New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-22
Federal Trust $l,500,00O
Excess Covers Creditors,
Says Commissioner.
BANKERS PREPARED
FOR ANY EMERGENCY
Committee TO Aid Pressed Firms
Fidelity Co. to Take Over
Ex.Boss's Property.

The financial collapse of ex-United
States Senator James Smith, jr., presi-
dent OF the Federal Trust Company,
who retired Saturday owing about
S1.750,O00, will not affect the trust
company in any way. This was declared
late last night by Commissioner George
VI. Lamonte, of the state Banking and
Insurance Department, ef;er examining,
the books and recOrdr Of the Fedora
company Just before leaving TOR ms
home. on the Bound BROOK. Mr. La,
monte made q statement that over ana
above all claims of deDositors there
was an excess of Sl,500,000 for capital
and surplus and large amount OF IN
divided profits. Mr.. Lamonte's state
ment is:
"An examination of the condition OF
the Federal Trust Company, as on the
close of business November 20. 1910,
under my supervision. shows that the
institution Is in an absolutely sound
condition, that the depositors and other
creditors are amply protected over
and above all claims of deposltors
there Is an excess Of assets OF a mill
ion and half dollars for capital and
surplus and a further large amount
for undivided profits"
There was not a word forthcoming
from the ex-senator concerning the
transactions which led him into maze
of obligations aggregating an esti-
mated inde b mess of about s1,75O..
900. His counsel, John r. Hardin, said
there was nothing tina. the ex-senator
would gay at this time. The eXamina-
ton in the Newark banks as well as IN
the institutions outside of that city
disclosed many notes, some secured
and others unsecured. II was also re-
ported that among the obligations were
loans Mr.. Smith had made from the
trust company over which he presided
since 1904
Bankers Offer Support
These loans. report said, ranged from
$4,000 to s3S0.000. Former associates
of Mr.. Smith in the directorate of the
company and other influential bankers
said that all the Smith obligations to
his trust company had been satisfied,
but none would say how. The impress
sion In financial circles is that some Of
the bankers went down into their own
pockets to wipe out these debts.
Millions of dollars have been placed
at the disposal of the Federal Trust
Company to meet any demand the fail
ure Of Mr.. Smith might precipitate.
The committee Of Newark bankers made
up Of Uzsl H. McCarter, president Of
the Fidelity Trust Company; Charles
L. Farrell, president Of the Essex Coun-
ty National Bank, and William Scheerer,
president Of the Union National Bank,
after putting in all of yesterday in ex-
amining the Federal books and records,
issued the following statement late last
night:
"The committee Of bankers making
the examination of the Federal Trust
Company, while unable now to make
their final and complete report as to
the condition of that company, say that
they have progressed far enough to say
il is their belief that the trust COM
pany is absolutely good for its every
obligation. The examination thus far
has convinced the committee that the
institutions which they represent IN
qualifiedly will lend any financial as
sistance should any be necessary, as
they have entire confidence in the en-
tire stability of the Federal Trust Com
pany."
To carry out the plan TO safeguard
the interests of Mr. Smiths creditors,
whereby the Fidelity Trust Company
will become the trustee and take
charge Of all of Smiths property, some
legal proceedings will be necessary.
These will be resorted to this morning.
Counsel for the Fidelity will go into
the Chancery Court and file q bond
and be formally designated by court
order as the trustee for Smith. The
company will then investigate the con-
ditions Of the various enterprises in
which Mr. Smith has put his money.