New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-09-10
COURT ORDERS CIRCUIT TO
, APPEAR IN BANK NQO|RY
Must Testify in Five Days or BE
Taken Before Investigators
by Sheriff.
SAYS APPEAL is PROBABLE
peneats Statement That He Is
Ready To Be a Witness If First
Informed as to Nature OF
Questions To BE Asked.

a-., Of his legal contests with BANKING
c,ner,ntendent Van Tuyl under a de-
c,e,on handed down by Justice Putnam
., the supreme Court. Brooklyn. Mr.
cro,lt must appear within five days be-
fore tie Union Bank investigators or the
ehoriT will be instructed TO take MIN
before them.
II ,s understood that he will carry the
~ co 10 the Appellate Division immedl-
s,ely The body will be in session by
-, time the papers are prepared for its
consideration. and hearing may be hau
on the first or second day of the OCTOBER
term.
on August 30 representatives Of the
Attorney General asked Justice Putnam
N Issue a warrant. directing the Sheriff
10 compel Mr. Grout to appear before
the investigators. As ex-president OF
the Union Bank. II was explained, Mr.
Grout was in a position TO explain the
affairs Of the bank after its reorganlza-
lion. While he had promised in a letter
70 Edward Lane Dodge, Deputy Banking
Superintendent. 10 appear voluntarily
and tell all he knew about the bank he
aftervard refused. unless allowed TO
know beforehand what he would be
asked about and 70 look over the books
Of the institution in order 10 refresh his
memory.
After he failed TO appear as requested
on August II "a subpoena was served on
him. calling him before the Investigators
on August -. He failed 10 obey. AS
sfnbl,man Louis Goldstein. the investi-
gator. then went 20 Albany and had
subpoena made out and signed by the
Banking Superintendent. This was
served upon Mr.. Grout. but he refused TO
obey it. saying the Banking Superin-
tendent had no right 10 compel his at
q endance at a bank investigation.
Tie court was then appealed 10. At
the hearing before Justice Putnam, Mar
tin ". Littleton. Mr. Grout's attorney
opposed the motion Of the Attorney Gen
erals Office. and denounced Mr.. Gold
stein and the methods and intentions Of
the investigators. Mr.. Van Tuyl an
swered his criticisms in an affidavit, in
which he insisted that his only object
was TO obtain a true understanding Of
the conditions that prevailed in the bank
up to the time Of its second closing.
While the hearings have been con-
tinued by the investigators they have
been confined 70 the transactions oc-
curing before Mr.. CIRCUITS administra-
ton began.
In his decision Justice Putnam explains
that two points were raised by the APP
plication Of the Attorney General for a
warrant TO compel Mr.. CIRCUITS attend
ence-the right of the Banking Depart
ment 10 conduct the inquiry and the con-
stituticnallty Of Section 500 Of the code.
enforcing the attendance Of defaulting
Witnesses. In his decision Justice Put
nam says:
The wording Of Section s Of the banking
law gives power 10 the SUPERINTENDENT 10
iDyeStgata the affairs OF a bank. The Su-
pernte1dert and an examiner under him
may put persons under oath. so that the IN
3 formation thus 10 be obtained shall have
The sanction Of sworn TESTIMONY il IS con-
tended however. that this provision is linn
lied % INV cS-igatlng q bank which is then
dong business, and that the authority
ceases after the business and property Of
he bank save been taken into possession by
the Banking Department under Section 70
o. the banking law
While Section S undoubtedly applies 70
banks that are normally tTansacting bust
ness Il would often be quite as essential 10
Irf ffra~r
aging It's affairs after the SUPERINTENDENT
temporarily mad closed the bank door
The taking possession Of a bank is often
necessary as "a temporary protection OF the
public while upon the Superintendent IS
derOivcu the difficult ami responsible ddtv
u decide whether or not The condition and
snaiTs are. or can be. put into such a soi-
sumo business
Il Is. however. pointed out that hv Sec
IONS rs and 10 the case OF a refusal to
disclose information may be q ground for
re superintendent 10 take possession Of the
oahk and that this provision indicates that
az investigation Of a bank before closing
ena not after lt is taken possession OF is
az NE power Of investigation that the Leg
stature has authorized.
Nhen the Legislatures intent IS consid-
- i must be borne IN mind that the Wit
1tss now summoned j. not an outsider.
usposltor or merely a stakeholder. but the
o1cal head Of the bank And even though
We DankoookS and assets are in the custody
uhe Banking Department, the corporation
.as not been dissolved. but maintains it's
ulpofdte charter existence. with its d.
,ec'orS and president still in Office la
,SSSsseue Trust Company agt. Higginbotham
40 App Div. 74-.)
:. Could the Legislature have intended that
~ exercise Of the right under Section l9
/ take possession and temporarily assume
,-aige OF the banks property step often
,sl.lred In an ergencv-should thereby
/ ~ dLo cut or the power 10 investigate
- oank officers and employees as 20 the
4 .sneefns of the bank and the conduct and
4 ~ aaInlsuatCn NJ IS officers up 70 the date
-. uosingt Such an Interpretation would
,,-sst ne purpose Of the Law. as the SUI
4 49, iCeni might then naturally delay his
nse..ss possession II that step. otherwise
f.nSsFy was az once % tie his hands
4 - n ne exercise Of the right 10 examine
osIeiais ~ the bank the solvency or in
Il Co. condition of which it was necessary
- '~aa!iy 20 ascertain.
~ ne justice concludes with the statement
40 ne can find no ground for holding Sec
800 70 be unconstitutional
'ef learning Of Justice Putnam's de-
~ AR Grout issued the following
Statement.
d.s,se. an appeal from Judge Putnams
utss.,an, VIII probably be taken, / cannot
NS,s'take 10 definitely determine that
NJ. consultation with counsel
hsrssn... ME. as / have done four times
Is thoIe' again state that / am now,
sgsx,1".'e always been, ready 10 waive all
ihos;1 ~ OF the Legality Of MIR. Dodges
b. Il W., and % appear before him. II
q g. INFORM me which Of the thousands
4 dssirss ana transactions OF the bank he
he ON, ~ lirlulre into and Will afford me
oess =, ~ unity 20 have the necessary ac-
To ne books and papers Of the bank
MI 40 - 9iNays been my position, and
sy .th 10 the courts on appeal should
% ne we proceeding is illegal II seems
far - o. ialr and can lead only 20
ihai = impartial inquiry. which is all
BOY DIED FROM RABIES