The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1912-06-11
HOW A NEW
YORK BANK
WAS WRECKED
SHOWING HOW CLEARING
HOUSE POWER WAS
MISUSED

& New York, June Testlmon
+ intended 10 show how the power ,
+; The New York clearing hoH8e con
4 mlttee was used To force solKcu
3 Dahh to HE wall during the aite
Inath Of the panic OF l9u7, with tn
result that the fair reputation d
IFS president was blasted" was dram
laucally presented today before TIA
Pulo committee OF the house OF rep
reseniatyos which is inyestieatin)
the so-called money trust
Mr. tntermNer had on the stan,
VIM. Sherer manager Of the cleariu'
house association, James c.. Cannon
esident OF the Fourth National banh
who recently became member Of
The clearing house committee, IT, "
JoneS, president OF the Oriental at tht
time of the panic, aud Erskine Hew
ltt and Chas A. Beekmau. directors OF
the bank.
During the first rumblings OF the
panic in October, 1907 Mr.. Jones was
summoned before the clearing house
ICommittee. according 10 the testimony
Iand told that the Oriental ,musta a5top
lcl"arine for three n0nmember banks.
liaclpding two Brooklyn institutions
which We're under legal Investigation
Mr Jones said the withdrawal OF The
balances of these banks under the pre-
INailing strained financial conditions
" Ould cause serious trouble To his
institution but the clearing house
committee was obdurate AT his re
quest the clearing house agreed toI
tide him over with a loan, after a
clearing house committee had exam
ned the banks condition and found II |
entirely satisfactory"
Meanwhile the rumors afloaf had
caused run on the bank and the
clearing house committee called be-
tore il Mr. Hewitt ANA Mr. Bcekmm |
and demanded, according TO MFR. Jones |
mat he resign and the late Hugh Kel |
~, also a director of the Oriental. be |
clected 10 succeed him.
This was consented to after prom
ise had been given TO Kelly by A.
l'arton Hepburn, chairman of the |
clearing house committee, according
to HeWitt's testimony, that the asso
cation would stand behind the
Oriental till the last ditch
AS described in letter, Jones tes-
tliied Mr.. Kelly prepared hut never
sent to the stockholders Of the Oren !
tai which was put in evidence, "a |
humber Of gentlemen OF high place III
affairs sat in judgment upon
IIm (Mr, jones' their fellow member
and concluded their deliberations
with the following sentence.
That the board Of directors Of the
Oriental bank must meet at once, ac-
Mr.. Jones resignation OF
he presidency and elect another pres
dent in his place
Thus in 4 moment the letter con
inued, without excuse other than
he statement without foundation Of
act, that Mr. Jones was either al
'eady indicted or would be indicted
hat day was a fair reputation blasted
md work of a lifetime. application
md honest dealing DESTROYED. Mr.
tones, in obedience to the command.
esigned and Mr. Hugh Kelly, was
'ected in his place. Mr.. Kelly who
lad returned from Europe only fWo
iays previous, sought Il hearing be-
ore the gentlemen who had thus con
lemned Mr., Jones and demanded TO
now how far he could rely upon the
fotcclloIl ana ana OF the clearing 4
ouse If he accepted the presidency a
nd was told in unqualified term ]
hat he and the bank would be pro
ected TO the end of the trouble"
"Iow the pledge given him al thail
ime has been carried out is easily
old by the banks suspension, two
,onths later OH January /, while in
condition OF absolute solyency