Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-02-18
SMITH BLAMED
FOR BANK WRECK
La Monte Says DefauIting
Cashier Forced Collapse of
RoseviIle Trust Co.


Blame for the wrecking of the Rose
vile Trust Company is placed upon
Ray mond Z. Smith, the former treas
urer, by George M. LaMonte, State
Commissioner of Banking and Insur-
ance in a report issued yesterday,
but the officials are also censured
for having continued Smith in their
~ Services after certain Developments
which occurred long before the bank
was wrecked. A portion of the an
nual report of the commissioner, con-
tanning a reference to the Roseville
Trust Company, has been submitted
= 70 Governor Fielder.
In reference to the Roseville Trust
Company Mr. LaMonte says that
great difficulties were encountered by
the State officials by their reluctance
TO call in all of the passbooks for
comparison with the ledgers for fear
of starting a run. He also states he
believes it would be a good thing to
enact legislation which would make
1t compulsory to have passbooks ex-
amined every so often and by this
means the State officers could get at
them without causing any undue I'M
=. easiness.
Continuing Mr.. LaMonte says:
The collapse of the institution was
due to the criminal acts of its treas
urer, who was found to be default
er for very large sum. Forgery,
classification of books and swearing
TO false reports of the company's con-
dltion in order to conceal his wrong
doings, were among the other crimes
with which he was chargeable.
THE treasurer had so manipulated
The books, papers and assets as to
make it a work of great magnitude
to ascertain the real condition of the
company. His disappearance and re-
turn and surrender to the authorities
and his subsequent commitment to
Jail, where he is now awaiting trial,
likewise the indictment of certain
other officials, directors and em-
ployees of the company on charges in
connection with its failure and the
conduct of its business are matters
which have been fully set forth in
the columns of the press.
THE company was Incorporated In
1908, and within a short time there
after the department called the at
.tention of the directors to certain
acts of the treasurer which clearly
indicated his untrustworthiness, and
recommended that he be required to
resign and sever his connection with
the institution; but Instead of heed
ing the warning they gave him vote
of confidence by adopting a resolu-
ton requesting the withdrawal of the
resignation he had presented follow
ing the receipt of the departments
communication.
Directors Censured.
/, in view OF what has happened to
the company and for which the treas
urer above all others was responsible.
this action of the directors is most
regretable. 1t was at least to have
heen expected that for their own pro-
lection they would have taken steps
TO put into effect the internal checks
and safeguards against wrongdoing
by officials or employees which in
other banking instit utions are deemed
essential to assure the safety of de-
positors and stockholders But in
this they failed also, thereby afford
ing the treasurer every opportunity
to continue his criminal course and
conceal his operations from the other
officials and the State examiners"
~ Comment was also made by Mr.. La
Monte upon the difficulties confront
ING his department in discovering the
shortages, because of the methods re-
sorted to by Smith to conceal his
Slefalcatfon. The only way in Which
this might have been done. he said,
was by calling in the passbooks and
comparing them with the ledger ac-
count. To do this, the commissioner,
Added, would probably have alarmed
9he depositors and started a run.
Mr.. La Monte took occasion to re-
ftcrate that all banking institutions
should make it point to call in and
examine passbooks, in order to keep
themselves fully advised as to their
liability to depos'tors. He suggested
the desirability of a law compelling
spassbook verification, pointing out
that such a statutory requirement
would probably enable the depart
ment to compel the examination of
.passbooks without unduly alarming