The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-28
RICHARDS RECEIVER
OF SCHWENK BANKS
Federal Court Fixes Precedent
for state Control Of Closed
Private Institutions.
TO SERVE WITHOUT FEES
Bank Department Sees Victory
for New Law and End of
Rcceivcrship Evils.

state superintendent OF Banks Eugene
Lamp Richards was appointed by Judge
van Nechten Nceder In IN. United States
district court Brooklyn, late yesterday
afternoon as receiver for the banking
business on 4 Grochowskl & Co, owned
by Ladislaus W. Schwenk. whose tbrs.
branch banks In Williamsburg, Jamaica
ana at Avenue \ and Seventh street. this
cry were taken over nv tho state
Banking Department on Thursday last.
Supt Richards agreed 10 act without
compensation and ex-Judge jeremiah T
Nahoney Of ~ Chambers street, who
represented the department In tho pro
co'dings, said 10 would serve ag counsel
&" th" receiver without fees
The action Of the Federal judge VAS
highly satisfactory 10 the state Banking
department and the members OF the
state Banking Commission. which drafted
the new state banking law, az It il held
TO establish valuable precedent and %
give the department control over private
bankers. ard 10 forecast tho end of
rcceivcrship evils
Mr. Richards viii to-day file a bond
IN the sum Of $500
The motion came up before Judge
Needer on a motion by Irving L. Ernst.
counsel for the petitioning creditors. in
the bankruptcy proceedings against
Schwouk begun last Thursday morning.
Robert 7. Lewis Of l7o Broadway, 10
whom Schwerk made an assignment, for
tho hencflt of his creditors. appes rcd FOR
himself, and Lawrence B. Cohen repre-
seuted Schwenk. Ernst and Lewis
favored the appointment OF Lewis as
receiver.
Ernst and Lewis attacked the right Of
the Superintendent OF Banks TO take
possession Of Schwerks banking business
on the ground that the section OF tho
new banking law relative to private
banks doc rot become operative until
November T.
Judge Malone replied that tho new
banking law in i's entirety went into ef.
feet on Aprii IL last The act which the
new law win c,rutrolly repeal gave the
state Comptroller supervision over priv ate
banks, and he ar-ucd that there is moth
!uharmouious iu having tho state do
partmeut IN control until tho finai transfer
" authority is maze on November I.
During the cnursc 81 the hearing II was
brought on that Investigations log Supt
Richards into Schwork's banking business
disclosed shortage of 81. 500 in the books
of IN" Jamaica uanN Judge Mahoncy said
last night that tho Banking Department
is not sure that the shortage involved
criW.nvl.ty. but add ID that II u developed
that crime has been committed pro-
cecI.UCs will b, taken.
Pauline Dudzutk1. 90 years old. OF 6l5
East Fifteenth street ono Of Schwenkt
many distressed dcpositors was arrested
n front IT ia" Av"nu" \ bank yesterday
for ohstructing trtfhc 10y trying to address
crowd. Policeman Eich Of the FiNh
street station said the woman struck
him boo the face when he ordered her 20
move on In tho Essex Market court
Mrs Dudz'ntka iu9i5ted the officer hit her
with his club Sh- took off her waist in
court TO SHOW bruises ou her arms. The
woman said all her money WAS in the
SchWrnl; bank and She had no means OF
feeding hor children. Magistrate Nolan
discharged her with a warning to keen
away from the bank.