New-York tribune., 1908-03-06
CRIME. SAY RECEIVERS
ORIENTAL BANK CHARGES.
Report Makes Grace allegations
AGAINST Old Management.

The Carnegie Trust Company and Henry
Schneider, temporary receivers for the Oriental
Bank. in a preliminary report sent to Attorney
General Jackson yesterday. characterize the ad-
ministration of the affairs of that bank for the
last two years as being marked by apparent for
geries defalcations. perjury and other viola
tions of the statutes, and charge that it has
been permeated with Irregularities. fraud and
crime. yet" the report states, ''the attention
of the authorities of this city state has not
been called the violation of the law by the
officers, directors or attorneys of the Oriental
Bank"
The receivers tell the Attorney General that
in their opinion "a considerable number of civil
and criminal actions must unquestionably be in
stituted in the winding up of the affairs of the
bank" and that indictments and convictions.
they think, Will follow. Charles c. Dickinson
said yesterday: In my opinion this exanlina-
ton have made shows that some men should
be behind prison bars
Hugh Kelly, the present president OF the bank.
in commenting the receivers report said that
it was as amazing as it was false. malicious and
misleading, and that he could not understand
why any receiver should issue such a statement
at time when application to discharge the
receivers TO permit the depositors TO be
paid in full was about to be made.
From facts ELECTED by their examination Of
the books of the bank, the receivers inform the
Attorney General that it be clearly seen
that the bank is "honeycombed with fraud. de-
ceit. falsifcations of its books. the making OF
false reports and that In fact. it's condition
may Justly be termed rotten"
SOME OF THE ALLEGATIONS.
Among the many allegations which the re-
ceivers make is one that the bank has not
earned dollar net during the last five years;
that in fact. it's losses have been greater dur
ing that time than its earnings. and YET IL has
paid dividends on it's stock 1t is asserted that
these dividends were paid out of the surplus of
the bank. and paying dividends out OF surplus
is a violation of the banking laws
Another charge Is that sums aggregating
large amounts have been charged off to the
nro6t and loss account and the offenders al
lowed to escape the penalty OF the law. "ap-
parently because they were employees OF the
bank. whom the officers were afraid to prose-
cute for fear of exposure of greater or more
serious irregularities or violations OF the law on
the part of those higher up in the adm1nlstra-
ton Of the banks affairs
sim another assertion is that the hank made
loans to its directors in amounts that are
,,,,,v amazing and upon security of little or
5orhtf,,l value; Furthermore. that these loans
have been changed from time loans to demand
-, a,a vice versa One of the receivers
,daod +bot when a director did not want a loan
,oda 70 him in person he had the bank make
o loan To his brother or sister or other reia-
.;,,. and that the total of loans of such nature
aggregated approximately SIWo""
DECLARE RECEIVER NECESSARY
T, closing the preliminary report the receivers
- that in their opinion mot only Is receiver
s,in necessary TO wind up the affairs OF this
,o,x hut if any bank or trust company at
,en7pts TO pay it's debts in full there VIII De d
-. ,osa sustained by whoever does it-it |
o,,,a he IN effect, taking the property OF one |
ban,x under the Jurisdiction of the state TO pay
the debts of another
The effect that this report would nave upon |
the consunlnatton OF an agreement between the |
Trust Company and the Oriental |
D,, which the former to pay off the debts of
The latter was much discussed yesterday. and it |
..arned 70 be the general opinion that any such |
plan would never be carried out 5 Stanwood |
,,arl,ap of counsel for the bank, and Samuel /
I-nterrnver of counsel for the depositors' COM
7,ittee called on Mr.. Jackson yesterday with |
,be modified form OF agreement" Said the |
Attorney General after their visit; The mod |
fled plan was filled with scratches. scrawls |
md InterIineations that L would not look AT il |
- oil told the gentlemen. Messrs Untermyer
md Menken. that they had better take 1t back |
and copy IL, putting ii In such form that L |
could tell what was really in it
The Attorney General afterward learned that |
the modified plan" as presented TO him had |
NOT been seen by the parties upon which il was |
supposed to be binding. Counsel for the bank |
will present some sort of agreement in court |
-o-day when arguments heard on the mo- |
ion to vacate the order appointing temporary |
receivers
The preliminary report Of the receivers was |
Continued third page.