Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1906-01-05
Pfovident Securities and
Banking Go. Of Boston
Alleged to Be Unable to Meet
Its Many Obligations.
Temporary Injunction Is Issued and an
Investigation will Be Made.

Banking Co. of this city, from doing
further business was petitioned for this
afternoon in the Massachusetts
supreme court by the State Savings
Bank commissioners. The court issued
a temporary injunction and Il hearing
will be held tomorrow on the question
of appointing a receiver. The com
pany is organized under the laws of
South Dakota and it has an authorized
capital of $1.5O0,0O0, had about $500 de-
positors with an average deposit from
each of $50. The savings bank commits
SiOner alleges that the banking COM
Iany was unable to meet its Obligations.
| The Provident Securities x Banking
Co. has engaged in the general banking
business, but has made a speciality of
soliciting small deposits. In con-
nection the institution has distributed
small banks to encourage the habit of
saving on the part of the people. Bank
books have been substituted for these
banks upon presentation ut the COM
pany'S affairs and an investigation fol
lowed.
According to the evidence of the
commissioners in the supreme court to-
day. the money deposited with the COM
/ been poorly invested. At Il given me-
/ mcnt not more than $500 could have
been realized by the company for the
| purpose Of meeting any obligations
| The commissioners were of the opin-
, ion that the best interests of the com
| munty and of the depOsitOrS We're con-
cerned by bringing about the suspcn-
sion Of the company's business and by
the naming of a receiver to take charge
of its affairs
The bank was organized in 1902 ana ba-
gan business in this city the same wear
with Adj. Gen. Samuel Dalton. on the
staff of Gov. Crane. as president. The
secretary and treasurer was Lorenzo W.
Hurlcn. formerly cashier of the Column
bian National Bank of this city The di-
rcctors were Col Sidney NJ. Hedges
prominently identified with the Ancient
and Honorable Artillery Company and
v-cl-known insurance man in this city;
Inspector General William II. Brigham Of
Hudson, also on the staff of Coy. Crane.
and Charles d. Gurlcy of Brookinr.
Mass. Col Hedges ana Gen. Brigham
severed their connections with tie COM
pany last April.
Durin" the past few months Gen. Dalton
| has been under treatment ut Il sanata-
rum in KoXbury, Mass. The business has
been conducted principally by NIr. Bur
len.
Although orga,iizcd under the laws of
South Dakota. the company has been
through II recent act of the LEGISLATURE
under partial supervision of the saw
ings bank commissioners of this state.
James S. Otis Of Maiden. one of the say
inGS bank commissioners. stated tonight
that TIL" commissioners had found tn:
Providcnt Securities and Banking Co in
Il dcplorab!r state.
Nv" found" said Mr.. Otis. ''that the
institution on Dec. 81 had deposits
nmountn ing tn $4,000 with assets; which
were probIematicaI in value. The cash
on hand on that date amounted to about
5000. The principal assets of the COM
rInv was 10000 shares in the Shenandoah II
Irrigation Co. of Colorado While the
commissioners did not know the value Of
this stock, understand that Their" wcr.
people in this city from tn" west last
mon,i1 who desired to purchase the stock
from the banking company a furtht 7
| SIlpNfu tllit tiNl'lfntiS. sd l.
aries and expenses Of tho company had
been paid out of deposits
'''ih" banking company" continued Mr
Otis. was not strictly under tn" el,pcr
vision Of the savings bank commission
crs Of Massachusetts. ynd'r an act "f
The Legislature passed i'll 100. the com
missinncTs had authority Ia visit foreign
| banking Institutions of this sort. but
could not make amy order or requirements
regarding I'll" manner in which tho insti-
tuition conducted business. I."causc If q
complain. mad" to us during tho first
par, Of last month. We .;cnt Mr. Henry -
WYman If this city. an expert account
ant, to the bank ana his report ma.lc !,
few days ago was submitted to Attorney
General Parker. Mr.. Wyman also report
ed that tn" company was being conduct
I'd by M"SsrS. f:urIcn ana Gurcy and
that other employees Of the institution
were directors. A Temporary injunction
was asked aud granted by u iustic" of
the supreme court this afternoon. and to-
morrow the court will tax" m the qucS-
ton Of m appoin m"nt ~ Il receiver
'Tho Massachusetts savings bank com
HIN@i'itiS. ~iHi MT. 'ptl|. VIII recon-
mend to tia" present Legislature that Il
chang" hc made in I'll" laws relating 10
foreign banking companies. ! personally
believe that lew should u" passed for
bidding such companies from doing bust
ness i'll this state. There ar" Of course.
many objections 10 such q law. on" of ths.
pal being that it might iniure such a
reD,tabl" institution as the Bank of No
VA Scotia. If. on the other hand tho law
should make it compulsory for The Mass
achusetts savings bank commissioners to
examine foreign banking companies they
have to face tn" problem that The char
tiers OF such companies permit them to
invest in all sorts Of securities while in
the case Of Massachusetts companies the
investments are designated"
A few hours after the granting Of the
injunction by the court number of the
hank officials. including Treasurer Burlen
had conference with their counsel
Messrs. Bartlett and Anderson Of this
city. The conference took place in a
local hotel. but at the conclusion no state
ment was given out nor would the counsel