New-York tribune., 1911-01-10
MORGAN READY FOR
Loss IN BANK DEAL
Paid S2,450,000 to Put It
Through, and Seems to Stand
to Lose $685., 900.
MAY NOT SUFFER IN END
Liquidation Would Bring Profit
Instead-Belief That Car
negie Company Will
Be Liquidated.

Sunday for the financial institutions
that he has added to his property, It was
learned yesterday. was S2,450,OOO.
or this sum 100000 went for the ac-
quisition of the Nineteenth Ward Bank
and the Twelfth Ward Bank. and ST.
10000 went to Andrew Carnegie for the
stock OF the Madison Trust Company.
The loss to William ]. Cummins. Mar
tin ]. Condor, Joseph b. Reichmann.
Samuel II. Kress and c. Arthur Moore.
jr., the five directors of the three insti-
tutions. who were compelled to sell out
their holdings, was $625.Oo0. while. cal
cuated on the basis of the quotations on
Saturday for the stocks Of the three con-
Germs. Mr.. Morgan accepts a loss OF
$685., 900 for the good Of the commu-
nifty.
In Mr.. Morgan's case. however. the loss
will be reduced to an even 100000 by
the liquidation OF the Madison Trust
Company, and It will he reduced consd-
erably more if the Nineteenth Ward
and Twelfth Ward banks are liquidated,
as is believed in well informed quarters
to be probable.
It was understood yesterday in Wall
Street that the two banks were 10 be
| liquidated within a short time, and add
| ed to the Equitable Trust Company.
which would establish branches in the
present offices and branches Of the
banks There would be an increase of
the Equitable Trust Company's stock, 1t
was said, with the addition 10 II OF tho
Madison Trust Company and the two
banks, and the apparent loss Of SoOO.ooc
would be changed to a profit amounting
TO considerably more. as the Equitables
stock was quoted on Saturday at 46O.
! Price Fixed by Cheney's Demands.
| The amount paid for the two banks
was fixed by the undesirable assets that
Bank Superintendent Cheney required
should be substituted with cash. These
assets were in the form of loans to the
five directors. and they gave up their
stock In the banks when Mr.. Morgan
agreed to pay off the loans. Henry +.
Dawson, OF ]. p. Morgan & Co, who was
one of those who conducted the negotia-
tions for Mr.. Morgan on Sunday, SAID
yesterday that the stock still, stood ~
the names Of the directors, but he ac-
knowledged that II had been commit
ted" and was ready 10 be transferred
whenever the new holder was named.
When the control OF the two banks
was acquired by those who have now
sold out, the price was $500 share for
the stock OF the Nineteenth Ward Bank
and 500 a share for that OF the Twelfth
Ward Bank. This would mean SSOOVO
for the bare control of the two institu-
tons. whereas it is understood that
much larger proportion Of the stock was
bought and Mr.. Morgan took them over
for 100000.
The stock Of the Madison Trust Com
pany was held by Andrew Carnegie as
collateral for loans amounting to Sl,l5O.-
600 advanced TO help out the Carnegie
Trust Company. The Van Norden FAM
fly announced in January, 1910, that
they had sold their holdings in the Van
Norden Trust Company. amounting 20
20 per cent OF the stock, to syndicate
Of directors OF tn Carnegie Trust COM
pany for S325 a share. The cost TO the
syndicate was $2,275, ,00O and they after
ward borrowed $1,75o.OO0 from Mr.. Car
negie giving the stock as collateral.
Attempts were made at various times
| to dispose of the stock and TO get IT back
from Mr.. Carnegie. 1t was said at one
time that a syndicate Of directors of
well known downtown bank had been
formed to take over the control OF the
trust company, but Mr. Carnegie refused
| to give up the stock without the actual
cash in~hand and when the crash OF
the Carnegie Trust Company came he
still had the stock OF the Van Norden
Trust Company the name Of which had
been changed to the Madison Trust Cons
pany, in his vaults
When the control OF the Madison Trust
Company passed 10 the Equitable Trust
Company on Sunday the consideration
was the paying off Of the loans made
by Mr.. Carnegie.
State Bank Examiners Busy.
The State Banking Department had all
of its examiners at work yesterday on
the books of the Carnegie Trust Com
pany. the Madison Trust Company. the
| Nlneteenln NaTu Bank ana tne 1WeIbu
Ward Bank. Financial men were par
ticularly interested in what the investi-
cation OF the books Of the Carnegie Trust
Company would show. They were Won
dering If District Attorney Whitman
would be called into the case.
John b. Stanchheld. one OF the direc-
tors OF the trust company. was at the
! Criminal Courts Building 10 see Mr..
Whitman yesterday afternoon. He said
afterward that his visit had nothing to
do with the affairs OF the Carnegie COM
pany Mr.. Whitman said
Mr.. Stanchefeld told me that he had
heard that was receiving many letters
complaining OF the way the affairs or
the Carnegie Trust Company had been
run. He said that he was willing 10 give
| me all the assistance in his power to
! explain anything that might appear at
first glance 10 be irregular.
'I have not been brought into the af-
fairs OF the Carnegie Trust Company ex-
cept in so far as Robins transactions are
concerned OF course | have received a
great many letters about the failure. as
is always the case when a bank or trust
company has 10 close its doors"
Wall Street opinion yesterday was that
the banking situation had been cleared
up in a highly satisfactory manner. IL
.,ororauy haliaVed that passihIv