The sun., 1907-10-19

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smf . y rN.ws-. shs ss~ lss~v~ss~f u
sNa Fe~rsv Nsw~ q NsusNsT - = " U~ss~
fssNtst sv~ss,fsrs n as~ 80 wssssf ss.i
fls~s Asst vk~~1 es~ss,t-r, sSs eksra vlr~
rr~sl,tews n Ne 0~sesrsgt~ s~sys~tivfy
ss'h " wetIss~~ sss' pws~~ s~s wrssshs
s~er~s~rs ef~sst l~Ne,v rs~sstsns
~ 80 w~ss~fn ssclar s1s fts sriv 's--'i
representative esmssw'~s ~ Ne s-ssd
s'ssr ths ss,~ a shs ssws'a l-tsv~s' ~ ,hs
H~snss- s~a wa'lsm ss,rr~r
w R'ax~y r~fp~~d ~ ssy yas.~vasy
/ sh~s~ No sst~cts ~ s~sociss~ ~lth ksvw~~fi
N ~s~~ h~ cvrs~s sN~ rsspt,ssirrs ~ svns
,rrl On ne sr~p,sw~~ W. siVi hsv~ ere
sipp-y' ~ ,h- t'l~~ss~s ucvs~ w ss~ ~w-
duot ~ 'hr hsns sna h~ vlh sls. ssv~ 'h~
~,pp~rt ~ hsnssy~ pvom,ns~t IN enc CI~ss.
/ lns Huusr IN acquiring th~ c-wsr@llins IN
,~r~~ In th- ss,-h W. wsdselv rssvrs~f 9
! ts,sh,~t n s-nssof sN~Ihy " CuIl-m n
Illinrts sni wss consisi~red rewsorshl~
~ ~,py,u>- that NJ call sl>p nviws stSrrs
/ ba~hipx from tho West whss~v~v the
nasns- ~ tho indiv'dYa,s. N Gas s~,J Tho
bsnh would crrtsiniy ~ ccu,roilrd nv
in,~r~s's independent n th.e- wish which
| N has ls,,~riv I~-n c,n,~vncd In ,h~ hsnk =
ing field
y. Augustus u~tnrs ~ tho waldorf last
night threw u di-cordso, nots into the
negotiation. Tor the transfer, though II 10
believed that he ha- already given an option
on y large part ~ his holdings.
have not -olt a shsr. ol my stock,
-aid Mr. Heinze. and am still IN control
~ the Mercantile Bank. The whole mis~r-
able situation In the result of the action Of
the Clearing House committee. Instead ~
coming out with y statement saying that
the bank was entirely solvent they made
n lot ~ remarks about the impairment ~
surplus and started q run on the hank In
the nope 81 attracting deposits to their
insSitutions.'
II was point~i OUT by prominent banker
after the Heinzs utteranoe1 were quoted
that the expressions hardly oomported
with the tender of Mr.. Heinxs's resignation
as director and the acceptance of his
resignation IA president. Moreover. the
accusations of selfish motives on tho part
of the Clearing House COMMITTEES were
declared to he absurd. The situation, 10
was said. was perfectly apparent 20 every
one. The Clearing House had to take
hold in order TO keep the bank open and
protect the interests ~ it's depositors.
Without Clearing House help IL would
have been closed yesterday morning, for
clearances- As a final and entirely con-
elusive refutation Of the charge IL was
pointed out that II the other banks had
wanted business they would have let tho
Mercantile fail
The Mercantile's debit balance to the
Clearing House yesterday was S7s5, 900.
The debit balance came on top ~ debit
balance of SsOOOOO Thursday morning.
The latter the bank was able TO pay. hut
aiu was extended TO II Yesterday morning
4. th... apt Of (ns n, h,- of hQIrnn
10 meet the second debit balance. Mem
hers Of the Clearing House committee
were present at the Clearing House when
the clearancsS were in progress and saw
that the assistance was given promptly.
A stated yesterday the Clearing House
committee found the hank entirely solvent,
though it's surplus WAS impaired. The
deposits the examiners found to be bit
more than Sii ,O00,0O0 as compared with
more than Si8,OOO.OOO when the Heinze-
Thomas party acquired control. The loans
we're about Sis,OOO.O00, practically the same
as sreported inlast week bank statement.
The deposits were reduced % a small
amount. The amount Of the surplus and
undivided profits reported in last weeks
bank statement was tS,O43,0OO. To just
how great an extent this fund WAS impaired
not even the examiners could say definitely.
for the reason that IL was represe nted in
part by securities not readily ma rketable.
Excluding all these securities, the amount
of the depreciation was about S4,OOO,OO0
hut ir would have been unfair OF course TO
report any such shrinkage Eventually
the securities might he worth the face value
Of the 81 ,Oo0.OOO, as has been found the case,
notably in the liquidation of the Ninth
National Bank, on several occasions in the
past.
The examiners found loans to Z. Angus
tis Heinze or his brokers. Other direc-
tors of the bank II was reported, had loan
accounts with IL. The amount which under
the banking laws a bank may loan to any
one individual il 10 per cent. OF the COM
bined capital and surplus provided that
amount does not exceed 10 per cent. of the
banks capital. In the case Of the Mercan-
tile. with capital Of 5000 900 and surplus
Of $4,000 .OOO. the largest individual loan
would thus he STO0,OOO Ii was said by a
prominent Clearing House banker that the
aggregate ~ theee loans To few directors
was approximately ~ 100000. Some loans
in the bank, IL was said, were secured by
United Copper and other stocks in which
the Heinzc party ia interested. but IL Was not
declared that the loans of the directors were
on such collateral. IL was recalled that on
Tuesday +. Augustus heinze said that
United Copper had been accepted at the
bank as collateral
None of the loans of the bank was "a call
loan. or in Wall Street banking parlance a
street loan" Unlike most banks in or near
the financial district the loans were time
loans entirely and not collectible instantly.
The aggregate Of loans, NsOO0,0OO, ex-
ceeded the deposits. 81 ono. 200. by y, ,OOO OOO
in addition TO which the bank had resources
in it's 81, 600 go capital and surplus. Even
conceding a depreciation in the surplus |
there was not the slightest doubt that the |
bank had q balance of several millions on |
the right side Of the ledger |
The Mercantile is in fine position de- |
clared acting President Miles NJ. O'Brien, |
and solid az rock.
Representatives Of the firm Of Otto Heinze |
4 Co.. suspended from the Stock Exchange |
the previous day. said that the liabilities
Of the firm would be about 81 .000,0 ,00O In |
this estimate. IL became known. there is
not included the S500.OOO claimed by Gross
q Kleeberg or the claims Of some other
brokers. The Gross 4 Kleeberg claim was
virtually repudiated. One Of the attorneys
for the Heinze firm announced that there
would be a meeting OF the creditors next |
Monday for the purpose OF -settling what
they consider all just claims. which will be
paid in full There will Of course be no
assi gnment," it was added.
The attorneys for Gross 4 kleeberg,
Myers h Goldsmith. have not decided |
what course Of action TO follow in enforcing
their clients claim against rhe Heinze firm.
IL ia DrObabIp thAt no decision will he