New-York tribune., 1907-12-18
PLAN TO REOPEN BANK.
ASSETS TO BE EXAMINED.
Justice Belts adopts Suggestion m
Borough Case-Counsel Approue.

Kingston n. Y, Dec. 1I.-Decisive action
looking to rehabilitation Of the Borough BANK
of Brooklyn taken to-day by Justice Belts
of the Supreme Court, who, after an argument
on the question of making permanent the re-
ceivers of the suspended bank, adopted a sug-
geston. which approved by all counsei III
the case, that referee examine and report on
the value of the disputed assets and on the pro-
priety OF Goodwin Brown, receiver of the Inter
national Trust Company, signing the deferred
payment agreement proposed as one OF the
plans for reopening the Borough BANK. waiter
Shaw Brewster. of Brooklyn, was appointed rel
cree by Justice Belts. who directed him to re-
port by February s, 1903. In the mean time all
counsel will join in asking Supreme Court JUS
tice Howard, of Troy, to hold in abeyance va
rious motions argued before him last Saturday
Referee Brewster will hold his first hearing on
Saturday.
The plan for the rehabilitation of the Borough
Bank was explained in detail by Paul Grout,
counsel for the bank. BY its provisions deposi-
tors agreed to accept the amount OF their de-
posits in five instalments, covering period OF
sixteen months, as follows: Ten per cent on oe-
mand the bank resuming business, ID per
cent in four months. 20 per cent in eight months
% per cent in twelve months and 80 per cent IN
sixteen months. Depositors whose loans nave
been due to agree to pay such loans proFloeo
Inand loans of S1l3O12 will be paid on resump-
ton of business, and certain assets VIII be sold
with which to meet the first payments due
Under this plan the bank can reopen with avail
able cash of 1905, go. To meet obligations
SSSSO54 will be required. leaving surplus OF
S1O7 1876. Depostors representing S2Oo3,lo2
have signed the deferred payment plan These
deposftors represent more than 30 per cent of
the total deposits. Under the proposed plan the
bank stock will he held in voting trust. and
eight of the fifteen directors must be depositors
who have been selected. Those selected are
John H. O'Rourke, Alfred Hamilton. Herman
Luckey Daniel L. Thompson. DR.. John Shep-
herd, Henry R Roelfs. William Mccormick and
DR.. Edward Day Ferris.
During Mr. Grout's argument It appeared that
the Excelsior Fire Insurance Company, or
Brooklyn. for whose dissolution Justice Belts
granted order last week, was organized by
William Cow. a director of the Borough Bank.
and others from moneys secured in part from
the bank for which they gave notes The Bor-
ough and Oriental banks hold the entire stock
issue of the company as collateral FOR the
loans The International Trust Company. now
in the hands of receiver was also organized
in part by moneys from the Borough Bank. for
which notes were given. Prior to the appoint
ment of a receiver the directors of the Inter
national company p6SSeu IeSOluliOiS AcitiAg iiS
credit slips Of the Borough Bank OF 100000.
less an offset OF s45.0o0. and agreed 10 what
ever action the depositors might take in plans
for a resumption. All liabilities or losses al
legged 10 have resulted from acts Of William
Cow and others who have been indicted by the
Kings County grand jury have been made good
by collateral put up as security MI Grout,
replying to a question Of Justice Belts. said
that he thought that the bank had taken all
the money and securities owned by Mr.. Cow
for collateral.
Mr. Crout said that thc surplus OF the Eighth
Ward branch Of the Borough Bank would
amount 20 1884. He said that no irregu-
Iarities occurred in that branch of the bank
An affidavit prepared by William :. Hurley.
second vice president showed that loans
which were not good amounted to sSs7,sss. and
that improperly made loans which were some
what secured amounted to S44237s. The afi-
davit disclosed that William Cows interest in
the Intercity Car Advertising Company. against
which the Borough Bank has a claim Of $4,000.
was now owned by the bank, and that Mr. Cows
income from this source was stated TO be
100000 year.
Edward NJ. Shepard who said he appeared
as counsel for the bank a matter Of civic
duty and not because he had received a re-
tainer, which he would refuse II offered. ar
gued that the two principal features presented
for determination were the value of assets con-
tested by receivers and depostors and whether
the receiver of the international Trust Company
had power TO agree to the deferred payment
plan.
Clarence J. Shearn. on behalf Of Receivers
Cox and Powell. of the Borough Bank, said he
did not see how the banks interests could be
jeopardized by the adoption of the plan, and
their position that rehabilitation was better
than liquidation If it could be accomplished.
Deputy Attorney General Mackey favored APP
praisement of securities by the Superintendent
of Banks or his appraisers, which is being done
in the cases OF the International Trust Company
and the Hamilton Bank.