New-York tribune., 1911-04-06
WITHDREW CITY DEPOSITS
ChamberIain'S Office Acted
Quickly Last January.
J. A. YOUNG TO GRAND JURY
P. S. G. Looking Into Robins
South Shore Ira ction Com
pany Collateral.

closed Its DOORS January :. 1911. was a day
OF excitement and apprehension in the City
Chamberain's Office. Mr.. Hyde himself
was away in the Florida Everglades at the
time and to Deputy Chamberlain Walsh fell
the responsibility of safeguarding city de-
posits.
To draw all city money out OF those
banks having Cummns loans-and what
banks they were was known. apparently. at
the City Chamberlains ofiice-was consid-
cred too radical a step. An emissary went
scurrying about, however. II was learned
yesterday. calling upon these banks to lille
larger bonds or IN some other way TO
strengthen the security for these deposits
Under pain of losing them Some OF the
banks told him TO take his money ana
others acceded to his wishes
Withdrawals were made In number OF
cases. The Hungarian American Bank,
which had lent Cummins 100000, debt
which has since been wiped out, secured
100000 Of its Sl25.0CO city deposit with rail-
road bonds and allowed the Chamberlain to
withdraw $4,000. The Madison Trust Com
pany, one of the three banks in the Carne-
gle Trust string. gave up all its city money
$275.OOO, which was withdrawn in two
checks. one for 10000 and the other for
$4,000 Two days later this money. which
in the mean time had been reposing in the
vaults OF the National City Bank, was de-
posted In the Equitable Trust Company.
Others ReIinquished Deposits.
The Nineteenth Ward Bank. another Of
the banks controlled by the Carnegie Trust
Company. lost its total city deposit OF
Sl25,OO0. The National Reserve and the Pub
lie Bank relinquished all their city money
toO-S25O,00O and $1,000. respectively. The
Savoy Trust Company. on the other hand,
secured 10000 of its city money with sure
~ bonds and gave up only $4,000 while
from the Mercantile National $4,000 was
withdrawn. All these moneys. II Is under
stood, were deposited for the time being IN
the National City Bank.
John Alvin Young. brother-in-law or
Madame Nordica and former president OF
the Windsor Trust Company and former
director Of the Hungarian American Bank.
testified before the grand jury yesterday in
corroboration Of what w. T.. Holloway has
already said-that a certain deposit. source
unknown. was promised the Hungarian
American FOR a loan to Cummins. and that
the same day the bank lent Cummins
100000 it received a city deposit OF sl25,Oo.
Arthur Watson. cashier OF the institution.
gave evidence TO the same effect on Tues
day. Mr.. Young. however. denied that he
had gone 10 Hyde in behalf OF the Hun
garian-American Bank. but he did call
upon the City Chamberlain. he said. 10
solicit outright a city deposit for the Wind
sor Trust Company.
The question OF the validity of $4,000 or
South Shore Traction per cent first mort
gage bonds held by the Carnegie Trust
Company has been raised by the Public
Service Commission These bonds the trust
company held as collateral against certain
notes of Joseph G.. Robin aggregatinS $780,
coo With other collateral to secure the
notes, they were sold at auction on March
90 by the receiver and biz IN by him with
the rest for $500.
The Public Service Commission began its
Of this bond issue on JAM
uary 9. There are outstanding $4,000 OF
these bonds The mortgage securing them
was executed in 1904, with the permission
of the old Board OF Railroad Commission
ers and before Robin became interested in
South Shore Traction. Tie company could
issue $2,00o,000 bonds against ii.
Question Of Authority.
But ii did not avail itself OF this privilege
until June 2s. 1907 In the mean time, on
June g. 1857. the Legislature had passed tho
Public Service commissions law The com-
missions were not actually appointed, how
ever and the law did not become fully
the passage of the law and the appoint,
ment Of the commissions the South Shore
Traction Company authorized the issue Of
$4,000 Of its bonds. the Empire Trust Com
pany being trustee under the mortgage.
The question is-arc the bonds Illegal be-
cause their issue had not the sanction OF
the Public Service Commission?
An overssue of three thousand shares OF
South Shore Traction stock, much OF which
was held as collateral by banks and trust
was another transaction which
engaged the commissions attention for a
time. That has been patched up, however.
due to the pressure brought TO bear on
Robin by the Columbia Trust Company,
register of the stock. ana the Public Ser
vice Commission.
But what the depositors of the Carnegie
Trust Company are more interested in is
the appraisal Of the Carnegie safe Deposit
vaults at 100000. The trust company
owns or holds 70 per cent Of the stock OF
the Carnegie Safe Deposit Company. the
other u per cent being neld by Charles VI.
Schwab and the estate OF -. c. Dickinson.
The vaults were installed in the basement
Of No llj Broadway, the address of the
trust company. by the Bethlehem Steel
Company. for $Gc0. 900, II is said. steel men
say that they could not be duplicated for
$50, 900. Tho capital stock Of the Safe
Deposit Company is only 5000, 900. however
Directly across the street from the Car
negie safe Deposit Company j. the Mcrcan-
tile Safe Deposit Company James Hazcn
llyde's promotion in the Equitable Life
II has been pointed out that the |
Equitable Building is 10 be torn down IN
the course of year or two. and tNat pos
sbly the Mercantile may want the Car
negie vaults. the Carnegie Safe Deposit
Company owes the trust company 100000
on loans.
incidentally the low appraisal Of the fur
niture and fixtures Of the Carnegie Trust
Company, $4,000, has been a source OF sur
prise 10 those who know that they cost
originally $4,000 The trust company's
banking rooiEs are infested now with fur
n.turc dealers looking for bargains.
Reichmann Not Worried.
Friends Of Joseph Il. Rcichmann. for
mer president OF the Carnegie Trust Com
pany. say that he IS not worrying little
BIT over his indictment for a misdemeanor.
They explain the transaction which caused !
his indictment on the charge OF signing a |
foIc. etat.,n.pt Of tie condition al fl, |