New-York tribune., 1908-10-24
CONTROLLER WARNED
PRESIDENT CURTIS
JOHN II. GATES UPHELD
BANKS BIG LOANS.
Mr. Ridgely SAID Prosperity OF In
sfitutiou Depended Upon Success
of Various Morse Enterprises.

William r Ridgely as Controller OF the Cur
-encv. freuuer,1ly warned President AilIeu =,
curtis and the directors Of the Natonal BAN pam
~ North America in the years 1eoo anu i"o'
thar The bank vas making excessive anu III ii'S
o,i-io., unsafe loans to Vice President Charles
" Morse. the Morse companies ana 'iie u,
recto-s themselves, according TO letters ohereo
., evidence bv the prosecution at the Morse
Curtis trisl yesterday before Judge Hough' IN
the United States District Court
Some Of those named having 100 large
loans from the bank We're, IN addition TO MT
Morse Warner Van Norden. OF the Van Norden
Trust Company: Oakleigh Tho-ne. president OF
the Trust Company OF America; James l.
Morse. the -'Uncie Jimmie who figured IN the
Morse Dodge divorce trial: John l. E-hott'
president Of the Consolidated Arizona Smelling
Company. a Morse concern; Wesley NJ Oler
president Of the America Ice Securities Com
pany. and Charles NJ Schwab.
Included in the companies TO which excessive
loans had been given. in the opinion OF Mr.
Tsiacely were the American Ice Securities Com
1,anr the Mercedes Import Company, which was
backed BY Mr.. Morse; the Consolidated Ari-
zona Smelling Company. the William Campbell
wan Paper Company, another Morse concern;
Primrose d Braun, the Morse brokers. and the
New York Contracting Company. Of which
Charles r. Nurphy's brothe- is head.
To these criticisms Of the Controller various
replies were sent by MI. Curtis and the direc-
tors, and the interesting fact was brought out
thar the directors almost invariably stood by
Mr. Morse and Mr.. Curtis, agreeing to assume
fun responsibility for the loans referred to as
excessive on the other hand, John ". Gates.
Ct that time one of the banks directors. sent a
special individual letter to MI Ridgely, in which
he defended in strongest terms the management
of the bank Mr. Gates said further that he
thought all the loans complained of were good
and sound" He also thought Mr.. Morse a re-
Iia ble man. and commended the banks action in
making loans TO him and 10 the Morse enter
prises.
G-Es GAVE HIS APPROVAL.
Concerning the advisabiIity Of making heavy
loans TO the directors, Nj Gates said he consid-
cred the action perfectly comnendable up 10
proper amount" as the directors would Ger
tainly look after the success of companies in
which they we're financially interested. On the
whole. Mr. Gates gave the banking methods of
Morse and Curtis his hearty approval
one letter, dated October >, 1906, was read by
United States Attorney Stinson, wherein the
Controller complained to Mr. Curtis that it was
making too many loans, and pointing out that
the reports showed a loan Of S1S3O00 TO the
Hudson Navigation Company. another Of S193.-
Uo0 10 the Steamship Trust. one of $4,000 II
Cakleica Thorne- discounted by Morse, which
the C.-troI-e- thought was not in keeIdng with
good banking. Tne Controller pointed out fur
tner that the hank was lending too freely on
collateral - companies in which Nr- Morse was
Interested The Controller also objected TO 50
many loans heinc made % directors and Of
ace-s Of the hank on speculative collateral in
companies in which they were interested. To
this Nlr. Curtis replied that the bank felt its
security was ample and that M Morse was
financially able To protect any loans he was
behind
The Controller again. in August. emphasized
what he had said before concerning the loans,
csr-eciaIIy these connected with and dependent
upon the Morse enterprises for security. Loans
70 the CLYDE Line Of S2Googo and the New York
Contracting Company Of $4,000 were especial
y referred 70.
WARNED PRESIDENT CURTIS
Ir January. 1907. the Controller took up the
affairs Of the bank IN earnest and wrote Pr=si-
dent curtis as follows:
i Is noted that loans aEsreEating &3.51o,-54 or
about - re~ cent of the bills receivable, have
pcrarians IN which they are Interested The
liability Of Wee President Morse in this respect
IS particularly large. His direct loans aud the
loans 10 his steamship companies and other IN
Jere=ts aggregate Sl,-GA,255-
This amount Is exclusive os the loans Of James
= 1Iorse. $1a4.5E5; Arthur Braun and Primrose
& Braun. S1Sz.75S. either both of which may
e Ter The benefit of Nr Morse. The total
ano1r. Of loans -he payment n which is de-
pendent upon ,llis director and cn enterprises
which he has promoted s entirely TOD large
Credit mas been extended to hia and the other
directors ard their corporations uEta tl1 vol
fare Of the bank iS iTSeTarably connected with
the prosperity Of these three interests.
While these advances may appear safe and de-
-irable. and even though a moderate extension
q such credit may be above criticism, II Is
neither desirable nor safe II have the chances OF