New-York tribune., 1907-11-20
BOROUGH BANK INQUIRY
INDICTMENTS PREDICTED.
EOidence Before Grand JHrg Nag
Lead to Blanket Charges.

grand jury yesterday by Acting Dstrict Attor- s,
ney Elder it is confidently expected by tsosetfn
position to know that two blanket indictp ppenrs
win be voted to-day against certain f1rmerNoH-se
cials Of the Borough Bank. in Brooklyn Odksr
indictments against certain other persons coA-
cerned in the peculiar transactions which have
been disclosed by the examination Of the state
Banking Department viii be considered. II Is
understood.
The International Trust Company end of the
| Borough Bank scandal will be taken up by Dis
trict Attorney Jerome. according to tie Brook
lyn authorities
1t developed yesterday that some of the trans
actions considered by the grand Jury involved
charges of technical grand larceny as we'll as
of forgery and improper loans There seems to
| be no basis for the story that money was taken
out of the Borough Bank improperly after the
bank had closed its doors on the night of Octo-
Der "a The notice of suspension posted on
the doors before the opening of business the
following day
II would appear from the facts brought out
that many of the Borough Banks troubles were
brought about through the incorporation Of the
International Trust Company, which was or
ganized by William Gov. Several OF the trans
actions considered by the grand jury were con-
nected with the effort to raise the S1.o00OO0
capital stock. one-half Of which had To be p=is
up before the trust company could open it's
doors. One was the signing OF a collateral note
for S25OOOO by Howard Maxwell. president OF
the Borough Bank. which was turned over to
the depositary of the International Trust Com
pany-a Manhattan bank-to the credit of Will
lam Cow. and was used to make up the required
paid-in capital of the trust company. To Sc
cure this note were two personal notes made by
John s. Jenkins and Nelson B. Burr for S14O.-
900 each
PRESIDENTS NOTE REPCDIATED.
1t was this S25OOOO note which was taken to
William Hurley. vice-president OF the Borough
Bank. the night before it's suspension. and
which demand was made for more security
by the cashier and director of the Manhattan
depositary for the International Trust Company.
Mr.. Hurley had never heard OF the note. and
promptly repudiated it. 1t has since been de-
cIared unauthorized by the directors Of the Bor-
ough Bank The officials Of the Manhattan
bank just about ready to make a demand
on Mr.. Cow for some security on the note when
| the latter forced TO turn over all his prop
erty to the Borough Bank.
Another transaction put through 10 raise mora
money for the capital OF the International Trust
Company included the signing OF a cashiers
check by Arthur d. Campbell at the direction Of
Mr.. Cow and Howard Maxwell the president.
| Several days later Mr.. Campbell was instructed
TO charge the check to the estate OF Carrie NJ.
| Mcguire. AS II happened that Robert ]. Cuddi-
ny. executor of the estate. made draft on the
! account which brought II down below what was
| left on the books. several Intermediary trans
actions had TO be hurriedly put through to keep
| the books straight. Some OF these were in the
form of notes all OF which taken UP as
the subscriptions to the capital stock were paid
in. all with the exception of $4,000 note made
by F W DoolittIe. which still stands
II happens that Mr.. Cuddihy. executor of the
Mcguire estate. is director of the Borough
/ Bank. but he had no knowledge of the transac-
| ton by which the estate funds juggled-
He witness before the grand jury yes
terday.
MANY WITNESSES EXAMINED.
Among the other witnesses examined were
Congressman John J. Fitzgerald. Hermann
Wischmann. ex-SheriH William ]. Buttling.
Thomas F. Martin. Warren ]. Diefendorf and
Charles E. Levi. all directors of the Borough
Bank; Henry ]. lies. the assistant receiving
teller. and A. z Kleinart. builder and father
in-law of Mr.. Hes The two latter testified re-
garding an allegation that Mr.. Hes. on learning
that the Borough Bank was 70 suspend. had
taken out some money for Mr. Kleinart. The
testimony showed that the transaction was per-
fectly proper.
It seems that Mr.. Kleinart got some $4,000 in
cash from the bank every week 20 pay his en-
his check for $4,000 his account 20 Mr.. lies.
asking him TO draw the money. This
Thursday. the last day which the bank Was
open. Mr.. Hes entered the check with the pay
ing teller intending 10 take the cash when he
went home Developments were such that he
did not get away until o'clock the following
morning when he carried the money away in
satchel. But it had been properly drawn out IN
banking hours Mr.. Kleinart had a balance Of
s4Os2 in the bank which is still there
All of the improper transactions carried on by
some OF the officials OF the Borough Bank
might have gone undetected had II not been for
an unfortunate mistake OF a lawyers clerk in
sending out notices to the stockholders Of the
institution. The story is an interesting one as
told last night. and only goes to show how the
International Trust Company apparently was
the Nemesis of the Borough Bank from the
start.
EFFECT OF CLEARING HOUSE ACTION
On the Tuesday before the Friday on which
the Borough Bank suspended. r. W Jones. r.s
president of the Oriental Bank. in Manhattan.
which had acted as clearing agent for the Bor-
ough Bank told the officials of the latter that
the Cleaning House had ordered il 10 stop
clearing for the Borough Bank This left the
Borough Bank in a helpless position for the
moment and Howard Maxwell the president.
went at once william Cow. the controlling
stockholder, and asked what TO be done
Between them it suggested that the BOr-
ough Bank be merged with the International
Trust Company. which had started in business
on October l. largely through the assistance
obtained through Borough Bank money With
such merger the Borough Bank. as a branch
of the international. could clear through the
arad rhe NJ