The sun. [volume] (New York [N.Y.]) 1833-1916, 1908-08-09
VETO FOR HORSES BANK PLAN
NORTH AMERICA WILL BE WOUND
UP BY THE RECEIVER.

Depositors q Get Par for Receivers Ger
tincates ut Several Banks in This City
Acting Comptroller OF the Currency
Says That the Morse Plan 10 Not Legal.
T. II Kane. acting Comptroller Of the
Currency. has vetoed Charles w. Morses
plan for the liquidation Of the National
Bank Of North America by the Assets Real
ization Company. MIR. Kane sent his de-
oision to Charles A, Hanna, receiver Of the
bank, yesterday. and set forth at length
bis reasons for denying the application.
The decision. according to Mr., Hanna.
for the reason that q number Of banks In
the city are cashing receivers certificates
at par.
In his instructions to Mr.. Hanna Mr.
Kane quotes a section Of the revised stat
Of a bank the Comptroller Of the Currency
shall pay Off all creditors. and then after
thirty days notice shall call q meeting Of
all shareholders. The shareholders at this
meeting are to determine whether or not
to continue the receivership. Mr.. Kane
say further:
While this section contempiates that funds
sufficient to pay all the liabilities ofithe bank
to depositors and other creditors and the ex-
penses OF the receivership shall be realized
from the assets Of the association before
a meeting Of the stockholders Is called for
the purpose OF ~electing an agent, In a num-
Der of instances this office has accepted funds
for this purpose from stockholders or others
Interested In a. speedy liquidation Of a failed
bank. In order that the depositors might
be paid promptly In full and the remaining
assets turned over to an agent OF the stock
holders to be liquidated more ad va ntageously
and economically for their benefit.
When you were authorized to permit the
representative OF the Assets Realization
Company to inspect the assets OF your trust,
with a view to that company placing In you
hands sufficient funds to pay of the remain
ing liza 1t was represented TO this office
that the stockholders Of the bank would share
alike in the proceeds of the liquidation In
proportion to their stockholdings, and that
the proposition OF the Assets Realization
Company was the simple plan above out
lined. The contract which they nave asked
the stockholders to sign. and which / saw
yesterday for the first time. presents this
proposition in an entirely different light.
Instead OF the Assets Realization Company
furnishing the funds necessary to pay of
the creditors the plan proposes that the
bank shall give It's notes to the company.
thereby creating q new debt for the payment
Of the old debts Of the association. contrary
to law.
The contract Of the Assets Realization
VIVA StshhNc sAA@t hbS NScto "a NV both
to that company. including the sum Of s275.-
600. compensation for commissions. shall be
paid In full before any payments are made
to the stockholders. This arrangement Is
not in accord with the representations made
to this ONCE by the agent OF the Assets Reali-
zation Company that the stockholders were
to share alike In the liquidation OF the assets
in proportion to their stockholdinss.
A number OF protests have been rec eived
from minority stockholders who hav not
consented to the proposition OF the Assets
Realization Company.
While IL is not the duty of the Comptroller
OF the Currency TO look after the interests Of
stockholders Of an insolvent bank, the law
providing q way In which their interests shall
be taken care Of. at the same time the Comp
troller would not be justified in jeopardizing
the, interests Of minority stockholders by
being a party to a proceeding not In conformity
with law, which contemplates returning the
assets Of the bank to the control OF
those responsible for the failure.
You are therefore instructed to decline to
accept the funds offered by the Assets Realiza-
ton Company and to proceed with the liauida-
ton OF the bank under your receiver ship.
When all the debts Of the association have been
paid from the proceeds realized from the
assets q shareholders' meeting will be called
for the election Of an agent In the manner pre-
scribed by law.
Mr.. Hanna also insisted that the plan
HAD not been properly presented and that
a large number OF stockholders were OPP
posed TO IL.
$50 far as the immediate payment Of
depositors goes he added. amy depositor
who has not heretofore sold or transferred
his receivers certificate can cash the same
at par at a number Of the banks in this
city. The Assets Realization Company
given TO understand at the beginning
Of their negotiations that unless ii secured
practically the unanimous cooperation of
banks shareholders its plans could not
be carried out. AS a matter OF fact, aside
Mr.. Morse's own holdings in the bank,
a large majority Of the shareholders nave
not consented TO the Assets Realization
plan Of liquidation