New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-21
"BOSS" SMITH.
OF FJERSEY,FAILS;
OWES S1,75O,000
Former u. S. Senator Quits
as Head of Trust
Company.
NOTES IN BANKS
FORCED ACTION
Institutions Concerned Sound
and Prepared TO Meet Any
Demands, Says Controller.

James Smith. jr.. former United
/ States Senator. banker and msnufact-
urer, of Newark, and political foe of
President Wilson, is in financial straits.
Reputed a few years ago to be worth
at least S5,OO0,000. he has found that
! ne owes banks in Newark, Philadelphia
and New York an amount estimated at
about sl,75OOOO.
His embarrassment led Mr. Smith to
submit his resignation yesterday as
president of the Federal Trust Com
pany, of Newark. Steps were immedi-
ately taken whereby all his property
holdings are to be turned over. prob
ably to the Fidelity Trust Company, Of
Newark, as trustee.
To inner financial circles the former
Senator's dilemma was not a surprise.
For months stories had been rife of his
difficulties. Assurances were given,
however. including one from Commits
sioner George NJ. La Monte, of the
State Banking and Insurance Depart
ment. that Mr.. Smiths plight would in
no way affect the stability of the trust
company over which he had presided
since 1904.
Further than to admit that his resig-
nation was under consideration, Mr..
smith. at his Office in the bank. yes
;erday, declined to make any state
ment.
Controller Ends Secrecy.
The secrecy that was being main
I taircd by banking circles and other in
terests was shattered, it is understood,
bv the activities in the Office OF John
! SHELTON Williams, Controller of the
, Currency al Washington, who had
learned that an unusual amount OF pa
per bearing the Endorsement OF the for
mer Senator was in the possession OF
several national banks.
An investigation disclosed the enor-
nous obligations of the former Sena-
tor. with the result that action became
imperative il the standing of the vari-
Gus institutions involved was not 10 be
impaired.
Following thc information that Mr..
Smith had agreed to quit the presi-
dency of his trust company, hurried
meeting of the directors of the COM
panv was held yesterday with the idea
of naming successor and otherwise
/ paving the way for the transfer of Mr.
I Smiths personal holdings to trustee:
i The directors assembled in the board
room of the Fidelity Trust Company
and after more than an hour with Mr..
Smith present, an adjournment was
taken to permit an examination of the
books and other records of the Federal
J Trust Company.
With the directors also were Charles
l.. Farrell. president Of the Essex Coun-
" National Bank, and Uzal ii. McCar-
ter. president of the Fidelity. These
two officials. with Bank Examiners Hor-
ace Biddle and James Thorne from the
state department, were deputized 10
make the examination and report TO
the full directorate.
While the examination of the Federal
! Trust Company records proceeded the
rest of the directors of the company
remained at the Fidelity board rooms.
In an adjoining room sat Charles
Starek. chief examiner Of national
banks for New York and Northern New
Jersey, who, it is said, made the pre-
liminary investigation for the Con
troller Of the Currency.
Tho directors of the Federal Trust
Company were in session until mid
night. when it was announced that
! Christian w. Feigenspan, president Of
the Christian Feigenspan Corporation,
brewers. had been elected president, to
succeed Smith. and that julius ). RIP
mel. a local stock broker and one OF the
largest stockholders in the Federal
company, had been elected a director.
Says Trust Company Is Strong.
81 can only confirm the report that
Mr.. Smith has retired as president Of
the Federal Trust Company" said Com
missioner La Monte last night. His
separation from the trust company VIII
have no effect upon that institution.
This company is in very strong imam
cial condition, according 10 ali the IN
formation in my possession. This shows
that the bank has its capital Of 81, l,OOO,-
600. the surplus of 100000 and large
undivided profits, thus afording am
plc protection TO all depositors.
About the same time Controller Will
isr1s. at Washington, authorized a
statement to the effect that Mr. Smiths
financial dealings would in no way al
feet any of the banks. tie declared
tha- there was TO occasion for alarm.
lie further asserted that the bankers
of Newarl had joined with the govern
ment j doing everything possible 10
meet the s.tuation. II was disclosed
that Controller Williams had spent Fri
day night e: Manhattan with Chief EX-
aminer Starek going over the hndlngs
Continued on page 4, column