New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-05-05
CITY BANK OVERCERT|F|ED
Vice-PresIdent Admits Fact in
Lathrop, Haskins & Co. Hearing.
PRACTICE COMMON, HE SAYS
Happened on Day of Hooking
Pool Crash, When Brokerage
House Was About to Fail.

Horace ". Kilborn, ice-president OF
the National City Bank, testtfytng in the
L.athrop, Haskins & Co bankruptcy pro-
ceedings yesterday before Referee Stan
ley ". Dexter. said that his bank had Ger
titled checks for brokers who deposited
with the bank as security nothing but an
unsecured note. He said this practice was
common in Wall Street
Mr. Kilborn in his testimony admitted
that the National City had certified checks
for about $4,000 drawn on the bank by
Lathrop, Haskins & Co. on the day Of the
firms failure.
Abram I. Elkus, counsel for Henry y.
Hotchkiss. trustee for the creditors of the
bankrupt firm, called Mr. KIlborn 20 the
stand for an explanation of the relations
between Lathrop, Haskins & Co and the
National City Bank, particularly to shed
some light on the GENERALIZATION OF
checks for the defunct firm by the bank
and an explanation Of the fact why Mr..
Kilborn had taken a large block of Sc
curities from tie firm after he had heard
that their suspension was imminent.
Asked by Mr.. EIkus what had tran
spired on January 70. 1910. the day Of the
slump in the Hooking stock. Mr.. Kilborn
said that he went to the Office OF Lathrop,
Haskins & Co.. where there were turned
over 10 him by Mr. Haskins and Mr.
Hotchl1tss the following securities: Two
hundred shares Southern Pacific, 200 Read
ing. 2n0 New York Central 800 Rock Isl
and, 200 Hooking. 400 Consolidated Gas, 100
Shelters. 800 Missouri. Kansas & Texas,
100 wabash, $50 Anaconda. 100 Kansas City
Southern and 500 United States Steel. Mr..
Kilborn said that this took place some time
after l p, m. and that Stephen E Albeck.
assistant cashier of the bank, accompanied
him.
When you went to them did you not go
there because there was an apparent over
draft by Lathrop. Haskins & Co. of $3.50
900 or $500 0GG?'' he was asked.
7 don't know he replied.
Did YOU not ask them for $4,000 Of Sc
curities?''
L don't believe I asked them for any
amount OF securities"
When you went there did you not know
that their suspension had been announced?'
Il knew that the stock they were inter-
ested in had declined and that they were in
trouble"
Mr.. Kilborn was then asked about the
contract loans mentioned by him. He said
they were in the shape of demand notes
drawn by Lathrop, Haskins & Co, two for
800 600 each and one for 100000.
Mr.. KiIborn then said that he asked
members of the firm for securities to make
good their loans
II was then that Mr.. Kilborn described
the usage of Wall Street banks which do
business with Stock Exchange houses to
make arrangements each day for loans
Mr.. Kilborn said il was custom of the
banks 10 overcertify their accounts for the
benefit of customers, provided they made
good at O'Clock each day.
ct is done to get around the law against
overcertifcationp' was suggested. The
referee overruled this question.
Mr. Kilborn said he went to the office
of the firm to get securities TO meet the
overdraft. He said that the bank had Ger
tilted checks for Lathrop. Haskins & CO.
for $685., 927. and that the deposits were S314.-
S45 plus demand notes OF $500 900,
Mr. Kilborn said the transactions de
scribed by him between brokers and Stock
Exchange houses took place every day 10
the amount OF many, many millions