The Sentinel=record., 1912-06-08
STRENGTH OF
 MONEY TRUST
SHOWN WHEN CLEARING HOUSE THREW SOLVENT BANKS INTO
 LIQUIDATION.
BANKS FORCED TO THE WALL
Sensational Testimony as to the Power of the Clearing House Assoca-
 tion at Money Trust Investigation.

New York, June 7.-Festimony inc tended to show how the power of the New York Clearing House Committee was used to force q solvent bank to the wall during the aftermath of the panic of 1907. with the result that the fair reputation, of it's president was "b!9sted,n was dramatically pre- sented today before the Bujo commit tee of the house of representatives, which is Investigating the so-called money trusts
 The testimony was elicted by sam ue Untermyer, special counsel of tine committee, in his effort to demon strate that the funitions of the clear ing house enabled it to control the destiny of New York's financial in. stitutions, and should be subject to regulation by law.
 The bank around which the testi- mony centered was the Oriental, or ganized in 1853 and one of the charter members of the Clearing House Assoc iation, but it was testified that three other banks, the Bank of North Anerl- ca and the New Amsterdam National Bank, in both of which Charles w. Morse was interested and the Mechan- ics and Traders, were similarly com pelled by the action of the Clearing House to close, although all proved to have been solvent.
 Their financial decease was tine re- suit, it was testified of a demand made by the clearing house committee three months after the panic began, that they redeem their clearing house
 loan certificates, and in the case of the Oriental followed a promise that | the association would stand by it eto
 the last ditch"
 MT. Untermeyer had on the stand | William Sherer, manager of the Clear | ing House Association James c. Can non, president of the Fourth National Bank who recently became a member | of the clearing house committee, R. w. Jones, president of the Oriental at the time of the panic, and Erskine Hewitt and Charles Beekman, direc- tors of. the bank,
 During the first rumblings of the panic in October, 1907 MT. Jones was summoned before the clearing house committee, according to the testimony and told that the Oriental must stop clearing for three non member banks including two Brooklyn institutions. which were under legal investigation. MT, Jones said the witness had balan- ces of the banks under the prevailing strained financial conditions it would cause serious trouble to his institute ion but the clearing house committee was obdurate. At his request the clearing house agreed to tide him over with loan, after a clearing house committee had examined the banks condition and found it entirely satisfactory"
 The Oriental then discontinued clearing for the Brooklyn Banks. as the result of which both soon closed. it was testified. President Jones was then taken II with m anrnonia, and 2 report became current that he was to be indicted in connection with the in vestigation of the Brooklyn banks and was shamming illness, the days testi- mony ran. It turned out that he was only wanted as witness
 Meanwhile the rumors afloat had caused a run on the bank and the clearing house committee called be- fore it Mir. Hewitt and Mir BeeSman and demanded according to Jones. that he resign and the late Hugh Kelly also a director of the Oriental, be elected to succeed him.
 This was consented to after a promise had been given to Kelly by A. Barton Hepburn. chairman of the clearing house committee, according to Hewitts testimony, that the associ- ation would stand behind the Oriental till the last ditch"
 Kelly obtained a specific guarantee. the witness said that the entire re- sources of the clearing house would be placed behind the Oriental.
 As described in a letter MT, Jones | testified Mir. Kelly prepared, but never sent. to the stockholders of the Orien- tai which was put in evidence, a number of gentlemen of high place in financial affairs. sat in upon him. l (Mr. Jones.) their fellow member, and concluded their deliberations with the | following sentence viz.
 "That the board of directors of the | Oriental Bank must meet at once, ac- cept MT. Jones, resignation of the presidency and elect another president
 in his place. Thus in a moment, the letter continued. without excuse other
 than the statement, without founda- | tion in fact, was fair reputation
 blasted, but work of d lifetime, appii-
 cation and honest dealings destroyed. l MT. Jones in obedience to the demand, resigned and Mir Hugh Kelly was 1 elected in his place.
 How the pledge given him at that | time has been carried out is easily | told by the banks suspension two