The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-07-15
CIRCUIT ADMITS HE
VIOLATED BANK LAW
Says He Did 1t to Protect In
stitutiOn by Holding Stock
From Sale.
WAS IGNORANT OF RULES

That he intentionally violated the let
ter Of the banking law in at least one
instance while president OF the Union
Bank OF Brooklyn was admitted yester-
day by ex-City Comptroller Edward VI.
Grout at his trial for perjury. but the
witness declared In the same breath that
he had done so to protect the bank and
that the Banking Department had tacitly
approved of the violation by taking no
action against him. This admission
came In the last few moments Of the
afternoon session after eight and one
half hours Of cross-examination.
The particular series OF questions
which caused MIR. Grout to say that he
had ignored the law had to do with the
acceptance Of linton tank stock by the
Union tank in BART payment of an old
debt of sl6.169.57 and carried In the in
dictment as the Ellsworth F. Bogart
item. The law permits this where the
debt Ii doubtful. but provides that the
stock must be sold within six months.
Did you try TO sell that stock?" asked
Mr.. Cropsey.
NO that particular stock" Mr.. Grout
! replied. adding in explanation that the
bank at that time was trying quietly
to dispose Of stock similarly hypothe-
Gated on the Sullivan and other loans.
Did you send any stock to the public
auction room in Manhattan TO be sold!
Mr.. Cropsey demanded.
why. certainly not" the witness re-
piled. Try to ruin the bank by forcing
a sale Of It's stock? That would have
been a fine thing TO do"
Despite the provisions OF the law: -.
Despite the provisions OF the law :!
Mr.. Grout shot back.
In connection with the Bogart item
Mr.. Grout professed ignorance as to
many details OF the banking Law. MT
Cropsey registered surprise when the
witness informed him that he had moi
read the law through on becoming pres!'
dent OF the bank.
Didn't you know you could take your
own stock in payment OF an Ola deo'
reearded as bad, and didn't YOU know
that II YOU did take II another provision
Of the law required its sale within ss
months Mr.. Cropsey demanded.
Grout Knew 81 Provision.
Mr.. Grout said he knew OF the provi'
sion. but not that the stock could III
taken outright. lie had thought thai
Union Bank stock accepted outright by
the bank would automatically reduce ti'
banks capital. His understanding wa'
that II might be held temporarily as q
form Of collateral.
Persisting in an effort TO make Grou'
admit thst he had been apprised by hi
own direction of the condition of Thu
Union Bank in 1909 and therefore hac
guilty knowledge OF the worthlessnesi
OF many items included in the false re
port to which he swore in 1910. Mr.
Cropsey asked: Have you any doub
that you received that report"
Mr.. Groupt stood up and exclaime'
Indignantly 81 have no recollection o
Il one way or another, sir"
The debt owed the bank by the Or
Contracting Company. which was carried
In the indictment as an item. was als'
taken up by Mr.. Cropsey. who tried 4
obtain an admission that Grout had per
sonal knowledge OF this item. as indi
Gated by the testimony of Louis Pink
who was formerly in the Grout Law ofiic,
but Is now a member of the Boarl o
Education and n practising attorney
Mr.. pin had testified that certain actor
in the Orr matter was taken ~ Nj
CIRCUITS personal direction. Mr.. Grou
testified that Mr.. Pink had been mis-
taken.
IAN the witnesses who have tcstifc
against you. Mr.. Grout, are mistaken
aren't they 49, asked Mr.. Cropsey. TIL
question was ruled out.
n cross-examination Of the defend
ant will be continued to-day.