The news-democrat. (Providence, R.I.) 1906-1909, 1907-11-30

| could find no express sanction in the law
| for this, and as the result of such action
would be 10 enable the indorser OF paper
the maker of which was solvent, To with
draw the full amount of his deposit. thus
possibly obtaining a preference over 9TH
or depositors. such requests were refused.
one such indorser applied 60 the court
for an order TO the receivers 10 permit
such set-off which the court declined to
give. If the maker OF paper is nsolvent
Nor collection cannot he made from him,
so that recourse must be had TO the In
dorser. the Indebtedness of the trust COM
pany TO the indorser must be set off.
when he makes payment but the attempt
should first be made 10 collect OF the
maker.
Another question with which the re-
ceivcrs early had TO deal was the pay
ment on account or in part OF obligations
secured by collateral. In many instances
there were held as collateral considerable
blocks OF a single stock portion of
which the debtor found an opportunity to
sell. In such cases the receivers have
allowed a portion OF such collateral 10 be
withdrawn and sold. the price realized
from such sale, i'm no event less i'm pro-
portion To the whole indebtedness. than
the proportion OF the stock sold to the
whole amount held as collateral. being
paid i'm reduction OF the debt. II seemed
clear to the receivers that whatever the
course OF the market an advantage must
result 10 the trust company. II the stock
decreased In value. they would have real
ized upon portion OF II more than they
could II they had held it. III it rose i'm
value, the security for the unpaid bal
ance of the Indebtedness was certain 10
be ample.
A matter which has caused tho receiv-
ers great difficulty is the disposition of
the proceeds OF paper left for collection
A m NJ d aI
ways the case. there were i'm the posses
sion Of tho trust company or IT'S cor
respondents hundreds OF notes drafts
and checks for collection for the account
OF its customers, including other banks.
The principle seems TO be that IL such
paper belonging TO a general customer OF
the bank is collected by tho bank itself
or collected by its correspondents and
credited TO u In account before tho sus-
pension, the proceeds belong to the re-
ceivcrs, and the owners OF the paper are
only creditors. on the other hand. IL il
is collected after suspension, and the
bank has no demand against the Gus
toner. IL is a trust fund i'm the hands of the
receivers for the benefit OF the persons
who lcft N for collection. In accorda nee
with this principle. the receivers ara
quite certain that there has come into
their possession very considerable sum
To which they. as receivers. have no
Is grave doubt. and they would have
been glad TO have dispossessed them
selves of u at once This has. however.
proved TO be impossible. Whether the
original owners of any single piece OF
paper left for collection or the general
creditors are entitled 20 the amount re-
ceived In payment. may depend upon n
great many different facts. tho existence
Of which can only be determined by care.
ful investigation. involving perhaps tho
entries upon the books OF other institu-
tions IN distant localities.
ANXIOUS II ODO JUSTICE.
So anxious were the receivers TO do
justice TO persons whose claims TO moneys
in their possession seemed perfectly clear.
That they asked the court 90 permit the
payment OF such moneys 20 the persons
for whom they were collected. but the
court wisely considered ~ better TO re-
duire claimants 20 present their claims I'm
the usual way and 90 afford creditors an
opportunity tc be heard with reference TO
their payment Collections made under
the circumstances above referred 20 were
deposited By the first receiver IN special
account and this course has been follow
ed by the three receivers. The difficult
task OF properly distributing this fund
should be entered upon at the earliest pos
slbe moment
This perhaps completes tho report OF
Continued on page Eight