New-York tribune., 1908-12-11
EIGHT BANKS INVOLVED
HOLD KEIR4N PAPER FOR
OYER 81 ESQ 900.
Carnegie Trust Com pany Got Al the
Security, and Safe Vas Empty
When Others asked More.

Eight local banks and trust companies are
involved in the wreck of the Fidelity Funding
Company and in the financial difficulties Of P.
J. Keiran its president. to the extent of a total
Of more than S1.2JO,oO0, according t. a state
ment made last night by a banker who is thor
oughly familiar with the company's business.
The trust companies which lent money on
heiran's schemes are the Empire Trust, the
Windsor Trust, the United States Mortgage and
Trust. the Carnegie Trust and the Columbia
Trust. while the creditor banks the Ma
tional Bank of Commerce, the Lincoln National
Bank Cd the National Copper Bank
These local banks and trust companies have
anywhere from 100000 to SSO00OO of the FL
deity Funding Company's paper, but all are
amply secured and no eventual losses are
looked for. Indeed the total of securities held
by the local banks and trust companies is esti-
mated at over s2,00O,O0o Some of the cred
itor banks are better secured than others, but
none of them has been caught mapping.
The best secured Of all the local institutions
turns out to be the Carnegie Trust Company,
and thereby hangs a tale. Early last fall the
creditor banks began to suspect that all was
not going well with the Fidelity Funding
Company, and a committee appointed to
look into the affairs of the company and TO
demand more margin on outstanding loans.
This committee was composed of George w.
Young, James s Alexander, Of the National
Bank of Commerce. and ex-Justice Morgan J.
OBrien.
The committee promptly visited the
pany's Offices but when more collateral
Curity was demanded il was found that there
was nothing in the safe but receipts Of the
Carnegie Trust Company. c. c. Dickinson,
president Of the Carnegie Trust, when he
turned from Europe late in the summer, had
told Keiran that he wanted more security and
had taken all the company had. The other
bankers. though a bit chagrined at finding an
empty safe, were alive to the humor in the
situation and congratulated Mr.. Dickinson on
his forest ght.
Next TO the commitments Of the local banks
the most interesting development yesterday was
the additional light thrown on Keiran's methods
Of high finance Chief Of these was the dis
closure that St Mary's Academy, Of Nauvoo.
Ill, had been induced by Keiran to build a water
works and construct railroad at an expense OF
upward Of 100000. This is believed to be the
first instance on record Of a Catholic institution
of learning branching out into railroading and
the building of public utility plant St. Mary's
Academy is believed to be so heavily involved in
the Fidelity Funding Comrany's failure that
trouble is inevitable
One familiar with Keiran's methods Of doing
business explained yesterday how many Of the
institutions which transacted business through
the Fidelity Funding Company happened 20 ind
outstanding notes for much larger sums than
they supposed they owed.
"keiran was accustomed" said this inform
ant, "to request the converts, schools and
churches with which he did business TO give
him certain number Of blank notes which he
was to fill in the client needed the money.
often it would happen that a bank would agree
10 take q certain amount. say, $4,000 Of the
church paper Keiran might not have a note for
exactly that amount just then. His method was
70 i'll in Of the blank notes for the sum he
required and then credit the difference 10 the
maker on the books of the company"
President Dickinson Of the Carnegie Trust
Company said last night that his company held
many authorizations from various diocesan
heads in regard to certain borrowings. He has
agreed to hold on to these documents and aid
his fellow bankers in collecting the notes which
are thus covered Wherever loan IS author
lied by the head of a diocese IL will undoubtedly
be paid. according 10 Mr.. Dickinson, who has
had large experience in Catholic Church banking
matters.
The books Of the Fidelity Funding Company,
il is learned. we're gone over by auditors less
than ninety days ago, and at that time every
thing was found 70 be in good condition. one
banker. who knows Keiran well. said last night
that he was confident that Keiran's affairs would
be found ali straight. This man said he had
had business dealings with Keiran involving
hundreds of thousands Of dollars, and had al
ways found him to be trustworthy and reliable.