& en V- l CORNELL UNIVERSITY LIBRARY THIS BOOK IS ONE OF A COLLECTION MADE BY BENNO LOEWY 1854-1919 AND BEQUEATHED TO CORNELL UNIVERSITY Cornell University Library HG2577.N72 E47 v.1 Testimony taken before the Senate Commit olin 3 1924 032 533 147 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924032533147 TESTIMONY TAKEN BEFORE THE Senate Committee on Banks AND THE SENATE OF THE STATE OF NEW YORK, IN REFERENCE TO OHAR8E3 PREFERRED BY WILLIAM J. BEST, Receiver, Etc., EDWARD MALLON AND JOHN" MACK, AGAINST DE WITT C. ELLIS,. f Superintendent of the Banking Department of the State of New York. ALSO JOURNAL OF THE SENATE. PRINTED UNDER THE DIRECTION OF THE CLERK OF THE SENATE, PURS UANT TO RESOLUTION OF THE SENATE, PASSED AT SARATOGA, AU8UST 17, 1877. VOL. I. ALBANY: WEED, PARSON'S & COMPANY, PRINTERS, , 1878. U , , STATE OP NEW YORK, i In Senate, August 17, 1877 On motion of Mr. Habris : Resolved, That 500 copies of the Journal of the Senate and testi- mony taken before the Senate in the trial of the charges against De Witt C. Ellis, together with the testimony taken by the Senate Committee on Banks, be printed and bound, and that the Clerk cause an index thereof to be printed therewith ; the printing to be done under the supervision and direction of the Clerk of the Senate ; and that the same be distributed by him to the senators, officers, Mr. Ellis and the counsel engaged in the case. By order. HENRY A. GLIDDEN, Clerh. TESTIMONY Taken bepore the Committee on Banes of the Senate of the State of New York, in references to charges preferred by William J. Best, Keceiver of the Mechanics and Traders' Savings Institution, against De Witt C. Ellis, Superintend- ent of the Bank Department of the State of New York. New York, April 23, 1877. Pursuant to the following resolution adopted by the senaie April 19, 1877, the committee met at the St. Nicholas Hotel : On motion of Mr. Eobertson, Resolved, That the committee on the judiciary be discharged from the further consideration of the message of the Governor, recommend- ing the removal of De Witt 0. Ellis as superintendent of the bank department, and the accompanying charges, and that same be referred to the committee on banks for the purpose of investigating the truth of said charges, with power to send for persons and papers, to employ a stenographer, and also a messenger, if they deem it expedient to do so, and that they report to the senate the testimony taken thereon. Present — Senators Coleman (chairman), Wellman, and St. John. Edward P. TJnderhill is employed as stenographer, to take notes of the proceedings of the committee. For the Eeceiver of the Mechanics and Traders' Savings Institu- tion, appears as counsel, John McKeon, Esquire. For the Superintendent of the Bank Department, appears as coun- sel, Orlow W. Chapman, Esquire. William J. Best, a witness, is duly sworn : Counsel for the receiver offers in evidence a message from his excel- lency, the governor, addressed to the senate in the words following: STATE OP NEW YOEK, ) Executive Chamber, V Albany, April 5, 1877. ) To the Senate : I have received from Mr. William J. Best, who was appointed by the supreme court, in July, 1876, receiver of the Mechanics and Traders' Savings Institution, charges against De Witt C. Ellis, superintendent of the bank department, accompanied by depositions and documentary proof in support thereof. The charges are that the bank was insolvent in July, 1874, the deficiency being then about two hundred thousand dollars; that this condition of the bank was exposed to Mr. Ellis in September, 1874, by two of its trustees; that Mr. Ellis then personally investigated the affairs of the bank ; that upon such examination he admitted the bank was insolvent ; that he was frequently requested by and on behalf of the two trustees to take immediate proceedings to protect the creditors, and that he neglected to do so until June, 1876, a period of nearly two years. In support of the charges are submitted: 1. A balance sheet (Schedule A) made out by George N. Pratt, who was at the time general book-keeper of the bank, and verified by his oath, showing a deficiency in July, 1874, of $201,017.52. 2. The testimony of William Floyd and Ira W. Gregory, two of the trustees of the bank, contained in their depositions, that they, as a special committee appointed in July, 1874, to examine its condition, reported a deficiency of assets as compared with liabilities of $181,- 505.71, and a deficiency in annual income, if the usual dividend of interest to depositors were declared, of $15,041.70. Schedules B and C showing this condition of things, now appended to the charges, formed a part of their report. Mr. Floyd deposes, further, that the trustees having, notwithstanding their report, declared the usual dividend, he, through F. P. Bellamy, his attorney, in September? 1874, laid copies of the report of himself and Mr. Gregory, accom- panied by the schedules above mentioned, before Mr. Ellis, and requested him to institute proceedings to protect the creditors; that thereupon Mr. Ellis went to New York, and in person examined the condition of the bank; that after such examination Mr. Ellis admit- ted to Floyd that the report of himself and Gregory was substan- tially correct, and that the bank was insolvent, and promised to take immediate measures to protect the depositors ; that he (Floyd) fre- quently between that time and June, 1876, urged Mr. Ellis to take some action in the matter, but that until the last-named date he neglected to do so. 3. The testimony of F. P. Bellamy, attorney at law, of Brooklyn> contained in his deposition, to the same facts and to the same admis- sions to him by Mr. Ellis, after his personal examination of the con- dition of the bank, that it was insolvent, and that he, Bellamy, had on behalf of the two trustees above named, frequently urged Mr. Ellis, thereafter, to take action to protect the creditors, and had mailed several letters to Mr. Ellis to that effect between the time of the ex- amination aforesaid and June, 1876, but that Mr. Ellis neglected to take any proceedings until the last date. 4. The deposition of Mr. Gregory, to the effect that he confirms all that Mr. Floyd has stated concerning the acts and doings of Mr. Floyd and himself, and of Mr. Ellis. The annual report of the bank department, dated March 5, 1875, exhibits this bank as possessing a surplus of assets over liabilities of $67,240.18. Assembly documents No. 108, p. 148. That of 1876, ex- hibits the bank with a surplus of $9,530.13. See Assembly Documents of 1876, No. 97, p. 157. Mr. Best alleges that at the time he was appointed receiver, in July, 1876, the deficiency had reached nearly $350,000. Upon these charges, and the proofs in support of them, which I transmit to you herewith, it becomes my duty to recommend to you, as J now do, the removal from office of DeWitt C. Ellis, superintend- ent of the bank department. This recommendation is made as a basis of action on the part of the senate, and upon the assumption that the deposition annexed to the charges are true, and make out a prima facie case. It is due to Mr. Ellis to say, that upon my invitation he has appeared before me and made explanations which seem to acquit him of any intentional wrong, but not, in my judgment, of culpable negligence. I submit the whole matter to the senate for such investigation and action as it may think proper for the protection of public interests. L. ROBINSON. Counsel for the receiver also offers in evidence the schedule attached to the preceding communication, in the words following : SCHEDULE A. Statement of Mechanics and Traders' Savings Institution, July 1, 1874. Liabilities. Amount due depositors as shown on general ledgers. . $2,565,252 83 Amount due depositors, dealers' ledgers, in excess of above, estimated 70,000 00 5,635,252 83 No balance seems^to have ever been taken off the dealers' or deposit- ors' ledgers. When balanced by the receiver, the dealers' ledgers showed that the institution owed its depositors more than $80,000 in excess of the sum appearing in the general ledger; hence the addition made above, which is only approximately correct. Assets. Par value. Market value. Bonds and mortgages $748,150 $748,150 00 Stocks and bonds 1,852,600 1,436,357 00 Cash in safe and banks 102,009 12 Interest due but not collected 47,516 78 Banking-house, cost 65,725 00 No. 30 Pres't st., Brooklyn (est'd) 15,000 00 No. 32 Pres't st., Brooklyn (est'd) 7,000 00 B. Goulard, judgment 5,004 48 Suspense accounts, nominal value $41,000, subse- quently realized 1 j 872 93 Office furniture, safe, etc 5,000 00 $2,433,635 31 Deficiency 201,617 52 $2,635,252 83 City and County of New York, ss.: Geo. N. Pratt, of the city and county of New York, being sworn, That in July, 1874, and for sometime previous and thereafter, he was general book-keeper of the Mechanics and Traders' Savings Insti- tution of said city. That he has examined the schedule hereto annexed, marked " A," and that it includes all the assets of said institution at the time named. GEO. N. PEATT. Sworn to before me, this 13th ) day of October, 1876. j Chas. L. Adrian, Notary Public, New York city. Mechanics and Traders' Savings Institution, | 283 Bowery, New York, October 13, 1876. J Sir — I have the honor to submit herewith, for your consideration, certain documents, which appear to me of the greatest public im- portance. In 1874, Messrs. Floyd and Gregory, two of the trustees of this institution, were appointed a special examining committee by the 9 board of trustees. In the course of my investigations, the report of this committee came under my notice. The details and figures furnished by this report are not critically correct, some items having been omitted, but the amount of the defi- ciency is very nearly exact. This appears by schedule A, hereto annexed. As the result of my investigations, I would state : 1. That the books of the institution furnished undoubted evidence that it was hopelessly insolvent in the summer of 1874, and for a considerable time previous. » 2. That the special examining committee, referred to herein, re- ported the insolvency of the institution to the board of trustees at one of its regular meetings. 3. That no action was taken by the board of trustees to make good the deficiency or otherwise protect the interests of the depositors. 4. That soon afterward, as appears by the inclosed affidavits, the condition of the institution was laid before Hon. DeWitt C. Ellis, then and now superintendent of the banking department. 5. That at the request of the counsel of Messrs. JFloyd and Gregory, the committee heretofore named, Superintendent Ellis came here and made a personal examination of the affairs of the institution, and, after such examination, freely admitted its insolvency, and promised to take such action in the premises as would protect interests of the depositors. 6. That no such action was taken by Superintendent Ellis, until about the beginning of June, 1876. 7. The total amount of the deficiency, at the date of my appoint- ment as receiver, was nearly #350,000, of which possibly half would have been saved to the depositors had Superintendent Ellis fulfilled his legal duty in 1874. The failure of this and many similar institutions has entailed vast losses upon the working classes, and excited in their minds grave doubts as to the solvency of other savings banks generally. For these reasons, and in the clear discharge of my duty, I have thought it proper to bring to the notice of your excellency the facts herein re- cited, with the proofs in substantiation of them, for such action as you may see fit to adopt. I have the honor to remain, Kespectfully, your obedient servant, WILLIAM J. BEST, Receiver. To His Excellency Samuel J. Tildes, Governor of the State of New York. 2 10 Counsel for the receiver offers in evidence the affidavits accompany- ing the communication to Gov. Tilden, and the schedules thereunto attached, in words and figures following : City and County of New Yobk, ss.: William Floyd, of the city of Brooklyn, county of Kings, being sworn, says : That in or about the month of July, 1874, and for a considerable time before and after, he was a trustee of the Mechanics and Traders' Savings Institution of the city of New York. That on the 13th day of July, 1874, deponent and one Ira W. Gregory, who was [then also a trustee of said institution, were duly appointed by the board of trustees a special committee to examine and report upon the condition of the. said Mechanics and Traders' Savings Institution. That in pursuance of such appointment deponent and said Gregory entered upon the discharge of their duties as such special examining committee, and schedules A, B and C, hereto annexed, are true copies of the report and accompanying schedules submitted to the board of trustees of said institution by deponent and said Gregory as such com- mittee. That at or about the time when such report was made and submit- ted, said board of trustees, notwithstanding the insolvency of said institution, which was alleged and set forth in the aforesaid report of deponent and said Gregory, resolved at a regular meeting to pay a dividend to the depositors for the six months ending July 1, 1874, although no dividend had been earned, and this deponent and said Gregory voted and protested against making or paying said dividends. That in September, 1874, deponent, by his attorney, P. P. Bellamy, Esq., laid copies of said special report and accompanying schedules before the Hon. DeWitt C. Ellis, superintendent of the banking de- partment, and requested him to institute proceedings to secure the depositors and other creditors of said institution against further loss. That, thereupon, said Ellis came to New York, and examined said institution, and informed deponent that the report of deponent and said Gregory, as to the condition of said institution, was substantially correct, and that said institution was then clearly insolvent, and then and there promised deponent that immediate steps should be taken to protect its depositors. Deponent further says that notwithstanding the aforesaid statement and promise of said Ellis to deponent, and notwithstanding the fact that deponent has frequently for nearly two years previous to June 1, 1876, by his attorney, P. P. Bellamy, requested said Ellis to take some 11 action in the premises, said Ellis utterly failed and neglected to take any substantial steps to protect the depositors of said institution until on or about June 1, 1876, when proceedings were finally instituted for the appointment of a receiver for said institution. WM. FLOYD. Sworn to before me, this 12th ) day of October, 1876. j E. A. Oakley, Notary Public, N. Y. Go. City and Cownty of New York, ss.: Ira W. Gregory, of the city of Brooklyn, county of Kings, being sworn, says: That he had heard the annexed affidavit of William Floyd read, and knows the contents thereof, and that the statements therein contained in respect to the acts and doings of said Floyd, and this deponent and of DeWitt 0. Ellis, superintendent of the banking department, are true, as stated in said affidavit. I. W. GEEGOEY. Sworn to before me, this 12th ) day of October, 1876. j E. A. Oaeley, Notary Public, N~. Y. Go. City oe Brooklyn, County of Kings, ss.: F. P. Bellamy, of the city of Brooklyn and county of Kings, being sworn, says : That he is an attorney at law ; that in or about the month of Sep- tember, 1874, at the request of William Floyd and Ira W. Gregory, two of the trustees of the Mechanics and Traders' Savings Institution of the city of New York, deponent went to the city of Albany, and there laid before Hon. DeWitt C. Ellis, superintendent of the banking department, reports and statements, sworn to by said Floyd and Gregory, purporting to show the insolvency of the said institution to the extent of $100,000, or thereabouts ; and requested said Ellis to take immediate steps to close said institution, or otherwise protect the depositors against further loss. That said Ellis returned to New York with deponent, for the alleged purpose of making a full and thorough examination of said institution and its affairs. That after having made such examination, said Ellis admitted to deponent and others that said institution was insolvent, and that he, the said Ellis, would immediately institute such measures as were necessary to protect the interests of the depositors in said institution. 12 That deponent subsequently wrote and mailed several letters to said Ellis, urging him to immediate action in the premises; but said Ellis, as deponent is informed and believes, failed and neglected to do and perform this duty, and has not even replied to the communica- tions of deponent. F. P. BELLAMY. Sworn before me, this J3tb ) day of October, 1876. A. L. Peck, Notary Public, Kings County. (SCHEDULE A.) The commitee appointed to examine the financial condition of the institution, and also to ascertain the whole of, the receipts and also the expenses for the six months commencing Januarv 1 to July L 1874, would respectfully Eepokt That they have very carefully examined and considered the same. Your committee would here state that they "most exceedingly regret to find the finances of the institution to be in the condition they are in. They find the whole assets of the institution to be $2,383,672.46, and the liabilities $2,638,752.83,* showing that the liabilities exceed the assets $181,505.71. See schedule A attached to this report. Your committee find that the whole receipts of the institution from January the 1st to July the 1st, 1874, to be $75,739.07, and the ex- penses during the same time to be $90,780.77, showing that the ex- penses exceed the receipts by $15,041.70. See schedule B attached. Your committee would, in view of the above facts, state that they may not be correct as to the very dollar and the cent, yet they feel very certain that they cannot be but very little out of the way. Your committee would therefore respectfully urge upon the board, if it be advisable for the institution to continue business any longer at all, that a proper regard to economy renders it imperative that im- mediate steps should be taken to save every dollar that honor and justice could dictate to be done. Your committee not wishing to be considered small by the board in the suggestions they may make, yet justice to the depositors and honor to themselves demands that they should speak plain. Your committee cannot refrain from saying that the secretary's report every month, of the petty cash paid out for suppers for the board and committees, and for segars, etc., is all wrong ; and they deem it equally important that not a dollar should be paid from the funds of the institution but what is legally right. * Less liabilities, interest credited to depositors, $73,574.66, error made on schedule A. 13 Your committee deem it to be highly necessary that the secretary should be more particular in itemizing his entries of expenses on his cash book, so that every member could see at once what they are, with- out having to inquire for explanation ; your committee have found some little trouble in this respect. Your committee would also urge that the secretary read his minutes of each session of the board prior to its adjournment, so that, if any errors, they could be corrected while fresh before the board ; and they deem it proper also that the minutes should be written up on his book in a day or two, at least, after the session, so that if any one member be absent he can examine the same. Your committee, in relation to salaries, in view of the above facts, do most strenuously urge the adoption of the following preamble and resolution : Whereas, If it be advisable for the institution to continue its business, a large reduction of salaries should be made, therefore, Resolved, That from the first day of August, 1874, the president's salary ; the salary of secretary, $2,000; Mr. Pratt, $1,600 ; Mr. Bennett, $1,500 ; examining committee, $600 to each. J. W. GEBGOKY, WM. 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CD lOHb t- £TJ CO CO © o -> c3 ), City Revenue 0, City Revenue Yonkers bonds E. Goulard bou a ^ a ^ E -" CC CD CD *J cr -(- £ t a CO CO co © © GO CO 39 •^ o *— ' ~ '53 © ° O © ■4-= a d O §£8"§ © o -M3 C3 a. +3 m CD rrt CO <~l ■* lO d CC S-< m -+-: CD fl >Tj r^ r^ rj^ M «5 C P a O 0} '53 o CQ s oi> 0D o CD rfl - c3 15 -1-3 -JJ i> CD fl -U +3 -W -tJ so a a Q h ID CO K CQ d QJ CD ,, CJ D 11 CD ■rj 13 13 CD M t-t '-i t* AS -2 ■'Z H « 0) « 2 -+j -+J -+J CD H CO CO 3 CD CD -Q -n cd 03 pq add ■ — 1 1 — i j — i p-l CO oo CD CO C3 a o d 5P !-i o Ph H -O ->l a K( CD tD d H CD -t-3 Cm cS < O W n M a d d 03 co CO © CO co CO o lO oo OS J> CO rH CO 05 CO CO OS 2> © j> CO CD 00 >-. CQ tH a CD © CD 1-iH CO O cd 03 CQ CD d.cc d £ fi o !"» t- -u . p CQ o S c P-, CQ i — - CD 03 OS CD d § a CO 13 03 £ d += K d o a ^g "■S' hC « =0 S ^ 16 SCHEDULE C. Statement of Expenses foe Six Months ending June, 1874. Salaries for six months Gas bill Advertising Petty cash book Referee foreclosure, President st Joel W. Mason Examining committee, property Special examining committee, incidental . Gas bill Petty cash Insurance, $5,000, bank building Insurance, 32 President st Examiners, bank department Gas bill Petty cash G. T. Clark, Virginia suit Insurance, President st Bank examiners Gas bill W. W. Sharp, annual advertising Advertising, German papers Advertising, German annual Petty cash Davies"& Vanderpoel. law suits Gas Co.'s bill Roberts, stationery W. W. Sharp, advertising Campbell Bros., repairing Petty cash Insurance, President st Gas bill Petty cash U. S. Revenue tax to June 1st Jas. Ross, coal, 154 Plumbing bill, 32 President st Plumbing, mantel bill Plumbing, mantel bill Interest on investment, President st., $21,510.92 Interest on investment, 32 President st., $7,044.47 . Taxes, President and Van Brunt sts., 1873, $501.84. 30th OF 19,850 00 29 15 93 50 75 86 1,288 65 24 00 47 00 103 59 37 95 86 93 25 00 8 75 79 11 29 97 56 17 104 50 18 75 150 00 24 47 226 90 52 80 131 20 44 12 1,750 00 21 45 71 15 93 25 17 85 41 02 11 25 18 70 72 84 1,381 31 77 00 12 08 29 99 4 50 752 88 222 26 250 92 17 Taxes, 32 President si, $186.46 $93 23 Cash, A. T. Couplin, Virginia 504 00 "Water tax, President and Van Brunt sts 18 00 Water tax, 32 President st, and stable 27 75 Tax, bank building, 1873, $765 382 50 Gas bill, President st 14 70 Plumbing, 32 President st a 05 Plumbing, 32 President st 5 15 Carpentering 3 59 Agent McDonough, commission 27 06 $17,206 11 Interest due depositors 73,574 66 $90,780 77 Recapitulation . Amount of interest received and accrued, viz. : Bonds and mortgages $26,185 25 Stocks and bonds 43,474 55 Oriental and other banks 3, 886 14 City revenue bonds 1,604 16 Yonkers bonds 23 33 Goulard bond and mortgage 17 26 Eents Brooklyn property 641 33 $75,832 02 Deduct interest on $3,800 $3.23 Deduct One-eighth commission, Rochester 92 05 $75,739 07 Amount ofinterest credited to depositors on $2,565,078. 17, $73,574 66 Salaries 9,850 00 Taxes and revenue tax 2 , 107 96 Advertising 599 65 Coal and gas bills 253 39 Bank department 229 11 Insurance 63 75 A. T. Conklin & Clark, Virginia 608 50 Special exchange, commissions and property 150 59 Eepairs President street and gas 103 02 Agent McDonough 27 06 3 18 Petty cash and expenses $376 94 Davies & Vanderpool 1,750 00 Other expenses I ' 088 14 $90,780 77 75,739 07 $15,041 70 The examination of the witness is proceeded with, as follows : By the Chairman : Q. Where do you reside ? A. In New York city. Q. What business are you engaged in ? A. At present I am the receiver of the Mechanics and Traders' Savings Institution. Q. Have you been connected with savings banks ? A. No, sir. Q. Never before ? A. Never. By Mr. McKeon : Q. When were you appointed receiver ? A. I was appointed July 12, I believe it was, 1876. Q. Had you before that been iu any way connected with the inves- tigation of banks ? A. Yes, sir. Q. In what way ? A. As a stockholder of a national bank. Q. Had you assisted any receiver in winding them up ? A. I wound it up myself. Q. That was one of the national banks ? A. Yes, sir. Q. When you went into the office of receiver, what did you do in relation to the examination of the affairs of the bank, as far as Mr. Ellis is concerned ? A. I made no examination of the bank as far as Mr. Ellis was con- cerned; I made it my business to investigate the whole management of the institution from its organization down to the day of its suspen- sion ; in the course of my investigation, among the mass of other papers thrown away into the corner, I found the reports of special examining committees, dated back as far as 1872. 19 By the Chairman : Q. When was this? A. In 1876. Q. Made after you were appointed receiver ? A. I began my examination immediately after that, and among those reports was that of Messrs. Gregory and Floyd, the original of which I have here. By Mr. McKeon : Q. Mr. Gregory, whose affidavit is appended to the communication to the governor ? A. Yes, sir; that is the original report. Q. And these are the schedules which accompanied it ? A. Yes, sir. By Senator St. John : Q. When was the first examination made ? A. That examination was made in August, 1874; I believe the re- port was made on the 8th of August [after examining] ; the report was made on the 10th of August, stating the condition of the bank on the 30th of June, 1874. By Mr. Chapman : Q. That is a report to the bank by two of its trustees, and not to Mr. Ellis? A. No, sir; not to Mr. Ellis. By Mr. McKbon : Q. What did you do instead ? A. I asked for Mr. Floyd and Mr. Gregory. Q. What was their character in connection with the bank ? A. They had been trustees. By Senator Wellman : Q. They were chosen as the regular examining committee? A. They were chosen regularly by two. By Mr. McKeon : Q. You sent for Floyd and Gregory ? A. Yes, sir; they told me they had brought this report. [Objected to on the ground that the parties referred to should be brought to prove the facts in connection with the report.] 20 . Counsel for the receiver offers the report of Messrs. Gregory and Floyd, and the schedules annexed thereunto, in evidence. [Objected to on the ground that the paper had not been served upon the examination. Objection sustained.] Ira W. Gregory, a witness, being duly sworn, testifies : By the Chairman : Q. What is your business ? A. I am in the insurance business — plate glass insurance. Q. Where do you reside ? A. In Brooklyn. Q. Where is your business located ? A. At 113 Broadway. By Mr. McKeon : Q. Were you at any time connected with the Mechanics and Traders' Savings Bank ? A. I was. Q. What was your connection with that institution in the month of July, 1874 ? A. I was president of the institution at that time, and one of the special examining committee about that time. Q. Who was on the committee with you ? A. Mr. Floyd, and, I think, Judge Tappan, was appointed or elected, to the best of my recollection ; I have the papers here ; Mr. Floyd — Q. What is Mr. Floyd's first name ? A. William, I think. Q. Do you recollect the date of your appointment ? A. I .do not ; no. Q. Will you state what you and Mr. Floyd did ? A. We endeavored to ascertain the assets and the liabilities of the institution. Q. You examined into the condition of the bank ? A. Yes, sir. Q. Go on and tell us what you found ? A. We made a written report to the bank ; I cannot tell you the exact figures, as far as that was concerned. Q. Look at that paper [producing a paper to the witness]. A. That is the report to the bank made by Mr. Floyd and myself. The paper is marked for identification A, April 23, 1878. Q. You made a report to the bank ? A. Yes, sir. 21 Q. Do you recollect whether there were schedules annexed to it — look at those [producing two papers to the witness]. A. I think there were [after examining the papers], yes, sir. Q. Those are what ? A. Those are the schedules, I believe. [The papers are marked respectively for identification B 1, and B 2, April 23, 1877.] By Mr. Chapman : Q. Did Mr. Ellis ever, to your knowledge, see those papers ? A. Not to my knowledge ; no, sir. Counsel for the bank superintendent produces a paper which he states is the only one received by the bank superintendent in reference to the Mechanics and Traders' Savings Bank, prior to the examination he made in reference to the condition of the bank. By Mr. MoKeon: Q. What was the condition of the bank at the time of your exam- ination ? A. It was insolvent. Q. What did you do after that ? A. We made this report to the bank, in the first place ; they took no notice of it, and then we concluded we would go to a higher authority. Q. Whom do you speak of ? A. Mr. Bellamy, Floyd, and myself. Q. The bank not taking any notice, you and Mr. Floyd agreed that you would apply to a superior power ? A. Yes, sir. Q. What was that ? A. The superintendent of the banking department, Mr. Ellis. Q. How did you communicate with him ? A. Through Mr. Bellamy. Q. Who is Mr. Bellamy ? A. He is a lawyer in Brooklyn, Mr. Floyd's lawyer. Q. Do you know whether Mr. Ellis received any information in regard to the insolvency of the bank ? A. He said he did. Q. To whom did he say it ? A. He said it to me. Q. Do you recollect of Mr.]Ellis coming to your office in the fall of 1874? A. I do. Q. State what occurred and what time it was ; look at that memo- 22 randum; I don't know whether it is in your handwriting or not, [producing a paper to the witness]. A. That is my handwriting. Q. Look over it and see if you can recollect ? A. It says, according to this memorandum, the 2d of October, 1874, about 12 o'clock, noon. Q. He came in and said what ? A. I cannot say exactly all he said in answer, but at any rate the matter was brought up in regard to our complaint of the statement of the bank which Mr. Ellis said he had seen, and he said it was sub- stantially correct, our report. By Senator St. John : Q. Your report ? A. Yes, sir. By Mr. McKbon : Q, What did he say about the condition of the bank; look at your own memorandum which you have got there ? A. He said he came down for the purpose of going to examine it at that time. By Senator Weinman : Q. This call at your office was after Mr. Ellis' examination ? A. No, sir ; that examination took place — I think he came right from Albany down to the office in the first place before he went to the bank — to my office, No. 73 Cedar street. Q. I understood you to say that he stated then that your statement was substantially correct ? A. As I understood Mr. Bellamy to say that he had been to Mr. Ellis — went up there the 28th of September, aud had seen him and had shown him the report, aud that Mr. Ellis then said it was sub- stantially correct. Q. As compared with what ? A. That our statement was substantially correct. Q. As compared with wha t; I cannot understand, if he had not examined the bank, how he should say it was substantially correct ? A. I suppose he had looked over the items; I suppose he had looked over the stocks, and I suppose that was the way he got at it. [Counsel for the superintendent objects to the answer of the wit- ness which are matters of supposition.] 23 By Mr. MoKeon : Q. Read the whole of that paragraph there, and then you will- have had your recollection refreshed ? A. He said our report was substantially correct; that the bank was in a bad condition, and that he had come for the purpose of examin- ing it particularly. Q. Look at that memorandum of October 7th ; read it first, and then I will ask you the question ? A. I suppose I can tell pretty near; there was not much of it. By Mr. Chapman : Q. You can tell the contents of the paper without refreshing your memory ? A. Mr. Ellis called at the office; in the meantime, in the time that he was examining, we had a talk in regard to this bank at that times in the office ; I think that Mr. Ellis was in the office twice or three times, twice at any rate, and 1 do not know but three times ; we expected to hear what results he had arrived at from an examination of the bank ; he did not come, and I said to Mr. Eloyd, or Mr. Floyd to me, or both together, that I would like to see Mr. Ellis before he went to Albany, and would like to know what the results of the second examination were ; we heard that he was about through, and„ heard that he was at the Metropolitan Hotel, and we went up there and saw Mr. Ellis in the afternoon ; I think about six or seven o'clock in the afternoon. Q. Give me the date ; look at that [producing the same paper to the witness] ? A. That is October 7th ; it says here that I asked Mr. Ellis if he had examined the bank, and he said he had, that he had got through, and I asked what about the result, and he said there was a deficiency of about $25,000 — that is my best recollection — and some might think it was more; I asked him how he made that out, how it was possible that there should be such a discrepancy between him and me, and then I called upon him to name some of the securities that he had taken down, and mentioned North Carolina bonds ; I asked him how he put North Carolina bonds down, and he said 30, and I asked him in regard to the real estate in Brooklyn, what that was put down for, and he told me — I don't know as I can tell the exact amount; he had taken North Carolina bonds, to the best of my recollection now, at 30. By Senator St. John : Q. What amount was there of them ? A. About $114,000 of them ; I could not imagine how he could put 24 down North Carolina bonds at 30 ; I told him I thought I could sell him all he wanted of them — -I will not be positive unless I look at the memorandum that I may have in my possession — at 16^, or less than 20; he said he had averaged them ; I could not understand how he could average the funds; he said there was some of one kind and some of another, and some were worth more than others ; that an average had been taken ; I told him that I knew there were different kinds of them ; different — Q. There were different issues of the bonds ? A. Nothing further than that we — $4,000, worth about — I cannot tell unless I refer to my memoranda — worth, I suppose, about 30 to $2,000; I guess about 56, and the balance of them were worth on about 16£ to 20 ; I forget which ; I had it then; I cannot recollect the exact amount. By Mr. Chapman. Q. $2,000 at 56 ? A. I do not say that, unless I refresh my memory in regard to it; but we had three different kinds, I think, which were bringing in the market different prices ; we had, I think, $4,000 or else $6,000 worth 30 or 36, and $2,000 worth 50 to 56; I cannot say positively. By Mr. McKeon. Q. That was a small amount compared with the larger portion that you had ? A. I think at the time I said to him that his average would not be very great. By Senator St. John : Q. In other words, you mean their value was over estimated ? A. Yes, overestimated. By Mr. McKeon : Q. Did he say any thing of what he thought was the condition of the bank ? A. Yes, that is, he did not tell me fully just the amount, but about $25,000, and some might say $50,000. £). Deficiency ? A. Deficiency. Q. Did he say what he was going to do about it ? A. I do not think he did; I do not think the matter was mentioned further than that. Q. Was any suggestion made to you about closing of the bank at that time, or having it secured in any way ? 25 A. Not at that time; no, I think not; we had talked the matte over previously. Q. With him ? A. Yes, sir. Q. "What did he say about that ? ' A. I do not think, to my recollection, that he ever said he was going to close up the bank — that is, to my recollection ; we talked about the state of the bank ; I told him that the bank was in a very bad state, in my opinion ; that I had examined it once or twice before ; also, that after I read the report that had been made up in March or April, which report called for about $70,000 of surplus, in that neighborhood; I said that it ought to be examined closely, that it was common talk ; there was nothing more than general talk, that I recollect positive, beside. Q. Did you call his attention to the necessity of a close examination of it? A. I think I did. Q. Was there any thing done at that time ? A. Not to my recollection ; it was in the hands of Mr. Bellamy, particularly, to look after that matter. Q. Do you know whether Mr. Bellamy took any steps ? A. I have reason to believe he did ; I do not know of my own knowledge. [Counsel for the superintendent suggests that these facts had better be proven by Mr. Bellamy himself, which will avoid the necessity of introducing hearsay evidence.] Q. Had you any conversation with Mr. Ellis after that ? A. No, sir, not to my recollection ; I think the last I saw of Mr. Ellis was at the Metropolitan hotel. Q. Have you any recollection of the other securities, beside the North Carolinas ? A. Yes, sir. Q. What were they ? A. Those in the bank you have reference to ? Q. Yes? A. We had Alabamas in the bank. Q. How much of them ? A. We had — I do not know as I can tell exactly ; we had a con- siderable amount; and we had South Carolinas; I think at that time the prices of Alabamas were mentioned; in regard to that I asked him what he put them down at, and, if my recollection is right, he put them down at 50 or 60. Q. What were they selling for ? 4 26 A. They were not selling for that just at that present time ; they were from the best information I could get anywhere — and I took some considerable pains to get information not quoted — not higher than 35 ; I think that was one point I stated at that time. Q. Do you recollect what kind of bonds he had ; whether he had any ; whether he had not got two kinds, one recognized by the State, and another not recognized by the State ? A. I do not know as he had two kinds of Alabamas ; I think there were but one kind. Q. Had you of any of the other States two kinds ? A. . Of North Carolina we had three kinds ; to the best of my recol- lection, of the Alabamas there was one kind that we had. Q. How about the South Carolinas ? A. The South Carolinas — I should have to look at my memoranda, but I think there were two or three kinds of South Carolinas ; they were issues of different kinds. Q. Do you know what price he put them at ? A. I have forgotten exactly. Q. This memorandum, which you have, will that tell us ? A. I think so, if I have it ; I have not it with me. Q. Did you look at his estimate of the value of the real estate? A. I called his attention to it, and I asked him what value he had put upon the Brooklyn property ; that is in the corner of President and Van Brunt streets. Q. There is one piece of property there ? A. If I recollect aright; to the best of my recollection, I think that was put at $30,000. [Counsel for the superintendent suggests that the report of Mr. Reed to the superintendent shows just the figures that were affixed to these various kinds of bonds.] Q. I am getting at the real estate ; you called his attention to the President street property in Brooklyn, that it was put down at $30,000 ; what did you say to him about it ? A. That I thought it was too much; we paid $14,000 for it at auc- tion. Q. Did you tell him that ? A. My impression is I did ; I would not like to swear. Q. Did you tell him when you bought it ? A. No, I did not. Q. Where did he say he got his information from in relation to these State stocks ? did he name any one from whom he got the values ? A. I think not, to my recollection ; I think he mentioned that he 27 had inquired of the highest authorities on the subject, where they ought to know. Q. He did n - ot mention names ? A. I think not ; I do not think he mentioned names. Q. Did you not expostulate with him a high price put on ? A. I do not know as I could use that word, exactly. Q. Did yon talk with him ? A. I claimed they were not worth that amount of money. By Senator St. John : Q. You thought that he had valued them too high ? A. Yes, sir. By Mr. McKeon : Q. With regard to the real estate, did he state how he reached the $30,000 ? A. The impression is strong that he put it at $30,000 ; I looked upon it as a very high price for the property at any time ; it has not been worth that for years. Q. I want to know if he gave you any reason for putting it at that? A. I do not say he did. Q. Was there not another piece of Brooklyn property ? A. Yes, sir, there was a very small piece. Q. What was the value he put upon that ? A. It is my impression it was $6,000, but that was the only case ; I did not go to particularizing about that. Q. Did you know the value of that ? A. I should have conceived that was not far out of the way; that piece of property — I speak more properly of the other cases; that piece of property had been put into our reports by the secretary at a high price always, which I always refused to recognize. Q. It was sold to the bank for $14,000 ? A. Yes, sir ; bought at auction. By Mr. Chapman : Q. And had been returned by the officers of the company yearly to the officers of the department at the value you put ? A. I think not by the bank ; it was by the secretary it had been reported. Q. The president and secretary swore to it year after year? A. That I did not see them do. By Mr. McKeon : Q. There were proceedings taken by Mr. Bellamy, or some one else, to close the bank that fall ? 28 A. That is only by hearsay that I know Mr. Bellamy went up to Albany. [Objected to.] Q. Do you recollect of making an affidavit in the fall of 1874 for the purpose of taking legal proceedings ? A. Yes, sir. Q. To close the bank ? A. I do not know what they were for ; it was for the purpose of bringing it before the authorities — that is the bank department. Q. And you employed Mr. Bellamy to go up to Albany and deliver them ? A. Mr. Bellamy was the man employed on the 28th of September to go ; it rained very hard the night he went away. Q. Was it after that that you had a conversation with Mr. Ellis? A. Yes, sir ; after he had been to see Mr. Ellis, Mr. Ellis came down ; Mr. Bellamy was in about ten o'clock in the morning and said Mr. Ellis would be in about twelve o'clock, which he was; Mr. Bellamy, myself, Mr. Floyd and Mr. Ellis were together in my office. Q. After this paper reached Mr. Ellis' hands he had the conversa- tion to which you have referred ? A. I suppose it reached him ; it was after we had made the affi- davits ; he came in consequence of that paper being served upon him, or some paper being served upon him. By Mr. Chapmaw : Q. Or left with him ? A. Or left with him ; I do not know how it was ; I was not there. Q. When was this bank organized ? A. That I cannot tell you. Q. About when, 1852 ? A. 1852, I think. Q. How many trustees had it in 1874 ? A. I do not know how many there were. Q. About how many ? A. It is my impression that there were 50 or 60; in that neighbor- hood. Q. Of trustees ? A. Of trustees, I think, at its first organization ; I was not present then ; I only know that by hearsay ; I was not in the bank at that time. Q. You were not in the bank in 1874 ? A. I was in the bank in 1874. Q. At that time how many trustees were there ? 29 A. To the best of my recollection about fifteen. Q. Fifteen? A. I cannot tell you that, either. Q. Were you a trustee ? A. I was. Q. How long had you been such then ? A. I think I went in that bank in 1862, to the best of my recollec- tion. Q. And had been a trustee from 1862 to 1874 ? A. Yes, sir. Q. You attended the meetings as a trustee ? A. Yes, sir. Q. With great regularity ? A. Pretty regularly. Q. Don't you know the number of trustees ? A. I cannot recollect now. Q. Don't you know, after serving eleven years as a trustee ? A. We had at different times a different number of trustees; they were reduced once or twice, I think ; there were 30 at one time, and then 24, and then 20, and I think less than that, as they dropped away ; I cannot exactly tell. Q. You could tell who generally attended ? A. Oh, yes, sir, that I could tell. Q. What committees were you on in 1874 ? A. I was on this examining committee — the only one I recollect of at present. Q. How often did you have a meeting ? A. Once a month. Q. You attended them regularly ? A. Pretty regularly. Q. Was this examining committee appointed for a special purpose in July, or was it a standing committee ? A. No, sir, it was appointed for this purpose to the best of my recol- lection. Q. Did you have a standing committee who examined accounts? A. Yes, sir; a committee who examined the books. Q. Annually or oftener ? A. Every month. Q. Who composed that committee ? A. Jacob L. Penn was one ; that had been altered a number of times. Q. How in 1874 ? 30 A. I think Mr. Boberts was another, and was another, I think, about that time. Q. Their duty was to see that bhe bank was properly conducted, so far as the accounts were concerned, was it not? A. I heard they did. Q. Not what they did, but that was a duty that properly belonged to them ? A. I guess it was. Q. That was a duty that properly devolved upon that committee, was it not ? A. What was ? Q. To see that the bank was properly managed, so far as the accounts were concerned — see that the accounts were correct ? A. To see that the accounts were correct — I believe that was what their business was. Q. Under whose supervision were the annual reports made ? A. The secretary's and president's, I think. Q. Who was the president of the bank ? A. Mr. Conklin — Mr. Alfred T. Conklin. Q. Who was secretary ? A. Mr. Henry C. Fisher. Q. Were the reports submitted to the finance committee, or exam- ined by any other committee for verification ? A. I think not. Q. How long had this president been acting as such, in round figures ? A. Six or seven years. Q. And the secretary about the same length of time ? A. I think longer. Q. How came you gentlemen to be appointed a special examining committee, inasmuch as there was a regular committee ? A. It was not their business — that kind of examination — to know what kind of stocks and bonds and how much we had ; their duty was merely to look and see if the clerks did their duties properly and right. Q. Had there been any other examining committee appointed for a similar purpose to this before ? A. I think there had been. Q. You had not been on that committee before ? A. I had examined the bank before. Q. And complained to the bank ? A. I had. Q. How long before ? A. I think in 1873, and also I think in 1873, and I do not know 31 but in 1871, and I do not know but 1870 ; I cannot ascertain without looking. Q. There was a difference between some of you gentlemen and the majority of the board of directors ? A. There was a difference so far as the examination of values was concerned. Q. The rest of the board of directors in fixing their valuation did not agree with you two gentlemen ? A. I do not know as the board particularly set any price as to the valuation ; I think that Mr. Conklin and Mr. Fisher got up a state- ment in regard to the worth of the stocks, bonds and securities, and they submitted it to the board, and which was usually carried. Q. Was there a division of sentiment between you gentlemen in the board along in 1874, which had been gradually growing ? A. No more than there had been previously. Q. Been growing up for a year or two ? A. Not particularly, not that I could say; there was no ill feeling to my knowledge ; I speak of my own self. Q. You were not conscious of there being any difference of opinion as to the proper management ? A. There was a difference of opinion in regard to the management of the institution and the worth of the securities. Q. Who sided with you in this matter beside Mr. Floyd, if anybody ? A. In these particular instances ? Q. Yes? A. I do not know that I can say, but to my knowledge — I do not think it was put — and I do not know who disagreed ; the report was accepted and ordered on file, to my recollection. Q. No further action was taken upon it? A. No further action was taken upon it to my recollection now ; there was no difference any further than this, that we were satisfied that the bank was not able to pay its indebtedness. Q. That is you and Mr. Floyd thought so ? A. Yes, sir ; and I think others thought so also. Q. Can you mention any one ? A. Well I do not know as I could answer that positively, but I got the impression sometime. Q. Your view was that the bank was not able to pay its indebted- ness after you had made this examination ? A. That was my view. Q. And the view was based upon the valuation which you carried out against these various items of assets ? A. Yes, sir. 32 Q. Of course, if the valuations had been greater than those which were carried out, there would not have been a deficiency ? A. If you put them high enough there would not have been. Q. Whether there was a deficiency or not depended entirely upon people's opinions as to the values of these various items ? A. No, sir, not at all. Q. Did you get the actual value of this Brooklyn piece of property ? A. No, sir. Q. Did you know the actual value — the real value — I am not ask- ing about the market value — but did you get the real value of the North Carolina bonds ? A. No further than this. Q. Answer my question ; did you know the real value — not the market value- — of the North Carolina bonds in July, 1874. A. Leaving out the market ? Q. Yes, leaving out the market ? A. T cannot tell you what the real value was. Q. Or the real value of either of the others ? A. No, sir; not in that sense I did not. Q. The same is true of the Alabamas, is it not ? A. The real value of bonds is covered by the price in the market. Q. A stock may have a market value of 50 to-day, and a week from to-day it may be worth par ? A. That is not very often the case. Q. It is true ; that is possible, is it not ? A. Put the question again, if you please. Q. A stock may have a market value of 50 to-day, and a week or so from to-day it may be worth par ? A. It might. Q. Then it would be actually worth very nearly par, would it not, in respect to its real value ? A. No, sir. Q. You mean the real value is what it would bring to-day? A. Just exactly what it will bring to-day ; that is what the stock is worth, and it is not worth any more. Q. Then a year ago, the Delaware and Lackawanna having a market value of 121 — that was its real value ? A. It was if you can sell it for that and get your money for it. Q. Then you do not draw the difference between real and market value that I do ? A. Stocks may be covered sometimes in that way. Q. My only idea in calling your attention to that is to draw your mind to the distinct idea that I have as respects the real value of the 33 stocks and their market value ; did your bank hold any Louisiana stock ? A. No, sir ; not to my knowledge. Q. When were these stocks bought ? A. That I cannot tell you. Q. About when was the Alabama stock bought ? A. That I cannot tell you from memory. Q. Within five years ? A. Yes ; I think I could come nearer than that ; I should say 1870 or 1871, but it is only guess-work ; the book shows for itself when they were bought. Q. Do you know who moved that this stock be bought? A- No, I cannot tell you now who it was. Q. Do you know that you made the motion — you or Mr. Floyd ? A. No, sir ; neither one of us. ■ " Q. Do you recollect what you paid for them ? A. That I cannot tell just at the present moment, unless I should look ; it is not in my mind. Q. Who did buy them ? A. I have no doubt that I bought them, together with the com- mittee. Q. You bought them yourself? A. With the committee, probably, that was appointed; I might have been a party to it. Q. To the purchase of these bonds ? A. To the purchase; there was a committee appointed. Q. On the subject of Alabama ? A. Alabama. Q. How about the North Oarolinas ; did you buy those ? A. I do not know any thing about that, whether I did or not. Q. What would be your impression ? A. My impression would be that I bought a part of them. Q. Hqw about the South Carolinas ? A. I have no doubt I purchased them also — a part of them. Q. You did not protest against buying them ? A. I think I did the South Oarolinas. Q. But not these others, you did not ? A. No, sir; I thought they were very good; they were all, I pre- sume. Q. You bought as a member of the committee ; how much did you pay for the Alabamas ? A. I have forgotten, to tell you the truth. Q. Was it about 80 or 90 ? A. It is my impression they were 90, or more. 5 34 Q. You paid 90 ? A. I think that is the highest. Q. It turned out that these bonds were good for nothing, or very nearly ? A. They could have been sold for sometime after for more than was paid for them. Q. The real value of those bonds, from the time you bought them, turned out very little, didn't it ? A. It so seems. Q. So, that it was largely a matter of opinion as to what they should be returned to the department in the annual statement, was it not? A. I did not look at it in that way ; if you ask me what I thought, I will tell you. Q. I was asking for the fact ; when you sit down to make a return to send to the department, estimating, as near as you can, in what way can you get at the value of these bonds, and carry them out at such a sum ? A. I look at the date of the official record, and if it says it sells at 16|, I put it 16£. Q. Suppose it has no market value ; suppose, now, if it is publicly sold, what do you do ? A. Then I go to parties, who are interested in that business, who buy and sell at private sale, and I ask of them, what is Alabama worth ? Q. Suppose you cannot find those, then what do you do ? A. I have never been placed in that position. Q. If the superintendent of the banking department made inquiries, when he made these examinations, in regard to the value of these stocks — pursued just this course, he did just what he ought to have done ? [Objected to.] A. I want the committee to judge of what he ought to have done. Q. He could do nothing more than obtain the facts, out of which to form an opinion ; is that true ? A. That is the only way he could do it, certainly; I showed Mr. Ellis — I had a price list when he was in my office — the price of some stock, and called his particular attention to them. Q. What stocks were those ? A. South Carolina, for one, and probably all of them that were re- ported at that time. Q. Have you any recollection in regard to it ? A. I think North Carolinas and South Carolinas — I called his attention particularly to them. 35 By Mr. McKeok : Q. To the list you had of prices ? A. To the price list. Q. It was a published price list ? A. Yes, sir. Q. Go on and state what you said to him about them ? A. I am not positive I said any thing about the Alabamas, but I did about the others. Q. What did you say to him ? A. I called his attention to the price of North Carolina bonds and South Carolina bonds, and I had a report of some that were sold that day or the day previous, that is the regular list of prices ; that is the way I got my prices. By Mr. Chapman : Q. Did you have the price of three classes of North Carolina bonds ? A. It may not have been reported — the three classes. Q. I am asking you how you did ? A. I am telling you ; I had these things there ; a friend called in — a person came in and said that is the price of these stocks ; that is what they sold for this day, and 1 called his attention to it; I cannot tell the price now from recollection. By Mr. McKeon : Q. Did you call his attention to the fact that the prices he had on his price list were above yours ? A. No, sir, he had not got through with his examination at that time ; afterward, when I met him the last time at the Metropolitan hotel, I did not have any price list there, I <^dy asked him how he put 30 as the price of North Carolina ; he said it was an average of the North Carolinas ; that a few of them were higher ; that there was a difference in prices. Q. How did his list of prices compare with your price list ? A. They were a great deal higher. By Mr. Chapman : Q. Your opinion was that he had estimated them too high ; that was your opinion, was it not ? A. It was not my opinion at all, but what I knew, that he had esti- mated them too high. Q. You had some Eochester bonds in there, had you not ? A. Eochester ? yes, sir ; I think we had. 36 Q. He did not estimate them high enough as it turned out, did he ? A. I forget. Q. Did not those bonds appreciate in value after that quite largely ? A. I bought them, and I ought to be credited with that, if it is so- Q. Is it not the fact that they appreciated in value very much ? A. Yes, sir. Q. So you and he had a different value ? A. Yes, sir; we had a different value. Q. You had the market value of that day ? A. Of that day; the time of the examination. Q. They subsequently appreciated in value very largely ? A. Yes, sir. Q. Is the same not true of New York city bonds ? A. I do not know whether we had any of them at that time or not ; I will not be positive ; it may be we had. Q. The Brooklyns appreciated also at that time in value, after this? A. I do not know; I cannot name the dates as far as that is con- cerned ; they did go up. Q. And Buffalo bonds? A. And Buffalo also. Q. Your estimate of values were wrong in some particulars, in that you estimated some so high that went lower, and some so low that they went higher ? A. No, sir ; I did not do any thing of the kind, as I understand it. Q. These New York city bonds, the Eochester bonds and Buffalo bonds and Brooklyn bonds, went higher shortly after your estimate ? A. How shortly ? Q. That is, they did after this appreciate in value ? A. Certainly; I do^ot doubt it. Q. It is a fact that the estimate that you put upon these bonds at that time turned out to be less than what could subsequently be real- ized upon them ; that is true, is it not ? A. Of what kind? Q. Along in July ? A. What bonds do you say ? Q. The Rochester, Buffalo's, New York city's, and Brooklyn bonds ; they increased in value ; they were beyond the figures you put upon them at that time ? A. I have no doubt of that ; I do not recollect exactly what time, but they did improve in price. Q. I do not ask you about when, but it is a fact that some of these bonds improved in price, and some fell in price, of course, according to the market ? 37 A. Yes, sir ; we will say they did ; I do not recollect about the par- ticular time, or what it was — what the price was — that I put upon stocks or bonds at the time we examined. Q. You put on them the market value at that time ? A. Yes, sir. Q. The real value was matter of opinion ? A. I do not know as I ever heard of anybody putting any real value upon Erie railway stock in my life ; a good many say it is not worth a copper, but it sells for a certain amount ; the price it will bring. Q. These other items, you think, have depreciated in value? A. I do not recollect to particularize. Q. But all you recollect of ? A. There may have been the whole of them ; I never saw the whole statement of these bonds that he put in, at all ; I do not know what the difference is. Q. I mean the bonds you found there when you examined ? A. I don't know what he put the Buffalo bonds at. Q. Those that were the subject of remark between you at any time ? A. I don't understand you. Q. These Alabama bonds ; South Carolina's and North Carolina's and this real estate— those are, the only items in which there is any depreciation that you now recollect of ? A. I did not go any further than that; I don't know what he put the balance of them at ; I merely for the purpose of asking how he only made $25,000 deficiency — how he put in some of these stocks; I did not go any further, I did not know at what price he put in the others. Q. You carried out the Alabama bonds at a less price in your list ? A. I think I did. Q. How did you determine that price ? A. 1 went to parties who were dealing in the article. Q. Cannot you tell to whom ? A. There were two of them on Broad street, and another in Ex- change place. Q. Did you ever see any published price of these bonds for a long time previous ? A. Not these particular bonds. Q. You went to two persons ? A. And Mr. Eloyd went with me, I believe. By Senator St. John : Q. To brokers ? 38 A. Brokers, who were then in the business, dealing in certain secu- rities and bonds ; brokers that were in that business ; if you went to a general broker they could not tell you any thing about it. Q. Were these two gentlemen you went to partners? A. No ; they were two separate parties. By Mr. Ohapman : Q. You took their statement of what their opinion of the value of those bonds was ? A. I did not ask what their opinions were; I thought the best way was to get their statement of what they were worth. Q. Was that any thing more than au opinion ? A. If 25 or 35 is offered and the property is sold, that establishes a price. Q. Did you offer these bonds for sale to them ? A. I didn't own them to offer. Q. Did you talk about the price to them ? A. I asked them what it would cost for bonds of such a description. Q. And that is the way you got at their opinion ? A. I will not say positively ; it may be that is the way I got at it. Q. Did yon go as a buyer, or a seller ? A. I don't know as I went as either; we went for the purpose of ascertaining the value of these bonds. Q. And you got their opinions of their value ? A. I think we put them in a position to name them ; that is, name a price — what they would give or take — 35 or whatever the amount was. Q. You put them down at 40; the difference between Mr. Ellis and you at that time was only ten per cent ; you put them down at 40, and he at 50? , A. I don't know whether he put them at 50 or 60, but I think the price was 35 ; I think we put it 40 so as to be perfectly safe in getting it high enough. Q. There was no quoted value for these bonds ? A. There was no quoted value to my recollection; I had no object in view any further than to get as near the standing of the bank as possibly could be done. By Senator St. John : Q. Your investigation was that the bonds were worth in the neigh- borhood of 35 ? A. Yes, but we thought we would put on a margin to make it safe, and put them down at 40 ; we had no interest to serve, no particular purpose to be carried out except to get at the truth. 39 By Mr. Chapman : Q. These bonds had been returned in the annual statement right along at a higher price ? A. I think they had. Q. How did you get at the value of the real estate ? A. My way of getting at the value of the property was — Q. Was that your own opinion, or did you get it after consultation with other people ? A. According to our articles I think we used to call our property what we paid for it; the value of the property as much as we paid for it; you can't go into speculative affairs, and, as far as I under- stand — ■ Q. No matter about that ; had you, prior to that time of purchasing it, had a loan on this property ? A. Yes. Q. On a mortgage ? A. Yes, sir. Q. To what amount ? A. $15,000, I think. Q. You foreclosed it ? A. They foreclosed it and bought it in at $14,000. Q. The bank bought it in ? A. Yes ; that is my best recollection. By Senator St. John - : Q. It came to them in a legitimate way ? A. Yes, as near as I can recollect. By Mr. Chapman : Q. This property, prior to 1874, had been^put down in your annual statements at how much ? A. I can't tell; the papers will tell better. Q. Give it somewhere near ? A. I think I had — Q. 1 do not care about that; how much did you return it at ? A. I can't tell. Q. $40,000 or $30,000 ? A. I tell you that you can see from the report of the bank. Q. You cannot come within $10,000 ? A. It would be an impression, and that is not worth any thing ; but I should say $20,000 or $25,000 they put it in for, or $30,000 ; I can't tell you, as I said all along. Q. When did the panic commence ; in October, 1873 ? 40 A. ThaO can't_tell|you. Q. Was it not in the fall of 1873 ? A. That property had brought $50,000. Q. The property had been sold for $50,000 ? A. Yes; I will give you the whole truth that I have. Q. How long before that ? A. I was told so ; it was only bought a few years ago ; Mr. Goulard sold it for $42,000 or $44,000. Q. When was this panic — when did it commence; in the fall of 1873, did it not ? A. I can't tell you. Q. Values of all kinds have been gradually going down since that panic ? A. A great many things have. Q. Almost every thing, real estate and almost every thing else ? A, Previous to that time it commenced — real estate did. Q. And real estate has been falling since about near 1872? A. I do not keep an account of that exactly, except a piece of prop- erty I particularly kuow. Q. This piece of property that you speak of, what did it consist of ? A. It was built for a savings bank ; there were a great many rooms in it, and it is well built; I think the house cost $35,000 to Mr. Goulard. Q. The building itself ? A. Yes, sir. [Counsel for the receiver states that he is informed it recently sold for $5,000.] Q. When you put it at $14,000 you made a mistake of $7,000 ? A. No, sir ; I did not calculate that way. Q. How many stories high is that building? A. A four-story building ; two buildings. Q. A large, elegant building? A. Two buildings; yes. Q. There was a time, when this building was built, that it was sup- posed to be located in what was to be a great commercial locality ? A. I can't tell. Q. It was speculative ? A. A speculative building ; not that I am aware of; it was not a speculation ; he owned the property and had owned it, and had been burned out before that, and he put up this building supposing he would sell it. Q. You do not know, I suppose, whether Mr. Ellis made investiga- tion and inquiry of different parties as to the value of these bonds? A. No, sir. 41 Q. You know nothing about it ? A. No, sir ; not in the least ; I only took the aggregate. Q. You do not know whether he ever owned one of the kind in the world himself ? A. Mr. Ellis ? Q. Yes ? A. No, I do not ; I hope he owns a great many. Q. I hope not of those bonds ; the only way he could ascertain in regard to the value of this real estate was to make inquiries ? A. If he did not know himself, for there were no quotations. Q. There would be no quotations of this identical piece of real estate ? A. I thought you spoke of something else ; no, sir. Q. That was the only way he knew ; the proper way to fix these various items was by making inquiry — the only way was by inquiry? A. If I should go through and tell exactly what I mean I should take a good many things into consideration. Q. I don't ask you what you Would do, but the only way Mr. Ellis had for ascertaining the value of these disputed items of account was by making inquiries around town of such parties as he could reach ? A. I should judge that by making inquiries of different parties I could get the information. Q. How long after Mr. Bellamy went to Albany was it that Mr. Ellis came down to act ? A. I think, to the best of my recollection, he went on the evening of the 28th, and Mr. Ellis came down October 2, and arrived at noon — 12 o'clock ; I guess he came down the same day that Mr. Bellamy did. Q. He made an examination ? A. He so said. Q. Did he ever write a letter to the president of the bank ? A. I never saw any to my knowledge. Q. Was it submitted to the board of trustees ? A. It may be ; I don't understand you. Q. I ask you whether Mr. Ellis, after he made this examination and had gone back to Albany, did not write a letter to the president of the bank in relation to the condition of the bank ? A. That I can't tell you ; as far as that is concerned I think there was a letter written and the contents spoken of in the board, but I don't not think I ever saw the letter. Q. Did you not hear the letter read at the meeting of the board of trustees ? A. I will not say that I did not. Q. Look over that letter and see if that letter was not read in your presence in the board of trustees [producing a paper to the witness] ? A. That I can't tell as far as that is concerned. 6 42 Q. Was there not a discussion — was not the letter discussed ? A. I think the letter was discussed. Q. ■ A letter of Mr. Ellis, shortly after he had returned to Albany ? A. That is my impression ; I don't think I read the letter. Q. Did not you call upon the president to read the letter if he had the letter there ? A. It may have been there, or it may not have been there. Q. If the letter was under discussion in the board of trustees — a letter from the superintendent of the bank department, whom you had called upon — did you not ask to see the letter ? A. If I did I have forgotten. Q. You have no recollection whether that letter was there being dis- cussed or not ? A. I don't think the letter was itself; the substance I presume was, because it spoke in regard to the trustees putting up some money ; as to the letter being all read, I don't recollect it, but the substance of it was talked in the board. Counsel for the receiver offers the letter in evidence in the words following : » "STATE OF NEW YORK, 1 Bank Depakthent, V Albany, October 19, 1874. ) "A. T. Gonldin, Prest.: " By the recent special examination made by Mr. Eeed and myself of the condition of the Mechanics and Traders' Savings Bank, it appears that the bank, instead of having a surplus, as heretofore reported, is deficient to the amount of $24,981.90. The assets of the bank consist largely of southern stocks, which are very much depreciated, and the market for which is so unstable and fluctuating that it is a matter of opinjon and judgment what the exact deficiency is. It would undoubtedly, in the judgment of some, exceed the amount named, and in fixing the valuation of some of the securities where there is no determined valuation by sales in the market, it would, perhaps, be as fair and equitable to name a price which would increase the deficiency to $50,000 instead of the sum reported to me. " It certainly is desirable for the bank to rid itself of this class of securities as fast as possible, with due regard to the ultimate interests of depositors, and substitute for them securities more permanent and certain. " I regret to find a lack of harmony in the board of trustees, which tends to cripple the success of the bank. Co-operation on the part of the managers can only insure the growth and prosperity of the insti- tution. 43 " In view of your present condition, it will be necessary for the trustees to make good the existing deficiency to depositors, either by direct payment or by satisfactory personal bonds, guaranteeing the depositors against loss by the present impairment of assets. "I would also suggest that all expenses not absolutely required in running the bank be dispensed with. It would seem that one paid officer, with his subordinates, would be all that would be needed until such time as your business is increased and your deficiency made good. " Trusting you will submit this letter to your board at the earliest opportunity, and awaiting their action and reply, " I am, sir, truly yours, "D. C. ELLIS, " Superintendent." Q. This was soon after Mr. Ellis returned to Albany, and that is the mode in which you were to make up this equivalent ? A. To the best of my recollection. By Senator St. John : Q. How much were you, during this time that the bank was under a cloud, paying to the officers, clerks and employees of the bank in the form of salaries - - 1 mean in 1874 ? A. I don't know exactly. By Mr. Chapman : Q. How long was Mr. Ellis in making the examination ? A. I should think four or five days. Q. Then when he returned to Albany he sent the president of the bank this letter, which was made the subject of a discussion among the trustees ? A. I don't recollect the letter being read, but the substance was talked of. Q. You do not know any other communication between the bank and Mr. Ellis after that ? A. Not to my recollection. Q. What the president or the secretary did, or what communication Mr. Ellis had with them, you have no personal knowledge ? A. It did not enter into my mind that they did; I know that the matter was talked of. Q. Did you have a banking-house ? A. Yes, sir. Q. In the examination and reports, I want to ask the question how that was returned and put down among your assets ? A. So far as concerned the bank itself ? - 44 Q. What was sent to Mr. Ellis; what was the value of that real estate — of the banking-house — that was put upon'it by your papers ? A. I think it had been just previous, to this — I don't recollect seeing the last report — at about $100,000. Q. What was the banking-house worth in 1874 ? A. With a view of getting at the worth of that banking-house, I went to Homer Morgan and Ludlow for the purpose of getting the value of that piece of property ; he said he would do it, and find out ; that he would go and look at it and examine it, and give me a price for it at that time ; in a week or ten days 'after he gave it to me ; he went up and he said that a fair valuation of the bank under any other circumstances, he would put it $70,000 or $75,000 ; that he should say about $75,000 was a fair valuation. By Mr. Chapman : Q. Under those existing circumstances at that^time ? A. He did not say about that time ; I told him, and I have given you just what he did say. Q. Are you sure that it was not reported that the cost price was $79,000, and that the market value was $100,000, to the department? A. The report will tell ; I can't swear to that. Q. Did you not see this report ? A. I might; I can't tell how that was ; I have no doubt it is so, but I say the report will tell for itself. Q. Have you any doubt about the fact ? A. That it was reported at $79,000 ? Q. Do you know what the cost was ? A. About $29,000 in the first place. Q. What appears on the books as the cost of that property ? A. I have to refer to the books, but I guess about $59,000. Q. Seventy-nine thousand ? A. No, sir ; it never cost $79,000; that is not my report. Q. Cannot you tell your own report, it shows here $69,000 [produc- ing a paper to the witness] . A. That is not my report, that is George N. Pratt's [the witness takes a paper], I can't recollect what I put it at — how much the bank- ing-house cost, it is probably on the books. Q. Was this taken from the books ? A. Probably ; I can't say positively. Q. How long had you had it ? A. I think it was 1861 or 1862. Q. Then you had been expending upon it ? A. We expended $29,000, in the first place, and then we raised it up so that its original cost, I think, was $59,000. 45 Q. In 1870, 1871 and 1872, was $100,000, as real estate rented then, too high ? A. I always thought so. Q. You were a bear in the market and the board of trustees were bulls ? A. I was not at all, I am not bearing any thing, I try to be truth- ful. Q. You insisted from 1870 to 1874, to the board of trustees, that these items you have spoken of should be rated down ? A. I think more than likely that was the case every time. Q. Did you ever notify Mr. Ellis of that fact ; did you ever com- plain of that report of Mr. Ellis, until this time ? A. I never saw Mr. Ellis in my life, until I saw him at my office ; that was the first time I ever saw him ; if I had been here when they were examined; if I had been there at the time they were examined, I should certainly have made that point decidedly. By Mr. McKeon : Q. You got information that you were to be called upon to pay up or give some security ? A. Yes, sir. Q. Was there any thing done in the way of paying up, by the trus- tees ? A. Not that I ever knew of. Q. No security in any shape or form ? A. Not that I am aware of. Q. Nothing was done in accordance with this recommendation of the superintendent ? A. Not to my knowledge. By Mr. Chapman : Q. "Was not a committee appointed, to your knowledge, to take action in relation to this matter ? A. Not that 1 recollect; there may have been something of that kind. Q. There was not the greatest harmony ? A. I never had any difficulty. Q. They treated you fairly ? A. They treated me fairly, but they did not keep that bank straight; that I know. Q. In regard to the Brooklyn property, you valued it at $14,000? A. We bought it for that. Q. That was for one house, or both ? 46 A. One house ; we did not have the other one. Q. The one was worth about the same. ? A. No, sir. Q. The other was worth about how much ? A. We had a loan upon that of $5,000 ; I did not put in that next house; I put in the corner that we bought for $14,000. Q. And the two together would be worth $20,000 ? A. Yes, sir. Daniel A. Moran, a witness, being duly sworn, testifies : By Mr. McKeon : Q. What is your business ? A. I am a banker and broker. Q. Will you look over this list and see if yon were a dealer in these stocks and know the value of them ? A. Yes ; I deal in them. Q. Look at this list and see if these are the prices of those stocks in June, 1874 ? A. A little memorandum below says the above quotations are about July, 1874. [Counsel for the superintendent objects to the proof, on the ground that evidence of value should be confined at the time the superintend- ent made his examination in the fall of 1874. Objection sustained.] By Mr. Chapman : Q. Have you any means of knowing what they were worth about the 1st of October ? A. It is quite a long time ago. By Senator St. John : Q. Suppose that you were to turn over your register or list of pur- chases and sales ? A. Several days may elapse before a transaction might take place. Q. That is what you call the price when one offers and another bids ? A. I have only memoranda of actual transactions ; I don't have memoranda of bids ; I have memoranda of absolute transactions and By Mr. McKeon : Q. You have memoranda of sales made about the 1st of October, 1874, and during the month of September? A. Yes, I presume so. 47 William Floyd, a witness, being duly sworn, testifies: By Mr. McKeon: Q. Where do you reside ? A. I live in Brooklyn. Q. And do business in New York ? A. Yes, in New York. Q. Were you at any time connected with the bank called the Mechanics and Traders' Savings Institution ? A. Yes. Q. In what capacity ? A. As trustee. Q. Were you such in the month of July, 1874 ? A. Yes, sir. Q. How long before that had you been connected with the bank ? A. I should think some twelve or fifteen years ; I I did not keep any memoranda of it. 0. Did you ever make any examination into the condition of the bank ? A. Yes. Q. When was your first ? A. That seems to cover a great deal of ground ; I have examined many matters from time to time. Q. I will come down in the month of July, 1874 ; did you make one at that time ? A. Yes, sir. Q. Who was your associate ? A. Mr. Ira W. Gregory and ex- Judge Tappan. Q. Were you appointed a committee by a resolution of the board ? A. Yes. Q. What did you do first, and what were your duties ? A. Our duties; the board appointed us to examine the institution [Counsel for the superintendent suggests that the resolution should be produced as the best evidence.] Q. In pursuance of that appointment you proceeded to do what ? A. We proceeded to examine. Q. What did. you do ? A. Judge Tappan was not with us. Q. He did not attend ? A. No, sir. Q. Mr. Gregory and you did it? A. Yes. Q. Tell us exactly what you did ? 48 A. As near as I can recollect the resolution was simply to inquire — [Objected to.J Q. I will assume that yon were directed, but state what you did ? A. We did more than what the resolution called for. Q. Tell what you did ? A. We examined first in regard to the institutions, whether they had lost or made money for the prior six months ; we then, inasmuch as we had got to work, deemed it best to ascertain what condition the institution was in at that time financially, and we resolved to examine the institution and find out. [Objected to.J [Resuming.] We examined two reports ; I think they were embodied in one report. By Mr. Chapman : Q. What report? A. How the institution had run for the last six months ; whether it had made or lost money, and then what condition it was in at that time. By Mr. McKeon : Q. What condition did you find it in ? A. We found it insolvent. Q. Then finding it that, what did you do ? A. We brought up the report, made our report to the board and showed the condition we found the institution in, and told them that something should be done at once, either by curtailing expenses or something of that kind; that the bank was getting behind. Q. What did the bank do in the way of dividends after that ? A. After that the bank declared a dividend, a regular semi-annual dividend of three per cent. By Mr. Chapman : Q. After you had made this report to the board ? A. Yes, sir. Q. They paid the dividend when ? A. In July ; I am certain a dividend was made after we made our report ; it may have been December. Q. What did you do when the dividend was declared after you had made such a report ? A. How I voted ? Q. Did you assent or protest against it ? A. I protested against it. Q. In what shape was your protest, in writing or not ? 49 A. In a meeting of the board at that time, and I desire it to b e placed upon the minutes by the secretary ; that was my desire. [Counsel for the superintendent suggests that the minutes had bet- ter be produced.] Q. Do you know how much you found the bank was behind ? A. It was around $200,000 ; I have forgotten the amount exactly. Q. That was talked of by the board of trustees ? A. Yes ; we made our report. Q. That report was referred to in the minutes ? A. Yes, sir. Q. You made this report, do you recollect when ? A. I do not ; I think it was August, 1874. , Q. Do you know a gentleman by the name of Bellamy ? A. Very well. Q. Did you have any thing to do with him ? A. Yes. sir. Q. What is his business ? A. He is a lawyer. Q. Living in Brooklyn ? A. Yes, sir. Q. Did you submit to him any papers ? A. Yes, sir. Q. What did you do ? A. Shall I tell you why I went to him, and how I felt about the matter ? Q. State the facts of what transpired ? A. I was afraid that we would get into trouble. By Mr. McKeon : Q. Tell us what you did ? A. I went to Mr. Bellamy and stated the condition — [Counsel for the superintendent objects, unless the matter was brought to the knowledge of the superintendent.] Q. You submitted certain papers to Mr. Bellamy, did you ? A. I don't recollect that there were any certain papers submitted to him. Q. You had communication with him ? A. Yes, we had communication with him. Q. After that did you see Mr. Ellis ? A. Yes, sir. Q. Tell us when it was you saw Mr. Ellis ? A. That was after Mr. Bellamy submitted the paper in Albany to Mr. Ellis. 50 Q. Tell us what occurred after Mr. Bellamy had been up to Albany? A. I saw Mr. Ellis in New York at Mr. Gregory's office ; Mr. Bel- lamy also came there ; he came down, as I understood, to investigate the institution, the Mechanics and Traders', and I believe he did so ; I then saw him again, after he had done this, at the Metropolitan hotel one evening, through his invitation, I think ; he also then told us that he had examined the institution, and he found it to be about $25,000 insolvent ; we asked Mr. Ellis how he had put the securities, as I and Mr. Gregory had taken a great deal of trouble to find out ; he told us, of the North Carolina, South Carolina, banking institutions, etc., the rates he had put ; we told him that he had put them too high altogether ; that we had taken a great deal of pains to find out what they were worth, and they were not worth near as much money ; Mr. Gregory told him he would sell them a great deal less that same day, these securities; then the banking-house was put down at $100,000. Q. You thought that was too high ? A. Yes, I thought so. Q. Did you say so to him ? A. Yes, sir. Q. What else? A. That was about all ; I urged Mr. Ellis, down at Mr. Gregory's office, that from my acquaintance of the trustees of the institution it could not be worse going on for the future ; that I knew the men that had control of it. Q. You told him so ? A. Yes, sir. By Senator Wellman : Q. Repeat that ? A. I told Mr. Ellis that that institution would be worse and worse, because of the men that had control of it. By Mr. McKeon : Q. That you knew the men ? A. Yeo, that I knew them well. Q. What did he say to that ? A. He said that there were institutions that were in a worse condi- tion than that was. By Mr. Chapman : Q. Prior to the examination? A. This last conversation was prior to the examination. 51 By Mr. MoKeon : Q. When was it he told you that he found that the concern was in- solvent to the extent of $25,000 ? A. That was at the Metropolitan hotel. Q. That was afterward ? A. Yes, sir. Q. You had a conversation with him after that, in which he admit- ted he found the concern was $25,000 behind ? A. A little short of that. Q. Then you asked him what price he put on the stocks ? A. Yes, sir. Q. Did he say how he had got at the price ? A. I recollect that Mr. Ellis said |he asked some gentleman across the street, whom he happened to see on the corner opposite the build- ing, what that building was worth, and this gentleman was quite cer- tain he told me it was worth $100,000. Q. Did he give the gentleman's name ? A. No, sir. Q. Did he say any thing to you about the Brooklyn property '( A. I don't recollect that he did. Q. Did he say how he got the values of these Alabama, North Caro- lina and South Carolina stocks ? A. I don't recollect. Q. You will not say he did not ask of any one ? A. No, sir ; Mr. Gregory, being a broker, did most of the conversa- tion. Q. Mr. Gregory told him that they were much too high ? A. Yes, Mr. Gregory told him that he could sell them right off to him at a great deal lower rates. Q. Were you present when the board brought up this letter written by Mr. Ellis [referring to the letter of October 19, 1874, introduced in evidence in the testimony of the previous witness] ? A. I recollect that. Q. Can you state whether, in view of the present condition of the bank, any thing was done by the trustees by direct payment or satis- factory personal bonds? A. No, sir. Q. Nothing of the kind ? A. No, sir. Q. Can you tell me what was the want of harmony referred to in the direction referred to in Mr. Ellis' letter ? A. Well, I don't know exactly that there was any, except that there was not any of the trustees who would want to make themselves liable for the deficiency. 52 Q. You do not understand my question ; were not some of them one way and some the other ? A. Yes ; Mr. Ellis must have seen that there was not harmony in the institution. Q. He says so in this letter ; what was that want of harmony aris- ing from ? A. Well, I don't know any better term than that I always consid- ered there was a ring in the institution which I did not belong to ; that is as near as I can give it. Q. You and Gregory were all one way, and they the other ? A. Yes ; I had to fight with all the ability I had, and for years was always an outsider. Q. You did not like the way things were conducted ? A. No, sir. By the Chairman : Q. What sort of a ring was it that you speak of ? A. The object seemed to be that some wanted to make more than was lawful; I don't know of any other term to use ; I considered it so. By Senator St. John : Q. The want of harmony was occasioned by a difference of opinion in regard to investments and the general management of the bank ? A. And the general management of the bank. By Mr. McKeojt : Q. Was that fact communicated to Mr. Ellis, so that he must have been induced to write this statement ? A. The fact that there was not harmony was communicated to Mr. Ellis. Q. And what you differed about ? A. I think so. Q. So far as your recollection goes, in your conversations with Mr. Ellis, the reasons for this were communicated Y A. I think so. Q. You paid no money to make up the deficiency ? A. No, sir. Q. You gave no bonds ? A. No, sir. Q. To secure depositors ? A. No, sir. Q. Was there any action taken by the board ? A. At every meeting, of course, I inquired if there had been any 53 further communication from Mr. Ellis, and whether any thing was going to be done ; and, finally, they got up a hocus pocus report that the bank, that really made — [Objected to.] By Mr. Chapman : Q. Was that communicated to Mr. Ellis ? A. Yes; what I was going to say about the report — Q. But we object to your characterizing it as " hocus pocus ? " A. I understood that they had reported to Mr. Ellis that the bank by some financial movement — I did not understand it — had made money enough to help her over this deficiency, and so reported to Mr. Ellis, some few meetings afterward. By Mr. McKbon : Q. Was that in writing; did you ever see it ? A. No, sir ; I never saw it; I don't know but some of them went to Albany. Q. I want to know whether it was in the shape of a report ? A. I am informed that there was. Q. There was no such report in writing ; was it communicated verbally ? [Objected to as hearsay. Counsel for the superintendent moves to strike out the previous answer.] Q. Do you know whether any proceedings were taken on the part of the trustees of the bank in pursuance of this letter ? A. Simply what I have already stated, that either by communica- tion or personally, it was so state:! to the board that they had in- formed Mr. Ellis that the bank had made up that. Q. You do not know that fact yourself? A. No. Q. Ts there any thing in the minutes showing it ? A. I don't know that there is. Q. Did you ever see Mr. Ellis after this meeting at the Metro- politan ? A. No, sir. Q. Do you know of a communication from him to the bank, after that? A. No. Q. After the Metropolitan hotel conversation ? A. Only the one you spoke of. Q. The one you spoke of is only hearsay ? A. I mean the letter you held in your hand. 54 Q. After that there was none ? A. I do not know of any more. Q. Did you ever see him at the bank afterward ? A. No, sir. [Counsel for the receiver calls for the production of the correspond- ence of the bank, referring to the subject of this inquiry.] By Mr. Chapman : Q. Did you attend the meetings of the trustees of 1870, 1871 and 1872, with regularity ? A. I don't think I did ; I had a great deal of sickness in my family at that time. Q. During 1874 you attended more regularly 'i A. I think I did. Q. Will the minutes show how frequently you were present at the meetings of the board of trustees ? A. I presume they do. Q. Can you tell me how many trustees of the board you had in 1874 ? A. No; there were 28 or 30, I think. Q. In 1874 ? A. Yes, sir. Q. Do you recollect them to have been present during this time, and of being present with them ? A. I recollect of their being trustees, but not all present at one time, By Senator St. John : Q. There was not a full board ? A. Not a full board. By Mr. Chapman : Q. What other committee were you a member of ? A. Only this I believe. Q. Your idea was, that there was a " ring " in the institution which you did not belong to ? A. "Well, yes. Q. They held the offices ? A. Yes, sir. Q. And controlled them entirely, irrespective of yours and Gregory's wishes ? A. Yes ; I think they did. Q. The paying offices were subjects of contest, were they not, be- tween the different members of the board ? 55 A. What do I understand you by contest? Q. Did you and Mr. Gregory endeavor to get control of some of the paying offices ? A. No, sir ; I did not. Q. Did you ever endeavor to get any of them — make an effort to get elected to them ? A. They ran me once for president of the bank ; I was elected, I believe, but I did not get the place. Q. They beat you out of it ? A. Yes, sir. Q. These same fellows ? A. Yes, sir. Q. What year was that, do you remember? A. That, I think, must be 1875. Q. That was in 1875, after Mr. Ellis had made this examination, you think ? A. I think it was. Q. And they still did not have confidence in you ? A. I believe I had a majority of the votes. By Senator St. John : Q. Did they have a returning board ? By Mr. Chapman : Q. Was this an 8 to 7 arrangement again ? A. I guess it was ; for my own character, I want to state that it came up all of a sudden, and I knew nothing about it. By Senator St. John : Q. It came up without any volition on your part ? A. No, sir. By Mr. Chapman: Q. Did you have any thing to do with the getting up of these •reports to the bank department ? A. No, sir. Q. But you have seen the reports after they were printed during the year you were trustee ? A. I used to hear them read, and I used to hear the secretary make his report. Q. You used to look them over and examine them, the printed reports for the bank superintendent ? A. I don't know that I did ; I think I have. 56 Q. Being one of the trustees for fourteen or fifteen years, of course you examined the reports, did you not ? A. I read the secretary's report. Q. You don't mean to say to this committee that all you knew about that bank was simply what the secretary read of his annual re- port, and you paid no more attention to it than that, as a trustee? A. I think I did look through the printed reports usually, but not every year. Q. You knew that the same items in the printed report were re- turned to the superintendent year after year. A. Yes, sir. Q. Did you have auy hand in buying of these bonds ? A. I don't think I did. Q. And did not protest against them when they were bought ? A. I can't say as to that. Q. About what amount of assets did the bank possess, based on the examination of July, 1874; 12,500,000, was it not? A. About that I should think. Q. In valuing these assets is where the deficiency which you found came in, was it not ? A. Yes, sir. Q. There need be a difference of but one per cent to make up the deficiency which you found ; it did not require more than one per cent to make up the deficiency ? A. That Mr. Ellis found ? " Q. Yes. A. But between his deficiency and ours there was a wide difference. Q. The difference between your estimate of the condition of the bank and his estimate of its condition, was a difference of opinion between you as to the value of these assets? A. No, sir, I do not think it was an opinion ; we took a great deal of trouble to get posted up, not to form an opinion. Q. Did you make these inquiries in regard to the value and assets, or did you rely upon Mr. Gregory's examination ? A. I went around myself to the different bankers; I went with Mi- Gregory and I went alone. Q. If you knew the value, why was it necessary to make inquiries ? A. I did uot until we made inquiries. Q. It was a matter of opinion based upon information you obtained ? A. The information I got in the market ; [I went to a banker and asked him the price of Alabama's to-day, and if he was a reliable man I put that down. Q. You took his statement and that goes to the making up of your opinion and the value of it. ' 57 A. Yes, sir. Q. When he goes around he does the same thing, makes the same inquiries, and arrives at a different opinion ? A. Mr. Ellis ? Q. Yes. A. I presume so. Q. You do not know of his making any investigation — instituting any inquiry ? A. I cannot recollect of any. Q. You do not know but he did ? A. No, sir. Q. You do not know that he made efforts to ascertain the value of these assets ? A. No, sir. Q. You know of Mr. Ellis doing nothing after the sending of that letter which has been shown, of October, to the president, until the bank was closed ? A. Nothing at all. Q. He ultimately closed up the bank, did he not ? A. Yes, sir. Q. Did you see the annual report which the company made after this letter was received from the department in 1875 ? A. The annual report of the bank ? Q. Yes? A. I do not think I did ; I do not recollect it. Q. You did not see that at all ? A. I do not think I did. Q. Although you made this investigation in 1874, you had not in- terest to see what report the board made ? A. The report of 1875 — yes, I think I heard that report read. Q. Did you examine it yourself ? A. No, I do not think I did. Q. Did you make any ptvtest against it to the board when it was read ? A. I do not recollect that I did. Q. At that time there had been an appreciation of some of the stocks — some of the securities held by the company, had there not, over what they were in 1874? take the Rochester bonds, Buffalo bonds, New York city bonds and Brooklyn bonds ? A. I do not recollect that. Q. Do you recollect one way or the other ? A. No, sir, I do not think I do ; I had got our report up very care- fully ; that was all I got. 8 58 Q. That was in August, 1874 ? A. Yes, sir. Q. You made no subsequent examination of the bank ? A. No, sir ; although in 1875 I think I went to the bank more or less every day live or six months regularly. Q. Did you commence an action against the president at any time to have him removed from the bank ? A. Yes, sir. Q. When was that ? A. The first suit was commenced — I think that was in 1873 — I kept no memorandum of it. Q. About 1873 ? A. Yes, sir ; against the president, as well as four trustees. Q. You brought an action in the supreme court ? A. Yes, sir. Q. Was that action ever brought to trial ? A. Yes, sir, I believe it was. Q. Did you succeed in the action ? A. There were four turned out ; Mr. Oonklin was not. Q. That was in 1873 ? A. Yes, sir. Q. You succeeded in getting a judgment "and turning out four of these directors ? A. I believe so. Q. You did not succeed in turning out the president ? A. No, sir. Q. You know whether you got such a judgment or not, don't you ? A. Mr. Woodward, Dr. Murray and Mr. Peck ; 1 believe there were four altogether, including Mr. Conklin. Q. That you say was the first suit ? A. Yes, sir. Q. When was the second suit brought ? A. The second suit, I think, was in 1875. Q. After this examination ? A. Yes, sir. Q. Was that suit prosecuted to trial ? A. Yes, sir. Q. Did you succeed ? A. No, sir. Q. What officer did you go to at first in that suit in 1875 ? A. What officer ? Q. Yes ; did you take your papers in the first place to the attorney- general, and ask him to proceed in the second suit in 1875 ? 59 A. Yes, sir. Q. You went first to the attorney-general ? A. ; Yes, sir. Q. And tie declined to proceed ? A. No, sir ; Judge Davies was the attorney, and he wrote a letter to the attorney-general. Q. And the attorney-general declined to proceed ? A. He instructed him to, I believe. Q. Did they commence an action in behalf of the attorney-general ? A. Yes, sir; so I understood. Q. In the attorney-general's name? A. I presume so ; so I understood it. Q. Was that to appoint a receiver ? A. No, sir; there were two points in that case; one was to remove Mr. Conklin and place me as president of the institution — Q. That was the result of election ? A. Yes, sir. Q. A quo warranto proceeding ? A. I suppose so. By Mr. McKeon : Q. Was there not some question about Mr. Conklin not being authorized to hold the place ? A. Yes, sir ; that is what I remarked. By Mr. Chapman: Q. Was that suit tried ? A. Yes, sir. Q. What was the result ? A. It was first brought before Judge Donohue — Q. What was the result; did you turn him out? A. No, sir. Q. You did not succeed in getting him out in that case ? A. No, sir. Q. Then was the other matter pushed, the appointment of a receiver ? A. No, sir; I think not; that had been done prior. Q. There was no necessity for turning him out, if you had had a receiver appointed ? A. No, sir ; there had been no receiver appointed. Q. Did you take steps for the appointment of a receiver ? A. No, sir. Q. Did you communicate these facts to Mr. Ellis ? A. No, sir. 60 Q. Did you have any communication with Mr. Ellis, since 1874, at any time ? A. No, sir ; I think my attorney has. Q. Who was he ; Bellamy ? A. Yes, sir. Q. You know nothing of that fact, of your own knowledge, except what he told you ? A. Yes, sir ; that is all ; the idea of this suit was in order, that as Mr. Ellis would not appoint a receiver, to get control of the bank and have it wound up in some other way. [Counsel for the superintendent objects to the answer, as irrespon- sive, and moves that it be stricken out.] [Kesuming.J The idea was, if the suit was decided in my favor, and I got to be president of the bank, the first action taken would have been to have had a re-examination made, to lay the matter again before Mr. Ellis and the attorney-general. Q. Why did you not, as a trustee, take steps to close the bank, if you wanted to have it in the hands of a receiver ; in 1872 and 1873 and 1874, why did you not put the bank into the hands of a receiver, if it was insolvent ? A. Didn't I try to do so ? Q. I did not understand that you took any steps ? A. It was through my attorney that the whole matter was brought before the attorney- general. Q. That was in 1876 ? A. No, sir ; 1874. Q. Subsequent to that time why did you not proceed, aside from the attorney-general and the bank department, to throw the bank into the- hands of a receiver ? A. The papers were all drawn up by my attorney to lay the matter before the supreme court, but in a conversation with some other lawyers — I think it was ex-Judge Davii — there were two reasons why I did not like to do it; one was, the effect it would have upon other institu- tions of a like character — Q. During the delicate times ? A. Yes, sir. Q. It was after the panic ? A. Yes, sir ; and the second was, I knew that would make a run upon the bank, and the widows and orphans having money would fare worse because they would be the last ones to get it out. Q. Those two points, would they not have much influence with Mr. Ellis, or had they not ? A. Mr. Ellis should have known that without my telling. * 61 Q. That was what influenced your action in preventing you from proceeding — those two points ? A. That was after the matter was laid before Mr. Ellis. Q. You thought it was the part of wisdom not to proceed at that time, after you had had a consultation with your attorneys ? A. But I looked upon the attorney-general. Q. I say these two reasons were sufficient to control your action to prevent you from proceeding for the appointment of a receiver, were thpy not ? A. What? Q. Those two reasons you have given, the effect upon the widows and orphans and also the effect upon the institution ? A. After the matter had been laid before Mr. Ellis and the attorney- general. Q. Then Mr. Ellis delayed for the same reason that you did ? A. Well, I looked upon Mr. Ellis and the attorney-general as occu- pying a very different position from me ; they were fathers of the in- stitutions and I was simply a trustee of one. Q. It was your business to exercise a wise discretion as to what would be best for the depositors ? A. Yes, sir. Q. You know nothing as to any communications, that the president and secretary, or either of them, or any of their officers, may have made to Mr. Ellis, after 1874 ? A. No, sir ; I do not recollect of any. Q. There may have been communications and you know nothing about them ? A. Yes, sir. Q. They would not be apt to consult you if any of them existed ? A. No, sir. By Mr. McKeon : ; Q. Did you not let Mr. Ellis understand how you felt in relation to these officers ? A. Yes, sir, certainly I did. Q. And the cause of it ? A. Yes, sir. Q. And your anxiety to have it corrected ? A. Yes, sir. Q. Did you distinctly state that you had ascertained that there was a deficiency of $200,000 ? A. About that amount. Q. You stated that to him ? A. Yes, sir, I think I did. Q. That was before he went into the investigation ? A. If I did not state it, he had my report. Q. How do you know he had the report? A. Because Mr. Bellamy had taken it to Albany and laid it before him. [Objected to on the ground that the witness speaks from hearsay.] [Resuming.] He took the amounts from the identical papers that were in possession of the bank. Q. He took the results ? A. Yes, sir. Q. In this conversation yon speak of as having had with Mr. Ellis did you give him to understand that a report had been made showing, a deficiency of about $200,000 ? A. Yes, sir. Q. In the next conversation with you he had found the deficiency to be only $25.000 ; did he ask you to show how you made it $200,000 ? A. No, sir, I do not think he did ; we undertook to show him he was wrong. Q. He did not ask you why you put it so much more ? A. I think not ; he stated that he had put the Alabama's at 50 at that time ; we had a large amount of them at that time, and from the best information I could get, they were worth 35, flat, at that time. Q. About this time you had lawsuits in relation to the occupation of the presidential chair; will you tell me whether they made any offers to you as to salary ? A. Yes, sir. Q. What was it ? [Objected to as inconrpetent and irrelevant. Counsel for the receiver insists that the witness ought to be permitted to show the fact that in all that he had clone he had acted in good faith, and that offers had been made to buy the withdrawal of his opposition to the other trustees. The witness states that he thinks he ought to be allowed to answer the question, as it was important for him to show whether he had been working as he had for character or money.] Q. Do you know whether Mr. Ellis ever knew that a salary had been offered to you and declined ? A. No, sir ; I do not. By Mr. Chapman : Q. You do not claim that there was an^ corrupt action on the part of Mr. Ellis in any way, do you — you do not find any evidence of it or any thing of that kind ? A. No, sir. 63 Q. Did you ever examine the banking laws to see whether he had violated any particular section of the banking laws ? A. No, sir; I do not think I did. Q. You do not know, of your own knowledge, that he has run counter to any law, do you — I mean of your own knowledge ; not a mere matter of opinion, because you may get opinions from a hun- dred different sources ? A. So far as — Q. I withdraw the question if there is going to be any controversy about it ; did you ever read the banking laws — that is, all of them, I mean ? A. I do not know that I have commenced to read it through, but I have read it back and forth — the different sections. By Mr. McKeon : Q. What did you find fault with ? A. That we were deficient $200,000, and I told him if matters con- tinued they would be only worse and not better, that the wron* kind of men were in control, and it was better to have the bank closed up. Q. That was said to him ? A. That was said to him. By Mr. Chapman : Q. Do you know that the other fourteen or fifteen directors said to Mr. Ellis, that they were the right kind of men, and that you and Mr. Gregory were the wrong kind of men ? A. How is that ? Q. Do you know whether Mr. Ellis consulted the balance of this board of trustees to see whether you were the right kind of a man ? A. Mr. Ellis told me — Q. Do you know whether he did or not ? A. Only by his conversation. By Mr. McKeon : Q. Tell us that ? A. That was that the other trustees with whom he had conversation gave Mr. Gregory and myself pretty good characters; said that we were the right sort of men. By Mr. Chapman : Q. You did not take any issue on that proposition ? A. Not at all. Q. Do you know whether he inquired of these four men who you succeeded in turning out ? 64 A. The three men — I don't know — I am on pretty good terms, I believe, with all of them now. By Mr. McKeon : Q. Did you pay your own legal expenses in this matter ? A. Yes, sir. Q. Is that your signature to this report [the paper marked, for iden- tification A, of this date] ? A. Yes, sir. Q. The schedule is in whose handwriting ? A. That is Mr. Gregory's. Q. These were annexed to it at the same time? Adjourned to Tuesday, April 24£A, at 10 o'clock, A. M. . New York, April 24, 1877. The committee met pursuant Lo adjournment, at 10 o'clock, A. M. Present — Senators Coleman" (chairman), Wellmast and St. John James M. Jackson, a witness, being duly sworn, testifies : By Mr. McKeok : ^Q. You are a resident of the city of Brooklyn ? A. Yes, sir. Q. Are you engaged in any business in the city of New York ? A. I have been connected "with the Lorillard estate for the last 16 years directly, and indirectly for 25 years. Q. Is that a large estate in the city of New York ? A. Yes, sir. Q. One of the largest ? A. Yes, said to be. Q. You are familiar with the value of real estate ? A. I think so ; yes. Q. Have been for years ? A. I have been for years ; I have had a great deal to do in the way of making mortgages, and one thing and another. Q. Have you seen the property belonging to the Mechanics and Traders' Savings Institution in the Bowery, in New York ? A. Just above Houston street ? 65 Q. Just above Houston street ? A. Yes, sir. Q. A marble building ? A. Yes, sir. Q. What would you say was the value of that property in August or September, 1874 ? A. About $50,000, at that time. Q. Were you present at the sale of it the other day ? A. No, sir. Q. Did you make inquiries about the value of the property before the sale ? • A. No, sir; I did after the sale ; I was solicited by a lawyer in Wall street to appraise the property on Saturday afternoon, I think, about four o'clock ; I went up there and made an appraisement of it. Q. When was that ? A. I think it was a week ago last Saturday, or two weeks ; I will not be positive which. Q. After this sale at public auction ? A. It was after the sale. Q. What appraisement did you put upon it then ? [Objected to. The committee rule that no testimony is admissible as to the value of this property subsequent to July or August, 1874, at the time the report was made by Mr. Ellis ; on the condition of the bank.] By Mr. Chapman : Q. Do you know of any sales in that neighborhood in July or Au- gust, 1874 ? A. I don't bring any to mind just now ; I don't know when the Bond Street Bank was built ; that was about 1874, 1 think, it might have been 1875 ; I won't be sure. Q. Do you know of a lot being sold opposite this bank on the oppo- site side of the street, along about that time, between July and Sep- tember ? A. Nothing only that Bond Street Bank on the corner. Q. The lot directly opposite ? A. Not that I recollect. Q. Your opinion as to the value has been asked recently" for the first time, has it not ? A. Yes ; I am not sure whether it was a week ago Saturday, or two weeks ; within a fortnight, at any rate. Q. Within a month or two your attention has been called to the value of this property as it was in 1874 ? A. No, sir; it never has been asked until this present time. 9 66 Q. Your opinion is formed as to what its value then was, in the light of all subsequent funds ? A. At the present time ? Q. No, relative to the falling market ? A. Yes, the fact is I got a little above my own figures when I went to value it. Q. I do not ask for that, I am merely getting at the foundation of yonr opinion ? A. I ascertained what the bank cost, and from that I make my opin- ion now. Q. You do not judge from what the market value of property in that immediate locality was in 1874 ? A. I do ; I combine the two together. Q. Did you know in 1874 the market value of property in that im- mediate locality ? A. I can't say that I particularly did, only as sales took place around there. Q. Have you any knowledge of any sales taking place in that im- mediate vicinity? A. Not particularly without it was the Bond Street Bank; I think that was built in 1874 or 1875. Q. Can you state whether that was sold in 1874, 1873, or 1875 ? A. No ; I could not tell for certain ; it has not been built there a great while; somewhere about three years ago, I think. Q. How near this immediate locality have you any knowledge of sales being made, in July or August, 1874 ? A. I have no knowledge of any, in particular, without, as I said before, it is the Bond Street Bank — the Bond street corner. Q. Is it not possible that your opinion, as to the value of real estate in 1874, may be shaded somewhat by your personal knowledge of the depreciation of real estate ? A. No, sir ; I don't think it is. Q. Did you own any property in the immediate vicinity of this bank in 1874? A. I owned an interest on the corner of Houston street and the Bowery, about 100 feet. Q. Do you own that still ? A. The estate does ; the Lorillard estate. Q. You made no sales in that immediate vicinity ? A. No, sir ; they don't make any sales. Q. You made no purchase in that immediate vicinity? A. No, sir. Q. There has been a very great depreciation in the market yalue of real estate, has there not ? . 67 A. Oh, yes. Q. When did the market value of real estate commence to go down ; before the panic of 1873 ? A. No ; it did not commence until after the panic ; real estate held its own better than any thing else. Q. Until when ? A. I should think about 1874. Q. About the middle of 1874 ? A. 1874 and 1875 ; it was the last to go up and the last to come down. Q. And in fact it was not until the latter part of 1874 and 1875 that real estate values commenced going the other way, was it ? A. I could not say definitely. Q. That would be your opinion? A. Yes. Q. It has been gradually falling ever since ? A. Yes ; pretty fast. Q. About what, in your estimation, has been the depreciation in real estate ? A. Prom 40 to 50 per cent. By- Senator St. John : Q. You speak of from 1874 to the present time ? A. Yes, sir. By Mr. Chapman : Q. Prom the latter part of 1874, or the forepart of 1875, I under- stood it held its own ? A. No ; hardly 1875. Q. The latter part of 1874 ? A. Yes, sir. Q. From that time it has fallen '( A. It has been gradually falling ; in fact, there has been no sales ex- cept forced sales. Q. It has been thrown upon the market ? A. Yes ; and had to be sold. Q. Slaughtered ? A. Yes ; a piece of property on Broadway is offered to us now for less than it is assessed at on the tax bills, not far from here either. Q. Do you have any thing to do with stocks ? A. No, sir; I simply haye charge of the Lorillard estate; I am the superintendent of out-door repairs ; new work and old, and in the office as well. 68 • Q. You do not sell any real estate ? A. No, sir. Q. Do you buy ? A. They occasionally buy and they make loans. By Mr. McKeon: Q. Does not your experience cover almost every part of the city, and particularly below Fourteenth street ? A. Particularly below Fourteenth, or below Forty-eighth street. Q. I don't want to know the extent of the Lorillard estate, but is it not in the neighborhod of millions ? A. It is pretty large. Q. It is in the millions, is it not ? A. We are not supposed to know in the office. Q. You estimate for the purpose of making loans on property ? A. Yes ; I appraise all property that they loan on ; of course, the gentlemen themselves look at itj as well ; they generally go by my opinion. By Mr. Chapman : Q. You would not be very apt to overestimate real estate if that was your occupation ; you would estimate it in a safe way — conserva- tive ? A. I would make a fair estimate for a safe loan, particularly if it was down to six per cent. By Mr. McKeon : Q. Do you loan at six per cent ? A. Yes, if it is gilt-edged — short time ; I had an application for a loan on your bank for $25,000, yesterday, at six per cent. Frederick P. Bellamy, a witness, being duly sworn, testifies : By Mr. McKeon : Q. You are an attorney and counselor at law ? A. I am, sir. Q. And residing where ? A. Brooklyn, New York. Q. Were you, in the month of September or October, 1874, in any way connected with the investigation of the Mechanics and Traders' Savings Institution ? A. In the mouth of September, 1874, I was retained by Mr. Wil- liam Floyd and Mr. Gregory, who were two of the trustees of the savings bank, as I was told, to look into the affairs for them and to 69 take some steps for the protection of the trustees and of the depositors in the bank, which they claimed was necessary to have done. Q. What did you do ? A. They brought me statements purporting to show that the bank was largely insolvent ; I prepared a summons and complaint upon certain facts. Q. Is that a copy of the paper [producing a document] ? A. I think it is; I have not read it over ; that looks as if it was a copy; I do not doubt it is. Q. You prepared a draft of a complaint, and you believe that to be a copy of it, with the schedules ? A. Yes, it looks as if it was. Q. Did that paper so prepared in any way reach the hands of Mr. Ellis? A. Thej>aper that I prepared I showed Mr. Ellis. Q. And you believe that to be a copy ? A. I believe that is a copy. The following is a copv of the complaint and accompanying schedules and affidavit : Report of the Mechanics and Traders' Savings Institution, an incor- porated* institution for .savings, of its condition on the 1st day of July, 1874, made to the Superintendent of the Banking Department, as required by chapter 136 of the of laws of 1857. Kesoukobs. 1. Bonds and mortgages, as per schedule A, hereto annexed $748,150 00 2. Stock investments, as per schedule B, hereto annexed 1,703,039 75 '3. Amount loaned on public stocks, as per schedule C, hereto annexed 4. Amount loaned on stocks or bonds of private cor- porations, as per schedule D, hereto annexed 5. Amount loaned on personal securities, as per sched- ule E, hereto annexed 6. Eeal estate, standing on books at cost market value, $130,554.55 — cost 109,582 05 7. Cash on deposit in banks or trust companies, as per schedule F, hereto annexed 82,009 12 8. Cash on hand not deposited in bank 20,000 00 70 9. Amount of assets not included under either of the above heads, the particular items of which are set forth in schedule G-, hereto annexed $ LOO, 375 01 $2,763,155 93 Liabilities. 1. Amount due depositors $2,565,178 17 Principal $2,491,601 51 Interest credited for the 1st of July, 1874 73,574 66 2. Other liabilities, viz.: Excess of cost 69,600 23 3. Excess of assets over liabilities 128,376 83 $2,763,155 93 State of New York, ) City and County of New York. \ " Alfred T. Conklin, President, and Henry C. Fisher, Secretary of the Mechanics and Traders' Savings Institution, an incorporated institution for savings, located and doing business at No. street in , being duly and severally sworn, each for him- self saith that the foregoing report and the schedules accompanying the same are in all respects a true statement of the. condition of said institution, before the transaction of any business, on the morning of the first day of July, one thousand eight hundred and seventy-four, in respect to each and every of the items and particulars above speci- fied, according to the best of his knowledge and belief. A. T. CONKLIN, President. H. 0. PISHEE, Secretary. Severally subscribed and sworn by both depo- ) nents, the 25th day of July, 1874, before me, ) Ferdinand Levy, Commissioner of Deeds. 71 SCHEDULE A. Bonds astd Mortgages. No. County where located. In what City, Vil- lage or Town. Principal un- paid. Estimated value of mortgaged premises. Rate of interest. 1 New York New York . . $4,000 $10,000 4 do do 5,000 10,000 5 Kings Brooklyn . . . 1,250 2,500 9 do do 2,000 4,000 10 do do 1,300 2,600 15 New York New York . . 4,500 11,250 19 Kings Brooklyn . . . 1,200 2,500 23 do do 800 3,000 24 New York New York . . 600 7,500 26 Kings Brooklyn . . . 1,600 5,000 29 do do 2,500 5,500 37 New York New York . . 1,000 2,600 45 do do 5,000 20,000 46 do do 2,000 5,00Q 47 Kings Brooklyn . . . 5,000 20,000 50 do do 500 2,500 52 do do 1,000 2,500 53 New York New York . . 12,000 25,000 55 do do 5,000 10,000 56 do do 6,000 12,000 57 do do 2,500 7,500 58 do do 6,000 12,000 59 do do 4,000 15,000 60 do do 5,000 10,000 61 do do 6,000 15,000 63 do do 7,000 14,000 64 do do 10,000 20,000 65 do do 5,000 10,000 67 Kings Brooklyn . . 1,500 68 do do do do 4,500 1,500 69 30,000 71 New York New York . . 12,000 30,000 72 do do 4,000 10,000 73 do do 15,000 37,500 76 do do 15,000 37,500 77 do do 15,000 37,500 79 do do 14,000 37,500 81 do do 7,000 14,000 83 Kings Brooklyn . . . 5,000 14,000 84 New York New York . . 10,000 25,000 85 Kings Brooklyn . . . 3,000 7,500 88 New York ■ New York . . 10,000 35,000 72 SCHEDULE A — {Continued). No. 89 90 91 92 93 94 97 99 102 103 104 105 106 107 108 109 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 138 139 140 141 County where located. Kings . do do do do do New York . . do Kings do New York . . do do do do do do do Kings New York . . do Kings New York . . , do do do Kings New York... Kings do .... New York . Kings .... do .... do .... do do New York . . do do do do do Kings New York.. do do In what city, village or town. Brooklyn. . do .. do .. do .. do .. do .. New York. do .. Brooklyn. . do .. New York. do .. do .. do .. do .. do .. do do ... Brooklyn. . New York. do ... Brooklyn. . . New York. , do ... do ... do ... Brooklyn. . . New York. . Brooklyn. . . do ... 5few York. . Brooklyn. . . do do ... do ... do ... New York. . do ... do ... do ... do ... do ... Brooklyn. . . New York. . do ... do' . . . IPrincipal unpaid. $5,000 5,000 5,000 4,500 3,300 3,300 6,000 2,500 500 8,000 20,000 6,000 6,000 8,000 5,000 6,000 6,000 6,000 15,000 10,000 7,000 6,000 12,000 8,000 9,000 5,000 16,000 5,000 4,500 1,000 5,000 2,000 2,000 12,000 2,000 3,500 3,000 7,000 7,000 7,000 3,000 4,000 10,000 10,000 7,000 7,000 Estimated value of mortgaged premises. $10,000 10,000 10,000 30,000 6,600 6,600 15,000 7,500 1,000 16,000 50,000 12,000 12,000 16,000 10,000 12,000 12,000 12,000 37,500 20,000 15,000 15,000 25,000 16,000 18,000 10,000 40,000 15,000 10,000 40,000 10,000 4,000 4,000 35,000 4,000 7,000 7,500 14,000 14,000 14,000 6,000 8,000 20,000 20,000 14,000 14,000 Rate of interest. 73 SCHEDULE A - {Continued). County where located. New York . do do Kings New York . do do do do Kings New York . Kings . . . New York do do do do do Kings . . . do ... New York Kings . . . New York do Kings . . . do ... do ... New York Kings . . . do ... New York In what city, village or town. New York do do Brooklyn New York do do do do Brooklyn New York Brooklyn New York do do do do do Brooklyn do New York Brooklyn New York do Brooklyn do do .New York Brooklyn do New York Principal unpaid. $8,500 6,000 6,000 3,200 2,000 2,000 2,000 2,000 12,000 1,800 9,000 4,500 5,000 10,000 10,000 10,000 10,000 10,000 2,000 1,500 5,000 6,000 60,000 11,000 5,000 2,250 2,250 8,000 5,000 1,000 3,800 Estimated value of mortgaged premises. Rate of interest. $748,130 $17,000 15,000 12,000 6,400 4,000 4,000 4,000 4,000 24,000 3,600 18,000 9,000 14,000 25,500 25,500 22,500 22,500 22,500 4,000 3,500 12,500 14,000 230,000 25,000 10,000 6,000 6,000 24,000 11,000 5,000 9,000 10 74 2. OOOOCOOOOOOOSt— IO OOOOCOOOOOi-ItJHOO OOWOi-HOiO'OOOWiOiO TH!>tOO>O«0000iO^"-OC?H (NNCDHHCONCO'rtllOHCOO O^ICOCOCDlOHO«l'i)« T-H H i— I CO C* CN! 1-H OtDHCOO C* tO !CI H IO t- Tf r- I Ci CO "O - CNcOOOOuOt-OiOOOOO ^OlQlOOt-lOlOWOOlOO cot-iraooioOi-Hs^iotooo mi>^ooHtDt-ocoocoo co ^ta>t-^tfT-:;■ ,,•■.'. given at a higher figure? ,. . A. Yes, sir. Q. A different figure ? '"■ ' A. Yes, a much 'higher figure ; but my 'figures' were taken from the quotations of the 1 securities.' ■ '' ' • " " II - ,: Q. There 1 'were so'me'secnrities that had no quotation at 'that time; there were no public, sales, were there? ' ' " ; ■■ ■'■■■'/ ■■■ > •. •'. A. That I don't know', I am Sui'ej; >''■•■' > JniiQ.-iMild you have any quotations of the Alabama bonds? A. Mr. Gregory gave me; quotations :that 'he had made;, I think 'there 'Weiieiquptiatiqnsiof mast of the., stocks. , ■ • < Q. Those were quotations not from printed papers ? A. Most of them I think were. ,,, ,,,,,, , Q. But some from figures Mr. Gregory gave, yqu ? A. Yes, I think so ; the stocks were qno^d.,, ,.:,,. r, Q. Mr. Ellis did not manifest any hesitation in coming down, and making an examination of the hank, did, he,? . >, , ,-i - A. No, sir. . i, ■.. •'..,. . ... >■ t. 91 By Mr. McKeon : ,,.,: -i. m , fll . .. ,,,,m.) .„,; ),.,i >'.n!o i Q. You do not know' whether' he' made any'exanrin'atidn,' do you'? ,; A ; . I don't kno'w' whether he ihade'aiiy' examination. ' '"-'■ '"' ' >" ■ ' <>'< •• ■ . ; 1l ]■•■{■ 'fh, ymr) / Q. He'did'tiot exhibit any hesitatfori'wheh you' talked with liim ? >•-* i 'A; No; he 'said 'he would come down 1 .' "->• ' ' • -«)i{mi:( •,([; «>'i ,.n;j --, : J j i''Qi : iDid not Mr..Bllis suggest the idea of coming. down 'Withiyou ?' ; A, No; I don't thinkihe did;. I am:quite confident?, ibbaC ■ he spoke; of (coming: down later; T.saidi we were very, anxious, to: hwve. him. come down.. ::ti !'.■.';,<;< ■ ; .i,.» -ifi •■■ ;;■{() ui yd , -m;,^ . --- ! > r r * . r :- .. /'./r<»iii r Q< He ,'did, in fact, after you had. this, .discussion, together, come down with you, on the return, train, or boat ?, ,,. .-tv„.,.,f ifi ,;, -,,-,„ ,'•••■•.):<; V A. Yes,, on the boat that night. Y ,[ , . ;j . s ; , -,.;,,,.),„, v,,!;,, ! Q. And: you have reason to . believe that , he got , his. examiner, an.^ they, r wen.| thereto the bank, and they went. on .with the examination? : Aj I don't , know, any , thing. about it. '., /l j,,, ,, tM •;.,Q. , You,,haV(e reason to believe that from information that you got from your clients ? ( , ,-,,,,,,• . A. That I don't know; I think very likely he did. ', i Q. During this conversation with Mr. Ellis he 'remarked' something about his, not approving of putting the company in the hands of a 1 receiver unless it was necessary ; this was after the panic of 1873, of !■■<■•>>, „' I!- 'i'.UI, ■■" ,l< [.'.< ■: .', ■ ,i.'V ''•.-> ,.i >"-.