Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-03-22
AIR BANKS AFFAIRS
Receivers for Defunct Virginia
Concern Make Report.
FIND WORTHLESS NOTES
c. J. Rixey Accused Of Making
False Statements.
INQUIRY NOT COMPLETED
Not Known Whether Dspositors
Will Receive Back Any
Funds.
Special Correspondence of The Star.

| Special Correspondence OF The Star.
ALEXANDRIA. Va. March ~, 1911.
| The report of J. K. M. Norton and
Howard w. Smith, receivers for the de-
funct Virginia Safe Deposit and Trust
Corporation. which institution was placed
in the hands Of receivers December -
last. was filed with Judge L. C. Barley
in the corporation court this morning.
The report Is voluminous, going into all
of the affairs Of the concern since it's
| organization nearly seven years ago.
The report embraces thirty-three type
written pages, covering many Of the
| transactions Of c. J. Rixey, president
of the institution.
In addition to the main report sup
Elemental report is also filed by Howard
w. Smith. The report contains but
| little that has not heretofore been
brought out in an examination of the
affairs OF the concern.
| Among other things, it is stated In the
report that ''in light OF the above trans
actions every statement Mr.. Rixey made
to the corporation commission under oath
Of the affairs Of the trust company was in
several important and essential articulars
incorrect, to say the least"
Find Notes Worthless.
Continuing, the report reads: while
the receivers do not feel that they should
attempt to make report in detail as to
the assets and liabilities that Is to be re-
ported on by the special commissioner, to
whom the cause has been referred, they
think they should call attention to two
facts in connection with the report of Mr..
Coates, the expert bank examiner, name
ly: First. Mr.. Coates reports as assets
notes amounting to the. sum of $219.352.O9
of
worthless. Second. Mr.. Coates reports In
dividual deposits subject to check as
amounting to $500, 771.O5. To this mustsbe
added overdrafts amounting to at least
81, 600.
''Other assets such as real estate,
Rixey's assignment, will fall below the
amounts reported by Mr.. Coates as un-
verified to the extent Of at least sos. "
In conclusion the report reads: "Un-
til the report OF the special commits
sioner is filed, showing what, il any,
are preferred claims. it is impossible
for the receivers or any ono else to
estimate what depositors and other
creditors will receive.
ANY attempted estimate would be mere
guess The foregoing report gives about
as full information as the receivers are
now able to make without encroaching
upon the matters referred by the decree
Of February IA, 1911. to q special COM
missioner for report"
In the report is a history Of many OF
Mr.. Rixey's transactions with various
concerns, among them with the Piedmont
Milling Company, Shenandoah Wooden
Mills. Charlottesville and Albemarle rail-
way and others.
Receivers Task Hard.
In the opening the report says in part:
'Tt HAS been a very difficult matter to
track out mahy of the transactions, be-
cause there was frequently no starting
point and the transactions were not car
ried in a definite shape on the books.
1--WE found at various times, on the day
books, two entries, on the same day,
under the head Of loans, and this led to
under the head Of loans, were entered on
the day book on the same day. one was
real, as shown by loan and discount
book. and the other was fictitious"
The supplemental report of Receiver
Smith reads in part as follows:
while the matters set forth in the
joint report are believed to be an expla-
nation of the present condition of the
defendant corporation, it is only fair to
state that q large sum has been expended
in the payment of dividends that appar-
emily were unearned by reason of the
large losses explained in the joint report.
gsEinnng .,t ssptemoer l. ,o,d 1904 and nea
cent semi-annual dividend was paid all
stockholders. From the books 1t appears |
that aggregate dividends paid out amount |
ed to 500, $50, and 1t Is extremely doubtful
If any Of dividends were actually earned. |
Failed to Keep Books.
''The apparent earnings appeared larger |
owing to the failure to keep q proper |
profit and loss. No such account was
kept. and there are numerous instances
where notes are either barred by the
statute Of limitation or the parties thereon
liable have long since become insolvent
but the notes are still carried as live
loans among the assets and have never
been charged of.
Attention was called that the board OF
directors May %, 1906. was authorized to
employ an expert once a year to make
an examination of the condition of the
Institution.
1T does not appear that this resolu-
ton was ever put into effect or that any
examination of the affairs of the cor
poration was ever made. Had these ex-
aminations been made the transactions
related to in the report would doubtless
have been discovered in their inception
and the present calamity in q large
measure averted."
In conclusion Mr.. Smiths report states |
that the total expenses incurred in OPP
Grating the corporation during the six
years and ten months of it's existence