Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-03-01

to resrond to an asse sment If that
were required.
But while perhaps the first duty
of this department is to the depositOrs,
it aloo owes a duty to the stockholders
and to all other interested persons.
to insist that the business of the bank
be conducted in prudent manner.
Under these circumstances / de-
sire at this time to offer the following
suggestions:
First That until further cOnsuita-
lion with this department. you grant
no more, loans, directly or indirectly.
to any Of the seven persons above
nameI, or on any paper bearing the
signature of any of them, either as
maker. drawer, acceptor, endorser or
surety 1t may be suggested that their
additional endorsement on the paper
of others would net be undesirable.
but that opens a dangerous door and
the safer course is to accept only such
Paper as is satisfactory without their
signatures.
Second That reductions and pay
ments he made on paper now held by
the bank as follows: =" Is
Third. Retain all collateral you
now hold as security for the several
amounts unpaid. except in cases where
the total Indebtedness secured by any
particular pledge is discharged
Fourth. Keep this office constant
~ informed as to all changes in this
paper. I'm ~, 4-a, .,
Fifth That no renewals of any Of
this paper be accepted for period of
more than four months at a time.
"a
circumstances it might be suggested
that these payments were demanded
on rather short notice, but you will
observe that when they are all made
you will still be holding some s4IO.-
55152 of this paper or four times your
total capital and surplus. Beyond that
I assume that preparations are already
well under way for this. from the TACT
that nv predecessor in office had had
the matter under consideration with
YOU for some time before his resigna-
ton.
IF / may seem exacting in making
specific demands, my answer must DO.
first that the general circumstances
seem TO require it, and second. that de-
snite Mr., Undertakes strenuous ef-
forts to secure a reduction of this
loan. YOU not only failed to materially
reduce it, but on August Z. last, you
took $500 more, and on August ~.
still another $1,000 all of which, al
though overdue, remained unpaid Oh
September 18th.
please do not construe this as an
approval OF the balance that VIII re-
main after these reductions are MADE.
Further suggestions looking to its re-
duction will be made from time to
time. unless the same is accomplished
without them.
while these efforts did not result
as satisfactorily as was hoped, there
did not appear to be any course to 1o,-
low except to meet conditions pre-
cisely as they existed at that time, 10
give the company and its officials the
benefit of every reasonable doubt ana
to undertake by cooperating with
them to work out the matter withou'
causing any general lack of condolences
that could possibly be avoided. Pre-
cipitate action at that time by way OF
enjoining the Trust Company from the
pursuit of its business, and the
liquidation of its assets would have
affected its own depositors by bring
ing a crisis which would have COM
PEELED the Trust Company to share
with other creditors Of the above
named syndicate in all Of the holdings
Of the members of that syndicate
which were not already pledged as
collateral. and from which by the
course adopted. the Trust Company
realized some 100000 in cash, or
more than $186008 in cash and the
surrender of good collateral before
the general failure of the members nj
the syndicate came. 1t would Also
have emphasized a weakness In our
banking laws. as they then existed.
viz. the total absence of any legal re-
strictiors on the amount of funds
which could be loaned to single In
dividual or group of individuals, which
weakness would then have necessarily
been followed by widespread lack OF
confidence in banking institutions i'm
general and Of this class in particu-
lar. but which was fully remediedN by
the trust company act of 1907. s..
Beside, this, although, Of course.
the department could not then fOresec
it. the public and especially the bank
ing public would have suffered meal
cuIable injury through any such crisis
as would have followed drastic action
at that time. coming so short q time
before the panic of 1907. In fact, with
conditions as they then existed and as
they continued until the spring Of
1909. with such progress as was actu-
ally realized by Cooperation Of this
department with the management of
the bank. there always appeared a
possibility that by. temperate action
the institution might be saved, while
il was from the first absolutely certain
that any action which would have
caused run on the Trust Company
would have resulted with no benefit to
| it or it's depositors and might have
| been very disastrous to all other
banking Institutions in it's vicinity.
and that, too. without any fault what
ever on their part.
In the winter of 1908. Hon. Charles
F. Johnson, with some reluctance. and
at my earnest solicitation, accepted a
position on the board of directors.
After full discussion of conditions
he undertook to assist in working out
satisfactory conclusion, and some
| further progress was made. It be-
came apparent. however. in the spring