New-York tribune., 1908-02-19
DEPOSITORS STIRRED UP.
Proposed Salts against National
Bank of \. II. Interest Them.

Depositors in the suspended National Bank of
North America took lively interest yesterday
in the news. published exclusively in The Trib-
une. that Charles A Hanna, receiver for the
hank, would soon institute suits against the
directors 10 force them 20 return 10 the bank
large sums OF money lost under the Morse man
agement IN unsuccessful deals in American Ice
Company stock.
William F. Havemeyer. who succeeded Alfred
IL Curtis as president of the institution when
Charles w. Morse was forced TO retire. Oc-
tober 10 last, was out OF town yesterday, and no
information obtaiDable TO his where
abouts.
john II. FIagier one of the directors denied
yesterday there were any grounds which would
Justify Mr. Hanna bringing suits against the
directors individually and collectively. He said
that the charge of the receiver was ridiculous"
ITO nay knowledge" said Mr. F4agler. no
such speculatons were made with the banks
money. If anything of the kind had taken place
] would certainly have heard of it, and such is
not the case
The counsel for one OF the directors said last
evening that the directors never authorized any
stock speculation on behalf Of the bank and
were not fairly responsible if officers, contrary
To the orders Of the board, had carried on such
speculation under cover Of what appeared 10 the
directors as loans. The directors had authorized
loans on what at the time appeared to be mar
ketable securities and, while they now see that
those securities were not as good collateral as
they had supposed. and the sOundness OF their
Judgment might be open TO quetion, they had
never authorized the use OF the banks money
for anything but what they regarded as loans
in good faith adequate collateral They might
have made bad loans by mistake. but that was
entirely different from speculating. So far as
they knew, the borrower was merely 10 pay his
interest and principal, and any gains from the
1iuctuation of stock which he might purchase
with the money loaned We're his. not the banks,
as would have been the case If the bank had
been specuiating.
OF the nine directors in the bank under the
Morse management. one Charles T. Barney, is
dead. Charles N. Schwab is in Europe and
Colonel Robert n. Thompson is in India on a
tour OF the world Mahlon n. Thatcher. reputed
TO be the richest in Colorado, makes his
home in Pueblo. He attended few Of the board
meetings Of the bank. and il is A question
whether he could be held liable for losses.
Colonel Thompson was director in the Bank
Of the State Of New York. and entered the
directorate of the National Bank Of North Amer
lea some six years ago. when Mr. Morse merged
the former l.. the latter institution. He resigned
as A director last August.
Some further light was thrown yesterday or
the manner in which the deals in question are
said 10 have been managed. Three Of the di-
rectors in the bank were members Of the famous
ice pool in addition 70 Mr. Morse. These were
Nessrs. Gates. Schwab and Thompson. II IS
said that these men. who were the most con-
srj,.rous fgIi-es in the manipulation Of Ameri-
can Ice stock, figured that il would be fine
chance for the bank make a handsome profit
and SO arranged for heavy line Of the stock t.
he taken by dummy who acted for The bank
and with the banks money. All went well as
Iong as the pool Was able 10 keep up the price
of the stock but when the slump came the bank
had 10 write of large loss.
Arthur Braun, of the Stock Exchange firm OF
Primrose 6, Braun which handled the transac-
iions for the bank. visited Mr.. Hanna yesterday
M Braun was formerly Mr.. Norse's private
secretary.
Furnors were afloat yesterday that aLr. Hanna
intended to institute other suits against the
directors for excessive loans and overcertifica-
tion. but this would fall rather in the province
Of the federal county grand jury, although
the receiver has the right institute civil suits
TO collect moneys lost by the bank
The last conference between Mr.. Hanna and
the directors is understood 10 have been helC
last Friday, and was referred to last night b!
one sn close touch with the banks affairs as Mr.
Hanna's Valentine party" The directors wht
attended are understood 10 have been Messrs
Havemeyer Gates, Flagler and Curtis. Messrs
SchNab and Morse II is said, We're represented
by counsel The receiver IS believed to have in
sisted OF q settlement at once or the alternativ.
OF a suit
Ex-Justice Morgan J. OBrien was a directo
in the hank for a short time last spring, bu
resigned 10 go abroad