Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-12-09

attention to. That Is the fifteenth
section Of what Is called the trust
company act, under which this cor
poration was organized:
No trust company shalt make
any loan to Its president. treas
urer, secretary and cashier, or to
any OF its directors, clerks, etc,
until the proposition to make
such loan, stating the amount,
terms and securities, If any are
offered therefor shall have been
submitted in writing by the per-
son desiring said loan at a meet
ing Of the board of director OF
such company or the executive
committee of such board. II any,
and accepted and approved by
vote of the majority Of those
present, consisting in a quorum;
and that a president, director or
other officer or employee who
knowingly violates this section
shall be guilty of a misdemeanor
and punished accordingly
"One of the directors of this bank
drew checks on 1t which were hon
ored for nearly $4,000 more than he
had credited to him in the bank.
What 1 said in relation to an out
slider who is guilty of such conduct
applies, of course, with equal force to
the director. And so, If this director
had any arrangement such as I have
described q little while ago with the
cashier by which his checks should
be paid without regard to the amount
of his deposit, he is subject to indict-
ment for conspiracy in conjunction
with the cashier.
Arrangement with Smith.
II am informed that this gentleman
says, by way of excuse for his aid in
the looting of this bank. that he sup
posed he had moneys deposited to his
credit that would meet these checks.
He says, so / am informed, that he
had an arrangement with Smith by
which Smith should credit to his aac-
count notes of his which aggregated
the amount OF the moneys he got.
II have read you this last provi-
sion of the statute to show how
futile any such excuse Is, for even IL
1t should be said that this was loan.
and not a. steal, the section i have
read says that the director who takes
money by way of loan out OF a bank
or trust company of which he Is a
director before making a request In
writing for such a loan and having
that request recognized by the formal
action of the board. of directors or
the executive committee, shall be
guilty of a misdemeanor. And so,
! even IL the gentleman to whom l am
now referring states the truth when
he gives the explanation / have re-
cited to you, he has committed
criminal offense under this last pro-
vision of the statute and should be
indicted for a misdemeanor, He Is
guilty also, as / have suggested, OF a
conspiracy If he arranged with the
cashier to have these moneys paid out
on his draft wnen he did not have any
funds in the bank to meet these
drafts.
There is one other matter I want
to speak to you about, This bank
closed It's doors In August. In June,
In compliance with the statutes, re-
port was made to the commissioner
of banking and insurance. showing
the standing of this institutions, and
that report showed 1t to he solvent.
1t was a false and fraudulent report,
made for the purpose OF deceiving
the commissioner of banking and in
surance.
ut stated that the total amount of
the deposits were, / will say, $250.000
II am not at all certain about my fig-
ures--when as a matter of fact they
were $l50,000 more at the time.
THE statute requires that that re-
putt Silhil DC bWOIH 10 Wy tHb piCSi-
dent OF the company and by the sec
rotary of the company, and shall be
atteste6 by at least three of the d.
rectors.
Bank Then InsoIvent.
AS I say. when that report was
made this banking institution was
hopelessly insolvent. The very vitals
had been taken out Of 1t by the means
/ have described. Yet these gentle
! inen--it Is not surprising the secretary
and treasurer, Smith, was willing to
| swear TO the report44but these gentle
men, as ] say, verified the accuracy
of that report, one OF them, the presi-
dent. by his sworn oath, and the d.
| rectors by their attestations,
NOW, the statute says that this shall
not be criminal-Athat Is, the making
of a false repoft-unless the parties
know that 1t Is false and make the
report with the intention of deceiving
| the commissioner of banking and in
| surance.
s. ut rs pretty difficult to tell. OF
course, what a man knows and what
he does not know so long as he keeps
| his mouth shut But the purpose Of
making the report IL that the inter-
ests of the stockholders and the de-
poeitors shall be safsguarded by the
commissioner of banking and instr
anee4-that he shall keep in touch with
| this Institution and at least twice a
year, that being the interval In which
the reports must be made, learn just
what the condition of the bank Is.
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