Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1909-05-04
REcE1vERsHzp ABUSES
New York's Safeguard for the Peoples
Money.
ISAAC F. MARcossoN In Saturday EDenins Post.
Money.

worth while to give the main facts
about the Knickerbocker fee. Original
ly the sum Of 100000 was set aside
for the expenses Of receivers and coun-
sci. Later, when motion was made to
discharge the receivers (there were
three), the court fixed the compensa-
ton of each receiver at $4,000 and that
of the counsel at $4,000, making to-
tai of 100000. 1t happened that At
torney General Jackson had deputy,
a keen young lawyer named w. A. De-
Ford. He opposed this fee, which he
extortionate. He took the
case before Judge Gaynor, who reduced
the total amount to $4,000. giving each
receiver $4,000 and the rest to coun-
sci. In handing down this decision
Judge Gaynor said:
1.-The amount allowed ($300,000) was
so grossly excessive as to amount to
spoliation of the assets Of the trust
company. To allow 1t to stand would
implant general distrust OF the admin
istration Of Justice"
Two banking institutions are now
being liquidated under the direction Of
the superintendent Of banks-the La
fayette Trust company and the Harbor
and Suburban Building and Savings
association.
We have seen what is done in the
case Of bank that is liquidated under
the new law. Let US now see the pro-
cedure with a building and loan asso-
clation, for that will give an idea at the
same time of the watch that is being
kept by Superintendent Williams on the
financial institutions OF the state.
The Harbor and Suburban Building
and Savings association, though not
a very large concern, was the reposi-
tory for the savings Of a number Of
people who wanted to build homes.
From q recent examination Of Its affairs
Mr.. Williams found out that its finances
neared the point where sudden drain
on the treasury would be fatal. There
were considerable assets but not much
cash. One day he read in the newspa-
pers that man had been struck on
the head by a brick that fell from a
house that the association was build
ing. The man sued the association for
$4,000 and got verdict. The COM
pany appealed the case.
Mr.. Williams set to work to watch
the progress of this case. When he
found that the higher court had affirm
ed the verdict Of the lower court he
sent for the principal officers OF the as
sociation.
"You can't pay that verdict" he
said. II think you are insolvent."
"Yes," said the officers.
'Have you anything to suggest?"
asked the superintendent.
Economy In Administration.
When they said no he closed the in
stitution and put one of his deputies in
charge as receiver The deputy had
the lock on the door and the combina-
ton Of the safe changed. He was In
actual possession. Then he went quiet
ly about the business Of converting the
company's assets into money, protect
ing its interests generally, and thus
really safeguarding the savings OF the
stockholders.
The interesting thing about this per-
formance, first, that it showed the way
the department works under the new
laws. and second, that all its machinery
was put into useful motion without
public excitement. Mr.. Williams knew
that a sensational report about the clos
ing of a building and loan association,
even a small one, might cause run
on larger and perfectly solvent institu-
tions. No news spreads quite 80 fast
as bad financial news; none Is more
subject to absurd exaggeration. 1t mas
caused more than one senseless run,
and these runs, In turn, have created
general distrust and panic.
Therefore, when every step had been
taken to conserve the company, the
superintendent Of banks made a brief
Of the closing on the
bulletin which he Is required by law
to issue every Friday, giving the news
of the department and his official acts.
It is posted in his office and then sent
to the press.
The official statement about this par
ticular case, as it appeared on the bull
letin, was:
Pursuant to the provisions OF
Section 10 (former Section 19) OF
the Banking Law, the Superintend-
ent Of Bank took possession OF the
Harbor and Suburban Building and
Savings Association and appointed
Horace ]. Young, Of Syracuse, New
York, an examiner Of the Depart
ment, special deputy superintend-
ent as agent in liquidation. Com
pensation, sixteen dollars day
while employed. Knickerbocker
Trust Company designated as de-
pository for funds.
Thus the compensation Of the receiv-
er is stated at the start, so there is no
possible chance for excessive charges.
Other news which is posted In this
bulletin may be the appointment Of a
new examiner, with the amount Of his
salary, the hiring of a clerk or stenog-
rapher, or the application Of bank or
trust company to open a branch office.
In short, the bulletin Is part Of the pub
licity programme Of the new banking
laws.
The state Is fortunate in having a
Duration of Receiver and