The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-09-09


,ls soldy A. Yes,
EMPLOYEES SIGNED THE NOTES.
Mr.. Randolph said that the transaction
didn't appear at first on the books OF tne
New York Trust Company as loan. Inat
wasn't done until along in 100? when tne
trust company people elected, TO give o on9
to The New York Life to have Applications
signed by two OF the company's employees
AT first he said 1t was passed over as q pro-
tected" loan, the purchase price bein8
placed to the credit Of the New aorK IAIe
on the trust company's books. me trus.
York Life, wanted il in the shape OF
collateral loan.
q. As a matter Of fact It was changed 70
he form of a collateral loan on the DOCKS
Of the New York Security and Trust Company
O.. Who made the notes' A. Two Of our
w 3 MsisS, IRE they' A. Mr. Madison and IN
O. What ONCE are they ln' A. In the
treasury department.. .,n,;n, IN
The N A%% 9 ioTk aecnrty and Trust Company
A. 1t was on the blanks they sent Out. the
usual form. whateSyer It was. uniform New
notes. A. They called it an applIioat Is,dD o
to q|hq Pe Ses apP Of sss TRUST as' Sopany
si' >,
Mr.. Madisons note the witness said,
wa, for Si,s57,O0O, against which there
we're 300 shares of Chicago and North
western and 5, 800 shares of st; Paul; There
"a. as additional collateral 5000 Union
Pacific preferred, 2,lO0 Erie first prelerrefu,
and e3l Evansville and Terre Haute, all
of which were preferred, taken out OF the
no1-ledger assets of the company
TIE IMPORTANT 5000 YEAR CLERK.
The s., 100000 note of Marshall, the 5000
u wear messenger was secured py seVera'
Thousand shares of Northwestern pre-.
aired. and the margin was 900 shares OF
Southern Railroad preferred stock, which
way also non-ledger asset.
The witness said Madison was bond
clerk and that he had been with the New
York Life several years when he entered
into the transaction with the trust COM
pany.
c,,rt ties in the hand, or the New York Security
and Trust Company y0n IN dnc nncs T Thbnf
would not mako the round figures exactly.
We must have adjusted 1t to sio,ooo.ooo.
The combined amount Of the two notes
~ which the account was Increased was
s3,a37 900, leaving cash balance on aepo ,hi
in the account for the first three months
e 1902 of 81, 0O5,OOO
o. so you supplied the New York Security
and Trust Company. through your deposit.
" tn the money that was necessary 10 make
vrs sir The rest OF the account cont nued
on The form,r bass.
In April. 1902 the New York LIES bal
uuce with the trust company rose from
$40, 100000 to Sl3,0O0,Oo0. SO Tar as the
witness knew there was no occasion Tor
the increase in connection with the dispo-
sition Of any stock by the New York Life.
MIR. Randolph said there was no par
ticular reason for having selected Madison
and Marshall to sign the notes, he as
"a nrfi n ~
in banks to have the employees sign notes
for the principals and make them appear
as borrowers of money for the principals.
Il imagine" said MIR. Randolph. that
there is not hank or trust company IN New
York that does not have notes made for
clerks" He used to follow the practise
when he was president of a bank. He
admitted that the reason for having EN-.
Rloyees sign was to keep the principals
names out of the transaction,
STEEL BONDS UNDER THE BAN.
Subsequent to the Chicago and North
western and the st. Paul stock transactions
there were, Mr.. Randolph said, two similar
ones entered into by the Lille insurance
COMPANY. Both of these. he said. were also
entered into as result OF the bylaw which
the company had adopted In reference to
carrying stocks on its schedule OF assets
One transaction concerned 81 800 600 OF the
Carnegie b0nds OF LI1o OniVou o'oSoe C'eo.
Neutrality-suspicious. bon ds-the best
issued by the steel company. MIR. Randolph
laid that the officers Of the company feared
that this security also might be ruled out,
and It was thought hest to get rid OF It, but
unfortunately there was not any quick mar mar.
the New York Life could find for the bonds
was the library market. They were
finally, Mr.. Randolph said, closed out and
carried on the loan account In the New
York Security and Trust Company. !hls
was after the original Marshall note had
been taken up.
SECOND NoTE-MAKING CLERK.
Another note for 81 1886 900 against u 900, :
coo Of Steel Corporation Go was given, OOO
shares Of Union Pacific preferred, 900
shares Of other railroad preferred stock,
800 Erie first preferred and 633 shares OF
Evansville and Terre Haute stock, all nom
ledger holdings. being put up IN adoition.
George A. Newkirk, another Clerk gave
The second note.
Mr.. Randolph said that it appeared on the
books of the New York Life that all these
stocks had been sold Mr.. Hughes wanted
to know whether, il an examination was
made Of the New York Life, any record
was interested in United States Steel bonds,
Mr.. Randolph replied that II an examiner
came in there he would learn OF the trans
action.
O. But apart from such explanation as
YOU might make to him. would any examinA-
{ion OF the books show you we're still IN
tere sted In them? A. Tho purpose was to
take them OF the books.
q. Then 4 they were taken on ths books.
then ha had
sale Of them-that they we're we're, si e out y,
United States Steel bonds occurred and your
company got a certain amount OF money Tor
them 4. Yes. sir. In closing out the account.
O. As a matter Of fact, you still own the
United States Steel bonds and they were put
up a. collateral AGAINST the loan q the money
8. That was the fact OF the transaction.
was 1t not? A. Use. sir. that was the TACT.
GOT RID OF ENGLISH SECURITIES.
Another transactio Of this sort referred
to by Mr.. Randolph was In LOT 800 OF United
Galleries bonds which the company wanted
to get rid Of. The bonds were offered
IN London and there was, the witness said, q
nominal sale to j. 8. Morgan 4 Co. The
company had underwittep these bonds in
the frst instance.
The bonds, Mr.. Randolph said. -were
simply charged on the New York LIES
books to j. s. Morgan 4 Co. They went out
Of the books, he said. at 70 per cent. below
cost.
O. But a. a matter OF fact you still own
them? A, Well. they are not sold.
In this case no notes were given, Mr.
Randolph said. I'VE simply have on the
books the advances Of j. s. Morgan 4 Co.
- o. an ,-our haoks II orpaara TINT xha,o