about the
company's present trouble.
When the company failed yesterday,
President Phillips issued a statement lay
ing the blame for the companys lnsolV-
ency upon the administration under Presi-
dent Edwin Langdon, and later Edwin
Hawley When VIM. B. Ellison of II Broad
way, counsel for the company, heard that
the president had tried to shift the blame
upon the former regime he threatened to
make a statement which would exonorate
the old directors, and last night he did Is
sue short statement, in which he said
that a meeting of the old directors would
be held today to take some action. 1t look
ed this morning as though the new direc-
tors and the old directors were trying to
hold separate meetings. and that as re-
suit of the conflict some interesting dis
closures would be made.
What Wrecked Bank.
President Phillips was asked this morn.
ing: "Who wrecked the bank?" and he
replied:
mo one person wrecked the bank. Err
rors were made in lending out too much
money on longtime loans. Experience has
shown that poor discretion was exercised
by the former management of the trust
company, but it was purely matter of dis
cretion and l cannot see wherein any one
could be held criminally responsible for the
bad judgment which was displayed"
There was no excitement at the main Of
flee of the insolvent company today. One
policeman was in attendance, just as
matter of precaution, and at times he was
kept busy preventing depositors from pass
ing through the gates into the inner office
to talk with President Phillips and the df-
NIni,o to
body that the receiver was now in charge
and that the officers of the bank We're no
longer in a position to transact its bust
ness. Several notices were posted up upon
the outer doors calling attention to where
certain checks drawn upon the company
could be paid.
Conference This Afternoon.
Several of the odd directors of the Mer-
chants Trust Company held conference at
1 o'clock this afternoon in the Office of Will
liam B. Ellison, II Broadway, counsel for
the company. Although the directors at
their meeting this morning were unable to
secure a quorum they held an informal
meeting. The old members of the board,
who have been held responsible by Presi-
dent Phillips for making the bad loans that
got the company in trouble, decided that
they would get together this afternoon to
determine exactly how far they were re-
sponsible under the banking laws of this
state for the loans that were made under
the former regime.
The attention of Superintendent Kilburn
of the state banking department was today
called to section % of the banking laws of
the state. and he was asked If it was not
a fact that the former officers and directors
of the Merchants Trust Company had vio-
lated that section which reads as follows:
mo corporation or banker to which this
chapter is applicable shall make any loan
or discount TO any person or corporation or
firm or. upon paper upon which any such
person or corporation or firm may be liable
to an amount exceeding one-fifth part Of
its capital stock actually paid in and its
surplus
Prohibited Loans.
The capital stock of the Merchants Trust
Company was $4,000 and its surplus ST.
600 OOO, making a combined capital and sur
Mus of $15OO,OOO. Under section % the
Merchants Trust Company 1t is asserted,
should not have loaned to any one corpora
ton more than 100000. but in the case of
the Hudson Valley Railway Company alone
the trust company loaned 1t 81, 200 600.