The sun. [volume] (New York [N.Y.]) 1833-1916, 1913-12-10
BAYONNE CRASH LAID
TO Big NOTE KITERS'
Group Of New York Promoters
Said to Have Preyed on
Wrecked Bank.
LOANS MADE TO DIRECTORS
Examiner Asserted to Have
Thrown Out $389,OOO Of
Worthless Paper.

"Note kters' ana orornoters OF Man
haitian. one Of WHOM, has a criminal rec
ord. preyed on the First National Bank
of Bayonne to such an extent. II was
learned yesterday. that they caused the
collapse of that institution.
Members of the board Of directors said
last night that Max Hart. a promoter
Of New York, who did some financing for
Tyson & Co, the opera ticket spectators.
mad guaranteed notes discounted at the
bank. amounting to between 100000 and
100000 They further admitted that one
Of their fellow directors had borrowed
more taan $4,000 from the bank and that
;hc entire amount Of this mans loans
might possibly reach $4,000. The Fed
crai banking law provides that a national
bank shall not make "A loan OF more than
10 per cent Of its capital to any one
individual or corporation.
It WAS ruinorcd also that Julius q.
IIocke. ono OF the directors. had borrowed
"a large amount of money from the bank
When questioned. he said he had dis
counted a note for $4,000. but never had
received more than that from the insti-
tuition.
Put Vp WOrthless stocks.
Thesc mote kiters" borrowed from the
bank either on individual notes or notes
, secured" by stock which has no market
value, and thus. in the opinion of the Fed
eral authorities. not only wiped out the
surplus and undivided profits of $4,000
but have deprecated the assets OF the
bank SO that at least S250.000 Is needed TO
| put Il on "A sound basis.
From one source Z was learned yester-
day that the bank has S3s?.000 of Ques-
! tionable paper. While the directors In
slst that all except $4,000 OF this paper
Is good they admit that Charles r. Chap
man. Federal bank examiner and tenn.
porary receiver. has marked almost that
/ much Off AS worthless ard has insisted
that the directors replace such notes with
cash.
| The Federal authorities have been on
the trail OF the so-calied mote kiters' fog
! several weeks The Comptroller of the
i Currency has caused thorough invest
cation to be made and bank examiners
have a list OF them. They are searching
tho assets Of all national banks for those
mems notes.
Crimim.l Action suggested.
In View OF the attitude OF the national
bank examiner 10 the conditions which
he found In the bark 4 was regarded as
likely that H. will submit certain fact,
to the United States District Attorney n
Trenton
lie probably VIII consult tie Comp
troller of tn. Currency first because that
officer has broad power and may. il h,
deems ii in the interest uf the d.posi
tors, pardon any slight offence on the par
Of directors and permit the bank to con
tinuo business The Comptroller Ia.
power to revoke the charter OF IA banl;
once, however. facts are laid before
Federal attorney there can be no draw
ing back
Chapman was sen; 10 the Bayorne Frs
National because of the report tina. ;hes
mote kiters" had made inroads on III
assets of the bank. His investigation. ac
cording to directors themselves. has con
WINGED Mr., Chapman that of the ssO0.O0
OF loans made to persons In Manhattan
almost one-half went TO promoters. From
information CLEANED yesterday the banl
examiners probe has revealed grave con
ditions which the directors characteriz a
"lack Of judgment on the part OF the on
cials of the bank"
Indeed, so grave IL the situation tina
president OF the bank. and several othe
of the officers to deposit their stock will
. him,
II was prophesied in Wall Street 81.
months ago that the Bayonne First Ma
= tiona was on the way to ruin becaus
I the mote kitsrs'' had got their clutche
/ upon it.
Clearing House banks and the Comp
1 troller OF the Currency have started
. crusade against mote kiters." and wit
n the revelations In connection with tn
t failed Rayonne institution it Is regarde
!. AS likely that the work OF some of ther
r will be stopped effectively.
Promoters Notes Questioned.
d One OF the men 10 whom the ban
examiner was said to have taken Ell
i ception WAS NJ. NJ. Hart. who Is cornmonl
= known as Max Hart promoter. {
=. li5 Nassau street. who In in the Director
OF Directors ~ director and treasurer c
Nj. NJ. Hart. Inc. Directors OF III
=, BayOnne bank declined TO tell Just ho
=, much money Hart. who In depos!'or
. the bank. got on loans. II was admitte
u that he had his own notes discounte
without giving any security whatever.
was also admitted that he had bee
instrumental In getting notes discounte
for persons who bought stock In vario,
companies from him. putting his own nan
on the notes as we'll. The collateral Is sa
TO have been the certificates of stoc
!. which Hart himself had sold to II
~ makers OF the note. The directors sa
!, that the par value Of this stock exceed
10 the amount of the loans.
r That fact. however. is disputed by II
10 Rank examiner.
10 Ills Record Investigated.
m Several persons In Manhattan said ye
terslay that they mad heard OF Ha
4. boasting that he owned 81 per cent Of II
I'd stock Of the Bnyonne bank. Hart's nan
does not appear on the stock list OF q
'r institution Investigation OF Hart h,
ID Continued on Fourth Page.
p No connoisseur omits ANGOsTURA nj
.. TE8S u punches aud fancy drtnks.--l6v.