■/ ifi-i-i,-- i:< course r ,! A. This wasVlS^. ; '"■' ! '" "•'* y '' , " Kl ^'''••'M->'-rfj ^ Q. And the stringency of the money market was a' Subject of 'con- versation there between yon; the bad time to put it'in the 'hands of 'a receiver, arid the effect' upon other corporations of the same kind ? '- , A. Yes, I think so; very likely. " Q. No indication' on his part that; he wag not willing.; and indeed that he did not want to do his duty, was there? ' ' 'i ' • ' A.'Oh, no. ' ' " [ ■"■ ' [ '" '•" ' Q. You did not know the fact that Mi'.- Floyd aiid Mr: Gregory had given three different values to Mr.'Ellis ? •'""" ' ' ' '' '! ■'."■ J ' A. I don't know any thing that happened when Iwas not there.' 1 ° J Q. : $115,000 deficiency' in this statement, $201,000 deficiency ;iii another statement, and 181,000 in {another statement, giving the 'com diti'on of 'the company oil the' first day 'of .July, 1874 ; .you did not know'any'thin'g'about that ? ' . <;(u" •■ . ■■.; •-.^■•; 1 A. I doubt whether they nTalde, any such .statement,; I don't know any: thing about it. ■■•' ■■ |,; ■»<■"> '' ■'.■■■' ' - ■.:.'.•■■, ■,;>:, - ; Mr. McKeon offers in evidence section 6 and 7, of, the act of • incor- poration of the Mechanics' and Traders' Savings Institution. - w-,, ,'■■'' ■ " •• '•<■ . •■.'■ ■! :.!■■.• ■■'.;, • ■ i ■• • i ..fit f,h/;i,>M 92 [Objected to. Objection overruled.] The following is a copy of the sections alluded to: " 6. The general business and object of the, corporation hereby crea- ted shall be to receive on deposit such sums as may be from time to time offered therefor by tradesmen, clerks, merchants, laborers, miners, servants and others, in such sums and on such terms as are allowed by this act, for the purpose of being invested in government securities or any public stock, created under and by virtue of any law of the United States or of this State, or in any stocks or bonds of any city author- ized to be issued by the legislature of this State, and also to loan any money upon bonds, secured by mortgages or unincumbered real estate situate in either of the cities of New York, Brooklyn or Williams- burgh, worth, at least, double the amount loaned thereon, or in such other manner as is authorized by this act for the use, interest and advantage of the said depositors and their legal representatives. In all cases of loans upon real estate, a sufficient bond or other satis- factory personal security shall be required of the borrower, and all expenses of searches, examinations, and certificates of title, and of drawing, perfecting and recording such papers shall be paid by such borrower. And the said corporation shall receive as deposits from the persons of the descriptions above mentioned, all sums of money which may be offered for the purpose of being invested as aforesaid, but not to exceed the sum of $5,000 from any individual, which shall as soon as practicable be invested accordingly, and shall be repaid to such depositor when required, at such times, with such interest, and under such regulations as the board of trustees shall from time to time pre- scribe, which regulations shall be put in some public and conspicuous place in the room where the business of said corporation shall be trans- acted, but shall not be altered so as to affect any deposit previously made. No president, vice-president, trustee, officer or servant of said corporation shall, directly or indirectly, borrow the funds of said corporation, or its deposits, or in any manner use the same or any part thereof, except to pay necessary expenses, under the direc- tion of said board of trustees. All certificates or other evidences of deposit, made by the proper officer of such corporation, shall be as binding on the corporation as if they were made under the common seal. It shall be the duty of the trustees of the said corporation to regulate the, rate of interest to be allowed to the depositors, so that they shall receive as nearly as may be a ratable proportion of all the profits of said corporation, after deducting all necessary expen- ses ; and it shall be the duty of the trustees of said corporation to in- vest, as soon as practicable, in public stocks or public securities, or in bonds and mortgages, as provided for in this act, all sums received by them beyond an available fund of not exceeding $100,000, or not ex- 93 ceeding one-third of the total amount of deposits with said institution at the discretion of the said trustees, which they may keep to meet the current payments of said corporation, and which may by them be kept on deposit on interest, or otherwise, in such available form as the trus- tees may direct ; provided that a greater amount than $10,000 of such available funds shall not be deposited to the credit of the corporation hereby created, unless interest thereon shall be paid by the bank in which such funds are deposited. 7. The board of trustees of the said corporation shall have power from time to time to make, constitute, ordain and establish such by- laws, rules and regulations as they shall judge proper for the election of their officers, for prescribing their respective functions and the mode of discharging the same, for the regulation of the times of meet- ings of the officers and trustees, and generally for transacting, manag- ing and directing the affairs of the corporation ; provided such by-laws' rules and regulations are not repugnant to this act, to the constitution or laws of this State or of the United States. Counsel for the receiver offers in evidence section one of an act relative to savings banks or institutions for savings in the city and county of New York and the county of Kings, passed April 15, 1853, as follows : Section" 1. It shall be lawful for the several savings banks or insti- tutions for savings in the city and county of New York and county of Kings, now chartered, or which may be hereafter chartered, in addition to the powers granted by their respective acts of incorporation, to loan . the moneys which they have received or shall hereafter receive on deposit or the accumulation thereof, on purchase of any stock or securities, for the redemption or payment of which the faith of any State in the "Union shall be pledged, or the public debt or stock of any incorporated city, county or town in this State which have, been authorized by the legislature of this State, to issue such stock, provided that the cash value of such stock or securities shall, at the time of making such investment, be at or above its par value, and such loans, so made, shall not exceed in amount ninety per cent of the par value of such stock or securities. Should the stocks or securities above mentioned depre- ciate in value so that the amount loaned thereon shall exceed ninety per cent of its par value, it shall be the duty of the directors or trus- tees of any savings bank or institution for savings, to require the im- mediate payment of any loan made by them thereon, or additional se- curity therefor, so that at all times the amount so loaned shall be at least ten per cent less than the par value of such stock or securities. 94 John B. Manning, a witness, being duly sworn, testifies: ■-. > : . ■■.■ > By Mr. MoKbon : ,. , ,, , -._ . , . ■; v , , i , i ., l .,, , .., , Q. What is your business ?■:■ •■ . ■ ■ ■ ! :-.■'! jh \\>j :i-<".',f. >■■> A. I am a banker and broker. ; ! , r. .,■ /,,!•; : .i'jt/ub ■:/•;■< >-jJ Q. In the city of New York ? • • - >e. 'i.i.ik; .-JjnrO -jJdi '!-,...; A. In the city' of New York..!.,-. ,.,:; v .;. i y.-'>h;i .'j.iwiy v'-frsr Q. What were you in the year 1874 ?_..■< , j, :i( j ; j,j, i; < , j.-jr •-. a-jiii';,- , A. I was in the same business- ,:. .., ■ , "., , ,.,; '- /:■ Q. Have, you been acquainted, with , the. securities, .known as. th,e Alabama, South Carolina and .North i Carolina bonds, issued, by those several States? , . .. .... ,,.;.. A. I have. , , ■ Q. And are, now? , . .,, _• , ,., ^ ,,,; Aj I am; yes, sir. -, .,, ,,.,,; Q. Did you know, about them in the year 1874? a. i did. /;;;" ., . , ;''" : ' /<( ". " Q. Do you know how many classes ,of bonds there were known in the market here of the South Carolina bonds ? '. . ' . A. In what time ? • Q. In the fall of 1874 ? A. Yes, sir; there were three classes of those bonds known and dealt in at our New York Stock Exchange' in that year. ■ Q. Of the South Carolina bonds ? A. Yes, sh\ Q. What were they known as? A. They were' known as the old Soitth Carolihas. the January and Julys, and the Non-fundables. ■ Q. Were they not known as Fundable and Non-fundable ? - A. The two first classes were of the fundable kind. Q. And the last non-fundable ? A. The latter issue were non-fundable or repudiated bonds. Q. Can you tell me what the value of those stocks was in the fall of 1874? A. What month? Q. September and October ? A. I have taken a memorandum from the quotations Of the New York Stock Exchange and it is briefly this, that the South Carolina, January and Julys were quoted at 17, and the .Non-fundables, or the repudiated issues, quoted at 6. By the Chairman: Q. Do these stock quotations mean that there were sales at those prices, or not ? 95 ■ A. There were sales at those prices, and that was the best bid at the time ; the most that could be obtained for them. By Senator ( St. .John: : Q. The old South Oarolinas-— how much were those? A. The old .South Carolinas,- the old ante-war bonds, were quoted at 20 at. that time. Q. Then you give the price of the three classes, the old South Caro- linas at 20,, the January and Julys at 17, and the Non-fundables '6? A. , Yes,, sir. r . , By Mr. McKeon: Q. Were the values of these classes published daily in the N. Y. Stock Exchange? . , A. Those were recorded daily; when there were not sales the bid- ding prices were recorded. Q. They were published in the price list of the N. Y. Stock Exchange ? A. Yes, sir, every day ; twice a day. Q. Were they also in the newspapers? A. The newspapers generally copy those things from the registered list issued by the N. Y. Stock Exchange. By Mr. Chapman : Q. What date were those that you have been giving? ' A. October 2d; we can get at the : prices most any day. By MjuMcEeoit:;- ,• •.'. .-; ■/,-■ i-.,. ■<.,.... Q. Give them on the 30th of September? > A. I will merely say' that the fluctuations in those stocks or those 'bonds would not vary much in the course of one, two or- three days; they were not an active stock in which large transactions were recorded daily, and they would not materially differ in the price from the date I have given you ; I guess I can turn to the list [referring to' the quo- tation of September 30th] : I find the> only difference is in the Non- fundables ; on that day they were quoted at 6-J, while on October 2d they are quoted at 6 ;,the Eundables were 17, and the old, bonds 20. Q. Turn to October 7th ? A. There is an advance in the January and Julys; they are quoted at 17f, and the Non-fundables at 6f, and the ante-war bonds, or the : old bonds, are 24. ■ .-..,:,.;■; Q. What are t,he classes of the bonds of North Carolina?. A. The North Carolina bonds that were dealt in and known on the ,,N. Y. Stock Exchange are thirteen different issues; in this report 96 [referring to Mr. Best's printed report, page 17] I notice there are fiv a different issues of bonds'; first the old issue or anti-war bonds are quoted on October 7th at 20j ; the two first items here come within the same price, 20^ ; then the North Carolina railroad bonds of the issue of 1854 are quoted at 42; the third issue of 1866 are quoted at '15 ; the issue of 1868 are quoted at 14 ; the last four items here would be put in the same category, and all known as new bonds; these would be quoted at 12^-. Q. Now, I will take the Alabama bonds; can you give us the price of the Montgomery and Enfala, Alabama, bonds in 1874, October 7th ? A. I have never seen a recorded sale of those bonds but once ; I mean the sales of the Stock Exchange ; I could not exactly say what date it was ; it was a sale at 90. Q. Had they any sale at all in October, 1874 ? A. There was no market for them at that time ; they were not sal- able in the market ; the regular Alabama — 45 was bid for them. Q. What was the price, on October 7th, of the regular Alabamas ? A. There was no quotation at that date ; those bonds were not actively dealt in. Q. Now, about the Tennessee bonds; was there more than one class of those ? A. On what date ? Q. October 7th ? A. On October 7th I find recorded bids for the Tennessee bonds. Q. Take first the issue of January 1st, 1866 ; see what the price of those is ? A. Those Tennessee bonds I would say a fair quotation at that date would be 54. Q. What is the next kind ; are they all one kind ? A. There is no distinction and no difference in the prices at that date. By Mr. CnATMAN : Q. That is, of all four of these items that you have before you on that page ? A. Yes, sir; that would cover the whole thing; they would not materially differ either way. By Mr. MoKeon : Q. Were not all these prices you have been speaking of advertised in the list of the public Stock Exchange, and in the newspapers generally ? A. The sales and the purchases and the bidding of those bonds are 97 recorded every day on the registered list, issued by the N. Y. Stock Exchange. Q. From what have you given your statements as to the values and prices of these stocks in the present examination ? A. I have given it from the registered stock list, issued by the N. Y. Stock Exchange. Q. And which is before you ? A. And which is before me ; I preserve a copy of those in my office for reference. Q. It is the printed list published by the N. Y. Stock Exchange, twice a day, isn't it ? A. Twice a day. Q. And distributed in Wall street ? A. Distributed amongst the members of the New York Stock Ex- change, and also amongst outsiders and the newspapers to copy from when applied for. By Senator Wbllman : Q. Had the State ever paid any interest at all upon the Alabama railroad bonds ? A. Prom my knowledge the State never did pay on those bonds. Q. I ask you whether the interest was ever paid ? A. My opinion and belief is that the State never paid interest. Q. Did any of the other parties ever pay it ? was the interest ever paid? A. I believe and am of the opinion that the railroad furnished the money to pay the interest. Q. Was the interest actually paid at any time after their issue ? A. Yes, sir ; the interest was paid. Q. Up to what time ? when was it repudiated for the first time ? A. Those bonds were issued in 1870, but they had not passed out of the hands of the railroad company ; they were not put on the mar- ket, I think, until 1871 or 1872, and my belief is that there were two coupons paid on them ; the railroad company that they were issued to held them in their own hands, and evidently went to work and cut off the coupons ; I know when they passed them out of their own hands or sold them, they furnished the money to pay the interest. Q. Can you tell at what time the interest first ceased to be paid on these bonds ? A. My impression is that they ceased in September, 1873. Q. That is, that was the last payment of interest? A. The last payment was March, 1873. Q. That is simply your impression ? if we should bring some person 13 98 on to the stand here to prove that he received interest in March, 1874, you would think you were mistaken ? A. No, I am sure I am not; I know I went to the office where the interest was to be paid, or where they announced it would be paid, and presented some coupons, and they were not ready or did not have the money to pay it. Q. When was that ? A. It was in March, 1873, but they paid afterward. Q. So that the March interest was paid ? A. That is to the best of my recollection. Q. Was that paid by the State or the railroad company ? A. When I go to their office, I do not ask who furnishes the money. By Mr. Chapman : Q. Then you don't know whether the railroad company furnished it or whether the Jtate furnished it ? A. No, sir ; I do not. Q. There were certain of the South Carolina bonds, I understand you, that were repudiated at a certain time; when was that they first refused to pay interest on them, or principal ? A. They refused to pay interest in January, 1872. Q. That is some of these bonds that are specified here ? A. Yes, sir; the whole of that issue that I examined for Mr. Best, as receiver. Q. The Non-fundables ? A. The Non-fundables and the others also; they all ceased to pay interest at the same time, which was January, 1872; then, in 1873 the legislature had met and passed a funding bill, aud in June, 1874, we ascertained from the capitol at Columbia that some of those bonds were repudiated. Q. Some of them ? A. Which was a majority of them ; there were 141,000 repudiated. Q. When was your attention first called to the value of these stocks ? A. I don't remember the date ; I think it was when Mr. Best took possession of the bank ; he sent down a messenger to ascertain and get the values, and I furnished him the prices at the time. Q. Did you furnish him the prices in 1874 that you have given here ? A. Not 1874 ; but I did furnish him the prices, I think, in 1876. Q. Did you furnish him the prices as of 1874 ? A. No ; I believe not; I have copies of the letters here; I furnished him the prices December 30, 1875. 99 Q. These stocks to which you have alluded vary in price, between the dates of October 1, 1874, and January 1, 1875 ; some days higher and some days lower ? A. They vary very little ; half a cent or so. Q. Were there any other stocks on your stock register that varied, during those times ? A. Yes, sir ; they all varied ; all governed by demand and supply. Q. Take the municipal bonds from October, 1874, to January 1st, 1875, was that an increase in the value of those bonds ? A. Municipal bonds that are dealt in at our stock exchange ? Q. Yes ? A. They generally increase as the interest ^accumulates, say about half a cent a month. Q. I am not asking you all that ; I am asking you whether you know that they did increase from October 1st to January 1st, 1875 ? A. If you will allow me to refer to my register. Q. Certainly ; refer to any thing ? A. What particular bonds do you refer to ? Q. Well, the Brooklyn park bonds ? A. What dates ? Q. Prom October 1st down to the latter part of December, 1874 ? A. I find the Brooklyn city bonds, water loans ; they are put at 95£ the first of October, and about 99 the 28th of December. By Senator St. John : Q. How much accumulated interest between that time ? A. Three months ; If per cent. By Mr. Chapman- : Q. Those are the Brooklyn park ? A. Those are the Brooklyn water loan ; there is no quotation for the Brooklyn park bonds. Q. Were Bochester bonds on the stock board at that time ? A. No, sir ; those are never on the stock list. Q. Were Buffalo bonds on the stock board ? A. No. Q. They did not have any market value ? A. Oh, yes. Q. They were not salable at the stock board ? A. They are not dealt in or called on ; they are never dealt in on the stock exchange; they are not on the list; they are not admitted. Q. These Alabamas were not admitted there ? A. Oh, yes, they were admitted ; they are called every day. Q. Where there are no sales ? A. No sales. 100 Q. Called every day ? A. They are called everyday; no quotations made for them ; no buyers. John F. James, a witness, being duly sworn, testified as follows : By Mr. McKeon : Q. What is your occivpation ? A. Eeal estate. Q. Where do you live ? A. 306 Schemmerhorn street, Brooklyn. Q. Are you acquainted with the value of real estate in Brooklyn ? A. Yes, sir. Q. How long have you been engaged in the business ? A. Twelve years. Q. And you have been in the habit of buying and selling real estate ? A. Yes, sir. Q. Do you know the property kown as 30 and 32 President street, Brooklyn ? A. Yes, sir. Q. Known as property belonging to the Mechanics and Traders' Savings Bank ? A. Yes, sir. Q. Will you give the value of those two pieces of property in the fall of 1874, in October ? A. The piece on the corner of President and Van Brunt streets — I should say about $14,000, and the other one about $8,000. Q. Is it next door to the corner ? A. Yes, sir. Q. Did not you sell that property lately ? A. I did, sir, at public auction. Q. What did the first piece bring ? [Objected to. Question withdrawn.] By Mr. Chapman : Q. There is a building that was erected as a bank building ? A. Yes, sir. Q. And another building ? A. A three story brown stone next to it, and a stable in the rear. Q. Do you take that in connection with the brown stone front ? A. Yes, sir; it is all on the 100 feet in depth. Q. The cost of those buildings was very much more than that, wasn't it ? A. Yes, sir; it was unfortunately put in a wrong location ; prop- 101 erty of the same kind put in another location would have been worth a great deal more money, but that is. right down in the tenement neighborhood. Q. About what would be the cost of that brown stone building in 1870 or 1871 ? A. Probably $8,500 to build it. Q. Just the building alone, saying nothing about the land ? A. Yes, sir. Q. And the bank building ? A. I have not the least doubt but what it would cost $20,000 to build it. Q. Would not it cost $30,000 ? A. No, sir; I don't think it would; but I should think it would cost $20,000. Q. The building alone? A. Yes, sir; it is a very well built building; one of the best, prob- ably, in the city ; but unfortunately it is in a wrong location, and used now as a tenement. Q. Mr. Jackson was here this morning, and he says real estate com- menced depreciating along about the latter part of 1874 or the fore- part of 1875 ; would that be your opinion ? A. Yes, sir; after 1872. Q. Your idea would be that it commenced depreciating in 1873 ? A. Yes, sir ; you might take a part of 1872 ; after the spring of 1872. Q. Brooklyn felt it the first of all ? A. I would not like to say that; I don't think it felt it any quicker than other places ; of course I felt it in Brooklyn, for the reason that I was doing business there. Q. It has been constantly falling ever since ? A. Yes, sir. Q. Depreciating in value ? A. Yes, sir. Q. The depreciation has been from 40 to 50 per cent ? A. Fully 33. Q. Of course as to what the value of those buildings may be is purely a matter of opinion, isn't it; one man may have an opinion that the value is higher than another? A. It is only what we can sell the property for; that is the way we figure on real estate. Q. This is merely your opinion in regard to it ? A. Yes, sir; if you asked a builder to estimate it would be a differ- ent matter — if you asked him what it would cost to put a building there. 102 By Mr. McKeon : Q. You don't know when this house was built at all? A. I think it was, as near as I can remember, some 13 or 14 years ago ; it may be a little less than that ; I am not positive about that. William J. Best, recalled. By Mr. McKeon : Q. Did you examine into the condition of the bank immediately after taking upon yourself the office of receiver ? A. Yes, sir. Q. Can you tell me what the deficiency was in this bank when you became receiver ? [Objected to. The committee decide that, as the time when r.he affairs of this bank went into the receiver's hands was subsequent to the time when Mr. Ellis handed over the whole matter to the attorney- general, the question is not proper.] Q. Can you give me the number of depositors in this bank ? . A. At the present time ? Q. When you came in as receiver? A. About 3,300, I believe; in that neighborhood. Q. What percentage have you paid to those depositors ? A. Sixty-five cents on the dollar, Q. Have you any assets remaining in your hands ? A. Yes, sir. Q. What do they consist of? A I have some bonds and mortgages in process of foreclosure. By the Chairman : Q. What amount of bonds and mortgages ? A. The exact amount I could not state ; I can give it to you exactly from the books. Q. About the amount ? A. I can only guess at it; it will be from fifty to sixty thousand dollars, I should say, on bonds and mortgages. Q. That you regard as collectible? A. I won't say that ; they are in process of foreclosure. Q. Any other assets than those ? A. The real estate that has recently been sold, a portion of which has not yet been paid for. By Mr. Chapman: Q. Which of these pieces of real estate have you got ? A. I have four pieces of real estate which have not been disposed of, as follows: the bank building; 227 East 45th street; 30 President street, Brooklyn, and 32 President street, Brooklyn. 103 Q. You have got all the real estate then that the company had in 1874? A. Yes, sir; I have all that they had in 1874. By Mr. McKeon : Q. Now in regard to the personal property ; you have got these bonds of North Carolina ? A. I have 113,600 of North Carolina bonds. Q. What kind ? A. According to the statement there ; the first bond I sold, because it was more valuable than the rest. Q. Are they funded ? A. These are regular North Carolina bonds, all recognized, all except the first bond, I believe, or the second ; there is one bond of a thousand dollars that I sold. Q. You have got all ? A. All the North Carolina with that exception. Q. Then the South Carolinas ? A. All except 14,000 ; 1 have 141,000 of South Carolinas ; those are the Non-fundables. Q. Then the Alabama ? A. 166,000. Q. How much of the Tennessee ? A. None; I sold the Tennessees ; then there are the fixtures and carpets, and the office furniture. Q. Have you sold the safe ? A. The safes are inside the building, but 1 think I can sell those ; they will be sold next week. By Mr. Wellman : Q. Any cash on hand ? A. The cash is very little ; not any more than the expenses; for the second dividend, I got all the money together that I could get ; the cash now available on the new dividend is trifling, a few thousand dollars, as we have been making but few collections. Daniel A. Moran, recalled. By Mr. McKeon : Q. Will you present a list of the stocks and their values in Septem- ber and October, 1874? A. The following is a list : 104 " New York, Oct, 13th, 1876. N". Y. City 6's, due 1875-79 95 and interest. N. Y. City 6's, due 1890 95 1ST. Y City 7's, due 1900 103 Brooklyn 7's, due 1915 102 100 Buffalo 7's, due 1890 b? " 100 Kochester 7's, due 1903 59 Oswego 7's, due 1888 98 Yonkers 7's, due 1890 98 Brooklyn 7's, due 1885 , 100 Morrisania 7's, due 1890 96 Westchester 7's, due 1890 96 Sept. <£■ Oct. '74. The above quotations are those for all July 1st, 1874. D. A. MOEATST." By Mr. Chapman : Q. The values in July of the Rochesters and Buffalos was 99 as first written in your statement ? A. Yes, sir. Q. And the only changes you have quoted on that paper have been an appreciation of bonds in two instances, September and October ? A. Yes, sir. Q. Those are what bonds ? A. The Buffalo bonds and the Rochester bonds. Q. They in September and October were sold at par? A. Yes, sir. Q. Do those give the buying or selling prices? A. These give about the bidding prices. For instance, these were taken in September and October, or it might have been on the last day of October; they are not transactions made every day ; sometimes be- fore we have a transaction in Buffalo bonds three or four days might elapse; maybe a week; then again we might goon two or three days at a time and have transactions. Q. Those figures merely indicate transactions when you were able to get at them ? A. Yes, sir. Q. When there was a sale made and a record of it ? A. Yes, sir. Q. Have you a knowledge of the fact that in December following, those muncipal bonds had appreciated in value, that is in December, 1874? 105 A. I have not a positive knowledge, but would naturally suppose they had appreciated. Q. What is the difference between your buying price and your sell- ing price ? A. Sometimes large atid sometimes small ; sometimes a big differ- ence ; the average is from 1 to 5 per cent. Q. These are generally bidding prices ? A. Yes, sir. Q. Suppose a man goes to you to buy certain of these municipal bonds, would you give him the same price as yon would if he came to you to have you sell them ? A. Certainly not. Q. The difference, you say, ranges from 1 to 5 per cent ? A. Yes, sir. By Mr. McKeon : Q. Do you think there would be a difference of 5 per cent with any of these bonds mentioned in this list? A. In what way ? Q. He asked you if there was a difference, and you answered, that there was from 1 to 5 per cent between the buying and selling price ? A: On some of them there would be, and on others there would be a difference of perhaps one-fourth per cent. By Senator St. Johjst : Q. Is not this the fact, that in all city stocks and government bonds, and State stocks that are current in the market, the dealings are gen- erally executed at one-quarter or one-half per cent? A. Where there is no quotation — Q. I do not speak of where there is no quotation ; I speak of bonds that are quoted every day on the market ? A. No, sir ; we buy them as cheap as we can and sell them as dear as we can. By Mr. McKbon : Q. Of all the stocks on this list, what stocks have appreciated in value ? [Objected to. Question withdrawn.] Q. There has been an increase in the value of those bonds? A. Yes, sir. William J. Best, recalled : By Mr. McKeon : Q. Have you a minute book of the bank ? 14 106 A. Yes, sir [producing a book]. Mr. McKeon offers in evidence the minutes, commencing April 13, 1874. The committee state that all portions of the minutes bearing upon the question now before this committee may be received in evidence. Adjourned to April 30, at 10 o'clock A. M. New York, April 30, 1877. The committee met pursuant to adjournment. Present — Senators Coleman (chairman), Wellman and St. John. Leopold Seldner, witness called on behalf of the bank superintend- ent, being duly sworn, testifies: By Mr. Chapman : Q. Where do you reside ? A. I live at No. 157 One Hundred and Sixteenth street. Q. What is your occupation ? A. Real estate agent. Q. How long have you been such ? A. Since 1870. Q. Are you acquainted with the Mechanics and Traders' Bank building ? A. I know the building. Q. Are you acquainted pretty extensively with the value of real estate in that vicinity t A. I have been living around in that neighborhood for the last seven years. Q. What, in your opinion, was the value of that bank building in September and October, 1874 ? A. You mean the ground and the building? Q. Yes? A. I should think it was worth $100,000, $105,000 or $210,000. Gross-examination by Mr. McKeon : Q. On what basis do you make that calculation — on the rent it would yield ? 107 A. No, sir; I make the calculation on the ground and on the building. Q. How deep is the lot ? A. 1 think the lot is about 75 feet ; I don't kuovv exactly. Q. You have not measured it? A. No, sir; only passed it. Q. How wide is the lot ? A. I think it is. about 21 to 23 feet wide. Q. Have you measured it ? A. I have not. Q. Have you been in the building ? A. I have been inside; I passed by there every day; my office was 243, which was the next corner to the German Exchange Bank; and 1 have left there two years, and I am now at 156 Bond street. Q. Can you tell me the width of the lot ? A. I think 21 or 23 feet. Q. You have not measured it ? A. No, sir. Q. Do you know what the building cost ? A. I think, at that time — to go back three or four years — it was worth from $35,000 to $40,000. Q. Where was there a lot bought? A. In the Bowery. Q. Between what streets ? A. If you commence at Canal street, all the way up, I may say, to Third street, I offered for a corner lot, at Third street, $65,000, 21 feet, I guess, by 100. Q. When was that ? A. I guess that was about four years ago. Q. 1873? A. Yes, sir. Q. Do you know of any lots that were sold on that block withiu the last five years ? A. I know some property that has been sold. Q. Do you know of any house and lot that has been sold ? A. Building lots — no, sir. Q. Do you know of any on the opposite side of the street ? A. I know of a house and lot being sold. Q. On the opposite block? A. Between Bleecker street and the next street. Q. Do you know the name of the street ? A. I know it is Bowery; it is from Bleecker street to the next street; I think it is Houston street. Q. Do you know the street which is south of the bank ? 108 A. I do. Q. What is the street south of the bank ? A. First comes Houston street, and then First street. Q. What is the next street ? A. Second street. Q. On the opposite side of the way? A. Then comes Stanton street. Q. What is on the opposite side of the street ? A. Bleecker street. Q. What is the street below it ? A. I guess after Bleecker street comes Prince street or Spring ? Q. Do you know whether it is Spring or Houston ; give me the names of the streets from Broome street upon the west side ? A. First comes Second street. Q. On the west side ? A. Broome, and then comes Prince, then comes Spring, then comes Houston, and then Bleecker, and then Bond. Q. Between Prince street and Bleecker, can you tell me of any sale there within the last five years ? A. I guess two or three years ago there were sales made ; Mr. Irving sold his building there, I believe. Q. When was it sold ? A. I guess it was offered three years ago ; I am not sure. Q. Can you fix any thing about the date ? A. Well, may be three years, I guess; I am not sure of it. Q. Do you know any thing about a sale there ? A. I do. Q. You are not sure of it ? A. I am not sure of the time of the year. Q. Have you any memorandum of your own ? A. If I sold a piece ? Q. Have you any books of sale ? A. Yes, sir. Q. Will your books show any sale ? A. I didn't make that sale myself. Q. Do you keep any memorandum of sales in the neighborhood there ? A. No, sir ; we keep the real estate record there. Q. You don't keep any thing else there ? A. Except what we sell ourselves. Q. When did real estate begin to fall ? A. Real estate commenced to fall from about 1874 to 1875 ; in the spring of 1875. Q. Not before that ? f' 109 A. Not much before; I bought a house myself in January, 1875, for $30,000, and I cannot get to-day $16,000 for it. Q. Can you give me any sales on which you make your calculation of $100,000 for that in 1874 ? A. A gentleman pretty nearly opposite — I am not sure, but any- how, in that neighborhood — Robert Irving, sold his house to a Mr- Brown, in Staten Island, and, if I am not mistaken, he got $95,000 for it. Q. How big a lot ? A. A 25-foot lot, I guess. Q. What kind of a house was on it ? A. I think it was a four story brick building. Q. Where are you carrying on business uow ? A. 56 Bond street, near the Bond Street Savings Bank. By Mr. Chapman : Q. How long did you live in the immediate vicinity of this bank ? A. I have been living there from 1870 to 1875. Q. About how near the bank ? A. On the corner of Stanton street is the German Exchange Bank, and I have been living next to that. Q. How near is that to the Mechanics and Traders' Bank ? A. I think three houses. A. A. Gould, a witness called on behalf of the bank superintendent, being duly sworn, testified as follows : By Mr. Chapman : Q. Where do you reside ? A. 196 Prospect place, Brooklyn. Q. What is your business ? A. Real estate business now. Q. How long have you been engaged in that business ? A. Between three and four years. Q. Are you acquainted with the property located at the corner oi President street and Van Brunt street ? A. I know of the property. Q. Built jt\s a bank building ? A. Yes, sir. Q. And another building connected with it ? A. Yes, sir ; the house is brown stone front ; the bank building is brick. Q. How many stories high is the brick building ? 110 A. Three stories and French roof. Q. How many stories high is the brown stone building? A. Three stories and high stoop. Q. Are you acquainted with the value of real estate in that locality? A. I am somewhat. Q. Acquainted generally with the value of real estate in Brooklyn ? A. Yes, sir. Q. What was the value of that property in September and October, 1874, in your opinion ? A. My opinion is, it was worth about $30,000 then. • [Objected to by Mr. McKeon.] Q. What time, relative to 1874, were yon engaged in the real estate business ? A. I went into it in 1872. Q. What do you say was the value of that property ? A. I should think it was worth then $30,000. Q. Both pieces ? A. Both pieces ; yes, sir. Q. It cost much more, doubtless ? A. I should judge so, from the appearance of it. Cross-examined by Mr. McKeoit : Q. Did you ever buy or sell any of the real estate in that neighbor- hood ? A. Not immediately in that neighborhood ; no, sir. Q. How near to it ? A. On Park place I have sold property. Q. Half a mile from that? A. Perhaps a mile from that locality, I should judge. Q. When did you buy or sell that piece of property ? A. I think it was in 1872 I sold a brown-stone house there for $60,000. Q. Was that for yourself ? A. No, sir; for another party ; I bought one for myself 1868, in that locality, or where I now reside. Q. How far from this place do you reside ? A. About a mile, I should judge; it may be a trifle more. Q. This place you bought a mile from President street — what did you pay for it ? A. I paid $14,000. Q. In 1868 ? A. Yes, sir. Q. And keep it still ? Ill A. I keep it still. Q. What is it worth to-day ? A. I don't suppose I could sell il for fifty cents on the dollar. Q. You could not sell it for $10,000 ? A. No, sir ; I don't know as I can get fifty cents on the dollar for it to-day; I don't know that I can get any more than that, at the present time, for it. Q. When did you go to President street ? A. Saturday afternoon. Q. You went specially to look at it ? A. Yes, sir. Q. Were you not very much impressed with the fine building that was there ? A. I was not very much impressed, on account of the dilapidated state it was in, that is, the bank building particularly; the other looks very well. Q. Was it ever used as a bank ? A. I could not say. Q. Why do you call it a bank building ? A. It was called so to me ; portion of it is used for some mission purpose. Q. It never was used as a bank ? A. I don't know that. Q. Don't you know it was used for a private residence ? A. No, I don't. Q. What kind of a neighborhood is it ? A. The neighborhood looks well enough. Q. Any tenement houses around there ? A. There are a great many tenement houses around there; it is near a large sugar refinery. Q. Don't that deteriorate the value of it? A. There are tenement buildings around there. Q. Don't those two things take away from the value of that property ? A. It does, in a measure. Q Plow much would you give for that property now ? A. For the two, you mean ? ] Q. Yes? A. If I had money, I should think they would be worth $15,000 to- day. Q. Do you know of any sale in that neighborhood in 1874 ? A. No ; I don't think I do. 112 By Mr. Chapman : Q. You, at that time, were investigating in regard to the value of real estate around there, that came under your observation ? A. Yes, sir. Q. And you base your opinion on values, as of that date ? A. Yes, sir. By Mr. McKeok : Q. Who sent you to examine that building? A. Mr. Payne. William Brinherhoff, a witness called on behalf of the bank super- intendent, being duly sworn, testifies : By Mr. Chapman : Q. Where do you reside ? A. 105 East 6] st street. Q. What is your business ? A. Real estate broker. Q. How long have you been engaged in that business ? A. 26 years, to-morrow. Q. In the city of New York ? A. Yes, sir. Q. Are you acquainted with the Mechanics and Traders' Savings Bank building? A. Yes, sir. Q. Were you acquainted with the value of property in that locality, in 1874 ? A. Yes, sir. Q. What, in your opinion, was the value of this property in Sep- tember and October, 1874 ? A. I should judge it was worth from $100,000 to $105,000. Cross-examined by Mr. McKeon : Q. On what basis do you make that calculation ? A. On the value of property generally at the time, for the purpose for which the building was to be used, and the character of the build- ing's location. Q. What could it be used for. A. For a bank building or insurance building ; any corporation of that kind. Q. Have you gone and examined the property ? A. Yes, sir. Q. When? 113 A. I was there on Saturday. , Q. At whose request ? A. Charles E. Loew. Q. Is Mr. Loew in any way connected with the building ? A. No, sir. Q. Who is Mr. Loew ? A. He is president of the Eleventh Ward Savings Bank. Q. Now connected with it ? A. Yes, sir. Q. What is the size of the lot ? A. I should judge it was about 18 to 20 by 70 or 73, may be only 70 feet ; I didn't measure it. Q. Did you go into the bank ? A. Yes, sir. Q. Where did you go ? A. In the front door. Q. Did you go up stairs ? A. No, sir ; right on the first floor. Q. You only went to look on the banking room ? A. Yes, sir. Q. And you found one floor ? A. Yes, sir ; I have been in the building many times. Q. But you have never been up stairs ? A. No, sir. Q. You don't know how high it is ? A. Yes, sir. Q. How many rooms are there in it ? A. I know there is more than one story to it ; it is a banking building. Q. Did you go down stairs and examine it? A. No, sir. Q. Did you look at how it had been built ? A. No, sir. Q. Who would give $100,0»)0 for that building in 1874 — what could they use it for ? A. For any building purposes, or insurance purposes, or commission and brokerage business — private banking. Q. Do you know of any private bankers up there that pay a rent of $10,000 a year? A. No, sir; not in that locality. Q. Don't you know the insurance companies — the Old Bowery and those companies — have places of their own ? A. Yes, sir. 15 114 Q. Where were all the banks and all the [insurance companies that were likely to want such a building ? A. That depends entirely on their class of business ; the Bowery that you speak of has an office in the Butchers and Drovers' Bank building, corner of Bowery and Grand street. Q. They have got their own building, have they not ? A. I don't know whether they own the building or not. Q. You have been 26 years in the business ? A. Yes, sir. Q. Did you know a man of the name of Hudson, connected with the Eighth National Bank ? A. I did. Q. Was he in the real estate operations? A. I don't know any thing about his real estate operations. Q. Were you in any operations with him ? A. I was connected with him in some operations. Q. Were you not with him in speculations in real estate on Lexing- ton avenue ? A. Yes, sir. Q. Did they turn out badly, or good ? A. They turned out badly. . Q. And involved you very much ? A. Yes, sir. By Mr. Chapman : Q. Have you known any one else who invested in real estate, along 1874 and 1875, in New York city, that turned out badly ? A. Yes, sir; a great number of gentlemen. Q. Yow have known of persons of pretty good judgment that in- vested in real estate before 1874 that turned out badly ? A. Yes, sir. By Mr. McKecw : Q. Before 1871 you have known of the same thing, have you not ? A. Yes, sir. Q. This bank building was worth more to a company occupying it at the time, in possession of it, and using it as such, than it was to put upon the market, was it not ? A. Yes, sir. Q. And, to the company occupying it in September and October, 1874, it would be worth more than the $100,000 or $105,000, which you have mentioned ? A. I should consider it would be ; yes, sir. 115 Q. What you have given is the market value at that time, in your opinion ? A. Yes, sir. By Mr. McKeon : Q. Is Mr. Charles E. Loew, of whom you speak, the county clerk ? A. He was the county clerk. William J. Best, recalled on behalf of the prosecution. By Mr. McKeon : Q. Refer to the minutes of the board of trustees of April 13, 1874 ? A. [Reading] '' Mr Gregory offered the following : " Whereas, The financial condition of this institution does not warrant the payment of the present expenses, which are in excess of the receipts ; and, " Whereas, It is not right to pay the expenses out of the deposits ; andj " Whereas, It is the duty of the board of trustees to preserve this institution on a sound and healthy basis, for this purpose, therefore, "Resolved, That the annual salaries of the officers and employees shall, from the 1st day of May, 1874, be as follows : " That of the president, $ " That of the secretary, 8 ■" That of the teller, $ " That of the night watchman, $ ; and that the salaries of all other employees remain as at present. " Whereas, The duties assigned to the examiners can be performed by a less number. " Resolved, That from the 1st day of May, 1874, the number of ex- aminers be reduced to two. " Mr. Gregory stated that he had left the salaries blank in each case for the action of the board. "It was moved by Mr. Penn that the resolution be laid over until the semi-annual report in July, which was declared earned." By Mr. Chapman : Q. No one voting against it ? A. It does not state ; it was declared carried. Q. It don't show that any one was voting against it ? A. No, sir; the next reference to these minutes is on July 13th, 1874. 116 "The resolution of Mr. Gregory, submitted at a previous meeting, in the matter of a reduction of salaries, was then taken up, and it was moved by Mr. Fenn that Mr. Gregory's resolution be referred to Messrs. Tappen, Gregory and Floyd to report to "the next meeting as to the expediency of a reduction of salaries, and until he reported of its acceptance by the board the salaries shall remain as at present. " Mr. Kane moved as an amendment that the matter of a reduction be postponed until the December meeting. Under a call of ayes and noes declared lost. " Ayes— Bennett, Le Count, Boss, Smith and Kane. "Noes — Fenn, Sharot, Wilcox, Gregory, Tappen, Floyd. " Mr. Koberts not voting. " Mr. Fenn then moved for a division of the question, and under a call of ayes and noes the same was declared carried. "Ayes — Bennett, Roberts, Sharot, Wilcox, Le Count, Ross, Greg- ory, Smith, Tappen, Floyd and Kane. " Noes — Mr. Fenn. " That part of Mr. Fenn's resolution which refers to Messrs. Tap- pen, Gregory and Floyd, the question of the expediency of a reduc- tion of salaries, was then put, and under a call of ayes and noes declared carried. "Ayes — Sharot, Wilcox, Ross, Gregory, Smith, Floyd. "Noes — Bennett, Fenn, Lc Count, Kane. Mr. Roberts excused. "It was then moved by Mr. Fenn that the salaries of the examiners be continued at $100 a month until the committee report of its accept- ance by the board. " Mr. Ross offered the following substitute: " That the election of examiners be laid over until the next regula- meeting. Under a call of the ayes and noes the same was declared carried, "Ayes — Roberts, Bennett, Fenu, Wilcox, Le Count, Ross, Smith, Tappen and Kane. " Noes — Sharot and Gregory. Mr. Floyd excused." The next meeting was on the 10th of August. Q. When was the dividend declared ? A. The dividend was declared. By Senator St. John : Q. I want the time the dividend was declared, and what it was ? A. On the 8th of June that meeting took place at which the divi- dend was declared. Q. How much ? A. I shall read the minutes ; it was three per cent semi-annual dividend : " It was then moved, by Mr. Fenn, that the usual semi-annual divi- 117 dend and extension of time be declared and published by the officers, which was declared carried unanimously." On the 13th of Jnly reference is made to it again : " Mr. Gregory desired his protest entered against declaring a dividend without taking the call of the ayes and noes. Mr. Floyd, too, entered his protest against paying a dividend which he believed had not been earned. By Senator Coleman : Q. This was after the dividend had been declared ? A. Yes, sir. Q. And they commenced to pay that the 1st of July ? A. Yes, sir. By Mr. McKeon : Q. Go on ? A. The following was then offered by Mr. Tappen : "Resolved, That the resolution directing the payment of the usual half yearly dividend, passed by the June meeting, be re-passed in the following form, and by a vote of ayes and noes to be taken and en- tered : ''Resolved, That a dividend of three per cent for the six months ending July 1st, be declared out of the earnings of the institution and credited and paid to depositors entitled thereto under the rules. "Under the call of ayes and noes the same was declared carried. '■ Ayes — Roberts, Bennett, Fenn, Wilcox, Le Count, Eoss, Smith, Tappen and Kane. " Noes — Sharot, Gregory, and Floyd under protest." By Mr. Chapman : Q. He voted under protest ? A. I am reading from the minutes ; the next is a meeting of August 10th ; on August 10th Mr. Gregory, from the committee to whom was referred the expediency of a reduction of salaries, in the absence of the chairman, submitted a report ; after considerable discussion it was moved by Mr. Fenn that the report be received and laid on the table, and made the special order of the September meeting; under the call of ayes and noes the same was declared carried : "Aybs — Roberts, Bennett, Fenn, Wilcox, Le Count, Boss and Kane. "Noes — Sharot, Gregory and Floyd. "A. B. Tappen, absent. " It was then moved by Mr. Fenn that the officers pay the exam- 118 iners the same compensation as heretofore until changed by the board; under the call of ayes and noes the same was declared lost. " Ayes — Bennett, Wilcox and Kane. "' Noes — Sharot, Boss, Gregory and Floyd. " Messrs. Sharot, Floyd and Gregory protested against any payment. "Mr. Fenn then moved that the examiners be paid the usual salary for the month of July, and under a call of ayes and noes the same was declared without dissent." The next minutes are September 14th, 1874 : "A communication from A. B. Tappen, chairman of the committee appointed to report on the expediency of a reduction of salaries, was then read, and, on motion of Mr. Kane, was received and ordered on file. The special order of the evening, the report of the committee in the matter of salaries submitted at the last meeting, was then taken up, and after considerable discussion Mr. Fenn moved the following salaries be substituted for those named by the committee, the same to take effect from October 1st: " President, $3,000 per annum. " Secretary, $3,000 per annum. "Book-keeper, $2,000 per annum. " Teller, $2,000 per annum. "And examiners, $800 per annum each. " Under a call of ayes and noes the same was declared carried. " Aibs — Messrs. Fenn, Wilcox, Le Count, Ross and Kane. " Nobs - Gregory and Floyd under protest, Mr. Sharot not voting." By Mr. Chapman : Q. That was a reduction ? A. Yes, sir; they recommended one reduction, and the board of trustees made another; the report was placed on file. Mr. McKeon — Let us have that. Mr. Chapman — You now refer to schedule A. Mr. McKeon — Yes, sir. Mr. Chapman — This report I want in; it tells a story; I have no objection to its going in, accompanying the report ; indeed, I want it in, with the understanding that the pencil marks are all Mr. Best's. [Mr. McKeon offered in evidence the report of the committee, Messrs. Floyd and Gregory, dated August, 1874, with schedules A and B.] 119 lOOOOOOOOO- 5*000000000: » O O O id o ' o o o e- o >0 >0 O O 'O O "C 10 iO O O >0 'O CO o rHCOCO^CO^uOCOCVC^COi^lO o COCT3rHG00 Td a CO 17? CBODOQf/ltBCOQQCQaiaQCOCQCat/J OOOOOOOOoOOOOo sssaasssssasss ■^ co co rH CO CO to O CO CO « CO CO O lO •§ a lO T— I CO 3 o CO 85 8 a P Q oooooooooooooooooo oooooooooooooooooo OOOOOOOOOOOOOOOiOCOO lOOOOOOOOOOOOOOOt-OJO i-hOOOOOOOOOOOOOCOcOCO-* comoo^oooocoor- it-nooooto ^C-O^tHCit-COOlO nNri O io>oo rHOO"<0t- J C0'>*O»COO"0OOS>O)0i> COiOOHt-OlOCOCOCOOt-COTHO^t- **t-O^tH00CD»0C»"^ i-H 'X>i>S>-Jr-!>!^-t-t-!^C-?>t-^<3DCD00 P5 a OOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOO "OOOOOOOOOOOOOOOOOO i— iooooooooooooooocoo GOiOOOt-OOOOCoOrHt-COCOiO'ilco <*S>0^01^!00«J i— I 0* 1— I CDlOHtO 2>- C?3 rH G-,> H3 c3 3 ^ ^-^b b £ aOoo 53 a! OSS !h S 3 S o o WDOWOWPOPhM rf CO ■J5\S Is GO ,-C! a> o Pn> CD as ^^ B a o ° 2 B B i=l 3 £ P3 Ph c ^ -4J _CT 5" O g fn X C3 OT CO i^3 Td B B co -Q -° cg^° g asges bo ' o"2 -£ o ° in O ° 2oo O O CO OC c co co © CO i- cacoc c CO as CO €© rH r-l -# i— 00 t- lO lO lO 2> t- t- <3& «■ «» >•> J -^ -w 'o C a o g ~S t-H oc i — CO J3 o o © co t- © « OO'* CO c lOC^t co o e» i-i ■«* CO -^3 t- m c © o co •cs »-< *• £~ ^ co so © o s© CO CO o o o © CO I- © © ^h «S © ■>* ^d WHi be t- »o o '3 IO rH i> A CO CO S3 t» O o s CO CO r^ 00 +3 W £j CO o 1 ' r-l fl GO CO Cj « f ^ t/ >~; 1i O r- CO * CD - s o 5 c £ C£ -t- CO CO CO o © oo o -ts cc a CO fH[x CO a> -t- **■ y? c"c ! g ■4- a , o o c a. -13 o, c "S *?* CO CO ^hV > £j c €» as * t-l -4- CO n3 t a) a a M £ a .£ .£ 5S £ -(£ co '3 '5 o c S>5 c as a 1— rv ^ -t-3 -+- > ■Co N p co a j .j-rgr^ a r^J •— •■; a) a i p CO O 2 -+^ +- cc F h- F h- 0? PC a a -t- ! CO © CO © 7> © co ;* CD *^ "O CO fc "Eh o M Ph H -JJ ~> co co .. T3 'O » fl M •S3 e ~ 2 co CD co t- ca CO GO CO Oi E- CO © co © CO CO © t- © i> CO J> CO CO CD © -* O0 £- © lO io co co © CO I— I 3S co © CO a 3 o 03 03 ■s s ■O ti « 03 l" 2 ^ HH o o a CO "3 en p p 121 SCHEDULE B. Statement of Expenses for Six Months ending 30th of June, 1874. Salaries for six months , $9,850 00 Gas bill 29 15 Advertising 93 50 Petty cash book 73 86 Eeferee foreclosure, President st., $1,288.65; Joel W. Mason 24 00 Examining committee, property 47 00 Special examining committee, incidental 103 59 Gas bill 37 95 Petty cash 86 93 Insurance, $5,000, bank building 25 00 Insurance, 32 President st 8 75 Examiners, bank department 79 11 Gas bill 29 97 Petty cash 56 17 G. T. Clark, Virginia suit 104 50 Insurance, President st 18 75 Bank examiners 150 00 Gas bill 24 47 W. W. Sharp, annual advertising 226 90 Advertising, German paper 52 80 Advertising, German annual 131 20 Petty cash 44 12 Davies & Vanderpoel, law suit 1 , 750 00 Gas Co.'s bill 21 45 Koberts, stationery 71 15 W. W. Sharp, advertising 93 25 Campbell Bros., repairing 17 85 Petty cash 41 02 Insurance, President st 11 25 Gas bill 18 70 Petty cash 72 84 U. S. Revenue tax to June 1st 1 , 381 31 Jas. Ross, coal, $154 77 00 Plumbing bill, 32 President st 12 08 Plumbing, Mantello's bill 29 99 Plumbing, Mantello's bill 4 50 Interest on investment, President st., $21,510.92 752 88 Interest on investment, 33 President st, $7,044.47 222 26 Taxes, President and Van Brunt sts., 1873, $501.84 250 92 16 123 Taxes, 33 President st., $186.46 $93 23 Cash, to A. J. Conklin, Virginia 504 00 Water tax, President and Van Brunt sts 18 00 Water tax, 32 President st, and stable 27 75 Tax, bank building, 1873, $765 382 50 Gas bill, President st 14 70 Plumbing, 32 President st., Jan. 8 2 05 Plumbing, 32 President st., Jan. 26 5 15 Carpentering 3 50 Agent McDonough, commission 27 06 $17,206 11 Interest due depositors 73,574 66 $90,780 77 Amount of interest received and accrued, viz. : Bonds and mortgages $26,185 25 Stocks and bonds 43,474 55 Oriental and other banks 3,886 14 City revenue bonds 1 , 604 16 Yonkers bonds 23 33 Goulard bond and mortgage 17 26 Kents Brooklyn property 641 33 $75,832 02 Deduct interest on $3 , 800 $3. 23 Deduct one-eighth commission, Rochester 92 95 $75,739 07 Amount of interest credited to depositors on $2,565,178. 17, $73 , 574 66 Salaries 9,850 00 Taxes and revenue tax 2 , 107 96 Advertising 599 65 Coal and gas bill 253 39 Bank department , 229 n Insurance 63 75 A. T. Conklin & Clark, Virginia 608 50 Special exchange, commissions and property 150 59 Eepairs President street and gas 103 02 Agent McDonough 27 06 Petty cash expense 376 94 123 Davies & Vanderpool , $1 , 750 00 Other expenses 1,088 14 $90,780 77 75,739 07 $15,041 70 The Witness — I now read from the minutes of December 28th, 1874: "After some discussion in the matter of declaring dividends it was moved by Mr. Fenn that a semi-annual dividend of three per cent be declared and credited to depositors on the 1st day of January next, and that the same be advertised as usual. "Under a call of ayes and noes the same was declared carried. "Ayes — Eoberts, Fenn, Wilcox. Le Count and Kane. " Noes — Floyd and Gregory, under protest." By Mr. McKeon : Q. Now turn to the meeting of June 14th, 1875 ? A. "June 14th, 1875. It was then moved by Mr. Oonklin that the usual semi-annual dividend of three per cent for the six months end- ing June 30th, be declared and credited to depositors on July 1st, and the same be advertised as usual. Under a call of ayes and noes the same was declared carried. " Ayes — Eoberts, Bennett, Conklin, Fenn, Sharot, Wilcox, Le Count, McMurray and Kane. " Noes — Gregory and Floyd under protest." Q. Now, turn to December 31st, 1875 ? A. "December 31st, 1875. After some explanation as to our actually accrued earnings and receipts from interest and sale of securi- ties, it was moved by Mr. Kane, and seconded by Mr. Eoberts, that we declare our usual semi-annual dividend of three per cent for the six months ending December 31st, 1875, and the usual notices be advertised. Under a call of ayes and noes the same was declared carried. " Ayes — Eoberts, Conklin, Sharot, Wilcox, Le Count, Eoss and Kane. "Noes —Gregory." By Senator St John : Q. That is for January, 1876 ? A. Yes, sir ; that was the last dividend. By Mr. McKeon : Q. Now, the value of the southern securities ? 124 A. I now read from the minutes of November 20th, 1874: "It was moved by Mr. Fenn that the president, secretary and Mr. Gregory be a committee to report at an adjourned meeting the class and value of our North and South Carolina bonds, and the propriety of selling the same and investing the same in interest-pa) ing securities, which was declared carried." The vote was not given in that case. "December 20, 1874. " Mr. Gregory, to whom was referred the question of selling our North and South Carolina bonds, etc., reported that at the present market prices the bonds- would realize in round numbers about $60,000. It was thereupon moved by Mr. Fenn that the report be accepted, the committee discharged and the matter be laid upon the table until the January meeting, or such time as the board may choose to act thereon, which was declared carried." By Mr. Chapman : Q. Who were on that committee ? A. The president, the secretary and Mr. Gregory. Q. Who made the report ? A. Mr. Gregory. Q. You have read all there is in relation to the dividends ? A. Yes, sir. Mr. McKeon — That is all we offer. By Mr. Chapman : Q. What were the number of directors at that time — trustees ? A. I think the number was twenty in 1874. Q. On the declaring of these various semi-annual dividends it ap- pears that Mr. Floyd and Mr. Gregory voted against them ? A. Yes, sir. Q. What would be the effect upon depositors, supposing the majority of the board had agreed with them and voted not to declare a semi- annual dividend ? A. I cannot say. Q. What would be the effect on the bank ? A. I should say the depositors in the bank would have regarded it as not in a sound condition. Q. They would have become alarmed, and continued to withdraw their deposits ? A. Yes, sir. Q. And the effect of it would he it would be a substantial closing up of the bank ? A. Yes, sir. Q. And the bank officers would be compelled to have sold their 125 securities at any prices they could get so as to meet these calls of depositors ? A. Yes, sir. Q. Then the effect of the vote of Mr. Floyd and Mr. Gregory, the complainants in this case, was to injure the bank, was it not? A. I won't say that ; I cannot tell what the effect of the vote would be. Q. If the rest had acted as they had it would have closed up the bank immediately, would it not ? A. Yes, sir. By Senator St. John : Q. I suppose this bank had a set of rules and by-laws, as other banks have ? A. Yes, sir. Q. Have they not a rule which gives the bank sixty days to pay depositors ? A. Yes, sir. Q. And they can give notice to depositors that they will not pay under sixty days ? A. Yes, sir ; and they have enforced the rule on several occasions since 1873. Q. So it would not have been a sudden closing up; it would have given the bank sixty days lease of life ? A. Yes, sir. By Mr. Chapman : Q. And the majority of those trustees voted to declare a dividend ? A. Yes, sir. Q. And these two gentlemen voted against it generally ? A. Yes, sir. Q. And these two gentlemen are the complainants in this case ? A. Yes, sir. Q. It was on their affidavits that you presented your letter to Gov- ernor Tilden ? A. The affidavits and these minutes. Q. The resolution which you read appointed this committee to in- vestigate the question of the reduction of salaries, didn't it ? A. Yes, sir. Q. Nothing was said in the resolution about reporting in regard to the condition of the bank ? A. Nothing. Q. Nothing in the books, so far as you have seen ? A. No, sir. 126 Q. On that resolution which appointed them for the purpose of in- vestigating the propriety of reducing salaries these gentlemen went on and made a report as to the condition of the bank, did they? A. Yes, sir ; that is the record. Q. Mr. Tappen was oue of that committee? A. Yes, sir. Q. Mr. Tappen didn't sign the report ? A. No, sir. Q. That is Judge Tappen ? A. Yes, sir. Q. This report which I hold in my hand is the report which you found when you went in there, is it not? A. Yes, sir. Q. Yon notice an erasure and an interlineation in that report, do you not ? A. I don't see an erasure ; there is an interlineation there. Q. There is a crossing out and interlineation ? A. Yes, sir. Q. Read that which is crossed out; it purports to be giving the amount of the liabilities, does it not ? A. Yes, sir. Q. Read that clause as it stood before the interlineation, commenc- ing with the liabilities? A. ''Showing. that the liabilities exceeded the assets by $255,080.37. See schedule A attached to this report." Q. Read it now as it is interlined ? A. " Showing that the liabilities exceeded the assets by $181,505.71. ' Q. There is a difference between those two readings of about how much ? A. $73,574.66. Q. On the margin against that is written what ? A. " Less liabilities, interest credited to depositors, $73,574.06 ; error made on schedule A." (j. These interlineations are indifferent ink from the original report, are they not ? A. I should say they were. Q. Now, in this schedule A, attached to this report, in the first place there is entered a deficiency of $255,000, is there not ? A. Yes, sir. Q. And subsequently, in different ink there js entered, " Deduct $73,574.66 ? " A. Yes, sir. Q. Leaving a deficiency of only $181,505.71. A. Yes, sir. 127 Q. And that is written in a different ink, and at a different time ? A. Yes, sir. Q. Now, I will ask you whether you do not know that those gentle- men who, in this report, say they have very carefully examined and considered the condition of the bank did not discover, after they had made the report to the bank, an error of $73,000, which they inter- lined ? A. That I know nothing of ; that is the paper as I found it ; I know nothing of it except as you have it in your hand. Q. These minutes which you have read indicate there was this dif- ference of opinion between these gentlemen, and other members of the board of directors ? A. Yes, sir. Q. And the superintendent's letter to the bank shows that he was cognizant of that fact, does it not ? A. Yes, sir. Q. And he advised them against continuing these quarrels ? A. Yes, sir. Q. You do not know whether there were any more complaints made to Mr. Ellis from 1874 down to the time of closing the bank ? A. I do not; there is nothing in the books to show it. Q. Is there any thing in the minutes here to indicate as to the length of time Mr. Ellis and Mr. Eeid were examining this bank ? A. No; I don't think that any length of time was indicated. Q. Let me call your attention ; read the following: A. " The chair then stated that the complaint made to the attorney- general by two of the trustees, had been by him submitted to the superintendent of the bank department; that the superintendent, in company with Mr. Eeid, as general examiner, had spent a week in ex- amining into the condition of the institution, and the result of their labors and calculations are submitted in a letter which the secretary here read to the board." Q. Do you recollect Mr. Gregory swearing the other day, that he didn't hear any such letter read ? A. I remember the question, but I do not remember his answer. By Senator Wellman : Q. What is the date of the minute ? A. November 9, 1874. By Mr. Chapman : Q. It also appears from that which you read, that there was one complaint by these gentlemen in regard to the amount of the salaries of the officers ? 128 A. Yes, sir. Q. And Mr. Ellis in his letter also told them they ought to reduce the salaries, did he not ? A. Yes, sir. Q. Do you know from your examination of the books that the sal- aries were reduced ? A. No, sir. Q. Do you know whether they were or not ? A. I think they were reduced in 1876; I won't be sure. Q. They were reduced in 1874? A. They were reduced to $3,000 from $5,000. Q. "Were they not reduced in 1875 ? A. I think they were ; it was in the latter part of 1875, or early in 1876, that there was another reduction. Q. Then the salaries were reduced after the receipt of the letter from Mr. Ellis ? A. Yes, sir. Q. There was a reduction before, and a reduction after ? A. Yes, sir. Q. Prior to the time Mr. Ellis took his position as superintendent the expenses of the bank had been large, had they not? A. Yes, sir. Q. Up to $23,000 and $24,000 ? A. Yes, sir; and as high as $34,000. Q. That was prior to the time Mr. Ellis came in ? A. Yes, sir. Q. Under a former superintendent ? A. Yes, sir ; I suppose so. Q. He came in February, 1873 ? A. Yes, sir. Q. Do you know that from February, 1873, the expenses of this bank for salaries to officers were being constantly reduced each year? A. Yes, sir ; I do. Q. Reduced in 1873, when Mr. Ellis first went in ? A. No; not when he first went in ; they were not reduced in 1873; I think they were not, but I won't be positive; there was a reduction made. Q. Were the salaries $34,000 in 1873 ? A. No; the expenses. Q. I am going to salaried officers; were not the salaries of officers reduced, so that in 1873 they were $10,000 less than what they had been ? A. No, sir ; the salaries were not reduced in any such proportion. 129 Q. They were not? A. No, sir; not $10,000. Q. Between 1872 and 1873, had they not been reduced ; I will ask you whether in 1872 the expenses of officers, etc., with insurance premiums, were not $34,500 ? A. Yes, sir. Q. In 1873, were they not reduced to $23,900. A. I cannot tell you without a memorandum ; I have it all taken off here. Q. [Handing memorandum to witness.] Well, I will give you the memorandum ? A. Yes, sir; $23,900. Q. In 1874 you have entered $24,282 ? A. Yes, sir. Q. Do you know that about $2,000 of that was payment for litiga- tion caused by these men, Floyd and Gregory ? A. They paid the expenses, I think, during that year. Q. Nearly $2,000 ? A. No; this was the year they paid for the litigation, in 1875. Q. They paid Davies and Vanderpoel $1,750 in that year for litiga- tion caused by Floyd and Gregory ? A. Yes, sir. Q. Making that reduction, is not the amount which this bank paid for salaries in 1S74 less than it was in 1873 ? A. Yes, sir; of course it is less; no, not in salaries; the reduction was in all expenses ; the salaries amounted for the six months — Q. I want you to answer my question ; in 1875 there was a very material reduction, was there not ? A. Yes, sir. Q. The expenses were how much, in 1875 ? A. Eighteen thousand and odd dollars. Q. That was the year after Mr. Ellis examined the bank, and after Mr. Ellis had written this letter to the officers? A. Yes, sir. Q. There was a reduction of about $8,000, was there not ? A. No, sir; $6,000 that would be. Q. And during the next year, up to the 10th of June, the amount paid was only $5,500 was it not ? A. Yes, sir; but that did not include the salaries that had accrued; some salaries had accrued and were not paid at the time of the con- cern going into insolvency; there were other salaries due which I am paying the dividends on now, with other matters. Q. Then it was about $6,000 from the 1st of January, 1875, to the 10th of July, 1876 ? 17 130 A. Yes, sir. Q. It appears from those figures that from the time Mr. Ellis went in there had been a material change in the action of the bank in ac- cordance with his suggestions ? A. There has been a change in reducing all the time. Q. A very material change ? A. Yes, sir. Q. In accordance with the suggestions in his letter? A. Yes, sir ; I should say so. Q. [Handing report to witness.] Look at that report and say whether they make any recommendation in regard to the reduction of the salary of the president at all ; is there any recommendation as to the salary of the president at all ? A. No, sir; there has been a recommendation, but it is crossed out. Q. As to amount ? A. Yes, sir. Q. Will you read it ? A. I cannot read it, because that has been very perceptibly scratched. Q. But it has been in your hands since you became receiver ? A. Yes, sir. Q. You didn't scratch it out ? A. No, sir. By Senator St. John: Q. During these years, 1873, 1874, and 1875, were the deposits of this bank largely decreasing — becoming a much smaller concern than it had been ? A. Yes, sir; they were running down steadily. Q. They were very much reduced in amount ? A. Yes, sir. By Mr. Chapman : Q. Commencing October, 1875, did not the depositors commence drawing out rapidly from this bank ? A. Yes, sir. Q. And continued down to June, 1876? A. March, 1876 ; then they enforced the sixty-day rule. Q. In the month of March, 1876, they drew out more than their deposits, some $;il2,000 ? A. Yes, sir; that is the record. Q. So that the depositors evidently became alarmed in the latter part of 1875? A. Yes, sir; in the fall. 131 Q. And pretty soon after the commencement of this suit by Mr. Floyd against the^bauk ? A. I don't know as to the time of the beginning of the suit; it was in 1875; I think it was in the spring of 1875. Q. But it went along into summer ? A. Yes, sir; I think it was in the summer it was decided. Q. And the effect of that became noised abroad, and the depositors became alarmed? A. Yes, sir. Q. As indicated by these withdrawals? A. Yes, sir. Q. These gentlemen were not then working in the interest of the depositors all the time ? A. That is not for me to say. Q. It didn't work for their benefit ? A. No, sir; it didn't. By Senator St. John' : Q. When the expenses of this bank, in 1873, were $23,900, how much property had they then to mortgage ? A. In July they had $3,931,348.95, according to the books. Q. Now, look in 1874 and 1875, on the 1st of July of each year? A. On the 1st of July, 1874, $2,565,252.83; July 1st, 1875, $2,436,520.85. By Mr. Chapman : Q. So that on the 1st of July, 1875, they had nearly as much assets as they did on the 1st of July, 1874? A. No, sir; nearly; yes, there was a difference of $120,000. By Senator St. John : Q. When you took possession of it, it was how much ? A. Less than a million and a half. Q. So that from July 1st, 1875, and largely from January 1st, 1876, there had been nearly a million of dollars drawn out, had there not — say from November, 1875 ? A. Beginning with October, 1875, I should say that all of a million dollars had been drawn ont up to the time of my becoming receiver. By Mr. Chapman : Q. Now, by reference to your minutes of November 9th, 1874, you find that the communication from the superintendent of the building department to the bank was written ? 132 A. Yes, sir. Q. What action was taken by the bank on receipt of that communi- cation ; read the action ? A. "It was moved by Mr. Kane, that the communication from the bank department be referred to a committee of five, consisting of the president, first vice-president, secretary, Judge Tappen and Mr. Eoberts, to report action thereon at an adjourned meeting, to be held on Friday, November 20th, at 5 p. m." Q. Who voted for that, or rather who voted against it ? A. " Mr. Tappen declined to serve. The resolution was declared carried, Messrs. Gregory, Floyd and Sharot asking to be quoted in the negative." Q. These gentlemen seemed to be opposed to obeying the sugges- tion of the superintendent of the banking department? A. I should say they were opposed to returning it in that way. Q. I will now ask you to turn to the minutes of the meeting of November 20, 1874, when the committee reported; read the proceed- ings : A. "The special committee to whom was referred the communication from the bank department submitted a report commending a compli- ance with the superintendent's suggestion in the matter of bonds, and also advising, in view of the fact that all good securities were advanced in price since the date of the superintendent's communication, that the committee be authorized to confer with him relative to a reduction in amount of such bonds, etc. It is moved by Mr. Fenn that the re- port of the committee be accepted and adopted, and under the call of ayes and noes the same was declared carried. "Ayes — Roberts, Fenu, Wilcox, LeConnt, Ross, Tappen and Kane. " Noes — Floyd and Gregory. " Mr. Tappen desired to explain, that while in favor of adopting the report he would leave the question of giving bonds to those trus- tees who deemed it their duty to do so." Q. It seems that Mr. Floyd and Mr. Gregory, the complainants in this case, were opposed to the appointing of a committee to communi- cate with the superintendent, and when the report came up in the board to agree with the suggestions of the superintendent, these two gentlemen voted against that ? A. That is the record there. Q. [Handing book to witness.] Now, in regard to some of these securities which Mr. Ellis is charged with having valued too high at this time, I will call your attention to the minutes of November 20, 1874; read that: A. "It was moved by Mr. Fenn that the president, secretary, and Mr. Gregory be a committee to report at an adjourned meeting the 133 class and value of our North and South Carolina bonds, and the pro- priety of selling the same and investing the proceeds in interest-pay- ing securities, which was declared carried." Q. Down to December 28 ? A. The meeting of December 28, 1874, Mr. Gregory Q. One of these complainants ? A. Yes, sir ; Mr. Gregory, the committee to whom was referred the question of selling our North and South Carolina bonds, etc., reported that at the present market prices the bonds would realize in round numbers about $60,000 ; it was thereupon moved by Mr. Fenn that the report be accepted, the committee discharged, and the matter be laid upon the table until the January meeting, or such time as the board may choose to act thereon. Q. Do you know the amount which Mr. Ellis put in the report as the value of the North and South Carolina bonds, when he examined it? A. No, sir; I do not ; I never saw his report. Q. [Showing witness original report.] Can you tell from that? A. $60,730. Q. Mr. Ellis valued those at $60,730, and Mr. Gregory reports them at $60,000 ? A. Yes, sir; Q„ This small depreciation in this large lot of bonds ? A. Yes, sir. Q. Do you know that some of these Tennessee bonds which are in Mr. Ellis' report, which Mr. Ellis valued at 58£, that some of those Tennessee bonds were subsequently sold by the bank at 65 ? A. I am not sure as to price they realized ; I can get you the actual figures they realized. Q. I wish you would bring that here ; now, I ask you to refer to your minutes of January 25, 1875 ; in the examination by Mr. Ellis, Rochester bonds were put in in October at par, were they not ? A. They are not here at par. 'Q. Now, on January 25, 1875, was it stated and recorded in the minutes that the Rochester and Buffalo City bonds were selling at present at 105£ ? A. Yes, sir. Q. The Rochester and Buffalo bonds are both put in at the time Mr. Ellis valued them at par — that is 100 ? A. Yes, sir. Q. And the interest had been taken off in the meantime ? A. That was with interest ; those were for 105 and interest ; that is the way those securities are always sold. Q. Then it would be 105£ and the interest from the 1st of January ? 134 A. Yes, sir. Q. That would be about 106 ? A. About 106. Q. [Handing letter to witness.] This is your letter to Governor Tilden, is it not, which I now show you ? A. Yes, sir. Q. The schedule marked A, attached to that letter, is in your hand- writing, is it not ? A. No, sir; it is in the handwriting of one of my clerks. Q. It was all made under your direction ? A. Under my direction. Q. The figures and writing ? A. Every thing there was made under my direction. Q. Made the day it bears date? A. No; probably it was made a few days before that time; within a few days. Q. In whose handwriting is the certificate purporting to be signed by Mr. Pratt ? A. That handwriting is the handwriting of one of my clerks. Q. The same one who wrote schedule A? A. No, sir; another one. Q. That certificate was drawn up by another of your clerks? A. Yes, sir. Q. When was that drawn up ? A. I suppose the day that it was sworn to ; I sent for Mr. Pratt, and I think he came down the same day, or the day after. Q. This certificate of Mr. Pratt appears to be on a different paper from the paper on which the schedule is? A. No, sir; it is the same kind of paper, but reversed ; it is legal cap turned upside down. Q. It seems to be attached to it ? A. Yes, sir. Q. Do you recollect that these figures were written in there at the time Mr. Pratt signed, or not ? A. That schedule was all made out before Mr. Pratt came to the bank ; all that I wanted him to certify was, whether or not those cov- ered all the assets of the institution up to that time, and not the market value. Q. This certificate does not certify at all as to the correctness of either the liabilities, or their amount, or their market value ? A. He certifies that it includes all of the assets. Q. He does not certify as to the market value, or the amount, or the amount of the liabilities ? L - A. No, sir. 135 Q. He simply certifies to the assets ? A. Yes, sir ; that is all. Q. And you carried out the prices of those assets? A. Yes, sir. Q. Did you call schedule A, to which I have called your attention, a balance sheet, which you sent to the governor ? A. I don't know that I sent it as a balance sheet. Q. Did you say to the governor that it was made up by Mr. Pratt? A. No, sir; I don't think I did. Q. When the governor, in his charge, which he sent to the senate, alludes to the proof of these charges, his first allegation is "a balance sheet made up by George 1ST. Pratt, who was at the time general book- keeper of the bank ; " did Mr. Pratt make out that balance sheet at all? A. No, sir; he didn't make it out. Q. He didn't, certify as to the values upon it ? A. No, sir ; he didn't certify as to the values. Q. You made those out ? A. Yes, sir. Senator St. John — I want to know what the valuation of these Alabama bonds was when this examination was made. Mr. Chapman — They were put in at 50. By Senator Wellman : Q. I would like to know the date of the meeting of the trustees at which the report was made in favor of the giving of the bonds, as sug- gested by the superintendent in his letter? A. November 24th, 1874; recommending a compliance with the superintendent's suggestion about giving bonds. By Mr. McKeon : Q. You have stated here that the depositors began to draw out their funds in the fall of 1875 ? A. Yes, sir. Q. Didn't they begin to draw out before that? A. Yes, sir ; they began to draw out back of that time, but heavily then. Q. When did they begin to draw so that it was noticeable ? A. It was noticeable in January, 1872 ; they drew out in that month, in excess of the deposits, $387,000. Q. Now, take 1873? A. November, 1873, the deficit was $48,000; March, $17,000; in April it was $45,000; in May it was $9,000; in June there was a sur- 136 plus of nearly $11,000 ; in July there was a deficit of $71,000 ; in August there was a deficit of $73,000 ; in September, $94,000 ; in Oc- tober, $20,000 ; in November, $32,000 ; in December, $20,000; in Jan. nary, 1874, $126,000. By Mr. Chapmak: Q. That includes the payment of the interest on the dividend ? A. Yes, sir; February, $39,000; in March, only $4,000; in April, $10,000; in May, $28,000; in June, 1874, there was a surplus of $5,000 ; in July, 1874, there was a deficit of $117,000. Q. That included the dividend ? A. Yes, sir; January and July; in August, $26,800; September, $18,000; in October, $27,000 in round figures ; in November, $9,000; in December, $9,000 ; in January, 1875, the deficit was only $7,000. Q. You declared a dividend also ? A. Yes, sir; in February, $25,000; in March, $13,000; in April, $27,000; in May, $12,000; in June, the surplus was nearly $25,000; the receipts exceeded the payments. Q. Aside from the payment of the dividend ? A. Yes, sir; in July, the deficit was $85,000 ; in August, $12,000; in September^ 33,000 ; in October, $81,000. Q. This is where the grab begins ? A. Yes, sir ; this is where the drain began ; in November, $162,000 ; in' December, $141,000; in January, 1876, $136,000; in February the deficit is $124,000; in March, $212,000; in April, $83,000; in May, $43,000. Q. So that the drafts commence in October, 1875, after those suits were commenced by Mr. Floyd and Mr. Gregory ? A. Yes, sir. By Mr. McKeon: Q. Didn't the report, made by the examiners in 1874, show a de- ficiency ? A. It shows a deficiency of income ; that is, an annual deficiency, and not for that time. Mr. McKeon — By the report made by the examiners, George W. Eeid, William F. Aldrich and Isaac H. Vrooman, to examine the bank March 31st and April 1st, 1874, it appears the following memorandum was made: "The large amount locked up in Southern State bonds, upon which interest is suspended ; the failure to rent real estate, and the balance of an old bankruptcy claim, have combined to reduce the income of the bank so much that a deficiency of over $14,000 will occur for the current year. The trustees hope to realize money from Southern bonds and the sale of real estate." 137 Q. Was that Goulard judgment ever paid ? A. No, sir ; but I consider it good ; I have returned it as worth its face ; it will be recovered; that is the Virginia case; it is not settled yet ; but it will be, I think. By Mr. Chapman : Q. Do you know how many different deficiencies have been found by these gentlemen and yourself in the state of the bank on July 1st, 1874 ? A. No, sir ; the only deficiency I know of fjis the one reported, and the one I made. Q. Do you know how many different deficiencies have been fixed upon by yon, Mr. Floyd and Mr. Gregory ? A. Only one by me, and I only know of one by Mr. Floyd and Mr. Gregory ; they are the only papers that came to me. Q. In the first report which Mr. Floyd and Mr. Gregory make to the board, they report a deficiency of $255,0110, do they not ? A. Yes, sir. Q. That is one deficiency '( A. Yes, sir. Q. That they subsequently correct by striking out $73,000 them- selves ? A. Yes, sir. Q. This report to the board, as thus amended, and the report after they have thus amended it, is a deficiency of how much ? A. Of $181,000. Q. You, in 1876, write this letter to the governor, in which you fix the deficiency in 1874 as $201,000 ? A. Yes, sir. Q. In the summons and complaint, already introduced in evidence here, Mr. Floyd and Mr. Gregory swear that the deficiency was $115,000 ? A. I don't know what th it is ; I have not read it. Q. By reference to that complaint you find the charge that on said date, the liabilities exceeded its assets in the sum of $115,000 ? A. Yes, sir. Q. All of these valuations which show these various deficiencies have been made as of 1874 ? A. Yes, sir, in regard to these gentlemen. Q. All of these valuations were made as of July, 1874? A. Yes, sir. Q. Yours was made as of July 1st, 1874 ? A. Yes, sir. Q. So here we have $225,000 deficiency, $201,000 deficiency, 18 138 $115,000 deficiency, and $181,000 deficiency, all as of the same date ? A. You will observe an item in my appraisement which differs from theirs ; the books of the bank are not correctly kept ; I put that in, and that made mine large. Q. On July 1st, 1874, the bank had cash on deposit, did they not? A. Yes, sir. Q. One hundred and two thousand dollars ? A. Yes, sir ; as near as I can remember. Q. Can you find in those figures which Mr. Floyd and Mr. Gregory reported a deficiency of $181,000, if they have got those figures ? A. No, sir ; they have not. Q. Then Mr. Moyd and Mr. Gregory made an error in the first place of $73,000, and after that was corrected there was still $102,000 cash in bank that they had not found ; is that not so ? A. This is not on the report. Q. So that from $181,000 should be deducted $102,000, according to their own figures ? A. Yes, sir. Q. Now, is there any thing in that report for office furniture and fixtures *! A. No, sir, there is nothing here. Q. Is the Goulard judgment in there? A. No, sir. Q. There is $10,000 more, is there not, that should be deducted ? A. Yes, sir. Q. So that from that valuation of these gentlemen made in August, 1874, for July 1st, 1874, there is $112,000 besides the $73,000 which they left out ? A. Yes, sir ; $112,000 from $181,000. Q. The whole mistake they made was $185,000, was it not ? A. Yes, sir. Q. That didn't indicate that they made a very careful examination, did it ? A. It did not, sir. Q. Had you discovered these deficiences at the time you wrote to the governor ? A. Which deficiencies ? Q. Their leaving out $102,000 cash, and $12,000 other items? A. Yes, sir ; I discovered all of those. Q. Did you call the governor's attention to that ? A. No, sir; I told him their statement was not technically correct. Q. Did you take up the letter to him ? A. No, sir ; I didn't take it to him. Q. You sent it to him ? 139 A. Yes, sir. Q. All you said to him then is contained in your letter to the gov- ernor ? A. Yes, sir. Q. You sent these figures of theirs showing $181,000 deficiency ? A. Exact copies of their papers. Q. Bead what you say in your letter to the governor about that ? A. " The details and figures furnished by this report are not criti- cally correct, some items having been omitted, but the amount of the deficiency is very nearly exact." Q. In order to make it exact, you have to put different values on these from what they put on ? A. I ignored their values entirely. Q. You had to put different values on these things in order to get the deficiency nearly like theirs ; in order to get the deficiency near $181,000, you had to ignore their values entirely ? A. Yes, sir. Q. If you knew that $112,000 should be deducted from the defi- ciency of $181,000 that you find, why didn't you call the governor's attention to that ? A. That appears in the papers themselves ; there is not a cash item in their account. Q. Did you call his attention to the fact that the cash item of $102,000 is left out ? A. No, sir ; I told him that some items had been omitted. Q. ' : The dates and figures furnished by this report are not critically correct, some items having been omitted, but the amount of the defi- ciency is very nearly exact." Was that thing ^calculated to mislead the governor ? A. It was not so intended by me. Q. You base your letter to the governor on those affidavits which were furnished by Mr. Floyd and Mr. Gregory ? A. And upon my investigation of the books of the concern. Q. And you find they report a deficiency of only $181,000? A. Yes, sir. Q. And you find a mistake of $112,000 in that, and you don't call the governor's attention to it in the slightest degree ? A. No, sir. Q. Then you go on and change these values according to your own notions? A. No, sir ; not according to my notions. Q. Then you go on and change those values, carry them out on this schedule A, which is. attached to the letter to the governor, and you get Mr. Piatt to sign this certificate to the effect that he has examined 140 the schedule hereto annexed, marked exhibit A, and that it includes all the assets of the said institution, and the governor, in allud- ing to this, calls it a balance sheet made by Mr. Pratt ; did you intend to deceive the governor, and lead him to think Mr. Pratt had made this balance sheet himself ? A. No, sir. Q. It is evident he was deceived by this paper you sent him ? A. I don't know how he could be. Q. Is it not true when the governor says as the first item of proof which he submits to the senate ; the balance sheet made out by Mr. Pratt, and when he says that, is it not evident he was deceived by this paper ? A. Yes, sir. Q. Is there any thing in your letter that would tend to undeceive him ? A. No, sir; there is nothing bearing on that point. Q. What use was there in getting the certificate of Mr. Pratt, as to the amount of assets ? A. They didn't differ. Q. The assets themselves didn't differ from what was reported to the bank department, did they 'i A. This was reported in brief and the other in detail. Q. Did the assets differ from what was written to the batik depart- ment ? A. I didn't compare them. Q. Did the assets differ from what appeared in the affidavits of Mr. Floyd and Mr. Gregory, and other papers submitted at the same time to the governor ? A. Yes, sir. Q. Except in the Goulard judgment, and except in the cash items? A. With those exceptions. Q. And the furniture and the 1102,000 cash items? A. Yes, sir ; those are the only differences. Q. Was it necessary to get 'the certificate of Mr. Pratt, the book- keeper, to attach to those to indicate what property the bank had ? A. I thought so. Q. What possible effect could jthat certificate, attached to that schedule, have upon the governor, except to deceive and mislead him with your letter ? A. It was not so intended. Q. Well, it did in fact, didn't it ? A. It would seem so from your construction of it. Q. You knew that Mr. Floyd and Mr. Gregory were hostile to the balance of the trustees in that bank, did you not ? A. No, sir ; I did not. ' 141 Q. Didn't you know that in September, 1876 ? A. I knew what I read to you from these minutes; I didn't know any of these men except Mr. Conklin. Q. Didn't you know on October 13th, 1876, that Mr. Floyd and Mr. Gregory were hostile to the balance of the direction of that bank in 1874? A. No, sir ; I didn't know that they were hostile. Q. They acted in antagonism to them ? A. Yes, sir. Q. They were off oxen ? A. I should say they were. Q. And they were criticising their action in every way ? A. Yes, sir. Q. These reports and the minutes indicate that ? A. Yes, sir. Q. And you knew these facts ? A. Yes, sir. Q. And when they made their report, and put their values upon those pieces of property, stocks, bonds and real estate, you knew they were the values of men who were seeking to depreciate the amount of property which the bank owned, did you not? A. I don't know that I can answer that fairly; I don't know what their object was in doing it. Q. They put them down very much below what the officers did? A. Yes, sir. Q. Very much below what the bank superintendent and examiners put them ? A. I don't know what they put them at. Q. And you in 1876 take hold and make an investigation as to the value of various stocks and bonds in 1874, and you put them down still lower, do you not ? A. Yes, sir. Q. You didn't intend to mislead or deceive the governor in regard to this matter ? ' A. No, sir. By Mr. MoKeost : Q. How did you make out a deficiency of $201,000, when yon made an examination ? A. I sent to the dealers in the different classes of securities held by the bank, and got from them their prices for these securities as on the 1st of July, 1874. Q. As they were then selling in the public market ? 142 A. Yes, sir ; and extended the whole amounts owned by this bank at those prices. Q. Did you make any estimate about the real estate ? A. I got the real estate all appraised by different parties. Q. As of those dates ? A. As of those dates. Q. And you made your own statement ? A. Yes, sir ; I made up my own statement ; I am sure it was not for expenses. Q. But you arrived at over $200,000 of deficiency in 1874? A. Yes, sir. Q. Which was open to every one the same way? A. Yes, sir ; I found partly on the suggestion of the appointed examiner, but before he came there, when he came two or three days after my appointment, he found me engaged in taking off a trial bal- ance from the dealers' ledger, something that had never been done, so that he could tell whether there was a difference between that and the general ledger in which the aggregate amount to depositors was entered; when I got the balance sheet I found that according to the dealers' ledger they owed the depositors something in excess of $80,000 more than appeared on the general ledger, and as I had already investi- gated the different books, and found that they had been falsified in the business, so as to cut down the amount of interest credited up, I presume that the two years, from 1874 to 1876, inclusive, here would account for about $10,000 of that difference, and I therefore estimate $70,000 as the difference that was due in 1874; there was a difference then. By Mr. Chapman : Q. Have you succeeded in getting in all the books of the depositors ? A. Yes, sir. Q. AVhen did you get in the last ? A. I have not got them all in ; there were 500 books that were sur- rendered and the accounts closed, which appear to be open on the books of the bank, but the pass-books were surrendered as general evi- dence of their accounts having been closed. Q. What time did you take possession as receiver ? A. I took formal possession on the 14th of July. Q. And you made your report to the depositors as of what day ? A. In September. Q. What time in September? A. As of the 1st of September. Q. You had a large number of clerks assisting you there, did you not? 143 A. Yes, sir. Q. And you were a month and a half finding out the condition of the bank ? A. Yes, sir. Q. You and all these assistants worked sometimes ten, eleven and twelve hours a day? A. Yes, sir, we worked more than that a great many days. Q. And it took all these assistants and you all this time to get at the condition of this bank ? A. Yes, sir, but I went back to 1852. Q. To get at the condition of the bank as contained in your report? A. Yes, sir. By Mr. McKeon : Q. You went back to the organization of the bank ? A. Yes, sir. By Mr. Chapman : Q. Did it ever occur to you as to what number of banks the super- intendent and examiner could go through with, with the same care that you did, in a year ? A. He could not go through with many of them in a year. J. W. Gregory, recalled for further cross-examination : By Mr. Chapman : Q. You were one of the committee appointed by the trustees to ascertain whether the expenses of the bank should not be reduced, were you not ? A. I think that is so, to the best of my recollection. Q. In 1874 ? A. Yes, sir. Q. Was there any authority given you in that resolution to investi- gate as to the affairs and condition of the bank ? A. I don't think there was. Q. You went on, you and Mr. Floyd, and made an investigation as to the condition of the bank ? A. Yes, sir. Q. And you made a report to the bank ? A. Yes, sir. Q. [Handing paper to witness.] And that is the report, introduced as schedule A, attached to your affidavit ? A. Yes, sir ; that is my signature. Q. Whose handwriting is that report in ? 144 A. I believe that is Mr. Floyd's. Q. There is an erasure and an interlineation there, is there not ? A. Yes, sir ; there seems to be. Q. Different ink ? A. Not that I am aware of. Q. Darker ink, is it not ? , A. It may be ; I think it was done in the bank. Q. After you made the report ? A. That is the best of my recollection. Q. And this on the margin was put in after the making of the report ? A. At the time it was being made. Q. You discovered you had $73,000 charged in there twice ? A. It was a mistake in asking the amount of interest due, to the best of my recollection. Q. And you got your $73,000 in twice ? A. Yes, sir ; in that way. Q. You reported in the first place to the bank a deficiency of $255,- 000, did you not ? A. Yes, sir; I believe that is correct. Q. After making this correction it reduced it to $181,000? A. Somewhere thereabouts, I believe that was about the thing. Q. And in this report you repeat that you very carefully examined and considered the condition of the bank ? A. Yes, sir. Q. Here is one item you had overlooked, the $73,000, in ypnr re- port ? A. No, sir ; I don't think I did. Q. You got it in twice ? A. We got it in from misapprehension. Q. You got it in twice, in fact ? A. So it seems. Q. And after your attention was called to it in the board this cor- rection was made by Mr. Floyd ? A. I think I discovered it myself when the report was being made. Q. When you were reading it ? A. I could not recollect. Q. You said you discovered it when the report was being made ? A. I believe so. Q. After making that correction you found a deficiency of $181,000 ? A. If that is the amount, I think that is a mistake ; I ain't positive about it, because I have forgotten it. Q. Here is an affidavit made the 12th of October, 1876 ? A. Yes, si) - . 145 Q. To that is attached a schedule showing the assets and liabilities of the bank to July 1st, 1874 ? A. Yes, sir ; I cannot say to July 1st. Q. [Handing affidavit to witness. ] Look at it ; is it not your affi- davit ; " in or about the month of July, 1874 ? " A. Yes, sir. Q. That on the 13th day of July you made an examination ? A. That is so ; I had forgotten, as far as my memory is concerned. Q. And you examined to see whether they ought to have paid the dividend to July 31st, 1874 ? A. I believe I did. Q. By this, after having made a correction of $73,000, you then find a deficiency of $181,000, and report that to the bank, do you ? A. I presume that is so ; my memory is not sufficient to recollect it, Q. You can tell by these figures ? A. That is probably correct. Q. You made these valuations as you thought they fairly should be made, did you ? A. I did. Q. Did you make careful investigations in regard to the value of these securities ? A. I did ; careful investigation. Q. Now you found the deficiency of $181,000 ; will you tell me where you put in the item of $102,000, whether the bank had the cash ? A. I don't know that they had it. Q. Did you give them credit for it ? A. I presume I did. Q. "Will you show me where it is in here ? A. I don't know that it is in here. Q. Don't you know that it is in there ? A. I do not. , Q. Don't you know that when you called Mr. Eeid's and Mr. Ellis' attention to these figures that they told you that they had left out all the cash the bank had, $102,000? A. No, 6ir. Q. The fact is it was left out ? A. I don't know. Q. [Handing report to witness.] Look at this report and see whether this $102,000 of cash is left out ? A. I don't know that it is in there ; I know all the cash was put in the report, in one way or another, up to the 31st of June, and the cash that was then on hand, was not on hand, probably ; it might have been something else. 19 146 Q. From the 31st of June to July 1st, how much difference would there be in cash ? A. There would be a difference. Q. Did you report any cash to the bank ? A. I am not positive; I don't know ; I believe I had all the assets of the bank altogether. Q. See if you can find the $102,000 of cash ? A. If I have not, they had not it. Q. Find any cash anywhere in that report that that bank had ? A. I don't see any cash mentioned here, particularly, that I see ; I cannot tell you exactly how I made it out. Q. Can you find the Goulard judgment among the assets ? A. I suppose that was put in ; no, no doubt it was in. Q. Can you find it ? A. " Five thousand, B. Goulard," Q. Is it carried out at all ? A. I don't know. A. Look at the items and you will see it is not carried out ; you were bearing this bank at this time ? A. No, sir ; I never bore it, I rather helped it. Q. Is it carried out ? A. In bonds and mortgages, probably ; that is the amount of the indebtedness. Q. Your account of the bonds and mortgages corresponds with all the other papers, so it is not in there ? A. The items are put in for the amount as I understand it. Q. Can you tell whether the Goulard judgment is carried out, or not? A. No, sir. Q. Is there any thing in there for furniture and fixtures ? A. No, sir ; I don't see any thing. Q. The bank owned some ? A. Yes, sir; and it never has been collected into the assets. Q. It was the property the bank owned, was it not ? A. Of course it was, but it was an article that was put in with the property of the bank ; that is the way we put it in. Q. You didn't put it in with this property of the bank ? A. Yes, sir ; that was included. Q. Will you show it to me ? A. The bank building includes the furniture ; that is what I mean. Q. The banking-house you put in at $65,725 ; that includes the fur- niture and fixtures, does it ? A. That is what I consider. Q. It cost $65,725 as you reported ? 147 A. That is the way they had it on the books. Q. Tell me the cost of the furniture and fixtures ? A. I could not say. Q. Do you say the cost of the furniture and fixtures is put into that item of $65,725 ? A. That is what I intended. Q. What was the cost of the building ? A. I cannot tell you exactly, but I can tell you in the neighborhood ; in the first place I think it was $25,000. Q. Don't you know that the banking building appears on your bank books as costing $79,000 ? A. I don't recollect ; it is not the cost of it. * Q. Do your books show it ? A. I could not tell you. ' Q. Can you tell me the cost of that bank building ? A. I can tell you very near. Q. How near ? A. I will say $16,000 and $29,000 ; I think that is the amount that was paid for it. Q. Forty-five thousand dollars ? A. And fixtures, etc., a little more. Q. Now, you swear that you returned the cost of that bank building and fixtures at $65,725 ? A. I understand you. Q. And you say the bank building cost $45,000, and you returned the furniture and fixtures at $20,000 ? A. I didn't return that at all ; I included all together the amount. Q. Do you say the $65,725 includes the cost of the building and the cost of the furniture and fixtures ; do you swear to that ? A. To the best of my ability ; I never handled the books, and don't know any thing about them. Q. Do you swear that the market value of the bank building and furniture and fixtures together cost only $65,000 ? A. That I should judge to be correct. Q. The market value ? A. So far — that is, at that time — I suppose it was ; that is, I put it at that probably on my judgment ; afterward I inquired particularly as to it, and some had put it higher than that; those that were acquainted with it. Q. After that ? A. Yes, sir ; but I put it whatever the amount is there as of my own value. Q. You meant to say that in that report to the bank you returned 148 the bank property as worth only $45,000 in 1874; do you wish the committee to understand that ? A. No, sir. Q. You put in that and the furniture at $65,725 ? A. I didn't name any furniture. Q. Was the furniture in ? A. That is what I conceive that to be worth. Q. What? A. The amount that I put it in there. Q. What conceive to be worth ? A. The bank and the fixtures that were in it ; we never had taken a separate account of them. Q. How much did you consider the bank property to be worth at that time ? A. I never had any other opinion in regaixl to it than what I put down there at the time, including what the bank cost, and the fixtures and other expenses. Q. In your report to the bank when you say " the banking-house cost value and market value, $65,725," you mean the banking-house and furniture and fixtures therein ; do we understand that so ? A. that is the way I understood it ; that is the way I meant to have it at any rate ; that is to the best of my recollection ; I cannot tell you exactly what I thought at the time ; it is sometime ago and I have not charged my mind with it. Q. Was not the actual cost of that banking-house $66,725 ? A. I think not; that is the best of my opinion. Q. You swore to a complaint, did you not, at sometime ? A. At sometime I presume I did ; I have forgotten at what time it was. * Q. [Handing paper to witness.] Look over those papers and see whether those are copies of those you swore to ? A. I could not tell you. Q. Look at them and see your signature and see where you swore to them, and say whether you swore to them or not. A. Yes, sir. Q. That is signed by Mr. Floyd ? A. Yes, sir. Q. Now, we will turn over here and find another signed by Mr. Floyd, and then one signed and sworn to by you before George C. Hall, notary public, that is a fact, is it not, in which you swore to the truth of this]' complaint ? A. To the best of my knowledge and belief; I presume that is the one ; I don't -know. 149 Q. Having sworn to the complaint, will you read the actual cost of the banking-house there, $66,725 ? A. That I think I took from the books. Q. It appears from your books, $79,000, you swore that this com- plaint is true, and that the actual cost is $66,725, did you not ? A. If that is my affidavit, whatever is there I suppose is, correct; I don't pretend to tell any thing that is wrong. Q. I assume not, but this is sometime ago, is it not ? A. Yes, sir. Q. And your recollection may not be entirely correct ? A. I could not recollect now. Q. And where you state your recollection of facts transpiring between you and Mr. Ellis and Mr. Eeid, they may be correct and you may possibly be mistaken ? A. How is that ? Q. Wherever you stated as to what occurred between you and Mr. Ellis and Mr. Eeid, being a mere matter of recollection, it is sometime ago, and you may as well be mistaken about that as them ? A. I took down from the memorandum of the conversation I had with Mr. Ellis, and consequently that is not a belief ; I recollect that. Q. When you swore in this complaint that the actual cost of this building was $66,725, did you include the furniture in that ? A. That was included in my own mind ; that is altogether; we had never taken an account. Q. Did you take into account the valuation of the furniture in the President and Van Brunt street house when you gave the value of that ? A. I didn't know the bank owned any furniture there ; there never had been any account taken of the furniture in the bank, connected with the bank ; we always called the bank worth so much ; it was never a separate item in my own mind ; I was trying to get as near as possibl* honestly, how our bank stood ; that was my object, and noth- ing else. Q. In your affidavit attached to this complaint, did you swear : " The said complaint, and each and every part stated therein, is true to my knowledge " ? A. I could not tell you now, to save my life, whether that is true or not. Q. Eeadit? A. " Except the fact stated in the third paragraph of the com- plaint," etc. Q. Now, turn back to the third paragraph and you will see it is not the one I have been examining you about ? • 150 A. Knowledge and belief. Q. When you swore the actual cost of the banking-house was $66,- 725, did you mean that ? A. I meant that that is what it was placed on the books, or equiva- lent to what it was worth. Q. Do you mean that that was what was placed on the books ? A. I presume so. Q. Didn't you hear Mr. Best say it appeared on the books, the cost as $79,000 ? A. I heard him say so. Q. Is there any doubt about that ? A. There have been other prices placed on it. Q. Is it placed on the book anywhere $65,000 ? A. I think I have. Q. And you have seen it $66,000, and $79,000 ? A. I think I have seen it less than that on the books ; that is my impression ; I think I have seen it all the way from $46,000 to $47,000 up to $100,000. Q. You are swearing as of the condition, July 1st, 1874 ? A. Or thereabouts. Q. Now, after this examination, do you say, to this committee, that you believe that in your report to the bank you included the furniture and fixtures of the bank in your valuation of the banking-house at $65,725j do you still think the furniture and fixtures were included in that cost and market value ? A. In my own mind I believe that to be the truth, that what is in there was considered worth that ; I cannot tell you what I thought then, to save my life. Q. I understand you to say you never saw Mr. Ellis, after the time you met him here at the Metropolitan hotel ? A. Not to my recollection. Q. That is just after he made his examination ? A. That is just after he had finished his examination; that is the last time I saw him, except when I saw him here the other day. By Mr. McKeon : Q. Do you recollect that the expenses of the bank committee were charged in the expenses of the bank for the building ? A. I think it was. Q. Do you know how much that was ? A. No, sir. Q. Do you know the balance of old bank account was charged to it ? A. I don't know that of my own knowledge, but my impression is, there was something of that kind. 151 Q. Do you recollect Mr. Fenn, who figures in the minutes here, was paid a commission for buying the lot ? A. Yes, sir. George W. Reid, a witness, being recalled, further testifies: By Mr. Chapman: Q. You are at present the examiner of the bank department ? A. Yes, sir. Q. When were you appointed as such ? A. In November, 1871. Q. Under the former superintendent ? A. Yes, sir ; Mr. Howell. Q. You have remained as bank examiner from that time until the present ? A. Yes, sir, I have had full charge of it during the past four years ; previous to that. I was assistant. By Senator St. John : Q. You are the only one ? A. I am the only one. By Mr. Chapman : Q. You are the only regular examiner ; are there some special ex- aminers ? A. Very few. Q. Will you look at this report and see whether that is a report of yours of an examination made to Mr. Ellis ? A. Yes, sir. Q. Made as of what date ? A. October 5th we commenced the examination, 1874. Q. Those are your figures attached to the report ? A. Yes, sir, that is my report. Counsel for the superintendent offers the papers in evidence in the words and figures following : "Hon. D. C. Ellis, " Superintendent Bank Department : " Having, at your request, examined into the condition of the Me- chanics and Traders' Savings Institution of New York, I annex state- ment showing deficiency of assets of $30,071.90.* " The state of Alabama suspended payment of interest last Janu- * Less judgment against E. Goulard, $5,090; making deficiency $34,981.90. 152 ary. and as it is uncertain when it will resume, it is almost impossible to ascertain the value of bonds, there being no sales at present; but from the best information attainable they are estimated at 50 per cent. The other bonds are put in at the present quotations. " The annual deficiency of income is estimated at present rate at $14,191.82. " Eespectfully submitted. " GEOEGB W. EBID. " Examined October 5, 1874, and subsequent days." 153 o © © © © © • . 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I do not ; it was a number of days ; we were there two days certainly, and then we came after for some additional work — some four or five days. Q. "Were you not there a week or ten days altogether getting the information and making the examination ? A. I should say we were fully a week. Q. As to the character of your examination, did you make a thorough and critical examination ? A. Yes, sir. Q. As the result of that examination I see you make a deficiency of 24,000 and odd dollars; that was the result of your examination after obtaining the valuations which you affixed to those securities? A. Yes, sir ; if the bank was to go on ; if the bank should be closed it would be different. Q. You say it would be different ; what do you mean ; if the bank were to be thrown into the hands of a receiver ? A. Then the item for liability, interest $36,000, would not go in — would not be a liability. Q. What is the effect of throwing a bank into the hands of a receiver upon the depositors? A. Then there is no interest allowed after the last dividend ; but here I made an estimate of accrued interest since the last dividend day ; if the bank goes into the hands of the receiver that is not allowed. Q. Then the interest that you allude to is interest due the depositors ? A. Due to the depositors. Q. Suppose that bank should have been closed up on that day, what would have been the deficiency ? A. Then there would have been a surplus of $11,018.10. Q. Because the depositors would have no right to draw interest except — A. On the declaration of a dividend by the trustees. Q. That is the half yearly dividend on the 1st of January and the 1st of July ? A. Yes, sir; there would be no interest allowed until the next dividend was declared. Q. So that if, at the time of this examination, you were making it for the purpose of closing up the bank, the depositors would not have been entitled to interest from July 1st, and the amount of liabili- ties would have been thereby lessened $36,000 ? A. Yes, sir. Q. And the bank would then have been solvent $11,000? A.. Yes, sir. 156 Q. Had«a surplus of $11,000 ? A. Yes, sir; a surplus of $11,000. Q. Will you tell the committee what the effect would have been upon depositors if the bank had been thrown into the hands of a re- ceiver ? A. In what respect ? Q. Is it a beneficial effect or otherwise ? A. It is very injurious. Q. Most disastrous to them, is it not ? A. Yes, sir ; in every case where a bank has been thrown into the hands of a receiver they have lost. Q. Even if a bank were barely solvent and it was thrown into the hands of a receiver, would it not be very injurious to the depositors ? A. Very, indeed; large losses would have accrued on account of forcing the securities upon the market and turning them into money and paying the depositors. Q. Are there not additional expenses ? A. Yes, sir ; receiver's expenses ; lawyer's expenses ; in various ways expenses are largely increased. Q. Prior to the time when Mr. Ellis was superintendent, was it the policy of the department, so far as you know, to throw a bank into the hands of receivers, unless it seemed to be hopelessly insolvent? A. Yes, sir. Q. It was the policy to throw it into the hands of receivers ? A. No, sir ; not to. Q. Depositors were the persons to be injured by throwing it into the hands of reeivers ? A. Yes, sir. Q. In regard to the valuations by which you ascertain the deficiency, whether a deficiency exists depends entirely upon the amount of values that you fix to the various items of assets ? A. Yes, sir. Q. Does your examination show an actual deficiency or a construc- tive deficiency where you find one ? A. A constructive deficiency only, upon the estimate that we put upon the securities. Q. The amount of the deficiency or surplus in each case depends upon the opinion yon may have as to the value of the securities at the time of the examination ? A. Yes, sir. Q. Is there any such a thing attainable as an actual mathematical deficiency' or surplus ? A. Not where it is so near balancing as this was. Q. Could you then get at the exact value ? 157 A. No, sir ; not the exact value. Q. In ascertaining these valuations in many instances, or in any instance, how do you go to work ? A. To go thr mgh, do you mean ? Q. Yes? A. When I commence a bank the first thing is to count the cash — the cash on hand in the bank, and then I get certificates of deposit of the amount of cash deposited in various other banks ; then I take the various securities, governments, State bonds, etc., and take a list of them and see whether they appear on their books, and then I ascertain the market value. Q. You go through the securities one by one ? A. Yes, sir, every one. By Senator Wellman: Q. You verify the amount ? Q. Yes, sir, I verify the amount. By Mr. Chapman : Q. You examine the securities — handle them yourself? A. Yes, sir; handle them all, and very frequently test the numbers as registered in the books of the bank ; then I take the governments and securities that are sold on the market and get the latest sales as reported ; then where there have been no sales reported I take the bids and offers, and if there are very few sales of those stocks, I usually take the average, unless I can get at it nearer ; if I can ascertain there have been sales within a few days or few weeks, I frequently take the last sales ; then I examine the books of the bank to see what the bank- ing-house is valued at and any securities they may have ; sometimes I exercise a discretion in regard to the value of the banking-house, if I find out in some cases, as I frequently do in the case of a wealthy bank, their estimate is very low on the books, I mark it up nearer ; or if I can ascertain that the value of the bank as put on the books is much larger than I think it ought to be, I generally get it down as near as I think the banking-house is worth to the bank — not what it would sell for a forced sale, but what it is worth to the bank ; that generally includes the furniture and fixtures — that is generally included in the value of the banking-house ; if they have no banking-house, of course, I put it down as a separate item. By the Chaibman : Q. You mean the furniture ? A. Yes, sir; the furniture and safe that I generally value as near as I can get at it. 158 By Mr. Chapman : Q. Is not the furniture generally charged to profit and loss? A. Yes, sir. Q. It is not with the banking-house ? A. What I mean is that I do not make separate items. Q. You do not give them credit for the furniture and fixtures in these examinations? A. No, sir ; not at all. Q. Did you pursue this course in regard to the assets of this bank at the time you made this examination. A. Yes, sir. Q. You and Mr. Ellis jointly ? A. Yes, sir; I went through and made out my list and where there was a doubt — where we had any doubt as to the value of the securi- ties, we ascertained them as we could afterward. Q. Do you recollect of going with Mr. Ellis to consult with any parties in regard to any of these securities ? A. Yes, sir; we went down to the Manhattan Bank and consulted the president and cashier with regard to the Alabamas; I am not cer- tain about what we said about the others, but the Alabamas particu- larly were not on the market, and there were very few sales, if any. Q. Did you go out whilst you and Mr. Ellis were there in consulta- tion with these gentlemen to see parties to whom you were recom- mended by the president of the Manhattan Bank, to ascertain the value of these securities ? A. Yes, sir. Q. These southern securities ? A. The Alabamas — I am not certain about the others. Q. You do not recollect one way or an other about the others ? A. No, sir. Q. You came back and reported ? A. Yes, sir. Q. To Mr. Ellis ? A. Yes, sir. Q. Mr. Ellis was still there ? A. Yes, sir. Q. Was the matter made a subject of consultation between all of you? A. Yes, sir. Q. As to the value to be fixed to the Alabamas at least ? A. Yes, sir. Q. Do you recollect the value of the other southern securities was talked over by you, and the amount fixed upon them there in the bank \ A. Yes, sir. 159 Q. Is the Manhattan Bank a savings institution ? A. No, sir ; it is a bank of discount and deposit. Q. A State bank ? A. Yes, sir. Q. This gentleman had no interest in this bank one way or the other, so far as you know ? A. No, sir. Q. How did you ascertain the value of the municipal bonds ? A. I do not remember ; I generally keep a run of them myself liv- ing here in this city, and it is so with almost all of the c'ommon banks, and having occasion to go through the States, I know. Q. You know the value of most of these on this list ? A. Yes, sir. Q. And did at the time ? A. Yes, sir. Q. Were those values which you have affixed to these securities con- servative valuations, or were they inflated? A. They were not inflated; I considered them a fair valuation at the time I made my examination in every respect. Q. What is this item of " suspense account," how did you get at the value of that? A. Yes, sir; that is an old bankruptcy claim; in one of the first examinations, in 1872, that was estimated at- $40,000 ; in 1874, in my examination, in March, I think I got that down to 120,000 ; 1 am not certain whether it was $10,000 or $20,000. Q. It was $21,000? A. Perhaps it was; this time I put it down at $10,000; it having continued for a long time without payment, I considered it was doubtful. Q. Don't you recollect that Mr. Ellis himself suggested — that this matter was discussed, and that he suggested that it be put down at $10,000 ? A. I think he did. Q. Were there some papers shown, or some inquiry made, which led you to think that there was at least that value to it ? A. There were letters shown us. Q. From the receiver ? A. From the receiver; I think it was estimated at considerably more than this. Q. As much as fifty cents on the dollar ? A. I think so. Q. But Mr. Ellis said not to put it down for more than $10,000 ? A. Yes, sir. Q. Did you make any inquiry yourself in regard to the value of the 160 real estate owned by the bank, or did Mr. Ellis do that on behalf of you ? A. I do not think I did ; I relied more upon my former estimate, and the general run of real estate. Q. You had a pretty good information of the value of real estate, living as you did here in the city and making this examination in dif- ferent parts of the city ? A. Yes, sir. Q. And your estimate was, that $100,000 was a, fair valuation ? A. Yes, sir ; a fair valuation for the purposes of the bank. Q. The bonds and mortgages amounting to $732,650 — you exam- ined them yourself ? A. Yes, sir ; every one of them ; I had the list of them that I had a year or two previous, and I checked them off with this list, to see they were there ; I had examined them critically previous to that, one year. Q. On these conservative valuations which you put upon these securities you found a constructive deficiency of only about one per cent? A. Just about one per cent with the accrued interest due depositors. Q. You credited the depositors with that ? A. Yes, sir. Q. And charged the bank with it as a liability ? A. Yes, sir ; the bank with it as a liability. Q. Was there any reason in that valuation why that deficiency could not have been readily made up by an appreciation of the value of the securities ? A. No, sir. Q. In a very short time it was possible ? A. Yes, sir, as it turned out afterward. Q. Did it turn out that this deficiency was wiped out by the increase in the values of the securities before the 1st of January fol- lowing? A. Yes, sir. Q. Can you give me readily the amount of the municipal bonds which were ranging from par and above at that time ? •A. The New York city bonds. Q. The whole of the municipal bonds, $1,100,000, or near $1,200,000, which were ranging at par and above ? A. There were over a million. Q. Was there not $1,200,000 ? A. Yes, sir; just about $1,200,000. Q. Do you know that those bonds appreciated in value quite rapidly after that ? A. Yes, sir, they did. 161 Q. A rise of two per cent in the value of those bonds would wipe out this deficiency entirely, would it not — these municipal bonds alone — though the other bonds remained about the same ? A. Yes, sir. Q. Do you know if those Tennessee State bonds sold as high as 65 ? A. Only from what I understood. Q. Which you had valued at 58| ? A. Yes, sir ; I know they were quoted in the market after that, if I recollect aright, at about 65. Q. Was that about the 1st of January ? A. About the latter part of December. Q. Do you know the fact that North Carolinas, South Carolinas were quoted in the market as valued by Mr. Gregory, one of these com- plainants, at about what you put them at ? A. Only what I have heard. Q. Do not the minutes of the board of directors allude to it ? A. Yes, sir : that is all I know. Q. They kept pretty well up, did they not ? A. Yes, sir ; $720 was the only difference between what Mr. Gregory stated in the board and my valuation ; I called it $60,720 and he called it $60,000. Q. Now in regard to the Alabamas ; from the time of your exami- nation down to the 1st of January, what did you learn as to whether they were quoted or not ? A. I do not remember as there were any quotations. Q. You fixed the value of Alabamas at 50 per cent from all the investigations you could make there, in consultation with these gen- tlemen in the Manhattan Bank ? A. Yes, sir ; and the gentlemen they referred me to and whom I went to see. Q. You went to see the gentlemen* to whom they referred you and got their estimate, and you jointly fixed upon that value as the fair valuation of them ? A. Yes, sir. Q. Did you ascertain that the latest sales you could find reported had been 90 ? A. That was sometime previous to that. Q. But the latest sales you could find ? A. Yes, sir; I do not know that I found any sales after that. By Senator St. John : Q. How long ago was that ? A. It was the spring previous — perhaps it may have been six 21 162 months previous; in July they stopped paying interest, and that, of course, knocked the bonds down. By Mr. Chapman. Q. You ascertained from the examination there, that Mr. Floyd and Mr. Gregory were antagonistic to those directors of the bank ? A. I always understood that ; I did not see either of the gentlemen at that time. Q. You understood that at that time ? A. Yes, sir ; it was notorious. Q. Is it an uncommon thing for complaints to be made by persons connected with banks and which have no merit in them ? A. I very seldom find these complaints made, but I have known two or three cases, and the result was that the complaints amounted to nothing; it was some personal feeling. Q. Now, before you made this examination, did you have any talk with Mr. Floyd or Mr. Gregory ? A. I do not know as I met either of those gentlemen. Q. I will ask you if you do not remember of Mr. Ellis seeing Mr. Floyd and Mr. Gregory ? A. No, sir; I think Mr. Ellis saw them alone; I have no recollec- tion of ever seeing them. Q. I will ask you whether in looking over this statement of the assets which they claim they had found the bank had, and reported to the bank, they had left the cash out entirely, $102,000, and whether Mr. Ellis — A. I do not know any thing about that, except what I have heard here to-day. Q. When did you make the next examination af the bank ? A. The latter part, I think it was, of March, 1876, in my regular course of examination. Q. Your biennial examination ? A. Yes, sir. Q. In the meantime, had you called in to see the officers of the bank, to inquire into their condition, and what they were doing ? A. Yes, sir ; frequently. Q. How was it reported to you they were getting along ? A. They were doing very well. Q. Was your attention directed to any thing that led you to think they were not doing well ? A. No, sir; there was nothing that I saw or heard. Q. By virtue of the act of 1875, they were not required to make a report to the department in July, 1875 ? A. No, sir. 163 Q. When they reported in January, 1875, they reported a surplus of about $60,000 ? A. I think they did, Q. I will ask whether, assuming that the times had changed, and instead of securities depreciating in value they had gone the other way — if good times had come January 1st, 1875, whether, in your opinion, there is any doubt of the possibility of the bank succeeding ? A. That would depend upon the depreciation of the Alabamas. Q. Suppose good times had come ? A. They probably would have recovered. Q. In spite of any depreciation in the Alabamas ? A. Yes, sir. Q. It would have been decidedly for the interest of the depositors ? A. There is no doubt about it ; at the time finding so small a de- preciation, with an apparent deficiency of only one per cent, the mat- ter was talked over by us, and we thought it would be a great hardship to the depositors to close the bank at that time on that slight depreci- ation. Q. And that was decided upon as matter of policy ? A. Yes, sir. . Q. And this was at a time a deficiency appeared ? A. At the time, yes, sir. Q. Before the superintendent made a requisition ? A. Yes, sir ; before we left the bank. Q. Is there any thing in the law which requires a small deficiency to be reported to the attorney-general, to your knowledge ? A. I think not. Q. It is left to the wise discretion of the superintendent as to what is best for the depositors ? A. The examination is reported to the superintendent, and it is left for him as to what course to take. Q. For him to decide as to what is the best interest for the depos- itors ? A. Yes, sir. Q. Did the bank officers at that time — at least a majority of them — complain that you had put their securities too low ? A. I think they did ; I think some of the southern securities. Q. Were you informed by the president of the bank that he had in- vested a large sum of money in this property for his niece, as trustee for his niece, if he had not personally ? A. I don't recollect that. Q. I will ask you whether you recollect that the secretary himself had personally invested some $20,000 of his own money in them ? A. I do not recollect, and if I knew it I have forgotten it. 164 By Mr. McKbon : Q. How long have you lived in New York ? A. I moved here in 1846. Q. Have you ever dealt in real estate ? A. No, sir. Q. "Were you in any business here ? A. Yes, sir. Q. What business ? A. When I first came down I was engaged ; I was one of the firm of Kuss & Eeid in laying the pavement on Broadway. Q. In what business ? A. The Kuss & Eeid pavement . Q. You had a contract with the city of New York ? A. Yes, sir, a contract with the city; I never owned any real estate here except the house I live in, which I bought afterward. Q. Were you ever connected with a bank before you went into this position ? A. Yes, sir. Q. What was it? A. The Bank of Lansingburgh ; I was teller. Q. When was that ? A. Prom 1834 to 1844 ; ten years. Q. You came down here, and were you connected with any bank here ? A. No, sir. Q. Were you in any mercantile business here ? A. No, sir. Q. How long were you in the Rnss pavement business ? A. Until 1854, in the fall. Q. When did Russ die ? A. He died two or three years afterward, I should think. Q. After 1854 what business were you in ? A. I was a clerk in various positions. Q. Were you connected with any bank ? A. No, sir ; I answered before that I was not. Q. I mean so as to give you an insight into the affairs of banks ? A. No, sir; except my general knowledge of banking operations. Q. Did you ever have any operations in stocks ? A. I did at one time, a year or two after I first came ; I bought a few thousand dollars' worth of stocks, but not since then. Q. You are not familiar with operations of Wall street ? A. No, sir ; except what I saw in the papers ; I am not engaged in stock gambling at all. 165 Q. You have to investigate ail the banks here ? A. All the banks in this State. Q. All the banks in this State ? A. Yes, sir ; all the banks in the State. Q. How many of them ? A. One hundred and fifty are reported; it is generally about 155 to 158. By Mr. Chapman : Q. That is savings banks ? A. Yes, sir. By Mr. McKeon : Q. Have you any thing to do with the other banks ? A. With trust companies and State banks where it is necessary to have special examinations. Q. You have of all savings banks ? A. Yes, sir; I have of all savings banks and all trust companies. Q. In 1871 did you give a value to their banking establishment — the Mechanics and Traders'? A. I did not ; Mr. Keyes had charge of the examination at that time ; that was left with him entirely. Q. You did not do it ? A. No, sir. Q. You knew nothing of the value of it in 1871 ? A. No, sir. Q. Each year do you look at the value of the bank building ? A. Yes, sir. Q. Do you know what the value of that building was in 1871 ? A. I had nothing to do with it then, as I left it with Mr. Keyes when he had charge. Q. Take 1872 — do you recollect that ? A. I mean 1870 ; our first examination was in March, 1870. Q. Do you recollect the value then ? A. No, sir ; that was the time that Mr. Keyes had charge. Q. Do you recollect when the panic took place in New York ? A. Yes, sir. Q. When was it, 1873 ? A. 1873 — September, 1873. Q. Did not every thing go down with a run ? A. Not real estate. Q. Did not real estate go as well as the rest ? A. No, sir; not for a year or so after. 