The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-16

purchase of stocks on its own account
purchases which were ultra vires-and
here again II used the dummy note OF
an employee, to falsely have II appear
that II had disposed of such stocks
when. in fact, II had not done SO after
having been directed so to do by the
then Comptroller.
ION ut least two occasions. and II Is
believed on many more, officers OF the
bank have borrowed it's money upon
notes signed by irresponsible dummies.
the collateral to secure such loans being
furnished by the borrowing officers and
the identity Of the actual borrower not
being made known to the other d.
rectors.
Until the passage Of the Federal re-
serve act the law required a national
bank to maintain a reserve equal to rs
per cent. of its deposits, one-half of
which must be In lawful money in its
vaults. Practically, continuously from
January l., 1912. to January 1, 1913. the
reports OF condition filed by the plain
tin bank show a shortage In Its reserve
averaging over $50. 900 and amounting
at the time OF the June. 1918. state
ment to more than s5OO.0 900, and an
examination OF the banks books showed
that in practically each instance there
was an average shortage in reserve for
thirty days prior to the rendering of
each report.
During the time he held Office. on,
OF plaintiffs directors was ~disQualihe I
by reason OF the fact that all his stock
In the plaintiff bank was hypothecateG
for a loan. Notwithstanding which OH
three separate occasions he made oath
falsely stating that the stock was un-
pledged.
Because Of the unlawful businesses
engaged in and the steps taken to eon-
ceal the same. the banks books have
not shown the true condition OF its az.
fairs and many OF the reports of con.
dition made throughout its ex~istencs
hav been false.
I'm addition to many actual viola
lions OF the law, in numerous ways the
business OF the bank has been conducted
irregularly M not with "A view to best
serving the banking needs of the com.
munity."
Its officers and directors have hor-
rowed heavily in May. 1918. one time as
much vs. 1851 .6i1.43. or approximately
one-fourth OF It's entire capital stock and
surplus large loans have been made 10
clerks upon the security OF stocks. some
Of which were hazardous and specula-
tive. and its officers have engaged in
speculation In the stock market the
bank In the purchase Of stocks for others
has frequently carried stocks until the
purchasers were ready 10 settle and car
ried such stocks as the equivalent OF so
] much cash. this item amounting at one
tins to as much a. $500 up to 1908.
the bank frequently loaned to officials OF
the Treasury Department having to do
with the supervision OF its affairs the
bulk of the banks loans-sometimes
more than 30 per cent-have been made
on the security of bonds and stocks and
II has odned a far smaller proportion OF
It's deposits upon commercial paper or
for the needs of the business community
than any other national bank in Wash
ingion, II. C.
The president OF the plaintiff bank,
Charles c. Glover. has held hat office
throughout its existence. Its vice.
president. Milton r.. Allies. has been
such since April 10. 1903 for Several
years prior t~hereto-during which time
plaintiff bank constantly violated the
law--he WAS Assistant Secretary OF the
Treasury. Its vice-president. William
j. Flather. and it's cashier. Henry II.
Father. ave been officers or employees
OF plaintiff during its entire existence.
These officers throughout the life of
the bank in large part have directed it's
policy and controlled It's management
and are still in control of its affairs.
They have caused IL to violate the law
and exceed its pOwers"