New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-12-21
CONNECTICUT
BANKS HELD WALSH BONDS
LEGISLATURE BLAMED.
Securities on Investment Last
against Committees Wishes.

New-Haven, Dec q (Special)-From thirty to
forty Connecticut savings banks have been caught
by the breakdown of the Southern Indiana Rail
way Company bonds. following the suspension OF
the Walsh banks in Chicago. These bonds were
bought by the banks of this State after the last
Legislature placed them the investment: list for
savings banks and trust companies. Whether the
losses in this State will be great or viii embarras5
any one of the banks interested in the Southern
Indiana bonds is not known. 1t said by bank
here to-day conversant with the situation that
there might be some trouble.
1t Is learned that the Norwich Society for Saw
ings, the bank in New-London of which President
Learned of the State Savings Banks Association is
president, Meriden savings bank and others in
this city, Rockville, Middetown and other locah-
ties. all purchased largely of the bonds. The New
London bank. 1t is said owns 100000 of them and
local bank upward of $4,000
These bonds sold to the Connecticut banks
Immediately after the last legislature approved
them, an agent named Cadgan acting for George
A. FernaId e Co. of Boston and Network. plac-
ing the bonds There is no scare the matter
as yet among the banks. but the legislature is be-
ing severely criticised
BONDS NOT APPROVED.
The bonds of the Southern Indiana Railway were
among those not approved by the Committee
Banks in the last Assembly. They were showed
through the legislature against the adverse report
Of the committee. The adverse report went to the
House June 2. There long debate in the
House on the matter. in which c. E Thompson,
of Orange, took a leading part arguing against
the admission Of the bonds. His committees
unanimous report was turned down. the House ad-
mtted the Southern Indiana bonds and the Senate
followed suit, under the party whip Of Senator
Paige. June q. The vote in the Senate for the bill
81 to Z, with absent.
Senator Atwood said the bill should have bean
named act to increase the emoluments of the
lobby. Mr.. Thompson, on the floor of the House.
said that the bill was backed by the lobby, and
added that there no further for the
Speaker to name bank committees, for, eff they
wanted committee to decide bank legislation
the Speaker could best choose IL from the third
house" It was understood at the time It in said
here to-day, that the lobby strong for the
Southern Indiana bill, and there were rurrors as
TO the expense of the passage of that bill.
SAYS BILL WAS RUSHED BY LOBBY.
Mr. Thompson, who is a banker IN this city and
House chairman of the Bank Committee in
the last legislature, said this morning in regard to
the passage of the bill:
There were several bills before that COMMITTEES for
legal investments We passed upon all of them
and accepted two as safe investments. These We're
the Consolidated Railways Company's As and the
on at least four others These were the Connect
cut Railway, and Lighting Company bonds, the
and the Atlantic Coast lines with Louisville and
ma$ sS e9ate ERA We're all good bonds
GENTLY safe for legalized investment of savings
The Connecticut Railway and Lighting bonds
for instance. we're good but the company had been
did not think the bonds were safe enough for
ings banks, though good for general investment.
The bonds of the Connecticut Railway and Light
Ing Company, for that matter. were not brought
up until 1t likely that the committee would ad-
init the bonds Of the Consolidated Railways Com
pany the rival Of the former. which latter bonds
backed by the New-Haven road, we regarded as
first class investment. The Southern Indiana bonds
came In as substitute for deoenture stock of the
Chicago Great western, and were in the form of
first mortgage gold As, maturing in 1851. They
were regarded by good. but not good
enough. and developments have shown the wisdom
OF the committees findings
COMBINATION WORKS HARD
report adversely on these bonds on the ground of
safety a combination in the lobby was formed
for these bonds, especially the Southern Indiana
and the Connecticut Railway and Lighting. This
combination out TO turn down the committee
report and pass the bills. One of the most promi
nent members OF the LOBBY actually went TO mem
bers of the committee before the matter came up
and after the report made. and tried TO OBJ
tain signatures of the committee members to a
paper Stating that in the minds OF such members
the Southern Indiana bonds were safe investments
for Connecticut banks. l sat down that
and said: Are you going to sign that paper!
Senator Peck of the committee, is said 10 be will
intend to-" Nor did he. That signing of a paper
was not carried OUT But the lobby went before
Lighting and the Southern Indiana bonds over our
W RgsaS not nroper1 made p in the first place
] did personally ABOUT these bonds one
way the other but as House chairman Of the
Committee on Banks did not reel thaf could
conscientiously allow them to. become lega! in
vestments, and said the floor of the House
where I was beaten. 1t purely a case OF lobby
acting for bond dealers. understand that as soon
as the legislature adjourned agents OF the SOUTH
sold them 10 savings banks in Connecticut in
considerable quantities. though 90 not unqer-
a.