166 Q. How much did real estate fall in 1872? A. I do not know as it fell any. Q. Do you know whether it fell in 1873 ? A. Not much. Q. Did it fall in 1874 ? A. I should think it did, toward the close. Q. What was the ratio of depreciation then ? A. It varied according to location in many instances ; 50 per cent ; in 1874 I speak of now. Q. Below Fourteenth street, on the main streets, Broadway and Bowery, what was the depreciation ? A. I am not an expert in real estate. Q. Then you don't know any thing of the value of real estate? A. No, sir ; only as I hear it stated. Q. To whom did you go to inquire about the value of the bank building ? A. I do not know. Q. Name any man — did you go to Homer Morgan ? A. No, sir. Q. Did you go to Ludlow ? A. I did not go to any of those real estate men. Q. Did you go to any leading man in real estate? A. I do not know as I did. Q. Now, in regard to these securities, the municipal bonds turned out very well ; it appears you found a large amount of southern securities ; do you know whether any of those States had defaulted in their interest in October 1874? A. Yes, sir ; they had, I think, all. Q. All these had? A. Yes, sir. Q. What effect had that upon the stocks ? A. It knocked them down from 70 or 90 per cent to the value they were then as I put them down here. Q. Did you think it was a safe investment of money to put it into southern stock ? A. I would not have done it; I have been opposed always to it. Q. Did you not expostulate with these officers? A. Yes, sir; but these gentlemen used to think that I had nothing to do with that. Q. Did you tell them they ought to be sold? A. I had no power to do that. Q. In your judgment, these southern securities were very bad securities? A. I always thought so. 167 Q. And who did you go to to inquire about the value of South Carolina securities ? A. I do not remember. Q. To whom did you go to to inquire about North Carolina? A. I do not remember. Q. To whom did you go for the Tennessees ? A. To the market quotations. Q. You are sure of that ? A. Yes, sir. Q. Now, in regard to Alabamas — to whom did you go for them ? A. I don't remember. Q. You went to the Manhattan Bank ? A. Yes, sir. Q. To whom, in the Manhattan Bank. A. Mr. Morrison mentioned a firm of brokers. Q. Who is Morrison ? A. He is the president of the Manhattan Bank. Q. He mentioned the concern ? A. Yes. Q. Who was it ? A. I don't remember ; it was a firm of brokers, I think, or foreign billholders, or some thing of that kind — dealers in foreign exchange, I think, they were. Q. More than one did you go to ? A. No; I think I went to but one. Q. You cannot mention the name? A. No, sir. Q. Do you keep file's of papers containing the official quotations of the Stock Exchange ? A. No; I always find them at the bank. Q. Did you look at the quotations to see how Alabamas were quoted? A. I don't remember; as near as I recollect, the last quotation was about 30 bid, and 70 asked ; I think that was the last information I had about them. Q. Can you give me any idea of the day when that quotation was made ? A. I cannot ; this gentleman I went to stated that he had control of a large, amount of these Alabama bonds for foreign bondholders, and from all the information he could get and seeing people, he was advising his correspondents not to sell, but to hold them ; and from the information I got from them and Mr. Morrison — I don't remem- ber any one else — we thought that to split the difference between the quotations would be about fair. 168 By Senator St. John : Q. They have not paid any interest since? A. No, sir. By Mr. McKeon : Q. Do you know what kind of bonds these Alabamas were that you inquired about ? A. They were given for a railroad to Chattanooga, I think; I am not certain. By Mr. Chapman : Q. They were given to the Montgomery and Bufala Eailroad ? A. I believe so. By Mr. McKeon : Q. Did you look, October 7, 1874, to see if they were quoted at all ? A. I did not. Q. You did not look at them ? A. I have no distinct recollection the way I found out at that time. Q. Did you look at them ; that is the point '( A. I don't remember : I relied more on the information I got from this broker than upon the quotations, because these quotations amount to nothing unless they are ready sales. By Mr. Chapman: Q. They may be " washed " sales ? A. They may be. By Mr. McKeon: Q. Do you know whether, from December, 1873, down to October 7, 1874, there had been any quotations at all of these Alabamas — of this kind of bonds ? A. I don't know about these particular bonds. Q. Did you go and tell this gentleman that they were Montgomery and Eufala bonds ? A. I do not know as I did. Q. You did not tell him any distinction between them ? A. No. Q. I will take the next bonds ; how did you get at the South Caro- lina bonds ? A. By a general average. Q. What price did you put upon them ? A. $17 for the South Carolinas. 169 Q. Do you know whether there are different classes of South Caro- lina bonds ? A. I believe there are. Q. Is there such a class as are. called non-fundable bonds ? A. Yes. Q. Do not you know these bonds of the bank were non-fundable bonds? A. I don't remember. Q. Do you know that while one kind of bonds were selling at $17, the non-fundable bonds were selling at 6f or 7 ? A. Of course I knew that the non-fundables were very low. Q. The highest price of the South Carolinas of any kind was $17, and the lowest price was 6 J and 7 ? A. These bonds were presented to us by the officers of the bank as being regular bonds, bona fide, acknowledged by the State, and we considered them as good bonds. Q. Did you inquire whether they were fundable or non-fundable ? A. I do not know whether I did. Q. Do not you know, as a business man, that there were two classes of bonds ? A. Yes, sir. Q. Did you not take the trouble to inform yourself whether they were fundable or not ? A. I don't know as I did. Q. If they were non-fundable they should have been put at 6 and 7 ? A. If I had known that I would have put them lower. Q. Do not you think it was your duty to know they were ? A. Perhaps it was. Q. You did not take the trouble to find out whether they were or not ? A. No, sir. Senator St. John — How many were there ? Mr. Best — $141,000. Q. And how many of the other bonds ? A. $155,000 in all. • Q. The majority of these were non-fundable ? A. I -don't know. Q. Take the North Carolina bonds — are there different classes of them? A. Yes ; half a dozen different kinds. Q. "What kind did the bank have ? A. I don't recollect ; they had all kinds ; they had five or six differ- ent kinds. Q. What kinds did they have, tell me ? 22 170 A. I don't remember. Q. At what rate did you put those North Carolina bonds? A. At 30. By Senator St. John : Q, There were various kinds and you averaged them at 30 ? A. Yes ; the prices were just about the same as they had been at the former examination. By Mr. McKeon : Q. Do you know what was the highest price of these North Carolina bonds ? A. I think about 45 ; something like that. Q. Where did you get that quotation — here is 42 — where did you get 45 ? A. I said about 45 ; I don't know. Q. Forty-two was the highest price here in October 7 ? A. A year and a-half afterward when I analyzed this whole thing to make my regular report, then I was more particular about it. Q. Do you know how many bonds the bank had of the first-class here ? A. I do not. Q. Do you know whether it had more than one of those which were selling at 42 ? A. I don't know. Q. "What was the next price ranging down from 43 or 45 ? A. They ran down, I think, to ten, and I don't know exactly ; some were very low. Q. Were not some as low as six ? A. Special tax, North Carolinas, were very low I know. By Mr. Chapman : Q. They did not have any of them ? A. I don't know what they had, I don't know how many of each kind they had — I have no recollection. By Mr. McKeon. Q. Do you know whether they had any of the funding act of 1866 ? A. I think they had. Q. What were those selling at ? A. I don't recollect. Q. $15 according to this paper ? A. I don't know. Q. Another set of 1868 — do you know how many they had of them — those were selling at 14 ? A. I do not recollect the different kinds. 171 By Senator St. John : Q. What was the whole ? A. $114,600. Q. Then the total amount of North Carolina bonds were valued at $30,000 ? A. $34,380. By Mr. McKeon : Q. There were new bonds in the bank, were there not ? A. I don't know. Q. Do you know whether they were selling at 12| ? A. I don't recollect. Q. Then another set August and October interest — those were selling at 10 — do you know how many of them they had 'i A. I don't recollect the different kinds. Q. Will you tell me how you got your average at 30 — in what shape or form you put that average of the bonds ? A. Prom information and from the valuations the officers put upon them, and the former examinations. Q. Did you know, at that time, a particle of the character of the bonds then held in that bank — did you know any thing of them ? A. Yes, sir. Q. Prom your answers here, I judged not ; what did you know ? A. I knew there were different kinds, but how many of each dis- tinct kind — Q. Did you see them ? A. Yes, sir. Q. Did you make a memorandum of them ? A. No, sir. Q. Why did you not look at the stock exchange reports of October 7, or any other date ? A. I don't know. Q. Will you tell me how you got 30 as the average, when they ranged from 6 and 10 up to 30, and one at 42 ? A. I can't tell you how I did it. Q. Can you explain it ? A. That is the fact ; that is all. Q. Can you tell me how you arrived at it ? A. No, sir. Q. Will you look at your report, on page 296, the report of 1875, and see what was the surplus reported by you on the 1st of April ? A. $82,331.18. Q. What was the deficiency found by you on the 7th of October, 1874? 172 A. $24,981.90 ; supposing that the accrued interest due depositors was credited. Q. What is the difference between April and October in round num- bers ; is it not about $107,000 ? A. Yes, sir. Q. In what securities did that change take place ? A. It was the Tennessee and Alabamas principally, and on account of the repudiation of interest. Q. What surplus did you find on the 1st of January, 1875 ? A. I had nothing to do with it; I made no examination in Janu- ary ; they made their own report. Q. Do not you read these ? A. I read them, perhaps six months afterward, when the report is published ; I have nothing to do with the work at Albany ; I have nothing to do with the getting up of these reports. Q. You say this difference, $107,000, arose from the price of Ala- bamas and Tennessees ? A. I should think it was due to that largely. Q. Do you know what they were selling for in April, 1874 ? A. No. Q. The Alabamas ? A. I don't know what they were selling at. Q. What were they quoted at ? A. We quoted them here at 90, Alabamas, and Tennessees at 70 ; there were very few sales ; they had just stopped their interest, and I put them in, I think, at what they stood at on their books. Q. On April 1, 1874, did you look at the quotations of the stock exchange ? A. I don't know as I did, as they had just repudiated their interest ; I think I put these in at about what tliey-stood on their books. Q. There is no report at all of these stocks held by the bank on the 1st of April, 1874 ? A. There was no report do you say ? Q. There is no valuation put upon them there ? A. For this reason, that I put them in at about what they stood on their books. Q. Then I understood you that you were not governed by the quo- tations at the stock exchange at all ? A. You don't understand me ; I say that the stocks that are readily sold — have a quick sale at the stock exchange — I take the exact valua- tion, but where there are very few sales, then we exercise considerable discretion; in this case they had just repudiated their interest from January previous, and there was no way of fixing the value at 173 that time; there was every prospect that they would soon' pay their interest in June or July ; it was generally supposed that they would resume in June or July, and if they did not they were worth what we put them in at. By Senator St. John : Q. But they did not come to be ? A. No, they did not. By Mr. Chapman : Q. But that you could not see ? A. No. By Mr. McKeon . Q. I will ask you whether any State that ever repudiated has paid up ? A. Yes, sir. Q. What ones ? A. Georgia and Missouri. Q. Has Georgia paid all her bonds ? A. Not those that were repudiated; the Bullock bonds are not paid. Q. Look on page 297 of the report of 1875. and you see there is a deficiency of income of $14,000; how was that made up? A. I took the securities — that is all interest-paying securities — and estimated them at so much and their income, and then I ascer- tained the amounts of current expenses and what they would probably be for the coming year, and made estimate of them. Q. Have you got the memoranda from which you made these esti- mates — the original papers ? A. I have not; I very seldom keep memoranda of reports after they are printed. Q. This was in 1874—1 think probably 1874 ? A. Yes, sir. ; Q. The deficiency of income was $14,000 and upward ? A. Yes, sir. Q. Did that ever improve ? A. No ; it got worse all the time ; that is up to my next examina- tion, two years. Q. Was not that a suspicious circumstance ? A. Yes ; but I could not tell what it would be two years after- ward. Q. When was the next examination after 1874 ? 174 A. My irext regular examination was two years from that time, in 1876, and the bank was closed on that report — on my next report in March, 1876. Q. Did they ever get up their income to their expenditures ? A. Not after that ; no, sir. Q. You did not find that out until 1876 ; when you made your report that closed it up ? A. No, sir. By Mr. McKeon : Q. Do not you think you would have given a different judgment in relation to this bank, if you had looked at the reports of the Stock Exchange ? A. I don't know whether I would or not. Q. Would you not have found out what kinds of securities were in the bank which might possibly be. selling from 6 to 10 ? A. I don't think I would if I had known it. Q. Don't you think it was your duty, as an examiner ? A. I don't know ; we consulted all of us together — Mr. Ellis, myself and the bank officers. Q. You depended upon the bank officers, did you ? A. To a certain extent. Q. Is it not an examiner's duty not to depend upon them ? . A. The examiner has to depend upon them sometimes. Q. Must he not take their statements with a great deal of allowance) as he is the supervisor over them ? A. We have to take their statement of the number of the depositors- By Mr. Chapman: Q. Is there any way you can find out the number of depositors in a bank at all except from them ? A. No, except by calling in the bank books I don't know of any ; in 1876 I called Mr. Best's attention to it. By Mr. McKeon : Q. Did you ever have a balance taken of the books ? A. I tried very hard to get one there. Q. Did you have one taken ? A. No, I did not. Q. Was there any one delivered to you ? A. In other banks ? Q. In this bank ? A. I don't think there was in this bank. 175 By Mr. Chapman : Q. It seems, from the report made by Mr. Gregory, one of the com- plainants in this proceeding, that you did not get very far from a cor- rect valuation of the North Carolina and South Carolina bonds? A. Yes, there was only $720 difference. Q. In a block of over $60,000 ? A. Yes. Q. It seems, also, to be the fact that the $1,200,000 of municipal bonds you undervalued rather than overvalued ? A. Yes, the result proved it. Q. The single case of the Alabama bonds is the only one in which you seemed to have overvalued ? A. Yes, sir. Q. If you did overvalue in that case ? A. Yes, sir. Q. In getting at that value, inasmuch as they were quoted at 30 bid and 70 asked, you made such inquiries as satisfied you — all of you gentlemen there — altogether as to what was the proper value to put down against those bonds ? A. Yes. Q. And that value was put down ? A. Yes, sir. Q. That is the way you ascertained in regard to them ? A. Yes, sir. By Mr. Wellman : Q. Was it known to you, or was it known to any one else at that time — at the rime of this examination in October, 1874 — that the State of Alabama had repudiated the Montgomery and Bufala bonds? A. No, sir. By Mr. Chapman.: Q. Since then they have repudiated the bonds themselves ? A. Yes, sir. Q. Previous to that they had only failed to pay the interest ? A. Yes, sir. Q. Since your examination, it was stated that the State designed to pay these bonds ? A. Yes ; so I have understood. Q. Do you recollect the fact that you, somewhere in your examina- tion, obtained a report from the State of Alabama that her interest would be paid upon those bonds ? A. Yes, that was the reason I put it in my report of March pre- 176 vious, because it was understood that they would commence paying in July. Q. Is it true, in the case of some of these securities, where States have passed their interest, they have commenced paying again ? A. Yes, in Tennessee, they did it. Q. I will ask you whether it is possible for you to make an examina- tion of all the banks under your jurisdiction, and make the examina- tion as extensive as that which you gave to this bank, and get around in two years, as required by law ? A. No, sir ; I made 83 last year, and 106 the year before. Q. Necessarily, you are compelled to pass over banks hastily ? A. Yes, sir. Q. In order to get around within the two years which the law com- pels ? A. Yes, sir. By Senator St. John : Q. Could there not be two or three examiners to work at the same time? A. At first I used to have two assistants, but under the new law I have done it all myself. Q. There is nothing to prevent the superintendent having au ex aminer in one section and another examiner in another ? A. No, sir. By Mr. Chapman : Q. Is it not a great deal better for one to make an examination, because he can keep a record of the whole, running along from year to year ? A. Yes ; I know pretty much every bank in the State now ; I have been through them all, I think, three times. By Mr. MgKeon : Q. Do you know whether the Tennessees are all paying interest ? A. I do not think they do now ; they paid and then stopped again. By Mr. Chapman : Q. Do you know how much they have offered by way of compromise ? A. I do not. Q. They offered only 50 cents on the dollar ? A. I don't know ; I believe there are negotiations but I am not familiar with them. 177 Q. You made all the inquiries, you and Mr. Ellis, that you deemed necessary in order to ascertain the fair value of these securities ? A. Yes ; we supposed that we had put every thing down at their fair value. Alfred T. Conhlin, a witness, being duly sworn, testifies: By Mr. Chapman : Q. You were the president of the Mechanics and Traders' Savings Bank? A. Yes, sir. Q. For how many years ? A. Sixteen years, but at different periods, though. Q. You know of these Tennessee bonds ? A. Yes, sir. Q. After the time of the examination in October, 1874, did you have occasion to sell any of those bonds? A. We sold some of them ; I can't give you the datec. Q. Was it after 1874 — after this examination ? A. Ob, yes; it was after the examination. Q. What did you sell them for — how much? A. I think it was 65, I will not be positive ; I have not got the figures in my head, but you can tell from the books ; they were sold in 1874 at 69, but we did not sell them. Q. Do you recollect in November, 1874, of Mr. Gregory and you being appointed a committee to see what you could realize for North Carolina and South Carolina bonds ? A. Yes. Q. Do you recollect Mr. Gregory's report to the board that 'you could realize $60,000 in round numbers? A. I think we made a report ; yes. Q. To that effect ? A. Yes, sir. Q. Did you join with him in investigating as to the value of those bonds at that time ? A. I think he attended to it principally himself, he being down town all the time. Q. Was he a stock broker ? A. No, sir ; but he was there generally in the street. Q. Wall street ? A. Yes; down there. Q. After the examination had been made by Mr. Ellis, you received a letter from him, did you not, calling upon you to make up a defi- ciency ? A. Yes, sir. 23 178 Q. The one that has been produced in evidence here ? A. Yes ; I think that is the letter. Q. Were you taken sick along at that time '{ A. I was taken sick the last of October. Q. Do you recollect of the matter having been brought up — the matter of this letter having been brought up, and the letter itself read and the contents of it discussed in the board ? A. I will not be positive I was there myself or not ; I was sick from October until December — I got out in December. Q. Do you recollect of your being appointed one of the committee with the vice-president, Mr. Ross, and, I think, another gentleman to consult with Mr. Ellis about the bank ? A. There was a committee appointed; I know that myself and Mr. Eoss went there. Q. Do you recollect what day it was you went to see him ? A. I went up Christmas afternoon. Q. December 25, 1874 ? A. Yes, sir. Q. Prior to that, do you recollect of having sold a block of 240,000 of Brooklyn park bonds ? A. Yes, sir. Q. I see Mr. Ellis, in his report, credits the bank with those at 103J October 7, 1874 ; what did you sell them for in December following ? A. At 106 and interest. Q. So that at the time you called to see Mr. Ellis in regard to the bank, you had actually reduced the constructive deficiency in this report some $12,000 by cash in your bank ? A. Yes, sir. Q. Do you recollect of taking up to him the quotations of these or some of the stocks contained in this report ? A. I took up quotations of Tennesseea; and also Eochesters, Buffalos, and Oswegos ; they had all advanced ; Tennessees were going, I think, at 69 — at 68 or 69. Q. These stocks which you held had advanced m that time, and made enough to wipe out the deficiency ? A. Yes, sir. Q. When you made the report in January 1, 1875, did you make inquiries as to the valuation of these stocks on that day ; when you made your report to the department ? A. I got then the best market reports I could get ; we got the reports daily, and where they were not quoted, we went to individuals and asked them. Q. And from these valuations, thus obtained, you had a surplus of sixty-seven thousand and odd dollars ? 179 A. Yes, I think it was; I am not positive. Q. These two gentlemen who are complaining of Mr. Ellis — Mr. Floyd and Mr. Gregory — had caused the bank a good deal of trouble? A. Yes, sir. Q. Do you recollect of their having brought a suit against the bank in 1873, or the fore part of 1874 ? A. I think it was 1873. Q. In 1875 did they not bring another suit against the bank ? A. Yes, I think it was 1875. Q. That was long prior to the time when the depositors commenced their withdrawal ? A. Yes ; they commenced that in February. Q. Not very much, as appears by the bank books ; they did not commence withdrawing until October? A. I believe that the suit was commenced. Q. But it was not argued until August? A. Yes; then the question was argued and they served an injunc- tion on me. Q. You succeeded? A. Yes; he claimed he was elected president. Q. And you not ? A. Yes, sir. Q. Did you succeed in that suit ? A. Yes, sir. Q. And from that time there commenced to be a withdrawal of deposits ? A. Yes, as soon as it got in the papers. Q. Then it got in the papers ? A. Yes. Q. And then the depositors commenced their withdrawal ? A. Yes, sir. By Senator St. John : Q. Were you aware that the bank was not earning sufficient to pay its expenses and a dividend in 1874 and 1875 ? A. I was not aware of it until I was told. Q. You were the president of the bank ? A. But I did not keep the books ; these statements were made up every six months or every year. Q. Was it not a fact that you showed a deficiency ? [Counsel for the superintendent suggests that the question is irrele- vant, as the proceeding is not against any of the officers of the bank, but the question is whether the superintendent had been guilty of negligence.] 180 Q. Were you aware, as president of that bank and as the principal officer of that bank, and receiving a salary for your services, in attend- ing to your duties, that the bank was not making money in 1874 and 1875 sufficient to pay its expense and pay a dividend ? A. I did not know it. Q. You have made here, in 1875, a dividend under the law, and have voted by ayes and noes, and have recorded yourself in favor of making a dividend ? A. Yes. Q. Would you permit a dividend to be made when it was not earned? A. I did not know whether it was earned or not; I don't know but the selling of stocks made it. Q. The selling of stocks ? A. Sometimes ; for instance, on the sale of stocks in December, 1874, there was a profit. 0- That is all right, but here, on the other hand, you have still these Alabama stocks, which have depreciated and have no value in them? A. They have depreciated enough, but not at that time. Q. How do you ascertain that ? A. From the best information we could get. Q. You have never been able to sell them or get an offer for them; you say you don't know whether you were earning expenses or not? A. I did not go through the books myself; I did not keep them. Q. Does not the secretary or treasurer present you with weekly or monthly reports, so that when you come to make a dividend you know whether you have made any thing or not ? A. These reports were made every six months; every six months we had a balance sheet made, and made our report to the department. Q. Do not you predicate your dividend upon this statement? A. Yes, on the statement. By Mr. Chapman : Q. On that statement you had a right to make it under the law ? A. Yes, sir. By Mr. McKeon : Q. You found yourself in October, 1874, behindhand? A. I did not. Q. Did you not hear from the superintendent that there was a defi- ciency? A. Yes, sir. Q. Did he not tell you it was $24,000? A. Yes, sir. 181 Q. Did he not say you had better assume it to be $50,000 ? A. Who? Q. The superintendent ? A. I think there was something of that kind. Q. Did he not suggest that yon give bonds or make up the defi- ciency 5 A. Not at that time ; he wrote a letter to us. Q. That was in October ? A. Yes, sir. Q. Did he not suggest that you make up the deficiency by giving bonds ? [Objected to on the ground that the letter is the best evidence of its contents.] Q. Did you give any bonds ? A. No, sir. Q. Did you make up the deficiency ? A. No, sir. Q. Did you as president require of them to give bonds ? A. It was read to the board, and there the matter ended. Q. Did you ever make up the deficiency in any shape or form ? A. No, only by the increase in value of the stocks, and the sale of • the Brooklyn parks. Q. You thought the bank was all safe ? A. Yes, sir. Q. It did not become safe that way ? A. We suppose it did. Q. When you say that by the sale of these stocks you could have made up the deficiency — the apparent deficiency of $24,000 or$25,000, you assume in your calculation that the values of the South Oarolinas and North Oarolinas were about the same ? A. Just the same. Q. That they stood still ? A. Yes, sir. Q. Had you any right to think that they would stand still, and that they would not go down every day until there would be no sale for them at all ? A. I had no right to assume any thing of that kind. Q. As a business man? Q. No ; because the State of Alabama, for instance, had given out that they were going to pay interest, and everybody supposed they would pay their interest in July. Q. Had North Carolina and South Carolina given that out? A. North Carolina did not give it out. , 182 By Senator St. John : Q. Have you ever seen this report which shows a deficiency of in- come of $14,000 ? A. Yes, I have seen that. Q. What did you think of the report ? A. I inquired of the secretary if he agreed with it, and he said he thought it was about right. By Mr. McKeon : Q. Did you ever buy on your own account these southern bonds ? A. Yes ; but not for my own individual purpose. Q. Did you know there was a distinction between fundable and non- fundable bonds of South Carolina ? A. Not until after the State had made the distinction. Q. When was that ? -A. I can't tell exactly, when it was. Q. Do you know what portion of each class of these bonds the bank held ? A. They were all of one kind ; as I understand it now, in regard to the State of South Carolina, the non-fundable and fundable bonds were the same bonds as issued; but only different numbers — the same issues, only with different numbers ; a part of the same bonds having a different number were fundable. By Mr. Chapman : Q. And they were made non-fundable by an act of the legislature ? A. Yes. By Senator St. John : ~ ! Q. How many of those were non-fundable ? . .] A. I don't know now. By Mr. McKeon : Q. Do not you know that they were known on the market as early as July, 1874, as fundable or non-fundable ? A. July, 1874 ? Q. Yes ? A. I don't know it ; no, sir. Q. Did you know any thing about these bonds at all ? A. The South Carolina 7 bonds ? Q. Yes, sir ? A. I knew them, I know at a particular time we bought them. Q. Were they purchased, under your administration ? 183 A. Yes, sir. Q. From whom were they purchased ? A. They were purchased from Robinson & Cox. By Mr. Chapman : Q. Did Gregory purchase them ? A. Yes ; I was out of town at the time. By Mr. McKeon : Q. What were the bonds purchased from Joslyn & Co. ? A. They were North Carolinas and Tennesees ; the Alabamas were purchased of Opdyke & Co. Q. Are you aware that non -fundable bonds, as far back as July 2, 1874, were quoted at 6 ? A. Was I aware of it ? Q. Yes, sir? A. I may have been. Q. Did you know any thing about it ? A. I did not know that we had any non-fundable bonds. Q. Did you ever read the bonds ? A. Yes; but it don't say on the bonds that they are non-fundable. A. Did you make any inquiries about them ? A. I will tell you why I did not, because these bonds were taken down to the State and there registered. By Mr. Chapman : Q. By the State authorities ? A. By the State; and every one of these bonds was registered, and every coupon was registered by the State agent on each bond. Q. They read all alike, do you say ? A. Yes. Q. No distinction at all ? A. No distinction at all ; if the bonds were produced here, you could see yourself; each one of these bonds was registered by the State. By Mr. McKeon : Q. Were you there when the bank building was put np — were you connected with the bank ? A. Yes. Q. What did it cost ? A. I can't say now what it cost. Q. What did the lot cost ? A. $11,000. * 184 Q. What did the building cost to put up ? A. I really can't state what the cost of the building was., for it was built at separate times; in the first place it was put up one story — a very high story, with a pitched roof above it ; afterward they thought they did not have room enough, and they put another story on it. Q. Did the whole cost more than $33,000 or $34,000? A. I can't tell. Q. Did it cost over that ? A. The whole thing ? Q. The whole building — the building and lot — the lot cost $11,600 and the building about $34,000? A. Oh, yes ; it cost a great deal more than that. Q. Do you recollect whether the trustees were paid for supervising it? A. I think they were. Q. What years were they ? A. I think it was 1860, 1861 or 1862. Q. Was it not in 1868 ? A. Eighteen hundred and sixty-eight — no; that was the time the addition was put on. Q. Do you know if they added to the expenses of the bank to cover loss on their transactions ? A. What? Q. Do you know that the bank was charged with Joss on their trans- actions? A. Yes, sir. Q. How much and what ? A. That bankruptcy claim. Q. Of whom ? A. Of the Joslyns. Q. How much of that was put on ? A. How much was put on ? Q. On the bank building ? A. I cannot tell ; I was not there because I was sick at the time ; Mr. Gregory arranged that. Q. Do you know how much was paid the trustees — was it not about $5,000 ? [Objected to as too remote. Objection sustained.] Q. What business were you in before you went into that bank ? A. I was in the provision business. Q. Were you carrying on business while connected with the bank ? A. A part of the time, yes. Q. The last six or seven years ? A. No. 185 Q. Doing nothing but attending to the bank ? A. No. By Mr. Chapman : Q. Was there any reason why, if times had changed from January 1, 1875, this bank should not have succeeded and gone on ? A. No ; that was our view of the matter ; if the fall in these secu- rities had not taken place there would have been no trouble. Q. Now at the time of the examination, or prior to that, had you received information from the State authorities of Alabama that the interest was to be paid upon these bonds which had been passed in January and July ? A. Yes, sir. Q. From the treasurer of the State of Alabama ? A. Prom the treasurer of the State. Q. You wrote the State yourself ? A. Yes, sir. Q. And you got this information ? A. Yes, sir. Q. That it was to be done ? A. Yes, sir. By Senator Wellman : Q. What date is that ? A. I can't tell, the letter was left in the bank. Q. Was Mr. Ellis' attention called to it ? A. Yes. By Mr. McKeon : Q. Did you say there are letters in the bank from the treasurer of Alabama ? A. Yes. By Mr. Chapman : Q. Left there by you ? A. Left there amongst the papers ; I did not take them away. By Mr. McKeon : Q. Did you show it to Mr. Ellis ? A. Yes; I saw it on Saturday in one of the price lists that they would resume in July, or supposed they would resume in July. By Senator St. John : Q. The Alabamas ? 24 186 A. Oh, yes ; but these were regular State bonds. Q. They were issued for some railroad ? A. But they were regular State bonds issued in favor of a railroad, the same as Oswego issued their bonds for the Midland. By Mr. Chapman : Q. Do you know whether Mr. Fisher, the secretary, invested $20,000, his own money, in those bonds ? A. Yes, we got information from the Dry Dock Savings Bank and the Citizens' when we went to inquire about these bonds, and they considered them first-rate ; I considered them as first-rate — the Ala- bamas — and we received dividends on them of eight per cent. Q. You did receive dividends on them ? A. Yes, sir. By Senator St. John : Q. How many did you receive on the North Carolinas and South Carol in as ? A. We did not receive any. Q. They did not pay you any dividends since you bought them ? A. They professed that they were going to pay and they bad paid; we came in just after they had paid. By Mr. Chapman : Q. As it was, you could sell these in November, 1874, at 60 ? A. We sold a few of these North Carolinas at 60£ or 62£. By Mr. McKeon : Q. How many did you sell at 60 or 62 ? A. The North Carolinas ? Q. Yes. A. Four or six, I think. Q. Out of how many? A. One hundred and fourteen, altogether. Q. Is this a letter you received from Alabama [producing a letter to the witness] ? A. We got two letters on the subject from Alabama, and I think this is one of them. Q. Is this the other one [producing a paper to the witness] ? A. Yes, sir ; this is Mr. Fisher's ; I was sick at the time. Q. You got two letters ? A. Yes, sir; the date of that was June 14, 1 see. 187 The first letter referred to is offered in evidence in the words fol- lowing : STATE OF ALABAMA, ) Treasury Department, [■ Montgomery, 30th Jan., 1874. ) A. T. Gonklin, Esq., 46 Broadway, N. Y. Dear Sir — Yours 26 to hand ; just at this time the State is not paying her interest, but I think will resume payment of interest soon. The recent panic has retarded payment of revenues to the department until a very recent date. The present rapid collection of such reve- nues will soon enable the State to pay her direct interest. Until further directions, applications for payment of coupons will be made to this department. Most respectfully, ABTHUR BINGHAM, State Treasurer. Q. Have you got a copy of the letter you sent — or what did you inquire ? A. I inquired when they were going to pay interest. Q. Did you tell what kind of bonds you had \ A. I think so — I do not know; I am not positive about it; they had paid the interest on the bonds up to the repudiation. Q. You did not tell what kind of bonds you had ? A. No, sir; I said State bonds; I did not think it was necessary to specify. By Mr. Chapman : Q. That letter was shown at the time of the examination ? A. Yes, sir; I come to recollect, now, that that letter was written after the committee was appointed — after the State appointed com- missioners; I asked Mr. Fisher to write down to them. * The letter is read in evidence, in the words following : STATE OF ALABAMA, ) Office of Commissioner, [■ Montgomery, January 14, 1875. ) H. C. Fisher, Esq. : Dear Sir — Your favor of the 18th inst., addressed to the governor of this State, is now before us. We appreciate your anxiety to obtain early information in regard to the resumption of the payment of interest on the indebtedness of Alabama, and it would afford us pleasure to be able to announce that 188 the State possessed the means of early resumption upon valid claims. But, unfortunately, we are not in that condition, nor can we now indicate when we will be ready to meet the creditors for adjustment and settlement of the liabilities of the State. The extent of the indebtedness of the State is unknown to us. The records are confused and imperfect, and do not, as they ought, disclose all the information which is essential to a full comprehension of the financial condition of the State. Obligations so called are reported to exist which are believed to be illegal; others have been incurred without a compliance with laiv : and thus environed, there will be unavoidable delay in consummating a final adjustment. We are now engaged in examining the records of the State, but full information can only be obtained by calling on the creditors for specific statement of the character and amount of their claims, which will be done by publication in one or more of your city papers in a few days. In the meantime the commissioners assure the creditors of the State that they will be met in a spirit of frankness, and that the right of both debtor and creditor will be duly regarded ; the inability of the State to mett just and legal obligations, although to some extent inju- diciously incurred, will not prevent the tender of an equitable adjust- ment. Very respectfully, GEO. S. HOUSTON, LEVI W. LAWLEE, W. B. BETHREN, Commissioners. Q. This letter was in your possession at the time of the last exam- ination ? A. It did not come until along in January, 1875; it is dated Jan- uary 14, 1875 ; I do not know what time he received it. By Mr. McKeok : Q. After you got it what did you put the Alabamas at ? A. In January, 1876?' Q. In July, 1875 ? 'A. We did not make a report in 1875. Q. Did you make a dividend ? A. Yes, sir. Q, What did you put these things at ? A. The law did not require us to put them in. ,Q. You made no examination into the value of those assets? A. There was no reason of making an examination of the value of the assets until we made our report to the banking department. 189 Q. Then on the 1st of January, 1875, you did make a report? A. Yes, sir. Q. What did you put the Alabamas in then at ? A. I cannot tell you from memory — the papers will show. Q. What means did you make use of in regard to the States of South Carolina, North Carolina and Tennessee, to know their condition in the fall of 1874 ? A. I did, in regard to the State of Tennessee. Q. Did you get a letter ? A. It was somewhere in the bank. Q. Then the States of North Carolina and South Carolina? A. I was down to the State of South Carolina to have the bonds registered. Q. The registration took place some time before ? A. Yes, sir; I think in 1874. Q. What time in 1874 ? A. It is in the fall of 1874 — no, it must be 1873. Q. What did you do in 1874 to find out the standing of North Caro- lina and South Carolina ? A. What did I do ? We took what we could find in Wall street, amongst those we supposed would know. Q. Did you look at the stock exchange list in 1874 ? A. I looked at it pretty much every day, at the prices; sometimes there were sales, and sometimes there were not. J. 8. Carman, being duly sworn, testifies : By Mr. Chapman : Q. Where do you reside ? A. In Orange, New Jersey, at present. Q. Did you at any time within the last few years reside in Brooklyn ? A. I always resided in Brooklyn till the last eighteen months. Q. What has been your occupation ? A. During the last nine or ten years real estate brokerage. Q. Have you an office in Brooklyn ? A. Yes, sir. Q. Are you acquainted with the values of real estate in Brooklyn ? A. Yes, sir ; I think so. Q. Were yon acquainted with the property at the corner of Presi- dent and Van Brunt streets, Brooklyn, consisting of a building erected for a bank, and the building with a brown stone front adjoining, and the stable behind it, with the land upon which it stands ? A. Yes, sir. 190 Q. What, in your opinion, was the value of that property in bulk in October and September, 1874 ? A. You mean the corner house and the house, and the house ad- joining. Q. The corner house and the stable back of it, and the building built as a bank adjoining it ? A. $32,500. By Mr. McKeon : Q. How could you get at that time 10 per cent from it ; would it yield a rent of 10 per cent; would it give an interest of 10 per cent on 133,000 ? A. They would not in the condition the corner building was in at that time. Q. Would they at any time ? A. By spending a very little money they would. Q. Would they do it as it was in 1874 ? A. That would depend upon what business they were going into. Q. Give us the way you get at your $32,000 ? A. The building could be altered and utilized for living purposes ; I think it would have paid in that way 10 per cent on the cost at that time. Q. What kind of a neighborhood is that ; it was tenement property at that time ? A. The neighborhood originally was built of very good houses. Q. What was it in the fall of 1874 ? A. It consisted of tenement houses. Q. How are you going to change that so as to yield 10 per cent on $32,000 ? A. The corner building, if it was fitted up properly, would be very fair paying property ; with one bath-room and one water-closet, the way tenements are fitted up now, that building on the corner could have been utilized and paid very well. Q. At what expense ? A. At an expense of $1,500 or $2,000. Q. With that expense added to it, how could you make $32,000 out of it ? A. You could not buy the lots in 1874 and put the buildings there for that money, and you could not buy the lots and put the buildings there to-day for less than $45,000. Q. What do you claim for it now ; what is it worth now ? A. I would like to get hold of the two pieces for from $15,000 to $18,000. Q. Do you know of any sale in 1874, near there ? A. Yes, sir. 191 Q. Where? A. In President street. Q. Whereabouts ? A. Near Hicks street. Q. How far was that from this building ? A. Just above it. Q. How many feet from it? A. 600 or 700 feet from it, I suppose. Q. What kind of a neighborhood was there there ? A. About a similar neighborhood to this, only this was corner prop- erty. Q. What kind of property was it ? A. Very cheap tenement-house property ; the cheapest kind. Q. What did they sell for ? A. About $16,000 apiece. Q. $16,000 for tenement-house property there? A. Yes, sir ; of the cheapest kind. Q. When did the break-down in the market of real estate come ? A. In the spring of 1875. \ Q. Didn't it take place in ]&73 ? A. No ; I didn't see it. Q. Do you mean to tell me that Brooklyn property has ever been favorite property with New Yorkers ? A. Yes, sir ; I will discuss that with you if you like. Q. Do you mean to say that there has not been a deficiency on every sale for the last year on mortgage r A. Yes, sir ; I know to the contrary. Q. What cases do you know ? A. I know several cases. Q. Tell me one case within a year past ? A. Where the property has not brought the amount on mortgage ? Q. Yes; how many such cases do you know — not one — but how many of them ? A. Well, I think I can run over a dozen. Q. Name two or three of them ; give the property, the amount of the mortgage, and the amount it brought ? A. There was property on Fifth and Sixth streets mortgaged for $6,500 ; some of it brought up to $7,500. Q. How does that location, on Fifth street, compare with this ? A. It was an entirely different neighborhood* Q. Go back to 1874 ; you know of one block that sold for $16,000, can you name another one ? A. Well, I won't say definitely, but there was some property sold on 192 Hamilton avenue, near this, and I wont say the figures for I might be wrong. Q. Have you an office on this side of the river ? A. Yes, sir. Q. Where? A. It is at 8 Pine street now, it will be at the corner of Broadway and Courtlandt, to-morrow, the 1st of May. Q. Did you attend the sale of this property ? A. No, sir. Q. You didn't go over to Brooklyn to attend it ? A. No, sir ; I didn't go to the sale. Q. Did you know of the sale ? A. No, sir. Q. Well, there is a vast difference between $5,000 and $30,000, is there not ? A. Yes, sir. By Mr. Chapman : Q. Had your attention been called to this property of Goulard, prior to 1874 ? A. Yes, sir. Q. What valuation was there upon it ? A. Mr. Goulard wanted $50,000 for the property ; he wanted to make a disposition of it at that time. Q. What was the amount of the bank's mortgages ? A. My impression was that it was in the neighborhood of $15,000, on the two mortgages, and Mr. Smith had second mortgages beyond that, and Mr. Lowery, Mr. Goulard's attorney, thought it better to hold the property than to sell it. Q. This man Smith is one of the largest real estate holders in Brooklyn ? A. Yes, sir. /. JV. Wyckoff, being duly sworn, testifies : By Mr. Chapman : Q. Are you a member of the firm of Wyckoff & Shepherd ? A. Yes, sir. Q. Eeal estate brokers and auctioneers on Broadway, New York ? A. Yes, sir. Q. How long have you *een a real e'state broker ? A. About 17 years. Q. Are you acquainted with the values of real estate in Brooklyn ? A. Yes, sir. 193 Q. Mr. James, the gentleman who was here the other day, called by the prosecution, was a former clerk of yours in this business ? A. He was formerly a partner. Q. Do you know the property at the corner of President and Van Brunt streets, Brooklyn ? A. Yes, sir. Q. Are you acquainted with the value of property in that locality in September, 1874 ? A. Yes, sir. Q. What, in your opinion, was the value at that time of the prop- erty at the corner of President and Van Brunt streets, consisting of a building erected for a bank, and a brown stone house and a stable be- hind it, with the real estate upon which they stand ? A. I should judge about $30,000. By Mr. MoKecw : Q. When was your attention first called to this building ? A. I have known it for a good many years ; probably six or seven years. Q. Were you living over in Brooklyn when it was being built ? A. Yes, sir. Q. Passing it every day ? A. Yes, sir. Q. Do you know of any sales in that neighborhood in 1874 ? A. I don't know that I do sir ; I don't remember of any. Q. What do you make your basis of calculation on for 1874 ? A. On general knowledge of the lots and value of buildings. Q. How could you get ten per cent out of that property ? A. You couldn't get ten per cent out of it now. Q. How could you then ? A. Well, if the projector had carried out his idea and made a bank there, it probably could have been utilized at ten percent; it might have been rented then at the rate of ten per cent. Q. Well, if there was not a bank there at what rate would it come? A. Well, it is rather difficult to answer that. Q. Isn't it tenement property all around there ? A. Well, generally, sir. Q. Has it ever been rented, to your knowledge ? A. Not to my knowledge. Q. Have you inquired whether it has ever been rented ? A. No, sir. Q. Do you know the rents of houses in that neighborhood ? A. Only so far as tenements go. 25 194 By Mr. Chapman : Q. Isn't it true that property has a value, even though you may not be able to rent it ? A. Yes, sir. Q. Isn't it true of almost all vacant lots in the cities of New York and Brooklyn that they have a value, although you may not be able to get 10 per cent out of them ? A. Yes, sir. Q. The mere fact that you may be able to get a certain per cent in rents is no criterion of the value of the property ? A. No, sir. By Mr. McKeon : Q. Isn't it the general rule by which dealers in property go ? A. Well, it has been for the last four or five years. Adjourned to Tuesday, May 1st, at 10 o'clock. New .York, May 1, 1877. The committee met pursuant to adjournment. Present — Senators Coleman (chairman), St. John and Wellman. De Witt C. Ellis, called as a witness, being duly sworn, testifies : By Mr. Chapman: Q. Are you superintendent of the banking department of New York ? A. Yes, sir. Q. When were you appointed ? A. The 19th of February, 1873, I think. Q. What position had you been occupying prior to that ? A. I was deputy State treasurer at the time the appointment was made. Q- How long had you been acting as such at that time ? A. I think I went into the treasurer's office January 1, 1872. Q. And remained as such down to the time you were appointed bank superintendent ? A. I did. Q. And have remained bank superintendent since ? A. I have. Q. Who was your predecessor as superintendent in the department ? A. D. C. Howell, of Bath. 195 Q. You have ruad the charges presented by the governor to the senate ? A. I have. Q. Also the letter of Mr. Best to Governor Tilden ? A. I have. . Q. Also the schedules acccompanying the governor's message and Mr. Best's letter ? A. I have. Q. And the affidavits of Mr. Floyd, Mr. Gregory and Mr. Bellamy ? A. All of them. Q. And yon have heard these gentlemen testify here in this investi- gation ? A. I did. Q. I would call your attention to the charges which the governor presented to the senate, taking them up one by one ; the first charge which the governor makes, or the first proof which the governor pre- sents, in support of the charges which he makes, is as follows: " A balance sheet, schedule A, made out by George N. Pratt, who was the general book-keeper of the bank, as verified by his oath, showing a deficiency in July, 1874, of two hundred and one odd thousand dol- lars : " did you hear Mr. Best testify in regard to that paper, which the governor characterizes as " a balance sheet, made out by Mr. Pratt," yesterday ? A. I did. Q. Did you hear him testify that he himself put on the figures to that paper, which the governor characterizes as "a balance sheet"? A. I did. Q. With those figures off, could there be any balance sheet of it? A. There could not. Q. Did Mr. Pratt then make that balance sheet ? A. He did not, if Mr. Best swore to the truth. Q. And Mr. Best is the man who presented these charges to the governor ? A. He made the figures himself, he said ; that makes the balance. Q. [Handing book to witness.] Will you look at that certificate of Mr. Pratt, and see what he certifies to ? A. He certifies he was book-keeper of the bank in 1874, and that he has examined the schedule hereto annexed, marked A, and that it includes all the assets of the said institution at the time named. Q. Will you read all there is in there, which he has certified to ; read the words simply which he has certified to on that paper ? A. "Bonds and mortgages, stocks and bonds, cash in the safe and in banks, interest due but not collected, banking-house, cost, '• No. 30 President street, Brooklyn, 196 " No. 32 President street, Brooklyn, "E. Goulard judgment, "Suspense account, nominal value, $41,000." Q. Did he certify to the figures ? A. " Subsequently realized, office furniture, safe," etc. Q. Is there any thing in that certificate to the assets, showing any balance sheet made out by Mr. Pratt ? A. There is not. Q. Has there ever been any question, so far as you know, but that the bank had the assets mentioned and certified to by Mr. Pratt ? A. I never heard it disputed or questioned. Q. Any claim so far as you know ? A. Never any. Q. Will you tell the committee then, if you can, what significance there was in obtaining Mr. Pratt's signature, or certificate, to the fact that this bank had these assets ; was there any ? A. I cannot see that there was any, except to furnish evidence on the part of the receiver that he received such assets, that they were there at the time. Q. That never has been questioned anywhere ? A. Not that I know of. Q. The, values were not carried out? A. It seems not, by Mr. Best's statement. Q. Or certified to by Mr. Pratt ? A. It seems not. Q. So that if Mr. Best's testimony was correct there was no balance sheet made out by Mr. Pratt ? A. No, that must be so. . Q. It is very evident the governor must have been misled ? A. I should have been misled by such a misstatement, and I have no doubt he was. Q. The second item of proof which the governor submitted to the senate reads as follows : " Second. The testimony of William Floyd and Ira W. Gregory, two of the trustees of the bank, contained in their depositions that they, as a special committee appointed in July, 1874, to examine its condition, reported a deficiency of assets, as com- pared with liabilities, of $181,505.71, and a deficiency in annual in- come, if the usual dividend of interest to the depositors were declared, of $15,041.70. Schedules B and C, showing this condition of things, were appended to the charges, and form a part of their report. Mr. Floyd deposes further, that the trustees having, notwithstanding their report, declared the usual dividend, he through F. P. Bellamy, his attorney, in 1874, made copies of the report of himself and Mr. Greg- ory, and, accompanied by the schedules above mentioned, appeared 197 before Mr. Ellis and requested of him to institute proceedings to pro- tect the creditors ; that thereupon Mr. Ellis went to New York, and in person examined the condition of the bank ; that after such exami- nation Mr. Ellis admitted to Mr. Floyd that the report of himself and Mr. Gregory was substantially correct, the bank was insolvent, and promised to take immediate measures to protect the depositors; that he, Mr. Floyd, frequently, between that time and June, 1876, urged Mr. Ellis to take some action in the matter, but that until the last- named date he neglected so to do." Now, I would call your attention to the items of proof in regard to that ; as to this $181,000 deficiency purporting to be shown by these statements which the governor sent to the senate, these schedules affixed to Mr. Floyd's and Mr. Gregory's affidavits, did you not find, when you came to investigate, that they had left out all the cash of the bank ? A. I did. Q. Amounting to how much ? A. $102,000, in round numbers. Q. And had left out the Goulard judgment ? A. They had. Q. $5,000 ? A. $5,000, estimated, I think. O. And they left out the furniture ? A. Furniture and fixtures and suspense account. Q. Now, you say you have read these affidavits of Messrs. Floyd and Gregory ; do you recollect that they swore that you had admitted to Mr. Floyd and Mr. Gregory that this report was substantially correct ? A. I remember they swore so in their affidavits. Q. Did you hear. Mr. Floyd and Mr. Gregory swear here the other day ? A. I did. Q. Did you hear Mr. Gregory swear the other day that you admit- ted- that to him, before you made the examination ? A. I did. Q. How could you admit that his report was substantially correct before you made the examination ? A. I didn't admit it. Q. Did you admit it ? A. I could not admit it, for I had no means of knowing, except their own statement. Q. And you recollect one of the committee calling Mr. Gregory's attention to that, and asking him how it could be? A. Yes, sir. Q. After you had made the examination, do you recollect of your finding but a deficiency of some $24,000 ? 198 A. I do. Q. And do you recollect of Mr. Floyd swearing that you claimed to him that you found a deficiency of $24,000 ? A. I do, very distinctly. Q. How, then, he reporting a deficiency of $181,000, and you report- ing a deficiency of only $24,000, could you have admitted to him that his report was substantially correct ? A. I could not, unless I guessed at it ; in fact, I never admitted it I never had such an idea in my mind. Q. The two are not substantially correct, and you told him it was only $24,000 ? A. Entirely different. Q. And he swore to it the other day ? A. Yes, sir ; and he swore I admitted a deficiency of about one per cent; that it would amount to about $24,000. Q. Now, in the affidavits to the governor you recollect that Mr. Floyd and Mr. Gregory swear that they frequently, between October; 1874, and June, 1876, urged upon you to take some action in the mat- ter, but that until the last named date you neglected to do so ? A. I remember it, and read it. Q. From .the time you were here in October, 1874, and saw Mr. Floyd and Mr. Gregory at the Metropolitan hotel, did you see either Mr. Floyd or Mr. Gregory at any time until after you had handed over the bank to the attorney-general in 1876 ? A. I never had seen them prior to that time, and never have seen them since that time, and never have had any communication, directly or indirectly, with either of them. Q. Then those affidavits which they presented to the governor, stating that they had frequently urged upon you to take this action, were fraudulent, were they not ? A. Absolutely. Q. Did you hear Mr. Floyd and Mr. Gregory themselves swear on the stand, in this investigation, that they had not seen you from the time they met you at the Metropolitan hotel until they came here ? A. They both swore to that, and swore to the truth when they swore to that. Q. That is different from their affidavits ? A. Yes, sir; a flat contradiction. Q. A flat contradiction of their affidavits to the governor ? A. Yes, sir. Q. Now, I will ask you whether from the time you were here in October, 1874, down to the time you handed the bank over to the attorney-general to be closed, you ever saw Mr. Bellamy ? 199 A. I never did. Q. Now, I will ask you whether you received any communication during that time from Mr. Bellamy, either directly or indirectly, by letter or otherwise ? A. I received one short letter, to which I replied, and the reply is here in the case. Q. It has been introduced in evidence ? A. Yes, sir ; it was a letter asking what had been done ; what was the result of the examination, to which I replied, referring him to the requisition and letter which I had sent to the bank. Q. That was after you were here and made an examination ? A. That was after the examination was concluded. Q. 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S "g ■S ► 9 2 P S i. «3 a m b ,55 * a " o § m ■d'O 44 *a P a o 0) ■ <3 .3 3 g t"g,.s| q s>p£o-£| fi ° d O Sfl K a. °bS3 a « £ s °s m *-sS' ! m.S-3 » . s *■ S * , 260 It is admitted that on September 11, 1876, the superintendent made a recommendation to the attorney-general to put the Bond Street Savings Bank in the hands of a receiver ; that papers were served by the attorney-general September 20, 1876, and the bank was pnt into the hands of a receiver soon after. Senator St. John asks to put in evidence all reports made by special examiners and all reports made by officers of the bank to the superintendent during his term of office. The committee decide that no reports other than the report of the examiners of March 25, 1875, are admissible as bearing upon the specific charge contained in the governor's communication. Be Witt 0. Ellis, being sworn in his own behalf, testifies : By Mr. Chapman : Q. You are superintendent of the banking department ? A. Yes, sir. Q, And have been since February, 1873 ? A. Yes, sir. Q. You have read this charge which is under investigation by this committee in regard to the Bond Street Savings Bank, have you ? A. Yes, sir. Q. And you have also read this report of the special examiners of March 25, 1875, which has been introduced in evidence? A. Yes, sir. Q. With the note accompanying the same ? A. Yes, sir. Q. I see there is an allusion by the examiners in this note to some of the investments and loans as though they were not authorized by law; was that the fact at the time, that there were any such invest- ments held by the bank — investments not authorized by law ? A. I think not, sir; I think every one of them was authorized by law, by their charter. Q. The Bond Street Savings Bank was doing business under a special charter, was it not ? A. Yes, sir. Q. Not under general laws ? A. No, sir. Q. It was originally incorporated as the Atlantic ? A. The Atlantic Savings Bank; that was the original title. Q. That is, by chapter 280 of the laws of 1860 ? A. Yes, sir. Q. And the name was subsequently changed from that to the Bond Street Savings Bank ? A. Yes, sir. 261 By Senator Wellman : Q. What year was the act passed which changed the name? A. I don't remember when it was changed ; it was about the time they moved to their new building, corner of Bond street and Third avenue; I don't remember the year; it was changed by an act of the legislature. By Senator St. John : Q. You say all their securities were such as you regarded they were entitled to take ? A. Yes, sir; as I understand it; this was originally a loan, not an investment ; a temporary loan, as reported, in this annual report. By Mr. Chapman : Q. The securities to which you suppose reference to have been made by your examiners are the New Jersey town bonds in aid of the Mid- land? A. It was the loan that he reports there as having been made on those bonds. Q. On the town bonds in aid of the Midland railroad ? A. Yes, sir. Q. By the general laws in force at that time, your idea is that they would not have been authorized to have loaned upon them ? A. I don't know that there was any general law at that time in rela- tion to these lands, except that one in regard to Brooklyn and New York; each bank was working under its own charter, and the provis- ions of its own charter until 1875. Q.' I show you section six of chapter 280, of the laws of 1860, which is the charter of this Bond Street Savings Bank, and ask you if that section contains the provision which authorized them to loan on those bonds ? A. Yes, sir; that is the provision. Q. I will read a portion of the section : " It shall be the duty of the trustees of said corporation to invest as soon as practicable, in public stocks or public securities, or in bonds and mortgages, a3 pro- vided for in this act, all sums received by them beyond an available fund of not exceeding one-third of the total amount of deposits with said institution, at the discretion of said trustees, which they may keep to meet current payments of said corporation, and which may be then kept on deposit or interest or otherwise in such available form as the trustees may direct." Other savings banks had special charters with a corresponding provision in them, had they not ? A. A very large number in the State had that or a singular provis- 262 ion ; I might say that it turned out, and I guess was always regarded by the department as one of the worst provisions that was ever put into the savings bank charter — that very provision ; but it was the law. Q. The department had so interpreted it ? A. Yes, and it had been so interpreted by the best counsel of the State ; by the counsel for this very bank. Q. And these investments are legal? A. That they had a right under that clause to make the loan. Q. Instead of an investment it is a loan ? A. It is a loan, as reported there ; the department had protested, in looking over the reports, against that clause, repeatedly, but the legis- lature had not seen fit to change it, and did see fit to create banks with such provisions. Q. Was that provision left in the general savings bank law that was passed in 1875 ? A. No, sir ; that law provides what they may loan on, and nothing else. Q. Under the law of 1875, they would not have power to make that loan ? A. No, sir. Q. The law of 1875 has a provision in relation to investments of loans that had been previously been made ? A. Yes, sir ; a special provision put in permitting banks to hold such securities as they had then invested in up to that time — which is not permitted by tha act of 1875 - - until such time as they could dispose of them to the best interests of the depositors. By Senator St. John : Q. What section is that ? A. I don't remember the section ; I remember the discussion in the committee over it, and the way it was finally disposed of. By Mr. Chapman : Q. One of the items of charge is that by this report of March 25, 1875, there was a deficiency of $20,499.28 in annual income ; did the same report show a surplus held by the bank of $145,731.05 ? A. It did. Q. Now, I will askjyou whether on that report, showing that sur- plus , you could have put the bank into the hands of a receiver ? A. No,^sir ; I could not ; it was a large surplus for a bank of this size, and I had no standing in court to close it up. Q. If the attorney-general had applied to the court upon this report he would have had no standing in court ? 263 A. I don't think he could have stood a minute. Q. The proceedings would have been dismissed on his own papers ? A. Yes, sir, that is my judgment; of course, that is based on the experience of former superintendents. Q. You have reports in your department of action attempted to be taken by former superintendents, where the bank beat the party on the ground of showing that it had a surplus ? A. You will find on Mr. Howell's report, in the case of the Third Avenue Savings Bank, they made an attempt to close it up, aud the court beat the plaintiff; all I know of it is in the record of itself. Q. Now I will ask you to explain in regard to this element of the deficiency of income ? A. That grew out of the suspension, to a large extent, of the inter- est on those town bonds, and, as the examiner says, there was a failure to rent some real estate. Q. Did the fact of there being a deficiency of income interfere, under the law, with their right to declare a dividend to depositors ? A. No, sir; not if they had the surplus. By Senator St. John : Q. Do you mean by that that a bank of this kind, since the law of 1875, could go on and declare a dividend when they had not earned it ? A. I mean just this, that the law of 1875 (I was familiar with the discussion of that very question) was framed so that a bank could declare a dividend if it had that showing on its books, whether it had earned it that year or any other year ; and that provision was put into the general law expressly to cover that class of cases ; they might in one dividend period of six months not make as much as that dividend, but if they had previously earned it, and it appeared on their books ; according to the language of the act they could declare the divi- dend ; of course, when they had used up their surplus they could n6t do it. By Mr. Chapman : Q. That very question was under discussion in the committee ? A. It was thoroughly discussed in the committee, and they finally agreed upon that form as a matter of justice to depositors ; a bank might be robbed during one six months of its dividend, and have a large surplus on its books and on hand, too ; and the ground taken was that the bank should be permitted to pay that dividend to the depositors just the same; the original draft of the bill had a pro- vision in that they should not pay any dividend not earned during that dividend period ; that was stricken out and modified as it now stands. 264 By Senator St. John" : Q. Then your idea is, if a bank, in making out their estimate, shows a surplus by inventorying its real estate and its stocks far above their value, that that would entitle them to declare a dividend? A. No, I don't say that. Q. I want to know what you mean ? A. I say if they have a surplus. Q. Is it a fictitious surplus, a surplus that is made up by putting a high price, and a price above the market value, on these, or is it a natural, fair surplus ? A. I assume that the officers and examiners when they make the examination as to values estimate fairly; if they do not, I have no means of understanding any thing about a bank ; we take the report in this case as we do in all other cases ; no complaint had ever been made about that bank : no one ever questioned its integrity up to that time, nor since, to me. By Mr. Chapman : Q. Now, in regard to the appointment of a receiver, your recollec- tion is that the matter was presented to the attorney-general Septem- ber 11, 1876 ? A. Yes, sir ; the report shows it — my recommendation. Q. I will ask you whether the bank, at the time you referred the matter to the attorney-general, actually had a surplus ? A. It actually had a surplus, taking its real estate at cost, of about $130,000 at the time we closed it up. By Senator St John : Q. When you put it in the hands of the attorney-general ? A. Yes, sir, By Mr. Chapman : Q. By the act of 1875, the value of the real estate must be returned at cost, must it not ? A. Not above cost. Q. The point that struck Senator St. John's mind probably was, if there was this surplus, the attorney-general, according to what you have stated, would not have had power to put it into the hands of a receiver ; explain that ? A. This bank was closed up after consultation with the trustees and myself, as a matter of expediency in the interest of the depositors ; we consulted together, looked the matter all over, and found that the deposits were being gradually withdrawn ; we had closed up half a 265 dozen banks, more or less, right along on that avenue, and there was a general distrust in that particular locality, more so than anywhere else ; and the result was these deposits kept being withdrawn gradu- ally ; no run on the bank, that I know of, but they were losing their deposits; and we got together and held a council and agreed between us that it was in the interests of the depositor to stop taking deposits and wind up the bank ; they would have done it themselves, volun- tarily, if they could have converted their real estate fast enough to meet the depositors ; after that consultation, I made the recommenda- tion, and of course there was no opposition on the part of the bank. Q. And hence you could have closed it up even if there was a surplus ? A. It was deemed advisable ; I regarded the officers as far as any action I could see, or had seen, as honest men, that wanted to do the best thing they could for the depositors ; in fact they showed a great deal of anxiety to protect the depositors, and they thought they could do it in that way. Q. Was there any thing at any time brought to your attention that led you to be suspicious of the trustees or of their actions ? A. No, sir. Q. Or of the bank officers ? A. No, sir ; that I now recollect of. Q. With the fall in real estate it was impossible for them to realize upon their real estate so as to meet their deposits ? A. Yes, sir. Q. In other words the hard times compelled them to close ? A. That is what it was, exactly ; it was that and nothing else, that I know of. Q. You say that you had closed up some few saving banks along in that locality ? A. Yes, sir ; half a dozen. Q. And the depositors being alarmed, commenced gradually with- drawing ? A. Yes, sir ; that was the fact. Q. Is there any thing in the law that requires you to report to the attorney-general in case you at any time discover a deficiency in in- come? A. Not that I ever heard of. Q. Certainly not, if the bank has a surplus as large in proportion to its assets as this ? A. No, I don't think the law mentions the subject of income at all, and as matter of fact the income of the bank varies from one year to another ; it is sometimes larger and sometimes smaller, and that is an estimated income ; it is not a natural one. 34 266 Q. Estimated for the six months in which this examination was made ? A. For the year; the examiner makes an estimate of the expenses of the bank and of the income of the bank, and strikes a balance. Q. Then, in fact, at the end of the year instead of there having been a deficiency of income, there may have been no deficiency at all ? A. That might be possible, but the examiner makes his estimate at the time he is there. By Senator St. John : Q. How could it be possible that th« income would be made np ? A. We will suppose that he made his examination in the early part of the year. Q. I want to take it just as it is ; how many thousand dollars of bonds were held by this bank that were non-paying bonds ? A. You can tell just as well as I, by looking at that report. Q. I am not so well versed as to non-paying bonds as you are; they report here $65,000 of bonds, from which they got no interest? A. These bonds are good now — as good as " governments" — interest and all. Q. They are town of Thompson bonds here — $30,000 ; do you think they are as good as "governments"? A. They say so ; they had a litigation, and they have beaten the town ; I don't say they are worth as much as "governments," but they are as valid. By Mr. Chapman' : Q. It is the fact, is it not, that in the case of many town bonds they may be very low at one time and subsequently appreciate in value to the full face ? A. Yes, sir ; as a matter of fact, that is so. Q. Their value may depend entirely upon the decision of the courts as to their validity or invalidity ? A. Yes, sir ; where the town repudiates them, or they are in dispute, of course it depreciates the bonds; when the question is finally settled for or against the town, if settles the value. Q. Are there not many cases of bonds or stocks on which the interest had been passed one or more times on which subsequently the interest was paid in full ? A. Yes, sir. By Senator Wbllman : Q. In regard to these four classes of bonds designated in the 267 examiner's l'eport as " interest suspended," and estimated at seventy, what do you understand about the suspension of interest having been removed — the payment of interest having been resumed ? A. Now? Q, Yes ? A. I am informed — I don't know of my own knowledge — that in the litigation they have succeeded, and that the bonds are declared valid, covering principal and all suspended interest. By Mr. Chapman : Q. That is your understanding of it ? A. I have no doubt about it. By Senator St. John : Q. Did you say that they had resumed interest on them ? A. I did not say that they had paid ; I say that I was informed by the receiver that they had succeeded in the case and the bonds declared valid, principal and interest. Q. Which ones are those ? A. These town bonds. [Mr. Mack was here asked if he desired to ask any questions of the witness, and he replied that he did not, as all the reports touching the bank have not been put in evidence.] By Senator St. John : Q. Have you ever had any special examinations of this'bank that are not reported ; have you ever appointed an examiner of this bank the report of which does not appear here ? A. I think not; I don't remember of any; I have no recollection of any thing of the kind. Q. Then all the examinations and means of knowledge of the con- dition of this bank is contained in the public records ? A. That is as I remember it; yes, sir. Q. You don't recollect of having the bank examined by a special examiner, and all the reports of examinations are those contained in your reports to the legislature ? A. That includes, of course, the regular examination by the exam- iners ; I have no recollection of any thing beyond that ; I think I should recollect if there had been. Q. The law. of 1857 transferred the superintendence of the savings banks to the superintendent of the bank department ; I want to ask you whether that law is in force now, I mean simply as to your powers ; whether you regard that law as in force, as to your powers ? 268 A. This law has been amended so that it covers more ground than the original act of 1857 ; I don't know that it repeals any portion of it. Q. I will read this, " Whenever any savings bank or institution for savings shall fail to make a report in compliance with this act, or ■whenever the superintendent of the banking department shall have reason to believe that any savings bank or institution for savings is loaning or investing money in violation of its charter or of law, or conducting business in an unsafe manner, it shall be his duty, either in person or by one or more competent persons by him appointed, to examine their affairs ; and whenever it shall appear to the superin- tendent, from such examination, that any savings bank or institution for savings has been guilty of a violation of its charter or of law, he shall communicate the fact to the attorney-general, whose duty it shall then become to institute such proceedings against said savings bank or institution for savings as are now authorized in the case of insolvent corporations. The expense of any such examination shall be paid by the savings bank or institution for savings so examined, in such amount as the superintendent of the banking department shall certify to be just and reasonable." Is that the law you are acting under? A. The law of 1871 re-enacts substantially that, with additional powers ; the law of 1871 requires regular examinations to be made once in two years; and that law of 1871 to some extent re-enacts the old law ; there is a change in the phraseology, but the substance, the general scope of it, is very much the same. Q. Well, I ask thequestion whether that law is in force ? A.. I don't suppose it is now : it is repealed by the law of 1875, that is, portions of it, as I understand it ; if you will look to the law of 1875, you will see that it refers to quite a large number of acts that are repealed. Q. That is a question that you ought to be perfectly familiar with, and able to give me any information that I ask of you? A. I can not give you any more than the law itself gives ; the pro- visions are there: By reference to section 56 of the laws of 1875, it appears that chapter 136, of the act entitled "an act in relation to savings banks," passed March 20, 1857, is repealed. Q. Then the authority is in that act now ? A. Yes, sir ; prior to that it was in the act of 1871, which required the superintendent to make these regular examinations ; prior to that there was no such power. Q. The laws of 1857 give the power ? A. It gives power to make examinations, but the law of 1871 re- quires him to make them once in two years. Q. That is the only difference ? 269 A. No, it is not the only difference ; that is a difference ; there are other differences, but that was the marked feature in it. By Senator Wellman : Q. The charges state that this bank was closed up at a loss of 1600,- 000 ; not the governor's charges ; I am speaking now of the general statement made by Mr. Mack, in his charges ; the assets do not appear to be of that character, that ought to justify any such loss; have you any knowledge on the subject whether there was any such loss sus- tained ? A. All I know is, the receiver told me within a week, that he had paid fifty-five cents on a dollar, and thought he should be able to pay in full, if he could realize any thing like a decent price for the real estate he could pay in full. By Senator St. John: Q. You don't know that he has paid fifty-five only by what he says? A. That is what he said ; the report to the attorney-general shows that. By Senator Wellman : Q. I understand that the receiver's report to the attorney-general shows that he has paid fifty-five ? A. Yes, sir ; so I am advised, I have not seen it. Q. He has not yet closed up the business, then ? A. No, he has not sold the real estate, and a good deal of the other assets ; that is his first dividend. Examination in regard to the Bond Street Savings Bank, closed. People's Savings Bank, New York City. The following examiner's report is put in evidence : 270 1 — 1 "W H H M ^ a m fc M O h & sr, M rO £ Mj" f- M 00 fc i-H ■«i „ pq O i— 1 CO O t. PCS § «j K> 32 s co H ^ .8 o s On fcj a s CO H H O 00 o o O rH © © O 00 O O OKOO co ^ oo o i-H CX CO o o © to CO O © C75 OS OS COJ-OOl cr? ^H io f- i— 1 C5 2> £— i-H CO i-H CO I— 1 03 i-Too oj U3 -* o o o o o o >0 © © © o co © o o © oo £- s o ~ CO CD CD P>S 271 CD O oo o ^H o O o o> o i-H et OS t- o i-H i-H «fc> otoo OOIO OitOff! CD i-l "* o o o o o o o o o o o © o o o o © © © © a © © o © © © © 00 © © , "a 8 53 53 8 s D g s GO H 3 CQ SP Sh a a- 03 o g O e3 cs moo 53 O C Ol cS hh02 M c3 Si? a ts t» o CD Sh Sh i—i 50 e! r=! S o a o o a o c '3 en 50 "5 i-< m ft d a ft a CD t*> a •d -1 & -M -«-= =3 0) o O ■s CD o >t «h 60 A a o o m > o «p CO IT *co O cd ft & O TJ CO O ed o >» EC A d CD N d .d. 0) >-, H T3 03 ft o N CD bfl (1 g :3-d ft o Tl CD •d O o be d CD a 1 — ' Tj Eh CD d rn" fcl O 3-0 o CI (1 tl O p" co CD m o ja CD ja [4 r/j o 3 CD n a CD CD CD a o: CD *H pg far 6 ft g CD CO tj <"> d a d -S CD i? =3 O 4-3 rn >i en a c o CD d ■a o ■3 CD «M hi) d CD o Sh J a OtJ CD fcl d Ha 272 Mr. Mack asks to put in evidence the examiner's reports for the two preceding years. The committee rule that those reports are not competent. De Witt C. Ellis, being duly sworn testifies as follows : By Mr. Chapman : Q. When did you receive this report, dated November 10, 1875, which has been introduced in evidence ? A. I received it the next day, on the 11th of November, 1875. Q. "When did you report the matter to the attorney-general for his action to close up the bank ? A. On the same day. Q. The records of your office show that fact, do they ? A. Yes, sir. It appears by the attorney-general's record in the case of The People, of the State of New York v. The People's Savings Bank of the City of New York, that 13 days after he received this notice from Mr. Ellis, namely, on the 24th of November, he obtained consent and order to show cause in the action ; that on November 26 a summons, complaint and order were served upon the president of the bank ; that on November 30, 1875, Mr. I. V. French was appointed receiver of the bank. Q. These trustees' bonds that are alluded to had been taken prior to your being superintendent of the department ? A. They were taken by Mr. Howell. By Senator St. John: Q. By the bank superintendent prior to your being superintendent ? A. Yes, sir. Q. Is there any authority which would compel trustees to give bonds ? A. No, sir ; not that I could ever find ; if there was, I don't think there would be many trustees ; that was an arrangement by Mr. Howell to secure the depositors. By Mr. Chapman : Q. Do you know of any reason why those bonds cannot be enforced ? A. They have been paid ; they turned out to be very good security ; better than some of the bonds. By Senator Wellman : Q. The trustees' bonds were not enough to cover the final defi- ciency ? 273 A. No, sir. By Mr. Chapman : Q. Enough, probably, to cover the deficiency at the time ? A. They were at the time. Q. But when this report came to you you would not accept trustees' bonds ? A. I never took any bonds of the trustees, I think ; I required them to put in money or bonds and mortgages, or such security as the law permitted. By Senator St. John : Q. You did propose to take bonds in another instance, I think ? A. No ; do you refer to the Mechanics and Traders ' ? Q. Yes ; I thought your letter suggested that ? i. My letter did suggest bonds or cash, but I don't think I intended — I never have done it — to take personal bonds ; I don't say that the superintendent had not the right to do it; I rather think he had ; I think Mr. Howell did in two or three cases. Q. I would like to make the inquiry whether when these reports are made to you — these estimates of assets and liabilities from these vari- ous banks — whether you yourself, personally, give them a careful examination, to see whether the assets are worth, in your opinion, what the bank owes ? A. I can tell you how they are treated, when they come to the office ; they first go to the head clerk. Q. For tabulation ? f~A. No, for examination ; he looks through all the items of assets, and if he finds every thing regular and straight, there is no particular mention made of it ; if he finds any thing that looks irregular, or any estimate that looks too high, or any thing of that kind, it is either handed to the deputy or myself, and we examine it carefully. Q. You mean by that, if the clerk reports every thing all straight you take no further pains with it ? A. No ; before they are finally sent to the public they are all exam- ined ; I mean on the receipt of these papers from day to day as they are going in ; for instance, take the quarterly statement of the bank ; he examines all those; that has been his business for years. Q. I don't care about the quarterly statement, I am talking now about savings banks ? A. They are all examined. Q. Do you make an estimate yourself as to the value of these lia- bilities to see whether the bank has got a surplus or not ? 35 274 A. We do sometimes, but for real estate and bonds and mortgages we have to take them at their face. Q. But where they have got these depreciated ^stocks, do you sit down and see whether those depreciated stocks are estimated at the fair market value, the prices to-day as they are reported in the papers and at the Stock Exchange, and whether these banks have got suffi- cient to pay their liabilities? A. That is the practice in the office ; I don't always do it personally ; I could not if I tried ; there are to many things to see to and to look after, to do all the clerical work in the office. Q. Not clerical work at all ; I mean after your clerk brings you the statement ; to illustrate, this bank that we have examined, having various depreciated securities which had fallen in the market, and which paid no interest — I ask you the question whether you yourself examine that and see whether your deliberate judgment, after giving the bank credit for all its assets and charging it with its liabilities to depositors — whether yon make a thorough examination to see whether that bank is able to]pay ? A. You mean in the office ? Q. Yes. A. As a general rule we do it Q. As a general rule you do ? A. Yes, sir; the deputy or myself examines it; if there is any peculiarity about the report, any bad securities or any thing of that kind we take particular pains to examine; take the Bowery report, for instance, we go through it and see that the figures are properly footed up ; we are not particular about comparing all the items. Q. I understand that perfectly; that is a bank that is beyond ques- tion ? A. We don't do in your bank as we do in some others. Q. Those are not parallel cases exactly ; take this very case where these securities are held as they were in the Mechanics and Traders, Bank where there was question about it, when there was doubt as to the value, and all that sort of thing, your examiner goes and makes a report and brings it to you, or the bank makes a report ; do you accept that report as final without revising it and looking over it yourself, and see- ing whether, in your opinion, the assets are sufficient to pay the debts ? A. No ; we do not do that, we examine it. By Mr. Chapman : Q. You make the best examination that it is possible for you to make under the circumstance, situated as you are ? A. Yes, sir; the deputy or myself always makes the examination; that is the rule. 275 Q. Do you ever change the figures from what comes from the bank or from your examiner ? A. In the report ? Q. Yes? A. No, sir ; we always publish the report as he sends it ; I think it has been sent back for correction ; sometimes, when errors have been made, and sometimes called back for correction ; we change errors in footing, or any thing of that kind. By Senator St. John : Q. A mere clerical error s A. Yes, sir. Q. What I mean to say was, whether at the department you ever change the values of stocks or real estate, or any thing of that kind ? A. I think not. Q. You take the figures as they are reported to you ? A. Yes, sir. By Mr. Chapman: Q. They are returned to you under oath, are they not ? A. The bank's reports are. Q. Would you have any right to change the figures that were sworn to? A. I should not have any right but to publish them as they are reported. , Q. Wouldn't it be perjury ? A. I am bound to publish their report as they make it, according to law, 'whether it is right or not ; I might publish a supplementary report. By Senator St. John : Q. If you were satisfied in your own mind that a bank had entirely overvalued its securities, would you publish it, or would you ask the bank to correct it ? A. Of course, if I was satisfied they had overvalued I could send it back for correction, or I could publish that report and publish a state- ment with it that I did not think it was true, or something of that kind; the law requires the superintendent to publish the report made by the bank ; he cannot make it for them, and he cannot change the figures. Q. If the bank makes a report which you yourself consider an incor- rect report, your course would be, not to change the report yourself, but send it to the bank and have it altered ? A. Yes, sir. 276 By the Chairman : Q. The bank examiner is a sworn officer, isn't he ; sworn to do his duty? A. I don't think he is sworn. By Mr. Chapman : Q. Don't he have to take an oath ? A. I think not. Q. If you saw from a report (what Senator St. John alludes to) that there was muggery in that report, you might send it back for correc- tion, and you might send an examiner down to go through and verify it? A. We do that with half the banks in the State. By the Chairman" : Q. Tf you think the valuations in the report are too high on some of their assets, you send them back for correction ? A. Yes, sir; we send them back for correction often, for one thing and another ; we send back of the savings bank reports every year, more than one-half for correction, for one thing and another. By Senator St. John : Q. Many of them are merely clerical ? A. Many of them are not clerical ; they get the figures mixed up ; they get items in the wrong place. By the Chairman : Q. Do you send them back for the correction or alteration of values of assets ? A. I think we have, in a few cases ; I don't remember the* exact cases. By Mr. Chapman : Q. If you find any thing in a report that is not satisfactory, you either send it back for correction or else you send an examiner and examine the bank ? A. Yes, sir ; always ; we do not publish any reports unless we think they^are right. Q. The law requires you to publish them as made by the company ? A. The law requires us to publish the report made by the bank, and sworn to. By Senator St. John : Q. How much does this bank pay depositors ? A. I don't know, sir ; it has not been closed up yet. Q. Have they made a dividend ? 277 A. I think I was informed that they had paid 65 per cent ; I am not positive about that ; there are so many of these banks that I don't remember the exact amount. Testimony closed in regard to the People's Savings Bank of the city of New York. Teades' Savings Bane. In regard to charge No. 3, the following report by the officers of the Trades' Savings Bank, made January 1, 1876 [page 176 and 177 of printed report], is read in evidence : 94. TRADES' SAVINGS BANK, NEW YOEK CITY. [224 West Twenty-Third street ; incorporated 1870.] Alexander M. Lesley, President. I. M. Preese, Secretary. FINANCIAL. RESOURCES. Bonds and mortgages $55,375 00 Stock investments, viz. : Stocks and Bonds : Estimated Cost. SPar value. market value. Cities in this State.. $31, 260 00 $31,500 00 $32,515 00 31,260 00 Amount loaned on stocks, as authorized by section 27, chapter 371, Laws of 1875 125 00 Cash on deposit in banks or trust companies 10,077 70 Cash on hand 10,917 50 All other assets not included above, viz. : Amount loaned on collaterals, viz. : Long Island City bonds, and bonds and mortgage $11,000 00 Excess of market value of stock investments over^cost 1,255 00 Accrued interest 1,067 55 United States revenue and postage stamps 318 32 Interest accrued on bond and mort- gage under foreclosure 466 66 14,107 03 $121,862 73 278 LIABILITIES. Amount due depositors $120,323 15 Principal $117,606 74 Interest credited for the six months ending January 1, 1876 2, 716 41 Other liabilities, viz.: Certified check 70 00 Surplus 1 ,469 58 Surplus based upon par value of stock investments $454 58 $121,862 73 CASH TRANSACTIONS DURING THE YEAR 1875. KECEIPTS. Cash on hand and in bank or trust companies January 1, 1875, before transactions of the day $17 , 796 43 From depositors 507,967 05 From interest on loans, deposits and investments 8,125 57 Erom all other profits, viz. , rents 715 82 Erom mortgages paid, called in or foreclosed 13,000 00 From redemption of stocks 11 , 000 00 From loans repaid 118,230 00 From other sources, viz.: Profit and loss $4,090 00 Certificates 29,924 70 Fixture account 7,996 49 Real estate 16,483 29 Exchange 118 99 Mamaroneck town bonds 7,940 00 66,553 47 $743,388 34 PAYMENTS. To depositors, including interest paid to them $494, 368 76 For loans on bonds and mortgages 43,375 00 For loans on stocks and other securities 99,335 00 For stocks and bonds purchased, par value $28,000 27,760 00 For real estate purchased 16 , 483 29 For interest, not included in payments to depositors 281 84 For expenses, viz. : Salary of assistant secretary $780 00 Salary of teller 216 00 279 Taxes $237 24 Other expenses 5,067 70 Other payments, viz. : 9 Profit and loss $308 55 Certificates 34,179 76 6,300 94 34,488 31 Cash on hand and in Bank December 31, 1875, after transactions of the day 20, 995 20 $743,388 34 STATISTICAL INPOKMATION. Number of open accounts January 1, 1876 809 Number of accounts opened during the year 1875 677 Number of accounts reopened during the year 1875 42 719 Number of accounts closed during the year 1875. . 520 Amount deposited, including interest credited, during the year 1875 , . . $514,481 93 Amount of deposits withdrawn during the same period, 494,368 76 Amount of interest credited to depositors for the year 1875 6, 574 88 Amount of each semi-annual credit of interest for the year 1875, and when credited : July 1,1875 $3,521 49 January 1, 1876 2,716 41 Credited at other periods during the year 276 98 Paid, but not credited, during the year 265 42 6,780 30 Amount of the largest single deposit, exclusive of interest, 5,000 00 Average amount of each deposit, January 1, 1876 186 50 Eate per cent of dividends or interest to depositors during the past year ,4 and 6 per cent. Also the following report by the examiner [page 331 of printed reports] : 280 O o M < m a « o o o o no o 2> o CO C4 >0 rH no i—l O o no o? of o? « o o © nO o? C2 O £- i— eooto 00 i-l 14 (W 1-1 o oo o cT o CO CO a . ^3 fe" S 4 * oo co o CD i—l i— i oo CO t- co"-*)T 00 o HO o o o O? OJ CO i-H o o no O o o © © © © © o o © no © •T3 ; Do a . c3 • CQ ; Jo a » 03 — «J gs"g n o s 3 o WOBhl SO •rH ••—* CO DQ 03 03 OO H M m ^H CD •*= Eh M O a en § £ 03 rt to a> -2 S 55 g O 03 a> a) 3 03 281 OS co CD o o o ■* <7« O O 00 O OS 00i>«3H © © o o © o o o 003100 mcosio ^* Oi rH rH 4fc a 0000 0000 "O © O rH t- © © 00 CONIOC- lO rH !>!>"* s s M.S O EH of H a H I 3 of bo o s £» e • a o ° E o 36 O 'o3 .n OS -coo pq -+3 , 1 a So a ^ a> o '" n 2-a a -u 6h O o s o o a 8 282 Henry L. Lamb, a witness called on behalf of the defendant, being duly sworn, testifies : By Mr. Chapman : Q. Are you deputy superintendent of the banking department? A. I am. Q. How long have you been such ? A. I was appointed and began to discharge the duties the first day of May, 1873. Q. The Trades' Savings Bank was a small bank, was it not ? A. Yes, sir; it was always a small bank. Q. Do you recollect of the examiner, Mr. Beid, having made a per- sonal examination of the bank, as of January 13, 1876 ? A. I recollect that he made a report of that date. Q. Beporting the amount of assets at how much ? A. [Referring to report] Mr. Reid reported that the assets were $102,872.92. Q. Liabilities how much ? A. The liabilities were $100,440.58. Q. Leaving what surplus, as of the date of his examination ? A. $2,432.34. Q. Prom the time of that examination down to August following, do you know of any other examination having been made; from the date of January 13, down to August, 1876 ? A. That is, between January 13 and August 1 was any examination made ? Q. Yes : to your knowledge ? A. No, sir ; none, to my knowledge ; none was ever reported to the department. Q. In August, 1876, was Mr. Ellis away; do you remember? A. Yes, sir ; he was away on his vacation ; I think he went away about the first of August. Q. Do you recollect, as deputy superintendent, of receiving Mr. Reid's report of his examination as of August 8, 1876 ? A. Yes, sir; I received this in the department; [paper handed wit- ness] it is dated the 9th day of August, 1876. Q. Can you tell whether that was received by mail or not ? A. I could not be positive, but I think it was. By Senator St. John: Q. What is that, the examiner's report ? A. Yes, sir ; of the date of the 9th of August, 1876; Mr. Reid com- monly sends a package by express, but a single one usually comes by mail. 283 By Mr. Chapman : Q. When was this report filed in the department ? A. It was filed in the office on the 10th day of August, 1876. Q. That report shows a deSciency, does it ? A. This report shows a surplus of $60.67; but the examiner reports among the assets two mortgages, with the memorandum, " owned by bank; no title shown." By Senator Wellman : Q. What is the amount of those mortgages ? A. $21,000 ; and it seems to me, if they had this property without title, they were not solvent. By Mr. Chapman : Q. That is a pencil mark, is it not, against the mortgages ? A. Yes; it is a part of the report; that is Mr. Reid's own hand- writing; one memorandum is: "Owned by bank; no title shown," and the other, " not recorded; no title shown." By Senator Wellman: Q. Do I understand by that they did not show any title to the land on which the mortgage was based, or did not show any ownership of the mortgages ? A. I construed it that it did not show any ownership of the mort- gages. By Mr. Chapman: Q. At any rate, there was enough suspicions about that report made to you by Mr. Reid, so that you thought it was expedient to report the bank to the attorney-general ? A. That was my conviction. Q. On receipt of this report, did you report the bank to the attorney- general ? A. I did in three or four days; I considered the question somewhat what I had best to do in view of it. Q. Did you on August 14th report the bank to the attorney-general for him to close it ? A. Yes, sir ; I did. Q. That is, within four days after this was filed in the department ? A. Yes, sir. Prom the book entitled " Register, Attorney-General's Office," i 1 appears that twelve days thereafter, to wit, on August 26th, the attorney-general served summons, complaint, injunction, and order to 284 show cause in this case, of The People of The State of New York v. The Taades' Savings Bank, that on September 14th, the attorney- general received an answer in the case ; that on October 27th the attorney-general received notice of the answer being withdrawn; and on that day he appointed Samuel B White receiver. Q. I will ask you whether subsequently you received from the regis- ter of the city of New York a certificate showing that the bank did own the mortgages, and that they were recorded in the register's office of the city of New York ? A. I did receive such a paper from the president of the bank. Q. Is that the paper ? [Handing witness a paper.] A. That is the instrument ; this paper was received subsequent to the proceedings. Q. Subsequent to your reporting it to the attorney-general ? A. Yes, sir; I received' it probably the 25th, the next day after it was made. The certificate referred to, from the deputy-register of the city of New York, under the seal of the office, and dated August 24, 1876? states that the mortgages before alluded to in the report of Mr. Keid had been recorded by the register of the city and county of New York. By Senator St. John : Q. Do you know whether these mortgages were ever of any value? did they prove to be good security ? A. I cannot tell you ; this paper was received by me the 24th of August, and the next day the bank was closed by injunction — or a couple of days thereafter — and we had no official cognizance of any transactions of the bank after that. By Mr. Chapman : Q. After it is reported to the attorney-general's office, you have noth- ing to do with it in your department? A. Nothing at all. By the Chairman : Q. Was there any special report made in regard to this bank in November, 1875 — special report and letters of George W. Beid; are there any other reports than have been produced here? A. I think there was an examination of the bank made in Novem- ber, 1875 ; that is my recollection. 285 By Mr. Chapman : Q. What was the result of that examination ? A. I believed it showed a small deficiency. Q. What was done with that deficiency? A. The bank,, or the officers of the bank, were informed that they must make it good. Q. What did they do ? A. They had a piece of real estate in the city of New York, known as the Beach street property, acquired by the foreclosure of a mort- gage ; that property they remodeled ; there is a report on file in the department, of November, I suppose. Q. Have you got that here ? A. No, sir; I have not. Q. Can you get them by going over to the department ? A. I don't know that 1 could at this hour, because the clerk who has had this correspondence in charge, looking it up, is now absent from the office ; I could produce it to-morraw morning, I suppose, or at any other time ; it is five o'clock now, and the office closes at four, and the vault is locked up. Mr. Mack desires to interrogate the witness in regard to the People's Savings Bank. By Mr. Mack : Q. What was the standing — the general reputation of the People's Savings Bank — from the time you were appointed deputy superin- tendent, until the closing of it; have there been complaints, letters, memorandums or private examinations, which have not come in any of those published reports ; I want the whole — documents, com- plaints, letters, conversations, etc. ; the general, reputation of the bank ? A. It was counted among the weak savings banks in New York. Q. Any complaints, letters or private memorandums about it, con- versations or examinations that are not published; if there are we want to know it and then we are through. A. I have no question we have got correspondence in respect to that bank, but what the statements are the correspondence would show better than I can say now ; the records themselves. • Mr. Mack asks that the witness produce all documents relating to the three banks thus far inquired about. The committee state that they will receive any thing that bears di- rectly upon the charges made by the governor. Adjourned to May 9, 1877, 10 a. m. 286 Albany, May 9, 1877. The committee met at 10 A. M., pursuant to adjournment. Present — Senators Coleman (chairman), Wellman and St. John. Trades' Savings Bank — Continued. DeWitt 0. Ellis, recalled : By Mr. Chapman : Q. Have you had an examination made in your department for the purpose of finding all letters and papers in your department in con- nection with the Trades' Savings Bank ? A. I have. Q. Have you had Mr. Lamb and your clerks examine in regard to it ? A. I have. Q. Charley and one other clerk ? A. Yes, sir; they went through the whole file. Q. For papers pertaining to this charge prior to November, 1875, and subsequent to the time Mr. Lamb reported the case to the attor- ney-general ? A. Yes, sir ; every thing. Q. Is this the bundle of papers which you have found in connection with that bank [handing witness papers] ? A. Yes, sir ; these are the papers and letters and reports, and every thing. Q. Commencing with 1873, and going down to September, 1876? A. Yes, sir. By Senator St. John : Q. These are all the papers found in connection with it ? A. Yes, sir. By Mr. Chapman : Q. In your examination of these charges, I will ask you, whether prior to yesterday, whether your attention had been directed to any examination made in November, 1875 ? A. No, sir ; not since that time. Q. I say, in your examination of the charges ? A. No, sir ; it was the first time I had thought any thing about it, and on reading the charges and looking over the reports, I supposed it to refer to that examination which appears in that report of January 13, 1876 ; it had entirely escaped my recollection that any examination 287 was made in November, until it was spoken of here yesterday ; I have a good many of those things to keep in my mind, and I cannot remem- ber every thing without referring to the papers. Q. I will ask you whether there was any thing in the copy of the charges served upon you which called your attention to the November examination ? A. No, sir ; there was not ; I never saw any papers except the mes- sage of the governor. Q. And all there is in relation to the Trades' Savings Bank in the message of the governor is this : " A similar charge as to the Trades' Savings Bank " ? A. Yes, sir. By Senator St. John : Q. The examination in 1875 was made by special examination? A. Yes, sir. By Mr. Chapman : Q. [Paper shown witness.] I ask you if this is the report of the examination made in November, 1875, which was filed in your depart- ment December 2, 1875 ? A. Yes, sir ; that is the report. Q. By that report there appears to be a deficiency of assets of $6,538.29 ? A. Is it so reported ? Q. The amount of real estate is $13,353.29 ; the deficiency of in- come $1,425.75 ; this value carried out to this real estate bid in on foreclosure as $13,000 — that was the cost to the bank in bidding it in on foreclosure ? A. That is as I understand it ; that is as he reports it. Q. Subsequently and prior to January 1st, was this real estate re- ported as having been sold by the bank ? A. Prior to January 1st ? Q. Prior to the examination of January 13th ? A. Yes, sir ; it was reported by the examiner's report. Q. On the examination reported to you, as of January 13th, the item of bonds and mortgages is increased $21,000 over that of Decem- ber 2d ? A. It appears so by the report. Q. And there is no real estate found by the examiner as belonging to the bank on that day ? A. No, sir. Q. What were you informed was done with this real estate which was reported December 2d as worth $13,000 ? 288 A. It was a building ; I never saw it, but the examiner stated that they were changing it into flats for rent, expending several thousand dollars on it with a view to selling it or renting it; that is the report made to me. Q. And was it reported to you that it was sold before this January 13th examination ? A. It was ; yes, sir. Q. For how much ? A. Some $28,000, I think ; I don't remember the exact figures. By Senator Wellman : Q. Do I understand you that flats had been built upon this land by the bank, or that the building was already in flats ? A. They turned it into flats ; yes, sir. Q. The buildings were on it and they turned them into flats ? A. Yes, sir ; expending $6,000 or $7,000, I was told in conversation with the secretary ; they expended that on the building to put it into shape so that they claimed it would pay good interest on $30,000 to rent; that is the way they reported it; of course I don't know any thing about that as a matter of fact except from the report and state- ments. By Senator St. John" : Q. You took their reports about it entirely ? A. I took their reports ; the examiner makes a report of what he finds there. Q. Then the examiner took the representation of these parties in reference to the value of the building ? A. Yes, sir. By Mr. Chapman : Q. It appears by the examiner's report of January 13th, that they did not own any real estate, that they had disposed of it. A. It so appears. Q. And yon suppose it to be true ? A. It says so ; it don't appear ; it says so. Q. On the receipt of this examination, which was filed December 2d, what did you do ? A. I don't know whether I wrote to the officers or not, but the sec- retary of the bank came up here immediately, or within a very few days, in regard to this report and the condition of his bank ; I told him that if they could not put that bank on a sound basis, and make good that deficiency to secure the depositors, I should close them up. 289 By Senator Wellman .: Q. What time was this ? A. Eight away after this report was made,' in December!' Q. That was the secretary ? A. Yes, sir ; the secretary came up here ; he promised to do it at once. By Senator St. John : Q. He promised to put it on a good footing ? A. To make it sound and strong; he talked as a good many of them do, pretty large, about that bank; that there never should be any loss there, and all that sort of thing ; and went back to do it, as he said ; he assured me he would do it. By Mr. Chapman: Q. Did he claim that this real estate was worth more than the amount it was carried out there — ■$13,000 ? A. Oh, yes ; my recollection is that he claimed that it was worth $20,000, and the loan, I think, was $10,000 ; the loan was made ; he claimed on that basis. Q. And putting the real estate at the value that he claimed for it, there would have been no deficiency on the date of your examination ? A. No, not if we had taken their estimate. By Senator St. John : Q. He claimed that it was worth $20,000 ? A. Yes, sir ; that was the original claim, that the property was worth that when the loan was made. By Mr. Chapman : Q. I ask you if, on December 25th, 1875, you sent a letter to the president of the bank, of which that is a copy [handing witness a paper] ? A. I did. The letter shown to the witness is as follows : Albany, December 25th, 1875. Alex. M. Leslie, President Trades' Savings Bank, New York City : Dear Sir — The report of the examination of your bank- shows that there is a deficiency of assets with which to meet its liabilities. The settled policy of the department is to close up all such banks unless the deficiency is made good at, once. Your immediate atten- tion is called to this matter with *.he hope that you will be able to put your institution on a sound footing before the 1st of January. D. C. ELLIS, 37 Superintendent. 290 Q. [Paper shown witness.] Did you after this letter, and before the 1st of January, telegraph to the officers of the bank, inquiring whether they had done any thing ? A. I suppose so, from this answer ; I don't remember 'the exact fact ; I received this telegram from Mr. I'reese, the secretary of the bank, which seems to be in reply to mine. The telegram referred to is as follows : " New Yokk, December olst. " To D. C. Ellis, Superintendent : " Telegram received. Every thing uxed up as proposed. "I. M. FREESE, "Secretary. " Q. I now ask you if you relied upon their statements, or if you sent Mr. Eeid to make another examination and see whether these state- ments were true? A. I sent him to make another examination to verify their state- ment, and see whether they had complied with the requisition I made of them. Q. Is that examination which he made in response to this requisi- tion of yours, the examination which was introduced in evidence yes- terday as of January 13 ? A. That is the report. Q. That showed that they had fixed it up, and that there was a sur- plus on that date, January 13, 1876, of $3,433.34 ? A. Yes, sir. Q. And in that examination of January 13, Mr. Reid cut down the safe and fixtures one-half, did he not ? A. Yes, sir ; I objected to that item as too large. Q. As returned in December at $4,000 ? A. Yes, sir. Q. And with that thus cut down, it shows this surplus of $2,433.34 on January 13, 1876 ? A. Yes, sir ; it was so reported. Q. Did that report of January 13, 1876, show an excess of income of $643.49 ? A. Yes, sir. Q. I will ask you whether, after the examination of January, 1876, you did not instruct Mr. Reid to keep watch of this bank ? A. I did, and several others of the weaker banks of New York ; to keep an eye on them, and if he heard a'ny thing, or heard any sus- picion, to drop in on them at any time and examine them ; that was a standing commission that he had. 291 By Senator St. John : Q. To keep watch of this and other banks ? A. Of the same class of banks ; there were half a dozen small banks there. By Mr. Chapman : Q. You speak of weak banks ; what do you mean by a weak bank ? A. I mean that all banks are weak until they get strong ; when a bank starts, a young bank, it is small, and it takes time, ordinarily, for them to get to be what we call strong banks. By the Chairman : Q. If a bank showed little, surplus, or none at all, or a small surplus, you would call it a weak bank ? A. Yes, sir ; I would cousider it a weaker bank, perhaps, not to say a weak bank ; it is a weaker bank than a stronger one that has got more surplus. By Mr. Chapman : Q. All savings banks commence with a first deposit, do they not ? A. Yes, sir. Q. And gradually go up ? A. They commence without any capital on the deposits of people who believe in them, and of course a young bank, of short life, must be necessarily a small bank. By Senator Wellman : Q. Was it under this general instruction that Mr. Keid proceeded to the examination in August? A. I think it was. Henry L. Lamb, recalled : By Mr. Chapman : Q. I ask you whether at the time of this examination in July, you did require Mr. Eeid to make this examination, from something that had attracted your attention? A. I wrote a letter to Mr. Keid under those circumstances/saying that he had better go and look into it ; he went there and the secre- tary would not let him make an examination unless he had a commis- sion. By Senator St. John : Q. In August ? 292 A. Yes, sir ; and then I issued a commission for a Special examina- tion. By Mr. Chapman : Q. And it was on that examination that you reported the bank to the attorney-general ? A. Yes, sir. Q. Mr. Ellis was away on -his vacation at this time ? A. Yes, sir. Q. And you were acting as superintendent, under the law ? A. Yes, sir. D. 0. Ellis, recalled : By Senator St. John : ' Q. I want to go back to the time of that examination, in relation to the two mortgages of $21,000 ; were those mortgages ever reported to the bank department before that time ? A. No, sir. Q. The mortgages were taken for the sale of this real estate ; was that it? A. Not the original sale, as I understand it; as I understand it they sold this property, and took back a mortgage; it was not this mort- gage ; subsequently, the next year, it seems now by that report, at least I have got that impression from some source, that the maker of the mortgage, the buyer of the property, failed to pay ; at any rate they got possession of the property again ; it came back on them, and it seems that they resold it, and these two mortgages that he says he does not find any record of, were the mortgages given on this resale, prior to this examination, a short time before, as I understand it ; they never had been reported to the department in any form. Q. But were taken for the sale of real estate which they owned "r A. It seems so. By Mr. Chapman: Q. I ask you whether yoii had any knowledge of any thing of this kind until after the case was handed to the attorney-general ? A. No, sir; when the case was handed to the attorney-general these facts came out; we had no evidence of it whatever. By Senator St. John : Q. I would like to know whether in any of these examinations — I mean all the other banks that we have gone through — whether at any time when you have had suspicion in regard to the stability and 293 soundness of these banks, you have examined the officers or employees' 0/ any body connected with it, under oath, as to the truth or falsity of their reports, etc. ? A. I personally make very few examinations ; Mi\ Reid does, some- times. Q. You have not administered any oaths to any person in relation to their condition ? A. This bank. Q. Any of these banks which we are investigating ; what I mean to say is, have you or your examiner (because he represents you in it) had the officers of these banks examined under oath ? A. I cannot say that ; I know in some cases he does. Q. I simply want you to let me know whether you have done it or not? A. I say, personally, I have not. Q. You think Mr. Reid has ? A. He has told me so ; I know that he has in some instances. Q. Did he report those examinations to you in regard to any of thes e banks ? A. Any of this list of banks ? Q. Yes, any of these banks that failed ? A. No, I think not ; that he put them under oath ? Q. Yes? A. No, sir; I don't think he has; I don't recollect of any now, although he may have done so. By the Chairman : Q. I suppose you mean by that that he did not state the fact in his reports, that he had examined them ? A. No, sir. By Senator St. John : Q. You really don't know what he has done about it, do you ? A. I only know what he says ; he reported to me verbally. Q. We were talking yesterday about the power of the superintend- ent of the bank department, and I referred to that law of 1857 ; it was the law of 1857 which transferred to the superintendent of the bank department the power of supervision over the savings banks, was it not ? A. Yes, sir. Q. Now, did you act under that law up to 1875 ? A. No ; I acted under the law of 1871. Q. "What is the law of 1871, in regard to your powers ? A. It is similar to the law of 1857. 