New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-19
II. S. HOLDING BAG
IN MUNSEY DEAL
Washington Bankers De-
eide 1t Must Bear Loss,
if There Is Any.
ASSURED OF SAFETY,
GUARANTEE is GIVEN
Relieved by This Means Promised
Deposit of 100000 May
Be Enforced.
From The Tribune Bureau

From The Tribune Bureau
washington, Dec. Is. 80 Convinced
chat in case of loss the United States
government would have to bear it, the
,,oyen national banks which are mem
ters of the Washington Clearing
House have devised a form of guar
o,,ee for the S1,OOO,O00 deposited in
The Munsey Trust Company by Assist
ant Secretary John Shelton Williams
on November 80, which their several
boards Of directors are proceeding to
execute.
Attorneys for the banks pointed out.
as told in these dispatches, that there
was a grave question as TO the legality
~ tbe action Of the Assistant Secretary
~ the Treasury and that any stock
holder Of the United States Trust Com
many might nullify by an injunction the
ralpe Of the securities of that com
many which Assistant Secretary Will
cams accepted as collateral for the
foan.
The banks have decided now, how
ever. that should there be any loss
through an injunction it would be pos
sible for them to escape responsibility
for the reason that the acceptance OF
that collateral was the official act OF
tho Assistant Secretary of the Treas-
urv. and that, therefore, they are not
,ncurring any unwarranted liability by
executing. in modified form, the guar
antee which Assistant Secretary Will
Jams has been so anxious TO obtain.
IF. because of the illegality Of the
act Of the Assistant Secretary of the
Treasury. the collateral Of the United
States Trust Company is tied UP by
one or more Of the stockholders Of that
concern. no loss could fall on us or
our stockholders. Uncle Sam would be
the loser is the way one banker put
il to-day.
The bankers would not execute what
they term the false pretences' guar
antee or application. which asked for
this million dollars to move the crops
and which was first demanded or the
national banks by Williams. but mas
much as they had given their word 10
see the transaction through they have
finally framed a form Of guarantee
which they are willing TO execute.
In 50 far as the question Of recover
ing the 100000 deposited with the
Munsey Trust Company is concerned,
the bankers have obtained from AS
sistant Secretary Williams a declara-
ton that they. and not the United
States Treasury. stand in the relation
of depositors in the Munsey Trust
Company. and they have decided.
therefore. with the advice Of counsel
nat they have it in their power TO de-
nand the return at any time by the
Munsey Trust Company Of the sum ed
vanced.
Frank A. Munsey has not yet made
good the promise Of his personal repre-
sentatives, Stuart Olivier and +. Lam
caster williams, that he would himself
deposit 100000 in the Munsey Trust
COMPANY. but it is believed that the
power Of the national banks 10 with
draw from that company the Sl,OoO,OO
deposited by the Treasury, but charged
20 them, can he used at any time %
compel Munsey TO make good the
promise.
The efforts 70 resuscitate the United
States Trust Company, and -hus 10
wipe the Treasury slate OF the trans
action whereby il promoted the an-
sorption O. that company by the Nun
Bey Trust Company, have not met with
much success, although the stockhold-
ers are still anxious that this end
should be achieved. To effect this It
will be necessary 70 find someone who
IS willing 10 come forward with a con-
siderable amount Of capital, with which
70 set the fallen institution on its feet.
And those who were prepared to take
that step before the absorption Of that
company by the Munsey Trust Com
pany are not now willing to do so.
The effort has not yet been aban-
doned, and the Treasury Department
would IL as much gratifed if it could
be accomplished as would the stock
holders of the United States company.
so that il may be effected ultimately.
But the prospects OF success are not
now bright.