New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-17
DIX NAMES GO[DS1E|N
AssembIyman to Probe Affa'rS o.
Closed Union Bank.
HOPES FOR NEW EVIDENCE
Criminal Action Foreshadowed
by Selection of Special
Counsel in Case.

covernor INV has appointed Assembly
man Goldstein. of Brooklyn speclai PVui'
sci TO the State Banking Depar tIiien' W
investigate the defunct Union bAnh VI
Brooklvn II WAS Godstein VINO cause"
the fight I'm the Assembly chamber AT Al
banv on Wednesday by persistins IN reao-
ing his charges OF improper auii','''s',
Of the banks affairs. lie had ii"
charged. as told In The Tribune
that political influence had kept t"o Wv
error and the state Legislature from III
vestigating the bank. After the scene IN
the Assembly chamber Governor DIX sent
for Mr.. Goldstein and agreed TO appoint
him special counsel to investigate the IN
stitution.
MIR. Goldstein said yesterday that the
Governors letter said that the ihVesusa
ton would be conducted under the More
land act. which gave the Governor power
TO investigate in person or by uep"''
any department or bureau OF the state
government. with the right to subpoena
witnesses. compel their appearance ana
compel them to testify under oath.
we are not sure that the act VIII hod
in this case" Goldstein continued but
10 send out my subprnas at once and ex-
pect to begin the hearings on Monday III
the offices Of the State Banking Depart
ment in New York. / sent my letter Oh
acceptance to the Governor to-day ana a
letter 10 Superintendent Van Tuyl inform
ing him that | would start TO work right
away.
81 was in conference with Superintend-
ent Van Tuyl for two hours this afternoon
and | am TO have another conference with
him tomorrow TO settle the details OF the
work 1t is my idea that the hearings
should be public and the depositors or the
bank have the full benefit OF everything
that is disclosed. / expect the hearings
70 develop the necessary evidence for
criminal prosecutions
AS far as I can see now. ! expect TO
have among the first witnesses before me
Edward NJ Grout. the last president or
the bank, and David A. Sullivan. who pre-
coded Mr.. Grout in the presidency
think both men are in position to give
information that will throw much nsht on
the affairs Of the closed bank | am going
70 Investigate. also. the bill that fau'
Grout has put in against the bank TOT
go. 7Ss 80 for legal services. Edward NJ.
Circuit was president Of the bank at the
time these services were performed. Pau
Grout WAS director Of the bank and was
member Of Edward NJ. CIRCUITS law hrnn
This bill includes a charge OF sl5,W Tor
services in connection with the loan OF
500 Oo0 the Union Bank got from the Met
rouolitan Trust Company. That loan cost
tho Union Bank more than 10000
Another thing that I am going to In
vestigate Is a dummy loan Of $4,000 on an
unsecured note That note is IN the assets
% the bank now without even an endorser'
ono of the officers Of the bank had taken
,5o O00 Of the banks money for his own
rurposes. He learned through some agen-
cv that the State Banking department.
vas about 10 examine the bank and put IN
this dummy note for $4,000 10 cover the
deficiency in cash. Then he went 10 the
Isvyer for a big estate and got from him
mort cages amounting 10 $4,000 There was
no assignment Of the mortgages to the
hank but they were exhibited 10 the ex-
ariner as the security for the loan. The
examiner did not ask to see the assign
ments. ard after the examination was mn
ished the mortgages were returned 10 the
estate.
Il am eoing 10 find out, also. something
about how the hank valued real estate.
The bank carried on It's books Its Atlantic
ovanuo branch at n valuation ~ $4,000.
That and similar real estate valuations
we're among the reasons for permitting
tho hank To reopen. Vet, when the bank
Was closed for the second time. the state
Ranking Department appraised the ATTAIN
tic avenue branch as worth only S2o."".
The records of the banking department
show that These are things that require
investigation and I am going to investigate
them thoroughly"