294 Q. You acted under the laws of 1857 and 1871 ? A. Yes, sir. Q. Up to 1875 ? A. Yes, sir. Q. Then you acted under the law of 1875 ? A. Yes, sir. Q. Does not the law of 1875 give you much more "extensive and larger powers than are contained in either of those other laws ? A. In regard to examination ? Q. Yes? A. Not much ; about the same thing. Q. Did either of the other laws allow you to examine under oath ? A. Yes, sir ; I think they did ; I am not certain about that though ; it is my impression that we had power under all ^these laws to examine officers under oath. Q. But you have never done it yourself ? A. I don't think I have personally. Q. Do you know of any one bank where Mr. Reid examined the officers under oath — any one of these banks ? A. Not of these ; I can name banks. Q. I mean the banks in trouble — the banks that failed ? A. No, I cannot name any. Q The law of 1875, in relation to your powers and duties, I think is very much more ample than the law before ; a more extensive law. I will read a portion of it : " It shall be the duty of the said superin- tendent, once in two years, either personally or by some competent person or persons to be appointed by him, to visit and examine every savings corporation in this State. The superintendent shall also have power in like manner to examine any such corporation whenever, in his judgment, its condition or management is such as to render an examination of its affairs necessary or expedient. The said superin- tendent and every such examiner shall have power to administer an oath to any person whose testimony may be required on any such ex- amination, and to compel the appearance and attendance of any such person for the purpose of such examination, by summons, subpoena or attachment, in the manner now authorized in respect to the attend- ance of persons as witnesses in the courts of record of this State, and books and papers which it may be deemed necessary to examine by the superintendent or examiner or examiners so appointed, shall be produced, and their production be compelled in like manner." That is your authority r A. That is the law. Q. You have not done that ; you have not examined under oath, as I understand you, any banks ? 295 A. That is what I have stated, I said that Mr. Reid had, though? Q. But you are not able to mention any one bank ? A Not of that list that you have got there. Q. Well, they were the bad ones ? A. Not all of them. Q. In looking at these returns which were made by these officers in regard to mortgages and various things, and estimates of value, had you no suspicion ,that those were incorrect or put above what they really were worth ? Q. What case do you speak of ? Q. I speak of these values of real estate and various things ? A. No, sir. Q. You had no suspicion that they were appraised above their value ? A. I had no reason to have suspicion in those cases any more than any other, that I know of. Q. You had suspicions in reference to some of these banks, or you would not have sent the examiner to look after them — I mean extra examinations ? A. Yes, sir. Q. Having that suspicion was it not right and proper tnat these men should be investigated under oath to find out just how their banks stood? A. We found enough to close them up without going any further ; that is the reason, I suppose ; we found enough in these cases to close them up, and did close them up on the report, without any further examination ; of course, as a matter of discretion, we could have gone on and spent weeks, going through the examination in detail, and it would have resulted in closing them up in the same way ; but when we found enough to satisfy us we did not go any further. Q. In this bank that we have under consideration now, you found, in 1875, a deficiency of 6,000 and odd dollars, and a deficiency in assets ; you did] not close it up ; there was a deficiency of income of $1,425, and it was a small bank ? A. Yes, sir. Q. Had you no suspicion that some of their affairs were out of the way, or not properly reported ? A. No, sir ; because Mr. Reid made the examination and found this deficiency himself. Q. But you did not think there was sufficient cause for you'to put the bank in liquidation ? A. I did unless they made it good, and I required them to do so ; if they had not done it, they would have been closed up ; it is a question of discretion whether the superintendent shall close a bank up at once 296 or whether he shall ask them to make up the deficiency ; as I under- stand the law, he is clothed with the discretionary power, and it is for him to exercise it to his best judgment, and my best judgment was to do all I could to protect the depositors in these banks ; if there was a deficiency, and the trustees saw fit to pay in the money, it was for the benefit of the depositors ; that is my idea about it, and it always has been. Q. The 44th section of this law is : " Whenever it shall appear to the said superintendent, from any examination made by him, or from the report of any examination made to him, or from the report made by any such corporation pursuant to the requirements of sections 36, 37 and 38 of this act, that any such corporation has committed any violation of its charter or of law, or is conducting ,its business or affairs in an unsafe or unauthorized manner, he shall by an order under his hand and seal direct the discontinuance of such illegal and unsafe or unauthorized practices, and strict conformity with the requirements of the law and with safety and security in its transactions ; and when- ever any such corporation shall refuse or neglect to make any such report as is hereinbefore required, or to comply with any such order, as aforesaid, or whenever it shall appear to the superintendent that it is unsafe or inexpedient for any such corporation to continue to transact business, he shall communicate the facts to the attorney- general, who shall thereupon institute such proceedings as the nature of the case may require." Then you regard that as simply a matter of discretion on your part ? A. I construe that to mean that the superintendent must exercise his judgment in regard to it; I think all superintendents have so construed the law. Q. There is no other superintendent but you that ever acted under this law ? A. The same provision is in all the laws, or substantially the same provision. By Mr. Chapman: Q. Except the first part that he read? A. Yes, sir ; that clause, I know that all the superintendents have so construed it, and you will find it in all the reports, and it has never been complained of before, I believe; I never heard of it. By Senator St. John : Q. The law of 1857 does not give the authority to the superintend- ent, clearly, to examine the officers of banks under oath ? A. That may be so. 297 Q. Well, is it not so ? A. The law shows for itself; I have not got it before me. By Mr. Chapman: Q. In regard to this power to administer an oath to any person, these returns are made upon blanks, which are sent to the officers by the department ? A. You mean the reports ? Q. Yes? A. Yes, sir. Q. The annual reports ? A. Yes, sir. Q. They are required to swear to them, are they not ? A. Yes, sir. Q. If they swear to the truth, would there be any particular advant- age in swearing them again ? A. I suppose not. Q. By this law of 1875 you are compelled to examine all the sav- ings banks once in two years, are you not? A. Yes, sir. Q. Is it practically possible to make such an examination as is indi- cated of all these savings banks once in two years ? A. To make what kind of an examination ? Q. Such examinations as have been indicated; swearing all the parties ? A. No, sir. Q. Take the case of the Trades' Savings Bank, had you any reason to lead you to think that their reports were not true? A. No, sir. Q. Or that they had sworn falsely ? A. No, sir. Q. It subsequently turned out, when you came to your examination in August, that they were in an unsound condition ? A. Yes, sir. Q. Is it possible for the superintendent to know at all times the condition of all the savings banks in the State ? A. I should think not; that is my experience; I think it would be a very wise man that could ; he may think he knows. Q. I will now read a portion of the law which the senator read • section 44 of the act of 1875 : "Whenever it shall appear to the said superintendent, from any examination made by him, or from the report of any examination made to him, or from the report made by any such corporation, pursuant to the requirements of sections 36, 37 and 38 of this act, that any such corporation has committed any violation of its 38 298 charter of the law or is conducting its business and affairs in an unsafe or unauthorized manner, he shall, by an order under his hand and seal, direct the discontinuance of such illegal and unsafe or unauthor- ized practices, and strict conformity with the requirements of the law and with safety and security in its transactions." In this Trades' Savings Bank did it appear to you, from any examination made, or from any report of any examination made, that this bank had com- mitted any violation of its charter or of law, or was conducting its business and affairs in an unsafe or unauthorized manner ? A. No, sir ; there was nothing in any of the reports. Q. Well, did it appear to you ? A. No, sir ; it did not. Q. Until the final report to the attorney-general ? A. No, sir. Q. Now I come down to the next subdivision of the law, which I will read : " Whenever it shall appear to the superintendent that it is unsafe or inexpedient for any such corporation to continue to transact business, he shall communicate the facts to the attorney-general, who shall thereupon institute such proceedings as the nature of the case may require." Now, I ask you whether, prior to the time when this bank was reported to the attorney-general, it appeared to you that it was unsafe or inexpedient for the bank to continue to transact busi- ness ? A. No, sir ; it did not. Q. I ask you whether, in the light of all the information you had at the time, you did not, in connection with this bank, exercise the best judgment you had? A. I did. By the Chairman: Q. By whom are the reports, made by the bank to the department, sworn to ? A. By the president and secretary, ordinarily. Q. Who, when they do not swear to them? A. Some of the officers of the bank, the vice-president, the treasu- rer, perhaps, but ordinarily they are sworn to by the two leading officers. By Senator St. John : Q. When you find a bank of this character with a large amount of real estate, is not that rather a suspicious circumstance in regard to the stand- ing of that bank ; legally, they have no right to hold, except for their purposes of business,' any property except such as falls into their hands ? A. That is the way they acquired their real estate, by its falling into their hands on a mortgage. 299 Q. The fact that they make loans on property which they are com- pelled to take up — does not that show a want of judgment on the part of these managers of the bank in making the loans ? A. I could not hardly say that, from the fact that the very best banks we have in New York State are now, and have been for years, obliged to foreclose more or less ofj their mortgages and bid in their property; that is particularly so in the city of New York; it may not be so much so in other places; but as a matter of fact the very best banks we have got there have to take more or less real estate. Q. There are very few that report as much real estate in proportion as this, certainly ? A. I don't know about that. By the Chairman : Q. You stated that the officers of the bank, the president and sec- retary, or the vice-president and secretary, swore to their reports ; do not the examining committee also swear to the same report ? A - Yes, sir; the officers swear to the report as the law provides', based on the sworn report of the examining committee of the bank. By Senator St. John : Q. That is since 1875 ? A. Yes, sir. Q. Who are your examiners now? A. Mr. Reid; he makes the most of them. Q. I want to know for the last two years who have acted as exam- iners for these banks ; Mr. Reid and who else ? A. For two years past ? Q. Yes? A. I think that he has made all of the examinations ot savings banks since some time in the summer of 1875, since the passage of this act. Q. He has made all the examinations of savings banks ? A. I think so; he may have been assisted in the early part of the season by some other gentlemen ; there was a time when there were three or four ; but just when the change was made I don't remember exactly. Q. You have had no'special examiners at all except Mr. Reid ? A. No, sir; I think not for savings banks. Q. Where does Mr. Reid reside ? A. He is living at present in Elizabeth City; he has an office in New York. Q. Then you have but one examiner who is a salaried officer ? A. Yes, sir. 300 Q. What is his salary ? A. It is in the report there, $3,800 a year; this report shows only a part of a year. Q. You know what salary he has for a year, do you not ? A. He has $3,800, I think. [Mr. Lamb states that the salary of Mr. Eeid is $4,500 and expenses.] The "Witness — That covers all his traveling and office expenses. Q. You have spoken a number of times about the impossibility of examining these savings banks; you have authority to appoint as many examiners as yon like, have you not ? A. Yes, I suppose so, by the law. Q. Are you restricted in your selection in any way ? A. To examiners ? Q. Yes? A. No, sir. Q. I mean by that if you wanted a bank examined in Buffalo, and you knew a first-class man to go in and look over the place, and report to you, it would be competent for you to appoint him ? A. I would have the power to appoint him, I suppose. Q. So that the examinations could not suffer, if you chose to trace them up; you could get all the examinations you wanted ? A. By appointing more examiners ? I have regarded it as better to have one man, or one set of men who are familiar with those banks. By Mr. Chapman : Q. I suppose you have authority to appoint men to examine every piece of real estate on which every bank holds a mortgage in this State, but do you deem it expedient or wise to do so? A. We have not so regarded it; it would take an array of men to do it. By Senator St. John : Q. You do not think it could possibly be necessary for you to ex- amine every "piece of property ? A. It has been claimed that the examiner should examine every piece of property. Q. Is not this a fact, that on the examination of mortgages in the bank your examiner or yourself look first at the mortgage and bonds to see whether they are properly drawn ; they are accompanied with an abstract of title ; then they are accompanied with a certificate or affidavit of some men who have appraised the value of that property ; don't yon require that of all' banks? A. Certainly of all, but it is claimed by some, as I said before, that 301 the bank department ought to examine every piece of real estate upon which the bank holds a mortgage, and ascertain its value, and all that sort of thing. Q. But you do not believe it ? A. No, I do not. Q. Then the claim is of no consequence ? A. It is very often made with persistency. By Mr. Chapman: Q. In order to make these extended examinations it would very largely increase the expenses of supervision of the banks ? A. Oh, yes ; there is one bank in Eochester that has got 3,200 mort- gages scattered all over western New York ; for an examiner to go to each piece of property, 3,200 pieces of property, and get at the real value, it would take him three months or six months. By Senator St. John : Q.-I want to know whether you think that is necessary, or whether you have exercised it, or have thought of exercising such a power ? A. I never have thought it necessary. Q. You have never exercised any such power ? A. No, we have examined some pieces of property. Q. You spoke of 3,200 mortgages held by one bank ? A. Yes, sir. Q. You would not think of going and examining every piece of property ? A. No, but newspapers have claimed that I ought to, and the people have, some of them. By Mr. Chapman : Q. You did not deem it wise or expedient to appoint examiners to examine every piece of property there was on which mortgages were held? A. You mean generally ? Q. Yes, all these banks ? A. No, sir. Q. Your judgment was that one examiner, going around once in two years, visiting all these banks and getting a knowledge of their securities, and comparing subsequent examinations with prior exami- nations, would much more readily understand the condition of the bank and whether it was improving or not, than strangers to such prior examination would ? 302 A. That was my belief, I thought a man who had had experience who commenced on this work when the law was passed, and who knew the general history of the bank and its working, would be much more valuable to the superintendent in the department, to keep him posted, than a different lot of men who only occasionally went into a bank. Q. Have you not found in practice that that was the case ? A. It is so, undoubtedly. Q. Is it not true that that method of supervision actually makes a saving to the depositors ? A. I think so ; I have no doubt of it. Q. Beyond what it would be if you appointed others to make exami- nations ? A. I have no doubt of it. Q. Mr. Keid, having gone through a bank at any time within two years, is much more capable of getting at the condition of the bank, and with a less examination, than a man who had not made an exami- nation of the bank before ? A. Undoubtedly he would be ; he keeps minutes of the examina- tions and has the printed report. Q. And he could make an examination much more rapidly and cheaply ? A. Oh, yes. Q. And that works for the interest of the depositors ? A. Yes, sir. Q. Mr. Eeid only examines in regard to savings banks, I suppose ? A. That is his specialty. Q. You have other examiners for the other institutions r A. He never has examined any State banks, I think ; we have special examiners for those — experts ; when we have occasion to examine a State bank we get an expert and send him out. Q. Does the law require that you pay your examiner a salary ? A. Yes, sir. Q. That is the law of 1875 ? A. Yes, sir ; the expense is collected from the bank. By Senator St. John : Q. It is collected from the banks now ? A. It is by a general assessment now ; it is a different method ; it all comes out of the depositors. Mr. Mack requests that the examination in regard to the Trades' Savings Bank be kept open, and be continued at a future day in New York, and he gives the following list of witnesses whom he desires to examine in New York : Samuel B. White, Receiver ; A. M. Leslie, President ; J. M. Preese, Secretary ; George W. Eeid, Examiner. 303 The committee after consultation decide that as to all the charges except those in regard to the Third Avenue Savings Bank, they will call for the proof referred to in the governor's message, and then such testimony as Mr. Ellis may have to give as an offset to those charges; and that under that ruling the examination in the case of the Trades' Savings Bank is now closed. Abingdon Square Savings Bank, New York City. The following report of the examiner is put in evidence : 304 P t* H i— i O M o ^ >H ft! £ H fei SzS <3i w Cb Sz. &■ <1 ffl "O «— CO 00 cS rH £ ■*" i—i t> !> <1 * CO S «3 S H •"« o- s m ft * o fc) O i> o OOJO O !> O c? © o CD CO O o> © OJ O 00 o CO r- I CO 03 ;o CO ?r tH G* ^H © o CO co o 39 a OlOO co o co J> © i-l c? o >n oo o >o co o c* o « o CO OS CO , ._ &; m ° 8-1 x 5S ea += ,-a a CO be 4S CO a o o a o a "S3 en 39 4^ w CQ CD 15 «3 CD Th -W r-H Hqa2P3£o«1 ■4-3 ■3 s o 03 a> en T1 .iy 0.d 60

H CD ci) a o 13 .3 -o &*> o H .3 a o i.Tti 03 CT O.T(4 ,3 a ^ g 1.2 s & s *" a"a, ho tr 83 9 3 u ■> all 2eh a, C3 a o Ji* ^ lis PI tzi o 3 CD £3 ~ • H j2 m o o,d so Sofia O 03 n a 15 « * •°S2o ^ — CO CQ ll co £>•« -g ° 5*" a 03 a !2 ■ssgf cs *^ o.S £60 «, ♦^ CJ — co a tog » CD 03 2 oj <» ■S' « 3 s^5 ^ CU'H O 306 Be Witt 0. Ellis, being duly sworn, testified: By Mr. Chapman: Q. [Showing paper to witness.] Is this the original report of the examination of Mr. Beid, of November 4th, 1875, of the Abingdon Square Savings Bank ? A. Yes, sir; that is the document. Q. By that document it appears from that examination that the bank had at that time a surplus of $4,424.70 as assets over liabilities ? A. Yes, sir. Q. When was that filed in the department ? A. December 2d, 1875. Q. Showing a surplus, had you any power to put the company in the hands of a receiver on that examination? A. I think not. Q. One of the points made in the charge in that case is as to the exchange of real estate being in violation of the charter; will you tell what there was about that ? A. The report showed that the bank came into possession of some real estate by foreclosure of a morcgage on which they had loaned. Q. That is, real estate bid in by the bank upon foreclosure ? A. Yes, sir. Q. Owned by the bank ? A. Yes, sir; and that they exchanged it for other property that they regarded more desirable for the bank, and had sold it when this report was made. Q. Prior to this examination ? A. Prior to this examination. Q. Sold it at a profit ? A. It is so reported here. By Senator Wellman : Q. They first exchanged this real estate, which they bid in upon a ioreclosure for other real estate ? A. Yes, sir. By Mr. Chapman : Q. And sold the other real esbate at a profit for the depositors ? A. Yes, sir; prior to this examination; when the examination was made the whole transaction was closed up, as reported. Q. And the second piece of real estate which they thus obtained they had sold previous to this examination at a profit, and had got in lien thereof purchase-money mortgages, which were good ? A. It is so reported there. 307 Q. So that by the transaction the bank had got good purchase- money mortgages in place of a piece of real estate which they had bid iu on foreclosure for the benefit of their depositors? A. It so appears by the report. Q. And all this had been done prior to this examination by Mr. Eeid ? A. Yes, sir; without my knowledge. Q. Your attention being called to the question as to whether they had the right to make this exchange, did you examine the question? A. I did. Q. How did it appear to you as to whether they had violated the charter or not, at that time? A. I made up my mind that it was not a violation of the spirit of the law; that is the opinion I had at that time. Q. In February, 1876, did the bank report their condition as of the 1st of January, 1876 ? A. They did, and this is the report. [Producing paper.] Q. Showing what surplus on January 1, 1876 ? A. $7,207.58. By Senator "Wbllman : Q. That was the statement of the bank itself? A. Yes, sir ; the sworn report of the bank. By Mr. Chapman": Q. You say it appeared to you at the time, from an examination of the law, that they had a right to make this exchange? A. It appeared to me that it was not a violation of the law. Q. Or of the charter ? A. Or the charter. Q. Did the same question come up for you to investigate subse- quently, in connection with some other bank? A. It did, in 1876. Q. Did you re-examine the question ? A. I did. Q. Tell what you did ? A. I looked the law up again, looked it over, and went into the at- torney-general's office with the law in my hand, and submitted the proposition to the attorney-general, or the deputy; I think he was the deputy at that time ; and stated that the question came to me for an opinion, and I had looked the law up and I thought I would take his opinion and establish the rule as to what he regarded the law of the case ; he examined it, and at first said he thought they had a right to do it; I suggested to him that I had thought so, but I could see that 308 it might let down the bar to the banks engaging in real estate specu- lation ; that while the law prohibited banks from speculating and doing business except as provided in their charter, I had thought that a bank holding real estate legally might exchange it in the interest of the bank for another piece of property if they regarded it more feas- ible, and he said he thought the same thing; but he thought it better to fix the rule on the safe side, and prevent any speculating enterprises on the part of banks that might start legitimately enough, and end by trading in real estate; so I wrote the opinion to this man who wanted to know about it, that the attorney-general held that he had no right to make the exchange, and that disposed of the question. Q. That was the final opinion of the attorney-general? A. Yes, sir ; a verbal opinion; he did not have a written opinion. Q. And that has been the rule of the department since ? A. res, sir. Q. Do you recollect of being on your summer vacation in July or August? A. I think I went away about the 1st' of August; I might have been out of town in July. Q. Down to July, 1876, had your attention been called to any de- ficiency, or had there been any thing to lead you to think there was a deficiency in the bank ? A. No, sir; I have no recollection of hearing any thing about the bank. Q. And the bank was reported to the attorney-general by the deputy, Mr. Lamb? A. Yes, sir. By Senator St. John : Q. Were there any other special examinations? A. There was one on which the bank was closed. By Mr. Chapman : Q. I will ask you whether it did appear to you that the bank had violated its charter or law, that required any action on your part? A. I said before I thought not at that time; that was my opinion. By Senator St. John : Q. You regarded this all the while up to July as a solvent, good in- stitution, able to pay its debts ? A. It was so reported ; yes, I did. Q. It did not turn out to be so, did it ? A. It turned out that we closed it up. 309 Q. Does it pay dollarfor dollar, or is there a loss on it ? A. I cannot tell you any thing about what it paid. Q. You have no knowledge of what the depositors got ? A. No, sir; it never has been settled up, I guess; after a receiver takes possession of a bank I have no further jurisdiction or supervision of it; what the receiver does I know nothing about only from hearsay. Q. Don't you take interest enough in it to know how these de- positors come out in the way of dividends ? do you know whether this bank has ever made a'dividend ? A.. I don't know any thing about it; of course it is in the hands of the court, and I have nothing further, to do with it. By Mr. Chapman : Q. The receiver is an officer of the court, isn't he ? A. Yes, sir. Q. Subject to the court's order ? A. Yes, sir; I suppose they would not hold me responsible for what the receiver did. Q. If times had turned, and instead of constantly growing harder they had gone the other way, do you know of any reason why this bank should not have succeeded ? A. I do not, on those reports, if they are correct. ■ Q. Well, do you know of any ? A. Not to my knowledge. Q. Do you know of any — any way — any reason why the bank should not have succeeded ? A. No, I do not. Henry L. Lamb, a witness, being duly sworn, testifies : By Mr. Chapman : Q. On July 19th, did you receive this letter from Mr. Keid showing that he had made an examination of the Abingdon Square Savings Bank [handing witness a paper] ? A. Yes, sir ; the letter is dated July 19th, 1876, and I received it, I suppose, the next day, the 20th ; the filing does not show, but that is the presumption ; it is a letter concerning the Abingdon Square Savings Bank, embracing a statement of its condition on the first day of July. Q. Showing an apparent deficiency of how much ? A. An apparent deficiency, without interest either way, of $7,125.39. The letter is read in evidence as follows : 310 New Yokk, July 19th, 1876. Son. D. 0. Ellis : Dear sir — In January, 1874, the secretary of the Abingdon Square Savings Bank, in order to make a better show, entered a bogus deposit of $10,000, and counted it as so much cash on hand ; when I discovered it a short time afterward, I remonstrated, and he promised not to do so again ; the same thing was done last January ; the attor- ney, Edgar F. Brown, put in his check for $5,000 ; his brother, D. S. Brown, $4,500, and the clerk, $5,000 ; the secretary is absent from the city at present, and I find the clerk put in his check for $9,800, and counted it as cash for the July report; he has also entered real estate as more than $60,000, on which they owe a mortgage of $5,000 ; these figures are not on the books, but furnished by the attorney ; the true figures, as shown by their monthly statement, are as follows: July 1st. Bonds and mortgages $43,800 00 Furniture and fixtures 4,431 70 Real estate bid in 38,411 50 Cash less check $26,079 91 9,800 00 16,279 91 Apparent deficiency without interest either way 7,125 39 Total $110,048 50 Due depositors $95,048 50 Less 9,800 00 Loan for $15,000 $110,048 50 This loan is secured by trustees' notes and assigned bond and mortgage. The attorney is out of the city, and as soon as he returns next week, I will see him. I am going to Perth Amboy this afternoon. Will return Monday. Yours, truly, GEORGE W. RKID. Q. Had you or the department, to your knowledge, any knowledge or information as to there having been a previous bogus deposit up to the time you got this letter ? A. I have no recollection of Mr. Reid ever communicating that fact to the department ; I judged that he admonished them personally, and did not report; I don't know that he ever reported it. Q. You never heard of it ? 311 A. No, sir. Q. Until this letter came ? A. Until the letter came. Q. After the receipt of that letter, did you then communicate to the attorney-general ? A. I did subsequently ; I cannot tell whether I did it the next day or two ; I don't recollect about that. Q. Mr. Ellis washout of town at this time, was he? A. He was at the time I addressed this letter to the attorney-gen- eral. Q. And on the 29th of July did you address the letter, a copy of which I hold in my hand, to the attorney-general ? A. I did. The letter last referred to is put in evidence, and is as follows : July 29th, 1876. Hon. Charles S. Fair child, Attorney- General : Sir — From the statement made by the examiner to the superin- tendent, it appears that there is a deficiency of assets in the Abing- don Square Savings Bank, in the city of New York, exceeding $7,000 It also appears that the actual condition of the bank was concealed in the report for July 1, 1876, and for January 1, 1876, by the deposit of checks by officers which were drawn by themselves, and counted as cash on hand. As the management of this savings bank is obiviously unsafe and unauthorized, and as there is no ground for the belief that the condition of the bank will improve if it continues to do business, pursuant to section 44 of chapter 371, laws of 1875, I recommend that you take legal steps to close the bank, and dissolve the said cor- poration. I inclose herewith the statement of the examiner. Yours, truly, HENEY L. LAMB. Deputy Superintendent. DeWitt O. Ellis, recalled : By Senator St. John : Q. Was this note of the trustees ever collected ? A. I don't know any thing about it. Q. It was left in the bank when it went into the hands of the re- ceiver? A. I don't know that. By Mr. Chapman : Q. In this report of the examiner, in December, 1875, allusion is 312 made to the trustees' notes amounting to $10,000 ; those were not reckoned by the examiner as assets in that report, were they ? A. No, sir. Henry L. Lamb, recalled. By Mr. Chapman : Q. So far as you know, up to the time of the receipt of this letter, the bank department had no kuowledge of any thing to impugn the correctness of the returns ? A. Yes, sir ; I think we had a letter of July 6th, showing a de- ficiency of about $6,000. Q. Prior to that, I will repeat the question, if the bank department, to your knowledge or information, which would tend to impugn the correctness of their returns to the department ? A. No, sir. By Senator St. John : Q. From whom is the letter of July 6th ? A. Mr. Reid. By Mr. Chapman : Q. Was there some negotiation between you and the officers of the bank in regard to their making up this deficiency? A. Yes, sir. Q. That may account for the eight or nine days' delay ? A. I think the negotiation was subsequent to my letter. Q. Subsequent to your reporting to the attorney-general ? A. Yes, sir; I would not be sure about that, though. By Senator St. John: Q. Have you ever examined any of these banks yourself personally ? A. I have accompanied and assisted Mr. Beid in the examination of some three or four swings banks ; the Emigrant Industrial, and the Citizens, and the Union Dime; I believe that is all of the savings banks that I have assisted in. Q. Have you ever in these examinations, where you had any doubt about matters, put the officers under oath, and examined them under oath as to their papers ? A. In these three banks they were perfectly solvent, with a big sur- plus, and there was no occasion for doing any thing of that kind ; I did accompany Mr. Reid and Mr. Aldrich on the examination of the Union Trust Company, and the officers were sworn as to certain securities. 313 Q. Has Mr. Eeid ever made any examinations under oath of the officers of these insolvent banks? A. Not to my knowledge ; I have never examined any of these banks that have since failed. Q. I suppose if you had any suspicion you would put them under oath? A. I don't know; if they would make a false statement in their re- port, they would perjure themselves if they were sworn. S. W. Swaney, a witness, being duly sworn, testifies : By Mr. Chapman : Q. Are you chief clerk in the attorney-general's office ? A. I am, sir. Q. How long have you been such ? A. Since the 1st of January, 1874. Q. Have you in your hands the register of the attorney-general's office? A. Yes, sir. Q. Will you turn to the record in regard to the Abingdon Square Savings Bank ? A. Page 186 of the register. Q. Have you there a record of an action having been commenced on the application of the superintendent of the bank department, or the deputy, to throw the bank into the hands of a receiver ? A. I have a record here showing that an action was commenced; I don't know whether the recommendation was from the deputy or from the superintendent. Q. It came from the bank department ? A. It came from the bank department. Q. What is the date that you commenced the action ? A. It was served in 1876, August 10th. Q. What was? A. Summons and complaint, affidavit and order to show cause ; it was undoubtedly mailed the. day before. Q. Have you any further record there of the proceedings in the case ? A. I have not, for the simple reason that I took my vacation along about that time, somewhere, and the remaining proceedings in the case were obtained when I was away ; I never saw the papers; I know, though, that Frank M. Thompson, of New York city, was appointed receiver, subsequently. Q. Have you the date of the appointment of the receiver ? A. I have no record of it. 40 314 Q. Have you any further record than what you have given ? A. No, sir. Adjourned to May 10, 1877, 10 A. m. Albany, N. Y., May 10, 1877. The committee met at 10 A. m., pursuant to adjournment. Present — Senators Coleman (chairman), Wellman and St. John. Bank of Lansingbitrgh. The following report by the superintendent, made in 1875, is put in evidence: 315 W ca- pe! !=> m a M CO M P « I— i P P O M <3 to Q pa <1 CO 00 a bXJ 1 Oh P < o W ■* CO "* o OOlOOOOi— IOOCO O -egid oo io o co ©■-lOOOOiOOOO iH t- r-H £- i— I OCUtOCOnOOCOO i> G-Soo „„„„„.)(. 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CSOq CN iH t- CN «& OH rH co q-i . . ^1 o PI 03 CO ^ CD o CD +3 p 03 > M r-4 G ft £3 Td "a o CO pj TJ C3 Ph 03 CD CQ , , '3 ^ !h 03 ai O o CD *H • 1— 1 o •rH 03 PI n3 a 03 CO ? o 03 CD o Pi s +3 CD o 5 o o ,-h 03 CO PI o CD PI ITS CD CD a -^ Pi CD r-a CO '3 CD CO CD c8 ft -4J 3 ® o a CO ai o CO s O CO CD SO be o.PI 03 ^ rH a o 9 s- 1 O c3 co a a a 52 d P Ph CO JD o drH t CD O C 03 ■ 1—1 rH as* ■+3 d o -^ 3 fn n s s ft a . CD - q_ a "n: o CC p c p p p a > c 2 i P a PC a P CC ^c c3 ^3 ._ CD -^ a P P c c p -S a a < < 318 S P pq l-H CO P o W pq += ft CC=H (D ,7, ^^ +5 o t- cd o o OD"H oj on H M M 3 < © © c? © © CD © © t- O © 1-1 CO CO CO © © CO o © 00 © © CO © o 10 10 *o © © s> o © co © © 1-1 © © f- 10 10 1—1 CO -H © © CO © © © © © 00 © © 00 lO "O ^H cpl o ■2 ft 03 Ph ns q o "-£ r! CD 9 <& B"S S s O o IB O O -" CD CS © 2^ ■& 9 : «5 % I 8 5 .» "q. P 4 ^ o (d a) ^ J? ? C ^ Ij S ^ OcoPoPP CD p p ,,.; 324 A. They had paid their dividend the first of July. By Mr. Chapman : Q. I now call your attention to the next year ? A. December 18, 1875, is the next.' Q. That corresponds to the first of January, substantially ? A. Yes, sir; surplus fund, $150,000; undivided profits, $18,803; the next quarter, March 18, 1876, surplus fund, $150,000; profits, $17- 137 ; June 24, 1876, surplus, $150,000 ; profits, $5,683 ; September 23, 1876, surplus, $150,000; profits, $1,762; the last report is for the 23d of December, 1876 ; surplus, $140,000; profits, $6,785.68. Q. What was the capital of that bank ? A. $150,000. Q. So that the bank had, down to the very last report, a surplus fund nearly equal to the cajiital — surplus fund and profits ? A. Very nearly ; I can tell why this undivided profit kept shrinking. Q. Well, tell ? A. They bought Michigan Central and Lake Shore stock when they were paying dividends, and the road stopped paying dividends ; their income was thereby reduced, and the accumulated profits that they re- ported once as $53,000, were used in dividends; Michigan Central and Lake shore were good dividend stocks four or five years ago. Q. They had been holding these for some time ? A. Those two. Q. The New Jersey Central they had been holding for some time, had they not? A. Perhaps 18 months before they failed. Q. At the time they purchased them New Jersey Central was up ? A. New Jersey Central was above par slightly when they made their first purchase, and had been previously paying 10 per cent dividend, constantly ; I will say, however, that they never, as far as I know, have asked any advice of the department whether they might invest in these stocks lawfully, or whether they had best do it. Q. Do you know of any thing in the law which would prevent them investing in these stocks ? A. No, sir ; I never found any prohibition, although I looked for it. By Senator St. John : Q. Do you regard this kind of purchase of stock, speculating in stocks by a bank, as being what is regarded as legitimate banking business ? A. No, sir ; but our guide in the department is the law, as far as we can follow it, and the bank had its capital and its large surplus too, for security. 325 By Mr. Chapman : Q. So that the depositors had for their protection over $300,000, or about $300,000 down to the time of the last report, its whole capital and this surplus ? A. Yes, sir; it was $297,000, very nearly, at -the time the report was made in December. By Senator St. John : Q. I should like to inquire how this large surplus is made up ; is it not made up by estimating all these railroad stocks at a very high price ? A. Their railroad stocks are put in on the other side of the ledger as resources, and this surplus fund was cash. Q. This surplus fund is cash ? A. Yes, sir. By Senator Wellman: Q. The surplus fund, I suppose, consists of whatever it happens to be invested in ? A. It was put in once in the undivided profits. By Senator St. John : Q. You do not mean that it is cash on hand — -money; no bank would keep $150,000 of money on haud ? The Chairman — This bank had nearly that sum ou haud when it failed. The Witness — About $187,000 I think. Senator Wellman — Of course the surplus fund is put in as one of the items of the liabilities, and the opposite side, the resources show what are the liabilities ? The Witness — -I understood Senator St. John to ask if this surplus was not made by putting an extra price on. Senator St. John — -I mean to say this: in making up this surplus these stocks were estimated, and must have been, at some price or other, as it is shown there ; were they estimated at a high price or a low price? what were they called worth in the statement ? The Witness — They put them in at cost to them. By Mr. Chapman : Q. What do you mean by "legitimate;" you used the expression ''legitimate;" I don't know but you mean it in the sense of illegal? A. I would not use it in that sense, because I stated I could find in the law no prohibition to their making such investments. Q. What sense do you use the word "legitimate," in? 326 A. Its general signification, that in doing a banking business it is not the right kind of securities to invest money in ; it is not a sound way of doing business. Q. But the fact of their investing money in those things does not give, under the law, the department any right to act ? A. No, sir; the officers of this bank make investments of their funds, we will say, in railroad stocks; as long as the capital of the bank is not impaired by any loss, no depositor is in danger; there is the capital for the guaranty fund, and the superintendent of the bank department can take no action until he has reason to believe that the capital of the bank is impaired; I am speaking now of this particular matter of investments ; as long as the capital is intact I don't know that the superintendent can interfere with the directors of the bank ; when it appears to him that the capital is impaired he can only require the bank, or the officers of the bank, to make the impairment good within 90 days from the date of the requisition; if they fail to do that, then there are other proceedings. Q. If they fail to do that, then they can report them to the attor- ney-general ? A. Yes, sir ; and we cannot ask for a receiver or report to the attor- ney-general or any thing until we make a requisition to make good the capital. Q. If they are doing any act which is in violation of their charter and that comes to the knowledge of the superintendent — A. Then he can report them. Q. So that the department acted as soon as it appeared to the department that it had any power to act in this case? A. Yes, or had any need or cause for acting. Q. This bank, after the requisition was made, was put in the hands of a receiver, was it ? A. Yes, sir ; on the motion of the officers of the banks. Q. And before the 90 days had expired, and before you had any authority to act at all in the department ? A. I think they did it in two days after the requisition was made. New Yohk State Loan and Trust Company. The following report by the examiner is put in evidence: 327 "a S I ""1 i re 00 'a s e s 13 o E-i a Kg © e- -^ © O OJ ia> e- as tN io E- oaiffi E- CO E~ co as eo o © o lO o o 00 o © CO o CO o? >o •o CO i-4 co co « © o © © © © © >o o o? -# CO CO >0 © © © © © © © © © © ©"© n3 T3 r—t i 1 o o bo hrj o CD &p r bCT* +j *-< ~. s 'a ^3 03 m M l-H CD ~H « i © O o ^M $ - mi ftO ■ 03 Po!5 o CO be -*^ u o a ce a 03 a a 03 l-> 03 m CI CD CD CD - &* " a Jh 03 COt-OOQOO t-^OOOJCO E~ W © © CO tH © CO © © E~ <;<} o CO r-t CO o CO CO o CO CO o? a © i-h o o o o o o co o o o o o O id o o o 10 o O i> oo c o t- o O CO 030 O CO (T? t— I I— I CNt © c> 3 H H M M CI o a wl O >^ ro o r/j S o £ CO O OJ o« = a £ CD ,jO O is to § o a> -4J OfiP^EHM g B A •S-l gnonS C3 j_- ce © © .2 o o ^ -4-3 CD 'S u . o-b 2 q-< to 3 CD rrj "3 B © l> o ^ , -'H * O^B c3 S.B o <*>■« °*» ° CD C3 °3 » 5 !h B =Kd 3-« ° m a to 17=1 5r!^ to cd B CO f. o *-< © ,• to 5*5 Si fl c3^ -g CD O CD :5 03 -g 03 to f-T'bo CD""c2 « .B^ fi'So DO &.T3 329 D. 0. Ellis, being duly sworn, testifies as follows : By Mr. Chapman : Q. This New York State Loan and Trust Company only came under your supervision by the law of 1874 ? A. Yes, sir. Q. Of that class of companies existing, about how many were brought under your supervision by that law ? A. Some dozen or fifteen in the State. Q. And you went to work getting up blanks and organizing in connection with the examination of those companies and the reports which were required by the law of 1874? A. Yes, sir. Q. You had no precedent ? A. No, sir. Q. Nothing to guide you except the language of the law itself? A. That is all. Q. This examination was reported to you in February, 1875, the one that has been read in evidence ? A. It was reported the date that appears there. Q. What was the capital stock of -the company ? A. A million dollars; that is, authorized; that was the limit; they had power to commence business on $150,000 paid in. Q. On this examination it appeared to you that the stock was all paid in except about 600 shares ? A. So reported. Q. By your examiner ? A. Yes, sir. Q. Were .those $100 a share? A. Yes, sir. Q. The charter was granted in May, 1870, was it not? A. Yes, sir. Q. A special charter ? A. A special charter. Q. By the charter the company was authorized to commence busi- ness when $300,000 had been actually subscribed and $150,000 paid in in cash ? A. That is the terms in the charter. Q. In regard to the effect of these 600 shares of stock not having been paid in or paid for? A. The effect in regard to stockholders? 0.. The effect in regard to depositors, contractors, or persons deal- ing with the bank ? A. By the terms of the charter, the stockholders are personally 42 ;330 liable for all debts of the corporation until such time as the stock is fully paid up ; it is so by the terms of the charter. Q. Did you read this section: "The stockholders of the company incorporated under this act shall be severally and individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held "by them respectively, for all debts and contracts made by such company until the whole amount of capital stock fixed or limited by such company shall have been paid in," etc. The stock, I see by this report of Mr. Eeid, is apparently worth about 73 per cent of par? A. That is the way he reported it. Q. And that one-quarter of the capital stock is lost; that indicated insolvency — -or simply an impairment of capital ? A. An impairment of capital, only. Q. So that on that examination the company was something like $700,000 from insolvency? A. Yes, sir; $750,000. Q. I notice in the report here the remark that there is a disposition now to do a legitimate business; did you have a conversation with Mr- Eeid in regard to what he meant by the word "legitimate"? A. Yes, sir; I did; when the report came — this was, of course, the first report that we ever received from this corporation ; this is the first examination that ever was made. Q. The first that had been required by law? A. Yes, sir ; the first required by law, and the first one authorized ; I read his report over and noticed the assets and liabilities and phrase- ology of his report, and the words " legitimate business ; " I turned to the session laws and took down the charter to examine it, read it through carefully, and I saw by the terms of the charter that this cor- poration had power to do any thing and every thing ; it is a very pecu- liar charter, and I could not see by his report where they had not done a legitimate business under the law ; and I asked Mr. Reid what he meant by the word "legitimate," whether he thought they had vio- lated the law in any way; he said no, but his idea was — I don't know about using that word, but what he meant was that they proposed to do a more conservative business, not to take so much risk, not try to make so much money; that is what he meant by the term "legiti- mate." Q. So that there was nothing that appeared to you to indicate that there had been any violation of the 'charter, or of law? A. I couldn't see any thing; 1 read the charter over in perfect amazement, and I did not see very well how they could violate it ; that is, so far as their investments and loans and discounts were concerned- 331 Q. Did it appear to you that it was unsafe or inexpedient for the corporation to continue to transact business? A. No, sir ; it did not, because they were aware themselves of the losses they had made, and how they were made, and expressed their determination to be more conservative in their management, and take less risks, although they had a right to take them under the charter. Q. And so the examiner reported to you that there was a disposition to change in that respect? A. Yes, sir. Q. Did you have any power, as you understood it, according to your best judgment, to take any action in the premises ? A. In regard to this impaired capital ? Q. Yes? A. None whatever. Mr. Chapman reads the following extracts from the charter of the bank, passed May 6, 1870 : " The said company shall have power to grant, bargain, sell, buy or receive all kinds of property, real, personal or mixed, or to hold the same in trust or otherwise, to guarantee the payment, punctual per- formance and collection of promissory notes, bills of exchange, con- tracts, bonds, accounts, claims, rents, annuities, mortgages, choses in action, evidences of debt and certificates of property or value, and the titles to property, real or personal, upon such terms or commis- sions as may be established by the directors of said company, and to receive upon storage, deposit or otherwise, merchandise, bullion, specie, plate, stocks, bonds, promissory notes, certificates and evidences of debt, contracts or other property, and to take the management, custody and charge of real and personal estate and property, and to advance moneys, securities and credits upon any property, real or personal, on such terms or commissions as may be established or approved by the directors of said company." The committee state that they do not desire to go any further in the investigation in regard to this bank. The Loaners' Bank. It is admitted that the charter incorporating the Pawners' Bank of the city of New York was granted April 27, 1868. No evidence is offered in support of the charges. De Witt 0. Ellis, being duly sworn, testifies as follows : By Mr. Chapman : Q. Was the name of the Pawners' Bank changed by legislation to the Loaners' Bank? 332 A. Yes, sir, it was by amendment to the charter ; it was originally the Pawners', and changed to the Loaners'. Q. By the original charter there was a provision of this kind: " that the bank shall make an annual report to the superintendent of the banking department"; was there? A. There was. Q. Was there auy penalty or punishment or inffliction attached to that provision ? A. None whatever; just that bare provision, giving the superin- tendent no power whatever to enforce it, no authority to print it or to do any thing with it, simply stating that they should make an animal report. Q. Had your predecessor printed its reports, or had it made any reports to the department ? A. Not any to my knowledge ; I inquired of the clerk who has been there during his administration ; I was told that they did send up one statement, and he stated that he had nothing to do with pawn-brokers £ shops, and stuck the report in a pigeon hole, and that was the last of it. Q. Did not print it ? A. Did not print it ; had no power to print it. Q. Had you auy means of getting the expenses of printing or admin- istration in connection with this bank, from the bank? A. None whatever. Q. Did the bank deposit any thing with the department ? A. No, sir. Q. The department under Mr. Howell, prior to your going in, had not reported it as a bank, and bad not required any report? A. No, sir. Q. Or made any examination ? A. None whatever; they could not; there was no power to make any examination ; no power to compel a report. Q. This was your condition down to the passage of the act of 1874, was it ? A. Yes, sir. By Senator St. John : Q. When that charter was altered, was there any change in the char- ter as to the powers of the bank ? A. No, sir; I think not; simply changing the name. Q. It was changed to the Loaners' Bank ; I want to know whether there was any restriction of powers ? A. No ; I looked that up carefully. Q. It was simply a change of the name of the bank ? A. That is all. 333 By Mr. Chapman : Q. The department at no time had any power, down to 1874 ; that never was questioned; no power to examine the bank or to do anv thing with it ? A. No, sir. Q. Now, you come down to the act of 1874 'i A. I think I can state that up to that time I had never heard of the institution, except after the passage of the act of 1874. Q. You did not know that there was any such bank ? A. No, sir; I did not know that there was any such institution in existence. Q. When chapter 324 of the laws of 1874 was passed — after that your attention was called to this bank ? A. It was called to it in this way: that we had to ascertain what companies were in existence in the State that came under the pro- visions of that law, and in looking through the Bankers' Magazine and other sources of information, we found this among the rest. Q. Then did you endeavor to make an examination of the bank? A. I did. Q. Now, I will call the attention to this act of 1874: "Every trust, loan, mortgage, security, guaranty or indemnity company or associa- tion, and every corporation or association having the power and re- ceiving money on deposit, existing or incorporated under any law of this State, or any corporation or association not incorporated under the laws of this State, which receive deposits or money or assume ob- ligations in this State, other than banks, institutions for savings and insurance companies, shall " make a report and shall be under the supervision of the department. Then the bank, on your endeavoring to get a report from them, claimed that the word "banks," in this law which I have just read, took them out from under the provision of that law ? A. That is the position they took and maintained to the end, that they did not come under the provision of this law at all. Q. Did you send your examiner to the bank to make an examination of it, or go yourself ? A. I examined this law pretty carefully. Q. Tell what there is of it ? A. I had very grave doubts myself as to the real position of that concern, whether it did come under the provision of the law or not, but I came to the conclusion in my own mind that we had not the power to meddle with them at all ; subsequently the question came up in another form ; questions were asked about the bank, and I made up my mind that I would test the question whether we could exam- ine it or not ; I sent the commission to Mr. Eeid, to go in there to 334 examine that bank ; they declined to allow him to examine it, on the ground that they were not under the jurisdiction of the bank depart- ment under the special charter ; I went to New York myself, and saw the president, and told him that I proposed to examine it ; that inquiries were made by prominent men in the State as to the condition of that bank, and if I had the power to examine it I proposed to do it; he said that he could not consent; they had always taken the position that we had no right to do so; he wanted to consult with his counsel, and asked a delay for a day or two, which I gave him ; I told him to consult, but I wanted the thing determined one way o 1 ' the other; and he did bring me a long written opinion of Mr. Tracy, counsel for the bank. By Senator Wellman : Q. What is the name of the president ? A. Dorr Russell ; that opinion took very strong ground that we had no right to examine the bank ; they furnished me some resolutions passed by the board, what they proposed to do, etc. By Mr. Chapman : Q. And declined to let you examine? A. Declined to let me examine; I took the papers and came back home with a view of getting the opinion of the attorney-general, and, if he sustained my position in regard to the examination, to test' the question; I had not much more than got home, two or three days — that is my best recollection — when they were in the hands of a receiver, which ended the whole case; it was my action, I have no doubt, that forced them into liquidation, because it was done at once. Q. Did you examine this opinion and compare it with the laws and refer to the laws cited therein ? A. Yes, sir. Q. With a good deal of care ? A. Yes, sir. Q. Now I ask you whether you have any doubt on the question of your having jurisdiction to examine that bank or compel them to report ? A. 1 don't believe I had ; I believe that opinion of Mr. Tracy's is good law ; my opinion as a lawyer, perhaps, is not worth as much as some others, but it was my opinion, and is yet; still, I should have tested the question if it had got as far as to the attorney-general. By Mr. Chapman : Q. How did it get into the hands of a receiver ? 335 A. They went in themselves, on their own motion, or the action of some one connected with it, I don't know about that ; after the. receiver was appointed I took no further action. By Senator Wellman : Q. You submitted the opinion of Mr. Tracy to the attorney-gen- eral ? A. No, sir ; I had not much more than got home and had time to look it over, before it was in the hands of a receiver. The committee state that they do not desire to make any further investigation in regard to to this bank. Security Savings Bank, New Yoke City. No evidence is offered in support of the charges. De Witt 0. Ellis, being duly sworn, testifies as follows : By Mr. Chapman: Q. Tell, in short, what there is about the Security Bank ? A. I cannot be positive about dates exactly, but my best recollection now is and it is refreshed by a statement made by the vice-president to me the other day, in New York, that sometime in the latter part of January or in February, 1874, Mr. Dewey, the then cashier of the Security Savings Bank, informed me that a robbery had been com- mitted by the preceding cashier, on Christmas day, prior. Q. That it had been committed then, or that they discovered it then ? A. Committed then ; Mr. Dewey so informed me, that the former cashier had committed a robbery, on Christmas day, of about as they found, $30,000 ; that was the first discovery; and that he, Mr. Dewey, had been elected cashier in his place; that he was then engaged — being a cashier and expert — in making a thorough and critical ex- amination of the condition of the bank, with a view to ascertaining its true condition; the officers of the bank were apprehensive that other larcenies had been committed by the cashier, as he stated to me> and they proposed to get at the bottom facts in the case, with refer- ence to future action, whether they would go on or close up ; on the 1st of March, 1874, they had got so far along with their examination that they did find other larcenies committed; they stopped taking deposits, and practically commenced to wind up the bank ; they found so much loss that they didn't deem it advisable to make up the capi- tal, but to close up ; the vice-president informed me that they paid off all their depositors and divided the balance among the stock- 336 holders, paying, as I understood him — though I may be mistaken about the exact amount — about 60 per cent. Mr. Mack — Twenty-one per cent. Mr. Chapman — To the stockholders ; the depositors were all paid. The Witness — It was my recollection thab he said about 60 ; I am not positive; it does not make any difference; they divided up the balance, and closed up the bank. By Senator St. John : Q. Did the Security Bank make reports ? A. Yes, sir. Q. What was their last report? A. It showed a surplus. By Mr. Chapman : Q." Previous to the time of this stealing? A. Previous to the time of this stealing. By Senator St. John": Q. When was the report to the department? A. I don't remember. By the Chairman : Q. Was there any report made after they discovered the stealing ? A. Yes, sir. By Mr. Chapman: Q. The quarterly report of the Security Bank of the 28th of March, 1874, shows claims against Lowes; that was the absconding cashier? A. Yes, sir. Q. And against his sureties? A. Yes, sir; they were debating how they would close up, and I think, shortly after the report was made, the receiver was appointed, Mr. Mack — There never was any receiver appointed; it was a com- mittee of the stockholders. The Witness — I suppose it was a receiver. By Senator Wbllman : Q. By the preceding reports, had they given you to understand in any way that they were violating the law ; that is, that their capital was impaired ? A. Nothing whatever. 337 up ? Q. Or that there was any thing that justified you in closing them A. No, sir ; nothing whatever. Q. Or that justified you in making an examination ? A. No, sir. German Savings Bank oe the Town oe Morrisania, New York (Jitt. The following report of the examiner is put in evidence : 43 338 N H M O r« O ^ *H «s £ SZ5 o ^ «l Cb < m M CO o -a a s? pq o Ol fc <£> |£ 1* CO >o OriOlCl) !-H O ^# CO 00 O £- co go «n 0 CO CO j> o co co ^ £-« co a ooooooooooo ooooooooooo ooooooooooo oooooooooot- OOCiOOOiOOOOOiOt- t-HOOCOi— l«-#riO) CO rH ■* HN 03 CO 00 t- « oo ci o -# o «© co CDOSCiOOOOOOOt- 000000000005 a < ooooooooooo ooooooooooo ooooooooooo ooooooooooo oooomooooirao 000r-lc?*^t* 0) M KB £-2>?>t-i>?>S>£-2.--2>£-2> TO H H o w JK OD QQ ! ^ 1^ •§ » r d mi: l?.s^d o o ^ -*> T3 ,_y ^4 -u * § o S' 3 'g O U) 0) |3 ° J .8 ll d 00 S "^ o d is -s ° d 4 " oil -0 O MS 13 a o jo nd d O d ^^ ° ° rl -° -^ s s= o 5 ^ d :§ s d « ag CO P d -^ 2 ,r_y «S C P _a 'S cp a. P -> 340 o O CO o o o o CO CO CO o lO o o o o o o o o 1-1 O CO 00 « o o o CO O « r-H i-H o o o o o o o o o o o o o o o O O O CO ^H O CO CO CO O CQ CD CO hDT3 c3 -^ O O rS cS WOO C3 CD 9 § a bo S.S -^-^ 2 o ^ S CO B 6 o cu cS CD U . . CD c8 CD S s CD . > Co -a e » o *" M s* b'3 5 « ■^ a -^ m I— I CQ h CD O O o O CD O l©<1 •S^iaa ' l 5 *^ ■ 5 .a © a) m ~M CC" O a p » CO -•s °§ s £ jX3 ® a *- * ^+3,3 a m— © o^t? ®S fOia C OfOS ■ <» - - £ 0) <»^ ISo&g CO e& CO C0T3 =oa.S2of ° a ° o Is***! d ^ m co 2 S^-HCOtTo 5 J9l9 R 5' «»= .h5g ag B 2 a - u C * o+a B a-C'S2s o ...S'O » o oOOF ^"co 111*?? a S—-H.ti t^ Slfe"g 3 g tj - ~ rt ^ *^ © 341 Be Witt G. Ellis, being duly sworn, testifies as follows : By Mr. Chapman : Q. When was that report filed in the department ? A. May 26, 1875. Q. After this report came to the department, wha,t was done ? A. I caunot remember exactly the dates, but I can give you the his- tory, the facts about it; the president of the bank and counsel for the bank came up to see me in reference to it, as soon as they found what Mr. Reid's report was, saying that Mr. Reid had stated to them that they would be required to make up that deficiency at once ; they came up to see me, and Mr. Held, an elderly German, understood to be worth a million of dollars, said to me that that bank should pay dollar for dollar, if he had to pay it all himself, that they would go to work and make up the deficiency; and we had a perfect understanding about it ; and they went back ; then [there were some proceedings among the trustees that I cannot give in detail ; Mr. Hall, the coun- sel, is here and can tell you all about that, but it seems they prepared some bonds, individual bonds, covering all this and Mr. Hall came up with those bonds to me ; and I said that I had never taken any per- sonal bonds, and I did not think I had any authority to take them, and I declined to take them ; that I should require the trustees to make good that deficiency in cash, or its equivalent in such securities as the bank was permitted by law to hold, and I think I gave him a letter to read to the board of trustees, stating just what I required; I think I did; lam not positive about that; at any rate my require- ment was communicated to the board of trustees and they acted upon it; they got together and paid in in cash and good securities enough to wipe out all deficiency and make a surplus of about 811,000. Q. On the first of January following ? A. That appeared in their report of January following, and also in a letter written to me by the counsel of the bank ; that, in brief, is the substance of it, and on that requirement being fulfilled I deemed it best for the bank to continue business ; I had confidence in the new trustees ; some of the very best men in Morrisania were in it, and all men of integrity, and unquestioned integrity ; the trouble with the bank took place with a former president, who had been removed and a new board elected ; my point was to secure the depositors ; if I put them into liquidation then, without any effort to, there would be a loss; and I think I succeeded in securing the depositors. By Senator St. John : Q. Were the depositors all paid ; was there no loss ? 342 A. There is no receiver appointed yeb ; but I am assured by the officers of the bank that they think they can pay dollar for dollar. By Mr. Chapman : Q. The next report to the department was made the first of last January ? A. Yes, sir; this showed a surplus of $12,100, in round numbers. Q. On February 24, 1877, you reported them to the attorney-gen- eral ? A. I did. Q. Is this the letter which you sent to the attorney-general ? [Pro- ducing a paper.] A. Ye,s, sir. Q. This report was made on the request of some of the trustees, was it not ? A. Which report ? Q. Your application to the attorney-general ? A. It was made after consultation with them ; we talked the matter all over and deemed it expedient to close the bank up, under all the circumstances. Q. A receiver has not been appointed yet ? A. Not yet ; I think Mr. Hall, and Gen. Sigel and Mr. Friedman came up. Q. Gen. Franz Sigel ? A. Yes, sir ; he came to see me with some of the others, and talked it all over, Q. In this report made by Mr. Eeid of his examination in 1875, he says that, " nearly three years ago, the former president made a loan of $105,000 to the Montclair E. R. of New Jersey, on various collat- erals ;" I will ask you whether that was not before yon came in as superintendent at all ? A. Yes, sir. Q. He speaks of this loan not being authorized by the charter ; is he correct in that ? A. Not as I read the charter. Q. It has that same available fund provision ? A. It has that same available fund clause in it which permitted them to loan one-third of their assets on any thing which the trustees might select. Q. The same clause that was in one of these other banks which we have considered ? A. Yes, sir ; and it was in a great many banks of the State at that time. 343 By Senator Wellman : Q. What is the date of your letter to the attorney-general ? A. February 24th, 1877. By Mr. Chapman : Q. He says " a part of the loan was then paid, reducing it to $90,500, when the company failed; it has been discovered that the president allowed the company to change the bonds which the bank originally held, for others of much less value (the trustees claim with- out their knowledge) " ; that was all done before you was superintend- ent ? A. Yes, sir. By Senator Wellman : Q. Did this bank stop receiving deposits ? A. Yes, sir ; they are under injunction. Q. The papers have been served, then ? A. Yes, sir. It is admitted that the papers were served February 28, by the attorney -general. By Mr. Chapman : Q. So that so far as any irregularities are concerned which are mentioned by the examiner to you, if they existed, they occurred under the prior superintendent ? A. Yes, sir; that is as I understand it; those investments were made prior to my connection with the bank department — or loans; they were loans, I believe, originally. Q. In your conversations with Mr.,Beid, in regard to the German, after the examination, did he express to you entire confidence in their ability to work through ? A. He did, in the men themselves, that they talked well, and acted well, and meant to save that bank, and they always talked that way to me. Q. Did you deem it expedu nt to close them up at any time before you did? A. No, sir ; I deemed it expedient to get that deficiency made up to protect the depositors, if I could ; that is the view I took of it. Q. Are not the depositors just so much better off to-day by reason of your action than they would have been ? A. Yes, sir ; they are just so much better off, and the trustees just so much worse off, so far as dollars and cents go. By Senator St. John : Q. This putting into the hands of a receiver was by mutual consent and not by any action of yours ? 344 A. Yes, sir. Q. He did not take the action upon any reports, but simply by the trustees and officers of the bank? A. No, sir. Ernest Hall, being duly sworn, testifies as follows : By Mr. Chapman : 0- Where do you reside ? A. New York city, at Morrisania. Q. Where this German Savings Bank is located ? A. Yes, sir. Q. Were you attorney for the bank in 1875 and 1876, and down to 1877? A. I was. Q. And acquainted with the internal working of the bank ? A. To a considerable extent ; yes, sir. Q. And knew the trustees ? A. I have known them all for many years; I have lived there all my life, and most of them have. Q. You might mention a few of the names of the trustees ? A. The men composing the board of trustees of the German Savings Bank were among the wealthiest, if not the wealthiest twenty men in the town of Morrisania, and men, I think, of integrity as high as any body of men of that number in the place; I could name some; Jacob Held, the president, was a retired merchant; Mr. Ebling and Mr. Hupfel, two of the largest brewers there are in the city ; Mr. Kuntz is a retired brewer; Mr. Zuegner is an undertaker, doing a very large business and owning considerable property; Mr. Folz is a retired silk merchant of New York; Mr. Denike has some kind of business, I really forget what, I think a general store; at that time Mr. Grote, the ivory manufacturer of New York, was one of the trustees; John Eichler, a wealthy brewer, and I think last year the largest brewer in the city of New York; Gen. Franz Sigel; Dr. Zeuschner, a practicing physician there ; Henry Schmidt, a wholesale liquor dealer ; Nicholas Thiel. Q. That is sufficient. A. They were all men that lived there for a great many years. Q. They were men in whom the depositors had confidence? A. Yes, sir. Q. Do you recollect of the examination made by Mr. Reid, and your attention being called to it? A. I do. Q. Do you recollect of your coming up here to have a talk with Mr. Ellis in regard to it? 345 A. I do. Q. Just state what occurred ? A. After the examination, that being I think in May or sometime after May, the attention of the bank officers was called to the matter by Mr. Eeid or by Mr. Ellis, that these securities, which they had, had de- preciated in value, making an apparent deficiency of assets in the bank ; I think Mr. Held, the president of the bank, and myself came to Albany some little time afterward ; I think it was perhaps twenty or thirty days ; we then had a conversation with Mr. Ellis, in which he stated that these securities must be replaced by securities bearing seven per cent interest or by money, or the bank would have to be closed ; we then had a talk with him, and, I think, several letters were written in regard to personal bonds being given by the bank ; the trustees agreed among themselves, either individually or collectively, to sign bonds for any amount that was required by the banking department; I believe that I then prepared, I know I did, a separate individual bond for each trustee, to sign, binding themselves to the German Savings Bank as a corporation in a sum much more than sufficient to cover the de- ficiency; those bonds were, or a great number of them, signed by the trustees ; afterward, I think, I came to Albany alone and saw Mr. Ellis, and upon an examination of the law he said that he had come to the conclusion that he could not receive those bonds as assets of the bank, that there was no provision of the law which made those legal assets; there had been considerable discussion about that; I then came up to Albany again to see Mr. Ellis, and had a conversation with him in regard to the matter, in which he stated that this deficiency must be made good in money or interest bearing securities so that the de- positors would be absolutely safe ; and that time he read me a letter to the trustees and delivered it to me, which I delivered to them, for the purpose of showing them the exact views of the banking department, and in that he stated those facts ; the trustees got together — this was sometime in December, 1875 — • the trustees got together between that and the first of January, and subscribed a sum in cash and in 7 per cent securities, bond and mon i;iges, and one steamboat bond of $1,000 perfectly good, worth par ; they subscribed an amount more than suffi- cient to make up the deficiency which existed ; they then put that in their report and sent their report up to the superintendent of the banking department with a letter from myself explaining it; I would say, part of this money was paid in bond and mortgage, part of it in cash; the bonds and mortgages were drawn, I think, mostly to third parties and assigned to the bank; those assignments are on record and are now in my possession, the instruments themselves. Q. 1 would ask you if you yourself gave a bond and mortgage on your own place for $1,000 ? 44 346 A. I did. Q. Are you a trustee of the bank ? A. I never was ; no, sir ; I came into the bank at the time of its troubles ; soon after, at least ; I would say further, that after Mr. Ellis called the attention of the bank to this matter, I expended a greatj deal of time and labor with the hope of discovering the means by which our former president transferred these valid securities for railroad bonds; I came very near several times, very near to finding the combination ; but I never could find it near enough to afford to spend any money on it ; I followed it up a great deal. Q. His actions in connection with that matter were all prior to the time Mr. Ellis was superintendent ?.| A. Yes, sir ; three years before I came into the bank, I think ; there were two loans when I went there; this'one and another of $48,000 that I collected every cent of with seven per cent interest, and this other one I think before Mr. Reid ever made any examination in February of that year; I called the attention of the president of the bank to it, and told him I thought it was his duty to communi- cate it. By Senator St. John : Q. What loan do you speak of? A. The loan on which the loss was. Q. How much was that ? A. The loan was made by the bank to Mr. Pratt, I believe, the president, I think, of the Montclair Eailroad Company, of $105,000, and was afterward reduced to $95,000 ; they gave securities of the town of Kearney, in New Jersey, Jersey City water bonds, I think — I am speaking from memory now — and I think some town of Somer- ville, or some such town ; all of which were worth par and bore seven per cent interest. By Mr. Chapman : Q. This was all some five years ago ? A. It was to my recollection, about five years ago ; the depositors have always been exceedingly opposed to have a receiver appointed, and in witness of that since the proceedings have been taken by the attorney-general, the reason they have delayed as long as they have has been at the request of the depositors ; the depositors to the extent of $196,000 signed an agreement rather to take 75 cents on a dollar than to have a receiver appointed; that agreement I have in my possession; $196,000 out of $225,000 liabilities; there was a feeling of great unanimity prevailing between the depositors and trustees ; so much so that when the meeting was first called of the depositors, I 347 being counsel for the bank, the depositors appointed me counsel to represent their interests at the same time ; tbey considered that the trustees' interests and theirs were identical. Q. There has been no charge of wrong-doing against the trustees ? A. No charge of any thing whatever, except the case of Mr. Pfeiffer, the former president; they kicked him out as quick as they could ; he was recommended to the bank by the gentleman who formed the bank in the first instance, and was supposed to be a very fine man. Q. The upshot of it is then, that after Mr. Ellis was informed of this deficiency, he insisted upon your making it good, and you did make it good before the next annual report? A. It was made good and so reported to Mr. Ellis in the next annual report, which was supposed to be filed the 1st of January, and I believe was filed about the 20th of January, 1876. Q. There was a surplus reported the 1st of January, this year? A. Yes, sir. Q. And the report comes to the attorney-general on the suggestion of some of the trustees of the bank ? A. I came up here with some of the trustees of the bank, and con- sulted with Mr. Ellis, and we discovered that we had not available assets sufficient to continue payment, and that it would be for the best interest of the depositors to have the bank closed; we so stated to Mr. Ellis ; he asked if that was the understanding and determination of all the trustees of the bank ; they stated that it was, and he, I be- lieve, on the same day took proceedings. By the Chairman : Q. What time did you say this was that you came up to see Mr. Ellis ? A. I think the 24th of February. Q. The report you say shows the surplus on the first of February? A. Yes, sir. Q. You were satisfied that there was not a surplus, that there was a deficiency, were you not ? A. No, sir ; I am satisfied that there was a surplus. Q. What was the reason then that they proposed to put the bank into liquidation ? A. That I can explain to you very readily ; between October last and February when we came up here, there had been a withdrawal from the bank of about $350,000, I think; there never was a run on the bank, never more than two or three people in the bank at a ( time, but the withdrawal was continual ; they were paid 100 cents on a dollar ; the trustees of the bank raised money on mortgages and raised money in different ways, and I think during the month of January paid out 348 something over $100,000 ; they found then that they would have to sacrifice mortgages in order to pay more ; their securities consisted of one item— the whole liabilities being only $225,000 — one item of $50,000, with some three years, I think, back interest, all bonds issued by the town of South field, bonds which they bought for 95 cents on a dollar, and which have been in litigation, therefore they were en- tirely unavailable, not available for auy purpose; they could not raise money on them, or sell them ; their dejiosits were about $625,000 ; their bank building, I think, cost in all with the grounds about $40,- 000 as reported, which was at that time a little over the amount of their surplus when they built it ; they had then $99,000 in bonds and mortgages, among them some very small amounts belonging to very poor people ; we attempted to foreclose some, and did foreclose one or two, and had to buy the property in ; we called in our bonds and mortgages, and got in about $200,000 paid in cash, never lost any money on them at all; if a receiver is appointed, there will probably be a loss. By Mr. Chapman : Q. Does not your experience as lawyer show you that there is always a loss when a corporation goes into the hands of a receiver ? A. When it goes into the hands of a receiver, the receiver has a law- yer, and when a lawyer gets hold of it, it always costs something, and in the case of a small bank like this, it is generally the old story of the oyster and the shell; the property that the bank has bought in — they never have bought but three pieces, and that is all worth to-day, at the depreciated value, more than they paid for it — the real estate which they bought in amounts to about $7,000. Senator St. John — $8,583 ? The Witness — The mortgage amounted to $7,000, and the back in- terest and taxes, and foreclosure, makes the balance; that is all they ever bought in ; they foreclosed about a dozen mortgages, and they all paid up. Q. These questionable transactions which are alluded to in this re- port of Mr. Eeid, the examiner, were all prior to Mr. Ellis' time? A. I cannot swear to that, for I have not the least idea when Mr. Ellis became superintendent, but as far as my recollection goes, they were. Q. About five years ago ? A. These things happened, so far as my knowledge goes, about five years ago ; this one transaction ; the bank had been wonderfully suc- cessful before that; they made a surplus of about $27,000 in about three years. Q. This is almost exclusively a German Bank ? 349 A. Yes, sir. Q. The Germans look upon it as a kind of a pet of their own ? A. No doubt about it. Q. And they were bound to keep it up ? A. Yes, sir; they put their money in to keep it up; that is more tban I have ever known any other bank trustees to do yet ; and I would say that I think that between six and nine of the trustees who subscribed their $2,000 apiece, mostly in cash, did not become trustees of the bank until long after this loss happened ; one of them bad not been a trustee for six months and he put in $2,000; some of them did not. Q. By reason of the course taken by Mr. Ellis, is there any doubt in your mind but that the depositors will get more than they would if the bank had been put into the hands of a receiver at that time ? A. They must get exactly as much more as this deficiency which they made up amounted to more than that, for this reason, that $400,000 has been paid in full ; they have been paid dollar for dollar, and therefore the deficiency, if any, of $52,000 goes all to the deposit- ors; only having $225,000 on hand, it would be an immense saving to the depositors. If they had been closed at the time this thing first happened, or at the time the report was made, I don't suppose they would have paid, with a receiver in, over 75 cents on a dollar. Q. To the whole of them ? A. To the whole of them, and very doubtful if they would have paid that. Adjourned to meet at the St. Nicholas Hotel, New York city, May 14, 1877, at 10 A. m. New Youk, May 14, 1877. The committee met at the St. Nicholas Hotel, at 10 A. M., pursuant to adjournment. Present : Senators Coleman (the chairman), Wellman and St. John. Third Avenue Savings Bank, New York City. Mr. Olmstead, of the firm of Tracy, Olmstead & Tracy, appears as counsel for Mr. Mallon. Bernard Gormley, being duly sworn, testifies as follows : By Mr. Olmstead : Q. Were you a depositor in the Third Avenue Savings Bank in this city, in 1874 ? 350 A. I was. Q. Your wife was also a depositor in 1875 ? A. Yes, sir. Q. What is her name ? A Catherine C. Gormley. Q. Is this her deposit book which you produce, in that bank, being deposit book No. 58,614 ? A. Yes, sir. Book offered in evidence for the purpose of showing that on March 24, 1875, there was a deposit of $100, and that on September 10, 1875, there was a deposit of $100 by Mrs. Gormley in that bank.. No cross- examination. Jacob liiger, being duly sworn, testifies as follows : By Mr. Olmstbad : Q. Were you a depositor in the Third Avenue Savings Bank in this city in 1875 ? A. Yes, sir. Q. Did you make a deposit in that bank after the 23d of March, 1875? A. When did the bank fail, in 1S74 r Q. Did you make a deposit in 1875 ? A. T did. Q. When did you make a deposit, and how much ? A. On the 12th of July, 1875. Q. What was the amount that you deposited on that day ? A. The amount was $2,150 and some cents. Q. Have you received any portion of that money ? A. Fifteen per cent; will you allow me to make a statement ? Q. Yes. A. I asked the secretary at the time, on the 12th of July, when I made this deposit ; I had been in the habit of making deposits in this bank before, under similar circumstances, and I asked him — [Objected to.] By Senator Wbllman : Q. Was this conversation, or the substance of it, ever communicated to Mr. Ellis ? A. Mr. Ellis' name never was mentioned ; I never saw him or had any conversation with the secretary in regard to Mr. Ellis. Mr. Olmstead proposes to show by this witness that the secretary 351 informed him when he made that deposit, on the 12th of July, that the bank had not been making any money for the last six months, but that they had a large amount of money on hand, and were doing a good business, and had more money than they could take care of. The committee rule that, for the present, conversations between the officers of the bank and depositors will not be received. Gross-examination : By Mr. Chapman : Q. Have you got your bank-book here ? A. I have not ; I forgot it ; I can get it. Q. Did you withdraw any money during that time, from March until September ? A. No ; except the 15 per cent that I got from the receiver. Edward Mallon, being duiy sworn, testifies as follows : By Mr. Olmstead : Q. Are you the same person who preferred these charges against Mr. Ellis ? A. Yes, sir. Q. Do you reside in the city of New York? A. Yes, sir. Q. Were you a depositor in the Third Avenue Savings Bank in this city ? A. Yes, sir. Q. Did you make any deposits in that bank subsequent to March 22, 1875 ? A.- Yes, sir. Q. What deposits did yon make subsequent to that date ? A. April 19, $3,500. Q. You produce your bank-book, No. 60,246 ? A. Yes, sir. The book shows that on April. 19,' 1875, 83,500 was deposited, and there is to his credit on the book a dividend on May 31, 1876, of $608.04, being 15 per cent. Q. Is that all the money that you have received on that deposit ? A. Yes, sir ; that is all I received on that deposit. Q. Fifteen per cent dividend ? A. Yes, sir. Mr. Olmstead offers the book in evidence. Q. Is Mary Mallon your wife ? A. Yes, sir. 352 Q. Was she a depositor in that bank ? A. Yes, sir. Q. Did she make a deposit after March 22, 1875, in that bank ? A. No, sir. Q. Prior to that time ? A. Yes, sir. Q. How much had she and you in the bank on March 22, 1875 ? A. The book shows it; I don't remember exactly [referring to the book] ; over $8,000 ? Q. How much had you deposited up to the time of the failure of , , the bank, both of you; over $8,000. A. Yes, sir. By the Chaiiuian : Q. Then you both had about $8,000 in when the bank failed ? A. Yes, sir. By Mr. Odmstead : Q. You understand that there has been 15 per cent dividend paid ? [Objected to.] Q. You are not acquainted with Mr. Ellis, personally, are you ? A. No, sir ; I never saw the gentleman, to my knowledge. Q. Have you informed yourself in any way about the condition of this bank by an examination of the books ? A. Only from the receiver. Gross-r.ramination : By Mr. Chapman: Q. Did you draw up these charges, that were signed by you, your- self? A. No, sir ; I did not. Q. Who drew them up ? A. 1 can't tell you. Q. Who presented them to you? A. Mr. Mack. Q. John Mack ? A. Yes, sir. Q. That is all yon know about it? A. That is all. Bernard Gormlei), recalled. By Mr. Chapman : Q. Did you not draw out, you or your wife, July 1, 1875, $180? 353 A. I don't know, that book will show. Q. The book shows that, does it not ? A. Yes, sir. By Mr. Olmsteab : Q. Your wife received a dividend of $15.19 ? [Objected to. Objection withdrawn.] It appears by the book that the amount of dividend which Mrs. Gormley received from the receiver on May 31, 1876, was $15.19. Mr. Olmstead offers to prove by Mr. Mallon, that on or about the 28th day of August, 1875, he went to the bank for the purpose of drawing out his money, and that the secretary told him he should require the usual sixty days' notice, and the secretary then told Mr. Gormley that the bank was perfectly solvent and he was to have his money at the end of sixty days, and he went at the end of sixty days and did not get his money. [Objected to on the ground that it was not brought to Mr. Ellis' at- tention, and is hearsay and improper. Objection sustained.] George W. Reed, being duly sworn, testifies as follows : By Mr. Olmstead : Q. Where do you reside ? A. In Elizabeth, N. J. Q. How long have you resided there ? A. About twenty years. Q. What is your business ? A. I am State bank examiner. Q. Of the State of New York ? A. Of the State of New York. Q. Were you residing there when yon were appointed examiner? A. Yes, sir. Q. How long have you been examiner ? A. Five years and a-half about; I was appointed in November, 1871. Q. Have you ever examined into the condition of the Third Avenue Savings Bank in this city ? A. Yes, sir. Q. When did you make the first examination of that bank ? A. In the spring of 1873, I think it was. Q. Was it on April 14 ? [Showing witness book.] A. April 14, 1873 ; yes, sir. Q. Was Mr. Ellis superintendent at that time of the banking de- partment ? 45 354 A. Yes, sir. Q. And has been ever since ? A. Has been ever since; yes, sir. Q. When you make examinations of these banks, do you make them of your own motion or on Mr. Ellis' order ? A. I send to Mr. Ellis for commissions; first I arrange to examine the banks, and he sends me the commissions, and then I take my own time to examine the different banks. Q. Do you send him suggestions as to whether, in your opinion, banks should be examined ? A. No, sir ; I have to examine them all in two years, and I take them as most convenient. Q. The law requires you to examine them as often as once in two years ? A. Yes, sir. Q. Or requires the bank superintendent to do so, and you examine them ? A. Yes, sir. Q. Are you in the habit of examining any of the banks oftener than once in two years ? A. Yes, sir ; whenever I think it necessary, or whenever the super- intendent requests me to do so. Q. The statute requires you to examine them as often as once in two years ? A. Yes, sir. Q. Did any one examine the Third Avenue Savings Bank with you in 1873? A. Yes, sir; William P. Aldrich and Isaac H. Vrooman. Q. Were they also bank examiners ? A. They were assistants, under me. Q. They were your deputies ? A. Yes, sir. Q. Please look at a report of an examination purporting to have been made by you of this bank on the 14th of April, 1873, contained in the annual report of the superintendent of 1873, on page 298, and state whether that is your report at that time ? [Handing witness a book.] A. Yes, sir. Q. Please look at the document now shown you and state what it is ? [Handing witness a paper.] A. It is my report on the examination of the Third Avenue Savings Bank, made on the 14th day of April, 1873, to Mr. Ellis, the superin- tendent. 355 Q. That is the original report ? A. Yes, sir ; the original report ; with a note appended dated May 17, 1873. Q. At the time that examination was made, did you examine any of the officers of the bank under oath ? A. Yes, sir. Q. Who? A. The managing man : I think it was Mr. Morgan who was then secretary. Q. Is his examination annexed to the report ? A. Yes, in part; the answers that he made to these various ques- tions are embodied in the report. Q. What is Mr. Morgan's first name; doesn't the document show his name ? A. No, sir ; David Morgan. By Senator St. John: Q. You say you did examine the secretary, Mr. David Morgan, under oath at that time ? A. Yes, sir. By the Chairman : Q. Any other officers ? A. I don't remember whether I did or not; I usually put the man- aging officer under oath, whoever has charge of the bank at the time. By Mr. Olmstead : Q. What did you find to be at that time the total value of the bonds and mortgages ? A. Two hundred and sixty-four thousand one hundred dollars. Q. What was the total amount of the bonds other than bonds and mortgages ? [Objected to on the ground that the report itself shows. J A. Pour hundred and thirty-nine thousand three hundred and sixty-five dollars. Q. What is the totil value of the real estate as appears by that report ? A. Five hundred and eighty-five thousand three hundred dollars. Q. How did you inform yourself at the time of the values of these different securities ? A. The State and other stocks in part were ascertained from the. selling prices in Wall street, and others that we could not ascertain we put them down as near as we could from the books of the bank and from the information that we could get in various ways. 356 Q. How about the real estate ? A. The real estate we took, I think principally as it stood on their books, and from the information that we could obtain, and also from a report that had been made to the department previously — a more elaborate report ; putting them all together we fixed upon this valua- tion. Q. How long, previously to this report, was that report made that you refer to ? A. I think nearly two years, or a year and a half; about a year and a half I think. Q. Had there not been a considerable variation in the price of real estate between 1871 and 1873 ? A. I don' know that there had at that time. Q. Did you get the estimate of any appraisers of the value of this real estate? A. No, not unless they had it from their own officer. Q. Did they have them there ? A. I don't remember; I think these were taken principally from their books, what they had cost — what they had it entered as costing on their books. Q. Did you not know that a portion of that real estate had been taken for debts due the bank ? A. Yes, sir; I think it all had, except the banking-house. Q. Had you any reason to suppose that it was taken by the bank at its true valuation ? [Objected to.] Mr. Olmstead proposes to show that, notwithstanding the condition of this bank at this time, there was no report and no examination by Mr. Ellis, or by his examiners, from the 14th of April, 1873, until March, 1875; that he took no pains to inform himself. of the condi- tion of the bank, or to protect the depositors; and that the real estate was increased in value, notwithstanding the condition of the market, without any apparent cause, from the first report to the second report, to the amount of $52,155.51 ; and proposes to connect the report of 1873 with the report of 1875, and that Mr. Ellis knew the. condition of this bank. [Objected to as not pertinent to the charges made by Mr. Mallon.] The committee decide that any testimony showing the condition of the bank, as brought to'the knowledge of Mr. Ellis at anytime, either by his examiners or otherwise, between the spring of 1873, after he became bank superintendent, down to March, 1875, is admissible. Q. What did you do with your report of April 14, 1873, after you had made it ? A. Sent it to Albany, to Mr. Ellis. 357 Q. The superintendent? A. Yes, sir. The following report of the examiner, of April 14, 1873, is put in evidence : 358 e a hi a a s a ~* s a a ^ > < g tfc l> < ■as 03 P3 W CO 00 ■* 5< a S a -u ID «5 o o o o CD o o CO © 00 O 00 o o o oo CO OS co i-i o o © o o o o © © © © © o © © © © © >o © © © © © ■* t- lO © © © © IO "0 00 "* •s r\ »\ »\ •* «\ »\ IO O O t- tH O C5 J> O -^ O ^ >H © © © © o© © © © o © ©o o © © © © © © © © © © © © © o © © CO © to © © 00 lO 35 ^H 00 © © co oo OS co « oo ex © © © -# m io c- © © as oo -* cj en © © © © o © © ©©©©©©© © © o © © © © © © © © o o © ooooooo »•.••. »■.»■,*.•■, •-, IO © O CO CO CO © £- © IO CO -# CN i>t-00t-00COCOS> .3 bO co a CST3 O S J§ 53 co 03 » *■» flgs co 13 c P- o a a 3 m P >-> c3 O © © - eg co m'CjfTj a 9. o -; ,o a -" £ OJ T3 oo ^ "8 **> 3°° [J 03 03 „ £;£ a o oo « >o cTcNc OJ" „ SP* 3 ?3 CO be as CO -u> K CO ® 03 -- W © © O i—l <5& aT SP bi) cT pS-J^,. 2 W i f— 1 „ § S o © *© * © • ™ -s 00 J ,53 13 8b' CO ^lS comM ca a 03 JO a a 359 • $24,868 49 4,181 78 100,000 00 650 00 32,776 02 i-i CO CO 00 iH J> OS i-i O lO CO t- «9 4,478 97 2,652 83 131 30 8,366 59 9,238 80 1,445,337 51 1,992 00 2,848 00 779 67 21,000 00 p « p c i.f - a 1 F - c ? » c h :s if s p l_p j -*■ i '5 > c hP i a cc 1 p > c 1.C * C p PC "V s- a ■s it p § .t I p c a C 1 o a a I a a t i| 1 r C P a a a • -J- . u \ X ; «»- • t ■ p ■ c ;! 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E- . a 4- " P ) •- 1 if '< > 1 ) > I i CO M Pi 1-1 3 M Hi a r- c -t- '5 c P a ! b -»- 1 p a 3P f P a I p J: i a !-£ p 1 t < a -J- a a a «f- C t P _a cp a P 1 3 ) 1 1 ) ? 1 i > i ) ) 360 o O o OS o o o o 10 CO as o o !> OOOOO OOOOO J> O o o o 00 10 o o 00 00 CN 00 CO 10 OOOOOO OOOOOO OOOOOO 1— I O O CO O CD O "* O CO O -* CO r-l 2> OJ i-l £- 0* OOOOO OOOOO OOOOO OOOOO co co •■* "O 00 t- iO« s a a t •% ■* >o o o 00 CD £- O lO CO OOOOO OOOOO OOOOO OOOOO OOOOO CO o o 00 o -* CNi O CO tri M so •< § w ^ 02 tS g 1 CO § H S 3 w EH i> t- 00 2> O0 m o o !>- i> £- t- £- o 8.5 g an bo c3 13 © e3 o dirt ►3 01 a> a Ph OT a o p4 p4 >-> CD m a c? !* <3 o -° a-s-g .2 2 * fl -cs^W.2 EPS l>»S ■ H K h B S>^AO C3 EH a o w a o,y 03 co S no a a os co CJOK o M » o co o a, o s-8 e ■2,3-8 a « a h- 1 OOk ft M o> DO ^ CD <1) TO +3 HO CD s o o a • l-t 54-1 o o 361 Mr. Chapman produces the original report of the examination of April 14, 1873, which is shown the witness. By Mr. Chapman : Q. That was all the report that you sent to him at that time ? A. Yes, sir. By Mr. Olmstead : Q. Was all this paper sent to Mr. Ellis ? A. Yes, sir. The original report is read in evidence, and is as follows : Bank Department, ) Albany, April 3, 1873. j Pursuant to the authority conferred, and the duty imposed upon the superintendent of the banking department, by chapter 693, Laws of 1871, I do hereby appoint George W. Reid, Isaac H. Vrooman, and W. F. Aldrich, to examine into the condition, working, and affairs generally of the Third Avenue Savings Bank, New York, and report therein to me in detail, as soon as practicable. Given under my hand and official seal, at Albany, the day and year first above written. D. C. ELLIS, Superintendent. Hon. D. C. Ellis, Superintendent Banlc Department : Sir: The undersigned, appointed to examine the condition, work- ing, etc., of the Third Avenue Savings Bank of New York, report : That difficulties having existed for some time among the trustees of this bank, and statements as to its solvency having been repeatedly published in a daily paper, a run commenced upon the institution early in January, 1872, which did not cease until, after forty-five days, $4,500,000 had been drawn out. The courage and perseverance with which the. trustees stood up under this pressure and met all demands, and the refusal of the supreme court to appoint a receiver, appears to have convinced the remaining depositors that their funds were safe, and since that time the deposits have been steadily increasing. A large number of the old board of trustees having resigned, the vacancies were filled by gentlemen of wealth and character, who appear determined to sustain the institution, and there is every reason to hope that it will be successful. Their personal obligation for the 46 362 deficiency of last year is already on file with the department, and they have also agreed to pay to the bank a sufficient amount to cover inter- est an the unproductive real estate at Tarrytown, and no doubt will make good the small deficiency that now appears in the assets. The estimate of receipts over expenditures for this year is $3,747. Your examiners have reason to believe, from diligent inquiry and personal examination, that that portion of the real estate at Tarry- town is worth full as much as the officers have estimated it in the assets. The item of $4,181.78 in the assets is balance of expenses in the transfer of mortgages to other parties at the request of the mortgagors, and will no doubt all be collected. Eespectfully submitted, GEO. W. EBID, W. F. ALDRICH, J. H. VEOOMAN. Since our examination, the troubles in Louisiana have rendered their State bonds unsalable, and, if continued, may cause a heavy loss to the bank. GEO. W. REID. May 17, 1873. 363 is «, CO £> f- to 00 2 1 r-l sV ^> 5*5 *5 ■e <» rS? ■** V. to Ss> s sS s s «H r K "ts to to 5*. « * Is g 55 W» fe *5j S V IS. &3 s S § 53 s ^3 O O i — I i — 1 o oo O CO o o o oo CO Ci lO ■* 00 rH . o o o ■* >o >o t- ■ o o O! oo Tt c; O) ■ o o o o o o o • o o o o o o o • o o o o c o o . o o o o o © o • © © © io HO O O © © © © © © © © © © © © © O GO © © © o © © © © © © © o © © o © O iO © o 478 97 652 83 131 30 • © © 00 CO CO © . !>- © IO CO ■* N • sH rH ■ ■» oo uo co oo rH © © -* co © © co <:>. oo c (So CO i-S hnO£ * a & © fe co © -e£© r>so co £ oo «& 03 l3 tS co en ™ S -" co S3 co cu co c3 ^ CO ^ SH 3 ^E, J CO i-i i-H O « >o 1— I m S H a aioooo« -* t- o o o CO cc 1-1 o GO O i-l o o co co -* ot o CO i-H O O E- O lO O © CO O t-«ooc»o mroi*fr-o CO OS qo t- o iflriS i—l CS O O 00 CO CO CO CO CO Oi GO OS v. <3 ^3 8 ^ pj a pp u. °> s Mpq S W aj co ho 9 =i a' O 03 CD c3 3 a a o CO o fitSPn^ >"> "> m ?> .2,3 &a ^ 2 o O co a o ^ ■2 1 5 8 00 » 1 s a, ** - ^ -^ C3 O O ?5 ° !> ^H "* 03 OOOOO =1 00 10 00 rH O O CD SO OOOOO a -* Vi m -# o^oioohi ocom^in 10« « rH 1— 1 3© «& OOOOO -OOOOO- i OOOOO OOOOO p. OOOOO OOOOO t OOOOO OOOOO +j T— 1 O O O lO OOOOO a HJlQOOtO CO 00 tOi>OlO^D illNOCOlS ! a «Hri 1-H.rH ! < #& !,_,« °s t- t- 00 s> 00 £- J> !> !> S> ID U S a O d+J H^> i K a -* cc T3 Pi O rQ M p4 i>^ CQ pH En m CD H-a 03 S Ph TO 1— 1 EH CO t3 d w fl E« t> n-j 03 M OJ ■-a a CD 03 is H-3 rH 03 03 T3 « H CO a) 02 rH d ■h <-c c3 -p w -i-3 CD cu H HJ 03 -4^1 CO CD ■^n-jrS 03 d fl CO O ft d a CD > CD 03 O) rH CD CD S3 la- ^"="^5 3 CD 1 t3 a 03 CO C O PQ HH cc a: 03 S3 03 d 0: 'a '5 C 1-5 3 'S 3 Cu E 3 03 0: 3 'S -r= > OS u cu 1-5 >p >- OJ -1-3 r-t ■s CO QJ r* 5 S TO rd O CO C CD K O ■+2 ■4-3 CO CD ^H CU ^^ d 1— 1 CO _a 5 Is 03 d 1— 1 CO CD r< 03 En CD CO _«; 3 03 CD CO d CO ? 366 Sundry items of assets or liabilities, also other statistics of the Third Avenue Savings Bank as found upon examination made April 14, • 1873: Keal estate owned, banking-house. Location, Third avenue and Twenty-sixth street. tv „ • , , 26' 6"x84' Dimensions of ground, .,„, fi/ , „., „/, Dimensions of building, covers whole lot. Cost of ground, $ . Building $180,000 00 Estimated market value of real estate 180,000 00 Amount of cash on hand 24,868 49 In vault (to be verified by examiner's account) 4,478 97 In banks or trust companies (to be verified by certifi- cates of bank officers), viz. : Fifth National Bank 2,652 83 National Park Bank 131 30 Murray Hill Bank 8,366 59 Manufacturers and Builders' Bank 9,238 80 Estimate or approximate calculation of interest accrued or due and unpaid on investments at this date, viz.: On bonds and mortgages 15,076 89 On stocks 12,711 25 On call loans, none. Guarantee bonds 100 M 2,022 22 On deposit in bank 175 00 Guarantee of Tarrytown income 2, 790 66 What amount of the above is more than three months overdue 32,776 02 Bent due and collectible, or accrued to date 650 00 Any other properties constituting assets, viz.: Guarantee fund, secured by bonds bearing seven per cent interest 100,000 00 Annual rental of real estate owned or leased, at current rates 27,460 00 Bate of interest on call loans, none. Bate of interest on deposits in bank, etc., four to seven per cent: Interest credited January 1, 1872 142,344 45 Deposits that date 4,938,980 72 Interest credited July 1, 1872 37,375 87 Deposits that date 1,321,355 82 Interest credited January 1, 1873 39,169 98 Deposits that date 1,396,661 90 Amount due depositors this date 1 , 445 ,337 51 367 Estimate of interest accrued this date $21,000 00 Any other debts or liabilities due or accrued this date, viz. : On mortgage due by bank 1 , 992 00 Ground rents due by bank 2, 848 00 Interest received 779 67 Miscellaneous facts relating to the condition and conduct of business of the Third Avenue Savings Bank, in the city of New York, as found upon examination made by direction of the superintendent of the bank department, 14th April, 1873 : Organization. Charter number of trustees 22 Number of vacancies 2 Number constituting quorum 8 Officers elected or appointed from trustees — President, first and second vice-presidents, secretary, surveyor and counsel. None receiv- ing salary except secretary. Officers, clerks and other employees not members of the board — Actuary, teller, two book-keepers and janitor. Standing or regular committees of the board, their powers and duties : 1. Finance — General supervision over the moneys of the bank, make investment and loans under the direction of the board of trus- tees. 2. Attending — Attend at the bank and make examinations from time to time, and report to the board. 3. Nominate — Consider all propositions for new trustees, and report. Expenditures. Salaries, current rate, viz. : Secretary, $2,000 ; actuary, $1,800; teller, $1,800; book-keeper, $400; book- keeper, $400 ; janitor, $900 $7,300 00 Other expenses, basis of 1872 : Rent, none. Internal revenue tax, January, 1873 779 67 Other taxes 3,400 00 Furniture, fixtures and repairs, legal expenses, printing and advertising, stationery and blank books, fuel, lights and attendance, other expenses 2,500 00 Conduct of Business. Regular meetings of the board, first Saturday after the first Monday in each month. Average attendance 1872, 10. 368 Attendance of officers during business hours, president and secretary (all day). Attendance of trustees, moderate. Application for loans on bond and mortgage, how made ; in formal application, to whom referred ? Finance committee. Report on value of property, by whom made ? Surveyor. To whom ? Finance committee. In what form ? Certificate. Are applications for loans and bond on mortgage filed or otherwise preserved ? Filed by attorney. Ditto of reports concerning value of property ? In book form at the bank. Action by vote or otherwise — -by whom necessary before money is advanced on bond and mortgage ? Finance committee, under approval of board. Ditto of stock investments ? Ditto. Ditto of call loans ? Ditto. Ditto of deposits in bank ? Board of trustees' authority. How or by whom are the companies designated, in which insurance, as security for loans on bond and mortgage, is effected ? In judgment of officers. Is the opinion of your counsel ever taken concerning the legality of investments, otherwise than on bond and mortgage? When necessary. Opinion in writing or oral ? Oral. At what period does interest on deposits commence? January, April, July and October. During what time must a deposit remain to be entitled to interest? Until dividend day, viz. : January and July. By what form of action is the rate fixed or declared : By special resolution of board of trustees. Is interest declared or fixed or promised in advance, or only at expi- ration of interest period ? Declared at expiration of interest period. Is it based upon the ascertained profits or earnings of the interest period for which it is declared, after deducting expenses therefrom, or is it fixed arbitrarily? From profits, after deducting expenses. Who is the responsible officer in charge of the conduct of business during business hours? President and secretary. Hours during which bank is open ? 10 A. M. to 3 p. m., daily. Monday, Wednesday and Saturday evenings, 6 to 8 o'clock. Who receive and pay moneys over the counters? Teller and assistants. What memoranda or entries, made by receiving-teller, of transac- 369 tions ? Deposit ticket first entered in a blotter (when the money is recounted), and often in the deposit-book. What ditto by paying-teller? Eeceipts taken for all payments, and afterwards entered in draft-book. Who revises and compares these with cash at close of business ? Book-keepers enter tickets which must agree with cash of tellers. How often revised and checked and compared by any other officer or committee ? Eevised by officers during the day. In whose custody, or accessible to whom, are the securities of the bank kept ? President, secretary and actuary. How often and by whom examined ? By attending committee, at various times. How is their correctness verified ? By stock register and general ledger account. At these examinations is the cash actually counted ? Yes. How is amount of cash deposited in bank ascertained by them ? By certificates from banks. Beports and statements of total cash received and disbursed made by whom ? Secretary and actuary. To whom ? Board of trustees. How often ? Monthly. In what form ? Statements. How and by whom verified ? Exam- ined by board. Ditto of assets and liabilities ? By officers. Bonds of officers, etc., viz. : Secretary, $10,000 ; actuary, $5,000 ; teller, $5,000 ; two book-keepers, $5,000 ea. ; janitor, $1,000. In whose custody ? President's. Number of open accounts ? April 1, 1873, 8,673 ; 14th, 8,633. Largest single ? Pive thousand dollars. Number exceeding $5,000 ? None over $5,000. Average ? One thousand six hundred and seventy-four. Are depositors allowed to draw checks upon their account? In two or three instances when the pass-book is with the bank. By whom must the checks of the institution be signed? President and secretary. Has any officer or trustee, to your knowledge or according to your belief ever received any commission or part of commission, or any bonus from any person, on any loan on bond and mortgage, or on the purchase or sale of any stocks or bonds by this institution ? No. 47 370 Q. What special inquiry did you make into the value of the Tarry- town real estate ? [Objected to unless communicated to Mr. Ellis.] The committee rule that the evidence is inadmissible, unless the information was shown to Mr. Ellis by reports- or otherwise. Q. When did you make the next examination of the Third Avenue Savings Bank, after April 14, 1873 ? A. March, 1875. Q. Was there any examination of the bank made, to your knowl- edge, up to that time, after your examination of 1873 ? A. No, sir. Q. By any one connected with the banking department ? A. No, sir; there was no examination between the two. By Senator St. John : Q. In other words, no special examination ? A. No, sir. By Mr. Olmstead: Q. Up to March 22, 1875 ? A. Yes, sir. Q. Is a report of the banking department published every year ? A. Yes, sir. Q. Does the department receive from the various banks sworn state- ments of their condition ? A. They do. Q. Each year ? A. Yes, sir. Q. And those statements are embodied in a published report ? A. Yes, sir. Q. Was there a report printed for the year 1875 ? A. Yes, sir ; every year. Q. Please look at the book now shown you, and state whether that is the report for the year 1875 ? [Handing witness a book.] A. That is the report for 1874 ; it was sent to the legislature March 5, 1875, for 1874. By Senator St. John : Q. It would be as the bank stood on the first of January, 1875 ? A. Yes, sir. Mr. Olmstead claims that this book being issued in connection with the banking department, it came to the knowledge of Mr. Ellis, and with that view offers in evidence the report contained in it, on page 168, in reference to the Third Avenue Savings Bank. 371 The following is a copy of the report : Third Avenue Savings Bank, New York City. [Third avenue, corner of Twenty-Sixth street ; incorporated 1854.] John P. Lyon, President. William S. Cabman, Secretary . ' Financial. Resources. Bonds and mortgages , $269,850 00 Stock investments, viz. : Estimated Stocks and bonds. Cost. Par value, market value. Stocks other than New York $313,264 87 $347,000 $347,000 Jersey City bonds 39,200 00 43,000 43,000 Dry Dock, East Broadway & Battery R.K.bonds 8,750 00 10,000 10,000 $361,214 87 $400,000 $400,000 361,214 87 Eeal Estate : Bank buildings covering two lots, Third avenue and 26th street, cost $171,948 65 Nine houses and lots, New York city, cost and market value 228,618 51 Beal estate at Tarrytown, Westchester Co., N. Y, cost 138,000 00 598,567 16 Cash on deposit in banks or trust companies 16,010 10 Cash on hand not deposited in bank 11,914 21 Amount of assets of every description, not included under any of the above heads, viz. : Interest accrued $61, 492 57 Furniture and fixtures 15,033 63 Estimated value of real estate at Tarry- town, over cost 31,000 00 Estimated value of bank buildings and lots over cost 8 , 05 1 35 Estimated value of stocks over cost 38, 785 13 Individual bonds of trustees bearing seven per cent interest 115,000 00 269,362 68 $1,526,919 02 372 LIABILITIES. Amount due depositors $1 > 454, 958 37 Principal $1,413,931 53 Interest credited for January 1, 1875 . . 41 , 026 84 Other liabilities 65,000 00 Demand loan on bond Excess of assets over liabilities 6,960 65 $1,526,919 02 Statistical. Number of open accounts on the morning of January 1, 1875 8,117 Number of accounts opened during the year 1874, 1 , 562 Number of accounts closed during the year 1874, 1,746 Number of accounts opened since organization . . 61,244 Amount deposited not including interest credited during 1874 , . . $680,296 89 Amount deposited including interest credited during the same period 761 ,795 91 Amount withdrawn during the year 1874 779,577 59 Amount of interest or profits received or earned during the year 1874 118,339 77 Amount of interest credited to depositors for the same period 81 ,499 02 Amount of each semi-annual credit of interest for the year 1874, and when credited : July 1 $40,472 18 January 1, 1875 41,026 84. Eate per cent of dividends or interest to depositors the past year, six per cent on sums of $5,000 or under, five per cent on sums over $5,000. By Mr. Olmstead : Q. Did you make any investigations yourself after the first report of 1873, up to the second report of 1875, with respect to this real estate ? A. No, sir; I know nothing about that report in January, 1875 ; that does not go through my hands at all. Q. It goes to Mr. Ellis ? A. Yes, sir ; I have nothing to do with that. Q. Did you have any conversation with Mr. Ellis during this period prior to March 22, 1875, relative to this bank ? 373 A. I don't remember ; my time is pretty much engaged in making examinations, and I report and very seldom see him. Q. Was he not in the habit of conferring with you personally in regard to the condition of these banks ? A. He was not. Q. Yon don't do all your business with him in writing, do you ? A. Most of my communications with him are in writing. Q. You were subpoenaed to produce what correspondence, if any, you had had with Mr. Ellis, were you not ? A. No, sir. Q. Have you brought any papers or correspondence ? A. No, sir. Q. Have you in your possession any letters or correspondence with him relative to this bank ? A. No, sir. Q. Nothing, except this report ? A. No, sir. Q. Did you discover whether this real estate was in fee or leasehold ? [Objected to unless brought to Mr Ellis' attention.] Q. Did Mr. Ellis, to your knowledge, make any investigation as to the condition of these assets, and the value of the real estate, whether it was mortgaged or leased ? A. I don't know that he did. Q. Did any of his deputies, to your knowledge ? A. I don't know. Q. Then I understand you to say that you had nothing more to do with this bank until you made your examination of March 22 and 23, 1875 ? A. I made no examination between the two examinations. Q. Please look at the book now shown you and state what it is ? [Showing witness a book.] A. It is Mr. Ellis' report to the legislature, March 20, 1876, the annual report of the banking department on savings banks. Q. And the report on the Third Avenue Savings Bank is on page 330? A. Yes, sir. Q. Is that the report made by yourself and Mr. Aldrich ? A. Yes, sir. Q. You examined the condition of the bank, did you, at that time? A. Yes, sir. Q. At whose request, Mr. Ellis' ? A. Yes, sir. Q. Did yon have a written request so to make an examination ? A. It is the ordinary printed commission. 374 Q. The same form as the other ? A. The same as the other. Q. Did you examine any of the officers of the bank under oath at that time ? A. Yes, sir ; I think I examined the secretary. By Senator St. John : Q. You say you think you examined him ? A. I did examine him ; his name is W. S. Carman. By Mr. Olmstead : Q. The bank did not make a report to the bank department in 1874, to your knowledge ? A. No, sir. Q. That is the report which you made March 22 and 23, 1875, that you have in your hand, is it ? A. Yes, sir. The following is a copy of the report : 375 rfS « ■^ s> ^ 1 H ^ H # s u £ « o 8 OS fc fefe M <» fe ?» -«l © M CO &5 rt i-O fc k-T C/J CO w w D 'W fc s W « < IN fi >*s M i- ,55 N •w «> s S e o O o O o o 2 . ° o O CO o 'cfl C5 r-i o O -* . CO CO B CO o =2 « as lO «& •PC oooooo o OOOOOO oooooooo o OOOOOO oooooooo O oooooo +j 0©Ot-0-*00 O oooooo 1 a ©lOce-^icoGoo o fi O O iQ O O 3 o O £- J> 00 CO O O oo t- >o ^ 00 o o a C? ■* i>t-0000COCOCOt- Sn CB CO : c , co i — I o = • d O 8f= • C O • fl O O Ph c 4 bo oc 9> Ph i — rH <3© 03 fa 0-5 CQ CB '^5 O -J- i O-d fl d CO -u> c O O) " w O CU co 5P M to a T5 co' H 0. bo a -3 W d 5 E- CO -— - DOi— 1 • fl -g -" o S JO go , fl -* CB d £ OS b CO CD fr- CB i— I d =2 1« CO as D r, „ c .d - * c cu ■e c s.s dec t State bonds . na State bonds la State bonds see State bonds a State bonds . 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Please look at the paper now shown you, aud state if it is the original of the report that you made on that examination [handing witness the paper] ? A. Yes, sir. The following is a copy of the written report : Bank Department, \ State of New York. J i Pursuant to the authority conferred and the duty imposed upon the superintendent of the banking department by chapter 693 of the laws of 1871, I do hereby appoint George W. Reid and William F. Aldrich to examine into the condition, working and affairs generally of the Third Avenue Savings Bank, New York city, and report thereon to me in detail, as soon as practicable. Given under my hand and official seal at Albany this 15th day of March, 1875. D. 0. ELLIS, Superintendent. Hon. D. C. Ellis, Superintendent Bank Department : Sir — The undersigned, appointed to examine into the condition, working ,etc, of the Third Avenue Saviugs Bank, report : It will be seen from the schedules annexed that after estimating the assets at full market value there is a deficiency of $219,000. besides the trustees' guarantee bonds of $115,000, held by the department. The annual deficiency of income is nearly $45,000, accounted for in part by the large amount of State Bonds on which the interest has been suspended, and the small income from the real estate. Respectfully submitted. GEO. W. REID, W. F. ALDRICH. Examined March 22 and 23 by G. W. Reid and W. F. Aldrich. 379 o o © o © CO 6fc © © © © © © © © © © O © © © © © © © S ©©©©©©©© ©©©©©o©© ©o©©©©©© ©OOt-©^iO© m t- t- qo to © © 0« ■* C< CX « >*r1 © ©©©©©© © ©©©©©© o © © © © O © © © © o © o © © 10 © © 10 © © on t- 10 ■* co © © CO © 00 CO CX CO S2>t-0000COCOCO!> H 1= Z H 5 M bo a a 0) bO co t>0s 51 CO =3 on a s CO do St! ^ O fl fl rO O ° ^-° ^ -m a> © 03 -£ ■+J -U TO £*« •S s s bo'3 c3 J g a cd o — < ^3 o o M Ph p J3 h to C/J -ts ^ S SO § CC -H © >-< rH E_i fr* ^ l 1-1 cp JT 1 © © © ■ ©" 2 '"H ©€& m o co TO" ^j Eh «! "3 -g 9 ■ to r— I -J-S ' gW * co o ■» ■*? 2 t>-»-a ■ o © © © © ',-* GO . -u -u» +3 tH rH CO o O _ S S£ CO CO 00 CD CD CD +3 © «© T3 © c3 ^P © 9 <" TO © o © £5 O p CO CD «i w CD rC +3 JppqH !h CD CD O CO CQ 3 s WW -> C3 bO ".So © tH 1^ Th „^? - CD i^ co „ S o o cci £§>§ CD .h CD CO ^ CO O 3 O WWW c3 t O o CD b0 4-3 rH O a Ti S fl O x> o o 3 C3 P O rX(RO 380 *e <3 En Eh «1 Eh 32 , oo © © .-i as 03 © © © 00 OO 00 oooo « c? » © © c 3 . . (33 O O © lO c 3 oo o © o iO c 3 co © o © +i oo c 3 C3 © © « C 3 00 c 3 oo © © co i < I— 1 7 ; ** oo oo oj <& H H I— 1 M S 5 • -t-a [S « F- n e U -4- ec +■ c c c «5 «H H o -* Tj • (0 -. D «*-, -» D3 h 3 CO 03 ' 03 • -(-3 CO £2 ' 03 -*J • bj) & o ) t ■ +3 > < -d ra ■ a • o • ■° '. • B • a p 3 A! ^ '. ■ o pc ca a n Jd -t= C3 T3 . S 2? 5 "SPm ]> ; 03 £ * .2 E- o = ^ ! CO a; *s , TJT3 CO ~ 03 tS a? T3 9 "2 Q3 '-Xj ~ ^3 £ (. p « •» * i-t CD — 00 ^3 a OOOOO OOOOO OOOOO OOOOO OJ o o o o (o o n o t» g .0 o En H 02 i>f-(Oi>-* Mo H ^ o> M T3 'tS *.§ oil Wo2 ^ s •lTgJ o c3 O 0■» o a "0 ca R 382 Q. I see by this report you find a deficiency of $219,000 ? A. Yes, sir. Q. And yon find these a guarantee bond of the trustees, of $115,000, held by the department ? A. Yes, sir. Q. Did you consider that $115,000 an asset of the bank at that time ? A. Yes, sir. Q. Did you inquire into the circumstances under which that bond was given ? A. I knew all about it. Q. What were the circumstances under which that bond was given ? A. When the examination was made, some years previous. By Mr. Chapman : Q. Prior to Mr. Ellis' time ? A. Yes, sir ; there was a deficiency fund of about $100,000, and Mr. Howell accepted the trustees' bonds for it ; $15,000 was added when Mr. Green, the former president, returned from Europe. By Mr. Olmstead : Q. Did you consider at the time you made this report that that bond was a legitimate asset of the bank ? [Objected to. Objection sustained. | Q. Is it the custom of the bank superintendent to receive the bonds of trustees in this city, for the purpose of payment of deficiencies of banks : did you ever know it to be done in any other instance ? A. Yes, sir. Q. Where and when ? A. There has been one received from the People's Savings Bank. Q. During Mr. Ellis' administration ? A. No, sir; previous. Q. How large was that ? A. It was originally $45,000, and I think added to, until it was about $55,000. Q. Was not the People's Bank started under Mr. Ellis' administra- tion ? A. No, sir ; some years previous. Q. Is there any law, to your knowledge, authorizing such bonds to be received ? [Objected to. Objection overruled.] A. I don't know of any, except the general supervision ; I don't know any special law. .383 By the Chairman : Q. Is there any law that you know of that prohibits the taking of a bond to secure the payment of a deficiency, if one exists in a bank ? A. No, sir. By Mr. Olmstead: Q. Is it not the law that if there is a deficiency in a bank, the bank must be wound up ? [Objected to.] Q. You state that there is an annual deficiency in income of nearly $40,000, accounted for in part by the large amounts of State bonds on which the interest has been suspended, and the small income from the real estate, what is the other thing that accounts for that deficiency besides what you have stated ? A. That the income was not as much as the charges on it owing to the expenses. Q. How did you inform yourself at the time of this examination of March, 1875, of the value of these assets, as stated by you in your report ? [Objected to.J Mr. Olmstead offers to show that Mr. Reed and Mr. Aldrich,at the time of their examination, March 22 and 23, 1875, took no measures whatever to ascertain the true value of the real estate held as assets by this bank, nor of the bonds held by this bank, nor how the deficiency of assets arose, nor why it was that the real estate of the bank had been increased in value from 1874 to 1875, $52,015.51 ; and purposes to ask this witness how that increase happened, and why it was made; and proposes to follow it up by showing the condition of the market here, and that these persons must have known that the property was not worth any such sum as that ; and proposes to follow it up by showing that the ninety-two acres of land at Tarrytown, which was put in at $138,000 on March 22, 1875, was sold by the receiver for $25,000 ; and that the house on Fifth avenue, that was estimated at $85,000, was sold at $33,000 ; and that the house in Forty-seventh street, which was estimated at $34,000, was sold for $5,700; that the banking-house on third avenue and Twenty-sixth street, which was put in at that time at $180,000, was sold for $55,000 ; and that the house adjoining was put in at $20,000, and sold for $6,500 ; that the assets that were estimated at that time at about $500,000, were not worth any thing like that sum, and were actually sold for about $97,000, and there was a loss on real estate of over half a million dol- lars ; and that the real estate was sold somewhere near its true value : and proposes to show that Mr. Ellis knew the condition and took no steps to protect the depositors. 384 Mr. Chapman" admits all the facts contained in the first charge, namely, that Mr. Ellis received the examiner's report of March 22, 1S75 ; also, admits the deficiency, and admits that Mr. Ellis did not report the bank to the attorney-general until September, 1875. The committee decide that the witness may testify as to how he ar- rived at the results stated in his report. Question repeated as follows : How did you inform yourself at the time of this examination of March, 1875, of the value of these assets as stated by you in your report ? A. I take the bonds and mortgages as they appear on the books, on the face, examining all the bonds and mortgages separately to see if they foot up the amount that I report ; the State and other bonds or stocks I take the current value, selling price, as near as I can, in Wall street ; I get the best information I can, where they are not selling from day to day; the real estate, I took it from the entries on the books as |they represented to me the property cost, and as near as I could ascertain the actual cost of the property or the value at the time. By Senator St. John : Q. You mean it was the cost to the bank at the time ? A. Yes, sir; the property at Tarry town, about a month afterward I was there, and from inquiries made I supposed that we had been safe in putting it in at that rate. Q. At $1,500 an acre ? A. $1,500 an acre, yes, sir ; we thought our valuation was about correct from all that we could ascertain there. Q. You made inquiries there, did you ? A. Yes, sir. By Mr. Olmstead : Q. Were those inquiries made before or after you made your report 'i A. Afterward ; about a month afterward. Q. What caused you to make the inquiry at that time ? A. Because I was up there examining a bank and took the oppor- tunity while on the spot to go over the ground. Q. Did you examine the Sve houses in East 46th street ? A. No, sir. Q. Did you make any inquiry about that, except from the officers of the bank ? A. I don't know that I did. Q. Did you make any inquiry from any one, except the officers of the bank, as to the value of the other real estate ? A. I don't know that I did. 385 Q. Did you examine the items of the cost on the books of the bank as to the banking-house ? A. To some extent. Q. Was that the actual cost of the bank building and lot, $180,000, as appears from the books of the bank ? A. No, I don't think it was. Q. Do you know how much it cost ? A. I do not ; I don't recollect. Q. How did you arrive at the value here ? A. From what I learned in the neighborhood, from the amount that it had been reported at for some years back ; putting them all together. Q. Did you conclude, from what you heard from inquiries, that that property was worth $180,000 at that time? A. Not that it would sell for that, but that it was worth that to the bank as a banking-house. Q. Is that the manner in which you estimate the value of property what it is worth to the bank for a banking-house ? A. I think it is. Q. Tnen you don't take the actual value of the property, but what you think it is worth to the bank ? A. There is no way unless you sell it. Q. Isn't the market price the value of it ? A. No, sir ; not for a banking-house. Q. If they want to realize on it as an asset, could they realize on it in any way except by sale ? A. I don't make my examinations to that determination, to close up a bank ; I put it in as to what it would reasonably be worth for their purposes. Q. Don't you estimate its value for the purpose of securing depos- itors ? A. To a certain extent. Q. If you do that, how can you estimate it otherwise than its mar- ket value; it must be sold in order to secure the depositors, must it not? A. No, I don't think that would be necessary; if a bank went on it would not be necessary to sell. Q. The depositors only get their money when the bank fails ? A. The bank had not failed then ; it would have to be closed up, of course. Q. Can you tell what the banking-house was worth outside of the value which you put upon it as banking property ? A. No, sir; I could not. Q. Did you or did you not consider that large amount of real es- tate, and its probable value ? 