The evening world., 1914-01-12
BANKS
UNDER SCRUTINY
Of LAWMAKERS
Senate Banking Committee
Calling Henry Siegel and
Receivers to Testify.
HOLD HEARINGS HERE.
Legislation Is Coming to Put
Such Concerns Under
, State Control.

A. an outcome Of the recent DIM
cuitiss Of the bank Of Henry sis9sl .
Co. q searching Investigation of the
methods Of private banks was begun
to-day by tho Senate Committee on
Banhtns, in the Aidsrmanic Chamber.
with Q view to shaping new Legislation
for the regulation Of such institutions.
AAsr the hearings are Over the Lssss-
iaturs will be asked 10 mako laws
which Will not only regulate privsks
banks but provide Tor their hausdAton
when they get In trouble
A number of witnesses were SUB
posnaed 70 appear bsfors the committee
to-day. Among theme were Henry Mel
vine, the reosaver Of the 0isgel bank;
Robert McMsskin. Secretary oe ne
sssgsa stores Corporation; John a. Oar.
van, counsel for <ths corporation, and
Oscar Prail. Secretary and Treasurer
q the Tourtssnth Strsst otors and The
simpson Crawford CompAny. two Of
the Slsgsl stores that are In rsoslvsrs'
hands. An effort was made 80 sub
posna Henry Siege, and TTank n. vogsi.
his partner. and william A. Aarobe, one
Of the receivers of the stores. but they
we're not found. Nr. siessl and Mr..
vogsl WILL however. be called 10 ap-
pear at . lAAsr sesston Of tho com
mtttse.
INTENDS 70 lNveorioATg THE
sieoel LoANo.
The Senate Committee includes OeoA-
tor Henry W. Pollock. Cheirman. and
Senators Hsaly. Psckham and Osmrod.
Before the opening OF the session
Chs1rman Pollock sad:
I'VE shall frame Hesitation aftsr thAs
Inquiry which wiz make ~ private
banks safer IN svssy way. We shAu
propose limiting them ia NE matter OF
Investments. - savings TANKS ars now
limited. but not quite % drasGcauy.
perhaps. We shan ssek 70 learn how
the siagsi Company made IL loans
and whore these loans were placed
smeng the several stores. OF oourses
We cannot expect that private banks
which have now made invsstmsnts shall
change than al 1t once. but We shsu
arrange soms plan BY which they shall
be limited to certain forms q invest
msnt. Also. there win bs . proposal to
regulate the liquidation a. these private
banks.
"Ths 10000 bond required By the STATE
Ia one form Of regulation. but the State
has Just now nothing whatever 10 say
In the matter Of the character Of invest
ments."
Senators Hsaiy. rDmsrson and Cars
we'll wsro upon the rostrum with
Chairman Pollock when no opened for
business at il.So o'clock. and called a
a witness John A.. Carver OF counsel
for the sisgel Stores Corporation. ga
50O.0 OF the common stock OF whict
had been deposited with the Siege
bank for the benefit Of the dspositors
Mr. Carver was required to show BY
his evidence tho close relationship be-
tween the Henry siegsl bank and the
siegsl storss In New York and Bos-
ton. which are In the hands Of re-
ceivsrs.
I'VE snjoinsd the dspositors Of the
bank from civil action because II We
hadn't done that the stores could not
have gone on for twsnty-four hours
Mr.. Carver declared.
"If the buoiareas can be kept going tho
larger creditors Win doubtless get to-
Esther and provide . plan for reorgani-
.ataon which win protect tho dopositors
In the bank. The average individual
deposit therein n 5000"
Wh~r ChsArur~n IAOllooir askod ths
witness how long no thought the re-
Org anisat1on of the banks affairs would
take Mr.. Carver Ssplied:
II think u will take only about sixty
days. II II IA drassed out over . iosss
time It will probably prove disastrous
I think Mr.. Seigei and Mr.. VoEel will
borrow funds TO pay OF tho depositors." "
"Ths creditors of the bank are on q
par, are they not. with te otheI
creditors OF the three department
stores?'
| "Yss. Just like commercial creditors
| with no priority OF claim. But the
small creditors are usually taken care
| Of hrst-those under $500 or StOo. the
| larger creditors waiting"
Questioned upon the prOfitableness oi
the two New York slegel stores, the
Fourteenth Street and Simpson Craw'
ford Company. Mr.. Carver said he un
derstood they were profitable. As TO the
Siegsl stores corporation. the witness
said that 'ts assets consisted In equities
In the two New York stores and the tw,
others-one in Boston and one In Chi
| cago-in the Slegel chain.