New-York tribune., 1911-12-30
'M|SUSED' BANKS FUNDS
President MaxWelI's Statement,
Made Before Suicide, Says So.
CASHIERS GIVES DETAILS
Hurley Shows at Union Bank
Hearing They Speculated and
Made Fictitious Loans.

The investigation into the affairs OF ths
defunct Borough Bank Of Brooklyn was r..
sumed yesterday, with the former vice.
president OF the institution, William A.
Hurley, on the stand. The hearing Is being
held in the Brooklyn Borough Hall by Dep.
uty Bank Superintendent Graham.
In backing up his denials that he hsd
any knowledge Of the forGcries and tha
making OF fictitious notes before the col.
lapse OF the bank. Mr.. Hurley produced for
the first time statements made by Howard
Maxwell. president OF the bank, who con-
mitted suicide, and Arthur u. Campbell,
cashier. who IS now under indictment for
his share In the manipulations Of tho
banks funds. Both statements are frank
admissions Of the misuse OF the banks
funds in order TO speculate on TIPS fur
nished by Mr.. Jenkins, attorney for VIII
lam Cow, the moving spirit In tho Bor-
ough Banks board Of directors. ...
J. r. Mahoney, as counsel for the Stats
Banking Department, asked Hurley TO in
spect a large bundle of notes and tell him
lust whom the names on each one repre-
sented. lie handed the witness two ndtts
that totalled $4,000 and bore the names d,
Morrow and Randolph
Hurley said he had not known OF the ey.
istence OF these notes until after the bank
had suspended. He said he then learned
that the makers of the notes were employees
Of Mr.. Half He felt sure that the d.
rectors had not known Of the lending Of
$4,000 on these notes.
When pressed further, Hurley said that
the transactions were explained in. tha
statements forced from Maxwell and camp
bell shortly after the failure of the bank
Mr.. Mahoney then read the statements.
The Campbell statement related 10 ths
money he and Maxwell took from the baEk
and used I'm speculation. According TO
Campbell. he and Maxwell made loans ~
l,etitious names as often as they were re-
auired to put up margins. He was told by
Maxwell that Mr. Cow knew all about
these transactions.
Mr.. jenkins, his [Gow'sl attorney tne
s,atement read, would come into tne
hank from time to time and supply VS. WIN
information AZ 10 the market coho''loiA
and advise us as TO the purchase OF slocA''
and on the strength of this information
Mr. Maxwell would direct me to buy or sen
stocks"
rampbeiis statement said that at 10
time. did he ever buy or cell stock, eScert
BIZ direct order from Maxwell, who sald
Cow knew all about II and would stanh
back of it. Maxwell was not present |heh
Campbell mado the fictitious notes. lhs
cashier said he had made about ten h''ss'
IN all. 10 cover Wall Street losses.
The Maxwell statement explained ms
$4,000 note to the Oriental Bank OF Man
haitian. which was made without ms
KNOWLEDGE Of the directors. and was re-
pudiated by them. The statement contih-
ued
do not know where the notes Wers
made. but jenkins, Cow and myself veIt
10 Jones OF the Oriental Bank. who sN,
gested that on account OF the loans he had
made to Gov he did not Wish 20 discouN
direct, bur he would re-discount. the ,tre
notes Jones filled out collateral note ter
$4,000 which. az his request. | signed.
There was no check given. The amour,
was credited directly 10 the lnternauonEI
Trust Company. The purpose Of making
this loan. on September 80. 1907, was 20 com.
plete tho capital and surplus of sloNCO OF
the International Trust Company.
It was reported at the hearing yesterday
that the depositor5 of the collapsed BANK
had employed an attorney TO prevent ths
the investigation. II was said the depos'
ftors feared the cost OF the proceedings
would fall upon them and they thought II
any crime had been committed the DlStnct
Attorney should bring tho matter before
the grand Jury.