49 386 A. Of course. (£. Did you inquire whether it was in fee or leasehold ? A. I knew it was partly leasehold; my report shows ifc. Q. What part of it was leasehold ? A. I don't remember; I should think pretty much all of the five houses; there was a mortgage on those five houses of $42,500, a mort- gage of $8,500 on the East Forty-seventh street, and a mortgage of $14,000 on the East Forty-ninth street, according to my report. Q. Did you consider at that time that a bank with a deficiency of assets of $^19,226.81 was in a condition to continue business ? [Objected to.] Q. Did you or not report to Mr. Ellis whether it was in condition to continue business ? ("Objected to on the grouud that the report speaks for itself.] Q. Did you make any other report to Mr. Ellis in regard to this Dank, except the one you refer to? A. I don't remember what the report did say. Q. Did you have any correspondence with Mr. Ellis subsequent to March 22, 1875, in regard to this bank ? A. I don't remember. Q. Were there not some mortgages, amounting to $50,000, that were second mortgages ? A. They were all represented to be as first mortgages; I always sup- posed they were ; do you mean whether there were mortgages back of these ? Q. Yes? A. I never heard any thing about that. Q. You never heard whether they were first or second mortgages ? A. No, sir ; I supposed they were first mortgages ; I never heard to the contrary. Q. Did yon never inquire ? A. I think I did at the time ; it was represented to me as the only lien upon the property. Q. The mortgages I refer to are on Kighty-fonrth street and Fifth avenue, $25,000 each — no, one is $25,000 and one is $29,000? A. I havj3 $42,500 mortgages on that property. Q. Did you inform yourself whether they were first or second mort- gages ? A. I understood they were the only lien upon that property; it was so represented tome; $45,000 is the amount I understood; I never knew about any more ; the $42,500 is on the East Forty-sixth street property ; 1 have no mortgages down on the Fifth avenue and Eighty- fourth street property. 387 By Senator St. John : Q. Were these prior incumbrances these mortgages ? Was the prop- erty mortgaged that the bank held ? A. Yes, sir ; as I understand it, they took a larger amount than these 92 acres from Tarrytown, and they wanted to put it into some- thing that they supposed would be productive, and as I understand it, they exchanged it for some of these houses, subject to mortgages. Q. What I want to get is simply this : whether or not this property which they took as a security was an unincumbered property : it was not a fee; they held no fee to it, or any thing of that kind, except about the incumbrances ? A. That is all ; it was leasehold property. Q It was also incumbered by mortgage ? A. Part of it. Q. Your report shows just what it is ? A. Yes, sir. By Mr. Olmstead : Q. Then I understand there was $54,000 of second mortgages; on which about $9,000 was realized? A. Yes. sir. Q. This property was then taken in exchange for Tarrytown property ? A. So I understand. By Senator St. John : Q. But subject to mortgages ? A. Yes, sir. Q. It was incumbered property when they took it r A. Yes, sir. By Mr. Chapman: Q. From all your examinations you supposed they were first bonds and mortgages ? A. Yes, sir. By Mr. Olmstead: Q. Did you have any conversation with any of the trustees as to the guarantee bond of $115,000 ? A. I think I did; but I don't remember who was there; but I think there was a few of the trustees in from time to time during the time that we were there. Q. Did you never have any conversation with Mr. Ellis prior to the dissolution of the bank, about this bank, after the examination in March ? 388 A. I might have had, I don't remember distinctly. Q. Can yon recollect what was said between you ? A. I am engaged most of the time examining the banks, so I have very little time to spend otherwise. Q. Do you know of any reason why this bank, with a deficiency of $219,226.81, was not dissolved immediately after your report? [Objected to on the ground that that will be shown by the report and other witnesses, also on the ground that it is entirely immaterial whether he knows or not. Objection sustained.] Q. Did you consider from your examination at that time, that the bank was solvent or insolvent ? [Objected to on the ground that it is immaterial and improper. What he considered is not material. What he returned to Mr. Ellis is already in evidence. Objection overruled.] A. My report shows that there was a deficiency of $219,226.81. Q. Do you mean to say that you considered it insolvent ? A. I suppose so. By Senator St. John" : Q. You considered the bank insolvent ? A. Yes, sir. By Mr. Olmstead : Q. Now I renew the former question and ask you if you know any reason why the bank was allowed to continue to do business ? [Same objection and ruling.] Q. Were you directed by the superintendent at any time after March 22, 1875, to make an examination of this bank ? A. No, sir. Q. Do you know of any subsequent report made by the bank to the bank department about July 1875 ? A. No, sir ; I have nothing to do with the reports. Q. Do you know of any report ? A. No, sir. Q. Do you know of any report that was made by the bank to the bank department subsequent to your report — subsequent to March, 1875 ? A. No, sir. Q. Did you at any time recommend to Mr. Ellis the closing of this bank ? A. I don't know that I did ; it was not my duty to recommend to him what to do. Q. It was only your duty to examine the assets and report them ? A. Yes, sir ; that was all. 389 Q. Did you consider the loans of the bank that were call loans, loans of the available fund made upon securities which were doubtful in their character and uncertain in their value or not ? A. They had no call notes when I examined it. Q. Do you know then, what the report to the superintendent made in the year 1875, on page 19, means, referring to loans of the avail- able fund of this bank ? A. For loans made years before I suppose ; they had none when I examined it. Q. You understood there were no loans at the time you made your examination ? A. No call loans at all. Q. Have you been examiner during all the time of Mr. Ellis' super- intendency ? A. Yes, sir. Q. You don't know of any loans of that character ? A. Does that refer to the Third Avenue Savings Bank ? Q. Yes? A. The loans of the available fund were made upon securities as in the case of the Third Avenue Bank ; he refers to these Pacific Mail loans made years before he came into office. Q. For which this real estate was taken in lieu '( A. Yes, sir. Q. The real estate took the place of these loans ? A. Yes, sir; but made years before he came into the department. By Mr. Chapman : Q. That exchange was made before he came into the department, wasn't it ? A. Yes, sir. By Mr. Olmstbad : Q. Have you got the bond given to the trustees ? A. I never had it; it is at Albany. Q. Is that note which is at the bottom of the report, a note attached by you — made by you ? A. I presume it is taken from that report; that is done at Albany. Q, The statement at the bottom of page 330, of the report of 1876, was not made by you, but added at Albany ? A. No, I don't say that ; it was taken from my report ; it is proba- bly an extract from my report. 390 By Senator St. John: Q. You say in both of these examinations which you made, you put the secretary of the bank under an examination ? A. Yes, sir ; under oath. Q. Did you take a written statement? A. No, sir; I never did that ; I never have, except in one or two instances. Q. What did that develop in regard to that bank ; what did the examinations develop as to the business of the bank — you examined them as to the securities and assets ? A. Yes, sir; and I got the amounts from him as I have it here, and then there are three or four pages at the close of the report as to the working of the bank — how they do their business. Q. Did you take any trouble to investigate him in regard to the real estate, and these depreciated bonds — did you take his opinion or views ? A. Not much ; I thought I knew about as much as they did, be- cause they were both new secretaries, just come in ; Mr. Carman had only been there a week or two, and Mr. Morgan only a short time. Q. About all you found out from them was, that they had such securities as you reported 't A. Yes, sir. Q. You got nothing further ? A. No, sir. Q. What I want to get at is whether you elicited any thing in your examination, which would go to show that the bank was unsound or insolvent to do business ? A. The secretaries at each examination, and the trustees that I met there, expressed themselves very hopeful of the future ; their deposits were increasing. By Mr. Olmstead : Q. Was not Mr. (Jarman secretary when the January report was made? A. He came in afterward. Q. Didn't he sign the January report ? A. He may have signed it, but he knew nothing about it. Q. He swore to it ? A. He swore to it, but he told me afterward he knew nothing about it ; he put his official name there ; that is all ; he took it as the report of the clerks. By Mr. Chapman : Q. May you not be mistaken in regard to his not being there in January; didn't he come in in December ? 391 A. I am not certain; he had only been there a short time; it may have been in December. By Mr. Olmstead : Q. Did yon consider it sufficient for you to make a report upon the testimony of a man who stated he knew nothing about the affairs of the. bank ? A. I didn't see it for sometime after. Q. You made the March report ? A. Yes, sir. Q. Did he tell you this thing before or after the March report ? A. I don't remember; it came up incidentally. Q. He is the man whose affidavit you took? A. Afterward, because he had had an opportunity to know some- thing about it then. By Mr. Chapman : Q. I see that these charges, the second item of charge reads as fol- lows : "Mr. Mallon alleges further, that an additional advance of $100,000 had been covered up by adding that amount to the cost of the banking-house." I will now ask you what you put the cost of the banking-house in at, on your examination in 1873 ? A. At $180,000. Q. What did you estimate it at in 1875 ? A. The same. Q. And in 1873, you made your examination the very next month after Mr. Ellis came into the office ? A. Yes, sir. Q. And in 1875, the examination which you made was the one on which the application was made to the attorney-general to close it up ? A. Yes, sir ; the last report I made. Q. Where, then, is the increase of $100,000 during Mr. Ellis' term ? A. Between my reports there is none ; I reported the same amount. Q. So if there had been any covering up of a hundred thousand dollars, it had been prior to Mr. Ellis' time ? A. Certainly. Q. By whom were you appointed ? A. Mr. Howell. Q. Bank superintendent before Mr. Ellis ? A. Yes, sir. Q. From the time of your report in March, 1873, to the time of your report in March, 1875, is there any increase in the value of the real estate ? A. April, 1873, to March, 1875, I made an increase ; I see the dif- 392 ference here is $8,300 ; that appears to be added on the five houses in East 46th street ; the other items were the same. Q. On the market value ? A. Yes, sir. Q. Were you here the other day when the witnesses were sworn as to when the depreciation as to the value of real estate commenced ? A. Yes, sir. Q. When did the depreciation of real estate commence ? A. The latter part of 1874. ■ Q. And the fore part of 1875 ? A. Yes, sir. Q. No material depreciation until after long toward the latter part of 1874, and the fore part of 1875 ? A. No, sir. Q. When was the report of 1875 filed ? A. March 25, 1875. By Mr. Olmstead : Q. I understood you to say that you informed yourself as to the value of this real estate, partly by examining the cost of the property on the books of the bank ? A. And through statements also. Q. And from an examination of the books ? A. Yes, sir. Q. Do'you not know that the bank book shows that the cost of the banking-house and lot cost about $72,000, and that the trustees had added $100,000 of fictitious value? A. I never suspected or heard any thing of it until sometime after the appointment of a receiver ; the valuation of the banking-house was about as we had kept it all along. Q. You djd not discover that they had added $100,000 to the actual cost, in order to make it appear as a larger asset ? A. No, sir ; I heard that afterward. Q. You heard it had been done prior to Mr. Ellis' time ? A. Yes, sir ; years before. Q. Do you mean to say that in your opinion there was no decrease of the valuation of real estate in this city between 1872 and 1875 ? A. I don't think there was. By Senator St. John : Q. I was speaking about the reports of the increased value of this real estate ; when I spoke about it, I did not refer to your reports ; I referred to the reports made by the bank itself, to the superintendent of the bank department ; therefore, I say that the figures which I 393 made was shown to be entirely correct in regard to it, that the real estate of the bank in 1873, was $546,551 ; at the time that report was made, I don't know who were their officers — yes, Decker and Morgan were the people who made that report ; they then show an excess of assets over liabilities of $15,659 ; the next year they reported that, as I stated before, at $579,651, and added thereby $33,100 to their esti- mated value of real estate, and having done that, it left them accord- ing to their accounts, taking their statement, an access of liabilities of $6,973 ; by adding $33,000 to their real estate, they were still able to show to the department on their returns, a balance of assets over liabilities of $6,973 ; the next thing comes in in those same reports in 1875 ; I don't know whether you paid^any attention to those reports or not? A. I have looked them over, but I have not the items ; I did not examine them ; I have nothing to do with them. Q. The next report was made $598,567, deducting the valuation the year before — of 1874, $579,651 — it made an additional increase of this $18,916 ; I say that the reports made to the department in those two years show an increase of $52,015.21 put on their real estate? A. Yes, sir. By Mr. Chapman': Q. This first report was made by the former superintendent, and before Mr. Ellis came into the office ? A. Yes, sir. Q. Whether after that report was made the mortgages had been les- sened before the subsequent_reports were made you did not know ? A. No, sir. Q. If the mortgages had been lessened by payments being made upon them, that would account for the increase in the value of the real estate when it came to be reported to Mr. Ellis, would it not ? A. Yes, sir. Q. If this report of 1875, to which your attention was called by Mr. Olmstead, in which an allusion is made to loans of the available fund being made upon securities doubtful in their character, Mr. Ellis was speaking in opposition to that kind of loans, was he not, in general terms ? A. Yes, sir; I suppose so. Q. This is the connection in which that allusion is made : " This unhealthy competition in securing deposits manifested itself in vari. ons forms, but always in the direction tending to the ultimate injury of the bank. It induces speculative loans and investments which promise large returns. Officers were tempted in making them to the 50 394 very verge of the legal limit, and in some cases beyond it. Loans of the ' available fund ' were made upon securities, as in the case of thp Third Avenue, doubtful in their character and uncertain in their value, subject to great fluctuations in the market and never proper securities for the loans of trust funds, which are of all moneys the most sacred." Those loans that you alluded to had been a long time prior to his time as superintendent ? A. Yes, sir. By Mr. Olmstead : Q. You have placed in your list of assets an interest accrued of $20,420 in your return of March 22d; is that the estimated value of the interest coupons attached to the bonds, or the par amount of the interest ? A. That is the interest accrued on the bonds and mortgages and the State and other securities, where the interest is not included; for instance, it is not estimated on these State bonds, because they are always sold " flat," as it is called. Q. If the bonds depreciated, the coupons would not be considered worth so much ? A. I never computed interest on bonds where they were repudiated. Q. I observe on some of these reports that the cost of the real estate is stated, and also the market value ; are you in the habit of making a statement in regard to the real estate in that way ? A. Sometimes. Q. Did you in regard to this bank in either case ? A. No, sir. By Mr. Chapman : Q. By the law of 1875 they were required to return their real estate at cost ? A. Not to exceed cost. Q. Whether under the law of 1875 any report was due from the bank in July ? A. No, sir. Q. The semi-annual report ceased to be given ? A. Yes, sir. Samuel II. Hurd, being duly sworn, testifies: By Mr. Olmstead : Q. Do you reside in this city? A. Yes, sir. Q. What is your business ? 395 A. I am receiver of the Third Avenue Savings Bank. Q. When were yon appointed such receiver '( A. I was appointed the 13th of November, 1875; I took possession the Gth of December, 1875. Q. Have you in your possession the books of the bank ? A. Yes, sir. Q. Have you brought any of them with you ? A. I brought the minutes, as specified on the subpoena. [Witness produces books.] Q. Those are 'the minutes of the board of trustees of the bank ? A. Yes, sir ; from 1867. Q. To the time you took possession ? A. Yes, sir. Mr. Olmstead offers in evidence a resolution of the trustees, which is a resolution taken on the last meeting entered on the minutes, on September 28, 1875. [Objected to, on the ground that it has not been brought to Mr. Ellis' attention in any way, and that he never saw it. Also, on the ground that it does not contradict in any way the allegation made by Mr. Ellis in his report, which is alleged to be false.] Q. You received these books from the bank yourself ? A. No, sir. Q. Who did you receive them from ? A. Prom Mr. Carman. Q. Yourself? A. Yes, sir. Q. Personally ? A. Yes, sir. Q. As the books of the bank ? A. Yes, sir; they were in a little box, and he .unlocked it and says to me, " those are the minutes." Mr. Chapman moves to strike out the answer. Q. Were they given to you in accordance with the order of the court ? A. Yes, sir. [Objected to; the order itself should be produced.] Q. Do you know the signature of Mr. Carman ? A. Yes, sir. Q. Is that Mr. Carman's signature ? [Handing book to witness.] A. Yes, sir. Q. He was the secretary of the bank at that time ? A. He was a receiver when I went there ; I didn't know him as sec- retary of the bank. Mr. Olmstead renews his offer of the resolution. [Objected to on the same ground.] 396 [The resolution is admitted, the chairman stating to Mr. Chapman that if he wants further evideuce in regard to its authenticity, the committee will allow him to call for it.] The resolution is as follows : " At a meeting of the board of trustees of the Third Avenue Savings Bank, held at the banking-house on Tuesday, September 28, 1875, at 7£ p. m., were present — Daniel Bates, president; Messrs. Brums, Moulton, Seiter, B. A. Lyon, Hartt, Peeg, Ford and Harrison. On motion of Mr. Brums, and seconded by Mr. Ford, the following resolution was unanimously adopted : Whereas, The recent pecuniary embarrassment of this bank, aris- ing from the long-continued stagnation of business, and the consequent continued depreciation in the value of the securities and real estate held by the bank, render it evident that the bank cannot safely con- tinue business or offer a reasonable security to those who deal with it, therefore, Resolved, That it is expedient that the bank be dissolved and its business affairs wound up. Resolved, That the officers of the bank be authorized to take the advice of the bank superintendent upon the best mode of effecting such dissolution, and that they be empowered to take all such steps in the matters as they may find for the best interest of the bank and its depositors. Resolved, That any new moneys hereafter received on deposit be kept separate and in trust for those making such deposits. W. S. CARMAN, Secretary." Marked "Exhibit No. 1, May 14, 1877, S. B. H." Q. Is that the siguature of Mr. Carman to the minutes of the meet- ing of April 14, 1876? [Showing book to witness.] A. Yes, sir. Mr. Olmstead offers such portion of this resolution in evidence as is proper to prove that John H. Lyon was the president of the bank and resigned on that day. [Objected to, on the ground that it has not been brought to Mr. Ellis' attention. Objection sustained.] Mr. Olmstead offers to show from the minutes of the bank that on July 17, 1874, the officers passed a resolution that in view of the fact of the annexation of a large portion of Westchester county, the valua- tion of the real estate at Tarrytown should be made up to $169,000. . [Objected to on the same ground as above stated. Objection sus- tained.] 397 Q. How many new accounts were opened in the bank from March 22, 1875, to September 28, 1875 ? [Objected to. Objection overruled.] A. Seven hundred and nineteen new accounts. Q. How much was deposited during that period ? [Objected to. Objection overruled.] A. I could not tell of my own knowledge ; the clerk had charge of them. Q. Who was your clerk ? « A. Mr. Sellers. Q. He has charge of the books for you ? A. Yes, sir. Q. As an accountant ? A. Yes, sir. Q. Have you sold any of the assets of this bank ? A. Yes, sir ; I have realized upon the assets. Q. State what assets you have sold, and what you have realized ? [Objected to. Objection sustained.] Mr. Olmstead offers to show that the receiver has realized on the bonds and mortgages, $75,139.75. From interest, 12,874.40. Prom the sale of bonds, the amount of bonds which stood on the books at $176,762.38, he realized $70,638.29. Prom the real estate which stood on the books at $659,014.51, he realized at public sale $137,945.66. The sale of the fixtures, $1,059.29. The total amount that he realized from the assets of this bank was $303,916.11. Some bonds and mortgages remain uncollected, and some have been collected since the report. [Objected to. Objection sustained.] Q. Are you acquainted with the general value of these assets in 1875? A. No; I knew nothing about the assets until December, 1875. Q,. That is when you took possession of the bank? A. Yes, sir; I knew nothing about it until I took possession of the bank ; nothing definitely. By Mr. Chapman : Q. I suppose there were, during this time from March to September, some old accounts that were closed ? A. I suppose there were. Q. There were more closed during that time than there were new ones opened, were there not ? 398 A. I don't know; I cannot say whether it was so or not; there was more money drawn out in a general way than there was deposited. Q. They were gradually drawing out of the bank? A. Yes, sir. By Mr. Olmstbad : Q. What dividends did you pay on these assets ? [Objected to. Objection sustained.] Q. Have yon collected, any thing on the trustee bond of $115,000? [Objected to. Objection sustained.] Mr. Olmstead offers to show that this bond made by the trustees to secure the deficiency are in litigation, having been sued, and that all save one person, who signed the bond, have filed their complaint deny- ing their liability; that Spencer K. Green, one of the bondsmen, by his answer, denies the power of the bank to make such an agreement, or accept such a bond and claims, there was no consideration ; Wil- liam A. Darling claims that the bank was insolvent at the time the bond was signed, and that fact was well known to Mr. Howell, the superintendent of the bank department, and claims there was no con- sideration ; Mr. Lyon, the president of the bank, also denies there was any consideration ; David Morgan claims to have signed an illegal agreement with the bank, and that there was no consideration ; Kich- ard Kelley says that the bond was merely nominal and formal, with- out legal obligation or force; so that a better showing of the apparent assets would appear; James Owen says, at the time of giving the bond, the bank was insolvent, and the assets and property insufficient to pay the depositors, and the fact was well known to the superintend- ent of banks at that time, and that the bond was made in pursuance of an illegal agreement between the bank and the superintendent to evade the law. [Objected to. Objection sustained.] A . tellers, being duly sworn, testified as follows : By Mr. Olmstead : Q. What is your position? A. I am Mr. Kurd's clerk in the Third Avenue Savings Bank since he has been receiver. Q. You have had charge of all the books and papers? A. Yes, sir; under Mr. Hurd's direction. Q. Oan you state how much money was deposited in the Third Ave- nue Sayings Bank between March 22, 1875, and September 28, 1875? A. I can. 399 Q. How much was it ? A. By the books $316,079.81. Q. Can you tell how much money remained in the bank on deposit on September 28th ? A. Do you mean what was the total amount remaining in the bank? Q. Yes. A. One million, three hundred and sixty odd thousand dollars; I don't remember exactly. Q. Remaining in the bank on September 28th ? A. Yes, sir; the amount to the credit of the individual depositors; these are the figures from the books of the bank. Q. How much cash was there in the bank at the time the receiver took possession ? [Objected to. Objection sustained.] Q. How much did Mr. Hurd as receiver receive from W. S. Carman as receiver ? [Objected to.] Mr. Olmstead offers to show that he received $7,621.79 as receiver. [Objected to, ou the ground that it was some four or five months after Mr. Ellis handed it over to the attorney-general. Objection sus- tained.] Q. Have you discovered in investigating the books, any evidence of robberies by the clerks or officers of the bank, and if so what ? [Objected to. Sustained.] Q. How much was the cash carried along in the books; was it not short cash all the time ? [Objected to.] Mr. Olmstead offers to prove that during the time that Mr. Ellis was superintendent, that they carried $60,000 short cash, pretending to have that amount of cash, when they did not have it. [Objected to, on the ground that it was not brought to Mr. Ellis' knowledge.] Mr. Olmstead offers to show that the difference between the general ledger and the deposit ledger was $(T6,000, and it was carried along dur- ing Mr. Ellis' time. [Objected to. Objection sustained.] By Mr. Chapman : Q. There was more drawn out than was deposited between _ March and September, was there not ? A. Yes, sir. Q. Do you know whether there was a greater number of accounts closed than new ones opened during that time ? A. I cannot state positively. 400 Q. Your impression would be, that there was, would it not ? A. No, sir; my impression is, there was more new accounts opened than old ones closed. Q. But a larger amount taken out than put in ? A. Yes, sir. By Mr. Olmstead : Q. Were those moneys that were drawn out generally moneys of the new depositors or old depositors ? A. I could tell you to-morrow, but not to-day; there is a man at work on that. Win. F. Aldrich, being duly sworn, testifies: By Mr. Olsistead : Q. Were you one of the examiners of the bank? A. Yes, sir. Q. Appointed by Mr. Ellis ? A. Yes, sir. Q. You examined with Mr. Eeid the Third Avenue Savings Bank on March 22 and 23, 1875 ? A. Yes, sir. Q. How long were you conducting that examination ? A. I think we were there two days. Q. Did you go through all the securities ? A. Yes, sir. Q. How did yon estimate the value of the real estate ? A. In that respect we took the old estimate, because we found there was so large a deficiency, we thought that would take a long time to look up the estimates or make a new estimate, and we took the esti- mate of a former examination. Q. You thought the deficiency was very large ? A. We found it was so large that it was not necessary to make any further examination in reference to the real estate, so we didn't spend any further time on it. Q. Did you ascertain at that time or know at that time, that the trustees had added a hundred thousand dollars to the original cost of the banking-house ? A. No, sir. Q. Did you learn it afterward ? A. I saw the report of this McDonald, he alleged that. Q. Did you consider the bank at that time wholly insolvent ? [Objected to. Objection sustained.] CJ. From what you saw of the assets of the bank at that time and 401 from what you learned of the value of flnose assets and of the liabilities of the bank, did you think that the bank could continue its business with safety to its depositors ? [Objected to. Sustained.] By Mr. Chapman : Q. Did you report to Mr. Ellis any thing except what was contained in that report ? [Objected to.] By Mr. Olmstead : Q. Did you make any report to Mr. Ellis ? A. I sent the report. Q. Did you make any other report except that ? A. No, sir. Q. Did you have any communication with Mr. Ellis other than that report ? A. No, sir. Q. Did you send him letters in regard to it, or write him in respect to it ? A. I don't recollect that I did. Q. Are you in the habit of meeting Mr. Ellis ? A. Not very often. Q. You are not in the habit of conversing with him about the banks of the city ? A. No, sir ; that is about the last bank that I examined. Q. The only way that he knew of your opinion of the bank, was the official statement that you sent him ? A. Yes, sir ; that I thought was sufficient. By Mr. Chapman : Q. That was as far as this bank was concerned ? A. Yes, sir. Q. You examined far enough in there to find this deficiency and did not consider it necessary to go any further in the examination ? A. Yes, sir. Q. And reported that fact to the bank superintendent? A. Yes, sir ; we found this deficiency, and we would not go on any further, and we concluded to make the report. Georae Heucken, sworn : By Mr. Olmstead : Q. Were you present at the last meeting of the board of trustees ? A. I think I was. 51 402 Q. Do you know the date ?* A. September 28th, 1875. Q. Look at that resolution and say if that was passed at that time ? [Handing copy of resolution to witness.] A. I don't see my name mentioned here among the members present, therefore I cannot say whether the resolution was passed or not ; I was present at a meeting in September, but I cannot positively say whether it was this time or not. Adjourned to May 15, 1877, at 10 A. m. New York, May 15, 1877. The committee met at -10 a. m.. pursuant to adjournment. Present — Senators Coleman (the chairman), Wellman and St. John: Mr. Olmstead offers in evidence the report of De Witt C. Ellis to the legislature, dated March 30, 1876, contained in the annual report to the bank department, commencing on page 5. REPORT. STATE OF NEW YOEK: Banking Department, ) Albany, March 30, 1876. j To the Honorable the Legislature of the State of Neio York : The legislature, at its last session, incorporated one savings bank, to wit : The Twelfth Ward Savings Bank in the city of New York. During the year 1875 the following savings banks were organized, under charters granted by the legislature, and reported to the depart- ment : Gloversville Savings Bank, incorporated in 1873. Kingston Savings Bank, incorporated in 1874. Newtown Savings Bank, incorporated in 1874. St. John's Savings Bank of Eordham, incorporated in 1874. Under the provisions of the general law, passed by the legislature of 1875, four savings banks have been organized, but none of them had actually begun to receive deposits on the 1st of Jauuary, 1876 ; hence they did not report at that time. They are : The Warwick Savings Bank, Warwick, July 27. 403 The Long Island City Savings Bank, Long Island City, November 3. The Bedford Savings Bank, December 11. Koslyn Savings Bank of Eoslyn, December 17. Two other applications for the requisite authorization to organize savings banks were filed in the department during the year. They are: The Watertown Savings Bank. The Stuyvesant Savings Bank of the city of Brooklyn. After making careful and extended inquiry respecting the necessity and the opportunity for a new savings bank in the city of Watertown, I was constrained to disapprove the application for a new institution there. The Jefferson County Savings Bank, which is located in Watertown, is a prudently managed and prosperous bank. Although it is small, it affords all the accommodation that the community can expect from such an institution. As there is no need of a new savings bank for public convenience or advantage, and as the establishment of another would divide a patronage none too large to maintain one in a sound and improving condition, I disapproved the application for authority to create such a bank, on the 23d of August. The applications for the Bedford Savings Bank, and the Stuyvesant Savings Bank were antagonistic. Both the proposed banks would cover the same ground, the Twenty-fifth Ward, in Brooklyn. While that portion of the city is growing, and the testimony indicated that it is a proper field for a new savings bank, where none now is located, it became obvious that two should not be authorized. The application for the Bedford was filed October 14th ; that for the Stuyvesant was filed October 16th. Other things being equal, the application of the Bedford was fairly entitled to precedence by priority. Some feeling was shown by applicants in their contest, but the weight of evidence and of influence among impartial and respectable citizens of Brooklyn favored the application for the Bedford Savings Bank. Therefore, on the 11th of December I granted the certificate of authorization to applicants for it, at the same time disapproving the solicitation for the Stuyvesant Savings Bank. The Mutual Savings Bank, of Auburn, proposed to change its name to the Cayuga County Savings Bank, which application I approved on the 17th of June, pursuant to the general act of 1875. Two savings banks voluntarily closed during the year, and paid their depositors. Neither of them ever had enough business to encourage it to go on. They are : The People's Savings Bank, of Amsterdam ; the Orleans Savings Bank, of Albion. Five savings banks in the city of New York failed during the year; 404 to wit : The Third Avenue Savings Bank, The People's Savings Bank, the Central Park Savings Bank, the. Mutual Benefit Savings Bank, the German Up-town Savings Bank. These failures will be treated more fully elsewhere. The whole number of savings institutions reported to this depart- ment January 1, 1875, was 158. The whole number reporting Janu- ary 1, 1876, was 154. 405 <5 B CD* 00 B S S s B 10 *- CO B S> 8 K> 3 ^ 5 S £ J § a ^ .B 1 B 8 B «tOSlf! • CR cc CO to iO ^* CO tH tJH t— 1 • CO 1CT. lOOO -* CO !<>. to CO • o oc l(3!>^ co ai !>->iim(D .ion ^h i> CO i— t X © © rH OS • -* 1C INH!^ CS( U lO CO CO Cn • Tf GS> CO "O CO o G H IQ CNJ i-H • CC m . . . . 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'^'S o o^,p c ber of insti ber of open ber of acco ber of acco o co a. a e a s p o « -S cc E E < CQ CO , S3 ^ ^ OCX E < C 1 c a a 9 406 lO CO CO Co -* • • as f- > «co o -k> 1—1 OS o FQ O O O CO 03 co i— i as oo lO o co -* ** fc- as « as co M .. o co as > »"" ' ■^ "^ CO < § © £- i-l 32 r\ rv c *s t- GO CO CD -^H i—( 1-1 1-1 6-i O 1 • M • • fc 3 ■d • a ■ ■ • -1— i • • o EH ■d as . S3 . .-d . . M ft Id ! CO o s (DM.. hO . . 4, Pi . 03 'd . fl H -s ! a> ° '0 GO • i— I •X3 ^ o g M tJO ^3 : a .-a 3 O H M PI . "C id . • 3 ? -X *" . rt 4s • Ph 3 n* t« W CD 3 o -« s g 53 s ^^ ^"S^ 5 © -^ ^3 -^ -^ 2> cu fl£ 13 g^ g^ he 13 s a> J 3 1 being an officer of the bank, to sign them, inasmuch as it had been brought to you by the secretary ? 429 A. I asked the question if the thing was all right, and he said he could afford to sign it, and I thought I could. Q. Do you know what is the cost of that bank building ? A. I do not. Q. When was it purchased ? A. That I don't know; I was not in the bank only about a year, trom 1871 to 1872. Q. It was not purchased during the time that you was in the bank ? A. No. sir ; I saw the cost put down. Q. Yon had no reason to suppose otherwise than that this statement that you swore to was correct ? A. No, sir ; there had been money raised as they supposed to make it good. Q. What money do you refer to ? A. Bonds. Q. The bonds of the trustees ? A. Yes, sir. Q. Were you one of the bondsmen ? A. Yes, sir. Q. Has your bond been sued ? A. It has. Q. Are you defendant ? A. Yes, sir. Q. On what ground ? [Objected to as immaterial ; that the answer itself should be intro- duced here, parol evidence not admissible of it; that it has occurred since the time of the handing of the bank over to the attorney-general by Mr. Ellis. Objection sustained.] Q. Did you suppose at the time you swore to this statement that has been referred to, that those bonds mentioned in the statement as $115,000 of bonds, were good and valid bonds, and good assets of the company. A. Yes, sir. Q. Has any thing occurred from that time to this to change your opinion ? [Objected to, on the ground that his opinion is not evidence ; it does not appear that it occurred before Mr. Ellis reported it to the attorney- general ; that the evidence is immaterial ; that what his opinion is makes no difference. Objection sustained.] Q. Upon what ground or grounds are you defending the suit upon your bond r [Objected to, on the grounds : First, that it is immaterial ; Secondj the answer itself is the best evidence; Third, that the grounds of his action have no bearing on the question at issue here in regard to Mr. 430 Ellis' action ; Fourth, that it occurred after Mr. Ellis passed the bank to the attorney-general.] Mr. Olmstead states that he is ready to produce the answer referred to in the objections. [Objection sustained, on the ground that it is a proceeding com- menced since the bank was put into the hands of a receiver. J Q. Who suggested the giving of these bonds ? [Objected to, on the ground that it was a long time prior to the time when Mr. Ellis became superintendent of the banking department ; also that it was never brought to Mr. Ellis' knowledge; also that it is immaterial on the issues that are here being tried. Objection sustained.] Q. Were you in the habit of meeting with the officers of the bank at their regular meetings ? A. No, sir. Q. While you were president ? A. In 1871 and 1872 ; yes, sir. Q. You did not meet with them after that ? A. No, sir; only once after 1872; then I notified them by letter and notified them personally that I would not serve only once. Q. Did you attend the meeting of the 28th of September, 1875, the last meeting of the bank ? A. That I could not say ; I don't remember what time it was. Q. Were you appointed a committee together with William S. Car- man, the secretary, to go to Albany, in relation to winding up the affairs of the bank ? A. No, sir ; not to my knowledge. Q. Did you go to Albany ? A. No, sir. Q. Did you or did you not suppose in March, 1875, that the bank was solvent or insolvent ? A. I didn't know any thing about it. Q. Did you not consider it your duty to inform yourself? A. 1 was very much engaged in business in Chicago, and I was not here but a very little of the time, perhaps once a month ; once in three months, sometimes. Q. Did you ever see Mr. Ellis, the bank superintendent ? A. No, sir. Q. Or Mr. Eeid or Mr. Aldrich, the examiners ? A. No, sir. Q. Do you know who did go to Albany with Mr. Carman ? A. I do not. Q. Do you know who the committee were ? A. I do not, sir. Q. Do you know of any reports having been made by the bank or 431 any of the officers of the bank to Mr. Ellis other than you have stated ? A. No, sir; that is the only one I ever saw. Q. Do you know who had charge of the bank as president during your absence ; did any one act as president ? A. In 1872? Q. Yes, from 1872 ? A. I think Mr. Bates served for a spell, and then there was some one else elected ; I forget what his name is. Q. Served as the acting president ? A. Yes; I have very little to do with it. By Mr. Chapmak : Q. This you only know from what you have heard ? A. That is all. Q. You have no personal knowledge of it at all ? A. No, sir. By Mr. Olmstead : Q. Then I understand you to say that you don't know who had charge of the bank during the time you were president after 1872 ? A. No, sir. By Mr. Chapman : Q. I suppose Mr. Ellis did not know of any conversation between you and Mr. Carman ? A. I don't know of any. Q. You don't know of any way that he could know it ? A. No, sir. Q. Either by way of examination of the bank or any other way ? A. No, sir; I never saw Mr. Ellis or any of the parties. Q. During the time that Mr. Ellis was superintendent you were not around the bank ? A. No, sir; not from March 19, 1872. Homer Morgan, being duly sworn, testifies as follows : By Mr. Olmstead : Q. Do you reside in this city ? A. I do, sir. Q. Your business ? A. Real estate agent and broker. Q. How long have you been such real estate agent and broker in this city ? 432 A. Since 1842. Q. Will you please state when the depreciation in real estate in this city commenced, on account of the panic ? A. It began to be felt in 1873. Q. How long did it continue ? A. Up to the present day. - , Q. How great was the depreciation of real estate generally, in this city, from 1873 to 1875 ? A. An average of 33£ to 40 per cent. Q. Are you acquainted with the Third Avenue Savings Bank build- ing on Third avenue and Twenty-eighth street ? A. Only generally; not by close examination. Q. What, in your opinion, was the value of that property, about March, 1875 ? [Objected to on the ground, First. That the opinion of Mr. Mor- gan on the question is immaterial on the issues here being tried. Second. That it must first be shown that Mr. Ellis' attention was called to his valuation. Third. That under the law Mr. Ellis is not required to act except it has been made to appear to him, either by his own examination or by the report of an examiner, that certain things appear. Objections overruled.] Q. [Question repeated.] What, in your opinion, was the value of that property — the banking-house and lot — about March, 1875? A. I should like to know the size of the lot; is there a diagram of it here ? Q. It was about 25 by 98 ? A. I think it was more than that ; it strikes me Q. There were two lots, one 25 by 84 and the other 25 by 98. A . Are you sure of that ? Q. So Mr. Ludlow says. A. I made my former calculation upon its being a little wider upon Third avenue. Q. Now, what was its value in March, 1875 ? A. It was about, perhaps, $110,000 or $115,000 as an entirety. Q. Was it ever worth any more than that sum since you have known it? A. I think it very likely in the highest days — perhaps three years before — before the commencement of the panic, which was in 1873 ; I think it would have brought $140,000 in the palmy days, but in the time which you speak of I don't think it would have brought on its merits more than about what I have stated ; it did sell, as I find on record [Objected to.] Q. Do you know what the property sold for ? 433 [Objected to as immaterial, and that it was after this bank had passed into the hands of the attorney-general.] Q. When was the property sold ? A. About a year ago. By Senator Wellman : Q. In fixing these values I understand you to estimate them at the prices at which you think the property could have been sold ? A. Yes, sir. Q. For the business of banking, or for any purpose ? A. For any purpose : for investments, or for any purpose. By Mr. Chapman : Q. Worth more to a bank already located in there than it would be to somebody else, would it not ? A. It would in prosperous times, but there would not be any very grpat advantage during this period of this great depreciation. CJ. If the bank had not had that building they would have had to go somewhere and get another ? A. Yes, sir. Q. It was worth just as much to them, probably, for banking pur- poses, as a building that would cost considerable more. A. Yes, sir; but it would not have brought its value as a bank if put up for sale. Q. Your value is based iupon that alone, what it would bring at a forced sale? A. Entirely. By Mr. Olmstead : Q. Would the property have been worth any more to other parties from the fact that there had been a bank there ? A. I think it would have had a little influence with the general buyer, it being a good building and suitable for that or any other pur- pose, but there isn't any particular (so far as my opinion goes) advan- tage in favor of a bank building being sold now out of the immediate center in Wall street or its vicinity. Q. And you valued it then, what it was worth, the lot and building ? A. Yes ; just upon its merits. By Mr. Chapman: Q. How much has property and real estate depreciated in New York since March, ] 875 ? 55 434 A. It is on a stand still ; I doubt if anybody can give a percentage about it ; there is no real market. Q. Do you mean to say that it has depreciated since March, 1875 '• A. Yes, sir. Q. How much ? A. That I could not answer, not by percentage, but it is constantly on the decrease ; in other words, there is no market hardly for any thing, except it is a made-up market — manipulated market; a buyer is disposed to offer a price, the seller won't take it, and then the inter- mediate men work as hard as they can to bring the two together. Q. Since 1873, then, real estate has had no market ? A. Yes, sir ; since 1873, it has had a market. Q. Since 1875, I mean ? A. Not that you can call a market; yon cannot find a buyer with- out a great deal of trauble. E. H. Ludlow, being duly sworn, testifies as follows : By Mr. Olmstead : Q. You reside in this city ? A. Yes, sir. Q. What is your business ? A. Eeal estate agent and broker. Q. How long have you been such ? A. I commenced in 1836. Q. Are you acquainted with the bank building of the Third Avenue Savings Bank, on Third Avenue and Twenty-sixth street? A. 1 know it outside, not inside ; I have seen it outside. Q. Will you please state what its value was in March, 1875 ; the value of the property known as the bank property ? [Same objection as to Mr. Morgan's testimony.] A. It is very hard to give the exact value of it at that time. Q. What would have been its value ; fair market value ? A. I should hardly think it would have brought more than $100,000 or 1110,000. Q. Do you consider that as its fair value at that time ? A. It is rather hard to give a fair value of it ; demand, since the great panic, for banking-houses, of course, has subsided; the build- ing is more calculated for a banking institution than any thing else — and insurance; it is hardly suitable for mercantile purposes up there ; I think it would have been very difficult, since the great panic — I think that was in 1871 — to have sold that property over $100,000. 435 By Senator Wellman : Q. You mean the panic of 1873, do you not ? A. Yes, sir; 1873. By Mr. Olmstead : Q. When did property commence to depreciate in this city ? A. I think it commenced before the panic of 1873 ; I don't think it was as lively before that, and after the panic it was much duller. Q. There was quite a large depreciation immediately after the panic, was there ? A. Not so immediately after, but gradually. By Mr. Chapman : Q. There were large and expensive vaults, were there not, in this bank? A. I never examined the property internally ; only externally I have seen it ; I presume the vault would be suitable for banking purposes. Q. Those vaults which are used by banks and insurance companies are very expensive, are they not ? A. They are considered to be; I am not very much versed in build- ing ; but I am told they cost a great deal. Q. Whether or not there were any in this building you have no means of knowledge ? A. No, sir ; I am not aware. Q. You don't know what this property costs? A. No, sir; I do not. By the Chairman : Q. In putting your estimate on it, do you calculate any thing for the value as vaults and safes inside connected with it — did you take that into account ? A. No, sir ; I did not take that into account at all, because I don't think they would have any value, except for a banking-house ; for mercantile purposes those vaults would be of very little us° By Mr. Olmstead : Q. Would that kind of property in March, 1875, have been as valu- able as an asset to the bank as a banking-house, as it would have been had the house not been erected for banking-house purposes ? A. It would be worth more to a banking-house than to any other party. Q. I am speaking of it as an asset which could be sold ; it would not be as valuable, therefore, to other parties as to a bank ? 436 A. No. sir ; to the bank itself it would be more valuable than any ordinary building. Q. It would really be worth less then than it is as an asset to be sold on the market ? A. I don't know as it would be worth any less; it would not be of any value to have those vaults for commercial purposes. Q. I understood you to say that in March, 1875, that banking-house would not be as valuable as it would be before ? A. I say that, and I say that again. By Mr. Chapman: Q. You considered that in the estimate which you have given ? A. Yes, sir. Q. It would be worth just as much to this back if it had continued in business, as a more expensive building, wouldn't it? A. It would have been worth as much for their business if it was comprehensive enough for their business. John H. Roberts, being duly sworn, testifies as follows : By Mr. Olmstead : Q. Are you employed in the county clerk's office as clerk ? A. Yes, sir. Q. You received a subpoena to attend here ? A. Yes, sir. Q. Have you examined in the county clerk's office for a report of the condition oi the Third Avenue Savings Bank, filed in that office on or about October, 1876, by S. H. Hurd, receiver ? A. I have searched for it. Q, Did you find it ? A. I have been unable to find it. Q. Did you find any record ? A. No record of any such document being filed. Q. What record would be kept in the office if such a paper had been filed ? A. It would have been entered in our books. Q. Is there an index in those ? A. Yes, sir. Q. Did you search the index ? A. Yes, sir; and went through the papers also; I think the trouble is they gave us no title to look after. Q. How were those reports entered ? A. It is generally somebody as the plaintiff against the bank. 437 By Mr. Chapman : Q. It is in a suit ? A. In a suit, yes, sir; it is not generally "in the matter of" the bank ; tell me who the plaintiff is, and about the dates, and I can find it. Mr. Olmstead states that as he has no more witnesses present, he desires an adjournment. Mr. Chapman states that he does not wish to proceed with the testimony on behalf of the defendant until the prosecution has finished. Adjourned to May 16, 1877, 10 A. m. New York, May 16, 1877. The committee met at 10 a. m., pursuant to adjournment. Present — Senators Coleman (the Chairman), Wellman and St. John. John H. Stewart, called on behalf of the defendant, being duly sworn, testifies as follows : By Mr. Chapman : Q. Where do you reside ? A. In the city. Q. How long have you resided here ? A. With the exception of a year or two, all my life. Q. You are president of the United States Trust Company ? A. I am, sir. Q. How long have you been such ? A. Twelve years. Q. Do you know Mr. Ellis, the superintendent of the banking de- partment ? A. I do. Q. How long have you known him ? A. Nearly all the .time that he has been superintendent of the bank department. Q. Do you recollect the occasion of Duncan, Sherman & Co.'s failure ? A. I do. Q. Do you recollect that a short time after that Mr. Ellis called upon you and consulted with you in regard to the advisability of throwing the Third Avenue Savings Bank into the hands of a receiver ? A. I recollect his calling shortly after that. 438 By Mr. Olmstead: Q. State about the date ? A. I cannot fix the date ; I remember Mr. Ellis being in the office of the Trust Company shortly after the failure of Duncan, Sherman & Co., and at that time he asked me — Q. I would like to know when that was; when was the Duncan, Sherman & Co. failure ? A. I think it was in the spring of 1875. Mr. Chapman — I think it was some time in May, 1875. The Witness — Mr. Hurd corrects me by saying that they failed in July, 1875 ; it was shortly after that; I cannot fix the month ; it was shortly after the failure of Duncan, Sherman & Co., whenever that was. Q. What was the state of public feeling in the market at that time, financially? [Objected to.] Q. Will you tell what occurred between you and Mr. Ellis at that time? Senator St. John — Is that date fixed ? Mr. Chapman — I have a minute here that Duncan, Sherman & Co. failed in April, ] 875. The Chairman — Mr. Hurd thinks it was July. Mr. Chapman — That is to be fixed hereafter. Mr. Olmstead — Let us know when the conversation was. Mr. Chapman — The witness states that he cannot give the date, but it was after Duncan, Sherman & Co. failed. [This testimony is taken subject to objection.] Q. State fully what occurred between you and Mr. Ellis ? A. To the best of my recollection he asked me what I thought would be the effect produced if he proceeded summarily to wind up the Third Avenue Savings Bank ; I told him in reply that there was, of course, considerable excitement prevailing in the community grow- ing out of the unexpected failure of Duncan, Sherman & Co., and that it was desirable at such times to endeavor, so far as it could be done properly, to allay excitement; that he should exercise a wise discre- tion, having reference to the interests of savings bank depositors gen- erally. Q. Go on and state fully what occurred between you and him ? A. He said that if he began with one bank it was likely that there were others that he should have to deal pretty summarily with, too ; and I remarked to him that in the case of the Third Avenue Savings Bank he was to consider whether there was any thing in the condition of 439 that bank that had not existed for a year or two; I don't know that it is proper for me to state my impressions at all. Q. I think so. A. I felt that that bank had been in an unsound condition for some time, and that unless there was some reason for proceeding just at that time during the excitement then prevailing, that it would be for the interests of the depositors of that bank, as well as for the interests of the depositors in many of the other savings banks, that he should move cautiously ; in reply Mr. Ellis stated that he had consulted several gentlemen in regard to the same matter, in whose judgment he had confidence, and that their advice was similar ; that is about all that occurred, sir. Q. In that conversation did he inform you that he had made an ex- amination of the bank and found it insolvent, or that in substance ? A. That is stating it pretty broadly ; I think he stated, that in his judgment the bank required attention ; I won't say that he said it was insolvent. Q. Do you recollect of his speaking something of this kind ; that it would have to be closed up and there were several others that would follow ? A. He did, sir; and the advice which I gave him was based upon his statemeut that several others would follow. Q. And you recollect the fact that after it was closed up, several others did follow, don't you ? A. Yes, sir. Q. About a dozen of them ? A. About a dozen. Q. Do you recollect of making any suggestion to him in regard to the real estate bringing better prices in the fall, probably ? A. I don't recollect having said to him that I thought it would, though I may have done so. Q. Do you recollect of saying to him that the effect would not be as disastrous if it was closed up after the summer vacation when the feel- ing was somewhat allayed — this excitement ? A. I recollect stating to him that it would perhaps be better to wait until the excitement growing out of the failure of Duncan, Sherman & Co., had in a measure subsided ; I don't think I stated to him that it would be better to defer it until fall, because I don't think fall is gener- ally the best time of the year to proceed to wind up an institution. Q. Yon don't recollect making any allusion to the summer vacation one way or the other? A. I do not. Q. You could not say that there was no such expression ? A. 'No, sir; the idea was that just at that time when that excite- 440 ment was prevailing it might be disastrous for him to proceed sum- marily to wind up that, to be followed by several other savings banks, and it was in the interests of the depositors generally that the remark was made. By Mr. Olmstead : Q. Did Mr. Ellis inform you fully of the condition of this Third Avenue Savings Bank ? A. No, sir. Q. Did he exhibit to yon any reports made to him or by him rela- tive to that bank at that time ? A. He did not, sir. Q. Did he inform you that on January 1, 1875, the secretary of that bank had made a report to the bank department to the effect that there were about $7,000 surplus money in the bank, and that on March 22, 1875, his own examiners, Mr. Eeid and Aldrich, had reported a defi- ciency of upwards of $219,000 in that bank ? A. No, sir ; Mr. Ellis gave me no particulars; the conversation was general ; I certainly would not have given any advice where the par- ticulars were presented to me, without considering it. Q. He did not give you that information; would you have given him the advice to continue that bank if you had known that there was a deficiency in the bank of $219,000 ? [Objected to.] Question repeated. Would you have given him the advice to con- tinue that bank if you had known that there was a deficiency in the bank of $219,000, and would you have advised that it should continue to receive subsequent deposits ? A. The latter part of it I can answer unhesitatingly ; I would not have advised him to allow them to receive subsequent deposits; in regard to the former, I don't feel competent to answer the question, not having the particulars presented to me at the time. Q. If you had been conducting the bank, you perhaps would have endeavored to protect the public as much as you can against the con- sequences of the failure, but you would not have allowed the bank to receive deposits ? A. I would not have allowed the bank to receive deposits — upon the statement that you present to my mind. Q. Would you or would you not have considered it your duty as a superintendent of the banking department, knowing that there was a deficiency in the bank of upward of $219,000, to have notified the attorney-general of that fact. [Objected to.] 441 A. 1 don't feel competent to answer the question what I would have done as superintendent, because I had no experience as superintendent of the bank department, and a man cannot tell what he would do. Q. "Would you have considered it your duty to have notified the proper officers who had charge of closing the bank, of that fact, if you had known it — the fact that there was a deficiency of upwards of $219,000 ? A. I think I should have felt it my duty to have wound up the bank if I knew there was a deficiency of $150,000 ; the only question presented to me — if I am permitted to say by way of explanation — bearing upon this, was whether that was the proper time to do it or not. Q. You only gave him general advice, I understand, in such general way as you have mentioned here, that it was his duty, all other things being equal, to do whatever was proper to protect the general banking interests and the depositors ? A. That is it, sir; the conversation was entirely general, and no particulars given. Q. If the same general condition of the bank had existed two years previously, that existed at that time, about March, 1872, and that fact had been brought to the knowledge of the bank superintendent, would yon have thought it proper for him to continue that bank under any circumstances, for two years and six mouths ? [Objected to.] A. I would answer that by saying that my impression has been un- favorable in regard to the Third Avenue Savings Bank for two or three years, and that I knew of no special reason why summary steps should be taken just at that time, that had not existed previously. Q. That is hardly an answer to the question ; question repeated. [Objected to.] Q. I show you the report of the examiners of April 14,1873, and also the report of the examiners of March 22, 1875 ? A. This appears to show a deficiency of $5,000. Q. Will you please* look over the securities that were held by that bank at that time, and state whether in your opinion, at that time, in 1873, that the bank was in a solvent condition ? [Objected to, first, that it is not within any of the charges made ; second, that Mr. Ellis is not charged with being negligent prior to the report of March, 1875 ; again it calls for the opinion of this witness as to what he would have done ; again, that it is speculative; again, that he is not shown to have known other facts bearing upon the question, such as the supreme court had passed upon, such as that there had been an examination of five months of this same bank the year before by the bank department ; also, that the examiner who re- ported this to Mr. Ellis, in 1873, reported that the deposits were in- 56 442 creasing and generally in favor of continuing the bank ; that there was an excess of income over expenditure ; that these and other ele- ments may influence his decision if he had known in regard to it. Objections overruled.] Q. You are familiar with the value of such assets, are you not ? A. I don't wish to call myself an expert in such matters. By Senator St. John : Q. You have a general knowledge ? A. I have a general knowledge ; it is impossible, looking at a report retrospectively, to say what a man would have done under the circum- stances; but with the light which I now have, with this report in my hand, I should say that it would be the duty of the superintendent to close it up ; I see assets here that I think comparatively worthless. Q. Please look at the report of George W. Reid and W. F. Aldrich, of March 22, 1875, on page 330 of the report of 1875, and answer the same question in regard to that report, taken in connection with the former report ? A. This shows it had not improved. Q. It shows a large deficiency; your answer would be the same in regard to this as to the former question? A. It showed no improvement, rather the reverse; it shows one item, I observe, that is not in the other, of individual bonds ; I don't know what value is to be attached to that. Q. You observe a deficiency of $219,000 and upwards ? A. I observe an apparent deficiency of $44,000. Senator St. John — That is a deficiency of income, and if you look above you will find a deficiency in assets of $219,000. The Witness — Yes, sir; I see a decided increase in the deficiency — an increased deficiency in the assets. Q. Over $219,000; that would be conclusive in your mind, would it not, as to the condition of that bank, taken in connection with the other report ? A. I think there is no doubt of that, sir. Q. The general condition of this Third Avenue Bank among busi- ness men in the city was rather notorious, was it not ? [Objected to. Objection sustained.] Q. Did the closing of the Third Avenue Savings Bank, in your opinion, have any influence upon the closing of the other banks which closed that year, so far as you know ? A. The condition of the Third Avenue Bank, as I have before re- marked, had become chronic, and I don't think it did have a very great influence. 443 By the Chairman : • Q. Suppose Mr. Ellis had closed it at the time he first talked with you about it, what do you think would have been the effect then ? A. I think it might have increased the uneasiness prevailing among depositors of savings banks, and the fear was that it might lead to a general run on the savings banks. By Senator Wellman: Q. Kelative to the examiners' report of 1873, you state that looking at it from the light which you now have, you would, upon the show- ing of that report, have felt it your duty if you were superintendent of the banking department to have proceeded to close the bank ; would you have done so if you had known that your predecessor had just made the effort to do so and had failed, only a short time previously — the court not permitting him to do so ? A. If the court had intervened to prevent a proceeding, I think it might have justified me in not acting ; the responsibility rests with the court then and not with me. By Mr. Chapman : Q. Would not the fact of your predecessor having made the year before a protracted and thorough investigation of the bank in con- junction with the court, and having accepted these individual bonds and passed them — would not that. have had an influence in determin- ing your action ? A. Certainly. Q. I will ask one other thing ; whether, if you were looking at this report in the light of the knowledge you have had and your own ex- perience in connection with savings banks and your knowledge of their condition here in the city ; would you make this suggestion in the light of all those facts ? A. I would. Q. Mr. Ellis came into the bank department only the latter part of 1873, with no knowledge of the savings banks ; he had to take the matter up new, investigate the reports, investigate the condition of all these and get the run of these matters; isn't that an element that would enter into the question in your mind as to whether he would naturally have acted at that time or not ; isn't it an element that would enter into the case ? A. Yes, I think it would. Q. Is not another element in there the rules of the department and the action of his predecessor in regard, not only to this bank, but other banks ; is that not an element that would also enter into the question ; 444 not conclusive, perhaps, but an element to be taken into consideration, in conjunction with the other elements of the case ? A. I should not attach very great importance to that, because I think that when the superintendent assumes the responsibilities of the position he must act for himself and he must form his own judgment and must not be influenced too much by the action of his predecessor. Q. Not too much; but still it is an element undoubtedly; it is an element? A. How much importance he should attach to it is another ques- tion. Q. That would be a question of opinion for the man himself to pass upon ? A. It would ; in other words, sitting here, looking at it retrospect- ively, is a very different thing from taking it up with the surrounding circumstances and passing judgment then. Q. Now, I will ask one other thing : Is it not, in your opinion, true, the worse the condition of the bank at the time Mr. Ellis consulted you in 1875, would not the shook on the street and the market have been worse ? In other words, if, instead of its being a small deficiency, there had been a very large deficiency — instead of being $50,000, there had been $500,000 deficiency, wouldn't it have made a worse shock ? Wouldn't the tendency of it have been in that direction ? A. Yes, sir, it might have been, but at the same time that would not have influenced any advice which I gave; it was simply that the proceeding to wind up this bank, to be followed by several others, in the exceptional state of the market just at that moment, might have been prejudicial to the general interests of depositors. Q. If the bank had stopped receiving deposits, that would have wound it up right along, wouldn't it ? The effect would be the same ? A. I think it would ; I would not be positive upon that point ; I think it might. Q. The question, as I understand, between you and Mr. Ellis was as to the advisability of winding it up right along ? A. The advisability of doing it just at that special time ; not whether it should be postponed a week, or two weeks, or a month, but whether he should wait until the excitement growing out of that failure had subsided in a degree. By Mr. Olmstead : Q. Would you not consider that the worse the condition of the bank, the more reason there would be for refusing to receive deposits? A. Certainly. Q. Do you know generally about how much money is invested in this city in savings banks ? 445 Mr. Chapman — About $180,000,000 ? A. I would make a guess of about $150,000,000. Q. "Would you not consider it the duty of the bank superintendent, who has confided tohim such large interests, to become competent for his duties immediately upon his assumiog office ? [Objected to. Objection sustained. ] By Senator St. John : Q. You speak of the condition of this Third Avenue Bank as hav- ing become chronic; you mean by that that it was a bank not in good repute for some time ? A. It had not been for some time. Q. Then I want to ask the question whether the winding up or the failure of that bank would produce any such influence upon the money market or commercial circles here as the failure of a bank which was supposed to be in good credit and standing ? A. Not at all. A. Sellers, recalled. By Mr. Olmstead : Q. Are these books that you now produce the books of the Third Avenue Savings Bank ? A. Yes, sir. Q. In the hands of a receiver ? A. Yes, sir. Q. Will you please state what they are ? A. The ledgers, journals, bond and mortgage books, minutes of the trustees, and books generally of the bank; that is, a portion of them. Q. Are you familiar with the books ? A. Yes, sir. Q. You have examined them ? A. I have. Q. And the entries ? A. Yes, sir. Q. Can you turn to the entry in the book showing the cost of the banking property ? A. Yes, sir. Q. Will you be good enough to do so ? A. Ledger No. 3, folio 462. Q. Does that entry show the cost of the banking-house ? A. Partially ; there is a balance brought over from another ledger where the entries commenced. 446 Q. Please look at that former entry; I think you have testified that you were an accountant ? A. Yes, sir; from the ledger that precedes ledger No. 2, the entries are brought over to No. 3. Q. Can you state from the entries in those ledgers what was the cost of the banking-house property ? [Objected to, on the ground that the superintendent acted on the report of the examiners, and knew nothing more in regard to it, and could not know any more in regard to it than that.] The committee rule that the witness may state what appears from the books in regard to the banking-house property at the time of the examination in the spring of 1873, but not previous to that time. Q. State what the books say about the cost of the banking-house in March, 1873 ? A. In March, 1873, the cost of the banking-house appears to have been $200,385.05 ; that is what the books show. Q. Does that appear to be the true cost ? [Objected to.] Q. Please read the entry in regard to that real estate at folio 107 of Ledger No. 2, commencing in January, 1871, and ending in March, 1873 ? [Objected to, on the ground that it was before Mr. Ellis had any thing to do with the bank.] Q. Is a footing entered under March 31, 1873 ? A. Yes, sir. Q. What is that footing? A. Just what I have stated, $200,385.05 ; it shows by the books that that was the cost of that real estate at that time. Q. Please look at the book and state what items of the account go to make up the $200,385.05 ? A. All that has gone before it in the account. Q. Please look at the account and state what items in the account go to make up that sum ? [Objected to, on the ground that the inquiry goes back to the time the account was opened, and before Mr. Ellis was superintendent; also that Mr. Ellis acted on the report of the examiners which came to him.] The committee rule that only entries subsequent to the 31st of March, 1873, are admissible, By Senator St. John : Q. Does the book show when the property was purchased ? A. The purchase of the lot seems to have been made in 1863, but it was not built on for some time. 447 By Mr. Chapman : Q. • I understand the balance to be substantially the same back to January, 1869 ; about $200,000 ? A. Yes, sir. By Mr. Olmstead : Q. Please to turn to profit and loss account ; give the condition of the profit and loss account from January 1, 1873. [Objected to.] The committee rule that the condition of the account cannot be given previous to the examination of April, 1873. Q. Please look at the book, and state whether the bond of $115,000 appears upon the books as an asset upon April 14, 1873 ? A. No, not $115,000; $100,000 does, and $15,000 afterward. Q. Is it an asset ? A. Yes, sir; credited to profit and loss; consequently it is an asset? , Q. Did it belong there as an asset ? [Objected to. Objection sustained.] Mr. Olmstead proposes to prove that the entry as to the $115,000 is a fraudulent entry, and is obviously so on the books. [Objected to as immaterial ; also that it occurred before Mr. Ellis was superintendent; also that the bonds themselves were in the de- partment; also that they had been passed upon by the prior super- intendent. ] Mr. Olmstead puts in evidence the following bonds: Know all men by these presents, that we, William A. Darling, John H. Lyon, Daniel Bates, W. D. Bruns, "William B. Harrison, James Stephens, Andrew Stevens, James Owens, Eichard Kelly, D. D. T. Marshall, David Morgan, George Henken, Jr., Thompson W. Decker, William S. Opdyke and John Lacey, in consideration that the Third Avenue Savings Bank of the city of New York, upon the request of each of us hereby made, docs continue its ordinary business after the fifteenth day of January, 1873, and in further consideration of the mutual covenants hereof, do hereby agree with each other to bind our- selves respectively, and are hereby severally bound, each for himself, his respective heirs, executors and administrators, and not one for the other, to pay unto the said Third Avenue Savings Bank of the city of New York, its successors or assigns, on the first day of January in the year one thousand eight hundred and eighty-three (1883) or six months after a demand therefor, the following sums respectively, viz: The 448 said William A. Darling the sum of fifteen thousand dollars ($15,000), the said John H. Lyon the sum of five thousand dollars ($5,000), the said Daniel Bates the sum of ten thousand dollars ($10,000), the said W. D. Bruns the sum of ten thousand dollars ($10,000), the said Wil- liam B. Harrison the sum of ten thousand dollars ($10,000), the said James Stephens the sum of ten thousand dollars ($10,000), the said Andrew Stevens the sum of ten thousand dollars ($10,000), the said James Owens the sum of five thousand dollars ($5,000), the said Bich- ard Kelly the sum of ten thousand dollars ($10,000). the said D. D. T. Marshall the sum of twenty-five hundred dollars ($2,500), the said David Morgan, George Henkin, Jr., Thompson W. Decker, William S. Opdyke each the sum of twenty-five hundred dollars ($2,500), and the said John Lacy the sum of twenty-five hundred dollars ($2,500), with interest in each case on the said amounts re- spectively, from the first day of January, 1873, at the rate of seven per centum per annum, payable on the first days of January and July in each year, until the principal sums are paid or discharged. And it is expressly agreed by and between the parties hereto, that the payments made on account of either the principal or interest of this bond shall not be claims against the said savings bank, nor con- stitute a debt of the said savings bank, except, however, that all pay- ments so made shall be returned, with interest, by the said savings bank, pro rata out of any actual surplus acquired by it exceeding the sum of one hundred thousand dollars ; such payments to be made by the said savings bank pro rata until the whole amounts paid here- under shall be returned with interest. And the said Third Avenue Savings Bank does receive this bond upon the terms herein expressed, and further agrees that whenever an actual surplus exceeding the amount of fifty thousand dollars shall have been acquired by it, then the rate of interest upon the several sums secured by this bond shall be reduced to such extent as shall not impair such surplus, and that proportionate interest shall be allowed and paid by it upon all sums of money actually paid on account of the principal sums secured hereby. And the said savings bank does further agree that whenever the ac- tual surplus acquired by it shall amount to the sum of ten thousand dollars exclusive of this bond, then this bond shall be discharged and the several obligors thereof be forever released therefrom. In witness whereof, we have hereunto set our respective hands and seals, and the said savings bank has hereunto affixed its corporate seal and caused these presents to be attested by its officers this twenty-eighth 449 day of December, in the year one thousand eight hundred and seventy- two. In the presence of Wm. A. Darling, (l. s.) John H. Lyon, (l. s.) Daniel Bates, (l. s.) Wm. D. Bruns, (l. s.) W. B. Harrison, (l. s. ) Jas. Stephens, (l. s.) Andrew Stevens, (l. s.) James Owens, (l. s.) Richard Kelly, (l. s.) D. D. T. Marshall, (l. s.) David Morgan, (l. s.) Geo. Hencken, J r., (l. s.) P. W. Decker, (l. s.) Wm. S. Opdyke, (l. s.) John Lacy, (l. s.) The word " severally," interlined on the eighteenth line of the first page before execution. HBNEY C. WEEKS. State of New York, ) City and County of New York, ) s ' On the 28th day of December, 1873, personally appeared before me W. A. Darling, Daniel Bates, Wm. D. Bruns, Wm. B. Harrison, Jas. Stephens, Andrew Stephens, James Owens, David Morgan, Geo. Hencken, Jr., T. W. Decker and W. S. Opdyke, and also on the 30th day of December, 1872, personally appeared before me Jno. H. Lyon, Richard Kelly, John Lacey and D. D. T. Marshall, known to me to be the individuals described in and who executed the foregoing instru- ment and severally acknowledged that they executed the same for the purposes therein contained. HENRY C. WEEKS, Notary Public. DANIEL BATES, Vice-President. [l. s.] DAVID MORGAN, Secretary. 57 450 State of New York, ) City and County of New York. \ ss ' On the 30th day of December, 1872, before me came David Morgan, with whom I am personally acquainted, who, being by me duly sworn, did depose and say, that he resides in the city of New York ; that he is the secretary of the Third Avenue Savings Bank, to him known to be the same corporation described in and which executed the foregoing instrument; that the seal affixed to said instrument is the corporate seal of said corporation, and was affixed thereto by its authority, and that he, its secretary, and Daniel Bates, its vice-president, subscribed their names thereto by like authority. HENRY 0. WEEKS, Notary Public, New York Co. Know all men by these presents, That I, Spencer K. Green, of the city, county and State of New York, in consideration that the Third Avenue Savings Bank, at my request, does continue its ordinary busi- ness after the 19th day of January (1874), one thousand eight hun- dred and seventy-four, do hereby bind myself, my heirs, executors and administrators, to pay unto the said The Third Avenue Savings Bank, its successors and assigns, on the first day of January, one thousand eight hundred and eighty-three (1883), or six months after demand therefor, the sum of fifteen thousand dollars ($15,000), with interest from the first day of January, one thousand eight hundred and seventy-three (1873), at seven per centum per annum, payable on the first days of January and July. And I expressly agree that the payments made ou account of either the principal or interest of this bond shall not be claimed against the said savings bank, nor constitute a debt of the said savings bank, ex- cept, however, that all payments so made shall be returned with in- terest by the said savings bank, out of any actual surplus acquired by it, exceeding the sum of one hundred and fifteen thousand dollars. And the said Third Avenue Savings Bank does receive this bond upon the terms and conditions herein expressed, and further agrees, that whenever an actual surplus, exceeding the amount of fifty-seven thousand five hundred dollars ($57,500) shall have been acquired by it, then the rate of interest upon the sum secured by this bond shall be reduced to such extent as shall not impair such surplus, and that interest shall be allowed and paid by it upon all sums of money actually paid on account of the principal sum secured thereby. And the said savings bank does further agree that, whenever the actual surplus acquired by it shall amount to the sum of ten thousand dollars, exclusive of this bond, and of a certain other bond, dated 28th December, 1872, made by William A. Darling and others, then this 451 bond shall be discharged, and the obligor thereof be forever released therefrom. In witness whereof I have hereunto set my hand and seal, and the said savings bank has hereunto affixed its corporate seal and caused these presents to be attested by its officers this 31st day of December, in the year one thousand eight hundred and seventy-three. SPENCER K. GREEN, [l. s.J DAVID MORGAN, Secretary. In presence of Henry C. Weeks, [l. s.J State op New York> ) City and County of New York, \ ' ' On the seventeenth day of January, 1874, personally appeared be- fore me Spencer K. Green, to me known to be the individual described in, and who executed the foregoing bond, and acknowledged that he executed the same for the purpose therein contained. W. B. HARRISON, Notary Publie. The words, " and upon condition that the said bank continues its said business until the first day of January, one thousand eight hun- dred and seventy-seven (1877)," in lines 8, 9, 10, 11 and 12, on first page, first stricken out, and the words "four (1876)," in line 22 on same page also stricken out, and the words " three (1873) and per annum," interlined before execution. W. B. HARRISON. State of New York, j . City and County of New York, j On the seventeenth day of January, 1874, before me came David Morgan, with whom I am personally acquainted, who, being by me duly sworn, did depose and say that he resides in the city of New York ; that he is the secretary of the Third Avenue Savings Bank, to him known to be the same corporation described in and which executed the foregoing instrument ; that the seal affixed to said in- strument is the corporate seal of said corporation, and was affixed thereto by its authority, and that he, David Morgan, its secretary, and T. W. Decker, its president, subscribed their names thereto by like authority. W. B. HARRISON, Notary Public. 452 Frederick Smythe, being duly sworn, testifies as follows : By Mr. Olmstead : Q. Are you the attorney for Mr. Hurd, the receiver of the Third Avenue Savings Bank ? A. I am. Q. And you have produced here the bonds which have just been offered in evidence ? A. I have, under a subpoena. Q. Have you commenced an action or actions on those bonds ? A. Yes, sir. Q. In what court ? A. The supreme court of this State. Q. Have you the summons and complaint with you ? A. I have the original summonses and complaint, and I have the answers in all the cases where answers have been interposed. Q. Whose answers are they ? A. I will have to look at them and see [examining the papers], I have the summonses and complaint in the case of George Hencken, Jr., and I have also the answer. Mr. Chapman objects to detailing the papers on the ground that the committee has already ruled that the matter is not competent evi- dence. By the Chairman : Q. What is the date of those papers which you have ? A. The summons in this action is dated the 24th of July, 1876. By Mr. Chapman : Q. All of these are actions by the receiver? A. Yes, sir. The committee rule that the papers are not admissible. By Mr. Olmstead : Q. Are most of the parties to the bonds sued ? A. Yes, sir. Mr. Olmstead offers in evidence the complaints and the answers in the several suits referred to, and offers to prove by them that the de- fendants set up that the bonds were fictitious and void, and not assets of the bank. [Objected to as immaterial and improper, that these are the actions of third parties, and never have been brought to Mr. Ellis' attention, and were after the appointment of a receiver, and have no bearing on the questions at issue before this committee. Objection sustained.] 453 James M. Morrison, a witness called on behalf of the defendant, be- ing duly sworn, testifies : By Mr. Chapman" : Q. You reside in this city ? A. I do, sir. Q. How long have you resided here ? A. About 52 years. Q. You are president of the Manhattan Bank ? A. I am, sir. Q. Is that a State bank ? A. It is, sir. Q. Do you know Mr. Ellis ? A. I do, sir. Q. How long have you known him ? A. I cannot tell you exactly how long ; several years. Q. Do you recollect of the occurrence of Duncan, Sherman & Co.'s failure ? • A. I do, sir. Q. Can you give us the date when that was, or don't you know ? A. No, sir; I was not interested particularly in it, and therefore did not charge my mind with the date. Q. Do you recollect shortly after that failure, of Mr. Ellis coming to see you and talking with you in regard to whether it would be ad- visable for him to close up -the Third Avenue Sayings Bank at that time ? A. I do recollect of Mr. Ellis having called some time after probably the failure of Duncan, Sherman & Co. ; I cannot give any date. Q. What view did you express to him as to whether it was policy or proper for him to close up the bank at that time, in the midst uf that excitement ? Q. Do you mean bank or banks ? Q. Well, the Third Avenue Savings Bank, with the possibility of other banks following after that was closed up ? A. I cannot speak in the singular number. Q. What occurred, as you now recollect it, between you and Mr. Ellis in relation to the matter ? A. Two years have elapsed since that time, and it is difficult for a man to remember every word of conversation ; I will do the best I can ; I will not vouch for the accuracy of every word I say, but I will say as near as my memory permits me ; Mr. Ellis did call at the Man- hattan Bank, as he was wont to do occasionally from time to time, and found myself and the cashier, and we had a conversation ; I recollect 454 of that conversation particularly, because it related to the savings banks. By Mr. Olmstead : Q. Can you give the date ? A. I cannot give the date. By Senator St. John : Q. It was after the failure of Duncan, Sherman & Co. ? A. Yes, sir ; that is the only way I can place it ; it may be two years ago ; it is a long time ; I dismissed the matter from my mind ; Mr. Ellis had an interview with us, the cashier and myself, in a con- versational way, and he stated, I think — I will not state positively the words, but I give you impressions and my memory of what was said — I think Mr. Ellis on that occasion said, that he had been to see one or two gentlemen in Wall street with reference to his position — with reference to the savings banks then being called in question — some- thing to that purport ; that he understood there was a panicky feeling in the community, and under these circumstances these gentlemen whom he had seen before coming to us, felt that it was rather a time when caution was necessary, no abrupt act to be done, so as to inflame the feeling that was then existing, the panic growing out of the failure of savings banks and Duncan, Sherman & Co., and others ; I think he submitted a question to us something of this kind : Whether it would be expedient and proper policy, beneficial in general, that he should be prompt in winding up the institutions ; something of that kind, and I think we gave it to him as our opinion — I speak in the plural number because I have had a conversation with my cashier this morn- ing, supposing that such a question would be put to me, to see if his memory and mine could be brought near each other, so that if my memory was wrong I wanted it to be right — I think we agreed, myself and the cashier, as to what I am now saying to you — that Mr. Ellis submitted to us the question, first expressing his own opinion in view of what he had heard as to the panicky state of feeling, whether it would be proper to be abrupt, to be prompt or to take any immediate action to close up the savings institutions in the city that required his attention ; I think that is about all I could say as to what Mr. Ellis said ; now, as to what we said to him : The cashier and I both agree this morning, talking the matter over, that we said to him that we could not decide that question, but that it was a panicky time, and in such times it was well not to increase the panic by any immediate ac- tion where no loss could occur from a little delay, and that we had no hesitation in saying that where no loss would likely occur by a delay. 455 it would be an advantage to the feeling in the community at that time, by way of allaying the feeling that then existed ; I don't know that I could say any more than I have said. By Mr. Chapman : Q. You cannot give the words of that conversation ? A. No, sir; if you had called upon me a month after that time I might have done it, but I cannot now. By Mr. Olmstead: Q. Did Mr. Ellis at that time exhibit to yon a statement of the con- dition of the Third Avenue Savings Bauk ? A. No, sir. Q. And you were not informed of it ? A. No, sir. Q. You did not know that a deficiency had been reported on the 22d and 23d of March of $219,226.81 ? A. I would say that I did not know ; I don't recollect. By Senator St. Johk : Q. I want to make an inquiry whether you had any knowledge of the assets of this bank, the character of them, what they were ? A. Of what bank? Q. The Third Avenue Bank ? A. I had not, sir. Q. You had no knowledge of what the assets of that bank con- sisted of? A. No, sir ; I am not interested in any way particularly. Q. And was not informed by Mr. Ellis ? A. I will not undertake to say that; I have no recollection of it; no statement was presented to me. Adolph G. Dunn, being called on'behalf of the prosecution and duly sworn, testifies: By Mr. Olmstead : Q. You reside in this city ? A. I do. Q. Were you a trustee of the Third Avenue Savings Bank at one time ; and if so, how long ? A. I was a trustee of the Third Avenue Savings Bank for about twelve or thirteen years. Q. When did you cease to be a trustee ? A. I resigned in 1872. 456 Q. Were you acquainted with the value of the assets of the Third Avenue Savings Bank in the mouth of March, 1875 ? A. No, not ^in 1875 ; I was not then present in the city of New York. Q. Were you acquainted with the value in 1874 ? A. No ; I only know that the value of property in general was lower than in 1872, when I left the bank, and in 1873 I went to Europe. Q. What time in 1873 did you go to Europe ? A. In April; it is now four years. Q. You knew the condition of this bank when you left ? A. Yes ; very well. By Mr. Chapman : Q. When you left it ? A. When I left the bank. By Mr. Olmstbad : Q. Did you not interest yourself in the affairs of the bank after you left ? A. I interested myself so far as to make a statement of the affairs of the bank to the superintendent, Mr. Howell. Q. Who made that statement ? [Objected to.] Q. Did Mr. Hennessey make it with you ? [Objected to, on the ground that it already appears that it was a statement made to Mr. Howell ; that there is no evidence of its hav- ing been brought to Mr. Ellis' attention ; that it is entirely immate- rial as to what statements were made to Mr. Howell.] Q. Did you make it to Mr. Howell as bank superintendent at Albany ? A. I made it to Bank Superintendent Howell L in the bank depart- ment in Albany. Q. Did you send the documents there ? A. I went there myself. [Question objected to. Objection sustained.] Mr. Olmstead proposes to prove by this witness that in 1871 himself and Mr. James Hennessey, acting as a committee, made a report to the bank department at Albany, in which they showed that the bank was wholly and entirely insolvent; and also proposes to show by him that the deficit of the bank at that time was $400,000 or thereabouts, and that Mr. Ellis, the present superintendent, in investigating the affairs of the bank, and his assistant, must have known that fact, and they cannot have failed to discover it with the most cursory examina- 457 tion of the accounts of the bank ; that the matter was a matter of public notoriety in the city and among all bank officers of the city. [Objected to, on the ground, first, that the objection is made for buncombe; second, that it is entirely immaterial; third, that the report itself is the best evidence ; fourth, that it appears from the evidence already in the case that in 1872 the former superintendent, Mr. Howell, to whom it is claimed this report was made, made an examination of some five months into the affairs and condition of this bank in conjunction with the supreme court; that an application was made to the supreme court to dissolve the bank, appoint a receiver and enjoin it, which was refused. Objection sustained.] Q. Were you acquainted generally with the books of the bank ? A. Somewhat ; yes, sir. Q. And with its papers and documents ? A. Yes, sir. Q. In your opinion, could two examiners have fully examined into the condition of this bank in two days ? [Objected to as immaterial, and that the witness left the country in the fore part of April, 1873. Objection sustained.] Q. Were the two bonds of $100,000 and $15,000 among the archives of the bank while you were trustee ? A. No, sir ; not when I was there. Q. Do you know the cost of the assets of the bank which appear upon the statement now shown to you, being an examination by Geo. W. Eeid and W. F. Aldrich, of March 22 and 23, 1875 ? [Handing witness the report.] A. There are only two houses which were the property of the bank in the time when I was trustee ; that is, the house in Fifth avenue at the corner or near Eighty-fifth street, which is marked down $85,000, and the banking-house Third avenue corner Twenty-sixth street, and the house and lot adjoining; the other property must have been acquired after I was a trustee. Q. Do you know what the cost of that banking-house was ? [Objected to.] Q. Do you know what the cost of the Fifth avenue house was ? [Objected to as immaterial and that it was purchased prior to Mr. Ellis' time.] Q. Did the bank build that banking-house ? A. The bank built it ; in regard to the Fifth avenue house it was not bought by the Third Avenue Savings Bank ; it was exchanged. Q. What was its value? [Objected to, oh the ground that the witness has already sworn that he did not know what the value was in 1875, and that he had then 58 458 been nearly two years in Europe, and that he is not competent to state]. By Senator St. John : Q. Did you say that you did not know what the value was in 1875? A. I was not here; I only knew what the price was of the Fifth avenue house in 1872. By Mr. Olmstead : Q. Do you know whether the value of real estate in this city had decreased or increased from 1870 to 1875 ? A. According to my impressions it has decreased considerably. Q. Universally so ? A. Yes, sir. Q. Now I ask you the cost of that property ? [Objected to.] Q. State the value of it at that time ? [Objected to as immaterial; that the witness was not here for a year and a half or two years prior to that ; that he has already sworn that he does not know the value in 1875 ; that he only knows the cost while he was trustee; and the question of cost is immaterial, the question being as to its value. Objection sustained.] Q. Why did you leave the bank ? [Objected to. Objection sustained.] Q. Were the trustees of this bank arrested ? A. Not in the time I was in New York. Q. You never knew any thing about that ? A. No, sir. Q. You was not arrested ? A. No, sir ; 1 was not here. Benjamin A. Mac Donald, called on behalf of the prosecution, being duly sworn, testifies as follows : By Mr. Olmstead : Q. Where do you reside ? A. City of New York, Westchester county. Q. What is your business ? A. Accountant and expert. Q. Have you examined the books of the Third Avenue Savings Bank with a view of informing yourself of the condition of the bank during the years 1873, 1874 and 1875 ? A. I did, sir, thoroughly. 459 Q. Please go on and state your connection with this matter, and what you have discovered in examining the books ? A. I propose to give it in a narrative form, confining myself strictly to all the transactions that appear on the books after Mr. Ellis was inducted into office as superintendent, and up to the time of the closing of the bank, and state my connection, and state the manner in which I became familiar with the history of the savings bank ; I understand the committee to rule that it must be confined strictly to every thing that occurred after Mr. Ellis' induction into office. In the fall of 1873, shortly after the appointment of Mr. Carman as receiver of the Third Avenue Savings Bank, I called upon Mr. Ellis at Albany to obtain from him the tabulated statements of the Third Avenue Savings Bank ; Mr. Ellis furnished me with tabulated statements of the Third Avenue Savings Bank from 1870 to 1875, inclusive ; he also furnished me with a private examination made; or rather it had not yet been made public ; an examination made by his experts in the preceding March, by which it was shown — [Objected to.] The Witness — I will give a narrative, and if you won't interrupt me I will give you the facts ; I will state connectedly, which I propose to do, and I will confine myself strictly to the subject-matter. [Objected to, on the ground that the contents of the paper would be best proven by the paper itself. What the paper shows, the paper will show now just as well as then.] By Senator St. John : Q. When was that report made ? A. In March, 1875. By Mr. Olmstbad : Q. Come right down to the conversation between you and Mr. Ellis? A. Mr. Ellis, upon showing me this report, stated that he knew the condition of the bank in the preceding March, that they were short over $200,000 ; I then said, " Why didn't you close the bank then and there ?" he said the reason he did not do it was, that upon advice from parties — certain parties, not naming them — that it was deemed inex- pedient, that it might create a panic ; he said it might have been an error of judgment, "but I took their advice;" I said, "that was very unfortunate; " Mr. Ellis then presented me with an additional state- ment made by Mr. Carman, who at that time was the receiver, an informal statement of the condition of the bank on the 1st of July of that year, 1875 ; that was not a sworn statement, because the law had changed, and it was only necessary to make an annual statement instead of a semi-annual examination, as had hitherto been the case; in that report which Mr. Ellis showed me, and Mr. Carman stated — 460 [Objected to ; the report shows for itself.] The Witness — There is no report ; it is not an official report; it was a paper furnished by Mr. Carman, of which Mr. Ellis gave me a copy; I may have it in my possession ; I then left Mr. Ellis and came to New York, and subsequently sent to him for the official reports — the certified copies, in order to obtain — [Objected to.] The Witness — Upon the reception of these details — the reports, I analyzed them and found that the bank had been insolvent — [Objected to, on the ground, first, that this occurred after the receiver was appointed, or after the matter was handed over to the attorney-general, as already appears to be the case.] The Witness — Mr. Carman was then receiver — the man that was secretary at the time the fraudulent report was made ; all the parties in interest were still in connection with the bank. [Objected to, on the ground that what this witness did is imma- terial. Objection sustained.] The Witness — I shall show the condition of the books during tha administration of Mr. Ellis and before the appointment of a receiver. By Senator St. John: Q. Do not say any thing about what occurred after the receiver was appointed ? A. I am speaking of the act that was done ; I did this after the receiver was appointed; I had the trustees of the Third Avenue Sav- ings bank arrested — [Objected to.] By Mr. Olmstead : Q. When was it done ? A. I think in October, 1875. Mr. Chapman moved to strike out what he had done. The Witness — I will simply state what I learned by the books ; I made an examination of the books, and ascertained from the books that during Mr. Ellis' administration, for the period from July, 1874, to January, 1875, the entire dividends of the Third Avenue Bank de- clared to its depositors were made out of fraudulent entries made from December 31, 1872, up to and including June 30, 1874; the en- tire dividends ; I will give you the dates of the dividends and the amounts, and the amounts of the fraudulent entries. Mr. Chapman moves to strike out that evidence on the ground that it is not material on the question here. It is not embraced in the charge. We have received no notice of any thing of the kind. The 461 question of dividends has no bearing upon the question at issue before the senate or before this committee. That Mr. Ellis' attention has not been brought to this in any way; that under the law as it stands now, and as it stood Jthen, he could not be chargeable, unless there was insolvency. The Witness — I propose to show that it was. [Motion to strike out denied.] The Witness — I also discovered among what was stated to be among the assets of the bank — By the Chairman : Q. At what time ? A. January 1, 1875, in the last statement that was made — included as an asset, a trustee's bond for $115,000, which never was an asset. Mr. Chapman moved to strike out the last clause of the answer. [Motion granted.] Q. It is not denied that those bonds were in existence at that time ? A. They were in existence at that time. Q. Bonds given to the bank ? A. Yes, sir; as collateral for a contingency, and that contingency never appeared upon the books. By Mr. Olmstead : Q. Does that contingency for which the bonds were given appear upon the books ? A. No, sir. Q. Was there any liability to counterbalance those bonds ? A. No, sir ; when the bank examiners made their examination in ■March, 1875, there then existed upon the books of the bank a defi- ciency in the profit and loss account, after the payment of the divi- dends — [Objected to, on the ground that it has no bearing upon the ques- tion.] By Senator St. John : Q. This has a bearing upon the report mftde by Mr. Reid to Mr. Ellis ? A. Yes, sir; most material. [Objection overruled.] By the Chaieman : Q. What item is there ? A. The revenue of the bank. 462 By Mr. Chapman : Q. Do you know that those entries were in that ledger at the time the examiner was there, or were they written in afterward ? [Objected to.J A. I can say they were there. Q. You know they were there ? A. Yes, sir; I will stake my life they were there; the total interest received the first six months of the year 1874, was 115,061.54, from January to July; from July, 1874, to January, 1875, $12,192.26. By Mr. Olmstead : Q. That was for the year ? A. Yes, sir; that made the entire year, an aggregate of $27,000, total interest received for the year 1874; the dividends paid on the 1st of July, 1874. [Objected to. Objection overruled.] The Witness — The dividends paid to depositors for the 1st of July, 1874, was $40,472.18; the dividend declared for the 1st of Jan- uary, 1875, was $41,026.84; on the 30th of June, 1874, there was a false entry made to the credit of the profit and loss account, by rais- ing the value of the real estate at Tarrytown, $30,513.52; by that entry they were enabled to declare the dividend of July 1st, 1874 ; on the 1st of January, 1875, the amount as stated to be due the deposit- ors from the books was $66,617.28 less than it should have been; the ledgers did not agree ; that is an additional liability of $66,000 which did not appear in the examiners' report; on the 1st of January, 1875, there was a debit balance to suspense account, of $37,024.86; that should have been in the profit and loss account; there is no such thing as a " suspense account " in a savings bank. Q. What time was that dividend made ? A. In January, 1875, the declaration was the 1st of January ; it was paid subsequently; it was $41,026.84; that was the last dividend de- clared. By Senator St. John : Q. There was no dividend in July, 1875 ? A. No, sir. By Mr. Oljistead : Q. Did you state when Mr. Ellis called on you ? A. I called upon him at Albany, in October, after Mr. Carman had been appointed receiver. Q. Would it have been a matter of difficulty for a man of ordinary experience in book-keeping to have discovered these errors which you pointed out ? 463 A. I discovered them in less than half an hour after I had access to the books, and any accountant could do the same thing. Q. Do you know any thing about the proceedings which occurred at Albany for the appointment of a receiver there ? A. By the records, yes, sir. Q. State what you know, if any thing, about that ? [Objected to. The records will show for themselves.] Q. Have you any records in your possession connected with that matter ? A. I sent for copies which we received at the time the application for the removal of Mr. Carman was made ; there are copies of the proceedings which I can produce. Q. Are they on file at Albany to the best of your knowledge ? A. They must be, because they are copied from the official papers ; there was the summons and complaint, the answer of the president of the Third Avenue Savings Bank and the order of the court appoint- ing the receiver, Mr. Carman, all done on one day. Q. What day was that ? A. The 29th of September, 1875. Q. Mr. Carman was the gentleman who acted as secretary ? A. Yes, sir; he made the report of January, 1875. Q. Showing a surplus at that time ? A. Yes, sir. Q. Did you ever have any conversation with Mr. Ellis in respect to the appointment of Mr. Carman ? A. I expressed my surprise that Mr. Carman should be appointed receiver. Q. What did he say ? A. Mr. Carman was urged by some very respectable gentlemen. Q. Did he say so ? A. Yes, sir; he said that there was a number of very prominent gentlemen who went up with Mr. Carman. Q. What did Mr. Ellis say to you about it ? A. He knew nothing of Mr. Carman, except in his relations with the Third Avenue Savings Bank ; Mr. Carman professed to have taken every thing for granted that was presented to him. Q. Did he say that he made any protest against the appointment of Mr. Carman ? A. No, sir; he knew nothing of Mr. Carman, except the report of values was at total variance with the real state of things. Q. Is that all you know about this case ? A. Yes, sir, included in that period. 464 Gross-examined iy Mr. Chapman : Q. Did you give the language which Mr. Ellis used to you, when you went to him and talked about Mr. Carman's appointment ? A. No, sir; it was a casual conversation; it was for nearly two hours ; Mr. Ellis treated me very kindly, and gave me every informa- tion in his power. Q. When you spoke about tabulated statements, you meant printed statements ? A. Yes, sir. Q. Was there any document, or paper, or any thing which you called for, that he did not either let you see or give you a copy of ? A. No, sir. Q. Didn't seem to do any thing that he was trying to hide up ; or keep away from you ? A. No, sir; we had a long conversation; I called his attention to a number of other banks in New York that were subsequently closed ; the People's, the Mechanics and Traders', the Central Park Savings Bank, and the Gerniania. Q. Did he tell you who the gentlemen were who went there with him ? A. No, sir. Q. But he said there were some respectable gentlemen ? A. Yes, sir. Q. Did he so designate them as being respectable gentlemen ? A. Of course; he knew nothing of Mr. Carman except his connec- tion with the bank, and that had only been a short time before the report of January, 1875. Q. That was the only time you ever had any conversation with Mr. Ellis in regard to the matter at all ? A. That is, a general conversatiou ; I subsequently saw him several times after the inauguration of the proceedings against the trustees Q. You had no conversation in regard to what occurred up there in regard to the appointment of Mr. Carman ? A. No, sir ; none. Q. Whether these facts which you have discovered in these books were ever brought to Mr. Ellis' knowledge, you don't know? A. I do not; 1 went upon the general principle that a superintend- ent ought to know. Q. How many books have you got here ? A. There are two ledgers and two journals, they are consecutive, two minute books, and a bond and mortgage book, and a bond and mortgage record. Q. Will you tell me how long it would take to find out the difference in the deficiency which appeared between the general ledger and the 465 depositors' ledger — about how long it would take to ascertain the pre- cise amount of that deficiency ? A. That I could not tell you without examining the books myself; I could not form an approximate idea. Q. You have not ? A. I have never made that examination. Q. That would be a pretty difficult thing, might it not be ? A. It might be ; yes, sir. Q. It might become necessary in order to ascertain that, to call in the pass-books, might it not ? A. It might; yes, sir. Q. And in order to do that you would have to reach every separate depositor who had a pass-book ? A. Yes, sir ; to compare the ledger. Q. On all those deposit books being brought in, then that item could be verified ? A. Yes, sir. Q. There were about 8,000 different persons, were there not, having deposits ? A. I think the report shows between 7,000 and 8,000 depositors. Q. To ascertain that difference then, would require communication with the whole of these depositors ? A. I presume it would. Q. Do you know how many books the bank has in which they kept their accounts, from the commencement? A. I don't know of my own knowledge. Q. This is only a portion of the books of the bank ? A. These are the material books. Q. These are only a portion of the books in which the accounts of the Third Avenue Savings Bank were kept ? A. These are the full books, containing the assets and liabilities, the full and complete register. Q. Are these all the books of the bank, in which accounts of the bank are kept ? A. No, sir; not all; outside of the depositors' ledger; but the aggregations are in these books. Q. How long had this bank been doing business ? A. A very great many years ; I think over 20 ; I think it was called The Bloomingdale originally, and then it merged into the Third Avenue. By Mr. Olmstead : Q. Where is the statement of July 1, 1875, that you have referred to? 59 466 A. I don't know whether I kept a copy ; it was a mere slip, showing the liabilities to depositors and the assets and the surplus ; the surplus, I think, was $6,000 or $7/000, as shown by that statement ; it was not an extended statement, as the proceedings once were, because it was not called an official statement, not required by law. ■ By Senator St. John : Q. You have been questioned as regards how long it would take to find out the difference on the deposit ledger ; how long would it take an accountant to find out those other deficiencies which you have named ? A. It might take half an hour or an hour ; I could do it in ten minutes; there are only two accounts to look at, the profit and loss and suspense account; anybody could take up this ledger and find these false entries within an hour, every oue of them. By Mr. Olmstead : Q. I understood you to say you did not know any thing about these proceedings that occurred at Albany, otherwise than what occurs upon the record ? A That is all. Q. Do you know any thing about a letter that was addressed by the committee or by the superintendent, Mr. Ellis, to the attorney-general, in respect to dissolving this corporation ? A. That formed one of the papers of which I have spoken ; they were all one day. Q. That would be on file in the attorney-general's office ? A. Yes, sir; they formed part of the records. Q. There was a paper of that character ? A. Yes, sir; first the complaint by Mr. Ellis — [Objected to.] Q. State what the papers were, generally, so they can be identified ? [Objected to ; the papers themselves must be produced ; objection overruled.] A. Mr. Ellis' communication to the attorney-general, in conformity to the law ; the summons and complaint of the attorney-general to the officers of the Third Avenue Savings Bank ; the answer of the president of the bank, Mr. Bates; the application to the court for an order of the court appointing a receiver — the application was made — they were all dated the 29th of September, 1875. By Senator Wellman : Q. What were the other sources of income of the bank during the year 1874, from January 1, 1874, to January 1, 1875, aside from what you have already given us ? 467 . A. Prom real estate on Fifth avenue, $413.27 ; from real estate Forty- sixth and Forty-seventh streets, $2,569.59; from real estate 725 East Forty-sixth street, $757.74; then an item of rent from the bank prop- erty, $1,298.33; interest on guarantee fund, $2,537.50; a guarantee of 1873, $2,400 — that was on Tarrytown property ; these items, with the item of interest received in the regular course of interest, which is, $15,061.54 ; those items together form the aggregate gross receipts of that six months; against that are the following charges, outside of the dividends: A charge against real estate of, $125.37; premium, $560; expenses, $1,469.74; salary account, $4,250.02; United States internal revenue, $728.69 ; deducting these items from the others, will give you the net revenue for the six months; from July, 1874, to January,1875, August 31, 1874, from real estate at Elizabeth, $1,346.70 ; December 31, real estate at Tarrytown, $102.86 ; real estate on Fifth avenue, $86.63 ; real estate 36 East Forty-ninth street, $250.75; iNTos. 19, 21 and 23 East Forty-sixth and Forty-seventh streets, $7,246.26; Kos. 7 and 25 East Forty-sixth street, $4,036.30; rent, $1,567.93; interest on guar- antee fund, $612.50; add to that the net amount of interest received from investment, $12,192.26. By Senator St. John: Q. Give the total receipts ? A. The total receipts from January 1 to July 1, 1874, are $25,257.33 against which is charged $7,133.82; the gross receipts from July 1, 1874, to January 1, 1875, are $27,442.19; against which is charged $9,198.10; that is exclusive of the two dividends which was declared in those two periods. Q. Deducting those gross charges will give the net income of the bank for the year ? A. Yes, sir. By Senator Wbllman : Q. I understand you to say that the total amount of the dividends declared were made up from fraudulent entries ? A. Yes, sir. Q. Then what becomes of these earnings ? A. I will show you ; at the time the debit against this account — at the time these fraudulent entries were made, that debit wiped out the entire amount of those receipts ; the debit to the profit and loss account on the 1st of July, 1872; you have to go back to get at this- Q. I am speaking of the condition of the books from January 1, 1874, to Jauuary 1, 1875 ? A. On the 1st of January, 1875, there should have been charged to profit and loss $37,024.86, an item of which stood to the debit of sus- pense account and belongs in the profit and loss account; it is a debit 468 balance to the suspense account ; they are absolute losses growing out of various transactions ; they are not suspended debts ; there is not a suspended debit in it. By Mr. Olmstead : Q. When the bank stopped, was there enough money there to run the bank ; pay the expenses of the bank ? A. No, sir. Q. They had used up the money ? A. Yes, sir. Plaintiff rests, with the exception of putting in such evidence at Albany as the testimony of Mr. Smith, Mr. Lamb and the attorney- general, and to put in documentary evidence, consisting of the papers of September 29, mentioned, and such other evidence as might be allowed by the committee. William H. Macy, being duly sworn, testifies as follows: By Mr. Chapman : Q. You have resided in New York how long ? A. Upward of fifty years. Q. You were the president of what bank ? A. Seamens' Bank fur Savings. Q. And have been such for how long ? A. Off and on for the last — president and vice-president — for nearly twenty years. Q. Do you know Mr. Ellis ? A. Yes, sir. Q. How long have you known him ? A. I have known him since he has been in the bank department. Q. Do you recollect the occasion of Duncan, Sherman & Co.'s failure ? A. Very well. Q. Do von recollect of Mr. Ellis calling on you and consulting with you in regard to whether it would be wise or expedient to close up the Third Avenue Savings Bank, after this failure? A. I remember that very well. Q. Will you tell what occurred between you and Mr. Ellis as far as you can recollect it ? A. It was a general conversation ; I remember very distinctly my reply first was to close it up at once. Q. That was your first suggestion ? A. Yes, sir; then we got to discussing the interest of the savings banks, which was very large through the State, the excitement was very great at that time in regard to their failure ; we discussed as to 469 whether it would be to the interest of the savings banks generally throughout the State, to delay it for a short time ; I think that was our conclusion, to delay it a little while, but not long. Q. The length of the time was left indefinite ? A. Yes, sir ; I think that was about the 1st of August, 1875. Q. Your idea is that this conversation was about the 1st of August ? A. Yes, sir ; it might have been a month or two before. Q. You cannot, I suppose, give all the conversation that passed between you and him ? A. Noj sir ; it was a general conversation relative to the savings bank interest of the whole country. Q. Do you recollect of his calling your attention to the fact that the Third Avenue Savings Bank was insolvent, and he came to talk with you about the expediency of closing it up then ? A. Yes, sir ; that was the object of the interview. Q. Did he speak also about there being other banks, that if this was closed up, that would undoubtedly have to go in the same way ? A. Yes, sir. Cross-examination by Mr. Olmstead : Q. Did Mr. Ellis give you full information as to the affairs of the Third Avenue Bank at the time ? A. No, he did not. Q. Did he show you the statement of March 22 and 23, 1875, of the examiners, showing a deticiency of $219,226.81, at that time? A. I don't recollect of our looking over any statement ; I was pretty familiar with the bank and the situation of it. Q. Was it a subject of general comment in the street among busi- ness men ? A. No, I don't think it was. Q. Would you think a savings bank showing a deficiency of $219,266.81 was in a condition to continue business ? [Objected to.] A. When the first examination was made by Mr. Howell, he found the bank then in a bad state, and brought the papers immediately down to me, I think, the next day ; I looked over it then, and had kept the run of it from that time forward; that is why I advised him at once to close it up ; but it was not done, because we came to another conclusion. Q. This conversation that you had with Mr. Ellis was four months after the date of that report of March 22, 1875 ? A. It might have been. Q. When did Duncan, Sherman & Co. fail ? 470 A. The latter part of July, I think. Q. Would you have considered it proper or right, for the trustees of a bank in this city to continue the bank and receive deposits in the bank after there had been shown to be a deficit of $219,226.81 ? , [Objected to. Objection withdrawn.] A. No. By Senator St. John : Q. Did you consider it a sound bank, or a good bank to do business with? A. No, sir ; I did not. By Mr. Chapman : Q. In the midst of a panic or where there is a panicky feeling in the street, the worse the showing would be, the greater would be the shock on the street, would it not ? A. I think that the failure of any savings bank would tend to in- crease it. , Q. The worse off it was, the more it would tend to affect it? A. Of course. Q. When Mr. Howell came to consult you at the time you spoke of, was or was not your advice to him to take the course that he did in regard to it? A. It was very similar to the advice I gave to Mr. Ellis. In the first place I said : " Close it up," then it also happened to be at a time of very great excitement in the market and we both concluded it was better to leave it for a short time. Q. That was the case with Mr. Ellis; at first your idea was to close it up at once, but upon reflection, you came to the conclusion it would be better not to close it up at once ? A. We thought in regard to other saving banks and other moneyed institutions of the street, it was better to delay it a little. By Mr. Olmstead: Q. He didn't come to take your advice until about four months after? A. I think it was about the 1st of August. By Mr. Chapman : Q. I understood you to say it might have been a month or two earlier that he was there? A. I predicate the time on the failure of Duncan, Sherman & Co. Q. It was not long after that? A. No, sir ; not long after that. 471 By Senator St. John : Q. Would the failure, or the winding up of a savings bank, that had this reputation among business men, of being an unsound bank, would the winding up of such a bank create any great sensation in this market, or would it injure sound banks in your opinion, to any great extent ? \ A. You should modify that, it strikes me, because those of us that were in the savings bank business, inside the other banks, and know- ing it would not affect us, so I said " close it up instantly." Q. Then it would not have created any great confusion if you had closed it up ? A. It would in the street generally. By the Chairman : Q. The street generally and the community generally did not un- derstand the condition of this bank as well as you did ? A. No, sir, they did not. By Senator St. John : Q. Do you think the closing up of this bank would have materially injured or impaired the standing of other good savings banks in any way ? A. No, sir, it would not do that. By Mr. Chapman : Q. But there was so much in that, that it did seem to you that it was best to delay it a little while ? A. Yes, sir. By Mr. Olmstead : Q. In none of the conversations you had with Mr. Ellis, he did not give you the particulars of the bank ? A. No, sir, as I said before, I was so conversant with this bank since Mr. Howell had it, there was no necessity to do it. Adjourned to May 18th, at 10 A. m., at Congress Hall, Albany. 472 Albany, May 18, 1877. The committee met at 10 A. m., pursuant to adjournment. Present — Senators Coleman" (chairman), Wellman and St. John. Henry S. Lamb, sworn on behalf of the prosecution. Examined by Mr. Olmstead : Q. What is your business ? A. I am now deputy superintendent of the bank department. Q. How long have you been such deputy superintendent ? A. Since the 1st of May, 1873. Q. Who appointed you such deputy superintendent ? A. The present superintendent, Mr. Ellis. Q. Were you summoned to produce any papers here ? A. The officer or person said I should produce certain papers, but I have none ; I believe they were all collected ; I think Mr. Ellis had them ; they were all collected together and I suppose they are here, Q. Were any letters or documents sent by Mr. Eeid or by other per- sons to Mr. Ellis, or to your office, relative to the affairs of the Third Avenue Savings Bank, in the city of New York, at any time? A. Mr. Keid sometimes did and sent reports. Q. Have you those reports ? 