The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-12-06
UNION BANK TANGLE !
AT INQUIRY TO-DAY
Wrecked Institution Will Play
Large Part in State In.
vestigatiOn.
MOVED WHITMAN TO ACT

Tho beginning to-day OF the !nvestiga-
ton Of the State Banking Department.
with particular reference to the
methods employed In the liquidating
Of banks that have failed. again
brings tho Ill fated Union Bank Of
Brooklyn to the front. II was largely
NJ the request of depositors OF that
wrecked institution that Gov. Whit
man appointed Frederick ]. 0roehl
commissioned TO hear charges.
In one form or another the affairs
OF the Union Bank have been before
the public for more than five years.
Its two presidents. David A. sullivan
n ex-City Comptroller Edward M.
Csrout. have been convicted of fclonies
committed while objects of the insti-
tuition. sullivan has served time In
Sing Sing. The banks troubles have
involved District Attorney Cropsey in
"A bitter controversy with half a dozen
members OF the Kings county judici-
AIRY. Three Governors have hed some
thing TO do with tho hanks affairs.
The original institution was formed
~ March. 1907. by David A. Sulli-
van through merger OF the old Mechan.
.a and Traders Sank OF Manhattan
and tho old Union Bank of Brook.
syn. This institution Toasted thirteen
branches, eight of them In brooklyn.
On January 90. 1908. Il came 20 grief
through u combination OF untownrd cir
cuilstances, chief OF which was the
panic of 1907 and S~ullivan's ambitious
schemes to make u great fortune in
real estate speculation.
sullivan Htd LUsaes.
The collapse of the real estate mar
Act left the bank on tie rocks. though
Sullivan. through u juggling Of assets.
managed to keep the fact hidden for a
time. In the end it made matters
worse for him. however. He was In
ti!ctcd for larceny and convicted. He
was called the evil genius OF the instt-
tuition. Wien he was forced out OF
7he bank Il was thought that the bank
might be- opened again.
Just who was responsible for the re-
opening has never been definitely an
certained. Al the trial Of Edward NJ.
Grout for perjury in connection with
the second collapse Of the bank the
prosecution held that Grout was mainly
to blame. Mr.. circuit laid the blame
on the state Banking Department, In
sisting that he had been urged to head
the institution as the only acceptable
person and finally had accepted az a
public duty.
Grout. who had been yice.president
Of the institution for a few weeks under
Sullivan. failed in his effort to save the
bank. 1t reOpened on August II, 1908,
M a Brooklyn institution. the branches
in Manhattan having been abolished.
On April 5. 1910. II closed n second time,
owing 23.o"0 depositors moro han
$4,000, 900.
With the closing of the bank came
many charges. Active among the nc.
cusers was Louis r. Goldstein. then nm
obscure Brownsville lawyer, jus. out Of
law school. One of the larger branches
OF the bank was situated in brownsville
and friends Of the young lawyer lost
their money. He decided that there
should be an investigation and ran for
Assembly with that end IN view.
Circuit. Like sullivan, Convicted.
lie was elected and took office on
January /, 1911. Powerful influences
we're brought to bear 10 defeat Cold
STEMS hill for a Union Ban investiga-
ton. II was not until Gov. Dix inter-
csted himself In the matter that Gold
STEMS efforts succeeded.
Goldstein secured the assistance Of
James c. Cropsey, afterward District
Attorney, II things hogan TO happen
with startling swiftness. The most sur
prising of the charges Wa that Grout
had sworn falsely to a bank statement.
overstat.ng the assets OF the bank by
$4,000, 000.
CIRCUITS trial took place only a abort
time ago. II lasted nine weeks. \ Jury,
after celebrating f~fty-three hours.
found him guilty OF perjury and he was
sentenced to Sing Sing for "a minimum
term of one year. He is now out on
bail pending appeal. He was never
charged with protiting through an ir-
regularity AT the bank but merely with
making a false statement for the pur-
Dose Of keeping the bank going.