New-York tribune., 1908-01-04
a GRAVE SCANDAL"

AS if to confirm by modern instance lhe
recent utterances of Governor Hughes con-
cernng receiverships, the referee III the case
of the unfortunate Republic Savings and Loan
Association has filed his report with the BROOK
lyn County Clerk In the Governors message
the statement is made that 1.-The amount OF leSat
Expenses incident to the liquidation OF lnsoiVeht
banking Institutions in this state is grave
scandal to which the committee of bankers
.fttingly calls attention After giving the
citizens of New York State forty y-eight hours
to think over this general proposition MI.
Alexander McKinny the referee OF the Repup-
lie Savings and Loan Association, makes pubic
the details about the receivershlp or the de-
funct corporation. His report lends slshih
cance to the Governors words and should md
terially help in bringing prompt legislative re-
lief from Albany. The most telling points in
Mr. McKinny's report are the following:
The receivership has lasted since June, 1900 a
period of seven and half years ne @ asses3 20
This corporation, which were placed by the Stdte
Banking Department just prior TO the appoint
ment of the receivers at $1,0S6,000. and subse-
quently fixed by the receivers themselves az
s9O4 900 have shrunk to about $4,000, as ap-
pears by the receivers final account rms was
apparently due to two causes: TO the lnproH-
dent and reckless investments made by the ON :
GERS of the corporation and to the expenses Oh
the administration Of the receivership oo, ooo
The assets. which were placed at slo6o,VVv. Soo =;
realized only S275000, and of the $2fo,00o IL
cost $4,000 to administer the same. VI thls
sum the receivers obtained only $4,000 between
| them for their fees in the proceeding; the re
mainder is for attorneys fees, referees ices,
disbursements of counsel. salaries OF clerks ana
rent. .,
The receivers impressed me favorably with
their apparent desire to aid the court in every
way possible and to explain every detail or ex-
pense and necessity for the same. of which they
had any knowledge, but it did appear to me that
their attorneys had unnecessarily prolonged
these proceedings. which should have been closed
some time ago.
II should in fairness be said that the admin
stration of this property is in no wise different
from relatively more expensive than that Oh
the average receivership in New York State
to-day Our statutes have permitted the growth
of a system which has received the positive, II
not active approval of the courts whereby the
sole administration of affairs usually is placed
in the hands of the receivers attorneys, whoen-
velop the most trifng matters in maze of legal
red tape when ordinary acumen and business
experience should suffice. The purpose is of
course protect the receivers and have them
act in Strict accordance with the law. The re-
suit is. however as demonstrated In this case,
that the expense of administration is nearly 70
per cent of the entire assets.
There is scant occasion for much comment
on facts like these, After making all due al
! IOwance for unavoidable delays in Strengthening
out tangles and dealing with obstreperous
shareholders, is it not severe tax upon human
credulity to believe that about 20 cents on
every dollar remaining in the bankrupt cor
poration's treasury was really needed to pay at
torneys and clerks for their work in restoring
! the other 80 cents to rghtful owners? But
is it not infinitely dsquieting to learn that
/ the present case is typical of the average re-
| ceivership in this state to-day? Governor
Hughes's recommendation that the Superin-
! tendent of Banks should be made a general
| official receiver ought TO gain strong support
! from this melancholy incident.