4.. I suppose they are among the papers. Q. Will you please examine the papers and see if you can find any such reports or letters or special .reports ? A. I believe the papers here embrace all the reports made by the bank officers after I became deputy; also the examination made by Mr. Eeid and Mr. Aldrich in March, 1875, and one letter which accom- panied that examination. Q. Please allow me to see that report and that letter. The witness produces the report and letter. Mr. Olmstead offers in evidence letter from George W. Eeid to D. C. Ellis as follows : New York, March 24th, 1875. Hon. D. C. Ellis, Superintendent: Dear Sir — Inclosed I hand you report in Third Avenue Savings Bank. There is $13,000 due from trustees for interest on their bonds; only a few of them having paid any thing the past year. Mr. Lacy, who was on the bond for $2,500, is dead, and his executors will con- test the payment of the amount. Andrew Stevens ($10,000) has failed and James Stevens ($10,000), it is supposed, has "softening of the brain," and from present appearances very little will be collected on the bond. 473 The house on Fifth avenue, $85,000, has not been rented for two years past. The trustees have sold $150,000 Kansas at par, but have not shown much financial capacity in their recent purchase of $55,000 Tennessee bonds at 51. The January report was " made up" for the occasion all the stocks or bonds being put in at par; over $20,000 past due coupons counted in as accrued interest ; $31,000 added to the value of the Tarrytown property, etc., etc. All the "ability and pluck" shown three years ago during the "run" has apparently disappeared, and the old adage of "rats leaving a sinking ship " is being verified in the resignation of a number of trustees during the past year. I do not think the depositors will re- ceive more than fifty cents on a dollar. Yours truly, GEOBGE W. EEID. Marked Plaintiff's Exhibit No. 1, May 18, 1877. S. B. H. Q. Have you any other letters there from Mr. Reid to the depart- ment in relation to this matter ? A. I have a letter written by Mr. Ellis to Mr. Eeid, which follows George W.' Eeid's letter. Q. Have you in your hands all the reports and letters which can be found in your department, relating to the Third Avenue Savings Bank? A. I believe I have. Q. Have you made a search for such documents in the office ? A. Myself and clerks, all of us taking a hand in the search, and I understand these are all the papers, and I believe they are ; I think all the papers are here. Mr. Olmstead offers in evidence a letter from D. O. Ellis to the Hon. Daniel Pratt, Attorney-General, dated September 29, 1875, as follows : Hon. Daniel Pratt, Attorney- General : Silt — In pursuance of section 44, of chapter 371, laws of 1875, I hereby call your attention to the condition of the Third Avenue Sav- ings Bank in the city of New York. Prom the official report made by George W. Eeid and W. F. Aldrich, examiners, duly appointed by me to examine into the affairs of said savings bank, it appears that on the 23d day of March last the liabilities of said bank were $1,443,112.39, and the assets were $1,223,886.08, showing a deficiency of assets with which to meet its liabilities of $219,226.31. From official knowledge, I have reason to believe that the deficiency has largely increased since that date, and that the condition of said bank 60 474 is such that it is no longer safe or expedient for it to continue its business. I would therefore recommend that you take such proceed- ings in the premises as may be requisite to close up its aifairs. Kespectfully yours, D. C. ELLIS, Superintendent. Marked Plaintiff's Exhibit No. 2, May 18, 1877, S. B. H. Mr. Olmstead offers in evidence the report of the Third Avenue Savings Bank, to the superintendent of the bank department, of the condition of the bank on the 1st day of July, 1873, with schedules annexed. Marked Plaintiffs Exhibit No. 3, May 18, 1877, S. B. H. 475 pal ■3* *£ • t> bt to *£a .§ S ft » o ooooooooooooooo o ooooooooooooooo o OOOOOOOOOOOOOOO o: o«ooomioo^«Moe!Oio oo NOHOHHriCOHH OHHH 00 CO i— I P5 00 o m w 1—1 EH ■a a ooooooooooooooo ooooooooooooooo ejisiooocoooiob-iaoooo »\ *i ». ». «v •> r, r, », .-,•-,«, .-. 1-1 rH T-t 00 o o 4» o bo 13 o t° ^" C i5 13 h. * * ° s-i!-h— < nv^^ : : : : -^h : ct>aja> * " * tz »-J "^ ^OQGOQQCQOQCQQQ . . .55 ^ PH (-»■ ^Ijoooooo a « fe fl g bo £ gSSSSSSS §.2 Sao I I "*MHHHHHHlOCOrl^HHH 476 "53 s 8 to a o m i— i W M 02 Eh HH ft Ph a H CD t> I— I M o o H 02 W a w W D 02 o o o o © © © © © o o o © © © © © © "tf © © lO © lO © © © © fl © © OO »Q CO 2> CO © © Ph O icj CD »0 t- tJH Si -# r-l rH CO ■* «» ■S& €& HCOHOO) c- o © t- co o CO O t-tOOSHS © C2 J> fr- 00 -* cd -* ■* CO rH OS «& rH CO CO «e «©• 00 !> 00 S> CO CD fc- ^5 CO TJ C o rO d O p4 M >, tH CD w -4^ o c3 o M CO T1 Ed 1=1 O c3 pij CO CCt ■< TJ JS s O c8 rO O -M siana Stat gia State ama State sas State, inia State. fe'A '3 S-S g £P g fc> ftO £ ft 477 PLAINTIFFS EXHIBIT No. 3 — (Continued). Schedule P. — Cash Deposited in Banks or Trust Companies. NAME OF BANK OR TRUST COMPANY. Location. Amount on deposit. Rate of interest. Fifth National Bank National Park Bank . . . , 3d ave. and 27th st . . $14,698 18 2,155 58 8,272 05 11,872 01 4 4 Manuf. & Builders' Bank. 3d ave. and 37th st.. 3d ave. and 57th st. . 4 6 & 7 Total $36,997 82 Schedule G-. Excess of market value over cost. Stocks of other States ... $36,338 13 Other stocks and bonds 6 , 300 00 Eeal estate 13,348 05 Total $55,986 18 Loans, deposits, investments, or assets of every descrip- tion, not heretofore enumerated 32,455 60 Total. 3,441 78 Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the first day of July, 1873, made to the Superintendent of the Banking Department, as required by chapter 136 of the laws of 1857 : RESOURCES. 1. Bonds and mortgages, as per schedule A, hereto annexed $274,100 00 2. Stock investments, as per schedule B, hereto an- nexed, cost 397,361 87 3. Eeal estate, banking buildings covering two lots, Third avenue and Twenty-sixth street, cost 166,651 95 4. Keal estate, nine (9) houses and lots, New York city, cost and market value, interest paying 275 , 000 00 5. Real estate, at Tarrytown, Westchester county, N. Y., cost, seven per cent interest guaranteed . . 138,000 00 478 6. Individual bonds bearing seven per cent interest. . . 8100,000 00 7. Furniture and fixtures 15,033 63 8. Cash on deposit in banks or trust companies, as per schedule F, hereto annexed 36,997 82 9. Cash on hand not deposited in bank 21,042 91 10. Amount of assets not included under either of the above heads, the particular items of which are set fourth in schedule G, hereto annexed 88,441 78 $1,512,629 96 LIABILITIES. 1. Amount due depositors: Principal 11,465,041 97 Interest credited for the 1st of July, 1873 40,376 61 $1,505,418 58 3. Excess of assets over liabilities 7,211 38 $1,512,629 96 State of New York, ) County of New York. ) 3S " Thompson W. Decker, president, and David Morgan, secretary, of the Third Avenue Savings Bank, an incorporated institution for savings, located and doing business at Third avenue, corner Twenty- sixth street, in the city of New York, being duly and severally sworn, each for himself, saith that the foregoing report and the schedules accompanying the same are, in all respects, a true statement of the condition of the said institution before the transaction of any business on the morning of the first day of July, one thousand eight hundred and seventy-three, in respect to each and every of the items and par- ticulars above specified, according to the best of his knowledge and belief. T. W. DECKER, President. DAVID MORGAN, Secretary. Severally subscribed and sworn by both deponents the 22d day of July, 1873, ■ before me. Henry C. Weeks, Notary public (50), New York County. 479 Also the report of the same bank to the superintendent of the bank department of the condition of the bank on the 1st day of Jan- uary, 1874. Marked Plaintiff's Exhibit No. 4, May 18, 1877, S. B. H. 480 H e M< -1 a © 53 H o H a 1— 1 pq i— i W 0 © 5* r-l CO CO © © CS >C CO H«HOHriHCOH r-l HOHH 00 CO iH CO 00 ©0©©©©©0©©©©OC©© ©oo©©©©©©©©©©©©© ©o©o©o©©©©©©©©©© oo©©©©©©©©©©©©©© 00lO>O©©C0©OCJ«COi>>O©00©iO C0«O-*SSC0i>«D»OC0 CO OS io «o © © © © <§©■ a o a > M d d -a ° o 03 o a cSS^So.Sg,- a I- 55!2iP!2iappL,HPQrShqHaw^PP 3i> O 1 — 1 o 1> 1*8 S-t f-l r-J S-t Sh Ph ?h MO>CDOa)tU(D OOtOOOOOJO r 0000000 .4J4J4J4J-P-P4J KOTOTGQGQCGaiOQ ^ojoocdcuoo ■t-3 ) . QQ CQ CD rs t«o m « b o 481 ^3 o N s i H 1 m rH 6 1— 1 fc M EH 1— 1 o H i—i W X PQ w W oo l=i Q N H HH M H O £ C7J I— < © o o © o o © o © o © © © © © © © © © © OOOlOlO © io © co co © © © © © © © © © © © © © © © ©©©©©. OOOlOlO © IO © CO CO © IO >fl CD HOtOHOJ tO © <7? CO rH "O © i— I « CN! 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Jjs 1 3 w. 2 <« •a g'Eis.S c3 m a is 03 p O o3 .&* D g CD " s ^ CD >* © © © © © CD © © © © © © CO CO t- CT- CO 482 PLAINTIFF'S EXHIBIT No. 4— (Continued). Schedule F. — Cash Deposited in Banks or Trust Companies. NAME OP BANK OR TRUST COMPANY. Location. Amount on deposit. Rate of interest. Fifth National Bank .... National Park Bank 3d ave. and 27th st. . Broadway $13,990 03 2,391 24 1,909 77 3,595 71 4 4 Murray Hill Bank Manuf. & Builders' Bank. 3d ave. and 37th st.. 3d ave. and 57th st. . 4 6 & 7 Total $21,886 75 Schedule G. Excess of market value over cost. Stocks of other States $36,338 13 Other stocks and. bonds 6,300 00 Heal estate 13,348 05 Total $55,986 18 Accrued interest, rents, etc 40, 134 31 Total . 5,120 49 Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the first day of January, 1874, made to the Superintendent of the Banking Department, as required by chapter 136 of the laivs of 1857. FINANCIAL. RESOURCES. 1. Bonds and mortgages, as per schedule A, hereto an- nexed $272,400 00 2. Stock investments, as per schedule B, hereunto an- • - nexed 397,361 87 3. Real estate, bank buildings covering two (2) lots, Third avenue and Twenty-sixth street, cost 166,651 95 Real estate, nine (9) houses and lots, New York city; cost, market value, interest paying 275,000 00 Real estate at Tarrytown, Westchester county, N. Y., cost and market value 138,000 00 483 4. Individual bonds of trustees, bearing seven (7) per cent interest $115,000 00 5. Furniture and fixtures 15 ? 033 63 6. Cash on deposit in banks or trust companies, as per schedule F, hereto annexed 21 , 886 75 7. Cash on hand not deposited in bank 28,987 72 8. Amount of assets not included under either of the above heads, the particular items of which are set forth in schedule G-, hereto annexed 96, 120 49 Total $1,526,442 41 LIABILITIES. 1. Amount due depositors, viz.: Principal $1,430,610 66 Interest credited for the 1st of January, 1874 42, 129 39 $1,472,740 05 2. Other liabilities, viz. : Demand loan on bonds 46 000 00 Internal revenue tax 728 69 3. Excess of assets over liabilities 6,973 67 Total $1,526,442 41 STATISTICAL. 1. Number of open accounts on the morning of January 1st, 1874 8,301 2. Number of accounts opened during the year 1873, 1,731 3. Number of accounts closed during the year 1873, 2,124 4. Number of accounts opened since organization. . . 59,703 5. Amount deposited, not including interest credited during 1873 $789,413 21 6. Amount deposited, including interest credited, for the same period 868, 959 80 7. Amount withdrawn during the year 1873 835,011 04 8. Amount of interest or profits earned during the year 1873 114,468 78 9. Amount of interest credited to depositors for the same period 79,546 59 10. Amount of each semi-annual credit of interest, for the year 1873, and when credited, January 1, 1873, $39,169.98; July 1, 1873, $40,376.61. Credited at other periods during the year. . None. 484 11. Rate per cent of dividends or interest to depositors during the past year, six (6) per cent on sums up to $5,000 ; five (5) per cent on sums above State of New York, ) County of New York, [ "" Thompson W. Decker, president, and David Morgan, secretary of the Third Avenue Savings Bank, an incorporated institution for savings, located and doing business at Third avenue, corner of Twenty-sixth street, in the city of New York, being duly and severally sworn, each for himself saith, that the foregoing report and the schedules accom- panying the same are, in all respects, a true statement of the condition of said institution before the transaction of any business on the morn- ing of the 1st day of January, 1874, in respect to each and every of the items and particulars therein specified, according to the best of his knowledge and belief. T. W. DEOKEK, President. DAVID MORGAN, Secretary. Severally subscribed and sworn by both deponents, the 26th day of January, 1874, before me, Henry 0. Weeks, Notary Public, (50) New York County. Also the report of the same bank to the superintendent of the bank department of the condition of the bank on the 1st day of July, 1874. Marked Plaintiff's Exhibit No. 5, May 18, 1877, S. B. R. 485 W Cs "O £-£-i>£-J>i>!>2>£-£-£->!> t! to oooooooooooooooo o to oooooooooooooooo o SB oooooooooooooooo o « £ oooooooooooooooo o ►p. oooooooooooooooo as o'S >0<^OOOiO"OOcOO«OiO-+t-»0 CO S -u ■•s-e HINHOHrHHCO OHririH oo CO rH CO 00 €©• <3& s a OOOOOOOOOOOOOOOO o •d oooooooooooooooo o rt oooooooooooooooo o d oooooooooooooooo o 3 ooioaoocoooioojooiocot-io ■* «J COO^NCOt-tOlO OilOCODtOHr- es r-t tH rH E- r- o T—l « d es €© F4 a Is o o * ' > a t"-. "3 >> « a *± o u a> bo 4*: -4-a 1 a fe oo to e h 5 . a 3 ' h h h >< h h h I ■_! l— I .rr ' « J) O 0) O « 0) ^, ,r 5(, ^KtHOOGGCOracG . rg ~^ h^ Z Z ^"ooo oooo -r> a g fat) K " a g>~ co o 1 &0 is a) CD GO is CO IS CO '3 pi w 03 J-l o c/j 3 cd a M a 486 ^5 H s " — p\ H a? in M t> O V, £ h- 1 R o i—l n W H HH f/J w 1 ffl w m 1-J pq Uh H 1 — i W o fc f/j M CO © © oioois -* "* « i-H a^ i-H rH CO -tf «& e& €© **M & " a © © o o o © © © © © o © © © © © © © © o io © >o © © © © © © oo io co i> CO © c3 C lOtDW -H ■* 1^ rH i-l iH CO ^H S3 €© ■S& €& fc i— 1 CO <— 1 © o t- © © ?:- © « CO © i—l co © © 00 lOHoeoff! ■* © ^H ??- rH © IO CO © © © © CO © « £- I-H © 03 s*? >o © O r~ © CO -* c? CO © !> © 00 -^ © i—l 1— i CO i-l CO m rH « «& CO a>£ ■g co e- © CO i> Ma iyj T3 a > ■ • * -Q d M M [>-» W 0J -t-J o EH 03 ^ nS O 3 H c3 a >» <) 03 a 03 dqPP tS*. a . . . • '5 Mc3 g.s a gq <3 § £-p '3 a -° a bo § 8 * a.a pcs If, s- a 1-: p 487 PLAINTIFF'S EXHIBIT No. 5 — (Continued). Schedule F — Cash Deposited in Banks or Trust Companies. NAME OF BANK OR TRUST COMPANY. Location. Amount on deposit. At what rate of interest. Fifth National Bank New York do do do $18,434 65 5,063 57 6,096 81 9,648 89 4 National Park Bank 4 Murray Hill Bank 4 Manufacturers & Builders' Bank, 4 - $39,243 92 Schedule G. Excess of market value over cost. Stocks of other States ' „ , „„ 313,264 87 $33,735 14 Other stocks and bonds 6,300 00 Eeal estate 44,348 05 Total $84,383 18 Loans, deposits, investments or assets of every descrip- tion, not heretofore enumerated, viz.: Accrued interest, rents, etc 43 , 787 27 Total of schedules $128,170 45 488 o o o o © o 00 © o o o o o o © © o CO IS 3 o H £ ^ P H >-a i— i M ef i— i B W c-n M CO H W CO ■4 pq H pci tf 1—1 H £ h- 1 o oj oo © © © o >o oo © © © © oo" CT> o © © © © CO -d el GO © © © © © © © © xo © ■4^ a) CD Sh CO d t3 a co CS bX) S CQ CD 2 CO O rd o c3 fe T3 EH 5 O d -t= »H 03 2 IS += co ij Ed S3 co4h O lO l™ CD J HRCI) ©© © © oo ° 9 o >o o > -* 1 o d CD > CD O Ph © © © © © © © © © © ©"*> CD i— I © © © © © © © © © © >0 i— I 3 O -d o ,d o pq c3 Ph lO d n3 d © © © © d & o 4^> eg - <7 o 3 o3 c3 m 489 o o o © o 02 co o o o o o ©" 00 © o © © © © o © o © 00 >-l 00 'r* CO C3 > 5 <» 1-5 c« -« s CO •— 1 §"£ a CQ h33o .3 WW fc-4 10 1ft C5 © 1-H CO 10 -* co co co co" CO i-H 00 +s .. ~M " ~ o S O OT ,£2 -^ IB ^ Kg COM =3 aw en 13 pq IN 62 490 Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the first day of July, 1874, made io the Superintendent of the Banking Department, as required by chapter 136 of the laws of 1857. RESOURCES. 1. Bonds and mortgages, as per schedule A, hereto annexed $272,400 00 2. Stock investments, as per schedule B, hereto an- nexed 369,964 87 3. Eeal estate, bank building covering two (2) lots, Third avenue and Twenty-sixth street, cost 166,651 95 Real estate, nine (9) houses and lots, New York city, cost and market value, estimated interest paying 275,000 00 Real estate, 92 acres of land, Tarrytown, West- chester county, N. Y.,. cost 138,000 00 4. Individual bonds of trustees bearing 7 per cent in- terest , 115,000 00 5. Furniture and fixtures 15,033 63 6. Uash on deposit in banks or trust companies, as per schedule F, hereto annexed 39,243 92 7. Cash on hand not deposited in bank 20,707 25 8. Amount of assets not included under either of the above heads, the particular items of which are set forth in Schedule Gr, hereto annexed 128, 170 45 $1,540,172 07 LIABILITIES. 1. Amount due depositors : Principal $1,436,819 48 Interest credited for the 1st of July, 1874 40,472 18 $1,477,291 66 2. Other liabilities, viz. : Demand loan on bonds 45,000 00 Internal revenue tax 649 36 3. Excess of assets over liabilities 17,231 05 $1,540,172 07 491 State of New York, ) gg . County of New York, \ I, Daniel Bates, vice-president, and David Morgan, secretary of the Third Avenue Savings Bank, an incorporated institution for savings; located and doing business at No. 354 Third avenue, corner Twenty- sixth street, in New York, being duly and severally sworn, each for himself saith, that the foregoing report and the schedule accompany- ing the same are, in all respects, a true statement of the condition of the said institution before the transaction of any business on the morning of the first day of July, one thousand eight hundred and seventy-four, in respect to each and every of the items and particu- lars above specified, according to the best of his knowledge and belief. DANIEL BATES, Vice-President. DAVID MORGAN, Secretary. Severally subscribed and sworn by both deponents, the 24th day of July, 1874, before me, Luther Wise, Commissioner of Deeds in and for New York Co. Also the report of the same bank to the superintendent of the bank department of the condition of the bank on the 1st day of January, 1875. Marked Plaintiff's Exhibit, No. 6, May 18, 1877, S. B. H. 492 < a H M o p OT|lra01DH': i-H OHOHHCO (T? i— 1H 1—1 o? ■5 IS CO i— 1 CO CT> «& «& H oooooooooooooooooc o oooooooooooooooooc o F-* , oooooooooooooooooc o Ss oooooooooooooooooc lO '3 3 eoooJioOKJiootoioooMoanoc CO a — •e9 COx* Wt-tOiO lO io in ■* CO H C4 CN CT5 fi 3 (T? T-l i— 1 C- «o t-H C<8 «© ■a© a o o If '? ^t>, +3 a M 4) a) t>0 too o ? ■airs si fan ""o tJ fe o3 rf -, a; r o3 Im r c >;'-"-' -5 ^ bo cjr-c J? l° ,± hi! "a ^P5S « P5 Sin ^ •« « o o;r CD o (0 u © ■a Is >. a s o o ^^M ^^^^S*^ M ai o i) d) a) . 'zt,.^ . ^ i-^ ^ O «) « « «) « ■ " "J2J „I^H f „ „ «u ai i r 1 a t/ -4- a a -4- a +- a a -4- c c 1= a b 1 r- a PC = ffl ) ;- c b R r b »6 R fc a ) 4 i c ?c > a ) a J c 1 9 493 ^e s « '•Si s H Cl W y . H 1 m w CO t> S3 o H- 1 fc M H u o i— i H W r/; i— i W 1 w ffl w w no 1-1 ^ n l=q w EH £ CO i— i <1 i-l CM o o © o © © © © © © © © o © © © © © © ■a a Si © © © © © © © © © © © © © © © © © © © © © lO 1C5 © © © © §« io © © oo co t- CO © © 3.M C*■>* i-l © S i— 1 i—l CO ^H «© «» © O i> © CD « 00 iH co © © 00 CO lO r-l CC! ff* ■* © © ** >o t- h en m CO © lO 1-1 i-l © (T* i- © G* IN O tJI t- CD CO IS CO Oi 00 1—1 rH 00 ■* CD i-l CO CD i—l co CO «& «& «fr f- 00 £- CO CO CO i- Mo co T3 a o -o t» o O . . . • • M « &>-. M o ^ o H CO ft nrf O a H . . . 03 a t> ■* a c3 r* O *H rapq T3 . (D • • • fl -s 52 * .S S "S s i= sn a 3 * o a> -3 •" a 1- 494 PLAINTIFFS EXHIBIT No. 6 — (Continued). Schedule F. — Cash Deposited in Banks or Trust Companies. NAME OF BANK OR TRUST COMPANY. Location. Amount on deposit. Rate of interest. Fifth National Bank . . Third avenue $7,759 10 3,453 74 4,789 49 7 77 4 National Park Bank . . Broadway 4 Murray Hill Bank .... Manuf. & Builders' B'k, Third avenue 4 4 $16,010 10 Schedule G. Excess of market value over cost. Stocks of other States $33,735 13 Other stocks and bonds 5 , 050 00 Keal estate, 26th street and 3d avenue 8,051 35 Keal estate at Tarrytown 31,000 00 Totals $77,836 48 Loans, deposits, investments or assets of every descrip- tion, not heretofore enumerated, viz. : Accrued interest, rents, etc 61,492 57 Total schedule $139,329 05 Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the first day of January, 1875, made to the Superintendent of the Banking Department, as required by chapter 136, of the Laws of 1857. resources. 1. Bonds and mortgages, as per schedule A, hereto annexed $269,850 00 2. Stock investments, as per schedule B, hereto an- nexed 361,214 87 3. Eeal estate, bank buildings, covering two lots, Third avenue and Twenty -sixth street, cost 171,948 65 Eeal estate, nine houses and lots, New York city, cost and market value 288,618 51 495 Real estate, 92 acres of land at Tarrytown, West- chester county, New York, cost $138,000 00 4. Individual bonds of trustees, bearing seven per cent interest 115,000 00 5. Furniture and fixtures 15,033 63 6. Cash on deposit in banks or trust companies, as per schedule F, hereto annexed 16,010 10 7. Cash on hand not deposited in bank 11,914 21 8. Amount of assets not inoluded under either of the above heads, the particular items of which are set forth in schedule G, hereto annexed 139,329 05 $1,526,919 02 LIABILITIES. 1. Amount due depositors; Principal $1,413,931 53 Interest credited for the 1st of January, 1875 , 41,026 84 $1,454,958 37 2. Other liabilities, viz.: Demand loan on bonds 65 , 000 00 3. Excess of assets over liabilities , 6,960 65 $1,536,919 02 STATISTICAL. 1. Number of open accounts on the morning ■ Albany, Sept. 29, 1875. ) Hon. Daniel Peatt, Attorney- General : Sie — In pursuance of section 44 of chapter 371, Laws of 1875, I hereby call your attention to the condition of the Third Avenue Sav- ings Bank, in the city of New York. Erom the official report made by Geo. W. Reid and W. F. Aldrich, examiners duly appointed by me to examine into the affairs of said savings bank, it appears that on the 23d day of March last the liabilities of said bank were $1,443,112.39 and the assets were $1,223,886.08, showing a deficiency of assets, with which to meet its liabilities, of $219,229.81. From official knowledge I have reason to believe that the deficiency has largely increased since that date, and that the condition of said bank is such that it is no longer safe or expedient for it to continue its business. I would there- fore recommend that you take such legal proceedings in the premises as may be>equired to close up its affairs. Respectfully yours, D. 0. ELLIS, Superintendent. 505 State of New York, City and County of Albany, \ ss ' ' Daniel Bates, of the city of New York, being duly sworn, says that he is the president of the Third Avenue Savings Bank, defendant in the above-entitled action, that the allegation of the complaint and the certificate or communication of D. C. Ellis, superintendent, etc., hereto annexed, are true. DANIEL BATES. Sworn to before me, ) this 29th day of September, 1875. J E. M. Barber, Commissioner of Deeds, Albany, N. Y. (Endorsed.) Piled September 29, 1875, 4.15 p. M. SUPREME COURT. — Albany County. The People of the State of New York agst. The Third Avenue Savings Bank. And now come the Third Avenue Savings Bank, defendant above named, by M. T. & L. Gr. Hun, its attorneys, and answers the com- plaint of the plaintiff and alleges: That the defendant is and was, during the times mentioned in the complaint, a corporation duly created and organized under and in pursuance of the Laws of the State of New York, and carried on business in the city of New York, as in the complaint alleged ; that the several allegations in the com- plaint contained, as to the financial condition of the defendant and as to the superintendent of the banking department of the State of New York, are true. M. T. & L. G. HUN, Defendant's Attorneys, Albany, iV~. Y. 64 506 SUPREME COURT.— Albany County. The People of the State of New York agst. The Third Avenue Savings Bank. To Messrs. M. T. & L. G. Hun, Defendant's Attorneys: Gentlemen — Take notice that on all the pleadings and papers record and proceedings had in this action, this court will be moved at a special term thereof, to be held at the City Hall, in the city of Al- bany, on the 4th day of October, 1875, at the opening of the court on that day or as soon thereafter as counsel can be heard that judgment of dissolution be entered against the defendant above named, and that a receiver of its assets and effects be appointed and that the plaintiff have such other or further order or relief in the premises as may be just. Yours, etc., DANIEL PRATT, Attorney- General, Plaintiffs' Attorney. At a Circuit Court and Special Term of the Supreme Court of the State of New York, held at the city hall in the city of Albany on the 4th day of October, 1875. Present — Hon. T. R. Westbrook, Justice. The People of the State of New York agst. The Third Avenue Savings Bank. This cause coming on to be heard on the complaint, report of Hon. De "With 0. Ellis, the affidavit of Daniel Bates, the answer of the de- fendant and a notice of motion for a final decree herein, after hearing Charles S. Fairchild / deputy attorney-general, on behalf of the plain- tiffs above named, and Hon. John T. Hoffman and Marcus T. Hun, Esq., on behalf of the above-named defendant, it is ordered, adjudged and decreed, First, That the defendant above named, the Third Avenue Savings Bank, be, and the same is hereby dissolved, and that from henceforth it determine and cease to exist as a body corporate. Second, That William S. Carman, of the city of New York, be, and he is hereby appointed receiver of all the stock, property, things in action and effects, real and personal, of said corporation, the Third 507 Avenue Savings Bank, and of all property held by it with the usual powers and duties in such cases enjoyed and exercised by receivers, ac- cording to the practice of this court. Third. That before entering upon the duties of his office, such receiver make, execute and deliver himself, aud cause to be executed and delivered by at least two sufficient sureties, to be filed with the clerk of Albany county, a bond to the people of the State of New York in the penal sum of seventy-five thousand dollars, conditioned for the faithful execution by said receiver of the trust in him placed and the due performance of all duties appertaining thereto ; said bond to be approved as to its sufficiency, form and manner of execution, by a justice of the supreme court after due notice of the time and place of the making of the application for such approval has been first given to the attorney-general of the State of New York, upon the filing of which bond thus approved the receiver is authorized and directed to take possession of and sequestrate the stock, property, things in action and effects real and personal of said corporation, and to take and hold all property held by or in the possession of said cor- poration. Fourth. That all money, personal property, choses in action and effects of or held by said corporation, and all securities and obliga- tions belonging to said corporation coming into the hands of said receiver, except articles of furniture and corporate books, and except the sum of ten thousand dollars to be retained by said receiver for the payment of necessary and incidental disbursements, be deposited with the United States Trust Company, of the city of New York, to be held by said last-named corporation, subject to the further order of this court and to the credit of the receiver in this action ; said money and securities so deposited as aforesaid with said United States Trust Company not to be delivered over by it except subject to and in pur- suance of the order of this court. Fifth. That the said receiver do also forthwith pi-oceed and recover by process of law, or otherwise, pursuant to statute in such case pro- vided, any sum which may be due to said corporations if the person so iudebted be not wholly insolvent. Sixth. It is further ordered that the said receiver, in the discharge of the duties of his trust, be vested with all the rights aud powers and be subject to all the duties and liabilities declared by statute in such cases, and proceed in all respects pursuant to article three, title four, chapter eight, part third of the Eevised Statutes (except as herein otherwise provided). Seventh. It is further ordered that before any distribution of any portion of said funds or assets shall be made, and within six months from the date of this order, the said receiver report to this court, after 508 giving notice of his intention so to do to the attorney-general, his proceedings under this order with an exhibit of the accounts and demands for and against said corporation and all its open and sub- sisting contracts, and a statement of the amount of the money and assets in the hands of said receiver, together with a statement of his expenses and commissions, to the eud that such order may be made in regard thereto as the nature of the case may require. And it is fur- ther ordered that until the coming in of said report, and the hearing thereon, the question as to the distribution of said assets and moneys, and of the rights and interests of the respective parties claiming the same or any portion thereof, and other questions not herein disposed of, be reserved for further directions. Eighth. It is further ordered that said receiver pay out of and from the moneys of said corporation coming into his hands to the attorneys for the defendant herein, their taxable costs and five huudred dollars as an extra allowance herein. Ninth. It is further ordered that such further application may be made to the court on the footing of this decree as the receiver may be advised is proper and necessary for his instruction in the management and conduct of his trust. It is further ordered that except as herein ordered and directed the said receiver shall not dispose of or in any manner interfere with any of the assets of said bank directed to be deposited with the United States Trust Company. He shall immedi- ately (upon the approval of the bond herein required to be given), in the presence of the superintendent of the banking department of the State of New York, take the assets so directed to be deposited from said bank and deposit them with the said United States Trust Company, and take from said Trust Company a receipt stating that such assets are received under and in pursuance of the provisions of this decree, and under the restriction as to their transfer or disposition in this decree mentioned. Tenth. It is further ordered that no application shall be made to any court, nor shall any action of the court be asked or suffered by the receiver relative to or in any way connected with the duties of said receiver, or the funds or assets of the defendant above mentioned, or their transfer, sale or delivery, unless a five day's notice of such appli- cation be first given to the attorney-general of the State of New York. WM. E. HASWELL, Cleric. [Endorsed] : Kecorded in Albany county clerk's office, October 6, 1875, 3 p. M., in book of orders appointing receivers of judgment debtors, page 456. WM. E. HASWELL, Clerk. And filed October 6, 1875, 3 p. m. 509 Q. Please look at the papers shown you and just referred to, and state if you know in whoso handwriting they severally are ? A. The notice signed by the attorney-general I do not know in whose handwriting that is. Q. Please state which of the papers are in the same handwriting ? A. The next is the order made by Judge Osborne, on the 29th of September, appointing Mr. Carman receiver; that is in the same handwriting as the first; the same as to the summons and complaint, with the exception of the writing on the margin of the complaint, which is in Mr. Hun's handwriting ; ' the other handwriting, while I do not know who wrote it, is the same handwriting as some copyist in Mr. Hun's office — the same handwriting as other papers that come from his office. Q. You believe it to be copied by a clerk in his office ? A. Yes, sir; no doubt of that ; then the copy of the letter from Mr. Ellis to the attorney-general, that I believe to be the handwriting of Mr. M. T. Hun. Q. The defendant's attorney ? A. Yes, sir ; then follows the answer which is in Mr. Hun's hand- writing and in the same handwriting as the previous letter from Mr- Ellis, and also the affidavit of Mr. Bates ; that is in the same hand- writing as the answer which is in the handwriting of Mr. Hun; then follows the notice or motion for judgment; that is also in the hand- writing of Mr. Hun ; then follows the order made by Judge West- brook, dissolving the corporation, and appointing Mr. Carman re- ceiver; that is in the handwriting of the copyist in Mr. Hun's office* to the best of my belief. Q. Then, so far as you know, all the papers are in the handwriting of Mr. Hun, the defendant's attorney, or in the handwriting of the copyist in his office ? A. Yes, sir ; except the signatures ; there are some interlineations here in the complaint ; there is one interlineation in the order made by Judge Osborne, in the handwriting of. Mr. Hun himself, and some interlineations in the complaint made by Mr. Hun himself. Q. Do you know who filed those papers in your office ? A. Mr. Hun did. Q. Did you see the attorney-general in relation to that at any time? A. No, sir. Mr. Olmstead offers in evidence the order made in the same suit at special term of the supreme court, November 30, 1875, by T. R. Westbrook, justice, removing Mr. Carman as receiver, and appointing Mr. Samuel H. Hurd. 510 [Objected to, on the ground that it has nothing to do with Mr. Ellis, and also that those other papers have not. Objection overruled.] Q. When was the order filed ? A. Filed in the clerk's office on the 6th of December, 1875. Order marked Plaintiff's Exhibit No. 8, May 18th, 1877. S. B. H. Plaintiff's Exhibit No. 8. At a special term of the supreme court of the State of New York, held at the Supreme Court Chambers, in the City Hall, at the city of Kingston and county of Ulster, on the 13th day of November, 1875. Present — Hon. T. E. Westbrook, Justice. The People of the State of New York agst. The Third Avenue Savings Bank. On reading and filing the order to show cause in this action, dated the thirtieth day of October, 1875, made by Hon. T. R. West- brook, justice, etc., returnable on the sixth day of November, 1875, with the petition, affidavits and papers on which the same was granted, with proof of service of the same as required by said order, the return thereof having been changed to this day by order of the justice who made the same on the application of William Peet, attorney for Wil- liam S. Carman, receiver, etc., and on motion of Edward Pitch of coun- sel for the petitioner named in said petition, after hearing Mr. Edward Fitch, of counsel for said petitioner, and Algernon S. Sullivan and Mr. James S. Stearns, each separately appearing for other creditors of the defendant concurring in the petition, and after hearing Messrs. Peet and Hun, for Mr. Carman, the receiver and the defendant, and Mr. Charles H. Fairchild, deputy attorney-general for the people, it is ordered, adjudged and decreed as follows : First. That the appointment of William S. Carman, of the city of New York, as receiver under and by decree of this court, made in this action at a special term thereof, held at the city hall, in the city of Albany, on the fourth day of October, 1875, be, and the same is, hereby vacated, annulled and revoked, and the said William S. Car- man is hereby perpetually enjoined and commanded to cease and de- sist from performing or exercising all and every the powers and duties given to or conferred upon him by the said decree. Secotid. That Samuel H. Hurd, of the city of New York, be and he hereby is appointed receiver in the place and stead of aaid William S. 511 Carman, of all the stock, property, things in action and effects real and personal of the corporation. The Third Avenue Savings Bank, defendant in this action, and of all property held by it with the usual power and duties in such cases enjoyed and exercised by receivers ac- cording to the practice of this court, subject nevertheless to all the terms, conditions and provisions expressed and contained in the said decree. Tliird. That the said William S. Carman account for and deliver and pay over to the said Samuel H. Hurd, hereby appointed receiver, all the money, stocks, property, things in action and effects, both real and personal, which have come into his possession and control as re- ceiver, as aforesaid, and that he render a correct and true account of all things done and suffered by him as such receiver. Fourth. That Delano C. Calvin be and he hereby is appointed re- feree to take and state the account of said William S. Carman, as receiver, as aforesaid, and report the same to the court, with his opin- ion thereon. Fifth. That the final decree in this action made as aforesaid be and the same is hereby amended so as to conform to this order. Sixth. It is further ordered, that the said Samuel H. Hurd, who is hereby appointed receiver as herein before stated, shall execute a bond in the penalty of one hundred and fifty thousand dollars, conditioned for the faithful performance of the trust, committed to him as such receiver as aforesaid, the form thereof and sureties thereto shall be approved by one of the justices of this court upon the approval where- of and not before the said Samuel H. Hurd shall enter upon the dis- charge of his duties as such receiver ; that upon the entry of this order and the filing of the bond approved as aforesaid, and the presenta-, tion to the said William S. Carman of a copy of this order duly certified by the clerk of the county of Albany, and of a certificate by the clerk aforesaid, that the bond hereby required has been duly filed, the said William S. Carman, who is hereby removed from his position as receiver, shall immediately deliver over to the said Samuel H. Hurd, all property of any kind, name and nature which he' has in his posses- sion or under his control, by virtue of his original appointment as such receiver, and also all books, papers, documents, vouchers and memo- randa kept, made or taken by him, while acting as such receiver. And it is further ordered, that the judgment entered in this action remain in full force, except so far as it may be modified by this order, the various parties who have appeared upon this motion will be heard hereafter upon the allowance, if any, to be made to counsel. Clerk of Albany county will enter the foregoing order. (Copy.) T. E. WESTBROOK, Justice Supreme Court. (Endorsed. ) 512 Kecorded in Albany county clerk's office December 6, 1875. 2 M. in book of orders appointing receivers of judgment debtors at page 444, etc. WM. E. HASWELL, Filed December 6, 1875. 2 p. m. Clerk. Charles 8. Fairchild, sworn on behalf of the prosecution. Examined by Mr. Olmstead: * Q. You are the attorney-general of the State ? A. Yes, sir. Q. Were you deputy attorney-general while Mr. Daniel Pratt wag the attorney-general ? A. Yes, sir; I was, except the first two weeks. Q. You was during September, 1875 ? A. Yes, sir. Q. Did you, personally, have any thing to do with preparing the papers contained in the judgment-roll in the suit of the People against the Third Avenue Savings Bank ? A. I signed these summons and complaint, and I went over before Judge Osborne when this order was granted appointing a receiver. Q. The last order ? A. No ; the first order, appointing Mr. Carman receiver. Q. The order appointing, on the summons and complaint, on the papers ? A. Yes, sir. Q. Who drew those papers? A. I think they are all drawn by Mr. Hun. Q. The attorney for the defendant ? A. Yes, sir. Q. Did you see Mr. Ellis at that time ? A. I think that 1 saw him that morning ; I cannot remember defi- nitely in regard to it. Q. Was he here in the city at the time ? A. I think he was. Q. He swore to some of the papers, did he not ? A. Yes, sir ; but I didn't see him swear to them ; I see that he is here as swearing to them. Q. Do you know whether he knew that Mr. Carman was proposed as receiver ? A. Yes, sir. Q. He understood that ? A. Yes, sir; so I understood; I cannot remember definitely in 513 regard to this, there have been so mftty of these things ; I think I came to the office in the morning, and I think Judge Pratt himself was in town, but I forget how that was; I know that those papers were prepared, and that this company had consented to having a receiver appointed, and proceedings had been taken to that effect. Q. All parties assenting to it ? A. Yes, sir. Q. You understood these gentlemen came up from New York for the express purpose of appointing hiA ? A. Yes, sir. Q. And that Mr. Carman was appointed receiver ? A. Yes, sir. Q. And to the best of your recollection, Mr. Ellis was aware of it ? A. Yes, sir ; I think Mr. Ellis made no objection to the appoint- ment of Mr. Carman. Cross-examinatio n. By Mr. Chapman : Q. Mr. Hoffman had' been governor of the State two terms? A. Yes, sir. Q. Mr. Hun had been deputy attorney-general prior to your time ? A. Yes, sir ; he was my predecessor ; he was deputy under Judge Pratt the first few weeks. Q. Do you close a savings bank except upon the recommendation of the superintendent of the bank department ? A. No, sir ; never to my knowledge has it been done. Q. His letter of recommendation is the foundatiqn of your pro- ceedings, is it not ? A. It is. Q. I show you a letter signed by D. C. Ellis, dated September 29, which is on file in your office ; is that the letter on which you moved to close the bank ? [Objected to, on the ground that the papers themselves show on what papers the motion was made. Objection withdrawn.] A. Yes, sir ; that is the original letter. Q. I ask you now, whether the letter which is attached to the com- plaint in these proceedings, to which your attention has been called, is a copy of that letter ? A. I cannot tell without reading it all over ; [after reading copy of letter], yes, sir ; it is the same. Q. It is a copy of this original letter which was left on file in your department ? A. YeSj sir. 65 514 Q. And it was on this letter flhat you proceeded to move to put this bank into the hands of a receiver ? [Objected to, on the ground that the papers will show. J Q. It would not have been done at all, except for the letter of Mr. Ellis; you commenced that action upon that recommendation of Mr. Ellis ? [Objected to.J A. That is the case, yes, sir. Q. The attorney-general comtfltenced this action on the recommend- ation of Mr. Ellis, and placed this bank in the hands of a receiver? A. Yes, sir. Q. You, as attorney-general, and your predecessor have placed quite a number of savings banks in the- hands of receivers on the recom- mendation of Mr. Ellis, have you not ? [Taken subject to objection.] A. Yes, sir. Q. Has not every savings bank which has gone into the hands of a receiver, been placed in the hands of a receiver by your department, on the recommendation of Mr. Ellis, with one single exception ? [Objected to on the ground that the papers themselves show what action was preliminary to the appointment of a receiver. Objection overruled.] A. There was only one, that I remember, that has been placed in the hands of a receiver, that was not upon the recommendation of the superintendent of the bank department; that was a savings bank in New York, the name of which I have forgotten ; Mr. Uhl was the receiver appointed for that bank. Q. Do you know that, in that case, Mr. Ellis had made an examina- tion of the bank, and they acted as a result of the examination before he got to you ? A. I don't know any thing about that. Q. And the mere technicality of drawing up the papers amounted to nothing unless they were approved by Mr. Pratt or the attorney- general ? [Objected to.] A. I know I looked over these papers to see if they were correct; Mr. Hun is very familiar with those proceedings; drawing of these papers, and more competent than anybody else that I knew of to draw them, and this was an agreed upon matter, and it made no difference; who drew the papers. Q. The attorney-general had moved as the moving party ? A. Yes, sir. Q. And you went over with the papers to the court ? A. Yes, sir. 515 Q. And was there at the time the order was granted ? A. Yes, sir. Q. Was not the motion also made upon the consent of the repre- sentatives of the bank ? A. The only thing we had any contest about was the amount of the bond ; I insisted on a large bond. Q. Yon moved upon the action of Mr. Ellis and the trustees ? A. I moved upon the papers; they made no opposition whatever. Q. It was by an understanding between the trustees and Mr. Ellis, and of all the parties ? A. That I don't know; there was this letter, and Mr. Hun was there, and said it would be assented to. Q. You understood that the trustees came up for the express pur- pose of having this done ? A. I did not see the trustees, myself; I only saw Mr. Hun. De Witt C. Ellis, sworn on his own behalf: By Mr. Chapman : Q. When were you appointed superintendent of the bank depart- ment? A. February 19, 1873 ; I think that is the date of the commission. Q. Since that appointment has any savings bank been placed in the hands of a receiver except as the result of your action ? A. I only now think of one bank that was placed in the hands of a receiver that was not the direct result of my action, and that was par- tially so. Q. What do you mean by partially so ? A. In the case of the German Up Town, there was trouble; it was about the time when there was trouble to some extent in all those banks; a gradual run and some excitement; the old president of the bank resigned, and a new president took his place, and on examina- tion he found some irregularities and frauds which took place during the prior presidency a short time previous ; I think the secretary had embezzled some moneys ; I sent Mr. Reid up there to look into the affairs ; it occurred while I was in New York that he went up there and, in connection with the president, looked over the books, and traced out far enough to lind that there had been some frauds of that kind; the new president changed his mind all at once; he had got into a bank that was not in the condition he supposed it was, and he held a meeting, and they thought best to close it up. Q. But after a partial examination by your examiner? A. Yes, sir, after my examiner had been there and looked the mat- ter over with him. 516 Q. Then, even in that case, it was partially a result of your efforts ? A. Yes, sir, it was partially ; it took place all within two or three days when we were there. Q. "When was this Third Avenue Savings Bank incorporated? A. I think in 1852. Q. 1852 or 1854? A. 1854, chapter 390, as the Bloomingdale Savings Bank. Q. Did it have that available fund clause in its charter ? A. Yes, sir. Q. And subsequently changed to the Third Avenue Savings Bank? A. Yes, sir, by an act of the legislature. Q. Mr. Eeid had been an examiner a portion of the time under your predecessor, Mr. Howell, had he not? A. Yes, sir, he was an examiner when I took the official position ; he was one of the examiners. Q. And you retained him in his place ? A. I did. Q. What do you say as to his competency as an examiner, from all you have seen, and heard, and know? A. All the testimony I have had on the subject from bank officers has been very flattering, and that he was a very faithful, conscientious and painstaking examiner. Q. Have you had any thing to awaken any suspicions as to his being incompetent or otherwise, or any hints of any thing of the kind, until the question of these investigations came up ? A. Never, sir. Q. You had every reason to believe in the correctness of his reports? A. I had, most assuredly. Q. And had every confidence in him as an examiner? A. Yes, sir. Q. Will you look at that letter, dated March 26th, 1873, and tell if that is a copy of a letter which you gave to him on sending him out to make examinations for you ? A. This is a copy of a letter in the letter-book of the bank depart- ment, which I sent to him at the time he commenced his work under me. Mr. Chapman reads in evidence the following letter : New Yoek, March 26th, 1873. Gbo.W. Reid, Esq.: I send you herewith commissions to examine the National Savings Institution and the Mechanics' Savings Bank of Brooklyn. I have not yet perfected my arrangement for a full force to examine the larger banks, but probably shall by the time you have finished some of the 517 smaller institutions which do not require more than one to make an examination. I will write you at greater length shortly, or will see you in person. You will please bear in mind the object of this exam- ination, namely, to show the true character and condition of each bank, either large or small, old or new, and make your examination rigidly and so searching as may be necessary to find out and present the material facts for the protection of the community doing business with them, without partiality or bias. Please acknowledge receipt. Yours, truly, D. 0. ELLIS, Supt. . Q. When he made an examination and made a report to you, I will ask you whether in any instance you had any reason at the time of the receipt of the report, or since, up to the time of these investiga- tions, to have any doubt as to the correctness of his report ? A. I never had, I always accepted his reports as truthful and correct. Q. If you did not take his reports as being true, what could you do? A. I could send and have another examination made by somebody else. Q. Suppose you could not accept his report ? A. Then I should have to send somebody else. Q. And so there would be no end to it ? A. Finally I should have to accept somebody's report. By Senator St. John : Q. You could go yourself ? A. Not as a rule, I could not. Q. You have the authority to go? A. Yes, sir; and I have in some cases; I have the power to do it; practically I could not make the examination. By Mr. Chapman : Q. In making examinations is it practically possible to go back and examine all those banks to the time they were originally created ? A. It is not, under the system we have been acting, since the pas- sage of the law of 1871. Q. It requires an examination of all the banks ? A. Yes, sir; it is practically impossible. Q. Very shortly after you went into office, I will ask you if you sent a commission to Mr. Eeid, Mr. Vrooman and Mr. Aldrich, to examine into the affairs of the Third Avenue Savings Banks, of New York? 518 A. I did. Q. Did they report to you the result of that examination ? A. They did. Q. Which has been introduced in evidence ? A. Yes, sir. Q. The examination of April, 1873 ? A. Yes, sir. Q. It has been claimed that the character of the assets, as they were returned to you by these exami ners upon that examination, were such that you should have closed the bank; what do you say in regard to "that? A. What is the date of that report ? Q. April, 1873 ? A. At that time, I had as my deputy the deputy that Mr. Howell had appointed, Mr. Shaw, and of course I consulted with him, being a new man in the position ; we talked the matters over together and this question of the Third Avenue Savings Bank for the first time, then came to my knowledge and it was stated to me, and as the records show, that owing to a big run on the bank at one time Mr. Howell had, in conjunction I think with the trustees of the bank, caused an examination to be made, which Mr. Keyes, one of the former deputy superintendents of the bank department, conducted on one side and Mr. Hennessey, I think, on the other, it was claimed to have been an exhaustive examination, and, on their report, Mr. Howell acted, I think it was on that report, that he took those bonds of the trustees, and he had determined the status of the bank. [Objected to.] The Witness — And also his statement that the supreme court had adjudicated all the disputed claims of the savings banks up to that time, and in regard to the character of the assets and the manage- ment of the bank and the evidence of the trustees, had refused to appoint a receiver, and under that condition of things I commenced to act. Q. It has been suggested that it was your duty as bank superintend- ent to put a bank in the hands of a receiver, and not the court's duty; I will ask you, how you could put a bank in the hands of a receiver without the court? A. I could not. Q. After, as you understood it, the court had refused to put the bank in the hands of a receiver on these very assets, how you could expect the court to put the bank in the hands of a receiver when you presented the same assets again ? A. I assumed that I could not; it was a positive fact it had been judicially determined. 519 Q. You acted upon that theory ? A. I acted upon those facts, as it appears in Mr. Howell's official report to the legislature of that year. Q. What year was that ? A. For the year 1872, made the 1st of January, 1873, six or seven weeks before I went into office. Q. I will ask you generally now, whether the character of the assets did not remain almost substantially the same assets, so far as they are given here, remain down to the time of your examination and reported to you by Mr. Eeid in 1875 ? A. Substantially the same. Q. Now I come to the real estate items ; in the governor's charge, it is said that the value Jof the banking-house had been increased $100,000 ; is that true during your time ? A. I think not; there is no evidence of it. Q. Look at this report of your examiners in April, 1873, and tell me what the value of the bank building is put in at there ? A. $180,000; that is the estimated market value. Q. Will you refer to the report made to you by the bank which has been introduced in evidence for July of 1873, and see what it is re- turned at ? A. Eeturnedat cost, $166,651.95. Q. That is the next report made after your examination in April ? A. Yes, sir; that is the first bank report made after I went into office. Q. There was no increase then ? A. No, sir. Q. That was returned at the cost? A. Yes, sir. Q. I now ask you how it was returned in the report of the bank to you of January 1st, 1874 ? A. At the same figures. Q, As cost ? A. Yes, sir. Q. The report made by the bank was in July, 1874 ; refer to that report and see whether the same figures are not returned as the cost of the banking-house in that case ? A. Precisely the same. Q. So that during your time, down to the time of the report of the bank for the 1st of January, 1875, there had been no increase at all ? A. None whatever. Q. On the report of January 1, 1875, how much is the cost re- turned at ? 520 A. $171,948.65. Q. There appears to be a slight increase ? A. Yes, sir. Q. Is there any thing suspicious in that the mere fact of its being an increase ? A. At cost ? Q. Yes ? A. None at all ; it consisted of three lots and the building. Q. There might be improvements to the buildings or expenses in connection with the buildings ? A. Yes, sir, it might be ; there could be changes made that would vary the cost of it considerably. Q. When your examiner comes to make the examination in March, 1875, what does he return the bank building at, the market value ? A. 8180,000. Q. Had there then been any increase in the value of the bank building during the time that you was superintendent ? A. None whatever, except that reported increased cost in 1875. Q. When did this report of January 1, 1875, come to your atten- tion ; it has been assumed that you received it on the 1st of January ? A. We received it the day it wais filed. Q. That is, it was received in the department? A. Yes sir. Q. That is January 25, 1875 ? A. Yes, sir. Q. Was this the only report that was filed in the department at that time ? A. No, sir; we probably had within a few days of that time 175 or 200 reports. Q. When do the reports for the 1st of January of a year come in to you? A. They are required to make them by the 1st of February; prac- tically they never do, all of them, but they begin to come in generally from the 20th, and the bulk of them come in from the 20th to the 1st of February. Q. You have the whole of these reports dumped down upon you almost at once ? A. Pretty much the greater bulk of them ; once in a while a man will get his in promptly. Q. Whether in the latter part of January and the fore part of February, 1875, you didn't have the annual reports of these various other institutions that had been placed under your hands ? A. Yes, sir. 521 Q. About how many reports did you have come into your hands along the latter part of January? A. I could not say, but I should say about 200; we had 165 savings banks at that time. Q. When they come first, do they come to you in the department ? A. No, sir ; they do not. Q. What is the order that you have necessarily to pursue ? A. They are filed and the clerks, whose business it is to examine these reports, tabulate them for the annual report made to the legis- lature, taking them alphabetically by counties as they appear by our printed report, and they take them as fast as they come in and examine the reports and verify the figures and tabulate them. Q. How long before this work is completed ? A. It is not completed sometimes until April; we have to send oack so many reports for correction that we do not get the full reports in until the 1st of March ; we had to send back nearly one-half of the reports this year. Q. Did you receive this report of January, 1875 — whether the report of January 1, 1875. came to your knowledge until the report which was made by your examiner, March, 1875, was received by you? A. I presume I never saw that report unbil that examiner's report was sent to me ; I would not naturally, under the ordinary circum- stances. Q. When you got the examiner's report of March, 1875, you would call for the report of January 1, 1875 ? A. Yes, sir ; I presume I saw it shortly after it came ; I could not say just what day it was. Q. In regard to this other real estate, I refer you to the report of your examiner in April, 1873, as to the value of the Tarrytown prop- erty ; what is that returned at ? A. $138,000. Q. In the next report, made July 1st, 1873, it was reported then the same, was it not ? A. Yes, sir. Q. Turn to January, 1874 ; it is returned at the same amount ? A. Yes, sir ; at the same price. Q. The bank report ? A. Yes, sir. Q. Turn to July, 1874 ? A. It is the same price. Q. Now turn to January, 1875 ? A. It is the same. Q. Now turn to the report of your examiner, as of March, 1875 ? 66 522 A. It isihe same. Q. Now, I go back again to the balance of the real estate, contained jn your examiner's report of April, 1873 ; how much did that aggre- gate ? A. $267,300. Q. By reference to your examiner's report of 1875, I ask you, whether you do not find that a mortgage on some of this real estate, which was returned in 1873, as $50,200, does not appear in the exam- ination of 1875, as $42,500? A. It does. Q. This indicates that, on that mortgage $7,700 had been paid ? A. It is so reported here. Q. If you add to this $267,300, which is returned by your examin- ers in April, 1873, the amount $7,700, which had bee n paid on the mortgage, does not that make $275,000 ? A. Yes, sir ; it does. Q. As the value of the real estate, $275,000 ? A. Yes, sir. Q. Increasing, in other words, the value of the bank property by $7,700 ? A. Increasing the interest of the bank in the property by that amount. Q. So that the value of that property, after the payment of that interest, would be $275,000 ; that would be the - interest the bank had ? A. Yes, sir ; it would increase the interest of the bank just in pro- portion as they paid off the mortgage. Q. Refer to the next report, which is as of July 1st, 1873, and see whether that is not the amount which is there returned ? A. That is the exact amount there returned. Q. Turn to the next report, January 1, 1874, and state whether that property is not returned there at $275,000 ? A. It is. Q. Turn to the next report of July 1, 1874, and see if it is not re- turned the same amount there, $275,000 ? A. The same amount. Q. Turn to the next report, January 1, 1875, and there there ap- pears to be an increase for the first time ? A. There it is increased to $288,618.51 ; the cost of the market value. Q. This report didn't come to your attention until the report which Mr. Reid made to you in March, 1875 ? A. That fact never appeared to me until after Mr. Reid's examina- • tion, that I recollect of. Q. Having thus gone over the real estate, I want you to state whether during any portion of the time that you were superintendent, 523 down to the time of Mr. Eeid's report of his examination to you, if there had been any increase of the value of the real estate ? A. Not as shown by the report. By Senator St. John : Q. Neither by the bank or the examiner ? A. No, sir. Q. Not brought to your knowledge in any way ? A. No, sir; nor intimated. By Senator Wellman : Q. That is until the time of Mr. Eeid's report of 1875? A. Yes, sir ; at that time it appears by the bank report of that year, that they had increased the value of the real estate. By Mr. Chapman : Q. The character of the assets remained substantially the same from the time you made the first examination, down to the time of the re- port of the last examination to you? A. Yes, sir ; substantially the same assets, so far as the real estate goes. Q. And so far as these questioned items are concerned? A. Yes, sir. Q. So that, so far as the character of these assets, and the right of the bank to hold them are concerned, that you considered to have been acted upon by the supreme court, and by your predecessor, as you understood it, and you acbed upon that ? A. I so found it in the official report of Mr Howell ; he distinctly states the fact, and I knew it as a matter of common talk whenever the question was brought up. Q. Now, I come down to this report, and your action under the report, when your attention was first brought to the condition of the bank by the report of your examiner in 1875? A. I do not undertake to give exact dates and words, but I will give the substance of the whole thing as near as I can ; when the report of Mr. Reid first came to my attention, that was the first savings bank that had been reported to me that had required, as I thought, any at- tention to close up. By Senator St. John : Q. That was in 1873? A. In 1875 Mr Eeid's examination of 1875 showed this deficiency Q. It showed a deficiency in 1873 ? 524 A. Yes, sir ; with an excess of income ; I treated that as having been disposed of, just prior to my introduction to the office, by the court and the encouraging letter of Mr. Eeid that the bank was in a fair way to become a good bank and to survive ; when Mr. Reid's report came, in 1875, showing the insolvency of the bank, my atten- tion was first called to it ; I have no doubt I compared it with the January report, and saw there was a big discrepancy between the two reports, and then the question presented itself, what was the best thing to do ? the first thought was to close it at once ; I talked with Mr. Lamb about the subject, as he testified here to-day ; that was his view ; but it occurred to me that we were then passing a general savings bank act; the bill had been framed and introduced, and it was in the hands of both committees; I bad spent considerable time over it, and that bill contained some remarkable, provisions, consider- ing the merging of one bank with another; I made up my mind that it would be better to wait until that bill became a law, having in view the effect it would have on the other savings banks; I was satisfied that that bank would have to be closed. By Senator St. John : Q. What time did that bill become a law ? A. The 17th of May, I think, toward the close of the legislature ; the point that I had in my mind at that time and ever since, up to the time of the final collapse, was to try and save those smaller banks ; I was satisfied in my own mind that when I closed up the Third Ave- nue Savings Bank, it would be followed by a good many others that were just barely solvent ; my idea was, that there would be a with- drawal of deposits from all these smaller institutions, and that they would come to an end sooner or later from the fact that they could not sustain themselves, would not do business enough, would not have strength enough, so I left the matter until we got through with the legislature, and the law was passed. By Mr. Chapman : Q. Was there a great difference of opinion in regard to the merging clause, among banking men ? A. There was great difference of opinion in regard to many provis- ions in the bill ; I don't know as there was specially about that, but there was great difference of opinion growing out of the fact that every locality had its own particular interest in the passage of this bill, through some provision or another ; within a fe\v days after the legislature adjourned, I went to New York in reference to this mat- ter, not only the Third Avenue Savings Bank, but in reference to future action in regard to these other smaller banks, and I had a con- 525 sultation with quite a number of savings bank officers of the larger and smaller banks, and we talked this over again — [Objected to, on the ground that any thing said to the people in New York had nothing to do with the case here, j Q. You took advice ? A. I didn't go for advice ; I went to consult with them as to the operation of this law and what could be done with it. [Objected to as immaterial and irrelevant. Objection overruled.] A. I made an effort at that time to bring about a consolidation, if possible, of some of these smaller banks that I was apprehensive would lose their business and have to be closed up with the larger banks> under this law of 1875, and in order to do that, of course I had to see the bank officers of the smaller and larger banks ; it was a new propo- sition, and of course men differed, in their judgment, as to how it would work, but I made the effort and at one time it looked as though something might come out of it. By Senator Wellman : Q. You made that effort- in regard to the Third Avenue Savings Bank, as well as the others ? A. It grew out of that; I had no faith that any bank would take hold of the Third Avenue Bank ; I had made up my mind that this Third Avenue Savings Bank had to be closed up. Q. What time was this? A. The third of May; my object was to try and save the other banks first ; this was the first bank that was closed ; it was the beginning of the end of these dozen banks that have been closed up, and it was my first experience in closing up savings banks ; as I said, it promised some success, and I left the matter under advisement, to be finally dis- posed of at a subsequent time ; left them to think the matter over and see what could be done ; if any thing. By Senator St. John : Q. Did any thing ever come out of it ? A. No, sir. By Mr. Chapman : Q. Go on in the regular order of events ? A. I think I went down shortly after again ; lam not positive; I know I went in May, for I have records to show it; at that time I came from New York ; in the early part of June there was a good deal of excitement and anxiety in Wall street ; some half a dozen brokers failed during the early part of June, and Broadway, Wall street and 526 Broad street were much excited ; the old. firm of Turner Bros, failed, owing a million and a half of dollars, and there was a good deal of excitement and nervousness; when I went down again, I don't remem- ber the date, I am not positive that I did go, until the time of the Duncan & Shearman failure ; my best recollection is, that I went in the meantime in regard to this same subject. Q. You mean you went down again after the failure of Duncan, Shearman & Co.? A. No, prior to that, I think I went once more. By Senator Wellhan : Q. Beside this time that you. went the latter part of May ? A. Yes, sir; besides that ; this was still pending and it was not dis- posed of ; it was not absolutely determined that they would do any thing or would not : I mean in reference to the merging of banks. By the Chairman : Q. State more fully in regard to this merging of banks, the effect upon depositors in other banks, how the merger would affect them ? [Objected to. Objection overruled.] A. I went down the last time with a view to settling this question either one way or the other finally ; the day I arrived in New York was the day of the failure of Duncan, Shearman & Co. Q. The delay in not acting upon the Third Avenue Savings Bank until you went down this time, was to see whether any thing could be brought about under this new clause in the law, which was passed that year, in regard to the other banks ? A. That was my object, not to save the Third Avenue Savings Bank, because I did not think it could be saved ; I made an attempt in that direction, but it was to protect the depositors of the smaller banks; that was the sole object. Q. You went down to see about the thing finally ? A. As I stated, the failure of Duncan, Shearman & Co. took place the day that I arrived in "New York; I got there at night, and they failed about 11 o'clock that day. Q. To settle this question of merger ? A. Yes, sir ; I probably should not have gone if I had known of the failure ; I didn't know it until I got there. Q. What date was that ? A. Their failure, at first reported, was the 27th of July ; the next day there was great excitement in New York ; very shortly, within a day or two after that, I called on these gentlemen and others who have testified in regard to closing up this bank. 527 By Senator St. John : Q. It was soon after that that you called on Mr. Stewart and Macy and the others ? A. Yes, sir. By Mr. Chapman : Q. And John J. Cisco ? A. Yes, sir. Q. You called on the men that came before us to testify ? A. Yes, sir. Q. Mr. Morrison ; who was he ? A. The president of the Manhattan Bank ; that is a State bank which represents the State, and pays the interest on the bonds of the State ; the State agent, and also where the bank plates are deposited. [All this is objected to.J The Witness. John J. Cisco is another gentleman I called on. Q. Who was he ? A. He was at one time a sub-treasurer in New York, a prominent man, a banker ; I called on Mr. Macy, the president of the Seaman's Bank for savings. Q. A large institution ? A. Yes, sir; one of the best. Q. Mr. Stewart? A. He was president of the U. S. Trust Co. Q. The largest trust company ? A. The largest on this continent, I believe; I called on several others ; I called on the representative men, representing the different moneyed interests in New York. Q. On the question of closing up this Third Avenue Savings Bank ? A. Yes, sir; they all, I believe, with one accord, said it ought not to be done under the circumstances, unless I wanted to injure the other banks, that that would be the general effect. [This is all taken subject to objection.] The Witness — I stated to all of them, not in detail, I had no figures with me, that this Third Avenue Savings Bank was insolvent and had got to be closed up ; we had got through with the question of merger, it did not amount to any thing practical ; they all agreed that it would be very inexpedient to do so just then ; I think Mr. Stewart suggested to wait until after the summer vacation; the char- acter of the assets were such that the bank would be no worse off than it was then at that time, and the public fever and the public mind would be cooled off, and it would be in the interest of the other bank's 528 that would be likely to be affected by delaying the matter until such time as it was safe to proceed. Q. Did you tell them also about the effect of closing this Third Avenue Savings Bank ? A. We talked that over, that this would precede the closing of quite a number of savings banks, as a natural consequence. Q. It did in fact, did it not ? A. It did in fact.' Q. How many banks followed the closing of the Third Avenue Savings Bank ? A. I think eleven others have been closed up since that time ; the panic of 1873 affected the banks more or less, particularly the small banks, during the year 1874 ; it was on that advice and in conjunc- tion with my own judgment in the matter that I postponed the clos- ing up of that bank until the time that I did, which was some six weeks. Q. I also ask you if prior, even whilst you were discussing this ques- tion of merger, if, as you understood it, there was a sensitiveness in the money market ? A. There was through May, and more or less in June, a good deal of sensitiveness. Q. Is it not the fact that the report of Dunn and Barlow showed that there were more failures during ^that six months than any six months for three or four years before ? A. Yes, sir ; five or six brokers failed in New York in June, brokers of long standing, and also the large London failures reported in the daily papers, and there was a good deal of anxiety in the minds of moneyed men in New York, more so than they had had since 1873. Q. You were looking for the interest of all the depositors of all the banks ? A. I considered it my duty as superintendent of the bank depart- ment, and I so regard it now, to look to the interests of the depositors in all those banks as well as one, and that any action that I might take at a specific time that would tend to injure the depositors gene- rally in the savings banks should be considered with a good deal of care and caution before action was taken. Q. At this time about how many depositors were there under your supervision ? A. There were over 800,000 depositors in savings banks alone. Q. What amount about on deposit in New York ? A. There was over $180,000,000 in savings bank deposits in New York state at that time. ■ Q. In your judgment the matter of closing up this Third Avenue 529 Savings Bank, to be followed by these other banks, was a matter you had got to proceed with great caution ? A. That is the way that I looked upon it, and I was Tery careful to proceed with caution. By Senator St. Jo-hut : Q. Is not the superintendent of the bank department governed by the law ? Does not the law point out what he has to do ? A. It does ; it gives him certain discretionary power ; I acted under the law ; I knew what the law was. By Mr. Chapman : Q. Did you consider it safe or expedient to do what you did then do, under the circumstances ? A. I would consider it very unsafe to the depositors generally, to have done different than I did. Q. Whether yon made a mistake of judgment or not ? A. That is for other people to say; my own judgment has not changed any in regard to it. Q. The charge is " neglect " in this delay ; was it a matter of neglect or a matter of judgment on your part ? A. It was a matter of constant anxiety and study all this time to do what was best for the savings bank interest. Q. If there was any mistake, it was a mistake of judgment? A. Purely ; I had no motive — could have no motive. Q. State if there was any relation existing between you and the Third Avenue Savings Bank, that would lead you to hesitate doing what you thought was the right thing ? A. None whatever; I had never met but one officer of the bank, and he perhaps for five minutes, in my life up to that time. Q. If there is any mistake here I will ask you whether it was a mistake of judgment or whether it was a mistake of neglect ? [Objected to. The facts show, and that is for the senate to pass upon. Objection sustained.] The Witness — I acted upon my judgment as to what was best for the savings bank interest. Q. Is this the original letter of September 29, 1875, written and handed to the attorney-general, on which this bank was closed ? [Handing letter to witness.] A. Yes sir; this is my own handwriting and it is the original letter. Q. In the charges, it is stated that your statement in the report sent to legislature in 1876, in regard to this savings bank, in which you stated that, on your recommendation, the attorney-general commenced an action and placed the institution in the hands of a receiver, is false ; what do you say to that ? 67 530 A. I say it is literally true. Q. Is it true that, on your recommendation, the attorney-general commenced an action and placed the institution in the hands of a receiver v A. It is absolutely true. Q. State what the effect of putting the Third Avenue Savings Bank into the hands of a receiver had upon other small banks which you had been trying to protect; what was it followed by? A. It was followed by the closing up, that same fall, of some five or six savings banks, and the next year as many more. Q. Suppose you had reported the Third Avenue Savings Bank to the attorney-general, and it had been closed up on the first receipt of your report, would the depositors have been affected generally? A. I think they would have been affected very seriously; much more so than at the time it was done ; after the failure of Duncan, Shearman & Co. — it was the great sensation at that time — subse- quent failures did not seem to affect New York or New York institu- tions as it had prior to that time ; the public seemed to be calloused and were looking for these things ; there were savings bank failures, and insurance companies failures, and private failures ; it got to be a sort of an epidemic. Q. If you had closed the bank on the receipt of the report of Mr. Reid, would the depositors in that savings bank have been benefited more than they were by waiting until the time when you did close it? A. Of course, that is a matter somewhat of opinion; some of them would have been benefited and some would not; I think the average would be about the same, I should judge. Q. Of course, some who were in there in March, 1875, were out when the bank was closed in September? A. Undoubtedly. Q. And some came in during this time who would be affected injuriously ? A. Yes, sir. Q. So the injury would be to different parties in some cases ? A. Yes, sir. Q. New depositors would suffer more than others ? A. They would have reason to feel worse about it. Q. And the parties who got out in the intervening time would feel better? A. Yes, sir ; somebody had to suffer. By Senator St. John : Q. Do you say you think if it had been closed up at that time, they would have got no more ? 531 A. I don't think they would ; I don't think it would have made much difference in the general result. Q. After this first of March there was no dividends made, was there? A. I don't know as matter of fact. Q. How was it in July ? A. I don't know now. Q. You don't know whether there was dividends made ? A. If I knew, it would be hearsay. Q. They were put into the hands of the attorney-general on this examination of March 23 ? A. Yes, sir. Q. You knew the bank, if it did not pay its interest, would fail right off ? A. Yes, sir ; I assume that they paid the depositors on the first of July dividends. By Mr. Chapman : Q. They had at their final closing up substantially the same assets that they had at the time of the examination in March ? A. Yes, sir. Q. I refer you to the letter of Mr. Keid to you, of March 24th, 1875, accompaning his report, and ask you whether that letter and the character of its contents was not one thing that led you to proceed with very great caution in regard to that bank ? A. It did in connection with the report. Q. I mean in connection with the other facts, and the surroundings and the times ? A. Whether this did, specially or not, I don't know ; all these facts coming to my knowledge influenced my action undoubtedly about that. Q. Some point has been made over the fact, or it has been claimed that the condition of the bank was worse in March, than reported to you by Mr. Eeid ; state whether it is not a fact, that the worse the con- dition of the bank at that date, the worse would be the effect of a pub- lic announcement ? A. Undoubtedly ; the worse the failure of an old institution like that, the greater the shock ; if the bank failed, and paid 90 cents on a dollar, the shock would not be half so great to the public as if it paid only 20 cents or 10 cents on the dollar. By Senator St. John : Q. How much did this pay ? A. Pdon't know ; it has never been closed up'yet ; I never saw the receiver until I saw him at this examination. 532 By Mr. Chapman : Q. I will ask you in regard to these personal bonds. I see in the report of the examination by Mr. Eeid of April, 1873, he returns $100, 000 personal bonds, guarantee bonds. Was that taken under your ad- ministration ? A. No, sir ; It was taken by Mr. Howell, after the examination in 1871. Q. Taken by him into the department and those bonds held in the department ? A. Yes, sir. Q. Treated as assets by him ? A. Yes, sir. Q. Afterwards I understand it was increased to $115,000. It ap- pears by his report of 1875, that there was $15,000 additional bonds ; were those ever brought up to the department ? A. No, sir; I never knew any thing about them, until they ap- peared in the report ; I can explain that ; it seems that the president Mr. Lyon, was abroad at the time they gave those bonds ; they were to give $115,000, and they made up the $100,000, and, when he came home subsequently, he put in his bond for $15,000; I think it was Mr. Green that made the $15,000 bond ; I never saw the bond, until the receiver was appointed ; then I think I saw it. Q. Do you know any thing in the law to prohibit giving the bond ? A. No, I do not; I think a superintendent would be clearly justi- fied, if he could save $100,000 to the depositors, by taking it. By Senator St. John : Q. These bonds were all by the trustees of the bank ? A. As I understand it, trustees and officers. By Mr. Chapman : Q. You don't know, personally, any thing in regard to their litiga- tion on this bond ? A. No, sir; I don't know any thing about it except as I see in the newspapers ; after the bank was handed over to the attorney-general 1 have no further supervision of it, and have no power over it. By Senator St. John : Q. Is there any law authorizing trustees of savings banks to use, in any form, the moneys of the institution, to borrow it, or have it di- rectly or indirectly ? A. They have no right to use it in anyway, as I understand the law, clear and emphatic, to get no personal benefit of it. 533 Q. Was that the law previons to the year 1875 ? A. It has always been the law; I have declined, since I have been superintendent, to take any personal bonds of that character. By Mr. Chapman : Q. In regard to the appointment of Mr. Carman what is there about that ; it is claimed that you got him appointed ? A. I can tell you what there is about it, so far as I am concerned ; I was in my office one morning, it now appears to be the 29th of September, 1875, and Mr. Carman and another gentleman, and Gov- Hoffman came in there sometime in the morning, perhaps about ten o'clock, or along there, and said — Gov. Hoffman introduced the con- versation — he said that he had come in about the affairs of the Third Avenue Savings Bank ; I said he was just in time, for I was then pre- paring the recommendation to the attorney-general to close the bank up; then Gov. Hoffman said, speaking for all the other gentlemen, I suppose, that they had stopped taking deposits, and had not taken any except special deposits, which they had put in envelopes, for some days, and the trustees had concluded that they could not go on; then we had a rambling talk about matters and things, and they went out; I sent the communication to the attorney-general, I think, while they were out; whether I ever saw them together again or not, I don't re- member; I think not, however. Q. Did you go over to the court in the appointment of Mr. Carman ? A. No, sir; never was near the court in regard to any appointment. Q. I see you swore to the complaint, which the attorney-general is- sued ; have you any recollection in regard to it ? A. No ; I have not ; but of course I did it as it appears so ; either I or my deputy had to swear to all the complaints in this matter; that is the usual form. Q. It was Gov. Hoffman that told you the trustees had made up their minds to wind up the concern ? A. He came there with the secretary, Mr. Carman, and another gen- tleman. Q. They said they were going to wind it up ? A. Yes, sir. Q. At what time had the letter of Mr. Eeid, accompanying the re- port of March, 1875, occurred to you ? A. No ; I had not thought of it. Q. At that time, also, I see in your letter, you allude to official in- formation which subsequently came to your attention ; you found that the bank had been in a bad condition for a year or so ? A. Yes, sir; the whole matter came up and Mr. Reid's report satis- 534 Bed me that all that deficiency could not have taken place since the date of their last report up to the time he made his ; I assumed that report was not correct at that time. By Senator St. John : Q. Which report was not correct ? A. The bank report of January 1, 1875, after getting Mr. Eeid's report. By Mr. Chapman: Q. Mr. Carman had recently come into the affair as secretary, had he not ? A. Yes, sir ; quite recently. Q. Prior to the receipt of the report of your examiner in March, 1875, did you have any reason to believe that there had been any change in the character or condition of the bank from what it was at the time it had been passed by your predecessor ? A. Except as shown by the reports. Q. No material changes ? A. No, sir. Gross-examination by Mr. Olmstead : Q. You have been present during all the examinations here during this Third Avenue Bank examination ? A. Yes ; I think so. Q. Did you ever see, while you were in the department, Mr. Hen- nessey's report ? A. Yes, sir; I have seen it. Q. When did you see it ? A. I can't tell you ; I never read it all through ; it is an immense mass of stuff. Q, How long ago did you see it ? A. I can't tell you. Q. Did you understand from that report that it represented this bank to be in a solvent or insolvent condition ? A. I never read the report; I took Mr. Howell's official statement ; I never read that report through. Q. What did you understand from it ? A. I did not understand any thing from it, except as I found it in Mr. Howell's report. Q. Did you or not take pains to inform yourself in regard to the condition of the bank ? A. No, sir ; I never did. Q. Did you yourself examine the papers and the records of the court 535 upon the application for the appointment of a receiver about which you have testified ? A. No, sir. Q. Do you know what those papers contain ? A. I know only as they appear reported in the newspapers. Q. How do you know then that the condition of this Third Avenue Savings Bank was presented to the court in these papers ? A. Because the papers show themselves as published. Q. How did you know it ? A. At that time, when I first went in, I did not know. Q. Did you ever know ? A. No, except as I saw it in the papers ; as I said before, I took Mr. Howell's official statement of the condition of the bank. Q. You never heard, except from the papers ? A. Yes, sir; I did from the clerks and the deputy. Q. You never yourself examined the papers to ascertain ? A. No, sir ; I didn't go back to examine any papers prior to my time. Q. Do you think, if the actual condition of these assets and this bank had been presented to the supreme court, they would have al- lowed it to continue in business ? A. I think they did ; I have no reason to think otherwise ; I judge what the court would do, by what it does. Q. Do you think if the actual condition of these assets and this bank had been presented to the supreme court, they would have allowed it to continue in business ? A. What time do you refer to ? Q. I ask you if, at the time when the application was made to the supreme court, this condition of affairs that exist now had been presented to the court, would they have allowed it to continue busi- ness ? A. I answer by saying they did refuse to appoint a receiver ; I am not going to give an opinion against the supreme court. Q. Do you know whether the condition of the bank remained the same after the application to the supreme court for a receiver as be- fore? A. So far as I know, it did. Q. Do you know ? ' A. I know only by the reports and the information from the office. Q. What information did you receive upon the subject ? A. The general fact that I have stated, that Mr. Howell made an exhaustive examination and decided and passed upon the question, all the questions that were brought up in connection with the bank. Q. Have you any other knowledge, except from hearsay, whether 536 the condition of the bank was the same, remained the same from the time of the application to the supreme court for the appointment of a receiver as before ? A. Yes, sir. Q. What? A. Official reports. Q. Then inform the committee what you discovered in regard to that bank, whether the condition did remain tiie same or did not ? A. The reports show they were substantially the same ; they are all in evidence. Q. But you don't know whether the condition of the bank was presented to the court in the moving papers ? A. Not of my personal knowledge. Q. While you have been superintendent, have you ever made any personal examination into the affairs of different banks, or any of them? A. Yes, sir. Q. Did you ever, or did you not, consider the condition of this Third Avenue Savings Bank such as to require your personal examination ? A. I d d not ; I had no particular reason for thinking so. Q. In your opinion was this Third Avenue Savings Bank solvent or insolvent in March, 1875 ? A. It was insolvent. Q. I desire to call your attention to the statute; the statute of 1871, chapter 693, in which it is provided that, " Whenever it shall appear to the superintendent, from any examination made pursurnt to the provisions of this section, that any savings bank or institution for savings has been guilty of a violation of its charter of the law, or is conducting business in an unsafe manner, he shall, by an order under his hand and seal of office, address to the institution so offending, directing a discontinuance of such illegal or unsafe practice and a con- formity with the requirements of its charter and of law; "do you consider, in March, 1875, this bank was conducting its business in a safe or unsafe manner ? A. I knew nothing about it being conducted in an unsafe manner; I knew, as a matter of fact, that it was insolvent ; how it got so, I don't know. Q. Do you consider that the bank at that time was conducting its business in an unsafe manner ? A. I cannot say I really did not ; I considered it insolvent and that law did not apply at all. Q. Yon cannot say whether you did or not ? A. I didn't regard that provision of the law in a case like that ap- plying where the bank was insolvent. 537 Q. Under what provision of law do you claim that you had the right to close the bank if you chose ? A. I closed it under the provision of the act of 1875, the general statute. Q. But you were acting under this act of 1871, prior to the act of 1875 ? A. Certainly. Q. State whether, prior to the act of 1875, you considered this bank was doing a business in a safe or unsafe manner ? A. I did not consider it doing business in an unsafe manner up to the time of Mr. Eeid's report in March ; then I considered the bank insolvent. Q. Do you consider those words, " an unsafe manner," applicable to the general banking interest, or only to the bank itself under consid- eration ? A. That word " unsafe," there, relates probably entirely to the indi- vidual bank, as you read it. Q. It is used in the same general manner in the law of 1875 ? A. Substantially. Q. It is under that general provision that you claim to have the power to close the bank ? A. No, sir ; under another provision. Q. Did you, under the law of 1871, have power to close the bank, as you understand it ? A. I think so. Q. Under that provision that I have read ? A. No, sir ; under another. Q. State what provision ? A. It is that where the superintendent deems it unsafe or inexpedi- ent for a bank to continue business, then he shall report it to the attorney-general. By Mr. Chapman : Q. Could you do it until the report of Mr. Keid in 1875 ? A. No, sir ; I don't think I could. Q. Under any provision of the law ? A. No, sir. By Mr. Olmstbad : Q. You could give notice to the attorney-general under the act of 1871 ? A. Yes, sir. Q. If you considered the bank doing a business in an unsafe man- ner? 68 538 A. I could, no doubt. Q. State whether in 1873, you considered the bank doing a business in an unsafe manner ? A. I saw nothing to induce me to believe they were doing business in an unsafe manner; that says " is " doing business; I didn't go back and see what they had been doing. Q. Then I understand you from your testimony, to say that in your opinion, those words have reference not to the particular bank which may be solvent or insolvent, but to the general banking interest? [Objected to.J Q. I understand you to say you didn't know or didn't think, be- tween the years 1873 and 1875, that this Third Avenue Savings Bank was doing a business in an unsafe manner ? A. I had no knowledge of it, except what the reports show, and they showed nothing. Q. Don't you think the reports show that they were doing business in unsafe manner? A. No, sir. Q. Didn't you think the report of 1873 did ? A. No, sir. Q. Or of 1875 ? A. That is the final report. Q. Are you familiar with the value of securities ? A. To some extent. Q. Do not you consider it your duty as superintendent to be familiar with bank securities ? A. A bank superintendent is not supposed to know every thing ; he is supposed to know some things. Q. Don't you consider it your duty to be familiar with the value of general securities ? A. Yes, sir, in a general way. Q. If you are not familiar, it is your duty to inform yourself, so far as they are taken by banks ? A. Undoubtedly. By Senator St. John : Q. In reference to these foreign stocks, had this bank any right, under the law, to take them ; I speak of North Carolinas ; and they have Virginia State bonds, Tennessee State bonds, Alabama State bonds ; Louisiana State bonds, Georgia State bonds and Kansas State bonds among their assets ; I make the simple inquiry, whether, in your opinion, that bank had any business in holding these securities at all ? 539 A. It depends altogether on the question of their market value at the time they were bought under the statute. Q. If they were above par in the market ? A. At, or above par at the time they were purchased. Q. The bank itself reports these stocks in the January report of 1875, at a cost of $313,264; they report the par value at $347,000 ; therefore, they were not par when they bought them; they must have been bought at a considerable discount — a discount of $35,000; that shows for itself, does it not ? A. They might have bought them under the charter; I don't know any thing about that, when they were bought, or the cost. By Senator Wbllman : Q. I would like to know if, in your opinion, the available fund clause of their charter would be repealed by a general act passed subsequently, prohibiting investments in southern securities ? A. I think it would ; they were permitted to hold any thing that they then held, until such time as they could dispose of them for the interest of the bank ; I will answer this way as matter of fact, some of the best New York savings banks, the very best we have got, hold these same class of bonds that were bought years ago ; for instance, a certain bank has $140,000 of North Carolinas, one of the largest banks in the city of New York, bought twenty years ago. By Mr. Olmstead : Q. The question I asked you was whether, where a bank was hold- ing securities that were worthless and not proper securities> whether a bank ought to be allowed to proceed in business holding those securi- ties? A. That would depend on the character of the rest of their assets ; I think if the bank was solvent they should be permitted to do busi- ness. Q. You think that this bank, after March, 1875, was doing business in a safe or unsafe manner ? A. They were doing business — the bank was in an unsafe condition but whether they were doing its business in an unsafe way that is another thing. Q. Do you suppose the act of 1875 merely refers to the manner in which the business was conducted ? A. Yes, sir. Q. Then on what power can you close a bank ? Can you close a bank at all, in your opinion, where it was totally insolvent, although it might be doing its business in a safe manner ? 540 A. I think there is ample power in the law to close up an insolvent savings bank. Q. You think the bank superintendent has a right to do it? A. He has a right to move the attorney-general to do it. Q. He has the right, under the act of 1875, to notify a bank to stop? A. He has a right to notify them to stop doing illegal practices, but not to close up the bank. Q. The act of 1875, section 44, provides thai " whenever it shall ap- pear to the said superintendent, from any examination made by him, or from the report of any examination made to him, pursuant to the requirements of such corporation, has committed in violation of its charter of law oris conducting its business and affairs in an unsafe or unauthorized manner, he shall by an order under his hand and seal order a discontinuance of such illegal or unsafe or unauthorized prac- tices," etc. ; the question is whether, in your opinion, on March 22d and 23d, 1875, this Third Avenue Savings Bank was conducting its business in au unsafe or unauthorized manner? A. The law for closing up savings banks is another provision there; this is to direct them to discontinue illegal practices under the hand and seal of the superintendent, and subsequently, there is a provision covering the case of closing a bank. Q. Did you consider it unsafe for that bank to continue its business after March 22 and 23, 1875 ? A. I did not consider it safe or expedient at that time to close that bank. Q. The question is, whether you considered it unsafe at that time for this bank to continue to transact its business ? A. In a general sense, probably, I did. Q. Do you consider that word, " unsafe," as applicable to the in- terest of the bank itself or to the general banking interest ? A. I should construe that word to refer to that particular bank. Q. Then was it not your duty, immediately upon your receiving that report of the 22d and 23d of March, 1875, to have notified the attorney-general, so that the bank could be closed ? A. No, sir; I don't think it was; I will explain it; if the legisla- ture intended that to be the fact, they would have said that, " when- ever a bank appears to be insolvent, it shall be the duty of the super- intendent to give the fact to the attorney-general forthwith." Q. It says he shall communicate the facts ? A. Whenever he deems it unsafe or inexpedient ; it clothes him with discretionary power. Q. That is your opinion ? A, That is the opinion of lawyers and judges . 541 Q. Do yon think it was a proper thing to do, where a bank is in- solvent and absolutely so, for that bank to continue receiving de- posits? A. As an independent proposition I should say not. Q. Is it or is it not your opinion, that you are confined in your duties to the circumstances and condition of each bank, without re gard to the other banks? A. No, sir, it is not; it was never held so by any superintendent that I ever heard of; otherwise, he would have no discretion. Q. You say that wherever you consider it for the general public good to continue a bank, in your opinion, although it is entirely in- solvent, may still continue to receive deposits and do business? A. Yes, temporarily. Q. For the space of six months ? A. That would depend on circumstances. Q. Why didn't yon proceed on the 22d of March to close this bank? A. I stated that the legislature was then engaged in passing a gen- eral savings bank law, with some peculiar provisions in it; that was one reason. Q. They are the same as you have stated on your direct examina- tion ? A. Yes, sir, they are ; I will state as an independent proposition, I should think it not only wise, but the duty to close up a savings bank, when it was discovered to be insolvent, if there were no other con- siderations interfering which would influence the superintendent to act differently. Q. You don't agree with Mr. Stewart, who testified the other day, in regard to that matter? A. Yes, sir, I do, perfectly. Q. He said that he thought it was not proper to continue after in- solvency ? A. lie swore that he advised me to continue this, as he really did. Q. I understand you to say that the general assets of this bank re- mained the same as you understand it, and the valuation so put upon them remained the same from 1873 to 1875 ? A. As far as the real estate goes, substantially the same. Q. Do you remember the testimony of Mr. Ludlow and Mr. Morgan in New York, the other day? A. Yes, sir. Q. Did you hear their testimony to the effect that real estate had largely depreciated during those years ? A. Yes; I heard that testimony. Q. Do you think that real estate did depreciate during these years? 542 A.. I think there was a perceptible depreciation took place in the fall of 1874 and the spring of 1875. Q. Then you do not agree with them in that matter ? A. I am giving my vhws. By Senator St. Johst : Q. Daring the year 1874, don't you think it rather depreciated? A. Not a marked depreciation ; that is my experience ; I will say one thing, that this witness swore under a misapprehension, Mr. Mor- gan, that bank property covers three lots instead of two ; one on Third avenue and two on Twenty-sixth street, aud he swore as to two lots. Q. You have stated, on your direct-examination, that during these examinations you had confidence in Mr. Eeid ? A. Yes, sir. Q. Have yon the same confidence in him now, after hearing the exa- mination ? A. He may have made some mistakes. Q. Did you examine these reports yourself, personally ? A. 1 presume I did, some of them. Q. Were you in the habit of doing it or not? A. I did not do it personally in all cases, unless there was some- thing special reported. Q Yon left it to yonr deputies ? A. To a great extent. Q. How long would it take you -in your opinion, to examine 200 reports ? A. That would depend very much on how much you examined them ; if you went to the different institutions to verify the reports, it would take the whole year and more. Q. Take the reports that are returned to you ? A. I could not tell you. Q. Is not that your business to do that thing ? A. No, sir, it is not. Q. What is your business ? A. It is a general superintsndency; it is not to do all the clerical work in the office. Q. Do you consider that clerical work ? • A. Yes, sir ; I have a man specially, in the first instance, that does it. Q. What is the business, then, of a bank superintendent, if not to examine the reports ? A. Many things. Q. What one thing is there ? A. The general business. 543 Q. I am talking about specific duties now ; do you know of any business you have, except to examine into the condition of the banks ? A. I have already stated that is generally his business. Q. You do not consider it your business to examine all the reports ? A. I do not say so ; I could not do it personally. Q. Could you not examine 200 reports? A. We have 400. Q. Could you not examine 400 report. A. It would depend on the character of the examination you made ? Q. I speak of the reading of the reports themselves ? A. It would take several months to read them and verify them. Q. I am not saying a word about verification. A. Then you do not examine them if you simply read them over. Q. How long would it take you to read them ? A. That would not take a great while. Q. How long? A. Take the schedules and everything, it would take some months. Q. Would it take you three months? A. That is a matter of opinion. Q. Would it take you three months to read four hundred reports? A. I could not give you the time. Q. Please look at the reports of 1875, shown you, and state how long it would take you, in your opinion, to read through that book ? A. There is not but little of it in that book ; there are several thousand sheets. Q. I want you to answer my question ; how long would it take you to read that book ? A. It would not take a great while. Q. How long would it take you to read through those printed re- ports as tabulated ? A. Not a great while ; I generally do that. Q. What do yoa mean by generally ? A. I do not read the report of the Bowery Bank, for instance ; where there is any bank that I have any suspicion about, or any thing that attracts my attention, I examine it more carefully. Q. Are these the only reports you read ? A. I don't say that ; I read all the reports ; I look over most of the reports. Q. You cannot say that you read them all ? A. No, sir, but some one in the office does it. Q. Then if your clerks in the office do not do their duty by giving proper extracts of these reports, you would not know what it contained ? A. I might and I might not ; many cases I probably should not. Q. You stated in your direct examination that your business is to 544 look after the interests of all the depositors of all the banks, and not after those of one only ? A. That is as I understand it. Q. Do you consider your duty as a bank superintendent would allow you at any time to ignore the interests of one bank or one set of de- positors for the general good of all the depositors ? A. That is a question difficult to answer; it is a matter of opinion or discretionary; as an independent proposition, in ordinary circum- stances, I have no hesitancy in saying that it would be the duty of the superintendent to close up the bank when he discovered it was insol- vent ; but there would be exceptional times and cases when he would be doing great injustice to proceed upon that theory. Q. Do you consider your duty as a bank superintendent would allow you at any time to ignore the interests of one bank or one set of depositors for the general good of all the depositors? A. I have answered that as fully as I know how. Q. You can answer it yes or no, can't you ? A. No, sir; I could not. Q. Don't you consider that in your course in the Third Avenue Savings Bank that while injustice would be done to all those persons who deposited after March, 1875, that such a course would be for the general good of all the banks and of the banking system? A. I considered the course I took in the interest of all the banks, and that was the sole and only motive. By Mr. Chapman : Q. By " bank " you mean depositors ? A. Depositors, of course. By Mr. Olmstead : Q. Do you not consider that where a bank is insolvent, the loss should fall wholly upon those parties who are interested in the bank at the time of its insolvency ? A. Undoubtedly that would be true as a general proposition. Q. How did it happen that these gentlemen from New York, the trustees of this bank, happened to be here on the 29th day of Septem- ber, 1875, when these proceedings were taken for the appointment of Mr. Carman as receiver ? A. I cannot tell you. Q. Did it happen as a matter or chance ? A. So far as I knew, at that time, of course, they informed me when they came there what their object was. Q. You intended to move on that day ? 545 A. I was moving at the time they came into the office ; I had the books and papers out examining the law, and said so to Gov. Hoffman. Q. Did you know at that time of the report of January 1, 1875, which was given by the bank officers to the department ? A. Yes, sir. Q. You knew at that time, of the report of March 22d and 23d, 1875 ? A. Most assuredly. Q. Did you not believe at that time, that the report made and sworn to by Mr. Carman and Lyons on the 1st of January, 1875, was false ? A. I don't know whether I thought of it or not, as a matter of fact, it was so indefinite. Q. Did you not consider it your duty at that time to prevent the appointment of a receiver like Mr Carman of that bank ? A. I don't think the question came up in that way ; the state authorities knew the fact ; the matter was talked over there. Q. That fact with the former report ? A. Nothing about the reports, but the fact that he was secretary to the bank. Q. Was there any thing said about his former reports between you ? A. I cannot say. Q. Did you notify the attorney-general of those former reports ? A. I presume not. Q. Did you or did you not think it your duty to inform those gen- tlemen of the facts of the report of Mr. Carman's back statements ? A. I only saw those gentlemen for a few minutes ; I don't think the fact occurred to me at all about those reports, in connection with Mr. Carman. Q. Was it not a very natural thing to occur to you, if you believed that a bank officer had sworn to what was false, and then trying to be- come a receiver ? A. I would, under the present light, but at that time I don't think that it occurred to me ; if I had regarded it as I do now, perhaps I should, although it is none of my business to appoint a receiver. Q. Did you have any reason to suppose, on March 22d, 1875, or after you saw that report, that the depositors subsequent to that period would be repaid their deposits ? A. I supposed under the action of the receiver they would get what- ever there was. Q. There was nothing in the nature of the case to lead you to sup- pose that they would be paid their deposits ? A. Unless the trustees should step in and pay them. Q. There was no proposition as that ? 69 5.4$ A. Yes, sir, there was ; T saw the secretary, aud laid the matter be- fore him. Q. Did they propose any such action ? A. That was talked over ; I hadn't much confidence in it myself. Q. Do you consider, or did you consider, that that $115,000 collat- eral bonds were a.ssets of the bank, ? A. I so treated them. Q. Do you think that a collateral bond is an asset, a bond that is given as collateral for a debt ? A. I did not understand it was a collateral bond; it was a bond to be paid under certain contingencies as I understand it. Q. Did yoi* consider that as an asset — would you consider that a collateral or guarantee bond was an asset ? A. If it was simply a guarantee bond it would be only good when the guarantee was enforced, but I do not understand that to be the purport of that bond entirely. Re-direct by Mr. Chapman : Q. You say that the loss from insolvency of the bank should fall on depositors at the time of the insolvency ; is that ever possible ? A. No, sir ; not absolutely. Q. The insolvency comes before even the officers of the bank them- selves know it ■? A. There is always a pivotal point between solvency and insolvency, Q. It runs along until a quarter or an annual day before the thing is discovered ? A. Yes, sir. Q. You were asked in regard to your having read Hennessey's reports through ; you said something about there being a large mass of re- ports ? A. Yes, sir ; a mass of figures and evidence taken from witnesses. Q. Could you verify the whole of them in six months ? A. No, sir. Q. So far as the action in the department and the court, in regard to these assets and the bank under Mr. Howell's time, you had Mr. Howell's deputy there with you ? A. Yes, sir. Q. And was in frequent conversation with him in regard to it ? A. Yes, sir. Q. You got your advice largely from him ; you assumed that, get- ting your facts from him, they would be correct ? A. There was the printed reports before me made by Mr. Howell and his deputy. 547 Q. Whether under the bank law you considered it unsafe or inex pedient to permit this bank to continue business as a general proposi- tion, situated as you were at the time ? A. No, sir; I did not; I thought it was in the interest of the bank and the depositors to permit it to continue business temporarily. Q. Counsel asked if you heard Ludlow swear that real estate com- menced to depreciate before 1874 ; you heard other witnesses swear that it did not commence to depreciate until the latter part of 1874, and the forepart of 1875 ? A. Yes, sir. Q. He next asked you if you looked over reports ; whenever there is any thing that comes up to attract your attention toward any specific bank, don't you then look over the report with care ? A. Always. Q. That is what you did in this case ? A. Yes, sir ; I don't look over the senator's, for instance. Q. You scan more or less the various reports that are presented to you? A. Yes, sir. By Senator St. John : Q. You say you don't look over mine. A. I say I don't examine yours as carefully as I would this* Q. That is the Newburg Savings Bank ? A. Yes, sir ; where a bank has never had any suspicion or trouble, and has a large suplus, we do not scrutinize it so closely. By Mr. Chapman : (J. Is it not true that, from about the middle of January until about the middle of March each year, you have something like a 1,000 sheets of manuscript coming into your office that has to be arranged, tabu- lated and placed in order and verified ? A. Yes, sir ; more than 7,000 sheets. By Senator St. John: Q. You say where a bank is in, as we say a " ticklish " position, you are more apt to look after it than you are before ? A. Yes, sir. Q. I call your attention to the report, made January 1, 1874, of this savings bank, in which they report the stocks of other States at $340,661, other stocks at $56,700, at the cost, I am taking now, making $397,361.87; they put them down at the cost and they are so expended here among the resources as $397,361.87; do you consider that a fair valuation of those stocks at that time ? A. I don't know now Tvhat they are. 548 Q. Was there any time when Virginia, Tennessee, Alabama, Louis- iana and Kansas state stocks were above par to your knowledge ? A. I think so; I am not positive; " Alabama H " wa s at one time at par. Q. But they have fell since ? A. Yes, sir. Q. I want to know whether you regarded that as a fair estimate as to the cost of those stocks at that time ; don't you think it is a liberal estimate for them ? A. Judging now from my present knowledge, I should say it was. Q. The par value was $440,000, and they are estimated at $397,000 ; do you think that was a fair valuation ? A. I can't say whether it was or was not. . Q. I want to call your attention to these items ; in looking over the assets of a bank, you have different heads for resources, you put down " bonds and mortgages ; " you put down " real estate ; " " cash in trust companies and in bank," and then you put down the amount of assets not included under any of the above heads and then among these items they put down $40,134.31 accrued interest; then they put down furniture and fixtures at $15,033.63 ; then they put down esti- mated value of stocks over cost $55,986. 18 ; I would like to ask you if you consider that a fair item to put in these assets after including other stocks at $397,000, then to add in this among their assets $55,986.18? A. Does that include real estate, too ? Q. Nothing about real estate ; it is the estimated value of stocks over cost ; do you think that is a proper item to put in the assets of this bank ? A. I should judge not now. Q. You never would have judged it was, would you, if your atten- tion had been called to it ? A. I cannot say how it was at the time. Q. By adding to that report that $55,986.18, they were able to show an excess of assets over liabilities of $6,973.67; January, 1875, the amount of assets of every description, not included under any of the above heads, the accrued interest, $61,492 ; how could there be accrued interest ? A. There is no doubt but what that is a false report ; I never saw that report until I got Mr. Reid's examination, then we compared them and found that was a cooked-up report. Q. Furniture and fixtures, $15,033.16; estimated value of real estate at Tarrytown over the cost, $31,000. That is added to this $138,000; estimated value of bank buildings and lots over cost, $8,- 549 051.35; estimated value of stocks over cost, $38,785.13. Of course you do not think those were proper entries to be put among assets of a bank, do you ? A. They would be if they were true. 550 STATE OF NEW YOEK: ) In Senate, April 23, 1877. j A message was received from the Governor in words following : scuTivB Chamber, Albany, April 23, 1877. '■' State of New York, Executive Chamber^ ) To the Senate : Since my message to the Senate of the date of April 5, 1877, recom- mendiug the removal from office of De Witt C. Ellis, Superintendent of the Banking Department, upon charges and proofs then presented, I have received additional charges against the same officer, which I herewith submit for your consideration. Of these, the following are made by Mr. John Mack, of 365 Fifth Avenue, New York : 1. That Mr. Ellis was informed in March, 1875, by Geo. W. Reid and W. F. Aldrich, bank examiners, that the bond street Savings Bank had made investments not authorized by law, and that it then had a deficiency of $20,000, in the annual income necessary to pay its dividends and expenses. The report of the gentlemen of their examin- ations made in March, 1875, attached to the next subsequent annual report of the department (see Assembly Documents, 1876, No. 97, pp- 269, 270), sustains this allegation. Mr. Mack adds that the bank was not put into the hands of a receiver until the following year, 1876. 2. That Mr. Ellis was informed in November, 1875, by George W. Reid, examiner, that the People's Savings Bank of New York city had a large deficiency of assets and a deficiency of $10,000 in annual income. The document previously quoted, page 316, sustains this allegation. Mr. Mack adds, that no reciver was appointed until 1876. 3. A similar charge a3 to the Traders' Savings Bank. 4. A similar charge as to the Abingdon Square Savings Bank, re- ported by the examiner in November, 1875, as having violated its char- ter by certain transactions in real estate, sustained by the document already quoted, page 264. 5. A similar charge as to the German Savings Rank of Morrisania, reported in April, 1875, as having a deficiency of $77,000 (see page 290 of document previously quoted), and allowed to go on until March, 1877, when it failed. 6. Charges of neglect of duty in reference to the Bank of Lansing- burgh, the New York State Loan and Trust company and the Loaners' Bank. 551 7. A charge that, in the autumn of 1873, he, John Mack, person- ally urged upon Mr. Ellis the importance of an examination of the Security Bank, informing said Ellis, that he, Mack, had reason to know that from $60,000 to $80,000 of its capital had been lost ; that Ellis refused and neglected to make an examination ; that in April, 1874, the bank failed, disclosing a loss of three-fourths of its capital. In addition to these, the following charge is made by Edward Mallon, of 434 West 28th street, New York city, to wit : That Mr. Ellis was informed by George W. Eeid and W. F. Aldrich, bank examiners, that in a written report of an examination made by them of the Third Avenue Savings Bank, on the 22d and 23d of March, 1875, that the bank was then insolvent, having a deficiency of assets of $219,226.81, and of annual income of $44,791; that there was also an old deficiency of $115,000, discovered in previous years, for which last named deficiency the defendant had taken the personal bond of the trustees of the bank. These allegations are sustained by the report of the examiners, found in Assembly documents, 1876, No. 97, page 330. Mr. Mallon alleges further that an additional deficiency of $100,000 had been covered up by adding that amount to the cost of the banking-house. He also alleges that the trustees are now resisting pay- ment of the bond of $115,000, on the ground that there was no con- sideration given. He also alleges that the same report revealed large investments in real estate not authorized by the charter, and that many of the other securities were of doubtful value; which allegations appear to be sustained by the report above cited. He also alleges that Mr. Ellis neglected to take any measures to close the bank, and that six months afterward, to wit, in September, 1875, it stopped payment; that during these six months great wrong was done by the trustees paying the deposits of certain favored friends and by the bank, in that period, inducing six hundred new accounts to be opened with it ; and that a statement made by Mr. Ellis, in his report of the 30th of March, 1876, to the effect that in consequence of the examination made in March, 1875, he, the superintendent, had caused the'bank to be closed, is untrue; that the loss to depositors is about $1,200,000, the dividend being only fifteen per cent. As the senate is already engaged in investigating charges similar to those heretofore presented, I have not deemed it necessary to submit those now made to Mr. Ellis for any preliminary explanation* on his part. The allegations contained in these, that Mr. Ellis was officially notified by his own examiners of the dangerous, and, in fact, insolvent condition 'of the institutions named, are in several instances amply sustained by the documentary evidence' cited. Whether he was guilty 552 in any of those instances of culpable negligence in delaying proper action after he had been so notified, is a matter of very ready proof or disproof before you. That there may be no technical objection to investigation of and action upon these charges, I again recommend the removal of De Witt C. Ellis from the office of superintendent of the banking department, as well upon the charges transmitted here- with as upon those heretofore presented and now under consideration in the senate. L. ROBINSON. Mr. Vedder moved that said message and accompanying documents be referred to the committee on banks, with instructions to investigate the same under the resolution heretofore adopted. The president put the question whether the senate would agree to said motion, and it was decided in the affirmative. TESTIMONY TAKEN BEFORE THE SENATE, ON CHARGES AGAINST DE WITT 0. ELLIS, SUPERINTENDENT OF THE BANK DEPARTMENT. 70 TESTIMONY TAKEN BEFORE THE SENATE ON CHARGES AGAINST DE WITT C. ELLIS, SUPERINTENDENT OF THE BANKING DEPARTMENT. In Senate. ) Saratoga Springs, Monday July 23, 1877. [ Mr. Tract — Mr. President, the first piece of testimony I propose to introduce will be found at page 354 of the printed proceedings had before the bank committee of the Senate. Mr. McGuire — Mr. President I would inquire whether it is the purpose to treat this testimony given before the committee as testi- mony in the case, or whether it is proposed to give the testimony de novo; I would like to have the counsel inform us what the inten- tion is ? The President — The chair supposes it is the intention of the counsel for the State to treat the book as testimony in the case, and to read such portions of it as the counsel for the State may desire to call the attention of the Senate to, and in the order of proof as he introduces his testimony ; is that the intention, Mr. Tracy ? Mr. Tract — Your honor has very briefly expressed the inten- tion. Where a thing has been examined into and the evidence taken, it is much more convenient, it seems to me, that the Senate should take it from the book rather than have it given over again, but we are under the order of the court, and if the Senate desires us to give it orally we will do it, but a great deal of time will be saved by taking it from the book. The President — Unless some Senator desires to submit the ques- tion to the Senate, the chair will decide that the testimony contained in the printed book shall be received as testimony in the case. Mr. Chapman — Mr. President, the point, as I understand, if my friend's suggestion is not in the nature of an objection to this specific part, it is in the nature of an objection to taking out one piece from the testimony and reading that before the Senate and leaving the rest unread or to be read by piecemeal. Now, I do not understand Mr. McGuire's objection to be to the testimony all going into the case, and it being in it would not be necessary to read part, and it seems to me as though it would be a little improper to read part without reading the whole. We have no objection to reading 556 the whole testimony, and at the same time we do not wish to impose upon the Senate, the members of which, I assume have read the whole of it, the delay of staying here to hear it, and if my friend' the counsel on the other side, consents, we will consider the whole of the testimony taken before the committee on the Third Avenue Sav- ings Bank case, in the case. The President — The chair supposes it is the intention of the counsel for the State to read the testimony in relation to each case introduced by the State, partly, I suppose, for the purpose of convenience in examining such witnesses as may be introduced by counsel for the State to complete or supplement certain testimony. It will be competent for the counsel to read the testimony introduced by the accused in relation to each case if the counsel shall so desire it. Mr. Chapman — Mr. President, to that course we have not the slightest objection. If the counsel on the other side will commence and read all the testimony which he desires, we will raise no objec- tion to it, with the privilege on our side of reading the rest. The only thing we object to, is the taking of certain items from this mass of testimony from their setting, if you please, and reading them in that way. The President — The testimony is all in the case. All the testi- mony in the book is testimony before the Senate, and there can be no difficulty in disposing of the matter. 