The Birmingham age-herald., 1912-06-08
Dramatic Testimony Evoked by Untermyer in Money
 Trust Probe
TESTIMONY COVERS
 THE PANIC OF 1907
Clearing House Committee Forced Oriental Bank President to Re- sign Without Any Evidence.
 Failed to Keep Pledge

New York. Jurh 7.-Testimony intended to show how the power of the New York clearing house committee was used to force solvent bank to the wall during the aftermath of the panic of 1907, with | the result that the fair reputation of Its president was blasted was dramati. eauy presented today before the PuJo committee of the House of Representa- tives. which is Investigating the so-caiied money trust
 The testimony was eicited by Samuel Irntermyer, special counsel of the com- mittee. in his effort to demonstrate that the functions of the clearing house en- able it to control the destiny of New York's financial institutions and should be subject to regulation by law.
 The bank around which the testimony centered was the Oriental, organized in 1858, and one of the charter members of the Clearing House association, but it was testified that three other banks. the Bank of North America and the New Amster- dam National bank, in both of which Charles w. Morse was interested. and the Mechanics and Traders were sim- |
 larly compelled through the action of the clearing house to close, although all proved to have been solvent.
 Fail to Keep Promise | Their financial decease was the result, 1 it was testified, of demand made by the l clearing house committee three months after the panic began. that they redeem their clearing house loan certificates, and | Al. .r.,.F t.I fntI Al promise that the association would stand | by fl to the last ditch.'
 i Mir untermyer had on the stand WILL | liam Shearer, manager of the Clearing | House association; James G. Cannon, Tresident of the Fourth National banls who recently became a member of the | clearing house committee; R. w. Jones, l president of the Oriental at the timeeof | the panic. and Ersk-ne Hewitt and chalres A. Beekman, directors of the bank.
 During the first rpmblinss of the panic ID 9ctooer, i9eg. Mr, Jones was sun,- l moned before tine clearing house com
 nittee according 10 the testimony, and told that the Oriental must stop clear ing for three non-member banks, in- l oiuding two Brooklyn institutions which were under legal investigation. MT, Jones said the withdrawal of the bal- ances of these banks under the prevail Ing strained financial conditions would 1 cause serious tronble'i to his institu- ton, but the clearing house committee 1 was obdurate. Al his request the clear | Ing house agreed 10 tide him over with | a loan after a clearing house commit | tee had examined the banks condition and found it entirely satisfactory 1 The Oriental then discontinued clearing 1 for the Brooklyn banks, as the result | of which both soon closed, it was testi- fed. President Jones was then taken i'll 1 with pneumonia and a report became current that he was to be indicted in connection with the investigation of the l Brooklyn banks and was shamming ill., ness, the days testimony ran. 1t turned out that he was only wanted as q wit ness.
 Demanded Jones' Resignation
 Meanwhile the rumors aioat had caused 1 a run on the bank. and the clearing house committee called before It MT Hewitt and MT. Beekman and demand ed, according to MT. Jones, that he re- | sign and the late Hugh Kelly, also a director of the Oriental, be elected to | succeed him.
 i 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 testi- inony, that the association would stand behind the Oriental till the last ditch . Kelly obtained specific guarantee. Hewitt said, that the entire resources of the clearing house would be placed behind l the oriental.
 As described in a letter Mir. Jones tes- tined MT Kelly prepared but never sent to the stockholders of the Oriental, which 1 was put in evidence, "a number or gentle 1 men of high place In financial affairs sat | in judgment upon him (Mr Jones', their | fsf h,r md erations with the following sentence, viz. | That the board of directors of the Orien- 1 tai bank must meet al once, accept Mir Jones resignation of the presidency and elect another president in his place.
 Thus in moment, the letter eontin- ued. without excuse other than the state ment without foundation in fact, that Mir. ! Jones was either already indicted or would | he indicted that day. was a fair reputation l blasted and work of a lifetime, applica- l tion and honest dealing destroyed. MT. Jones, in obedience to the demand. re- signed, and Hugh Kelly was elected in | his place.
 Pledged Support
 "Mr. Kelly, who had returned from Eu- l rope only two days previously, sought a | hearing before the gentlemen who had thus condemned MT Jones. and demanded l to know how far he could rely upon the | protection and aid of the clearing house if he accepted the presidency. and was told In unqualified terms that he and the bank | would be protected to the end of the | trouble.
 How the pledge given him at that time | has been carried out is easily told by l the banks suspension two months later, on January 1, while in condition of ab- solute solvency. Then without previous ] warning or discussion of the subject with l the officers of the Oriental came the de | mand, publicly announced for the retire ment of the outstanding clearing house l certificates before February {. In previ- otis periods of financial uneasiness certlh- cates had been permittd to run for six months or more. Tn this instance the larger institutions had recovered their deposits and their equilibrium in shorter term. and then the situation resolved itself into case of the devil take the hindmost'
 "The fatal blow had been struck at the Oriental and the run. both over the eeun- try and through the exchanges which fol- lowed compelled the closing of It's doors. Subsequent events prove the monsfrous injustice that was done to t and to its president personally. The latter was made use of to satisfy a condition that threatened not merely the Oriental but every clearing house bank in New York