New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-05-20
Holds Controller Had No
Right to Impose $1,000
Fine on Bank.
UNTERMYER BITTER
AGAINST OFFICERS
Lawyer Asserts Their Hostility
to Treasury Heads Due to
Latter'S Reforms.


Washington. May 10. A frank opin-
ion by Justice Mccoy that Controller
Williams had no right 10 impose the
$4,000 fine on the Riggs National Bank,
which has been the principal bone Of
contention in the injunction suit Of
the bank against Treasury officials,
crumpled up the government attorneys
in the case Just before adjournment Of
court this afternoon.
Samuel Untermyer had ended an all
day speech in which he had made an
impression quite pleasing TO the friends
Of the Treasury officials when Justice
Mccoy took the ground from under his
feet. Justice McCoy's point was that
the law provided for fines to be i'm
posed at the rate Of 500 a day for fail
ure by bank 10 give the five regular
reports Of the banks condition in each
year within five days after each call,
and full information about dividend
declarations within ten days following
dividend actions. He held. however.
that other reports demanded BY the
Controller, while thew must be given,
did not subject banks failing to give
them within any given length OF time
10 a fine
Mr.. Cntermyer sang the praises OF
Secretary McAdoo. occasionally saving
few Kind words for Controller VIII
Jams. Until Mr.. McAdoo went into the
Treasury Department, the lawyer said.
there had been pipe line between the
Riggs National Bank and the National
City Bank Of New York and the gov
ornment through which governmen:
funds poured to be used in stimulating
speculation in Wall Street. incidentally
without the bank paying any interest
on these deposits.
Criticises Milton f. Allies.
Abiding to Milton r. Allies. vice
president of the Riggs Bank and spe-
cial preventative Of the National City
Bank, Mr.. Cntermyer INQUIRED what
services he rendered TO the New York
institution which could possibly be
worth the salary paid him by the bank
900 a year. Mr.. Allies. he said. a
few days before leaving the Office OF
Assistant Secretary Of the Treasury
deposited $2,900000 OF government
funds in the Riggs Bank. without in
terest. Mr.. Cntermyer admitted that
this was withdrawn from the National
City Bank, but pointed out that the
latter had not been deprived Of il long.
as the next call showed its government
deposits had not been impaired. This
money put into the Riggs Bank BY
Allies. the lawyer said. constituted 40
per cent of the entire deposits Of the
bank, and the National City Bank usu-
ally had from one fourth 70 one-tenth
Of all the government deposits
81 don't care 10 characterize this ac-
ton" said Mr.. Cntermyer. at char
acterizes itself. But have heard no
satisfactory explanations"
Mr.. Untermyer discussed the action
OF McAdoo in forcing national banks 70
pay interest on government deposits
At the rate OF per cent. they never
having paid any before. He denied
that this was nccessitated by act of
Congress, saying the Nreeland act did
not apply 10 general deposits. Only
seven of the 1900 national banks re
fused TO pay . per cent on government
deposits. he continued. Of which the
National City Bank was one
apparently the balance kept by the
government in national banks did not
have the same color OF money as the
deposits of correspondent banks" said
counsel. "lt may be that when these
big deposits were made in the National
City BAN and the Riggs Bank 1t was
all right 10 loan money 10 the men
who had charge of the placing OF the
government deposits without interest.
but a code of morals which would JUS
tify that is passing away, and happily
so. When banks loaned money TO the
men who had supervision over them
they az least laid themselves open 20
criticism. and when they loaned money
10 the men who examined their books.
that was certainly much worse
why not say crime suggested
Senator Bailey.
no, but we have seen 10 il that it
has been made crime asserted Mr..
Untermyer. with some heat.
Later Mr.. Untermyer declared the
Young woman representing the Ma
tional City Bank in the Treasury had
been allowed extraordinarily improper
facilities in being placed available TO
confidential communications
Bitter Against Banks Officers.
Mr. Un'ermyer declared that the
enmity Of the officers OF the Riggs
Bank toward the Treasury officials had
been aroused not by the demands for
information. but because OF the dlsap-
pearance OF its special privileges. lie
was particularly bitter in denouncing
the actions of the bankers in conduct
ing a brokerage shop inside national
bank"
"On May IS" said Mr.. Untermy"r, "a
new examiner. from another district,
examined the Riggs Bank and found a
condition which to a person accustomed
to legitimate banking was an amazing
state OF affairs. II you have bank on
tap to lend money on the securities you
buy It Is a mighty easy way 10 run
stock brokerage business. II is like a
man sitting OF both sides OF the table.
Who owned this account Of Flsther &
Eon,inu~a an ma "a L. roIumu