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Building $180,000 00 Estimated market value of real estate 180,000 00 Amount of cash on hand 24, 868 49 In vault (to be verified by examiner's account) 4,478 97 In banks or trust companies (to be verified by cer- tificates of bank officers), viz.: First National Bank 2,652 83 National Park Bank 131 30 Murray Hill Bank 8,366 59 Manufacturers and Builders' Bank 9,238 80 Estimate or approximate calculation of interest ac- crued or due and unpaid on investments at this date, viz.: On bonds and mortgages 15,076 89 On stocks 12,71125 On call loans None . Guarantee bonds 100 M 3,022 22 On deposit in bank 175 00 Guarantee of Tarry town income 2,790 66 What amount of the above is more than three months overdue 32,776 02 Rent due and collectible, or accrued to date 650 00 Any other properties constituting assets, viz. : Guarantee fund, secured by bonds bearing seven per cent interest 100,000 00 Annual rental of real estate owned or leased, at cur- rent rates 27,460 00 Rate of interest on call loans None. Rate of iaterest on deposits in bank, etc., four to seven per cent : Interest credited January 1, 1872 142,344 45 Deposits that date 4,938,980 72 Interest credited July 1. 1872 .. ', 37,375 87 Deposits that date 1,321, 355 82 Interest credited January 1, 1873 39,169 98 566 Deposits that date $1,396,66190 Amount due depositors this date 1,445,337 51 Estimate of interest accrued this date 21,000 00 Any other debts or liabilities due or accrued this date, viz. : On mortgage due by bank 1 , 992 00 Ground rents due by bank 2,848 00 Interest received 779 67 Miscellaneous facts relating to the condition and conduct of business of the Third Avenue Savings Bank, in the city of New York, as found upon examination made by direction of the superintendent of the Bank Department, lith April, 1873 : Organization. Charter number of trustees 22 Number of vacancies 2 Number constituting quorum 8 Officers elected or appointed from trustees — President, first and second vice-presidents, secretary, surveyor and counsel. None receiv- ing salary except secretary. Officers, clerks and other employees not members of the board- Actuary, teller, two book-keepers and janitor. Standing or regular committees of the board, their powers and duties : 1. Finance — General supervision over the moneys of the bank, make investments and loans under the direction of the board of trus- tees. 2. Attending — Attend at the bank and make examinations from time to time and report to the board. 3. Nominate — Consider all propositions for new trustees, and report. Expenditures. Salaries, current rate, viz. : Secretary, $2,000 ; actuary, $1,800; teller, $1,800; book-keeper, $400 ; book-keeper, $400 ; janitor, $900 $7,300 00 Other expenses, basis 1872 : Rent, none. Internal revenue tax, 1873 779 67 Other taxes 3,400 00 Furniture, fixtures and repairs, legal expenses, printing and 567 advertising, stationery and blank-books, fuel, lights and attendance, other expenses $2,500 00 Conduct of Business. Eegular meetings ofjhe board, first Saturday after the first Monday in each month. Average attendance 1872, ten. Attendance of officers during business hours, president and secretary (all day). Attendance of trustees, moderate. Application for loans on bond and mortgage, how made ; informal application, to whom referred ? Finance committee. Eeport on value of property, by whom made ? Surveyor. To whom? Finance committee. In what form ? Certificate. Are applications for loans on bond and mortgage filed or otherwise preserved ? Filed by attorney. Ditto of reports concerning value of property? In book form at the bank. Action by vote or otherwise — by whom necessary before money is advanced on bond and mortgage ? Finance committee, under ap- proval of board. Ditto of stock investments ? Ditto. Ditto of call loans? Ditto. Ditto of deposits in bank ? Board of trustees' authority. How or by whom are the companies designated, in which insurance as security for loans on bond and mortgage, is effected ? In judgment of officers. Is the opinion of your counsel ever taken concerning the legality of investments, otherwise than on bond and mortgage ? When neces- sary. Opinion in writing or oral ? Oral. At what period does interest on deposits commence? January, April, July and October. During what time must a deposit remain to be entitled to interest ? Until dividend day, viz. , January and July. By what form of action is the rate fixed or declared ? By special re- solution of board of trustees. Is interest declared or fixed or promised in advance, or only at ex- piration of interest period ? Declared at the end of interest period. Is it based upon the ascertained profits or earnings of the interest period for which it is declared, after deducting expenses therefrom, or is it fixed arbitrarily ? From profits, after deducting expenses. 568 "Who is the responsible officer in charge of the conduct of business during business hours ? President and secretary. Hours during which bank is open ? Ten a. m. to 3 p. m., daily ; Monday, Wednesday and Saturday evenings, 6 to 8 o'clock. Who receive and pay money over the counters ? Teller and assist- ants. What memoranda or entries, made by the receiving-teller, of trans- actions ? Deposit ticket first entered in a blotter (when the money is recounted), and often in the deposit book. What ditto by paying teller ? Receipts taken for all payments, and afterward entered in draftbook. Who revises and compares these with cash at close of business ? Book-keepers enter tickets which must agree with cash of tellers. How often revised and checked and compared by anyother officer or committee ? Revised by officers during the day. In whose custody, or accessible to whom, are the securities of the bank kept ? President, secretary and actuary. How often and by whom examined ? By attending committee, at various times. How is their correctness /verified ? By stock register and general ledger account. At these examinations is the cash actually counted? Yes. How is amount of cash deposited in bank ascertained by them? By certificates from banks. Reports and statements of total cash received and disbursed made by whom ? Secretary and actuary. Towhom ? Board of trustees. How often ? Monthly. In what form ? Statements. How and by whom verified ? Exam- ined by board. Ditto of assets and liabilities ? By officers. Bonds of officers, etc., viz. : Secretary, $10,000; actuary, $5,000; teller, $5,000 ; two book-keepers, $5,000 ea. ; janitor, $1,000. In whose custody ? President's. Number of open accounts ? April first, 1873, 8,673; 14th, 8,633. Largest single ? Five thousand dollars. Number exceeding $5,000 ? None over $5,000. Average one thousand six hundred and seventy-four. Are depositors allowed to draw checks upon their account ? In two or three instances when the pass-book is with the bank. By whom must the checks of the institution be signed ? President and secretary. Has any officer or trustee, to your knowledge or according to your belief ever received any commission or part of commission, or any bonus from any person, on any loan on bond and mortgage, or on the purchase or sale of any stocks or bonds by this institution ? No. 569 Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the first day of July, 1873, made to the Superintendent of the Banking Department, as required by chapter 163 of the laws of 1857 : Eesoubces. 1. Bonds and mortgages, as per chedule A, hereto annexed $274, 100 00 2. Stock investments, as per Schedule B, hereto annexed, cost 397,361 87 3. Eeal estate, banking buildings, covering two lots, Third Avenue and Twenty-sixth street, cost, 166,651 96 4. Eeal estate, nine (9) houses and lots New York city, cost and market value, interest paying, 275,000 00 5. Eeal estate, at Tarrytown, Westchester county, N. Y., cost seven per cent, interest guaranteed, 138, 000 00 6. Individual bonds bearing seven per cent interest, 100,000 00 7. Furniture and fixtures ' 15,033 63 8. Cash on deposit in banks or trust companies, as per Schedule F, hereto annexed 36,997 82 9. Cash on hand not deposited in bank 21,042 91 10. Amount of assets not included under either of the above heads, the particular items of which are set forth in Schedule G-, hereto annexed, 88,441 78 $1,512,629 96 Liabilities. 1. Amount due depositors: Principal $1,465,041 97 Interest credited for the 1st of July, 1873 40,376 61 $1,505,418 58 3. Excess of assets over liabilities 7,211 38 C ' \ss ■ $1,512,629 96 STATE OF NEW YOEK County of New York Thompson W Decker, president, and David Morgan, secretary, of the Third Avenue Savings Bank, an incorporated institution for savings located and doing business at Third avenue, corner Twenty- sixth street, in the city of New York, being duly and severally sworn, each for himself, saith that the foregoing report and the schedules accompanying the same are, in all respects, a true statement of the 72 570 condition of the said institution before the transaction of any business on the morning of the first day of July, one thousand eight hundred and seventy-three, in respect to each and every of the items and par- ticulars above specified, according to the best of his knowledge and belief. T. W. DBOKEK, President. DAVID MORGAN, Secretary. Severally subscribed and sworn by both deponents the 22d day of July, 1873, before me, Henry C. Weeks, Notary Public (50), New Fork County. Report of tne Tliird Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the \st day of January, 1874, made to the Siiperintende?it of the Banking Department, as required by chapter 136, of the Laws of 1857. FINANCIAL. Resources. 1. Bonds and mortgages, as per Schedule A, hereto annexed $272,400 00 2. Stock investments, as per Schedule B, hereto annexed 397,361 87 3. Real estate, bank buildings covering two (2) lots, Third avenue and Twenty-sixth street, cost, 166,651 95 Real estate, nine (9) houses and lots, New York city, cost, market value, interest paying 275,000 00 Real estate at Tarrytown, Westchester county, N. Y., cost and market value 138,000 00 4. Individual bonds of trustees, bearing seven (7) per cent interest 115,000 00 5. Furniture and fixtures 15,033 63 6. Cash on deposit in banks or trust companies, as per Schedule F, hereto annexed 21,886 75 7. Cash on hand not deposited in bank 28,987 72 8. Amount of assets not included under either of the above heads, the particular items of which are set forth in Schedule Gr, hereto annexed. . 96, 120 49 Total $1,526,442 41 571 Liabilities. 1. Amount due depositors, viz. : Principal $1,430,610 66 Interest credited for the 1st of January, 1874 42,129 39 $1,472,740 05 2. Oilier liabilities, viz. : Demand loan on bonds 46,000 00 Internal revenue tax 728 69 3. Excess of assets over liabilities 6,973 67 Total $1,526,442 41 Statistical. 1. Number of open accounts on the morning of January 1st, 1874 8,301 2. Number of accounts opened during the year 1873, 1,731 3. Number of accounts closed during the year 1873, 2,124 4. Number of accounts opened since organization.. 59,703 5. Amount deposited not including interest credited during 1873 ■•■•.... $789,413 21 6. Amount deposited, including interest credited, for the same period 868,959 80 7. Amount withdrawn, during the year 1873 835,011 04 8. Amount of interest or profits earned during the year 1873 114,468 78 9. Amount of interest credited to depositors for the same period 79,546 59 10. Amount of each semi-annual credit of interest for the year 1873, and when credited: January 1, 1873, $39,169,98 ; July 1, 1873, $40,376,61; credited at other periods during the year. . . . None. 11. Rate per cent of dividends or interest to depos- itors during the past year six (6) per cent on sums up to $5,000, five (5) per cent on sums above. STATE OF NEW YOEK, ) County of New York, j ss ' ' Thompson W. Decker, president, and David Morgan, secretary of the Third Avenue Savings Bank, an incorporated institution for sav- ings, located and doing business at Third avenue, corner of Twenty- sixth street, in the city of New York, being duly and severally sworn each for himself saith that the foregoing report and the schedules accompanying the same are, in all respects, a true statement of the condition of said institution before the transaction of any businesson 572 the morning of the 1st day of January, 1874, in respect to each and every of the items and particulars therein specified, according to the best of his knowledge and belief. T. W. DECKER, President. DAVID MORGAN, Secretary. Severally suscribed and sworn by both deponents the 26th day of January, 1874, before me, Henry 0. Weeks, Notary Public (50), Neiv York County. Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the 1st day of July, 1874, made to the Superintendent of the Banking Department, as required by chapter 136 of the Laws of 1857. S Resources. 1. Bonds and mortgages, as per Schedule A, hereto an- nexed $272,400 00 2. Stock investments, as per Sehedule B, hereto an- nexed 369,964 87 3. Real estate, bank building covering two (2) lots. Third avenue and Twenty-sixth street, cost 166,651 95 Real estate, nine (9) houses and lots, New York city, cost and market value, estimated interest paying, 275,000 00 Real estate, 92 acres of land, Tarrytown, West- chester county, N. Y., cost 138,000 00 4. Individual bonds of trustees bearing 7 per cent in- terest 115,000 00 5. Furniture and fixtures 15 , 033 63 6. Cash on deposit in banks or trust companies, as per Schedule P, hereto annexed 39,243 92 7. Cash on hand not deposited in bank 20,707 25 8. Amount of assets not included under either of the above heads, the particular items of which are set forth in Schedule Gr, hereto annexed 128,170 45 $1,540,172 07 Liabilities. 1. Amount due depositors : Principal $1,436,819 48 Interest credited for the 1st of July, 1874 40,472 18 11,477,291 66 573 2. Other liabilities, viz. : Demand loan on bonds $45,000 00 Internal revenue tax 649 36 3. Excess of assets over liabilities 17,231 05 K, 1 $1,540,172 07 STATE OP NEW YOEK County of New York I, Daniel Bates, vice-president, and David Morgan, secretary of the Third Avenue Savings Bank, an incorporated institution for savings, located and doing business at No. 354 Third avenue, corner Twenty- sixth street, in New York, being duly and severally sworn, each for himself stiith, that the foregoing report and the schedule accompany- ing the same are, in all respects, a true statement of the condition of the said institution before the transaction of any business on the morn- ing of the 1st day of Jnly, 1874, in .respect to each and every of the items and particulars above specified, according to the best of his knowledge and belief. DANIEL BATES, Vice-President. DAVID MORGAN, Secretary. Severally subscribed and sworn by both deponents the 24th day of July, 1874, before me, Luther Wise, Commissioner of Deeds in and for Neiv York Co. Report of the Third Avenue Savings Bank, an incorporated institu- tion for savings, of its condition on the 1st day of January, 1875, made to the Superintendent of the Banking Department as required ly chapter 136 of the Laios of 1857. Resources. 1. Bonds and mortgages, as per Schedule A, hereto an- nexed $269,850 00 2. Stock investments, as per Schedule B, hereto an- nexed 361,214 87 3. Eeal estate, bank buildings, covering two lots, Third avenue and Twenty-sixth street, cost 171,948 65 Real estate, nine houses and lots, New York city, cost and market value 288,618 51 Real estate, 92 acres of land at Tarrytown, West- chester county, New York, cost 138,000 00 4. Individual bonds of trustees, bearing seven per cent 574 interest. ■. . . $115,000 00 5. Furniture and fixtures 15,033 03 6. Cash on deposit in banks or trust companies, as per schedule F, hereto annexed 16,010 10 7. Cash on hand not deposited in bank 11,914 21 8. Amount of assets not included under either of the above heads, the particular items of which are set forth in schedule (J, hereto annexed 139,329 05 $1,526,919 02 Liabilities. 1. Amount due depositors : Principal $1,413,931 53 Interest credited for the 1st of January, 1875 41,026 84 $1,454,958 37 2. Other liabilities, viz. : Demand loan on bonds 65 , 000 00 3. Excess of assets over liabilities 6, 960 65 $1,526,919 02 Statistical. 1. Number of open accounts on the morning of Janu- ary 1, 1875 8,117 2. Number of accounts opened during the year 1874, 1,562 3. Number of accounts closed during the year 1874, 1,746 4. Number of accounts opened since organization. . . . 61,244 5. Amount deposited, not including interest credited during 1874 $680,296 89 6. Amount deposited, including interest credited, for the same period , 762,898 46 7. Amount withdrawn during the year 1874 779,577 59 8; Amount of interest or profits received or earned dur- ing the year 1874 108,339 77 9. Amount of interest credited to depositors for the same period 82,601 57 10. Amount of each semi-annual credit of interest, for the year 1874, and when credited, January 1, 1874, $42,129.39; July 1, 1874, $40,472,18. Credited at other periods during the year, none. 11. Rate per cent of dividends or interest to depositors 575 during the past year, six per cent from one dol- lar to $5,000 ; five per cent above $5,000. State of New York> ) . County of New York, \ John H. Lyon, president, and William S. Carman, secretary of the Third Avenue Savings Bank, an incorporated institution for savings, located and doing business at Third avenue, corner Twenty-sixth street, in the city of New York, being duly and severally sworn, each for himself, saith, that the foregoing report and the schedules accom- panying the same are, in all respects, a true statement of the condition of said institution before the transaction of any business on the morning of the first day of January, one thousand eight hundred and seventy-five, in respect to each and every of the items and par- ticulars therein specified, according to the best of his knowledge and belief. JOHN H. LYON, President. W. S. CARMAN, Secretary. Severally subscribed and sworn by both deponents, the 23d day of January, 1875, before me, George Hill, Commissioner of Deeds. 576 o o c o o o o o o o © o © CO C5 N ^ ^2 ^s s S ©©oo©ooo ©©oo©©o© ©©©O©©©© © © © £- © -* iO © © IO © £ * CO GO © O S> S> 00 CO CV -^ S9 GN! 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J-> CO 22 c3 „, fl W ■S .3 S bo'co ^3 o'3-g oj O — i CO pq fl a C8 C3 O CD 23 -« ^£ g gb § CO -^ O © © ,-: "° © i-H © e& £ ° o CO a ■* cS • © • ©'© • O © • "^-* " GO rH ' bfibcS -u +^ -4j rH *H CO oo s a£ co coSg tn DO Gx „ - d © © a © © CD 00 a © * O pi o o — ' s -^^ CO CO M qq a a c a o o -^ o wwwa SP bJD o s TS a cS ^3 a o ^3 CD ch 53 -a a a gS cs=g a CD rH g a o a ■+= !- .s 581 (BOOri © 0: 00 CO 00 eo to c* e» © -n c* rH rH ui ■3 ^Or(IN rH rH NlOOOl CO CO €&H W rH ** ^H rH W -* -* 1-1 I-H «© J> O Ol © O O IO O CO © O © IO O c . +j a « . . . . . ^^ ^s ft ^ +a s -^ CQ d t &H at -+J ho tH c3 e O bo n5 w a i> M X! t- CO £- tJ< ID fcn izi H EH a o o to bo a a a "" o _ - OQ 9 ° til a? g-fe 4 ™ a o o o if 0Q a) S>J0 ^ Sh *" M O ,1-1 ^ fll ~ W as eg -*-s I — I W02 a o >1 o a '3 CD IO<4 583 New York, March 24, 1875. Hon. D. C. Ellis, 'Superintendent : Dear Sir. — Inclosed I hand you report in Third Avenue Savings Bank. There is $13,000 due from trustees for interest on their bonds ; only a few of them having paid any thing the past year. Mr. Lacy, who was on the bond for $2,500, is dead, and his executors will contest the payment of the amount. Andrew Stevens ($10,000) has failed and James Stevens ($10,000), it is supposed has "softening of the brain," and from present appearances very little will be collected on the bond. The honse on Fifth avenue, $85,000, has not been rented for two years past. The trustees have sold $150,000 Kansas at par, but have not shown much financial capacity in their recent purchase of $55,000 Tennessee bonds at 51. The January report was "made up "for the occasion, all the stocks or bonds being put in at par ; over $20,000 past due coupons counted in as accrued interest; $31,000 added to the value of the Tarrytown property, etc., etc. All the "ability and pluck" shown three years ago during the "run " has apparently disappeared, and the old adage of "rats leaving a sinking ship " is being verified in the resignation of a number of trustees during the past year. I do not think the depositors will re- ceive more than fifty cents on a dollar. Yours truly, GEORGE W. REID. The examination of the bank made by the department in 1875 ; showed conclusively that the interest of the depositors required the bank to discontinue business, and on my recommendation the Attorney- General commenced an action and placed the institution in the hands of a receiver. Whether it would have been better had a receiver been appointed in 1871 instead of 1875, is a question mostly speculative. "At a meeting of the board of trustees of the Third Avenue Savings Bank, held at the banking-house on Tuesday, September 28, 1875, at 7£ P. M., were present — Daniel Bates, president; Messrs. Brums, Moulton, Seiter, B. A. Lyon, Hartt, Feeg, Ford and Harrison. On motion of Mr. Brums, and seconded by Mr. Ford, the following resolution was unanimously adopted: Whereas, The recent pecuniary embarassment of this bank, aris- ing from the long-continued stagnation of business, and^the consequent continued depreciation in the value of the securities and real estate held by the bank, render it evident that the bank cannot safely con- tinue business or offer a reasonable security to those who deal with it therefore, 584 Resolved, That it is expedient that the bank be dissolved, and its business affairs wound up. Resolved, That the officers of the bank be authorized to take the advice of the Bank Superintendent upon the best mode of effecting such dissolution, and that they be empowered to take all such steps in the matters as they may find for the best interest of the bank and its depositors. Resolved, That any new moneys hereafter received on deposit be kept separate and in trust for those making such deposits. W. S. CARMAN, Secretary." Judgment roll marked Plaintiff's Exhibit No. 7, May 18, 1877, S. B. H. PLAINTIFFS EXHIBIT No. 7. SUPREME COURT — Albany County. The People of the State of New York against The Third Avenue Savings Bank. To the defendant above named : You will please take notice that on the annexed papers this court will be moved, at a Special Term thereof, to be held at the City Hall in the city of Albany on the 29th day of September, 1875, at ten o'clock in the forenoon, that the Third Avenue Savings Bank, the defendant above named, its officers and agents be restrained and enjoined from exercising any of its corporate rights, franchises or privileges and from collecting or receiving any debts or demands and from paying out or in any manner transferring or delivering to any person any of the moneys, property or assets of the said corporation and that a receiver of the property and effects of said corporation be appointed pursuant to the provisions of the Revised Statutes and laws of this State with all the power and authority conferred upon receivers in such cases and that said plaintiff have such other or further relief in the premises as may be proper with costs of this motion. Yours, etc. , DANIEL PRATT, Attorney- General, Plaintiff's Attorney, Albany, N. Y. At a Special Term of the Supreme Court of the State of New York held at the City Hall in the city of Albany, on the 29th day of September, 1875. Present — Hon. A. Melvin Osborne, Justice. 585 The People oe the State of New York against The Third Avenue Savings Bank. On reading and filing the summons and complaint, report of Hon. De Witt C. Ellis and the affidavit of Daniel Bates, and a notice of this motion ; after hearing Charles S. Fairchild, Deputy Attorney- General, on behalf of the plaintiff above named, and John T. Hoff- man on behalf of the above-named defendant, and after due delib- eration thereupon had, it is. Ordered, That William S. Carman, of the city of New York, be and he hereby is appointed receiver of all the corporate property, assets and effects held by it. It is further ordered that such receiver, before entering upon the duties of his office, execute a bond, to be signed by himself and suf- ficient sureties, to be approved, after notice of application therefor to the Attorney-General, by a justice of the Supreme Court, as to its form and sufficiency, and mariner of execution, in the penal sum of $400,000, said bond to be given to the People of the State of New- York and to be filed in the Albany county clerk's office. It is further ordered that said receiver have and enjoy all the powers and duties conferred upon such receivers by the Eevised Statutes of the State of New York, and the laws thereof; that all moneys received by him and all the securites and obligations now held by said defendant, The Third Avenue Savings Bank, excepting the sum of $10,000, to be retained by said receiver for the payment of necessary and incidental disbursements, be deposited with the United States Trust Company, of the city of New York, to be held by said last-named corporation, subject to the further order of this court, and to the credit of the defendant in this action, said money and securities so deposited as aforesaid with said United States Trust Company not to be delivered over by it, except subject to and in pur- suance of the order of this court. It is further ordered that said corporation, The Third Avenue Sav- ings Bank, its officers and agents be restrained and enjoined from exercising any of its corporate rights, privileges or franchises and from collecting or receiving any debts or demands, and from paying out or in any manner transferring or delivering to any person other than the receiver above named any of the moneys, property or effects of the said defendant above named. A. M. OSBORN, Justice Supreme Court. Wm. E. Haswell, Cleric. Indorsed : Recorded in Albany county clerk's office, September 29, 1875, 4.15 p. M., in book of orders appointing receivers of judgment debtors, at page 422, etc. WM. E. HASWELL, 74 Clerk. 586 SUPREME COURT — County of Albany. The People of the State of New York against The Third Avenue Savings Bank. To the above-named defendant : You are hereby required to answer the complaint of the plaintiff herein, a copy of which is hereto annexed, and to serve' a copy of your answer on me at my office in the State Hall, in the city of Albany, N- Y., within twenty days after the service of this summons, exclusive of the day of service, or the plaintiff will apply to the court for the relief demanded in the complaint. DANIEL PRATT, Attorney-General, Plaintiffs' Attorney. SUPREME COURT — Albany County. The People of the State of New York against The Third Avenue Savings Bank. The above-named plaintiffs, by Daniel Pratt, their Attorney-Gen- eral, complain of the defendant, and allege: That the defendant is a corporation duly created and organized under and in pursuance of an act of the Legislature of the State of New York, entitled "An act to incorporate the Bloomingdale Savings Bank," passed April 17, 1854, and an act entitled "An act to amend an act entitled 'An act to incorporate the Bloomingdale Savings Bank,'" passed April seventeenth, one thousand eight hundred and fifty-four, passed February 24, 1859, and " An act to amend ' An act entitled An act to incorporate the Bloomingdale Savings Bank,'" passed April 17, 1854; and " An act amending the same," passed Feb- ruary 24, 1859, passed April 1, 1865 ; and " An act in relation to the Third Avenue Savings Bank," passed April 25, 1867, and the several acts amendatory of those above mentioned. That said corporation has for several years last past conducted and carried on in the city of New York, in the State aforesaid, the busi- ness of a savings bank. That said corporation is now and Jhas been for more than one year last past insolvent, and unable to pay its debts and the liabilities of the said corporation arising from the deposits of money made therein, have been and are very much greater than, and far in excess of, the value of all the assets of said corporation. That, in pursuance of chapter 371 of the Laws of the State of New York, passed in the year 1875, and chapter 693 of the Laws of 1871, the Superintendent of the Banking Department of the State of New York has caused said corporation to be visited and examined by two ,}■ 587 competent persons appointed by him for that purpose, and said Super- intendent has sent a communication to the Attorney-General of the State of New York, a copy of which is hereto annexed and made part of this complaint. Wherefore, these plaintiffs demand judgment, first, that said corpo- ration, the defendant above named, be dissolved ; second, that said cor- poration, its officers and agents be restrained and enjoined from exer- cising any of its corporate rights, privileges or franchises, and from collecting or receiving any debts or demands, and from paying out or in any manner transferring or delivering to any person any of the mon- eys, property or effects of the said corporation ; that a receiver of the properly and effects of the said corporation may be appointed pursuant to the provisions of the Revised Statutes and laws of this State, with all the powers and authority conferred upon receivers in such cases ; that the plaintiffs have their costs of this action. DANIEL PRATT, Attorney-General,, Plaintiffs' Counsel. STATE OP NEW YORK, Albany Oitt and County, DeWitt 0. Ellis, of said city, being duly sworn, says: That he is the Superintendent of the Banking Department of the State of New York, and is familiar with the facts set forth in the foregoing com- plaint; that the aforesaid complaint is true of his own knowledge, except as to those matters therein stated on information and belief, and as to those matters he believes it to be true. D. 0. ELLIS. Sworn to before me, this 29th day ) of September, 1875. \ **' - R. M. Baebee, Commissioner of Deeds, Albany, N. Y. STATE OP NEW YORK: Bank Depaetment, ) Albany, September 29, 1875. ) Hon. Daniel Peatt, Attorney-General: Sib.— In pursuance of section 44 of chapter 371, Laws of 1875, I hereby call your attention to the condition of the Third Avenue Sav- ings Bank, in the city of New York. Prom the official report made by Geo. W. Reid and W. F. Aldrich, examiners duly appointed by me to examine into the affairs of said savings bank, it appears that on the twenty-third -day of March last the liabilities of said bank were $1,443,112.39 and the assets were $1,223,886.08, showing a deficiency of assets, with which to meet its liabilities, of $219,229.81. From official knowledge I have reason to believe that the deficiency has largely increased since that date, and that the condition of said !• ss.. i 588 bank is such that it is no longer safe or expedient for it to continue its business. I would, therefore, recommend that you take such legal proceedings in the premises as may be required to close up its affairs. Kespectfully yours. D. C. ELLIS, Superintendent. STATE OP NEW YORK, City and County of New York, Daniel Bates, of the city of New York, being duly sworn, says that he is the president of the Third Avenue Savings Bank, defendant in the above-entitled action, that the allegation of the complaint and the certficate or communication of D. C. Ellis, superintendent, etc., hereto annexed are true. DANIEL BATES. Sworn to before me, this 29th day of September, 1875. R. M. Barber, Commissioner of Deeds, Albany N. Y. Indorsed: Eiled September 29, 1875, 4.15 p. M. SUPREME COURT — Albany County. The People of the State of New York against The Third Avenue Savings Bank. And now come the Third Avenue Savings Bank, defendant above named, by M. T. & L. G. Hun, its attorneys, and answers the com- plaint of the plaintiff and alleges: That the defendant is and was, during the times mentioned in the complaint, a corporation duly created and organized under and in pursuance of the laws of the State of New York, and carried on business in the city of New York- as in the complaint alleged; that the several allegations in the com plaint contained, as to the financial condition of the defendant and as to the Superintendent of the Banking Department of the State of New York, are true. M. T. & L. G. HUN, Defendant' s Attorneys, Albany 2V". T. SUPREME COURT — Albany County. The People of the State of New York against The Third Avenue Savings Bank. To Messrs. M. T. & L. G.Hun, Defendant's Attorneys. Gentlemen. — Take notice that on all the pleadings and papers, record and proceedings had in this action, this court will be moved at a Special Term thereof, to be held at the City Hall, in the city of Albany, on the 4th day of October, 1875, at the opening of the court 589 on that day or as soon thereafter as counsel can be heard that judg- ment of dissolution be entered against the defendant above named, and that a receiver of its assets and effects be appointed, and that the plaintiff have such other or further order or relief in the premises as may be just. Yours, etc. DANIEL PRATT, Attorney-General, ■Plaintiff's Attorney. At a Circuit Court and Special Term of the Supreme Court of the State of New York, held at the City Hall, in the city of Albany on the 4 th day of October, 1875. Present — Hon. T. R. Westbeook, Justice. The People oe the State of New York against The Third Avenue Savings Bank. This cause coming on to be heard on the complaint, report of Hon. De Witt 0. Ellis, the affidavit of Daniel Bates, the answer of the defendant and a notice of motion for the final decree herein, after hear- ing Charles S. Fairchild, Deputy Attorney-General, on behalf of the plaintiffs above named, and Hon. John T. Hoffman and Marcus T. Hun, Esq., on behalf of the above-named defendent, it is ordered, adjudged and decreed, First. That the defendant above named, The Third Avenue Sav- ings bank, be, and the same is hereby dissolved, and that from hence- forth it determine and cease to exist as a body corporate. Second. That William S. Carman, of the city of New York, be and is hereby appointed receiver of all the stock, property, things in action and affects, real and personal of such corporation, The Third Avenue Savings Bank, and of all property held by it with the usual powers and duties in such cases enjoyed and exercised by receivers, according to the practice of this court. Third. That before entering upon the duties of his office, such receiver make, execute and deliver himself, and cause to be excuted and delivered by at least two sufficient sureties, to be filed with the clerk of Albany county, a bond to the people of the State of New York in the penal sum of seventy-five thousand dollars, conditioned for the faithful execution by said receiver of the trust in him placed, and the due performance of all duties appertaining thereto ; said bond to be approved as to its sufficiency, form and manner of execu- tion, by a justice of the Supreme Court after due notice of the time and place of the making of the application for such approval has been 590 first given to the Attorney-General of the State of New York, upon the filing of which bond thus approved the receiver is authorized and directed to take possession of and sequestrate the stock, property, things in action, and effects real and personal of said corporation, and to take and hold all property held by or in the possession of said corporation. Fourth. That all money, personal property, choses in action and effects of or held by said corporation, and all securities and obliga- tions belonging to said corporation coming into the hands of said receiver, except articles of furniture and corporate books, and except the sum of ten thousand dollars to be retained by said receiver for the payment of necessary and incidental disbursements, be deposited wilh the United States Trust Company, of the city of New York, to be held by said last-named corporation, subject to the further order of this court and to the credit of the receiver in this action ; said money and securities so deposited as aforesaid with said United States Trust Company, not to be delivered over by it, except subject to and in pursuance of the order of this court. Fifth. That the said receiver do also forthwith proceed and recover, by process of law or otherwise, pursuant to statute in such case pro- vided, any sum which may be due to said corporation, if the person so indebted be not wholly insolvent. Sixth. It is further ordered that the said receiver, in the discharge of the duties of his trust, be vested with all the rights and powers, and be subject to all the duties and liabilities declared by statute in such cases, and proceed in all respects pursuant to article three, title four, chapter eight, part third of the Revised Statutes (except as herein otherwise provided). Seventh. It is further ordered that before any distribution of any portion of said funds or assets shall be made, and within sixth months from the date of this order, the said receiver report to this court, after giving notice of his intention so to do to the Attorney-General, his proceedings under this order, with an exhibit of the accounts and demands for and against said corporation and all its open and sub- sisting contracts, and a statement of the amount of the money and assets in the hands of said receiver, together with a statement of his expenses and commissions, to the end that such order may be made in regard thereto as the nature of the case may require. And it is further ordered that until the coming in of said report, and the hear- ing thereon the question as to the distribution of said assets and moneys, and of the rights and interests of the respective parties claim- ing the same or any portion thereof, and other questions not herein disposed of, be reserved for further directions. Eighth. It is further ordered that said receiver pay out of and from. 591 the moneys of said corporation coming into his hands to the attorneys for the defendant herein, their taxable costs and five hundred dollars as an extra allowance herein. Ninth. It is further ordered that such further application may be made to the court on the footing of this decree as the receiver may be advised is proper and necessary for his instruction in the management and conduct of his trust. It is further ordered that, except as herein ordered and directed, the said receiver shall not dispose of or in any manner interfere with any of the assets of said bank directed to be deposited with the United States Trust Company. He shall immedi- ately (upon the approval of the bond herein required to be given), in the presence of the Superintendent of the Banking Department of the State of New York, take the assets so directed to be deposited from said bank and deposit them with the said United States Trust Com- pany, and take from said Trust Company a receipt stating that such assets are received under and in pursuance of the provisions of this decree, and under the restrictions as to their transfer or disposition in this decree mentioned. Tenth. It is further ordered that no application shall be made to any court, nor shall any action of the court be asked or suffered by the receiver relative to or in any way connected with the duties of said receiver, or the funds or assets of the defendant above mentioned, or their transfer, sale or delivery, unless a five days' notice of such application be first given to the Attorney-General of the State of New York. WM. E. HASWELL, Clerk. Indorsed : Recorded in Albany county clerk's office, October 6, 1875, 3 P. m., in book of orders appointing receivers of judgment debtors, page 456. WM. E. HASWELL, Clerk. And filed October 6, 1875, 3 p. m. PLAINTIFF'S EXHIBIT No. 8. At a Special Term of the Supreme Court of the State of New York, held at the Supreme Court Chambers, in the City Hall, at the city of Kingston and county of Ulster, on the 13th day Nov- ember, 1875. Present — Hon. T. R. Westbrook, Justice. The People ob the State of New York against The Third Avenue Savings Bank. On reading and filing the order to show cause in this action, dated the 30th day of October, 1875, made by Hon. T. R. Westbrook, 592 justice, etc., returnable on the 6th day of November, 1875, with the petition, affidavits and papers on which the same was granted, with proof of service of the same as required by said order, the return thereof having been changed to this day by order of the justice who made the same on the application of William Peet, attorney for William S. Carman, receiver, etc., and on motion of Edward Fitch, of counsel for the petitioner named in said petition, after hearing Mr« Edward Fitch, of counsel for said petitioner, and Algernon S. Sullivan and Mr. James S. Stearns, each separately appearing for other creditors of the defendant concurring in the petition, and after hearing Messrs. Peet and Hun, for Mr. Carman, the receiver and the defendant, and Mr. Charles S. Fairchild, deputy attorney-general, for the people, it is ordered, adjudged and decreed as follows : First. That the appointment of William S. Carman, of the city of New York, as receiver under and by decree of this court, made in this action at a special term thereof, held at the City Hall, in the city of Albany, on the 4th day of October, 1875, be, and the same is, hereby vacated, annulled and revoked, and the said William S. Carman is hereby perpetually enjoined and commanded to cease and desist from performing or exercising all and every the powers and duties given to or conferred upon him by the said decree. Second. That Samuel H. Hurd, of the city of New York, be and he hereby is appointed receiver in the place and stead of said William S. Carman, of all the stock, property, things in action and effects real and personal of the corporation The Third Avenue Savings Bank, defendant in this action, and of all property held by it with the usual power and duties in such cases enjoyed and exercised by receivers according to the practice of this court, subject, nevertheless, to all the terms, conditions and provisions expressed and contained in the said decree. Third. That the said William S. Carman account for and deliver and pay over to the said Samuel H. Hurd, hereby appointed receiver, all the money, stocks, property, things in action and effects, both real and personal, which have come into his possession and control as receiver, as aforesaid, and that he render a correct and true account of all things done and suffered by him as such receiver. Fourth. That Delano C. Calvin be and he hereby is, appointed referee to take and state the account of said William S. Carman, as receiver, as aforesaid, and report the same to the court, with his opin- ion thereon. Fifth. That the final decree in this action made as aforesaid be and the same is hereby amended so as to conform to this oi'der. Sixth. It is further ordered that the said Samuel H. Hurd, who is hereby appointed receiver as herein before stated, shall execute a bond 593 in the penalty of one hundred and fifty thousand dollars, conditioned for the faithful performance of the trust committed to him as such re- ceiver as aforesaid ; the form thereof and sureties thereto shall be ap- proved by one of the justices of this court, upon the approval whereof, and not before, the said Samuel H. Hnrd shall enter upon the discharge of his duties as such receiver ; that upon the entry of this oi'der and the filing of the bond approved as aforesaid, and the presentation to the said William S. Carman of a copy of this order duly certified by the clerk of the county of Albany, and of a certificate by the clerk aforesaid that the bond hereby required has been duly filed, the said William S. Carman, who is hereby removed from his position as re- ceiver, shall immediately deliver over to the said Samuel H. Hurd all property of any kind, name and nature which he has in his possession or under his control by virtue of his original appointment as such re- ceiver, and also all books, papers, documents, vouchers and memoranda kept, made or taken by him while acting as such receiver. And it is further ordered that the judgment entered in this action remain in full force, except so far as it may be modified by this order, the various parties who have appeared upon this motion will be heard hereafter upon the allowance, if any, to be made to counsel. Clerk of Albany county will enter the foregoing order. (Copy.) T. E. WESTBROOK, Justice Supreme Court. Indorsed : Recorded in Albany county clerk's office, December 6 > 1875, 2 p.m., in book of orders appointing receivers of judgment debtors at page 444, etc. WM. E. HASWELL, Clerk. Filed December 6, 1875, 2 P. M. SUPREME COURT. The People of the State of New York against The Third Avenue Savings Bank. Ulster Special 'Term, November 1875. Motion on the part of the defendants to remove William S. Carman from the office of receiver of the bank. Mr. Fitch, for sundry depositors making the motion. Algernon S. Sullivan, for other depositors who unite in the appli- cation. James S. Steams, for still other depositors, who also ask the removal of the receiver. 76 594 * Peet & Hun, for the receiver. Charles S. Fairchild, deputy attorney-general, for The People. Westbkook, J. — Continual engagements in Circuit, since the sub- mission of this matter one week ago, have prevented its earlier exam- ination and decision, and other and pressing duties at the present only allow a very brief statement of the reasons which induce me to grant the application to remove the receiver. From the complaint in the action, which was verified by Daniel Bates, president of the defend- ant, it appears that The Third A. venue Savings Bank was on the 29th day of September, 1875 (the day of the verification of such complaint) insolvent, and had been for more than a year prior to such date. On the 23d day of January, 1875, the receiver, who was then the secre- tary of the corporation, signed and verified a report which purported to be a just and true statement of the condition thereof, on the first day of that month, whereby it was shown that the bank was solvent, and that the assets of the institution were $6,960.65, in excess of its liabilities. On the 26th day of December, 1874, and about a month prior to the date of such report, the present receiver had been made secretary of the defendant, at which time its situation must have been known to the directors who appointed him. The suit to dissolve the corporation and wind up its affairs, was confessedly instituted at the request of its directors and the appointment of the present receiver upon the application for judgment. No objection being made by any of the counsel who appeared in it originally, was evidently the suggestion of such officers. The present application then pre- sents this question: Is an individual, who, on the 26th day of December, 1874, was appointed secretary of the then known insolv- ent savings bank, by its three directors, who was used by them in a month thereafter to make and verify a false statement, declaring its solvency, and who was named by them as its receiver in a suit which they caused to be instituted to wind up its affairs, a fit and proper person to execute such trust; especially should he be retained when every creditor, so far as known, asks for his removal? The statement of the case indicates the answer. If Mr. Carman made a willfully false oath in January, 1875, representing the bank to be solvent, he surely is not a proper person to be intrusted with the delicate and important duties which he is called upon as a receiver to discharge. If after filling the office of secretary for only three days less than a month, he could be so easily imposed upon as to make such false statements, he certainly has not the requisite mental qualifica- tions to grapple with the difficulties which must surround him in his new position. If he was so confiding as he says he was, by way of excuse, as to take the actuary's statement of the condition of the 595 company as true, and swear positively upon mere information, without knowledge, such confidence may be imposed upon hereafter, as it certainly has been in the past, to the great injury of others. Apart; however from the objections which present themselves to the con- tinuance of Mr. Carman, as receiver by reason of his confessedly erroneous report and affidavit in January last, his connection with the managers of the institution renders him an improper person to dis- charge this trust. He was the secretary of their selection, the re- ceiver of their choice. In his latter capacity he will be called upon to investigate the acts of his patrons and the proper discharge of his duties may require him to sue those to whom he is under personal obligations. Duty and feeling should not collide in the person of the receiver. If they do, and the former is overcome, human nature will only repeat itself. To such a temptation no officer which the court selects should be subjected. These views have been expressed befoi'e by me in another case, and they are regarded as sound now. Besides, the investigation of his own conduct as secretary may be necessary. How many of the present depositors of the defendant, if any, have become such by reason of his false statement in January, does not appear. It is but fair to conclude, however, that as there was no public disavowal by Mr. Carman of the want of truth in his affidavit until this suit instituted in September last to dissolve and distribute the effects of the corporation, startled the public, that considerable of the creditors became such during that period. Is it fair that such persons that Mr. Carman should sit in judgment upon his own conduct? To this most obviously only a negative answer can be given. For the reasons thus briefly stated Mr. Carman must be re- moved and a new receiver appointed. The attorneys for the moving parties will prepare the necessary order and submit the same to me for approval. Samuel H. Hurd, being duly sworn on behalf of the State, testi- fies as follows: Examined by Mr. Tract: Q. Where do you reside, Mr. Hurd ? A. In New York city. Q. Are you the person who was appointed a receiver of the Third Avenue Savings Hank? A. I am, sir. Q. Do you still hold that position ? A. I do. Q. When did you enter upon the duties of your office as receiver? A. I think it was the 6th of December, in 1875. Q. Have you brought the books with you that you were subpoenaed to bring? A. Yes, sir; I think I have brought all that I was called upon to bring. Q. Have you the copy of your subpoena here? A. Yes, sir [wit- ness produced it.] 596 Q. Have you got here the ledger, cash-book and minutes ? A. Yes, sir. Q. And all the matters mentioned in the subpoena? A. I think all of them, except some orders called for that Mr. Smythe will bring up; he had them; I brought all I had in my possession. Q. Where did you keep your office, as receiver, from the first? A. I kept it in the bank building, corner of Third avenue and Twenty- sixth street, until the bank was sold. Q. When was that? A. About the 1st of May, 1876; I am not positive as to the date; it may have been the twelfth and under the Fifth National Bank on Third avenue, near the corner of Twenty- third street. Q. Upon entering upon the duties of your office did you examine the books and papers of the bank ? A. I did, sir. Q. What was' your occupation before that ? A. I was in the mer- cantile business. Q. Were you, or were you not, familiar with the books and accounts? A. Yes, sir, lam and were. Q. Did you report the condition of the bank from time to time after you were receiver; the condition of affairs ? A. Yes, sir ; I do not understand the question exactly; I did make reports. Q. Did you make reports to the superintendent? A. No, sir; I did to the courts on two occasions, I think, and to the depositors once or twice, I think. sir. Q. Mr. Carman, the previous receiver? A. Yes, sir. Q. Can yon say whether they seemed to be a complete set of books of the bank? A. Well, I would not like to say, but I believe they are mostly there ; I discovered on several occasions a slight deviation from some of the books ; not in the books themselves, but a lapse of time between two or three of the minute books, which is only neces- sary to say the whole of the thing was in such bad order, the books and every thing else, it is hard to tell. Q. How much cash was there handed over to Mr. Hurd ? A. About $7,000. Mr. McGuiee — To all this line of investigation, Mr. President, we object; and probably we might as well have the question settled by the Senate here, as anywhere. Respondent's counsel object to this class of testimony as being immaterial and inadmissible, and improper as against the respondent. The counsel for the people said that the first object of the testimony is to show what the real con- dition of the bank was at the time the receiver was appointed. Also, upon the ground of the respondent's pleadings put the question in issue. The President — The chairman is of opinion that the testimony is competent upon the question of the degree of negligence. If any Senator desires it, the chair will submit the question to the Senate ; if not, the examination will proceed. Mr. Tracy will proceed. Q. Will you state how much cash was handed over by the first receiver to the second ? A. About 17,000. Mr. McGutee — The President will bear me witness; the plea of general denial was interposed the other day for the purpose of going along with the proceedings, reserving the right on our part to put in such a plea as we might desire. 598 The President — Does the learned counsel undertake to withdraw his plea of general denial ? Mr. McGuiTtE — Yes, sir ; because there are admissions in this plea inconsistent with a general denial? The President submitted the question, whether the testimony should be received, and it was decided in the affirmative. The Senate hereupon took a recess to four o'clock, p. m. Saratoga Springs, July 23, 1877 — 4 p. st. The Senate met pursuant to adjournment. Mr. Chapman" — Mr. President; after adjourning to day noon, and going to the hotel, I was very sorry to receive a telegram from Mrs. Ellis, to the effect that Mr. Ellis was very sick in Albany, and that it was uncertain when he could come ; I have also a communication to the effect we shall hear from them ; the telegram indicates we shall receive a further communication from them by mail ; and it seems to me it would be a matter of impropriety in going on with the examina- tion of witnesses without Mr. Ellis being here; I would suggest, there- fore, the propriety of adjourning until to-morrow morning. On motion of Senator Cole, the Senate adjourned to to-morrow morning at ten a. m., July 24, 1877. Saratoga Springs, July 24, 1877 — 10 a. m. The Senate met pursuant to adjournment, a quorum being present. Mr. McGutre — Mr. President, we have received a communication from Mrs. Ellis, the wife of the superintendent, announcing that it is impossible for Mr. Ellis to be here now, and that the physician under whose care he is forbids his attendance, at least for a day or so. And as the counsel for Mr. Ellis do not feel justified in consenting that his prosecution should go on in his absence, caused by his sickness, we would therefore ask the Senate to postpone the hearing until to-mor- row. And in consultation with Mr. Chapman we have concluded to — one or the other of us — go to Albany to-day, if possible, to see Mr. Ellis, and ascertain his condition ; and after ascertaining what condi- tion he is in, then our future conduct will be governed by the condition in which we shall find him. But we can determine by to-morrow morning as to what course the superintendent or his counsel will be inclined to pursue, and we therefore would ask the indulgence of the Senate to postpone this matter until the counsel for the respondent can communicate with him, either in person or otherwise. 599 The counsel for the prosecution announced that they were ready to go on with the prosecution in relation to the Third Avenue Savings Bank. The counsel for the respondent said they had no objection to the identification of any documents which the counsel for the people might desire to establish. Frederick Smytlie, being duly sworn on behalf of the State, testi- fied as follows : Q. Mr. Smythe, will you state your residence ? A. New York city. Q. Your profession ? A. Lawyer. Q. Were you the attorney and counsel for the receiver of the Third Avenue Savings Bank? A. Counsel for the receiver. Q. And as such had you any charge of certain bonds called the in- demnity bonds, guarantee bonds ? A. I have. Q. Have you those bonds here ? A. I have, sir. Q. Produce them [witness produced some papers]. Q. Will you produce the bonds ? A. Yes, sir. Q. On page 443 of the testimony, signed by Wrn. A. Darling; is that the paper ? A. It is. Q. Have you some other bonds ? A. I have a bond for $15,000, signed by Spencer K. Green. Q. What is its date ? A. December 31, 1873. Q. What amount ? A. Fifteen thousand dollars. Q. Is it in the same form as the other ? A. Substantially. Q. Have you another bond ? A. I have a copy of a bond. Q. Not the original ? A. Not the original. Q. You know it to be a copy ? A. I believe it to be a copy. Q. Will you state the amount and date ? A. Yes, sir ; it is signed by David Morgan and a number of others. Q. Bead the names ? A. Wm. A. Darling, John H. Lyon, Daniel Bates, Wm. D. Bruns, W. B. Harrison, Jas. Stevens, Andrew Stevens Jas. Owens, Richard Kelly, D. D. T. Marshall, David Morgan, Geo. Hencken, Jr., P. W. Decker, Wm. S. Opdyke, John Lacey. Q. Give the date and amount ? A. Date, the 28th of January, 1872. Q. Repeat the amount? A. It is a separate bond; each bond is in the sum of $600 to each. Q. Several bonds ? A. Yes, sir. Q. Have you another ? A. No. • Mr. Tracy — • Mr. President, I offer all those in evidence ; I do it simply to show they are substantially in a form contained on page 443. Mr. McGuirb — If they are offered, the respondent objects to their reception as entirely immaterial. The President — These are the indemnity bonds in the printed book ? 600 Mr. Tract — Yes, sir; they are the bonds which were given by gentlemen in the form which is contained here, and were entered as a guaranty bond, or something or other to the bank. The President — The chair is of the opinion that the testimony is material, but will submit the question to the Senate if the Senate so desires. There being no objection to the ruling of the chair, the bonds will be received in evidence ; they will be marked Exhibit No. 1. Q. Did you prosecute those bonds ? A. I did. Mr. MoGuire — To that line of proof an objectien is also inter- posed, for a like reason. The President — Do you wish to show the bonds proved to be worthless, or defended on some ground touching the validity of the instrument ? Mr. Tracv — The charges are, the bonds were claimed to be in- valid, and turned out to be, with the exception of one, worthless for any purpose of raising money; I want to show just how it turned out. The President — The men were trustees of the bank ? Mr. Tract — Yes, sir, mainly. The President — The chair is of the opinion the testimony is com- petent. Q. Did you use them? A. I did; I commenced actions on all those bonds in the Supreme Court, in the name of the receiver. Q. Have you brought here your pleadings and processes ? A. Yes, sir. Q. You have them in your possession ? A. I have them here, sir. Mr. Tracy — I will beg to offer those in evidence; it is a formal thing to do; we can get them afterward; and I offer the summons and complaint in the several actions, and also the answers as far as received, and demurrers. Q. Have you them all here ? A. Yes, sir. Mr. McGuire — A like objection to the reception of such papers ? The President — The chair is of the opinion that the testimony is competent. Mr. Tracy — It is to fulfill the allegations made here; I want to get in the fact that they offered the defenses as stated in the charges. The testimony was submitted to the Senate by the president, and it was decided to receive the papers in evidence. Mr. Tracy — Mr. President, in order to save time I will offer th e parcel in evidence — offer the whole set in evidence; the whole are presented as proof of the fact that such answers were put in to the complaints made; and in respect to printing the whole of them, I 601 think that can be avoided by putting in a sample of them, which we will do when we have time to prepare them. The President — Has the counsel for the State finished the ex- amination of the witness in reference to the identification of docu- ments ? Mr. Tracy — Yes, sir. The President — Then the question comes before the Senate on the application of the counsel for the respondent. Mr. Tracy — I desire to ask Mr. Smyth if he has recovered judg- ment in any of these cases', and whether he has recovered any money. Those two questions will dispose of all I have to say. Mr. McGuire — We have no objection, Mr. President, to their ask- ing the questions, but to be taken under our objection as the other class of testimony was. By the President : Q. Have you recovered judgment in any of these actions? A- I recovered a judgment against two of the parties. Q. State who they were and to what amount ? A. I cannob give you the names. Q. Can you give us the amounts ? A. It was on the large bond. Q. The old bond of 1873 ? A. Yes, sir. By Mr. Chapman Q. The hundred thousand dollar bond ? A. Yes, sir ; the judg- ment was recovered in this way : they demurred to the complaint, and I got judgment overruling the demurrer as being frivolous, and upon that 1 took the judgment against those parties. Q. Are the pleadings in those actions among this number ? A. Yes, sir. < Q. Did you recover judgment in any other cases ? A. You asked me if I recovered any money in those cases ? Q. Yes, sir ? A. No ; the execution has been returned unsatisfied ; in respect to one other person, Mr. Opdyke, who was one of the signers of the bond ; I wrote to him and he immediately paid the amount that he was bound for. Q. Is that W. S. Opdyke ? A. Yes, sir ; that amounted to $2,500, or in that neighborhood, and that is all the money that has been collected on those bonds ; in the others, the suits are all pending, and not yet tried, they are on the calender, and have not yet been reached. The Senate hereupon adjourned to Wednesday, July 25, 1877, at eleven a. m. 76 602 Saratoga Springs, July 25, 1877 — 11 a. m. The Senate met pursuant to adjournment, a quorum being present. Abraham Sellei-s, beingj duly recalled on behalf of the State, testified as follows : Examined by Mr. Traoy : Q. When you commenced your service for Mr. Hurd, the receiver, did you see whether the following real estate was still on hand, undis- posed of; I will read it, page 371 : Ninety-two acres of land at Tarry- town, five houses in Forty-sixth street, house on Fifth avenue at Eighty-fifth street, house on East Forty-seventh street, house 36 East Forty-ninth street, the banking-house on Third avenue and Twenty- sixth street, and the house and lot adjoining ? A. Yes, sir; it was all there. Q. On hand still ? A. Yes, sir. Q. Will you state what, of this real estate, was disposed of by the receiver, and when and how it was done,and with what result ? Mr. McGuire — Mr. President, do I understand the Senate to have decided that proof might be given of what this real estate or any of the assets sold for ? I therefore object to any proof as to the values of the property established by the sale of the receiver, as being entirely immaterial and irrelevant to this examination. The President — When was that property sold, Mr. Tracy ? Q. When was it sold? A. Most all of it onthe twelfth of April. Q. What year ? A. Eighteen hundred and seventy-six. By Senator Bradley : Q. I desire to ask whether it was sold at public auction, or privately? A. All of it sold at public auction. Q. At public auction ? A. Yes, sir. Q. Advertised sale ? A, Thoroughly advertised for several weeks. The President — The opinion of the chair is the testimony is material and competent. Does any Senator desire to have the testi- mony submitted to the Senate; if no Senator so desires, the case will proceed. Q. Having stated it was sold at public auction, upon advertisement, and the time about when it was sold, will you state what was the result of the several sales ? A. Yes, sir ; I can read them ; I can state the price of each piece of property. Q. State them ? A. Banking-house, Third avenue and Twenty-sixth street $55,000 00 House and lot, Fifth avenue and Eighty-fifth street 34,000 00 Lot and brick stable, Twenty-sixth street, adjoining the Bank 6,550 00 603 Lot on Oue Hundred and Fifty-ninth street, east lot, as it is called ; it is divided into two parts $3,850 00 West lot, same street 1 , 130 00 House and lot, ID East Forty-sixth street 1 ,600 00 House and lot, 28 East Forty-seventh street 5,100 00 House and lot, 21 East Forty-sixth street 1 , 550 00 House and lot, 23 East Forty-sixth street 1 , 575 00 House and lot, 36 East Forty-ninth street 7, 600 00 House and lot, 25 East Forty-sixth street 1,600 00 Lot at Yonkers 2,250 00 Property at Tarrytown 15,865 66 By Mr. Tracy : Q. What description of. the property? A. It is put down ninety- two acres ; it measured within a fraction of ninety on a subsequent survey. Q. Have. you before you the aggregate of those figures ? A. One hundred and thirty-seven thousand nine hundred and forty-five dol- lars and sixty-six cents. Q. State a little more particularly about the banking-house, whether the. banking-house and the other lot were sold together or separately ? A. Separately. Q. In the list you have given the figures separately from the adjacent property? A. Yes, sir; banking-house, $55,000. Q. At the time you went there were there other bonds and mort- gages on hand ? A. Yes, sir. Q. State now what was done with them in the way of collection and realization ? A. They were as many as could be collected, col- lected, and the rest were put in suits, as is usual in proceedings taken, and many of them are still pending. Q. Were any of them second mortgages? A. Yes, sir; two of them. Q. Which were they? A. They were both on property on Fifth avenue, above Eighty-fifth street. Q. Two of them? A. Yes, sir; on two houses. Q. What was the result of those second mortgages? A. One of them, the property, was sold under a foreclosure of the first mortgage by the Mutual Life Insurance Company and brought $906.60 over and above the first mortgage. Q. Nine hundred and six dollars and sixty cents the receiver got? A. Yes, sir. Q. How much was that second mortgage ? A. Twenty-five thou- sand dollars. Q. The other one ? A. Twenty-nine thousand dollars. 604 Q. What was the result on that? A. Nothing has been done on that; the first mortgage is in foreclosure yet by the Mutual Life Insurance Company. Q. Has the receiver had any offer for his mortgage, the second mortgage — Mr. McGuieb — I object. The Pbesident — The chair is of the opinion it is not competent. Q. Has any interest been collected on the second mortgage? A. None, sir. Q. State now to the Senate what has been done with the other mortgages, and what they produced? A. They are in process of collection. Q. How much has been realized on them so far, that have been foreclosed or collected? A. I think there is only one that has been actually sold un'der a foreclosure ; two or three pieces of property were bought in by the receiver, no bids having been received at any price for them. Q. Bought in on his own foreclosure? A. Yes, sir; one piece was sold, and at lor about the value of the mortgage, and the money will be paid ; they had sixty days to pay it in ;-it is not paid yet, but it will be. Q. That was about the value? A. Yes, sir; just about covered the claim. Q. In the other cases? A. In the other cases we had to bid the property in ; we could not get a bid at any price. Q. Are there some of those mortgages yet in the process of suit ? A. Yes, sir. Q. Will you turn to the books which are here and state to the Senate how many new depositors made deposits with the bank between March, 1875, and September, 1875? A. I can state that ; I have not the books here ; it was impossible to bring them here ; it would take a car to bring them up here. Q. Can you state them? A. Yes, sir; upwards of 700 new de- positors between March twenty-second and the day the bank closed; between March twenty-second, the day of the examination, and the closing of the bank. Q. What was the amount of deposits in that period ? A. In the neighborhood, of $130,000, in the new accounts. Q. What other deposits were received at that time, and the amount? A. I do not remember that at all; I have no way of get- ting at that. Q. Will you state how much was drawn out during that period? A. About $34,000, leaving about $96,000 of the new money in the bank when the bank closed. 605 Q. About 134,000 of the new deposits drawn out? A. Yes, sir. Q. Leaving how much in? A. Iu the neighborhood of about $94,000 to 96,000. Q. Were any dividends made among the creditors and depositors by Mr. Hurd, or Mr. Carman, either of the receivers ? A. Mr. Car- man made no dividend.; Q. Mr. Hand made a dividend ? A. Yes, sir. Q. Of how much? A. Fifteen per cent. Mr. McGrUiBE — I object to that as entirely immaterial. The President — In the opinion of the chair it is immaterial. Mr. Tracy — It may not be material, but it would be very awk- ward „if the Senate did not know how it came out; it will appear otherwise, perhaps. Q. Will you look at the books and see whether any thing was done in the way of a dividend July 1, 1875, when the bank was in opera- tion ? A. Yes, sir; there was a partial dividend declared — not de- clared, but it came in a peculiar way as it appears by the books. Q, Look at the books and state, what do you find there? A. I find commencing July, 1875 and running up to the twenty-ninth of September,, the day the bank closed ; I find a credit to certain deposit- ors of interest amounting to $8,429.77. Q. Was that credit in all the accounts ? A. No, sir ; only partially. Q. At what rate was it credited ? A. Two per cent. Q. Was it credited on the same date or different dates ? A. Dif- ferent dates; running from July to September. Q. Will you find the entry of dividends made in the former year; will you state generally in what form the dividend appeared as made on the former occasion ? A. Always by a resolution of the board of trustees. Q. After the resolution, where were credits made? A. They were regularly credited on all the books, on all the accounts. Q. At once ? A.. Yes, sir. Q. As of that date ? A. Yes, sir. Q. This case of July 1, 1875, was it provided by resolution of the board of trustees ? A. Ko, sir. Q. You found these credits ? A. Yes, sir. Q. Upon the books ? A. Yes, sir. Q. Will you state how many depositors there were of that bank altogether at the time it closed? A. Upward of 7,000 — open accounts. Q. To what amount did they all come ? A. A million four hundred and odd thousand dollars. Q. Can you turn to the books and see what was the actual cost of 606 the banking-house? A. I can tell what it purports to have cost [after examining the book the witness said] ; the cost of the bank- ing-house, as shown by the books, is $195,000. Q. Will you read off the items of that account as it stands on the ledger ? A. That goes back to another ledger, over ten pages, includ- ing all the building accounts. By the Peesident: Q. Was the banking-house built or bought already built? A. Built. By Mr. Tracy: Q. I understand from the witness this account fills a good many columns, - I will ask him to read the items on this page ? A. They are items of repairs. Q. Eead what they are; read the first one? A. The amount brought forward is $180,004.22; the page of the ledger is 462, Ledger No. 3. Q. Take the next item if you please ? A. This is a bill of car- penter work by a man by the name of Bird. Q. Bead the entry? A. Bird, $165; plumbing, $113.05; ditto, plumbing, $15.00 furniture and fixtures, $15,033.45. Q. That is the last item ? A. Yes, sir. Q. Turn to the first account ; have you the first opening page of the account ? A. Yes sir. Q. What is the first item charged ? A. This is ledger No. 2. Q. The date ? A. Eighteen hundred and sixty-three ; page 25. Q. Item ? A. " Bond and mortgage, $6,000 ;" that was a mort- gage on a lot that they purchased. Q. That was the first payment? A. Yes, sir the account of the bank building is the house and lot, too. Q. Do you find on that first page what the cost of the land was complete ? A. It appears to have been $11,150. Q. Which part was that ? A. It was just the banking-house; because the other was bought long years afterward. Q. Will you go on and give the items from the book before you, what the building down to its completion cost not the upholstering and repairing of it afterward, and all that? A. Of this account I could say in a few words, that all the items for the land and for the building and so on are charged against it; the land cost $11,150 > the balance is supposed to be the cost of the building ; $195,000 it stood on the books. 607 Q. "When did it stand at that? A. When the bank closed. Mr. Tract — I want to see what it cost some time before; I would like to put the whole of that account in evidence ; it seems to be impossible to make any thing out of it by reading it. The President — Are you able to get the cost of the building at the time of completion ? A. No, sir; not without looking over this account an hour or two. The President — Do you desire to have the witness make the com- putation now ? Mr. Tracy — I will recall him on this point. Q. Turn to the resolutions of the 17th of July, 1874; have you before you the books of minutes of this corporation ? A. Yes, sir. < Q. Have you the resolution adopted on the 17th of July, 1874 ? A. Yes, sir. Mr. Tracy — I wish to read from this book, adopted on that day, the following resolution : " On motion of Mr. Hencken, seconded by Mr. Bruns, resolved, that in view of the fact that the annexation of a large portion of Westchester county to the city of New York, and the prospect of a speedy completion of the New York, Boston and Montreal railroad have enhanced the value of the Tarrytown prop- erty, the application of that real estate in the July statement be esti mated as follows : Seventy-seven acres at $2,000 $154,000 Fifteen acres at $1,000 15,000 Total $169,000 Also the following resolution : On motion of Mr. Bruns, seconded by Mr. Harrison, the usual semi-annual dividend was declared for July. By the President: Q. What year was that? A. July 17, 1874. Q. State what the usual dividend — half-yearly dividend was ? A. Six per cent per annum; five per cent on certain large amounts; six per cent on the smaller amounts. Q. In the examination of your books, did you find a deficiency of about $66,000 of cash, between the depositors' account and the cash account? A. Yes, sir. Q. Point that out, if you please ? A. On the 24th of September, 1875, T find on the journal this entry, made by Mr. Carman previous to his removal a few days: "Profit and loss. Dr. To depositors' account, $66,617.28." This amount being the difference between the general ledger and the dealers' ledgers, as appears by balancing the dealers' ledgers, commencing the 1st of January, 1875, and continu- 608 ing the examination by the secretary and book-keepers down to date. From information received of former clerks of this bank, this differ- ence has existed in the books for several years. By the President : Q. How much is the difference ? A. Sixty-six thousand six hun- dred and seventeen dollars and twenty-eight cents; that is to say ; the dealers' ledgers show $66,617.28 more due to the individual depositors than the general ledger did. By Senator Harris : Q. What was this item ? A. To throw it into profit and loss. Q. What was the date ? A. September 24, 1875. Q. Bead the whole thing again a little more deliberately ? A. "Profit and loss. Dr. To depositors' account, $66,617.28;" then follows the explanation. Q. Go on with the explanation ? A. " This account being the difference between the general ledger and the dealers' ledger, as appears by balancing the dealers' ledgers, commencing the 1st of January, 1875, and continuing the examination by the secretary and 1 book-keepers down to date. Prom information received of former clerks of this bank, this difference has existed in the books for several years." By Senator Welljian: Q. I understand you that entry is made by Mr. Carman ? A. Yes, sir. Q. After his appointment as receiver ? A. Yes, sir ; no, just before his appointment as receiver; no, while secretary. Q. My question was, whether the entry was made by Mr. Carman, the receiver, and if so, whether it was made before his appointment or after ? A. It was made by Mr. Carman before his appointment as receiver ; a few days before the closing of the bank. Q. As secretary ? A. Yes, sir. By Mr. McGitire : Q. That appears simply by the entry, but not as a fact ; you do not pretend to state it as a fact ? A. No, I do not; I am speaking from the books. Q. Are you familiar with Mr. Carman's handwriting ? A. Yes, sir. Q. That is his handwriting ? A. Yes, sir. Q. Have you before you the petit cash-book of the expense account of the concern ? A. Yes, sir. 609 Q. Ill March, 1873, do you find any entries from examination being made from the department ? A. Not in March, in April. Q. What day ? A. The twenty-fifth of April. Q. What is the entry ? A. Bank department examination, $175. Mr. Tracy — Mr. President, I have asked all the questions of this witness I desire to ask, but one, and that is the cost of the banking- house, and therefor I will suspend the examination for the present. Q. I believe you did not state what the fixtures produced on the sale,' did you ? A. One thousand and fifty-nine dollars and twenty- nine cents. Mr. Tracy — That is all of him. By Senator Harris : Q. In relation to the $66,000, did that appear upon a certain class of books as having been deposited ? A. Yes, sir. Q. And on another class it did not appear? A. Yes, sir. Q. And this entry was made to make the two classes of books agree ? A. Yes, sir. Q. The bank-books did show $66,000 had been received, and an- other book did not show it had been received ? A. Yes, sir. Q. And this entry was simply to balance the two? A. Yes, sir. By Senator McCarthy : Q. Were, any of these bonds and mortgages on unproductive prop- erty, that is to say, vacant lots, or land? A. Mr. Hurd could answer that better than I can. By Senator Bradley : Q. I desire to ask if the witness is aole to state out of what par- ticular transaction this $66,000 arose? A. No, sir; he states there, from information he had received from the clerks, it had been going on for years. Q. I understand it appears in one set of books there is an excess of $66,01)0 of what appears in another? A. Yes, sir. Q. I will inquire whether, by tracing the books, you can ascertain out -of what particular' transaction that arose? A. Yes, sir; I sup- pose it could be done with a great deal of labor, running through three or four years. Q. Whether the furniture and fixtures, for $15,000, sold for $1,000; whether a part of them sold for about $1,000, or the whole of them ? A. The whole of them. Cross-examination of Abraham Sellers : By Mr. Mcguire : Q. I understand you, Mr. Sellers, to state that you were employed 77 610 by Mr. Hurd soon after he was appointed receiver? A. At the time; yes, sir. Q. Did you make a schedule of the property soon after he wa s appointed? A. We receipted a schedule handed us by Mr. Carman after comparing it with the fact. Q. My question was, whether yon made a schedule yourself? A. No, sir ; X did not. Q. Yon took the schedule made by Mr. Carman? A. Yes, sir. Q. Did you examine that schedule? A. Yes, sir. Q. Did you compare that schedule with the last preceding, report of the bank ? A. No, sir. Q. To the department? A. No, sir. Q. Have, you ever compared to see whether that schedule contained the same items of property as reported by the bank to the department on the 1st of January, 1875? A. Yes, sir I have that; it does agree. Q. It agrees? A. Yes, sir. Q, So, all the property then that the bank reported to the depart- ment it had on hand? A. Yes, sir. Q. Have you converted the entire assets of the bank? A. No, sir. Q. What remains unconverted? A. A number of bonds and mort- gages, and the trustees' bonds. Q. Those bonds mentioned by Mr. Smythe here yesterday? A. Yes, sir. Q. Have you sold the State stocks which the bank reported to the department that it had? A. All of them. Q. Can you state what you sold the Louisiana bonds for? A. A fraction over forty-four, I think one-sixteenth or one-eighth. Q. Can you state what the examiners reported the value of those bonds to be to the department in March, L875 ? A. Yes, sir. Q. What was the amount? A. Twenty-seven. Q. Then you sold those bonds in excess of the value put upon them by the examiners; some $17,000? -A. Yes, sir. Q. Can you state what you sold the Alabama bonds for? A. Not from memory: I could from the schedule. Q. Look and see ? A. The amount is here in gross, and I will have to make the calculation ; the rate is not here ; the gross amount is $32,761.88: thirty-three and a fraction is the rate; $68,500 of the Alabama bonds brought $'22,761.88, being a fraction over thirty-three per cent. By Senator Staebuok : Q. Apprised at what ? A. That I don't know. 611 Q. Can you tell, generally, whether it was in excess, or below the amount fixed by the examiners ? The President — The evidence already shows that. Mr. MoGuire— Mr. President, I hardly know, then, what to ask, if I am to be circumscribed in this way. The President — The schedule before my eyes shows they sold foi- led than the amount reported. Senator Cole — That fact we do not know. Mr. MoGuire — If we are to be limited to what does not appear we may as well quit. The President — The only object was to call the attention of the counsel to the fact that the testimony was in, while the precise ques- tion may not be important sometimes the question is asked for the pur- pose of founding another upon, and not for the purpose of consuming time. Go on. Q. If you will answer the question, whether it was below or above the amount fixed by the examiners? A. Below. Q. How much below? A. What is your amount there ? To about nine per cent below. Q. The Georgia State bonds, how were they, above or below the amount fixed by the examiner? A. We had no. Georgia bonds; they were all sold before Mr. Hurd took charge. Q. State as to the Virginia bonds ? A. They sold below. Q. One general question upon it, Mr. Sellers; take the aggregate amount of all the bonds you did sell or convert — was the aggregate amount above or below the aggregate reported by the examiners to the superintendent? A. Above. Mr. Tracy — In April ? A. Yes, sir. Mr. McGuire — In March ? Senator Wellman — Will the counsel please repeat the question and answer ? Mr. McGuire — The "question was whether the aggregate amount of the sales of stock exceeded the aggregate amount reported by the examiners to the superintendent in March, 1875; your answer is> above ? A. Yes, sir. Q. I will call your attention now, Mr. Sellers, to the list of mort- gages ; you may look at this and see what amount you have collected upon the mortgages ? A. Seventy-nine thousand seven hundred and thirty-four dollars and eighty-five cents. Q. That is of principal? A. Yes, sir. Q. How much of interest? A. On the mortgage alone? Q. Yes, sir ? A. Three thousand two hundred dollars and eighty- two cents. Q. Can you state the amount of mortgages uncollected ? A. Onf 612 hundred and seventy-one thousand nine hundred and sixty-five dollars and fifteen cents. Q. Take the two together, Mr. Sellers, the amount uncollected and the amount collected, how do the aggregate of those two sums com- pare with the amount reported by the examiners to the department? A. They report $264,900. Q. Take the examiners then, $264,000, as the question was confin D d to that ? A. What is it you ask, sir? Q. My question was, Mr. Sellers, to add the amount collected upon the mortgages to the" amount uncollected ; how does the aggregate amount compare with the amount reported by the examiners to the superintendent? A. Thirteen thousand two hundred dollars less. Q. And is that $13,000 less upon them, on bonds and mortgages, balanced by the increased amount realized upon the sale of the State bonds ? A. That J will have to make a calculation upon ; 1 do not know. Q. You have a general idea of the excess ? A. No ; for I do not think I ever looked at it again. Q. As Mr. Tracy wishes to call you again, I can ask you again as to that; so then from this statement the large deficiency as appears upon your statement appears in the price put upon the real estate ? A. Mostly ; yes, sir. Q. You have the book there of the testimony taken before the com- mittee ; you state generally. Mr. Sellers, that you found upon the schedule furnished you by Mr. Carman, the receiver, substantially the same property that the bank reported to the State department on the 1st of January, 1875? A. Yes, sir. Q. You turn to page 371, if you please, containing the report of Mr. Hurd and Aldrich, of March 22 and 23, 1875 ? A. Yes, sir. Q. You will see in that report $25,000 of Kansas bonds ? A. Yes, sir. Q. Did you find any of those ? A. No, sir. Q. They had been converted or disposed of before it came into your hands ? A. Yes, sir. Q. Turn to page 488, being the report of the bank to the bank de- partment, January 1, 1875; you see there on page 489, that they re- turned to the bank department — that they had Kansas bonds to the amount of $125,000, ; do you not? A. Yes, sir. ■ Q. Were you acquainted with the market value of Kansas bonds? A. Not at all . Q. Do not know whether they sold at par or not ? A. No, sir. Q. You found no Kansas bonds, nor any Georgia bonds? A. No, sir. Q. Such as the report of the examiners show ? A. No, sir. 613 Q. You will see mentioned, that that report of the bank of the 1st of January, 1875, does not refer to any Tennessee bonds ?" A. It does not ; no, sir. Q. Have you looked at the books of the bank to see when those Tennessee bonds were purchased ? A. I can tell in a minute by looking. Q. Do so, if you please ? A. They were bought on the 23d of Jan- nary, 1875. Q. Can you state the price paid ? A. Yes, sir, by looking at the book; $25,000 bought at fifty-three, and $30,000 at fifty-three and a quarter. Q. Please inform us when the Kansas bonds were sold, and at what price? A. They were sold on the 4th of March, 1875, at par.- Q. The whole of them ? A. Yes, sir; a hundred thousand dollars, it appears here; I think that is all there was. Q. They originally had $175,000, you will see by their report of 1874? A. Yes, sir; $100,000 was sold in March, 1875, at par. Q. The examiner, you will see, on the twenty-third of March, re- ported they had $25,000 still on hand ? A. The $25,000 was sold on the 7th of June, 1875, at ninety-nine and three-quarters. Q. Will you please look at the report of the bank to the department, January 1, 1875, and see whether the bank reported those bonds at a sum in excess of par ; on page 489 is the report of the bank ; see whether the Kansas bonds were reported at par to the bank depart- ment ? A. No, sir; reported to have cost $114,000; the market value $125,000. Q. The par value would be $125,000 on hand ? A. Yes, sir. Q. They simply reported at par ? A. Yes, sir. Q. And their cost value was $114,000 ? A. Yes, sir, according to the figures here. Q. When did you commence to advertise the sale of the real estate ? A. I cannot tell exactly; some several weeks previous to the day of sale ; I have not got that ; it was in April, but they were advertised a month or six weeks before. Q. Can you state in what papers the advertisements were published ? A. Perhaps Mr. Hurd can ; I can tell you only when it was sold ; that is all. Q. Have you any means of informing us who purchased this bank- ing-house at $55,000 ? A. I only know the parties represented in the transaction ; I know there were two men : Thomas J. McCahill and Solomon Laimbeer, I think, his name was. Q. Did you know the gentlemen at the time of the sale ? A. Never saw them before in my life. Q. Can you state what their business is ? A. Mr. McCahill is a real 614 estate operator I understand, and Mr. Laimbeer, I understand, was formerly in the stable business, and I do not know what he does now- Q. They both reside in the city of New York ? A. No, sir. Q. The house and lot on Fifth avenue and Eighty-fifth street — who purchased that ? A. John Stevens. Q. What is his business ? A. That I do not know, sir. Q. Had yon any acquaintance with him prior to the sale? A. I can answer that question generally ; I had no acquaintance with anybody that purchased that property. Q. Who was the auctioneer that conducted the sale ? A. Richard V. Hornet. Q. Who purchased the lot and brick stable in Twenty-sixth street? A. I really cannot remember, sir ; I would have brought our own books up if I had thought it was necessary. Q. Yon have some books ? A. Yes, sir. Q. Were those cash sales? A. Yes, sir; within thirty days; cash sales; yes, sir; in all cases. Q. The east lot on One Hundred and Fifty-ninth street — can you tell who purchased that? A. No, sir ; I] do not think I remember any of the names. Q. Was that a vacant lot ? A. Yes, sir. Q. And west lot on One Hundred and Fifty-ninth street — was also a vacant lot? A. Yes, sir. Q. The house and lot on Forty-sixth street — do you recollect the name of the purchaser of that ? A. I really do not; I do not remem- ber the names of any of them. Q. Were those pieces of city property all sold at the same time? A. All sold at the same time; yes, sir ; the city property was. Q. That is what I am speaking of? A. Yes, sir. Q. Was that in April, 1866 ? A. April, 1876. Q. Eighteen hundred and seventy-six, I would say. A. The twelfth of April. Q. Mr. Sellers, was not the market for real estate at cash sales in April, 1866, much depreciated ? Senator Woc-Dixr — Eighteen hundred and seventy-six. A. I know nothing at all about the value of property ; I am a com- parative stranger in New York ; have been there only three or four years, and do not know any thing about real estate. Q. Any idea of the depreciation of real estate in the city of New York in — say 1876? A. I know it was very much depreciated; every thing was; yes, sir. Q. And you were acting for the receiver, I understand ? A. En tirely, sir. Q. Did you regard it as prudent to force upon the market that 615 large amount of real estate at cash sales at the then unsettled or depreciated condition of the market? A. Well I should have to — yes, I thought it was prudent from the circumstances of the case. Q.. It was prudemt because it was a receiver's sale; that was all that made it prudent, I suppose ? A. No, sir ; It was prudent because I think the depositors would never have been satisfied unless they had a dividend right away; some would have been scalped. Q. Where was the Tarry town property sold ? A. Where all the rest was; at the real estate exchange. Q. How far is Tarrytowu from the city of New York ? A. That I do not know; never was there in my life. Q. How far is it? A. Twenty-six miles a gentleman told me. Q. Do you know what county it is in ? A. No, I do not even know what county it is in ; I think it is in Westchester, though. Q. Was the sale of that property advertised in any paper in the county of Westchester ? A. That I do not know. Q. You know, Mr. Sellers, it was not, do you not? A. No, sir; I do not. Q. You do not know that it was ? A. I do not; I presume it was, as a matter of course. Q. I am not asking for presumptions; can you state now how long that real estate at Tarrytown was advertised for sale; confine your attention specifically to that ? A. No, sir; I cannot say how long. Q. Can you state in what papers in the city of New York the Tarry- town property was so advertised ? A. If I was in my office I could ; but I cannot tell here; we have copies of all those advertisements. Q. Was it sold on the same day as the city property ? A. It was not, sir; it was put up on the same day, but no bids; it was then re- advertised. Q. How long subsequently before it was sold ? A. About a month. Q. Was that sold in a body, or in parcels ? A. In parcels. Q. Was it sold any different from what you have -stated in this report — "Tarrytown property, $16,865.66" ? A. That is the aggre- gate amount of the sale. Q. You say it was sold in parcels ; describe what you mean by being sold " in parcels" ? A. I mean that one purchaser, a man who had property up there, as I understood it, bought a small lot of it ; the balance of it was all bought by one man ; it was put up in sections ; all of it was bought by one man, but a small portion. Q. What amount in each section ? A. It was uneven ; it was according to the survey. Q. On the average ? A. I could not say; as high as six acres. Q. A gentleman living there bought a small lot? A. Yes, sir. 616 Q. To what extent? A. Some ten acres, I think, and the balance was sold to another gentleman. Q. The other sold to some gentleman in New York ; a real estate operator? A. I do not know. Q. Do you recollect the name of the purchaser? A. I do not; Kinnealy, or some such name as that. Q. Did you know the gentleman that purchased ? A. Never saw him in my life until he bought it. Q. Can you tell whether he lived in the city of New York, or else- where ? A. I do not know that. Q. You had the principal charge of the sale ? A. No, sir ; I had nothing to do with it at all ; Mr. Hurd managed all that. Q. You were present at the sale ? A. Only the Tarrytown prop- erty ; I was present there. Q. The inquiry now is limited to the Tarrytown property ; can you state whether any private offers had been made for this Tarrytown property before this public sale ? A. I do not know, sir. Q. Had any been made to you ? A. None, sir. Q,. Had any been communicated to you by Mr. Hurd, the receiver? A. None, sir. Q. It will save us a little computation, as I apprehend the Senate will not need all the documents ; can you state the price per acre of the Tarrytown property ? A. It averaged about $180, if my recol- lection is right. Q. Have you sold all of the real estate belonging to the bank ? A. No. sir.- Q. What remains unsold ? A. It is all sold. Q. Is it included in this report? A. No, sir. Q. State the aggregate amount of the sales of real estate, as appearing by this report ? A. One hundred and thirty-seven thou- sand nine hundred and forty-nine dollars and sixty -six cents. Q. What is the amount not upon that report? A. One leasehold house was sold for 12,750 at the same time that all this property was sold ; the purchaser paid me ten per cent, and when the time came to make his payment he did not come up to his purchase and it was left. Q. Is that the only piece of property ? A. Yes, sir. Q. It has been subsequently sold ? A. Yes, sir. Q. For how much? A. I do not know exactly ; I have not received the account yet of it; it has been sold lately. Q. It was sold for the charges upon it? A. Yes, sir. Q. What do you mean by that ? A. Accrued interest and ground rent. Q. Accrued interest on what ? A. On the mortgage ; that was all 617 leasehold property; all that "Forty-sixth and Forty-seventh street houses. Q. That was one of the houses upon which there was a prior mortgage? A. No, sir; this is leasehold ; it just about cleared itself out. Q. What charges were upon it in 1875 ? A. I could not tell you that, sir, at all ; I do not know. Q. Could you tell whether there were any? A. Yes, sir; when we took possession there wis a large amount of taxes and ground rent laying against all that property ; some $20,000 altogether. Q. Have you credited yourself with the payment of the taxes and ground rent upon that property, in this report ? A. Yes, sir ; I can show them to you. Q. You have credited yourself, given the amount you have received, so as to get into the debtor side? A. On the leasehold property there was a laying against it when the receiver took charge. Q. I am speaking of this particular one piece of property ? A. I cannot tell you that. CJ. That was a piece of property I was calling your attention to ; cannot tell that ? A. No, sir ; I could if I had our receiver's books here. Q. You have spoken about putting the mortgages in process of fore- closure ? A. Yes, sir. Q. How soon after you took charge of the business, did you com- mence foreclosure of these mortgages? A. Different mortgages at different times, as the judgment of the receiver dictated. Q. That hardly gives us any information ; say the first that you commenced foreclosure on? A. I could not, to save my life, answer any of these questions without our receiver's books; I cannot carry it in my mind, and was not asked to bring them, or I should have done so. Q. I did not know but you might recollect whether it was a week or a month ? A. It was longer than that; in the first place all the parties that had mortgages due were written to instructing them to pay up ; a certain time was allowed them, and foreclosures started in some cases. Q. Were there any other legal proceedings commenced by the reciver except the foreclosure of mortgages, and actions upon these personal bonds ? A. I think not ; I do not know of any. Q. Will you look at that report and please inform the Senate the amount of fees the receiver has paid to counsel for the commence- ment of these foreclosure suits, and these suits upon bonds ? A. I can answer that without looking at this ; the only payment we made was $3,000. 78 618 Q. How much payment, in all, has been paid? A. I probaoly did not understand your question. The President — How much, in all, has been paid ? Mr. McGuike — As appearing from that report which Mr. Hurd makes to the court, in which he claims credit for it, $15,039.15; that is what Mr. Hurd paid ? A. Yes, sir. Q. What did you mean by saying but $3,000 ? A. I thought you asked how much did we pay of our own counsel fees ; these were paid by order of the court, with the exception of $3,000. By Mr. Tracy: Q. Only $3,000 were for services rendered to Mr. Hurd ? A. Yes, sir. Q. The balance is for the former receiver, and putting the bank into the hands of the receiver ? A. Yes, sir. Q. Some $10,000 or $12,000 for putting the bank into the hands of the receiver — do you mean that ? A. Yes, sir; I suppose it is that; it is by order of the court. Q. Inform the Senate what expences Mr. Hurd has paid for per- sons employed about the receiver since he took the charge ? A. About $6,300 for services. A. That is from December, 1876, to what time ? A. December, 1875, to May, 1877. By Mr. McGuire: Q. For convenience, Mr. Sellers, if you will state the aggregate amount of receipts realized by the receiver, and the amount of ex- pences, aggregating them, so that we can make a memorandum of it without going into the particulars?* A. The total amount of all kinds we have charged ourselves with. Q. Yes, sir? A. Received $309,291.61? By the President: Q. He wishes to know how much has been expended? A. By us for our expenses? Q. For all purposes ? Mr. Tracy — For all purposes except dividends. By Mr. McGuire : Q. No, excluding dividends, so as to see what there is for a divi- dend, if any ? A. Forty-six thousand eight hundred and ninety-five dollars and sixty-four cents. Q. The balance was divided among the depositors ? A. Yes, sir ; there was fifteen per cent dividend declared by order of the court. 619 Q. How much balance was there on hand of cash? A. At the expiration of that report, there was $51,000. Q. Still on hand ? Yes. sir. Q. I will call your attention, Mr. Sellers, to the sale of the fix- tures, as neither the proof before the committee, or proof here, show what those fixtures were ? A. No, sir ; of course, among the papers, 1 have the auctioneer's account of each piece. Q. No; what did the property consist of, called fixtures? A. Bank desks, gas fixtures, chairs, safes, and things of that kind. Q. Can you tell us what kind of a safe it was ? A. There were two safes in, the vault. Q. What kind ? A. One was called the Terwilliger safe and I think the other was a Herring. Q. Can you state what those safes sold for separately ? A. I can- not; they did not bring much. Q. Did not bring much ? A. No, sir. Q. Did they together bring. $100? A. Yes, sir; one of them brought over $100. Q. How much over $100? A. I think about $150. Q. That is the best one ? A. Yes, sir. Q. How much did the other bring? A. Less than $100 ; I think about seventy-five dollars or eighty dollars. Q. About $225 for the two safes? A. That is my remembrance, sir. Q. Can you tell ns what the largest or best safe cost when pur- chased ? A. I am told about $1,200. Q. Your books show ? A. Yes, sir. Q. The one that was sold for $1,500 cost, when purchased, $1,200 ? A. Something like that ; I would not say exactly ; they were both in a vault, and the vault bnilt around them, and could not be got out. Q. Can you tell who purchased that safe ? A. I could not remem- ber ; I think it was the man that bought the building ; I am pretty sure it was. Q. Can you tell what the safe that was sold for seventy-five dollars cost when purchased ? A. I do not know, sir. Q. I suppose you could tell by the books ? A. Yes, sir ; I could tell by the books I have in town ; I could exactly. Q. If you will look at that item ? A. The books are in New York. Q. I misunderstood you ; desks, tables and chairs ? A. Yes, sir ; all office furniture of the bank. Q. Rather costly furniture ? A. Some quite costly. Q. Was that sold for nominal prices ? A. Yes, sir. 620 Q. Purchased by the same man ? A. Some of it was, and some was not. Q. Who else purchased some of it ? A. People who were stran- gers to me. Q. Sold by the same auctioneer ? A. Yes, sir. Q. When were they sold, A the same time the real estate was? A. No, sir, after ; shortly before the first of May. Q. Is this the item that you mention as 13,000 paid by the present receiver for council fees ? A. Yes, sir. Q. Was that for commencing suits upon these bonds ? A. That was for professional services. Q. Commencing suits upon these guaranty bonds ? A. Yes, sir. Q. A retaining fee ? A. I do not know what you call it; I am not a lawyer. Q. They had not performed any service when you paid the $3,000 ? A. They had performed considerable service ; there had been fore- closure of mortgages before the date of that payment. Q. The same firm foreclosed some of these mortgages ? A. All of them, every bit of it. Q. How many of the mortgages did they foreclose? A. I could not tell you without our books; I guess first and last ten or twelve, and perhaps fifteen. Q. And the property bid in by the receiver in all of the foreclos- ures ? A. Not all. Q. What proportion of the sales under the foreclosure decrees was the property bid in by the receiver ? A. All but one piece, I think; I do not know. Q. What is this item : "Paid Mr. Lawrence, appraiser, $163.63 ?" A. By order of the Supreme Court. Q. I see it is; what is the service for which that payment was made ? A. Appraising the property. Q. When was the payment made to Lawrence? A. About January or February, 1876. Q. What was the necessity of making the appraisement when you had a schedule of the property returned to you by the receiver? A. I do not know. Q. If you will tell the necessity of making the appraisement I would like to know ? A. I believe it is usual in those cases. Q. I do not know but what it is among the receivers, but I am ask- ing you what the necessity was for making the appraisment so as to call for an expenditure of this fund of $1,500 ? A. I had not charge of the property; the receiver had charge of the property, and I was acting under him and under his direction. 621 Q. I see also a like payment of $1,509.63 to E. G. Ealston as appraiser? A. They were both appraisers appointed by the court. Q. Were they appointed by the court, or selected by the receiver? A. Appointed by the court. Q. So that for the appraisment of property by these two gentlemen you paid over $3,000, it seems ? A. Yes, sir. Senator Harris — I do not know what the theory of the counsel for the respondent is, but it seems to me that we are not here to try the receiver at all ; what he has done with the property does not affect the issue the Senate is to pass upon; if he had stolen all this property it would make no difference in regard to forming a judgment as to the matter before the Senate ; it seems to me that a great deal of time is being taken np here upon a matter which is entirely irrelevant to the matter which the Senate is called to decide upon; of course the Senate undoubtedly desires to give the greatest latitude to the respondent; it is right to do so; but, after all the particular manner in which the receiver has performed his duty, is clearly outside of the matter which the Senate has to pass upon here. The questions and inquiry in regard to the value of the property, and what was realized for it by the re- ceiver, may be pertinent, but as to what the receiver did with the money, what expenses he paid, what counsel fees he paid, what ap- praisers he paid, these are entirely irrelevant. And while I do not wish to make a motion, it does seem to me that we are taking up a good deal of time upon matters which we cannot try. Take, for instance, the inquiry just put to the witness. We are not here to decide whether the receiver was justified in appointing appraisers or paying counsel, or what services the counsel rendered,, or whether those services were worth the amount paid. Of course every Senator can see that it is not a matter we are to pass upon at all; has nothing to do with the matters with which we are charged to inquire into. Mr. McGuire — Mr. President, I fully agree with the Senator from the Twelfth, that the whole of it is immaterial, and we insisted from the start that all this class of evidence had no materiality whatever, and, therefore, there will be no issue between the learned Senator and myself as to the materiality of it ; but if the Senator will look at his documents he will find that one of the charges of the Governor against the Superintendent is that the depositors of this bank received only fifteen per cent. Now if this money is being squandered away in useless services, whether it is material or immaterial, it is directed particularly against the charge of the Governor. It shows that it is no fault of Mr. Ellis that they did not get any more than fifteen per cent, but the fault lies elsewhere. But I will say again, I do not regard the evidence as of any materiality whatever. As long as it is in the case it seems fit that we should give some answer to it. 622 The President — The counsel for the State has stated that the prosecution intend to insist here the bank superintendent should be held responsible for the conduct of the receiver, and the chair supposes that the inquiry is confined to matters which occurred before the appointment of the receiver, and, therefore, all the testimony of the conduct of the receiver is not material. The counsel will proceed. Mr. Tract- — I beg leave to ask one question. Kedirect-examination : Q. Will you state about how much, if any thing, the aggregate of the stocks purchased amounted to more than the examiners put them at? A. I could by making a calculation, but I cannot without doing so. Q. Can you tell about how much it was? A. No, sir. Q. Can you tell whether the aggregate amount of the stocks pur- chased was greater or less than the amount they returned, after the bank's report for the first of January? A. Greater. Q. It was greater ? A. What they sold for than the amount that was in the appraisement. Q. I do not speak of the appraisement ? A. Tn the report. Q. What was the difference? A. I cannot tell without making a calculation ; I know it is more; and that is all that I do know. 0,. During the time that elapsed after the receiver came in and the sale of the real estate, can you state what income was received from the real estate? A. Between what ? Q. What income was derived by the receiver from the real estate while he held it, before the sale'? A. Five thousand seven hundred and sixty-five dollars and four cents. Q. In how long a period of time was it? A. Between December and the first of May, when the property was sold. Q. What year? A. The first of May, 1876. Q. December was the time Mr. Hurd came in as receiver? A. Yes, sir. Q. Can you tell what the charges were upon the property during that time? A. No, sir; not without a calculation from my own books. Q. Can you tell whether it was more than the receipts? A. I cannot tell. Q. Will this paper, which I show you, aid you in the matter? A. No, sir. By Senator Harris : Q. You state the amount of deposits drawn out by depositors between the examination in March, 1875, and the appointment of the 623 receiver in September — can you state the amount of deposits drawn out by old depositors? A. No, sir; I never was asked to go into that question; it was about the new depositors, and therefore I never went into the other. Q. Would the books show ? A. Yes, sir ; not the books that are here. Q. You cannot state the whole amount of deposits drawn out? A. No, sir. Q. You only stated here the amount drawn out by new depositors? A. That was all. Samuel H. Hurd, being duly recalled on behaf of the State, testi- fied as follows : Examined by Mr. Tracy : Q. You are the receiver ? A. I am, sir. Q. Will you state, sir, whether any mortgages were on any unpro- ductive property, unimproved property ? A. Yes, sir. Q. State all about it ? A. There was a mortgage on property in Tarrytown that is unimproved; mortgage on some property in New Jersey, I think near Plainfield, that was unimproved ; mortgages on property in Fifth avenue that are unoccupied. Q. What property was that? A. The Fifth avenue property, on which there were second mortgages, but after all it is improved property. Q. But unoccupied? A. Yes, sir: there are some mortgages upon some unimproved property in Elizabeth, N. J.; a large mortgage. Q. Were any of these mortgages upon vacant lots in New York? A. So far as I recollect, not on any vacant lots in New York city. Q. Where were the vacant lots? A. These mortgages on this property in Elizabeth, is property that had been laid off into city lots; it is a large tract of land; been laid off aud ready to build a city upon; and this land at Tarrytown was a tract of something like twelve acres, that the bank originally traded to a man by the name of Kerwin, I think, for some of this Forty-sixth or Forty-seventh street leasehold houses. Q. Are you able to say, Mr. Hurd, about how much the whole stock investment has produced? A. How much has been realized, you mean, out of the bonds that were on hand? Q. No, sir ; the stock ? A. I do not understand you ; by stock you mean the State bonds? Q. For some Georgia state bonds? A. There were no Kansas state bonds that ever came into my possession, nor were there any Georgia state bonds ; their books show sales, from time to time, along for two or three months prior to the dissolution of the bank, of Kan- sas bonds, and Tennessee and Georgia bonds. 624 Q. Yon found Louisiana bonds? A. Yes, sir, $100,000 of Louis- iana bonds that were sold for about forty-four. Q. Alabama bonds ? A. Yes, sir, for between $68,000, and $69,000, that were sold for about thirty-three. Q. Tennessee State bonds ? A. There were a few of those, about $7,000, and they were sold for — I do not recollect the figure exactly, but I think somewhere in the neighborhood of forty ; that is from recollection, though; and a few Virginia — $2,000 or $3,000 of Vir- ginia, a part of them in bonds, and a part of it a deferred scrip ; the State of Virginia claimed West Virginia was entitled to pay, and among it were some scrip certificates for unpaid interest, all amount- ing I think to about $3,000, and there was an exchange market value for them ranging all the way, I think, some of the interest scrip, perhaps as low as nine or ten per cent, and from that on up to I think, in the region of forty-two or forty -three for the best of it ; it was a matter of perhaps in the neighborhood of $3,000 ; that was all the bonds that came into my possession. Q. Did any Jersey City bonds come into your possession ? A. No, sir. Q. Any Dry Dock railroad bonds ? A. No, sir. Q. State how this came out, or sell in comparison with the figures given for them in the last previous annual report of the bank ? A. The previous annual report of the bank, from my recollection, the bonds were put in at par, and so stated; they did not assume to make a market value for them, I think ; they brought in the same ratio the price I stated bears to the par value. Q. How did the result of the sales compare with the estimate made by previous examiners ? A. The Louisiana bonds brought more ; I think the next were less. Q. Taking it altogether, which way did it come out ? A. The bonds that were left, I think, brought more than their appraised value, taking them in the aggregate, because the $100,000 of Louis- iana bonds was the great bulk of the bonds; these was more than half of them. Q. Can you tell about how much? A. I cannot ; because I never looked at the matter with a view of calculation. Isaac Smith, being duly sworn on behalf of the State, testified as follows : Examined by Mr. Tract : Q. Where do you reside ? A. At Albany. Q. What is your occupation? A. Clerk in the bank department. 625 Q. How long have you been in that bank department? A. A little more than twelve years. Q. More than twelve years? A. Yes, sir. Q. During the time while Mr. Ellis has beeu there, what has been your particular business in the department? A. Keep the journal accounts of the department, and examine the reports of the banks, and savings banks. Q. What has been your practice, when a report came to your hand, to do with it ? A. I examined it, and if I thought the bank was not weak, passed it ; if I thought it was weak I showed it to the superin- tendent, and told him what I thought about it. Q. Did you, in those cases, point out some statements and figures, and show him ? A. In one case only, and that was because it was a very complicated affair. Q. Was any other of the clerks charged with this particular duty of scrutinizing these reports and explaining them to the superintend- ent ? A. No, sir ; I do not know that I was charged with it. Q. I mean you was the one that did it ? A. Yes, sir. Q. Had practical charge of it; which of the reports of this bank, the Third Avenue Saving's Bank, did you first examine in this way, in 1873 ? A. In July. Q. In July, 1873? A. Yes, sir. Q. You examined that, did you ? A. Yes, sir. Q. Page 471 ; in which the bank had a surplus of $2,000; did you take up that report and examine it in decail ? A. Yes, sir. Q. Did you examine the schedule found on those pages, 472 and 473 ? A. Yes, sir. Q. Did you make any communications to the superintendent about the result of your examination ? A. I did not until about Septem- ber, for the reason that the July report showed a surplus, but I was not satisfied with that, and in September I made calculations — tak- ing the market value of the stocks as they were then in September, and allowing other assets as they reported them ; I forget pxactly, but I made statements on two bases; they will be in the papers that will be brought here. Q. Those statements you gave to Mr. Ellis ? A. Yes, sir. Q. They are now among the papers being put together for the pnr- pose of being brought here ? A. They were yesterday. Q. Mr. Lamb, another officer of the department had them to bring ? A. Yes, sir. Mr. Tract Mr. President, Mr. Lamb was subpoenaed and is not here yet ; I can explain why he is not here by the telegram from him, and the witness must speak of them from his memory. 79 626 Mr. McGuire — I must object to any parol evidence without the papers. The President — What is the object of making the statement to the court, Mr. Tracy ? Mr. Tracy — Mr. President, I have arrived at the point that I desire to examine this man about these statements in which he went through the examination of these things and developed the real condition of the bank, and laid them before the superintendent, showing the bank was in a very bad condition. Those papers we have called for by subpoena, and Mr. Lamb, who is the principal clerk in the office there, the deputy, has the charge of them and is prepared to bring them up, and Mr. Lamb got informed this morning, not from us, that he need not come this morning; but he informed us by telegram, which came to us ten minutes before ten o'clock, that he should come to-day atone o'clock, any way; but he had been told that he need not come this morning, and not from us. Mr. McGuire — Certainly not from me. By Mr. Chapman : I will read the following telegram : " Chapmau here, and says I need not come this morning ; I come at one o'clock to day any way. " HENEY L. LAMB." Mr. Tract — I do not make any complaint about it; that is the reason why we are desirous in presenting at this time the documents. The President — If the objection is made to parol evidence of what he presented to the superintendent in writing, the objection is good, of course. Mr. Tract — I will ask some other questions. Mr. McGuire — Mr. President, I object. If there is any written statement, that statement should be produced. Q. You stated you did present this paper to Mr. Ellis in September, 1873 ? A. Yes, sir. Q. About September ? A. Yes, sir. Q. Did you have any conversation with him, then, on the subject ? A. Only that relating to the paper explaining it. Q. You explained it to him ? A. Yes, sir. Q. Can you recollect any thing that was said in the conversation between you and him? A. No, sir; it is too long ago. Q. Yon were in the department when the examination of the ex- aminers in March, 1875, came in ? A. Yes, sir. Q. "What day was that brought into the department ? A. I cannot tell you, sir. Q. The papers will show it ? A. Yes, sir. 627 Q. Was it the twenty-fifth of March ; do you recollect that fact ? A. I think it was that time, or I think the examination was made at that time. Q. The twenty-second or twenty-third ? A. Yes, sir: Q. Did you look into that? A. No, I did not look into that; that was a report from the examiners ; I have not examined all those reports; they were sent to my desk. Q. Did you call Mr. Ellis' attention to this report of the return of the examiners ? A. No, sir; I believe not. Q. Was there one of those papers upon which you made or found some pencil memoranda, and called his attention to them? A. The only pencil memoranda that I know of were statements I made myself in regard to the Third Avenue Savings Bank. Q. Yon were in the office of the department when the gentlemen came from New York, in September, 1875, about the time the bank was closed ? A. Yes, sir. Q. You were ? A. Yes, sir. Q. Was Mr. Ellis there ? A. He was. Q. What gentlemen came? A. Ex-Governor Hoffman and the president of the Third Avenue Savings Bank ; I have forgotten his name; and a Mr. Carman, the secretary, and I think Mr. Marcus T. Hun. Q. A lawyer ? A. Yes, sir. Q. Gov. Hoffman was practicing law at that time in Albany ? A. I understood so. Q. What took place after these gentlemen came in? A. They went to Mr. Ellis' private office, and soon he came out and told me to tell the Attorney-General, Pratt, to come in, and he did so ; and then Mr. Ellis asked me for the March report of 1875 made by the ex- aminers ; I got it for him. Q. Did he take it to his room ? A. Yes, sir. Q. How long was he there ? A. Probably half an hour, and I think Marcus T. Hun drew up the papers and the proceedings closed. Q. Go on and state what happened as they came out ? A. They came out into the larger room, and there was some conversation in regard to it, and Mr. Ellis made a remark at the time: "we stir the waters and the Attorney-General catches the fishes;" and I inferred from that — Mr. Ellis added that, at least— that he was taking these proceedings without an intervention by any one else, that he found the condition of the bank was bad, and he moved of his own accord to close it ; and I asked Mr. Carman, whom I was acquainted with — 628 By Mr. McGuire: Q. In the presence of Mr. Ellis ? A. Yes, sir ; I cannot say that he heard it, but I spoke loud enough ; I asked Mr. Carman how they came to wind tip; he said it was a movement by the trustees of the bank, by a resolution passed by them ; and, so far as I was informed} that was the first intimation the department had that the bank was closed, or about to be closed. Q. That was the 29th of September ? A. I do not remember the day exactly ; it was in September, 1875. Q. Will you state what other clerks there are in the department besides yourself ; give their names ? A. Edgar A. Werner, Charles S. H. Ellis. Q. A younger Mr. Ellis ? A. Yes, sir. Q. L. Werner, Lamb and yourself ? Yes, sir. Q. Those four ? A. Yes, sir. Q. That is the whole force ? A. That is the whole force. Mr. Tract ■ — If your honor please I have gone as far as lean, under the rule. Cross-examination of Mr. Smith : By Mr. McGuire: Q. Who came into the department with Governor Hoffman ? A. The two chief officers of the savings bank ; the president and secre- tary. Q. Did you hear any conversation between those gentlemen and Mr. Ellis, before they went into the private office ? A. No, sir Q. Did you hear any conversation in the private office ? A. No, sir. Q. Did you hear the conversation, after the Attorney-General came in ? A. No, sir. Q. You have given us your inference of some things instead of the conversation ; was that an inference founded upon any conversation that you heard there ? A. No, sir. Q. Can you state what relation existed between the Attorney-Gen- eral, Mr. Hun and Gov. Hoffman at that interview ? A. I can- not. Q. Your recollection is that Mr. Hun prepared the papers there? A. Yes, sir; and, I believe, in the Attorney-General's office. Q. Then the papers were not brought up, already made and ready to be placed into the hands of the Attorney-General, from New York ? A. I think not. Q. Were the papers served on the same day that this interview that you have spokeen of took place — the papers from the Attorney- 629 General upon the officers of the bank ? A. I don't know any thing about the service of the papers. Q. You have stated all that you recollect of that interview ? A. Yes, sir. Q. I don't know as I understand you correctly, Mr. Smith, that you inferred that Mr. Ellis was going to wind up the bank himself with- out the aid of the Attorney-General ? A. I inferred from this remark, that he took to himself the credit of closing that bank without first being asked by the trustees to do so. Q. That was an inference of yours ? A. Yes, sir. Re-direct examination : By Mr. Tract : Q. There is a letter in these papers from Mr. Ellis to the Attorney- General, and dated that day, the twenty-ninth of September ; was that drawn by the gentlemen who were all there ? A. I suppose so. but I was not present. Q. You did not know of its existence then ? A. No, sir. Q. What time of day did the party arrive ? A. In the morning, I should say rather early, by ten o'clock. Q. Had any information come to the department, before their ar- rival, tending toward producing such a letter from Mr. Ellis ? A. Nothing that I know of; nothing in the department. Q. So far as you know, that letter must have been written after they came there ? A. Yes, sir. Q. The letter to put the Attorney-General in motion by communi- cating with him, as I understand you, drawing the inference you did, when the superintendent had spoken, that he really had set the thing on foot, you asked Mr. Carman the question you did ? A. That was the reason of my asking Mr. Carman the question 1 did. By Mr. McGtjire : Q. The letter you speak of is the notice given by the bank depart- ment to the Attorney-General to commence proceedings? A. Yes, sir. Q. That is what is called a "letter" here? A. Yes, sir ; applica- tion, I suppose. Mr. Tract — I will have to recall the witness when I get the papers here. Isaac H. Vrooman, being duly sworn on behalf of the State, tes- tified as follows : Examined by Mr. Tract : Q. Where do you reside ? A. Albany. 