Northern Wisconsin advertiser. [volume] (Wabeno, Wis.) 1898-1925, 1912-06-14
SOUND BANKS WERE
FORCED TO CLOSE
Clearing House Denied Help at
Critical Times.
RESULTED IN KELLY'S DEATH
money Trust" Investigation Develops
Tragedy of "High Finance" and
Cause of Failure of Four Big
Institutions.

New York, June 10.-Testimony on
Friday intended to show how the pow
er of the New York clearing house
committee was used to force a solvent
bank to the wall during the aftermath
Of the panic of 1907, with the result
that the flair reputation" OF its presi-
dent was blasted" was presented dra-
matically before the Pujo committee
Of the house of representatives which
Is investigating the so-called money
trust.
Witnesses told how Hugh Kelly,
after being induced by members OF the
clearing house to assume the prest-
dency of the Oriental bank, was de-
MED help at a critical time, the bank
being forced to suspend. This. 1t is
declared by friends, was the direct
cause Of the death Of Mr.. Kelly eight
months later.
r. w. Jones, himself broken In
health, produced letter soon after he
had been called to the witness stand
by Samuel Untermyer, counsel to the
committee. Mr.. Jones was president
of the Oriental bank when the finan-
cial cyclone of 1907 swept over New
York. According to his testimony and
that of Erskine Hewitt, son OF the late
Abraham Hewitt, and Charles K. Beck
man, both of whom were directors OF
the Inflated bank-Mr. Hewitt also be-
ing it's counsel-the clearing house
committee of the New York Clearing
House association, prescribed condi-
tons for the conduct of the Oriental
bank which made it impossible for 1t
to survive. And so it was driven to
the wall, although as shown by Its as
sets, it was perfectly solvent
Their statements indicate that as
soon as President Jones met one re-
quirement made by the clearing house
committee that organization would
prescribe a new one, until finally 1t
issued it's ultimatum that nothing
would be done to aid the Oriental un-
less Jones resigned the presidency and
was succeeded by Hugh Kelly.
The Oriental was one of the Oldest
banks In New York and was charter
member of the clearing house. The
two Morse banks-the National Of
North America and the New Amster-
dam-and the Mechanics and Traders
went down to ruin with the Oriental.
The Brooklyn bank and the Borough
bank of Brooklyn had closed previous
ly when the Oriental was ordered to
cease clearing for them.
Mr.. Kelly accepted the presidency
under protest and only after he had
been solemnly assured, according to
the sworn testimony of the witnesses
mentioned, that the clearing house
would stick to the Oriental ito the last
ditch" This stern demand was made
by the clearing house committee in
the latter part of October, 1907. when
President Jones lay unconscious and
struggling for his life from an attack
of pneumonia at his home.
Soon after Mr.. Kelly reluctantly as
sumed the Oriental's presidency he
and the board Of directors took adj
vantage of the privileges extended to
all members of the clearing house in
that crisis to borrow clearing house
certificates. The amount was $780,
900 which was secured by quick assets
of $3,6C0,000. On January 25, 1908, &C
cording to the testimony of all three
witnesses the Oriental bank, as did
also the two Morse banks and the Me-
chanics and Traders, received word
from the clearing house committee to
return the clearing house certificates
not later than February 6. News Of
the calling of these certificates was
published in some of the newspapers
the next day. Then the fierce tor
nado broke afresh over the four finan-
cial institutions and they went down
three months after Mr.. Kelly had as
sumed control of the Oriental. Mr..
Kelly died of a broken heart eight
months later.