New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-11
NOTE KITINC LED
BANK TO SUSPEND
First National, of BayOnne,
One of Three Involved,
1t Is Said.
LINE WAS CUT
BY EXAMINER
Refused to Permit $4,000 Loan
To Be Cancelled by Check
of Notorious Coterie.

The First National Bank of Bayonne
which closed its doors Monday, is one OF
three New Jersey banks all of which arc
involved In the transactions Of notorious
coterie of note kiters, with headquarters
IN this city. For several weeks Charles
II. Chapman. q federal bank examiner
had watched the rapid interchange OF the
obligations OF these three banks until he
saw his opportunity to pounce on the
First National Bank and cut the vicious
circle. His refusal to allow this bank to
accept in payment of certain loans checks
drawn on the others led to its suspension.
Max Hart of No 115 Nassau street, who
was convicted in May. 1906. OF larceny
but whose conviction was reversed by the
Court of Appeals. is the man most promi-
nently mentioned in connection with the
failure. 1t was the loans which he TOOK
aggregating $4,000 or $4,000, 10 which the
bank examiners specifically objected.
The Treasury Department is keenly in
terested In Harris transactions, not only
with this bank, but with others, most oil
them outside the city.
A bit OF it's paper for which the bank
has Hart to thank is a note Of Tyson
Co.. very recently IN trouble over their
hypothecation Of opera tickets. Richard
j. Hartmann. president Of Tyson & CO..
when he first applied to President CAR
ragan. OF the bank, was turned down.
Hart, however, was able TO get him the
money.
William J.. Marshall the Tyson attor-
ney. said Yesterday the theatre ticket
concern had borrowed recently in the
neighborhood Of So 500. and that the note
was IN the First National Bank of Bay
onnc. in the name OF Max NJ. Hart, he
believed.
Max NJ. Hart, at his office Yesterday de
MED having transacted any business that
might have played part in the closing
Of the doors of the bank
The whole story is ridiculous, Hart
declared 1T makes me laugh"
Whereupon Hart. who is short OF stature
and stout. smooth shaver. slightly laid
ard of nervous temperament. did 20.
81 have no reply To- make" he added.
neither denying nor affirming the story
that he was Partly responsible for over
drafts on the First National. Il; has been
said that the amount OF money loaned me
on notes is betv cen $1,000 and $1,000 That
is not 50. All the negotiable paper
have over had with the Bdyonnc iustitu-
ton does not exceed $500 And ! want
TO state that when my notes now held hy
the bank have matured they will be paid
W cent for cent"
IL. n
and draft for $50 which, he said. were
due yesterday, and then said he was
forwarding them TO the Bayounc Bank.
when Mr. Chapman went in the First
National Bank" Hart continued, II Of
fcred 10 give as security for my notes
surety bond o. first New York
real estate mortgage. They did not ac-
ccpt the proposition Just a few days
before that I settled $1,000 on tote
for $500, and renewed the balance Of
$l.5OO
IF Mr. Chapman or any officials OF the
Bayonne bank want TO ask me any ques-
tons ! shall be- right here at my ofiice.
The whole thing Is not worth bothering
about
Hanna the bank examiner. who
preceded Chapman In Bayonne and sur
rounding territory, had warned the OFF,
GERS Of the First National against Hart.
according TO Hyman Lazarus. a former
Judge and director Of the bank But be-
cause Hart seemed to bring the bank "a
lot Of profitable business and maintained
what appeared 10 be a handsome balance
there the executive committee paid no
attention to Hanna's objections Some
Of the banks exchanges did, however.
and instead of tiding the bank over de-
manded cash IN settlement OF all UNI
favorable balances. For this reason the
bank had been for the last three months
dangerously low in its reserve.
Last Thursday a moderate run deyel-
oped. and by Friday noon the banks
available stock OF cash had been almost
wiped out ExJudge Lazarus said the di-
rectors had already offered 10 take the
loans In which Hart was interested out
OF the bank and substitute cash. but the
run made them realize that they would
have 10 do more to prevent suspension
on Sunday night they sought help from "A
local capitalist, who, however succeeded
only In soaring them still more So In
desperation, they decided to close the
banks doors without further parley
In addition TO the $4,000 TO $1,000 in
which Hart il interested. the bank exam
liner has set aside about $500 900 in paper
which he regards as of doubtful value
Judge Lazarus takes direct issue with
him on this point. but says that even II
not cent could be realized on these as
sets the bank would stll be able 10 pay
every depositor 100 cents on the dollar.
Depositors of the bank will meet on
Saturday TO consider What action they
should take TO conserve their interests.