630 Q. What is your profession generally ? A. I have been engaged in the banking business, and have been admitted to practice law ; I was engaged in the banking business for twelve or fourteen years. Q. Were you ever appointed one of the examiners by the superin- tendent of banks? A. Yes, sir ; in 1873. Q. By Mr. Ellis ? A. By Mr. Ellis. Q. Have you been appointed examiner more than once? A. Well, I suppose the examination extended over the time I was employed : for every examination there was a new commission made out ; in some instances, there were three examiners ; in others, two. Q. In each case a certain commission was made out for each bank ? A. Yes, sir; named Mr. Eeid, Mr. Aldrich and myself as examiners. Q. Reid, Aldrich and yourself, were the examiners? A. Yes, sir. Q. Where was this ?• A. The first examination I made was in April, 1873. Q. Of this bank, the Third Avenue Savings Bank ? A. Yes, sir ; it was on the fifteenth and seventeenth of April, I think. Q. Did you all three go to New York ? A. Mr. Reid resides in New Jersey, and Aldrich in New York, and I at Albany ; I went from Al- bany to New York. Q. Had any part of the examination of the estimation of property or inspection of property been done by them before you arrived ? A. Yes, sir. Q. What part was that? A. Mr. Reid generally commenced the examination by counting the cash ; it appears they had been at work on the fifteenth ; I arrived on the fifteenth. Q. You found the cash had been counted by them ? A. Yes, sir. Q. Had they examined the real estate out of town, or mortgages ? A. No, sir; I think they commenced the examination of mortgages after I arrived. Q. State what was the mode of proceeding, while you were there, in the matter of making the examination ? A. Mr. Reid generally left schedules at the bank, two or three days previous to the examina- tion, which the officers of the bank filled out. Q. State it again ; that Mr. Reid usually left at the bank before- hand a sehedule in blank to be filled up by them, indicating their property ? A. Yes, sir ; bonds and mortgages and securities, what- ever they had ; then, when the examiner came there, they called for the bonds and mortgages to correspond with the schedule, and we examine them. Q. And also the stocks ? A. Yes, sir. Q. You looked at the securities themselves ? A. Examined each bond and mortgage, and examined the security ; sometimes the bank had the securities in their vaults, and sometimes in the safe deposit company. 631 Q. Did you see the securities of bonis and mortgages? A. Certainly. Q. Find any other papers with them ? A. Generally examined searches and estimate of value by some disinterested parties. Q. Those appraisals were made when the loan was made ? A. Yes, sir. Q. They and the abstract of title and bonds and mortgages came to your notice ? A. Yes, sir. Q. You looked to see whether they were recorded ? A. Yes, sir; to see that it was properly executed and recorded. Q. Did you follow it through from one to an other bond and mort- gage ? A. Yes, sir. Q. What did you do with the bonds or stocks ? A. We examined and compared the stocks produced with the statements given, and arrived at the value by taking the quotations of the day previous. Q. The newspaper quotations ? A. Yes, sir. Q. With that you found your guide in the public announcement of the quotations ? A. Yes, sir ; stock reports. Q You looked to see that the certificates of shares were there as bonds, whatever they were ? A. Yes, sir. Q, How long did it take you to perform the examination at the Third Avenue Savings Bank that time? A. I was there two days ; it appears by memorandum that I have that the Atlantic Savings Bank was examined about the same time, because I was on the Third Avenue Savings Bank the fifteenth and seventeenth, and on the Atlantic the sixteenth, seventeenth and eighteenth of April. Q. You were on both of those banks ? A. Yes, sir. Q. Some parts of one day must have been devoted to each of them, some of the time ? A. Yes, sir. By Senator Stakbuck : Q. What evidence had you that the bank owned them and did not borrow them ? A. We generally swore them, after we had finished the examination, that the securities produced were theirs and had not- been borrowed for the occasion. Q. Then a report was drawn up or sort of return ? A. Yes, sir ; Mr. Reid generally busied himself in talking with the officers how they were conducted and one way or another; Aldrich and myself didn't make such an examination of the books, as Mr. Reid did that himself. Q. He was there the first day? A. Yes, sir; he styled himself ' principal examiner-in-chief. 632 Q. When you got through with all this, a statement was made up, or kind of return, and was that signed by you ? A. Yes, sir. Q. All signed it ? A. Generally ; there were some of the examina- tions I did not sign. Q. In this case you signed it ? A. I think I did. Q. You have seen. copies of that, know what it is, that return ? A. Yes, sir. Q. What do you say about the truth of it; was it a true return? A. I considered it was. Q. Done with care ; you believed it to be right at the time ? A. I did; there was some controversy about the Tarrytown property; we did not know the value of that, and Mr. Reid and Aldrich went to Tarrytown afterward and examined the bank there, and they satisfied themselves as to the value of the property; I have no personal knowl- edge of what the property was worth. By Senator Woodin : Q. That was after the report was made ? A. No ; before, I think. By Mr. McGuire : Q. After the examination and before the report ? A. Yes, sir. Q. You relied upon those two gentlemen's views upon it ? A. Yes, sir. Q. Otherwise, you speak from what you saw in regard to the bonds and mortgages and securities? A. Yes, sir. Q. That report of yours shows a deficit of $5,735.01 ? A. What- ever the amount is, I do not recollect it, under the date of April 14, 1873. Q. For your services in this capacity, did you receive an annual or monthly salary? A. I received a per diem while I was at work. Mr. McGuire — Mr. President, I object to that as immaterial. The President — What is the object of the question ? Mr, Tracy — Mr. President, it is the duty of the bank to pay these things, and I want to inquire whether the bank paid it in this case or not. The law provides that the superintendent may exact payment of these things from the bank, I would like to know whether this gentleman got his pay from the banks, or whether it was charged to the department. Mr. McGuire — Mr. President, I object to the inquiry. The President —Unless the counsel expects to prove concealment or evasion about it, I do not think it is competent. Mr. Tracy — Mr. President, I do not think there is any conceal- ment about it. The President — Then I do not think the question is material. 633 Q. What was done with the report after it was thus completed ? A. Mr. Reid forwarded it to the department ; he took charge of the report. Cross-examinatioQ of Isaac H. Vroman. By Mr. McG-uike : Q. Can you state about the number of bonds and mortgages the bank then held ? A. No, sir. Q. The nnmber ? A. I don't recollect the number. Q. Were there a large number? A. I don't recollect;. I think the report ought to show. Q. The report simply shows the aggregate amount, $264,100 ; I desire to know if that was embraced in one or 100 mortgages ? A. Proba- bly more than one mortgage, but whether it was over 100 I could not say now ; there were quite a number of bonds and mortgages. Q. Can you tell whether those bonds and mortgages were originally given to the bank or assigned to the bank? A. I think they were all regular on their face ; they were either given directly or assigned. ' Q. They were either given to the bank as mortgages, or else there was a proper assignment from the mortgagee to the bank ? A. Yes, sir. Q. You examined far enough to see that ? A. Yes, sir ; we always examined far enough to see that they were properly in the hands of the bank. Q. Do you not know it would be an utter impossibility with all the banks of this State for one, two or three' examiners to go to every mortgagor or assignee and ascertain from him who owned the mort- gage ? A. I think it was. Q. An impossibility ? A. That would probably be impossible ; we took the evidence that was produced of each mortgage. Q. You took the evidence that the bank was the mortgagee on the face of it, or else owner by assignment? A. Yes, sir. Q. In regard to the State bonds which you examined there, did you ascertain that the bank was the owner of these bonds ? A. If they produced stock they must have either been in the name of the baDk, or if they were bonds — government bonds — coupon bonds not being registered, the only evidence we had they belonged to them was the oath administered to them that they owned them. Q. You performed all that you could do to require the officers of the bank to show who were the owners ? A. Yes, sir. Q. And not put in there for a fictitious purpose ? A. Yes, sir. Q. I see from the report you put in then, you put in the Tarry- town land at $1,500 an acre in this report ; do you recollect that ? 80 634 A. I recollect there was quite a large amount of Tarrytown property. Q. You put it in at $1,500 an acre? A I don't recollect that part of it; there was some evidence produced before ns as to the value; I stated (page 358 of printed testimony before the committee) there was " ninety-two acres of land at Tarrytown at $1,500 — $138,000." Q. Then do you recollect that that was also secured by guarantee bonds of that amount ? A. I do not. Q. I see, in reading from this report, guarantee bonds on Tarrytown lands, $138,000, and you also have in that report, following as revenue received from those guarantee bonds, $9,660; do you recollect that ? A. I have no distinct recollection of the whole report only as it is there. Q. You have no recollection, particularly, outside of the report itself? A. I have not. Q. You can state that you made sufficient inquiries into the assets of these banks, properly and intelligently, to make this report to the superintendent ? A. Yes, sir, I did. Q. On page 362, in your written report, you stated " your exam- iners have reason to believe, from diligent inquiry and personal exam- ination, that that portion of the real estate at Tarrytown is worth full as much as the officers estimated it in the assets?" A. That was arrived at by W. F. Aldrich on a previous or subsequent examination ; I understand from Mr. Aldrich that he considered it worth what it was put in at. Q. This report could not have been forwarded to the superintendent until after the seventeenth of May ? A. I think not, from that memo- randum. Q. I see appended to the report by George W. Reid alone, dated May fifteenth ? A. I notice that is there. Q. I see, on page 358, the Tarrytown land is put in at $1,500 an acre at first; on page 360, you will see "guarantee bonds on Tarry- town land $138,000," the revenue derived from those bonds $9,660; I call witness' attention to page 362, where they say, in their report "from diligent inquiry and personal examination, that that portion of the real estate at Tarrytown is worth full as much as the officers have estimated in their assets ; " then, on pages 266, 267, 268 and 269, are the questions put to the officers of the bank ? A. 1 presume this is a correct copy from the report; the report has a very large number of questions generally put to each managing officer of a bank. Q. That business was principally managed by Mr. Reid ? A. In the presence of the others; Mr. Reid principally, or Mr. Aldrich. By Mr. Tracy : Q. You have not stated how you got at the figures $180,000, the 635 value of the banking-house; how did you get at that? A. I suppose there was some evidence produced that was satisfactory to us or we would not have put it in. Q. You do not recall how it was done? A. No, sir. Q. Whether you got it from observation ? A. It may have been taken from the books. Q. There is one item here in the assets of accrued interest ; how did yon get at that; that item of $32,000? A. Prom the books; Mr. Reid did all that ; he assumed to look at the books more particularly than Mr. Aldrich or myself; he busied himself with the accounts; looking over the books and taking statements. Q. The item of $100,000 guarantee fund, secured by bonds bearing seven per cent interest ; were those bonds produced to you ? A. They were individual bonds I believe, sir; of course they must have been produced or they would not have been put in. Q. Were you present in court yesterday, when Mr. Smyth was examined ? A. A part of the time ; he produced a package of papers I recollect. By Senator Woodiit : Q. I see in this report he states "from a personal examination, as well as from inquiry, that portion of the real estate at Tarrytown is worth fully as much as the officers estimated it in the assets ; " at the time he sigued that report, you had not seen this real estate at Tarry- town ? A. No, sir ; I did not see it at all. Q. Do you know that either of the others had seen it at that time? A. Mr. Aldrich has informed me since that — Q. I ask you the fact whether they had seen that real estate ? A. I did not know that he had until he informed me this morning. Q. Do you know whether Eeid had seen it? A. Mr. Aldrich said he and Mr. Reid went there and satisfied themselves of the value of the property. Q. Prior to the time of making the report? A. Yes, sir. Q. Is that matter of inference or actual knowledge on your part? A. It is information received from Mi - . Aldrich. Q. They went and examined the real estate in 1875, but whether they did prior to that ? A. I cannot tell you. By Senator Starbuck : Q„ I would like to know whether or not the guarantors of these bonds are, to any extent, the trustees of the bank ; whether or not this keeping up of the pretended value is secured by the trustees of the bank — they paying this $9,660 per year revenue? A. I do not know, sir. 636 Q. How is that P A. I have no information upon that subject. Senator Wellman — I can give the information the Senator seeks for, as it was obtained by the committee at their examination, if it is desired. Senator Starbuck — Is it in the book ? Senator Wellman — Mr. President, the information was obtained that the trustees of the bank pledged themselves for the payment of the interest or income upon the amount invested in the Tarrytowu land, so that the income of the bank should not suffer from the invest- ment, and that payment was kept up for some time by the trustees ; after a time it ceased. The President — The Senator from the Eighteenth asks whether the trustees were the obligors upon any of the bonds known as the guar- antee bonds? Senator Wellman — Mr. President, they were the obligors upon the matter of the investment in the Tarry town property. Senator Starbuck — Mr. President, they are the persons who paid the $9,660 per year ? Senator Wellman — Mr. President, yes, sir. Senator Schoonmaker — Mr. President, I ask for a decision of the Senate upon the question decided a few moments ago. Since the ques- tion was put by the counsel for the State, it seems to me it may be an important and material inquiry to ascertain what amount of money has been paid by the savings bank for the examinations made. It appears by the last report laid upon our desks, and by one of the witnesses who testified here, that the amount paid by one bank in 1873 was $175 ; at that rate the average amount runs up to nearly $2,000 per year. These were certified to by the Banking Department. It seems to me it is material and important that this body should know how that branch of the business in this department is managed. We are investigating that department. It strikes me it is material we should know that, and for that purpose I ask that a vote of the Senate may be taken upon it, and I call for the ayes and noes. Senator Harris — Mr. President, I differ with the Senator from the Fourteenth [Mr. Schoonmaker] in regard to our investigating the Bank Department. We are simply here to try the charges that have been laid before the Senate by the Governor. If among those charges there is a charge tha,t the Superintendent of the Bank Department has been derelict or has used his office improperly in regard to the employment or the appointment of these examiners, and paid them too much, then, of course, the testimony would be material. But I do not remember that there is any such charge. The Governor's mes- sage to the Senate, and the documents which accompany them, are the subject-matters of inquiry, and it seems to me that we are not at 637 liberty to wander and try the department itself, as the Senator from the Fourteenth says, to find out how he has managed the department in other respects than those contained in the charges. I think the Senate is limited entirely and wholly to the charges against the super- intendent contained in the Governor's message, and there being no charges of any impropriety on the part of the superintendent in regard to the appointment of examiners, or the certification of their fees, it seems to me that it is not a proper subject for the Senate to enter upon. Senator Schoonmaker — Mr. President, I do not propose to go into any discussion of the subject. I rise simply to protest against this theory of want of jurisdiction of the Senate to try upon any thing except the charges specified in the communications from the Governor. I understand, sir, that there is no limitation upon the jurisdiction of this body, and that it would be a most fatal heresy for this Senate or for any body in a proceeding of this character to limit its own juris- diction to the specific charges mentioned by his Excellency the Gov- ernor. The Governor need not send any charges. He can recommend the removal of this statutory officer, as provided by the statute, and then it devolves upon the Senate to institute its own inquiries. I have no facts upon which to base such a proposition, but let me sup- pose that the facts should be that this very officer had been guilty of the grossest corruption, and had taken, by virtue of his office, $100,000 from the savings banks of this State, would the Senator say the Sen- ate could take no cognizance of such startling fact as that, but that we must limit ourselves to some slight charge relating merely to the mode or manner of performing this statutory duty ? I know the honorable Senator too well to believe for one instant he would hesitate to take cognizance of such a grave charge. Now here is a fact, that secret charges are made against savings banks. They are not reported to the Legislature. They are not made known to the people. Have we no right, a matter of public policy, to know what these charges are and what becomes of this money ? I submit that question to the Senate. Mr. McGuike — Mr. President, I supposed when the counsel for the State asked this witness what he received as his per diem for the examination, I thought it was immaterial, and taking up the time of the Senate unnecessarily, and I therefore interposed an objection; I was not aware it was going to provoke any debate, and, for the pur- pose of relieving the Senate of voting upon the question, I withdraw the objection. Q. Did you receive your compensation for making this examination? A. I did. Q. What was it ? A. I find a memorandum of $109.50 received of 638 Mr. Reid by check on the Broadway National Bank ; the nine dollars and fifty cents was for fare betM'een Albany and New York ; my regular compensation was twenty dollars per day; I received forty- three dollars and something for that examination ; it was taken in connection with the Atlantic Savings; those two together make five days. Q. You got twenty dollars a day on the examination ? A. Yes, sir ; Mr. Reid said afterward that Mr. Ellis objected to my expenses, and he said lie did not want me paid more than twenty dollars a day; I wanted to be paid twenty dollars a day, and in going and coming, and he allowed it. Q. All the way through, have you received twenty dollars a day? A. Yes, sir ; all that I received over was the twenty dollars in Buffalo, and the nine dollars and fifty cents. Q. How was Aldrich paid? A. I presume the same; I have no personal knowledge in regard to his compensation. Mr. McGuike — Then I object to that. Q. Do you know how much was paid by the savings bank for these examinations? A. Only in a few instances. Senator Loomis — Mr. President, I object to that, on the ground stated by the Senator from the Thirteenth [Mr. Harris]. In my present state of health I am not able to make an argument. The President — The ruling of the chair was upon the ground that no reference has been made in the charges to any matters relat- ing to the charges of the employees of the department, and it was un- derstood from the expressions made here in the Senate, that the Senate would not go beyond the charges in this examination, and, therefore, until a distinct direction has been had by the Senate, the chair felt bound not to admit the testimony. The Senator from the Fourteenth [Mr. Schoonmaker] asks that the testimony be received. The ques- tion is: " Shall the testimony be received ?" Senator Bradley — Mr. President, the question presented now, is simply one of propriety, and not one of power. The idea will not be entertained, I apprehend, by any Senator, that when assembled for the purposes for which we are assembled here, that we have not the power — the jurisdiction — to make an inquiry into the action of this officer, whether contained in the Governor's message or not. And a question of duty arises which seems to me overcomes, to some extent, what may be deemed one of the proprieties by some of the Senators. We owe a duty to the public. Here is an office]: charged with important duties in which thousands are interested ; and, if he is not a man to dccupy that place and perform the duty for the protection of those great in- terests, the Senate, it seems to me, should make the inquiry. I assume this motion is made by the Senator from the Fourteenth, for the pur- 639 pose of making an inquiry into this subject. There is no law, as I understand, requiring the superintendent to expose in his report the moneys received for examination of banks by the examiners. This is a matter entirely in his discretion, and whether any thing has been done by the superintendent which would reflect upon his conduct, upon his integrity, it seems to me it is a subject that should be in- quired into ; and, as I understand the counsel for the respondent with- draws his objection to this investigation in that respect, relying, of course, upon the integrity of his client, I think we should make a thorough and full investigation of any thing that relates to the char- acter of the accused. It seems to me we should take this testimony. Senator Staebuck — Mr. President, we have learned that one of the three examiners received twenty dollars per day. Now, suppose the counsel were prepared to say, "what I propose to prove is that the three examiners, for examining this bank, were paid $300" (or any other sum), and suppose he was prepared to say, " I propose to prove that the circumstances under which this transaction was had, are such that I am going to ask the Senate to find that an exorbitant charge inade hi behalf of one examiner was colorable only, and it really was the money of widows and orphans, transferred through this irregularity to the superintendent himself." Is there a Senator who would reject it. For myself, I would hear it. Senator Harris — Mr. President, I will not take up the time of the Senate in any extended remarks upon a question like this. I simply propose now to answer one or two suggestions that have been made, and the first is, that the proper mode of proceeding in case this officer, the superintendent, of the bank department, has been guilty of any im- propriety in respect to the appointment of the examiners, or the certify- ing to their pay, is for any Senator or any citizen of the State, who knows of any impropriety on the part of this officer in that respect, to lay his charges before the Governor, and the Governor commuuicate that he, in his judgment, thinks proper to communicate to the Senate. He can do that to-day. He can do it at any time, and that is the proper mode of proceeding. That is the mode in which we are assembled here to-day. We are assembled on the proclamation of the Governor, who sends to us certain charges against this man. This matter is not insinuated. It is not alleged by any one that there has been any im- propriety on the part of the superintendent in regard to the examiners or their pay, but it is, to speak in common parlance, a mere fishing operation to find out what has been done here. No one alleges — no one has alleged — not even the counsel for the prosecution, that there is any thing improper ; but it is merely an inquiry, and after we have got through such an inquiry as that in re- gard to examiners, we can start an inquiry in regard to his clerks, 640 an inquiry in regard to his stationery, not that there has been any charge here that there has been any impropriety, but, under the sweeping idea that we can inquire into any thing, that sitting here as a Senate, with certain charges before us, that we can inquire into any thing outside of those charges; we might as well have used the few days we have spent upon joining issues in taking testimony, and spent it usefully; for what was the occasion of this long preparation about charges and answers if we are not confined to the issues thus joiued ? It was entirely useless, if the idea of the Senators from the Four- teenth, Eighteenth and Twenty-seventh is correct that we are not confined to those issues at all, but can wander anywhere, without any danger of any impropriety and can examine into any thing. I protest against any such idea as that; we are here to try the charges sent us by the Governor, and nothing else. Senator Cole — Mr. President, . I desire to say for myself that I concur most heartily in the suggestion made by the Senator from the Fourteenth, that the Senate have the power, but we have laid down a rule by which we are to be governed. Charges have been made against the Superintendent and laid before the Senate, and we are here, after several days, with the full knowledge of the charges as alleged. Now, sir, it seems to me that we had better confine ourselves to the issues that are made, and that, while doing that, we do not recognize a principle or a precedent, as the Senator says, that shall go out here; we have not the power. We have the power; but the question is, after having settled a question, shall we take up that power? Shall we exercise that power? Is there any necessity for it? Is it right on the part of the Senate? Is it right toward the individual who stands accused? I think not. Senator Geraed — I recognize, sir, the jurisdiction and right of the Senate to go into this inquiry as regards all the savings banks of the State, but I find in this inquiry an entirely new issue presented for our consideration, and from what has been presented to the accused for a defense, I think there is a propriety and a justice in letting him know beforehand the charge upon which he is to be tried. The one now under consideration has never been brought to his notice or attention. He is now absent. I don't think, under the cir- cumstances, there is a propriety in going into this matter; therefore, I shall vote in the negative upon this proposition. The President submitted to the Senate the question, whether the testimony should be received and it was decided in the negative. The Senate hereupon took a recess to five o'clock p. M., July 25 1877. 641 Sarato&a, July 25, 1877. The Senate reconvened at five o'clock, p. m. — a quorum present. Abraham Sellers, being recalled on behalf of the Senate, testified as follows : Examined by Mr. Tract : Q. What was the cost of the banking-house of the Third Avenue Savings Bank as you ascertained it from the books? A. Upon examination by both Mr. Reid and myself, when we first took charge of the bank, we figured up, as near as we could, the proper items of the cost of the building, and we found it to be about in the neighbor- hood of $80,000. Q. How much ? A. About $80,000. Mr. McGuire — Mr. President, I submit this wholesale swearing will hardly do ; we are entitled to know all the items. The President: — Undoubtedly, you are. The Witness — I shall have to send to New York for another book before I can give all the items. Q. Turn to the book where that account is standing; turn to the item in the ledger of April 3, 1868, and read what that item is. A. The bank building is debited with $100,000. Q. What is the item ? A. Profit and loss is credited, and the bank building debited with $100,000. Q. What date is that? A. April 3, 1868; it reads: "Increased valuation of real estate owned and occupied by the bank, $100,000; real estate debtor to profit and loss, $100,000; increased valuation of property owned and occupied by the bank;" it was added into the cost of the bank building. Q. What was the date? A. April 3, 1868. Q. Was that at the time the bank was completed ? A. This was after the bank was completed. Cross-examination of Mr. Sellers : By Mr. McGuire : Q. Do you know who was Bank Superintendent in 1868 ? A. I do not; I think it was Mr. Howell. Q. Do you know that George W. Schuyler was? A. I do not know. Q. I did not know but your books would show who the Bank Superintendent was ? A. The books don't show any thing of the kind. Q. Don't the books of the bank show that report was made to George W. Schuyler in 1868 ? A. I should not be surprised; I haven't them here; I don't know. 81 642 Q. It was then returned at $180,000 ? A. Yes, sir. Q. And returned every year from that time down to 1875, at 000 ? A. There or thereabouts ; yes, sir. Q, All through the administrations from 1868 down to 1875 ? A. Yes, sir ; it was returned with that $100,000 added. Eedirect examination of Mr. Sellers : By Mr. Tracy : Q. Have you made any further figures about the deposits? A. Yes, sir. Q. Give them ? A. Between the twenty-second of March, as I un- derstand the question, and the twenty-ninth of September, there was deposited in the bank $319,537.12 ; there was drawn out- during that time $433,978.58. Q. Those figures cover all the deposits ? A. Yes, sir. Senator Woodin — Does it appear what proportion of the new de- posits between those periods were drawn out ? Mr. Tracy — YeSj, sir. By Senator Robertson - : Q. During what time ? A. Between the twenty-second of March, the date of the last report to the Bank Department, and the 29th of September, 1875. By Senator Kennaday : Q. Mr. Sellers, do you know when the bank building was completed ? A. I do not, sir ; there is no way of telling that accurately, for bills probably came in five or six months afterward. Q. Do you know generally about the time? A. I should judge the building, from the appearance here, was completed some time in 1865 or 1866. Q. Do yon know when the ground was purchased ? A. The first payment on the ground was in 1863. Q. Do you know the area of the ground ? A. I don't know the size at all it is. Q. What was the price paid for the ground ? A. Eleven thousand one hundred and fifty dollars, as it appears by those books. By Mr. McGutre : Q. I would like to make an inquiry, as it is suggested that further books may be required ; will you state, Mr. Sellers, what books you found in the bank when you took possession ? A. I found what was considered, I suppose, a complete set of books. 643 Q. Books that belonged to that bank? A. Yes, sir ; that is to say, a complete set of cash books, ledgers, etc. Q. How many of each ? A. I don't remember; there are chree ledg- ers that I know of; five journals and three or four cash-books, and then any quantity of dealers' ledgers and books appertaining to the in- side management of the bank; cart loads almost of those. By Senator Starbuck : Q. Have you looked any further to see how much was the deposit after March 22, 1875, up to September 29, 1875, and how much of that new deposit was drawn out? A. I have given that; I gave that this morning. By Mr. MoGuirb : Q. How many ledgers did you say t A. Of the general ledgers, as they are called, there are three. Q. How many cash books ? A. I don't know how far they ran ; I think they ran to No. 5. Q. And what you called the depositors' ledger ? A. There were a great many of them ; the ledgers ran from one to number nine ; attached to almost all of them there are duplicates, and I suppose there are, at least, twenty of the depositors' ledgers. Q. Did you ever go through those books ? A. "We took a balance sheet off of all those books for our own guidance. Q. How long were you engaged in , taking a balance sheet off? A. A. I suppose, at least, in perfecting it three months. Q. How many assistants had you examining the^ooks of that bank ? A. One. Q. Spending pretty generally the whole of your time at it ? A. Yes, sir. Q. That was merely to get a balance sheet ? A. That was merely to ascertain how near the actual statement of the debts due to the de- positors agreed with the former statement. Q. To get a general idea of the books ? A. Yes, sir. Q. And accounts ? A. Yes, sir. Q. Did you also examine the securities upon hand; you had appraisers, I see ; but, in addition to the acts of the appraisers, did you yourself take time to examine and compare your securities ? A. Yes, sir ; the number of bonds and mortgages and all that. Q. How long were you engaged at that? A. That didn't take a great while. Q. How long were those appraisers engaged in the business that were paid $1,500 apiece for their services — engaged in appraising the 644 assets of those banks? A. I could not tell yon ; I think from two to three weeks. Q. Not longer than that ? A. I don't think they were oyer three weeks. Q. How many books have you, as receiver, that you had entries upon? A. Cash-book and journal, or cash-book and ledger. Q. You said this morning you could give more perfect information if you had certain books here ? A. Yes, sir. Q. What book do you refer to ? A. The books of the receiver. Q. The cash-book? A. The cash-book and ledger of the receiver. Q. Those books contain the names of the purchasers of this prop- erty ? A. Yes, sir. Q. And also the papers in which the advertisements appeared and the length of time the advertisements ran? A. Our counsel has all that; Mr. Smythe has all that; copies of papers and advertisements. Q. You have the originals ? A. No ; the counsel has all that. Q. Can you form any estimate what time it would have taken Mr. Sellers to have taken these accounts and vouchers, and made the com- parison for the purpose of verification as to the number of these books of this bank, and also the entries and all the securities? A. I don't know that I exactly understand the question, sir. Q. As an expert, have you examined these books, and can you give us some idea of the length of time it would require to have looked over all the entries of the books and the vouchers, and to have made the comparison for the purpose of verification ? A. Even as far as the dealer's ledgers are concerned ? Q. Yes ? A. It would have taken a long time. Q. What time ? A. I should think it would take two men, to go to the bottom of the thing, four or five months. Q. You made a remark this morning, in answer to some question, that it would take two or three years to do something; what was that that you had reference to ? A. I don't remember what that was; I am speaking now of open accounts ; yes, sir ; I remember what the question was. Q. I am speaking not of open accounts ; I am speaking of all the entries in these books, of their character? A. I would not undertake to do it in a year, to go to the bottom of it. Q. You could not have formed a perfect estimate of the condition of the bank; unless that was done, could you? A. Well, no; that is another question, I think, decidedly ; the bank keeps, all banks keep, a balance sheet of the individual ledgers which, added up, should agree with the general ledger ; they are called " proof-books ;" those proof-books, added together, should agree exactly with the general ledger. 645 Q. If they do not ? A. Then it would take a long time to do it. . Q. It appears they do not ; in this case there 'was a deficiency of $66,000 ? A. That could be told in twenty papers. Q. If they had all the papers, wouldn't you have to verify the proof- sheets? A. The proof-sheets are supposed to be correct. Q. When you are employed as an expert to ascertain the condition of a bank, you do not take the papers that the bank furnishes as absolute verity, do you ? A. I would, in all instances, take the foot- ings of the proof-books. Q. Would you take the names to ascertain if those proof-sheets were correct or not ; or whether there were any false entries there ? A. Unless it was pointed out to me, or else it was told to me to hunt up something of that kind. Q. When you are employed as an expert to examine books, unless there was some false entries pointed out to you, or you were requested to look for some false entries, you would accept the proof-sheets of the bank as evidence of what they contained, would you? A. Yes, sir; if I was appointed to examine a bank, I would go first into their book-keeping, and that would be the very first question I would ask, in going into the* bank, whether their individual ledgers and general ledgers agreed; I would ask for their proof-books, and if ^their proof- books and general ledgers agreed, I should have to take it as an answer to the question that^the thing was correct. Q. Then you would rely upon what they told yon as to the system of keeping books, and if they furnished you with a proof-sheet, and that corresponded with what they told you, then you would assume that the information and proof-sheet were correct? A. No, sir; I would say this : I would ask for their proof-books, and compare them with the general ledger, and if they agreed on a cursory and general examination, I would have to take that, as a matter of course ; if this did not, I would have had to begin again to find it out. Q. And that would have taken you a long time ? A. A great while. Q. The books that you have spoken of in regard to the entries, sales of the real estate and the purchasers, have you any objection to fur- nishing them? A. None at all; I will give you a list of them ; the name of each purchaser and the price each property brought, and the names and residences. Q. Could you also furnish the paper of the publication of the notices ? A . Yes, sir. Q. And the length >f time they were advertised? A. Yes, sir; I will send that up to you at any time you may desire. Q. At your earliest convenience ? A. I will send them up, and take a memorandum of it now. 646 Mr. Chapman — Mr. President, I wish to make a single remark in relation to a telegram which I hold in my hand ; I understand that this morning, in my absence, some suggestions were made here, which tended to indicate that I had been attempting to keep the witnesses of the people improperly away from this court; it is proper I should say, in connection with this matter, that last night, just before retiring, I seent a telegram to Mr. Lamb that he need not come here this morn- ing; that he could come up with me on the one o'clock train; that we would be in time. It seems the messenger could not get the dis- patch off, and without knowing any further about it, he met Mr. Lamb at the depot, and verbally reported to him that he need not come up here. I did not know at that time, as Mr. Lamb subsequently tells me, that Mr. Tracy had had any communication with him in the nature of asking on his part, asking a postponement so far as he was concerned. I assumed, when I sent the telegram, that he had been subpoenaed for this morning, and I then assumed that the attention of the Senate would be occupied this forenoon and during this morn- ing's session, beyond any question, with these books and papers, and that the Bank Department men would not be reached under any cir- cumstances until after dinner ; and, as an old friend, 1 wanted his company along up, and suggested it would be just as well for the men to remain, so far as he was concerned, and to Mr. Smith, that it would be just as well for them to remain in the Bank Department this forenoon, and to not take them away, because they could not be reached. That is all there is of it. I did not have any idea of inter- fering with my friend's witness. The President — It is not deemed any interference on the part of the counsel at all. Mr. Chapman — It is a thing I would not do under any circum- stances. The examination of Mr. Sellers resumed. By Senator Schoonmaker : Q. Mr. Sellers, are you able to state, from your examination of the books of the bank in question, what moneys were paid out during the year 1875, other than drawn out by depositors ? A. Yes, sir. Q. Can you give the aggregate ? A. No, sir ; not without a long calculation; there is an every-day entry of depositors ; outside of that, there is not a great deal. Q. The inquiry is, what amount of money was paid out by the bank, during the year 1875, other than the money drawn out by depositors? A. That involves a great many accounts; it will amount to a great deal of money, because stocks and bonds and mortgages were bought. 647 Q. I do not mean money paid for purchases of security, but for dis- bursements of the bank. Q. Do you mean just the expense account? A. Yes, sir. Q. Yes, sir? A. I can tell that; the whole year 1875 I can tell; there is charged up to expense account here, in various items, from January, 1875, to the closing of the bank, $3,400. Q. Docs that include salaries ? A. No, sir ; in salaries, $2,464.08. Q. Do the books show a miscellaneous account? A. No, sir; they did not keep any thing but a salary account and an expense account, both of which were charged to profit and loss at the end of every six months. Q. Is it there charged to profit and loss ? A. Both of those were ; I do not know what else was charged to profit and loss. Q. Does that include taxes? A. Yes, sir; all expense account from March to September, $2,742.67; all salaries, $1,466,64. By Mr. McG-uire : Q. Three thousand four hundred dollars in the aggregate of the expense account as you have mentioned ; how much of that is for salaries paid to officers ? A. Nine hundred and forty-nine dollars and ninetv-eight cents; they kept a separate salary account up to the .first day of June ; they then balanced that salary account and com- menced charging their salary to expense account. Q. Is that also included ; this last item of receiver's matter, three dollars and twenty-three cents ? A. Yes, sir. Q. That goes to make up the $900 ? A. No, sir. Q. Then deduct that and see what the actual expense is after de- ducting the original receiver's matter out of it. A. The receiver's mat- ter — I don't know what that means; that is something before Sep- tember twenty-ninth. Q. See what the actual expense account is ? A. Two thousand one hundred and twenty-seven dollars and sixty-eight cents. Isaac Smith, being recalled on behalf of the State, testified as fol- lows: Examined by Mr. Tract. Q. Have you received now from Mr. Lamb the paper that you spoke of when on the stand before ? A. Mr. Lamb has it here. [Paper pro- duced. ] Q. Is this the paper which you prepared, which you described this morning ? A. Yes, sir. Q. State when it was prepared? A. I think about September, 1873. 648 Q. Describe what is the first page of this partly in ink ? A. This is a copy of the report of July 1, 1873 ; the part in ink on the first page is a copy of the report of the 1st of July, 1873, made by the bank. Q. The pencil marks are by you ? A. Yes, sir. Q. State what the other papers are, following that ? A. This paper is the statement of the condition of the Third Avenue Savings Bank, July 1, 1873 ; " value of real estate allowed, as shown by report of examiners April 14, 1873, and value of stocks at their quoted market value, September, 1873;" I took it from the report of the examiners in April, 1873. By Senator Harris : Q. You took the value that they reported ? A. Yes, sir. Q. What else is on that second page? A. Statement of condition of Third Avenue Savings Bank, July 1, 1873 ; value of real estate allowed, as shown by report of Examiner Keyes, 1871, and value of stocks at their quoted marked value September, 1873. Mr. Tract — I desired to put the papers in evidence, but I wanted it understood what they were; I would like to put these papers in evi- dence in connection with some testimony I shall offer. Q. When this paper was prepared, what did you do with it ? A. I showed it to Mr. Ellis in his private office. Q. Did he look at it ? A. Yes, sir. Q. Was there a conversation between yourself and him about it at the time? A. Yes, sir. Q. Go on and state it ? A. It was mostly by way of explanation, explaining the manner in which the statement was made up and the object ; to get at the approximate condition of the bank at that time. Q. Do you mean you made explanations to him of how you had done this work ? A. Yes, sir. Q. And how you had arrived at the result ? A. 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' SO OS ©©OO©©© ©©CO ©o©ooo© ©©00 ©©©©o©©' ©©o ©©O©©©©. ©©00 © © SO © SO © ©■ 0©05 r\ (^ »s <^ ^ r\ *\ *\ ■% *\ © © CO SO CO CO O © © -* OlOtxiio -*« CO £4 rH Ma 3 p G 02 H Ph co £- co t» xi to t- a> bC c3 bjj c3 o Ph Id fl' o. ..... .,Q. c3 : : : : : :o : : : : : :<%" , ^ -*J rrj ■S 03 .-S PhMpr Ph O f-i a is o i; « co tn C3 OS 654 "a a EH © c tH OC t- O CC C* Kt CG o it: £- OC r-l o k: 1-1 tH in «& 4» iH I- © 3 a t> -> += a .1 a 3 a) • >-* «M S C o o I § 0) *c P a^ 5 1 O H- P cc c P 655 Q. The document which you have now read/containing three pages, was prepared by you ? A. Yes, sir. Q. The first page of it in ink that you read exhibits the securities of the bank on the first of July as made by itself ? A. Yes, sir. Q. And the second page is a re-examination of that year, chang- ing certain values according to the stock valuation ^for the time ? A. Yes, sir. Q. How was the third one ? A. The third one was the same ; I believe you will find the only change in that is in the real estate. Q. On what basis did you change the real estate between the two ? A. One shows that it was from the examiner's report of 1873, in April, I believe — and the other was Mr. Keyes' examination in 1871. Q. That makes the difference between the two ; the second and third report ? A. Yes, sir. Q. By each of them you made out the deficiency $226,000 and $70,000 and odd on the other ? A. Yes, sir; I would like to state, though, there may have been some changes in those assets in those times that I would not have found here ; I had simply to take the report of July, and assume they had the same real estate shown pre. viously ; that will be found on pages 477 and 478. Q. You presented this paper to him, and talked it over with him ? A. Yes, sir. Q. Was there any thing said about closing the bank at that time ? A. No ; I don't recollect that there was any thing said at that time. Q. Any thing said about its being insolvent ? A. I don't think that is necessary, so I don't think any thing was said about it. Q. After this interview was any thing done about that bank in the department ? A. 1 believe there was nothing done. Q. "Was there any special examination ordered after that ? A. Not that I ever heard of. Q. When next was it examined ? A. I think the next examination occurred in 1875. Q. That was the regular examination, once in two years ? A. Yes, sir. Q. The regular examination was the next one ? A. Yes, sir. Q. Nothing was done that winter ? A. I believe not ; the records will show. Mr. McGrUiBE — Mr. President, I hardly know how to examine this witness without having an opportunity to examine this paper by comparing it with these reports. Mr. Teact — Mr. President, I beg to say it has all gone into the stenographer's minutes, and will appear in the printed testimony. 656 Mr. Chapman — That is precisely the point A very great deal of this evidence Senators can readily see from this printed book. Indeed, all the evidence taken down by the stenographer,- unless it is printed so that we can have it before us, we are not able to analyze. The President — It is printed with all the rapidity that is possible. Mr. Chapman — The only point in regard to it is, whether we are going to have it in time so as to look it over and compare it with the report and analyze it, so that we can make an examination. The President — The paper is before you, and the witness has stated its contents in full. Have you any questions to ask of the witness 'i Senator Bradley — Mr. President, I would like to ask the witness a few questions. Q. What induced you to make this examination and statement ? A. Because I knew the bank, or at least I believed from the report of the examiners, and their own report to our department, that the bank was insolvent — absolutely insolvent — and that I could present it in better form to the superintendent in that way than I could by any vconversation, and it was rather complex, too. Q. Did you have any circumstances that suggested to you the propriety of making an examination, except what you derived from the reports of 1871 and 1873 ? A. No, sir. Q. Was it a subject of conversation in the office ? A. Yes, sir. Q. In the Banking Department ? A. Yes, sir. Q. In the presence of Mr. Ellis ? A. That I cannot say. Cross-examined by Mr. McGuire : Q. Did you suppose you could make a more accurate report than special examiners that had been appointed ? A. No, sir ; and I did not try to. Q. Did you take the report of the examiners in making this last paper that you have read ? A. I believe I took the report of the examiners of 1871, as to the real estate. Q. I am speaking of the last paper that speaks of the examination made in 1871 ; did you take that examination of the 'appraisers as your guide ? A. As far as real estate is concerned, in one case. Q. Did you change the real estate at all ? A. No, sir — well, changed it from their report as taken bv their report of July 1, 1873. \ iQ. Did you change the amount or valuation put upon real estate by the examiners in 1873? A. No, sir; I just stated I took the fig- ures. Q. What then did you change of values made by the examiners in 1873 ? A. The stock ; stock and the bonds. 657 Q. Then your examination was to see whether the stocks were as valu- able in September as they were in the preceding April; is that 'it? A. No, sir ; I did not care any thing about the value of the stocks ; my object was to show the condition of that bank, as nearly as I could, in September. Q. Yon have stated that ; I wish you would answer my question ; I want you to state in what way you changed the value of stocks ? A. I changed them as contained in the market values. Q. Did you have an idea the special examiners did not give the true value of the preceding April ? A. No, sir. Q. Then what induced you to change it ? A. I didn't change their values in April ; their values in April were probably different from what they were in September. Q. I understood you that you took their figures of the real estate ? A. Yes. Q. Now, do you mean to be understood that you took their figures on the stock or State bonds, or did you change those ? A. I did not take their figures nor did I change any of their figures. Q. Did you, in ascertaining the assets, or attempting to ascertain the assets of the bank, fix the same value of stocks and State bonds that the special examiners had two months preceding? A. No, sir. Q. What induced you to change it? A. As I stated in there; I wanted to show the condition of the bank, in September, 1873. Q. What induced you to change those figures if you did not regard yourself as more competent to make the examination and the special examiners ? Mr. Tracy — I will object to the learned gentleman's assuming a fact which has not been proven ; he says he did not change their fig- ures, but put in his own, on their then present valuation. Mr. McGuibje — What I mean by a "change," is not following their figures. The President — He means to ask why the witness did not take the figures of the examiners. Mr. McGuire — Take the values of real estate; did not take the values of stocks. Q. I want to ask you what induced you not to take the values of stocks as fixed by the special examiners ? A. Because I wanted to show the condition of that bank in September, 1873, and not in April, 1873. Q. Did you have any reason to suppose that the examiners in April, 1873, had put a fictitious value upon the stock ? A. No, sir. Q. Did you assume then that such was the value as fixed by them when made by the examiners ? A. No, sir. Q. You did not take any means to ascertain then what the value 83 658 was in April ? A. I did not want to know ; that was the reason I did not. Q. You did not want to know ? A. No ; I had no object in know- ing. Q. You saw from that special report made in April that the special examiners reported a deficiency of between $5,000 and $6,000 ? A. I have forgotten the amount; I think it is stated there. Q. Five thousand and some odd dollars ; don't your figures show it that you made? A. I don't remember the figures in pencil memo- randa ; probably they do show it. Q. Five thousand seven hundred and thirty-five dollars and one cent ; you recollect now of seeing the deficiency as reported by the special examiners ? A. Yes, sir. Q. That examination you were not inclined to follow ? A. No, sir. Q. You thought you could improve upon it ? A. No, sir ; made no attempt to. Q. Do you know whether there was any difference in the value of stocks or State bonds in April or September ? A. I don't know that I do ; know the value of September. Q. How did you ascertain the value of stocks in September ? A. I took a financial paper and referred to the stock quotations and gave the bank the advantage of the highest price; for instance, I put it at eighty, because I could not find out what had been paid. Q. Did Mr. Ellis inform you that he had sent three gentlemen there to make the examination of that bank, and their judgment was more reliable than yours ? A. No, sir. Q. Didn't he indicate that to you, that it was no part of your busi- ness to be supervising the report of the special examiners ? A. No, sir, for I did not supervise any reports of special examiners. Q. Or volunteering to make a report against special examiners ? A. No, sir. Q. Didn't he indicate a seeming disapproval of interference on your part ? A. No, sir ; he had no reason to do so. Q. What value did you put upon Kansas State bonds ? A. I believe par ; not being able to find the quotations. Q. Look at the paper and see; in September, 1873, what did you put upon them? A. Par. Q. The amount? A. $155,000. Q. Didn't you observe that the special examiners in 1873 had reported Kansas State bonds at $175,000? A. No, sir. Q. What is the report of the bank in July, as to the amount of Kansas State bonds ? A. The same as I had it. Q. The same as you have got it there? A. Yes, sir. 659 Q. "What did you write the value of $100,000 Louisiana State bonds at? A. $55,000. Q. Did you see that the special examiners reported those bonds in the preceding April at par? A. No, sir. Q. Did not notice that at all ? A. No, sir. Q. Was not your attention in any way called to their examination? A. Not at that time. Q. How, then, did you get at the value of the real estate then fixed by the examiners at that time if you did not look at the report? A. I did not say I did not look at the report; I looked at the report for the purpose of ascertaining at what amount they put in the real estate. Q. You looked at it for no other purpose? A. As I remember, that was all. Q. It was all in one column so that you could by a glance of the eye see ? A. My only object was to get that item. Q. What did you put the Georgia State bonds at? A. Forty-four thousand five hundred, the market value; eighty-nine per cent. Q. Did you notice that the examiners put them at ninety-nine the preceding April? A. No,, sir. Q. What did you put the Alabama State bonds at? A. $54,800; fifty per cent. Q. The examiners how much — fifty-four cents? A. I don't know what they put it at. Q. Virginia State bonds, what rate did you put on them? A. Fifty per cent. Q. That is higher than the examiners? A. I don't know any thing about that. Q. The Jersey bonds, what rate did you put those at? A. Ninety per cent. Q. You saw the quotation in the paper of that date ; the financial papers of that date say only ninety per cent for Jersey bonds? A. I took it from the financial journals of that date, and I supposed I had them correct. Q. Didn't you know a year afterward they sold above par ? A. I don't know. Q. You had no occasion to look at a financial journal after making that paper, I suppose ? A. Yes, sir. Q. What rate did you put the dry dock bonds at ? A. Par. Q. Did you notice the examiners only put them at ninety-seven cents? A. No, sir. Q. When was your attention first called to this examination made by the examiners of 1873 ? A. I can't tell exactly ; but I think I saw it soon after the report was received at the department. 660 Q. Can yon tell about what time it was received ? A. No, sir. Q. Do you recollect of this addenda to this report signed by Mr- Reid ? A. No, sir. Q. Have you seen that which I showed you in the printed boot? A. I don't know. Q. Don't you remember that ? A. No, sir. Q. That Mr. Reid stated that the troubles in Louisiana have ren- dered their State bonds unsalable ; don't you recollect your attention being called to that in the department? A. I have no doubt I read that if it was in the text of his report; but of course I do not remem- ber it ; there were a good many of those reports received. Q. Not of this character; not many reports that trouble has ren- dered bonds unsalable ; you have never read many of those reports ? A. No, sir ; I was speaking of the report of the examiners. Q. Did you afterward look to see whether these Louisiana State bonds appreciated in value? A. No, sir. Q. Have you ever given any attention to the price of Louisiana bonds prior to making that statement? A. I don't remember; prob- ably I have. Q. You don't remember ? A. No, sir. Q. You stated that you did not subsequently say the only occasion you ever had to -refer to Louisiana bonds to ascertain their value was the precise time you made that statement ; is that it ? A. No, sir. Q. I ask you if you have had occasion, since then, to refer to Lou- isiana bonds for any purpose, as connected with the department? A. I can't say that I have or have not. Q. Then you have no recollection at all ; then the only recollection that you have is referring to quotations at the precise time ? A. The reason I recollect that is, because it is written on it there. Q. I was only calling your attention to the bonds and not to the paper; your business, I suppose, was confined exclusively to the Banking Department ? A. Yes, sir. Q. Assuming that the assets of the bank were as reported by the special examiners and their value as reported by them, would you call this bank then in a state of insolvency ?' A. I don't know that I un- derstand your question precisely. Q. Assuming that the bank held the securities which the special examiners reported to the department, and that the value of those securities were as reported by them, would you call the bank then in a state of insolvency ? A. I cannot say as to that, for I have made no calculations. Q. But it seems that you have three different statements there; what was the purpose of making three ? A. The first one is a copy 661 merely of the report made July 1, 1873, and the other two are based upon that changing of values for 1873. Q. Why did you go back to 1871, Mr. Keyes' report of the value of real estate? A. Because I thought there was not a very definite idea as to the value ; the two examiners reported the value differently. Q. That is, one in 1871 and one in 1873, different ? A. Yes, sir. Q. That is what attracted your attention to the real estate ? A. No, not that step, but it occurred to me to make the statements on those two bases, in order to get at something like an approximate idea of the condition of the bank in September, 1873 ; an approxi- mate result, rather. Q. Did you keep track of the mortgages in those days ? A. No, sir ; only as I referred to them in the financial papers ; I did not watch them closely. Q. Can yon tell whether there was an appreciable difference in the value of stocks in the spring and fall of 1873 ? A. No, sir, I did not notice them in that manner. Q. Did you notice whether there was a panic in 1873 ? A. Yes, sir. Q. When did that panic commence ? A. It commenced in the fall; I think in September. Q. Commenced about the time you made the statement? A. I don't know about that; it never occurred to me when I made the statement. Q. That panic brought down the price of all stocks ? A. Yes, sir. Q. And then you fixed a price of stocks upon panic prices ? A. I don't know that I did, sir; I hardly think I did; I do not believe I did. Q. You did not put them above quotations ? A. I took the quota- tions as I found them. Q. What time in September was this paper ■ made ? A. I didn't date the time exactly. Q. Can you state whether it was the fore or the latter part of the month ? A. I am inclined to think it was the fore part of the month, because I took up the report as soon as I could after the first of July, to make the examination. Ee-direct-examination of Mr. Smith : By Mr. Tracy : Q. Before doing this work had you before you the fact that the bank reported a surplus in July ? A. I believe so. Q. Had you heard the fact that these examiners a few months before reported a deficiency ? A. I did know of that. 662 Q. Now then was it usual for these reports to come into your hands for scrutiny after they came in the department ? A. Yes, sir; that is, the reports from the bank. Q. You were called the head clerk ? A. They called me chief clerk; the title is accountant. Q. Was it not known to Mr. Ellis that that was a part of the busi- ness which you were doing ? A. He saw that was the business I was doing when he came into office. Q. It was your custom to go to him and to give him the result of your scrutiny ? A. Yes, sir. , Mr. Tracy — I would like to read a passage from the testimony in print, when Mr. Ellis was on the stand, on page 273. " By Senator St. John : Q. You did propose to take bonds in another instance, I think ? A. No ; do you refer to the Mechanics and Traders' ? Q. Yes ; I thought your letter suggested that ? A. My letter did suggest bonds or cash, but I don't think I intended — I never have done it — to take personal bonds ; I don't say that the superintendent had not the right to do it ; I rather think he had ; I think Mr. Howell did in two or three cases. Q. I would like to make the inquiry whether, when these reports are made to you — these estimates of assets and liabilities from these various banks — whether you yourself, personally, give them a care- ful examination, to see whether the assets are worth, in your opinion, what the bank owes ? A. I can tell you how they are treated when they come to the office; they go first to the head clerk. Q. For tabulation ? A. No ; for examination ; he looks through all the items of assets, and if he finds every thing regular and straight, there is no particular mention made of it; if he finds any thing that looks irregular, or any estimate that looks too high, or any thing of that kind, it is either handed to the deputy or myself, and we examine it carefully. Q. You mean by that, if the clerk reports every thing all straight you take no further pains with it ? A. No ; before they are finally sent to the public they are all examined ; I mean on the receipt of these papers from day to day, as they are going in ; for instance, take the quarterly statement of the bank ; he examines all those ; that has been his business for years. Q. I don't care about the quarterly statement, I am talking now about savings banks ? A. They are all examined. Q. Do you make an estimate yourself as to the value of these liabilities to see whether the bank has got a surplus or not ?" 663 By Mr. McGuieb : Q. I omitted, Mr. Smith, to ask you this ; you have been in the office, you say, about twelve years ? A. Yes, sir. Q. Performing the same duties you are performing now ? A. Yes, sir. Q. Who was the immediate predecessor of Mr. Ellis? A. Mr. Howell. Q. Who preceded Mr. Howell ? A. George W. Schuyler. Q. Reference has been made to the addition of the cost of the building ; when was that first brought to your notice ; was it in 1868, or did you ever notice it ? A. I don't know whether I noticed it or not. Q. You were, then, not taking sufficient interest in the bank at that time to see that on the 1st day of July, 1868, they had added $100,000 to the cost of the building from what they had reported on the 1st of January, 1868 ? A. I did not examine the reports in 1868. Q. I understood you were doing the same business then as now ? A. I did not mean to state for the whole time ; when Mr. Howell came in, I commenced the examination of the reports; sometime during his administration, but not during Mr. Schuyler's. Q. Mr. Howell came in in 1871? A. In 1870, I helieve. Q. Had not your attention been called to the report of this bank, to show this deficiency of $100,000 ? A. Not at that time ; no, sir. Q. When was your attention first called to it ? A. My attention was not called to the addition of $100,000 to the cost of the bank. Q. To the cost of the bank building? A. Bank building. Q. You never, then, commenced scrutinizing these reports with any care until Mr. Ellis took charge of the office ? A. I never scrutinized the report until Mr. Howell had taken charge of his office; sometime during his administration. Q. While Mr. Howell was superintendent this bank had a great deal of trouble, did it not ? A. Yes, sir. Q. And was it while Mr. Howell was superintendent this $100,000 of personal bonds were lodged in the department ? A. Yes, sir. Q. You recollect that fact when they were brought there? A. Yes, sir. Q. Were they brought there or given by the bank upon the demand of Mr. Howell ? A. I believe it was the result of a compromise upon the part of the bank officers and the Superintendent of the Bank Department. Q. Did the Bank Department, while Mr. Howell was superintend- ent, institute any proceedings'against this bank to wind it up or stop it ? A. I believe not. Q. Do you know the fact that there was a suit commenced to 664 dissolve this bank, upon the ground that their assets reported in 1873 were not legal and proper assets ; didn't you so report to the department that such a suit was commenced ? A. By the Attorney- General? Q. Yes, or from any source ? A. I don't know any thing about that ; I know they had a considerable trouble ; I don't know any thing about suits having been commenced. Q. Was any official information communicated to the Bank Depart- ment that these very securities which the examiners found there in 1873 were decided by the court to be legal and proper securities ? A. The Alabama bonds ? Q. The securities which the examiners found there in 1873 ? A. I don't know of any such decision. Q. I did not ask you about the decision ; I am asking about information communicated to the Bank Department — that the court had decided those securities to be valid, and these personal bonds to be valid securities? A. No, sir; I do not. Q. Do you recollect Mr. Howell so reported to the legislature in 1873 that fact? A. No, sir. Q. That it was communicated to the department? A. No, sir. William F. Aldricli, being duly sworn on behalf of the State, testified as follows : Examined by Mr. Tracy: Q. Where do you reside? A. In New York city. Q. Have you been one of the examiners appointed by the Superin- tendent of the Bank Department? A. Yes, sir. Q. For how long a period have you served occasionally in that duty? A. I think 1 was in it probably five years; I think about that; four or five years, occasionally; I was appointed by different banks, by Mr. Howell and by Mr. Ellis. Q. On each occasion you have a separate appointment? A. Yes, sir. Q. Were you one of the examiners of the Third Avenue Savings Bank in April, 1873 ? A. Yes, sir. Q. Who were your associates? A. Mr. Beid and Mr. Vroman. Q. Mr. Vroman, who has been here on the stand ? A. Yes, sir. Q. You signed the report you then made ? A. Yes, sir. Q. That report is on pages 358 and 359 ; what did you say as to the correctness of the report as to the deficiency of the bank being $5,735.01? A. I think that was the balance we made out against the bank at that time. 665 Q. What do you say of the correctness of your report? A. I believe it was correct ; as near as we could get it. Q. Fairly done? A. Yes, sir; supposed to be. Q. When were you called on next as an examiner of that bank ? A. In March, 1875. Q. Were you afterward ? A. Yes, sir ; about two years afterward Q. Pages 375, 376, 378 and 380; this report has been put into evi- dence, and I will call the witness' attention to it ; did you examiners, on that occasion, make out that deficiency there, and if so, state what it was found to be? A. We made a deficiency, I think, of over $200,000. Q. Look at that book and state ? A. That is the deficiency of income. Q. How much did you make the deficiency of assets at that time ? A. Two hundred and nineteen thousand two hundred and twenty-six dollars and eighty-one cents, without reappraising the land; we found the deficiency was so great we did not think it worth while to reap- praise the land at that time ; the real estate of the bank. Q. Look on the portion of it on page 377 where the annual income and charges thereon were examined by you ? A. I have done so. Q. How much did you make the annual income? A. A deficiency of $44,791. Q. You observe the note at the foot of that column ? A. Yes, sir. Q. And on the next page the letter which Mr. Reid and yourself signed? A. Yes, sir. Q. Where he says: "It will be seen from the schedules annexed that, after estimating the assets at full market value, there is a defi- ciency of $219,000, besides the trust guaranty fund of $115,000? A. Yes, sir: Q. You included the $115,000 in the footings of assets, did you? A. Yes, sir; I think so ; yes, sir; we included those. Q. Will you state how long you were occupied in this examination? A. Two days, I believe. Q. I find in the official testimony you gave before the committee the following on page 400: "Q. How did you estimate the value of the real estate? A. In that respect we took the old estimate, because we found there was so large a deficiency we thought that would take a long time to look up the estimates or make a new estimate, and we took the estimate of a former examination." Q. You thought the deficiency was very large? A. We found it was so large that it was not necessary to make any further examina- tion in respect to the real estate, so we didn't spend any further time on it. 84 666 Q. Did you ascertain at that time, or know at that time, that the trustees had added $100,000 to the original cost of the banking-house? A. No, sir; it was unnecessary to go into that, as the deficiency was so large. (J. In other respects the examination was carefully done? A- Yes, sir. Q. And the report a correct one ? A. I believe so. Q. Were you ever called upon afterward to examine that report ? A. No, sir. Q. Did you examine any bank after that? A. I think I did; I think I examined some at Eochester in October of that year. Cross-examination of Mr. Aldrich : By Mr. McGuiee . Q. You made no examination or re-examination of the value of the real estate in 1875, as I understand you ? A. No, sir ; no new one. Q. Took the old one ? A. Yes, sir. Q. Did you make one in 1873, you and Mr. Reid ? A. Yes, sir. Q. Will you state, Mr. Aldrich, if you please, what you and Mr. Eeid did in 1873 in regard to the appraisal of this Tarrytown land? A. Some little time after the report of the examination of the Third Avenue Savings Bank we went to Tarrytown to examine the Tarry- town bank ; we took that occasion to examine personally this land and to inquire of residents of that vicinity the price of land of that character; we found that land not as good was selling at a larger price, $2,000 an acre ; further over from the village than this, and, as near as we could ascertain the market value at that time, we, as reported, made up our minds, and estimated ; I might state here there was a good deal of excitement at that time, in consequence of what they called the New York, Boston and Montreal Railroad Company, constructed just over the ridge from this land ; and they had a report at that time that they had negotiated a mortgage of $6,000,000, and that the money was on the way to complete it ; and there was a good deal of excitement about land at that time ; and another reason why we put it at that rate was that the trustees of the bank agreed and were willing, they said, to pay interest on that investment, personally, and give that price, personally, for the land to the bank ; that they would, become responsible for the interest at $1 , 500 an acre to the bank. Q. And did not the fact that lands not as good as this, in the same neighborhood, were 7 selling for $2,000 an acre, influence your judgment also ? A. Undoubtedly. Q. Were your inquiries as to the value in that locality general ? 667 A. General ; we saw a good many individuals that knew about land. Q. The value, then, Mr. Aldrich, that you put upon the land was rather under than over what was regarded as the value of the land in the neighborhood at that time ? A. They regarded this as worth that and we put it at that. Q. Your attention has been called to your report of 1873 ; have yon the book there ? A. Yes, sir ; this is for 1875. Q. Eighteen hundred and seventy-three, I now call your attention to ; turn to page 361 ? A. I have it. Q. You have a report accompanying the schedule signed by Mr. Reid, yourself and Mr. Vroman ? A. Yes, sir. Q. You stated that your reports were correctly and truly madet and according to the best of your judgment ? A. Yes, sir. Q. And arc the statements in this written report true, or were they true at the time ? A. Yes, sir. Q. You stated that " a large number of your board of trustees hav- ing resigned, the vacancies were filled by gentlemen of wealth and character, who appeared determined to sustain the institution, and there is every reason to hope that it will be successful ; " did you find that io be the fact upon inquiry ? A. Yes, sir. Q. Thai is accompanying the report of the examination of 1873 ? A. Yes, sir. Q. Did you learn what gentlemen of wealth and character came into the institution as trustees? A. Yes, sir; I think we did. Q. Can you mention any of them now? A. I cannot; Mr. Laim- beer was one. Q. Mr. Opdyke also ? A. Yes, sir ; the young man ; the young Mr. Opdyke, and Mr. Decker and some others; I don't recollect now the names. Q. The determination you then found in these gentlemen of wealth and character to sustain the institution induced you not to make any recommendation to the superintendent ? A. We hardly ever made any recommendations to him ; we stated the fact and let him draw his own conclusions. Q. You had a purpose in stating that fact, that gentlemen of wealth and character had got into the institution as trustees and were willing to sustain it ? A. Yes, sir. Q. What was that purpose ? A. We wanted to give the bank all the benefit of that fact. Q. This small deficiency you then found of $5,735.01, under the circumstances that you stated in this report, was not very alarming ? A. No, sir. 668 Q. Do you know what the policy of the department had been prior to Mr. Ellis being in the office, that is, as to when they found a small deficiency under like circumstances whether he immediately closed ^he bank or gave it time to repair? A. I think the policy gen- erally was either to require them to secure it, or, if so small as this, to give them time to see what effect the change of market stocks would help them as the market price was continually changing; if it was a small .deficiency, I believe they did not notice it, but if it came Tip as high as $10,000, it then required either a bond or money put up. Q. Some security given ? A. Yes, sir. Q. You also referred in this report to the courage and perseverance witli which thetrustees stood up under a run upon the bank by which in forty-five days $4,500,000 had been drawn out? A. Yes, sir; we alluded to that fact; it was immediately after that run that we made it. Q. This run was in 1872? A. I have forgotten; it was a short time before that. Q. The run upon the bank, in which in forty-five days they paid $4,500,000, was in 1872, and you examined it in the spring of 1873 ; wasn't that it? A. I think it must have been late; I think it extended' into the winter of 1873; I won't be sure about that; but my impression is it was January or February, 1873. Q. It was after the run a short time ? A. Yes, sir. Q. You stated in the report the fact that they stood up under this run, and paid the $4,500,000; do you know whether that was a fact that they paid that? A. Oh, yes, sir. Q. You could see from an examination of their books? A. I was familiar with the fact before. Q. How did you ascertain the fact that you stated in your report that the Supreme Court had refused to appoint a receiver ? A. I don't recollect now how I ascertained the fact, but it was in the re- port at any rate; I knew the lawyers, and knew of the attempt- to appoint a receiver; knew all about it. Q. It was a fact understood which you deemed should be com- municated to the superintendent? A. Yes, sir, it was; for he had tried to get a receiver appointed. Q. At the foot of page 361 and top of page 362 you say that " their personal obligation for the deficiency last year is already on file in the department;" what did you refer to by that? A. This deficiency of the bond; we did not have that before us, but we wrote the department of the fact it was with them, and whether it was legal or not, we supposed the department had taken counsel about that. 669 Q. And you counted that in the assets? A. Yes, sir. Q. "And they have also agreed to pay to the bank a sufficient amount to cover interest on the unproductive real estate at Tarry- town;" was there any written agreement of that kind? A. No, sir; they said they would do" that, and we reported the fact to the department. Q. That it was said so? A. That they would agree to that, that the department might take action upon it. Q. You put all the information you possessed about it before the superintendent, so that he could do what he saw fit? A. We spread all the facts before him and the grounds of our action. Q. Your action consisted merely in stating the condition of the bank? A. Yes, sir. Q. And all these other things? A. That was our duty to inform the superintendent. Q. It was not your business to recommend any action ? A. No, sir; the law required us to report the deficiency to the superintendent. Q. I see that the final note on the report seems to be dated the 17th of May, 1873, signed by Mr. Keid ? A. Yes, sir; that was done in my presence. Q. That was before the report was out of your hands? A. Yes, sir; when we came from Tarrytown, we found the difficulties about the Louisiana bonds, and Mi\ Eeid added that addenda: ''Since our examination, the troubles in Louisiana have rendered their State bonds unsalable, and if continued, may cause a heavy loss to the bank. May 17, 1873." Q. You knew about that note ? A. Yes, sir; I was present. By Senator Harris : Q. ilow did you place the value of stocks on hand and arrive at the value ? A. Mr. Reid went down to Wall street, and ascertained from the actual market value and from the quotations there obtained, as they were then. Q. You put them at the quotations at that time? A. Yes, sir; as near as we could get them. Q. Did you do that in both examinations of 1873 and 1875? A. Yes, sir. Q. So that in both the reports that you made, as examiner, you took the stocks that were on hand, and placed them at the market value on the day you made your report ? A. Yes, sir ; on the day when there was a market value before us ; we started on'the Louisiana bonds, there was no market value at that time. Q. In 1875 ? A. In 1875. 670 Q. And the real property you placed at the same value in both re- ports of 1873 and 1875 ? A Yes, sir; the reason we did not go through with that estimate I have already explained. By Senator Schoonmaker : Q. Mr. Aldrich, did you draw this report ? A. No, sir ; Mr. Eeid drew it. Q. Did yon assist in the preparation of it ? A. No, sir ; Mr. Keid drew it up and submitted it to me, and I do not think I made any amendments to it. Q. It had your full assent ? A. Yes, sir. Q. Were you a professional gentleman at that time ? A. Yes, sir, Q. What was your profession ? A. I am a lawyer. Q. Where were you practicing ? A. In New York. Q. Had been a resident of New York some time? A. Yes, sir. Q. How long? A. About seven or eight years at that time. Q. Did you make a specialty of real estate ? A. No, sir. Q. Did you have any special or particular knowledge of the value of real estate ? A. No, sir ; only general knowledge of that ; we made inquiries of brokers and others, in reference to the real estate in 1873, both in the city and at Tarrytown. Q. State precisely where this land was located ? A. It is back of Tarrytown — what they called the " Herrick castle," that the Herrick castle was on. Q. You mean back of the village of Tarrytown ? A. Yes, sir. Q. Back of the station ? A. On the back of the hill. Q. How far from the station ? A. I should think it was something over a mile ; a mile and a-half perhaps. Q. Is it improved land ? A. Yes, sir. Q. Did you report it was unproductive land, and what did you mean by that ? A. I don't know as it was farmed at the time ; it was cleared, and the farm buildings upon it, barus, etc., but I won't be sure it was worked ; at any rate it produced very little ; it "was villa- site property ; that was the real value. Q. Was it tillable land ? A. Yes, sir. Q. Was it under actual cultivation ? A. A part of it. Q. How much ? A. I don't recollect. Q. Nearly all of it ? A. Nearly all of it, I think. Q. Did you make your inquiries as to the value? A. In Tarrytown, of various individuals, and of individuals living in that vicinity. Q. What did yon make your inquiries about? A. I inquired — I recollect one gentleman — Mr. Bradley — V. 0. Bradley. Q. Men in what occupation ? A. Various occupations ; I don't 671 recollect exactly what their business was ; a banker there I inquired of and others; a hotel keeper that we put up with, and other individu- als there ; Mr. Bradley was a large landholder. Q. Did you inquire of any real estate agents, dealers ? A. No, I think not ; I don't recollect of seeing any there. Q. What railroad did you speak of ? A. I think it is called the " New York, Boston and Montreal Railroad." Q. "Was that proposed to be located through this property ? A. No, sir ; just east of it ; just over the other side of it. Q. "Was that understood to affect the valuation of this property ? A. Yes, sir, favorably ; further off from Tarrytown, they bold me, land was selling for $2,000 an acre. Q. Did yon learn of any sales of that character ? A. Yes, sir; we heard of one ; a gentleman told us that he knew of one. Q. At what time ? A. It was a farm. Q. At what time ? A. A short time before we were there; in the spring. Q. Land in that immediate vicinity ? A. Yes, sir. Q. Similar to this ? A. Not as well located, I think. Q. I understand you to say the value you considered this land to possess was for villa purposes ? A. Yes, sir ; it was not for agricul- tural purposes worth any such thing. Q. This was a mile from the village? A. Over, I think. Q. "What was the date of this report ? A. It was the date that was sent up; May 19th, I think ; that was the date of the addenda. By Senator Bradley : Q. I do not understand the witness to state the manner in which they arrived at the value of the Louisiana State bonds? A. By inquiring in "Wall street. Q. I understood you to say there was no market value in 1873 or 1875 ? A. No ; in 1873 I think there was ; at the time we made that addenda in 1875, the troubles there had rendered them unmar- ketable. Q. In 1875, how did you put it ? A. "We stated that fact at the bottom of the report. By Mr. Tracy: Q. In 1875, on your second examination, did you make any inquiries about the Tarrytown land, at all ? A. No, sir ; we assumed the defi- ciency was so great that there was no necessity of it. Q. Did you assume also the lands were not worth as much as they were before? A. We did not assume any thing about it; we put them in as it was. 672 Q. Had not real estate, particularly that description of real estate, subsided immensely in those two years? A. Not so much; that was before the panic — • the spring before. Q. Had not real estate of that description subsided ? A. J do not recollect. Q. Do you recollect that railroad enterprise had failed in the mean- time ? A. Yes, sir ; that had failed. Q. So that the prospect of a future villa was exploded ? A. No, sir : it was easily reached from the Hudson River road. Q. I suppose from this report that you did not look into the valu- ation of the land, upon the assumption that they were not worth any more 'than they were two years ago ? A. They were not worth any more than they were two years ago. By Senator Geraed : Q. Was the Hudson river visible from any part of this land ? A.. Yes, sir ; I think so. Q. Were you on the land ? A. Yes, sir. The Senate adjourned till Thursday, July 26, 1877, at 8 o'clock, a. m. Saratoga, July 26, 1877. The Senate met pursuant to adjournment ; a quorum present. Edmund M. Plumb, being duly sworn on behalf of the State, testi- fied as follows : Examined by Mr. Tracy : Q. What is your business and position? A. Clerk of record in the county clerk's office in New York city. Q. Do you produce from the files of the county clerk's office in New York the report of the receiver in this case ? A. I do. Q. What is the paper you have in vour hand? A. The report of the receiver in the case of The People of the State of New York against the Third Avenue Savings Bank. Q. When filed ? A. Filed December 16, 1876. Mr. Tracy read the paper in evidence, as follows: SCHEDULE A, Annexed to report of S. H. Hurd, of the Third Avenue Savinas Bank, in the city of New York, verified January 14, 1876, filed in the office of the clerk of the city and county of New York, Jan- uary 15, 1876 : 673 Banking house, Third avenue and Twenty-sixth street, $55,000 00 House and lot, Fifth avenue, at Eighty-fifth street 34,000 00 Lot and brick stable, Twenty-sixth street 6,500 00 East lot, One Hundred and Fifty-ninth st., $3,850 00 West lot, One Hundred and Fifty-ninth st., 1,130 00 4,980 00 House and lot, No. 19 East Forty-sixth street 1 , 600 00 House and lot, No. 28 East Forty-seventh street 5,100 00 House and lot, No. 21 East Forty-sixth street 1,550 00 House and lot, No. 23 East Forty-sixth street 1,575 00 House and lot, No. 36 East Forty-ninth street 7,600 00 Lot at Yonkers 2, 250 00 House and lot, 25 East Forty-sixth street 1 , 600 00 Tarrytown property 15,865 66 Ten per cent on sale 7, East Forty-sixth street 275 00 $137,945 66 SCHEDULE B, $100,000 Louisiana bonds sold for $44,157 50 68,500 Alabama bonds sold for 22,761 88 7,000 Tennessee bonds sold for 3,018 75 2,908 Virginia bonds and scrip sold for 700 16 $70,638 29 Mr. McGuike — There are other schedules accompanying this report that we desire to put in, attached to the same paper ; we desire to put them in. William F. Aldrich, recalled by the counsel for the State, further testified : Q. Do you desire to correct or explain any part of your testimony given yesterday, in respect of the value of the Tarrytown real estate in 1875? A. I misapprehended your question; and speaking of the panic, I referred to the first report, the first examination having occurred before the panic, and the second after the panic. Q. Eighteen months after the panic ? A. Yes, sir. Q. At the time of the second examination, had there or had there not been a large fall in that description of real estate ? A. I think there had, sir. Q. Do you observe in your first and second examination there is a difference in the quantity of Kansas bonds held by the bank, and mortgages in the second examination than the first; do you recollect that circumstance ? A. No, sir. 85 674 Q. Also of the Dry Dock railroad ; do you recollect that circum- stance ? A. No, sir. Samuel H. Hurd, recalled by the counsel for the State, further testified : Q. Mr. Hurd, I would like to hear from you distinctly whether you were surprised at your appointment, or otherwise? A. The appraisers were appointed by the Supreme Court. Q. What were your proceedings before selling the real estate ? A. There was a good deal of discussion in regard to the propriety of selling ; some people thought that because of the dull market it ought not to be sold ; the depositors were clamorous for what money they could get out of it; it was going to cost $10,000 or $12,000 to hold the real estate, for a year with the, to me, no good prospect during the time of selling it, so that I would be justified in holding it ; think- ing there would be any better real estate market, I petitioned to the Supreme Court for instructions ; I served a copy of my petition upon the Attorney-General, and upon two or three gentlemen in New York, who represented depositors; counsel for the depositors; the matter was heard, and those gentlemen were heard, some of them; the court ordered that I should advertise and sell at public auction, at the Exchange in New York, subject to the approval of the court ; I did advertise it for six weeks in most of the daily papers in New York city; I advertised in two papers in Tarrytown ; I advertised it by posting bills on each piece of property in and about New York, and some in Tarrytown ; the diagram of each piece of property was printed and sewed together in pamphlet form and distributed; it was sold at the Exchange and at public auction ; I made my report to the Supreme Court, and served a copy of roy report upon the Attorney-G-eneral, and upon the counsel that I mentioned before ; my report was accepted, and I was ordered to complete the transfer of the property upon the. payment of the money as provided by the sale ; perhaps I had" better say that at the first sale of extent, as to the Tarrytown property, there did not seem to be anybody that wanted it; the sale was postponed, I think, for two weeks ; at any rate new posters were gotten out and posted around Tarrytown, and it was advertised in the Tarrytown papers as well as in the New York papers. Q. What do you say about the decrease of values in real estate along after 1873 down to this time ? A. I do not think the property would bring as much to-day as it did then. Q. Has there been any recovery of price ? A. No, sir. Q. This banking house was a large building? A. It is; it fronts on Third avenue twenty-six feet and some inches, and it runs back, I 675 think, 109 feet with an ell ; it runs back on Twenty-sixth street about one hundred feet or about half the block and I should think, about twenty feet wide ; I do not recollect the exact width. Q. Will you briefly describe how the building was cut up, and how arranged ; how the interior of it was ? A. The banking-house was on the corner; occupied the corner; part of it running back, should think seventy-five or eighty feet ; then there was another room, which was the secretary's room ; and back of that, on Twenty-sixth street, was a very elaborate building, the trustees had put up for their delibera- tions. Q. Was any part of the building proper rooms for shops or stores, such as are ordinarily rented ? A. The front bank building could have been used for a store ; it was more adapted to a banking-house than any other purpose ; I think the corner part of it could have been used very nicely for a store ; it has two or three steps to go up in it. Q. Could the rest of the premises be used for ordinary commercial purposes ? A. No, sir. ; Q. Was it adapted to the purposes of a dwelling-house or residence? A. The upper part of the building is in flats, and is occupied for dwellings. Q. Was the upper story adapted to any ordinary use? A. No, sir. Cross-examination of Mr. Hurd : By Mr. McGuire : Q. You say the appraisers were appointed by the order of the court; is that so ? A. Yes, sir. Q. Did these appraisers ever make a report of the values? A. Yes, sir. Q. To whom ? A. To the court, I suppose. Q. Did you have a copy of it? A. I had the appraisal of each piece of property on a separate slip of paper ; I don't recollect that I ever had a full, detailed report. Q. You had the full appraisal on separate slips of paper ? A. Yes sir. Q. Have you those slips of paper here ? A. No, sir. Q. Can you say what the appraisal was ? A. I do not recollect, but it was more than the property brought; I think the appraisal of the banking-house was $75,000; I have that recollection of the matter. Q. And all the other pieces of property in the same proportion, I suppose ? A. Yes, sir ; I should think they were ; there was one piece of property on One Hundred and Fifty-ninth street that I think 676 « brought a little more than the appraisal $100 or $200; but, aside from that, the property brought less than the appraisal. Q. Are the slips of paper that you spoke of now in your possession ? A. I don't know whether they are or not; I suppose they are in the office in New York. Henry L. Lamb, a witness^on behalf of the State, being duly sworn, testified as follows : Examined by^Mr.^TKACY : Q. Where do you reside ? A. My residence is at "West Troy. Q. What is your business and position ? I am Deputy Superin- tendent of the Bank ^Department. Q. How long have you been in that position ? A. Since the 1st of May, 1873 , ' Q. Will you produce, if you have,.any letters which came into the department about the Third Avenue Savings Bank ? A. I have all the correspondence here. Q. This letter "^that you produce is one of them ? A. That is one of the letters on file in the office from Mr. Reid to the Superintend- ent, dated New York, March 24, 1875. Mr. Teacy — That letter is already gin evidence. Q. Were you in the department when the examination in March. 1875, of the examiners came in? A. I was. Q. Did you see it? A. I did. Q. Did you examine it ? A. I did. Q. Did you have any conference or communication with Mr. Ellis on that occasion? Mr. Chapman — Mr. President, myjiriend has been all over that; it is in the printed testimony. The Witness — I testified to all I knew about this matter at Albany during the former inquiry. Mr. Tracy — The question I now ask is not there at all, the ques- tion about conference with the superintendent. Mr. Chapman — Youwilljind that reported at page 496. Q. Did you have conference with him ? A. We had a conversation the morning the report was received at the department in regard to the bank and the report. Q. That was the only one you had ? A. That was the only one. Q. Will you state /what was said and done in that conference ? A. I said that I thought the bank ought to be closed up ; Mr. Ellis said, in view of pending legislation in respect to savings banks, that he thought it best to wait until the Legislature adjourned. 677 Q. In point of fact when did the Legislature adjourn? A. I cannot tell the exact date ; I think it was past the middle of May. Q. Was any thing done by Mr. Ellis about that bank after this conference, and, if so, what and when ? A. Not to my knowledge; what he may have done himself at New York I am not apprised of, and was not at the time. Q. Was there any order under his hand and seal issued by him to that bank ? A. Not to my knowledge. Q. You were there at the department at the time the proceedings were instituted to close the bank ? A. No, sir, I was not. Q. Where were you at the time ? A. I was at Chicago. By Senator Woodin: Q. This report that came in in 1875, from those examiners, is the one that showed the large deficiency ? A Yes, sir. Q. And in that conversation that took place between you and . Mr. Ellis, after you suggested the bank should be closed up, he replied that he thought, in view of pending legislation, that proceed- ings had better not be taken ? A. In view of pending legislation in respect of the savings banks. Q. Did he state, in that conversation, how the pending legislation would affect the question of the solvency or insolvency of that bank ? A. No, sir ; there was no discussion of the question generally ; but I understand that he felt that the closing of this bank at that time might obstruct or become prejudicial to this general savings bank act, which he desired to see passed ; it was the effect of closing upon that bill that he apprehended. Q. Was that the reason assigned by him ? A. I don't know that it was stated precisely, but that is what I understood; I don't think it was stated fully and explicitly ; that was my understanding of his reasons. Q. It was not that the bank or banking institution was to derive any advantage? A. No, sir; I did not understand that. Q. But that the legislation pending might be impeded by the clos- ing of the bank? A. Yes, sir. Q. Is that the reason ? A. So I understood. Q. How long were you engaged in conversation with him about that report ? A. I should not_ think more than four or five minutes. Q. And the subject was dismissed ? A. Yes, sir. Q. Have any further conversation with him about it? A. No, sir. Q. Do you know whether the subject was up in the Banking Depart- ment for consideration of that, during the session of the Legislature; I mean whether the subject-matter of this bank was under consider- ation during the session of the Legislature that yeer? A. No, sir; I don't know that it was. 678 Q. That was all the consideration it received at that time ? A. Yes, sir. Q. Was it under consideration so that it formed the subject of dis- cussion between you and the superintendent, or by the superintendent, after the adjournment of the Legislature, and prior to proceedings being taken in September ? A. No, sir. Q. This bill passed, did it not ? A. It did. Q. Do you remember the day of its passage ? Mr. McGuire — It was May seventeenth. Q. I mean the time that it became a law ? Mr. McGuire — That was the day — May seventeenth. Q. I ask whether the superintendent issued an order of any descrip- tion in regard to this bank, after the coming in of this report until sending in the letter to the Attorney-General? A. I don't know, sir. Q. Any order to the bank ? A. Not to my knowledge. Q. When these orders were issued by the superintendent to the varisus savings banks — ■ for instance, any order to discontinue illegal practice — are those matters that come under your immediate super- vision ? A. No, sir. By Mr. Chapman : Q. I will ask you whether there was not in the general savings bank law, pending in the Legislature at the time this report came in, some new provisions in regard to the merging of banks ? A. Yes, sir, there was ; entirely new provisions. Q. Providing for the merging of weak institutions together, or their absorption by other larger institutions ; the general law of mer- ger ? A. Yes, sir ; what puzzled me, there was no discrimination made between weak banks referred to, but any banks could be merged or absorbed. Q. Was not that itself spoken of by yourself and Mr. Ellis in regard to the effect to this bill in case it became a law, and the possible action under it ? A. We had some talk about this new provision of the law, and about results that he hoped might be accomplished in New York in the consolidation of some of the banks there. Q. Now, in regard to the issuing of these orders that have been spoken of, had it not been the construction of that law in the depart- ment that those orders applied to the violations of law existing at the time the orders were issued ? A. Orders for what purpose ? Q. To discontinue illegal practices ? A. I do not now recall any case in which such an order was made prior to the transaction with the Third Avenue Savings Bank, of which we are speaking. 679 Q. Had Mr. Howell acted under the law of 1871, to your knowl- edge, or, so far as appears from the records of the department, issued any order of that description under that law? A. 1 cannot telFyou. Q. Do you know of any such ? A. No, sir, I do not. Q. Do you not recollect that Mr. Howell, in his report to the Legislature, called attention to this very bank; alludes to [the fact that there not being any irregularities then in progress he did not give you any order ? A. No, sir; I do not recollect that. Q. Don't recollect any thing about the report ? A. No, sir. Q. But, in fact, you know of no order having been issued by the Bank Department under this law of 1871, or under the law of 1875 ? A. Not prior to March, 1875; that is an order to discontinue illegal practices. Q. I mean that; an order to discontinue illegal practices? A. An order to make good deficiencies; but that is another branch. By Senator Woodin: Q. I understand you to say that there was some provision in this bill pending before the Legislature, providing for a way of merging weaker with stronger banks ; some such provision ? A. Merging any banks; it was purely general. Q. Was it with a view of making that available to this particular bank that it was desired to have it postponed, the closing of it up ? A. I never understood that it was. Q. That was eliminated from the bill, was it not — the merging? A. No, sir. Q. Was it in the bill as it passed ? A. Yes, sir ; no application of it has ever been made. By Mr. Chapman : Q. As to what efforts Mr. Ellis has made to save banks under that provision, of course you have no knowledge? A. No, sir. Q. What consultation he had with bank officials, you have no knowledge? A. I do not know; I do know that in the summer of 1875 he had hopes that some of the weaker banks in New York might be so consolidated, and a plan to that purpose was discussed by him and the savings bank officers of New York; he went to New York immediately after the adjournment, or within a very few days, in 1875, and down to New York two or three times during the summer on savings bank and other bank business; of course, I have no knowledge of what transpired at those meetings. Q. Is it not your opinion, Mr. Lamb, that if the bank officials had seen fit to take advantage of this provision of the law, that many of 680 these failures of savings banks might have been prevented and much good done thereby, providing it could have been made effective and they could have been taken up; that may justify an effort to make it effectual on the part of the superintendent? A. I would not like to answer that question yes or no; I should want to qualify it a good deal. Q. Is it not within your knowledge that the superintendent had hopes of doing something under that law? A. Yes, sir; he did have hopes, as I have already stated ; he had more intimate knowledge of the accommodations of New York than I, because I never went there to discuss these questions with savings bank men since I have been in the office. By Mr. Bradley : Q. After the passage of that law, did you hear Mr. Ellis say any thing about applying the principles of merger to this particular bank? A. No, sir; never. Q. Did you hear him give any reasons for not proceeding to close the bank ? A. Not until after it failed. Q. I mean after the passage of this law, before the application was made for a receiver? A. No, sir; we never had any conversation about it until the morning the report came into the office, until subsequent to its closing. By Mr. Tract : Q. 1 will ask you if Mr. Ellis ever expressed to you any thing of this kind, which he swore to before the committee? A. I made an effort at that time to bring about a consolidation, if possible, of some of these smaller banks that I was apprehensive would lose their business and have to be closed up with the larger banks, under this law of 1875, and in order to do that, of course I had to see the bank officers of the smaller and larger banks; it was a new proposition, and of course men differed in their judgment, as to how it would work, but I made the effort and at one time it looked as though something might come out of it. By Senator Wellman : Q. You made that effort in regard to the Third Avenue Savings Bank, as well as the others? A. It grew out of that; I had no faith that any bank would take hold of the Third Avenue Bank; I had made up my mind that this Third Avenue Savings Bank had to be closed up. 681 Q. What time was this? A. The third of May; my object was to try and save the other banks first; this was the first bank that was closed; it was the beginning of the end of these dozen banks that have been closed up, and it was my first experience in closing up sav- ings banks ; as I said, it promised some success, and I left the matter under advisement, to be finally disposed of at a subsequent time; left them to think the matter over and see what could be done, if any thing. By Senator St. John : Q. Did any thing ever come out of it ? A. No, sir." Mr. Tract — I will read a passage from the act of 1875: "And whenever it shall appear to the superintendent that it is unsafe or inexpedient for any such corporation to continue to transact business, he shall communicate the fact to the Attorney-General, who shall thereupon institute such proceedings as the nature of the case may require." The proceedings instituted by the Attorney-General may be for the removal of one or more of the trustees, or for the transfer of the corporate powers to other persons, or the consolidation and merger of the corporation with any other savings corporation that may be willing to accept of the trust, or for such other or further relief or correction as the particular facts communicated to him shall seem to require ; and the court before whom such proceedings shall be insti- tuted shall have power to grant such orders, and in its discretion, from time to time, to modify or revoke the same, as the evidence in the case and the situation of the parties, and the interest involved shall seem to require. Senator Schoonmaker • — I understand, gentlemen, that you are now through with your testimony touching the Third Avenue Savings Bank, except one witness? Mr. Tracy — Yes ; except one witness. By Mr. Olmstead : Q. You testified on the previous investigation as follows : " I told him I thought it ought to be closed up at once ;" did you state any reasons to Mr. Ellis for closing the bank at once ? A. No, sir ; I found my reasons in the report of the examiner. Q. Did he ask you for your reasons ? A. No, sir. Q. Did you have any papers before you when that conversation took plaee ? A. I had the report of the examiner and the accom- panying letter. Q. Was it before you and Mr. Ellis at the time ? A. Yes, sir ; the conversation occurred the morning that the report and the accom- panying letter were received in the office. 86 682 Q. Was there no conversation as to the value of the assets of the bank ? A. We had the report of the examiner, made the day before, as to the value of the assets and the condition of the bank ; that was the occasion of our talk. Q. Was there any thing said in the conversation, by you or Mr. Ellis, in respect to the assets of the bank? A. No, sir. Q. Was Mr. Ellis, at the date of this conversation, acquainted with the contents of that report ? A. Not in detail, but in results. Q. How do you know that he was acquainted with them ? A. Be- cause we had it before us ; his attention was called to it when he came into the office that morning. Q. What did you understand to be the reason for closing that bank? A. I was told that the trustees had had a meeting, and proposed to go into liquidation. Q. I mean, what was your reason for closing the bank at that time ? A. That it was utterly insolvent. Q. What, in your mind, was the object in closing it? A. The longer it ran the worse it got, and the sooner it was closed, the better for the depositors. By Mr. Chapman : Q. As I understand you, Mr. Ellis himself had the idea that the bank was insolvent and that it ought to be closed up? A. He had no question about it, as I understood. Q. And the only question was as to when would be a proper and expedient time to close ? A. Yes, sir. Mr. Olmstead — The next bank in order is the Trades' Savings Bank of the city of New York, the testimony in regard to which is on pages 277-303 of the printed case, and Mr. Lamb, now on the stand, is our first witness. By Mr. Olmstead : • Q. You were subpoenaed to produce here the reports made to the Bank Department in regard to the Trades' Savings Bank of the city of New York ; have you them with you ? A. Yes, sir; I have all the papers relating to it that I could find. Mr. Olmstead called upon the witness to produce the report of an examination made by George W. Beid, December 9, 1873; the witness produced the paper and Mr. Olmstead proposed to read it in evidence. Mr. Chapman, of counsel for the respondent, objected to its admis- sion, on the ground that it was immaterial, not coming within the scope of the charges. The President — What is the paper? Mr. Olmstead — It is a report made by Mr. George W. Eeid to 683 the department on December 9, 1873, under an order issued by Mr. Ellis, the superintendent. The President — What was the objection ? Mr. Chapman — The objection is this, we object to all evidence in relation to any reports or transactions outside of those embraced in the charges either of the Governor or of Mack. The President— How do the counsel for the prosecution claim that this report relates to the charges ? Mr. Olmstead— We wish to show the condition of the bank between 1873 and 1875 ; what Mr. Ellis' duty was after 1875 might depend very much upon the previous condition of the bank. The President — His duty with reference to making an examina- tion of the assets ? Mr. Olmstead — Yes ; this examination was made by his own examiner. The President— The chair is of the opinion that the evidence is material. Mr. Olmstead read the report and the accompanying letter of appointment in evidence, as follows : EXHIBIT No. 12. Bank Department, ) Albany, November 26, 1873. J Pursuant to the authority conferred and the duty imposed upon the Superintendent of the Banking Department, by chapter 693 of the Laws of 1871, I do hereby appoint George W. Reid, Esq., to examine into the condition, working and affairs generally of the Trades' Savings Bank, New York, and report thereon to me in detail as soon as practicable. Given under my hand and official seal, at Albany, the day and year first above written. D. 0. ELLIS, Superintendent. Hon. D. 0. Ellis, Superintendent Bank Dep't : Sir. — The undersigned, appointed to examine into the condition, working, etc,, of the Trades' Savings Bank of New York, reports: Last spring the trustees concluded to wind up the affairs of this bank and had paid the depositors down to about $1,100, when some of them resigned, and were succeeded by the present officers, who have, by energy and perseverance, raised the deposits to nearly $29,000. The president, who is said to own considerable property, says he is determined to make the bank ,a success. The promise of seven per cent interest to the depositors; the issue- of "coupon certificates of 684 deposit " and all other extraordinary measures are to be abandoned, and every thing in future to be done upon strict business princi- ples. From the statement of assets it will be seen that there is an appar- ent surplus of $2,220. and the trustees will pay any deficiency there may be in meeting the expenses. Eespectfully submitted. GEO. W. REID. Examined December 9th. Trades, December 9. Bonds and mortgages, 7 $15,500 00 Safe and fixtures 2,000 00 Lease of Banking-house 3 , 600 00 Cash in safe $8,839 62 Cash in N. Y. S. Loan and Trust Co 1,197 67 10,037 29 $31,137 29 Due 270 depositors 28,916 32 Surplus $2,220 97 The interest accrued from the assets will just about pay interest accrued to depositors, and the amount of expenses over income will be paid by the trustees for the next year. Mr. Olm stead called for the report made to the department by the officers of the Trades' Savings Bank, as of January 1, 1874, which was produced by the witness and read in evidence by the counsel, as follows : SCHEDULE A. Bonds and Mortgages. No. 1.. 2.. County where located. In what city, village or town. Principal unpaid . Est'd value of mortgaged premises. Rate of Interest. New York Kings Kings New York Brooklyn . Brooklyn . $10,000 3,000 2,500 $30,000 8,000 6,500 Seven. Seven. Seven. 685 SCHEDULE P. Cash deposited in Banks or Trust Companies. Name of Bank or Trust Company. Location Amount on deposit. Rate of Interest. 92 Broadway.. 94 Broadway... $817 25 3,000 00 Five. Four. Report of the Trades' Savings Bank, an incorporated institution for savings, of its condition on the first day of January, 1874, made to the Superintendent of the Banking Department, as required by chapter 136 of the Laws of 1857. Financial. Resources. 1 2. 4. as per Schedule A, hereto as per Schedule B, hereto Bonds and mortgages, annexed Stock investments annexed Amount loaned on public stocks, as per Schedule C, hereto annexed Amount loaned on stocks or bonds of private corpo- rations, as per Schedule D, hereto annexed 5 . Amount loaned on personal securities, as per Schedule E, hereto annexed 6 . Keal estate, cost, $ ; market value, $ ; stand- ing on books at $ 7 . Cash on deposit in banks or trust companies, as per Schedule P, hereto annexed 8. Cash on hand not deposited in bank 9 . Amount of assets not included under either of the above heads, the particular items of which are set forth in Schedule G, hereto annexed $15,500 00 3,817,25 6,859 61 8,098 45 Liabilities. 1 . Amount due depositors Principal $29,318 34 Interest credited for the 1st of January 1874 57787 2. Other liabilities, viz. : 3 . Excess of assets over liabilities $34,275 31 $29,869 21 4,379 10 $34,275 31 686 Statistical. 1. Number of open accounts on the morning of January 1, 1874 274 2. Number of accounts opened during the year 1873 . . 413 3. Number of accounts closed during the year 1873. . 243 4. Number of accounts opened since organization 645 5. Amount deposited, not including interest credited during the year 1873 $194,444 54 6- Amount deposited, including interest credited, for the same period 195,209 70 7. Amount withdrawn during the year 1873 184,009 75 8. Amount of interest or profits earned* during the year 1873 776 57 9 . Amount of interest ^credited to depositors for the same period 765 16 10. Amount of each semi-annual credit of interest, for the year 1873, and when credited: June 30, $58.25; December 31, $577.87; credited at other periods during the year, $129 . 04. 11. Bate per cent of dividends or interest to depositors during the past year, five and seven per cent. STATE OP NEW YORK, ) . County of New Yobk, j " ' C. B. Le Baron, President, and I. M. Preese, Secretary of the Trades' Savings Bank, an incorporated institution for savings, located and doing business at No. 275 West Twenty-third street, in the city of New York, being duly and severally sworn, each for himself, saith that the foregoing report and the schedules accompanying the same are, in all respects, a true statement of the condition of said institu- tion before the transaction of any business on the morning of the first day of January, one thousand eight hundred and seventy -four, in •If amount received is reported, strike out " or earned; " if amount earned is reported, strike out " reoeived or." 687 respect to each and every of the items and particulars therein speci- fied, according to the best of his knowledge and belief. C. B. LB BAKON, President. I. M. PBEESE, Secretary. Severally subscribed and sworn by both deponents, the 22d day of January, 1874, before me. James Lodbk, Notary Public for N. Y. Co. Mr. Teacy [to witness] — Where is Schedule G, referred to in this report ? The Witness — I have not got it ; unless it is among those papers, I don't know where it is ; these papers have already been used on one trial, and there are a good many of them missing; the papers pro- duced here were all taken from their proper depository to be brought here. Mr. Olmstead — > Have you had possession of these papers since they were taken from the department? The Witness — Yes, this week. Mr. Olmstead called upon the witness to produce all the papers and letters in his possession relating to the bank under consideration, and the witness produced a package containing, he said, all such papers or letters of which he had knowledge. 1 Mr. Olmstead called for a letter of G. W. Eeid to the department, dated February 5, 1874. The witness produced the letter, and Mr. Olmstead read it in evidence as follows : New York, February 5, 1874. Hon. D. 0. Ellis, Superintendent: Dear Sir — Night before last the trustees of the Trades' Savings Bank removed Secretary Preese and put in Mr. Newton, one of Le Baron's clerks. Preese and his friends called in a policeman and gave the safe, etc., in his charge. Yesterday I visited the bank and found the Le Baron party and the police in the bank, and Ereese and his counsel up-stairs. Preese had an affidavit partly drawn, making serious charges against Le. B., that he had attempted to use the jfunds of the bank in an improper manner, made propositions to him to divide the use of the funds to a certain extent between them, etc., etc., which proposition he rejected. This affidavit was to be placed in my hands to be sent to you. When Le B. "purchased the bank" (with only about $800 due the deposit- 688 ors) he paid McClave, the former president, $2,100, taking an assignment from him individually of the lease, safe and fixtures. Two-thirds of this property Le B. afterward transferred to Freese for the same amount of money, and gave him the position of secre- tary. This money Freese now wishes to get back, and hesitates about giving the "affidavit," saying he is ready to give his testimony when called upon. Freese appears to have been working in the interest of the deposit- ors, thinking he could restrain Le Baron, but he has compromised "himself by his representations to me as to the management of the bank and in his reports to the department. If you consider it " unsafe or inexpedient " for the bank to continue to transact business (act of April 25, 1871), can you turn it over to the Attorney-General, or will it require further action here ? There is $20,000 on deposit in the Hanover Nat. Bank, subject to be drawn on the signature of the president and secretary, and $1 , 347 in the N. Y. S. Loan and Truat Co., which can be drawn by the president alone. The loans of $15,500, in B. M., were made by Le B. without the action of the board, as required by section 6 of the charter and from what I now learn were for the benefit of Le B. There is about $5,700 cash in the safe, and $2,300 in checks, said to be good, making assets $44,847, with safe, furniture, etc., to pay $47,000 deposits. Yours truly. GEO. W. EBID. P. S. — Mr. Aldrich wishes me to say that if a receiver is appointed he would like to be the man. Mr. Olmstead called for the report made by the Trades' Savings Bank to the department, of date January 1, 1875. The witness produced it, and it was read in evidence, with accom- panying papers, as follows : SCHEDULE A. Bonds and Mortgages. No. County where located. In what city, village or town. Principal unpaid. Est'd value of m'rtgag'd premises. Bate of inter'st. New York Kings $10,000 3,000 6,000 3,000 3,000 Called in. $15,000 7,000 14,000 7,000 7,000 Brooklyn Seven. Seven. INDEX. A. Abingdon Square Savings Bank : Pag6i Lamb, H. L., letters from, to Attorney-General 311, 1100 letter of, to trustees of „ 1099 Eeid, G-eorge W., letters from, to Ellis relative to 310, 1068 1075, 1088, 1095, 1096, 1098 Keport of examiner of, Nov. 4, 1875 304 examination of, Deo. 1 , 1873 1069 Nov. 1875 1089 Witnesses relative to : Best, William J., testimony of 1066 Cisco, John J., testimony of ] 127 Ellis, DeWitt C, testimony of 308, 311 Lamb, Henry L., testimony of 309, 312, 1067, 1152 Eeid, George W., testimony of 1111 Swaney, S. W., testimony of , 313 Thompson, Frank, testimony of 1134 Aldrich, William F. : Appointment of, to examine Mutual Benefit Savings Bank, 1336 Testimony of. 400, 664, 673, 1359 Answer of DeWitt 0. Ellis to charges 2002 B. Banks, William M. : Testimony of 1326 Bellamy, F. P.: affidavit of 11 testimony of 68, 1025 Best, William J.: appointed receiver of Mechanics and Traders' Bank 1035 report of sale of property of Mechanics and Traders' Bank, 1039 testimony of 5, 962, 972, 1066, 1248 letter from, to Governor Tilden 8 Bond Street Savings Bank: Page. statement of examination of, by George W. Eeid and Wm. P. Aldrioh, March 25, 1875 256 witness, D. 0. Ellis, testimony of 260 Bond: of trustees of Third Avenue Savinys Bank 447, 448, 450 Brinkerhoff, William : testimony of 112 c. Carman, J. S.: testimony of 189 Chapman, 0. W. : argument of, on behalf of the respondent 1740 as counsel for Mr. Ellis 5, 1949 remarks of, an admission of printed testimony taken before the committee on banks 555, 556 Charges : against Dewitt C. Ellis 1955, 1977, 1978 Cisco, John J.: witness 1227 Clark, Samuel H.: testimony of 1183 Conklin, Alfred T. : letters from Arthur Bingham to 187 of, to D. 0. Ellis 220 testimony of 177 Connor, George: designated as page 1948 Counsel : for D. 0. Ellis 1949 prosecution 1949 D. Doorkeeper of Senate : authorized to serve subpoenas 1009 Dunn, Adolph G. : testimony of 4.45 E. Ellis. D. C. : charges against, by the Governor . . . 1,255, 550, 1955, 1977, 1978 letter from, to A. T. Conklin, Oct. 19, 1874 42 Ill Ellis, D. 0. — (Continued). p age . Letter from, to A. M. Leslie, president of Trades Savings Bank, Dec. 25, 1875 289 to Attorney-General 473, 1595 to Geo. W. Reid 516, 1161 to Geo. W. Reid and Aldrich to examine Mutual Benefit Savings Bank 1336 to S. P. Bellamy, Oct. 19, 1874 88 removal of, from the office of Bank Superintendent 2046 report of March. 30, 1876, in evidence 405 testimony of, 194, 260, 272, 286, 306, 311, 329, 331, 335, 341, 515 reply of, to charges against 2002 testimony of, before the Senate 1371 Evidence : testimony before committee on banks to be evidence before the Senate 2 Exhibits : 1. Bond of Spencer K. Green, and others 599, 2005 2. Wm. A. Darling, and others 599, 2005 3. David Morgan, and others 599, 2005 4. Samuel H. Hurd, receiver of the Third Avenue Savings Bank v. Spencer K. Green on $15,000 bond 599, 2005 5. Same v. Geo. Hencken, Jr., $100,000 bond 599, 2005 John H. Lyon, $100,000 bond 599, 2005 Wm. A. Darling, $100,000 bond 599, 2005 Thompson W. Decker, $100,000 bond .... 599, 2005 Wm. D. Harrison, $100,000 bond 599, 2005 Richard Kelley, $100,000 bond 599, 2005 D. D. T. Marshall, $100,000 bond 599, 2005 James Owens, $100,000 bond 599, 2005 Wm. D. Bruns, $100,000 bond 599, 2005 6. James Owens, $600 bond 599, 2005 Wm. B. Harrison, $600 bond 599, 2005 Wm. D. Bruns, $600 bond 599, 2006 Geo. Hencken, Jr., $600 bond 599, 2006 7. Report of condition of Third Avenue Savings Bank, July 1, 1873 649, 2009 8. Report of examination of Third Avenue Savings Bank, April 14, 1873 653, 2009 9. Report of examiner Keyes of Third Avenue Savings Bank in 1871 65J, 2009 10. Schedule "A," annexed to report of S. H. Hurd, receiver of Third Avenue Savings Bank, filed in office of clerk of the city and county of New York 672, 2010 Exhibits — (Uotitinued). Page. 11. Schedule " B," statement of bonds sold 673, 2010 12. Eeport of Mr. Keid as to condition of Trades' Savings Bank 683, 2010 13. Eeport of Trades' Savings Bank, Jan. 1, 1874 684, 2010 14. Letter of G. W. Reid, Feb. 5, 1874 687, 2010 15. Report of Trades' Savings Bank, Jan. 1, 1875 688, 2010 16. G. W. Reid, examiner of, Nov. 12, 1875. . 693, 2010 17. Trades' Savings Bank, Jan. 1, 1876. .. . 703, 2011 18. Letter of G. W. Reid, Jan. 4, 1876 700, 2011 19. G. W. Reid, Jan. 13, 1876 705, 2011 Report of G. W. Reid as examiner of, Jan. 13, 1876, 705, 2011 20. Letter of G. W. Reid, Jan. 19, 1876 706, 2011 21. to H. L. Lamb, Aug. 2, 1876, 707, 2011 22. Commission of G. W. Reid as examiner of 708, 2011 Report of G. W. Reid, as examiner of 708, 2011 23. Letter from H. L. Lamb to Attorney-General Fairchild, Aug. 14, 1876 712, 2011 24. Letter from G. W. Reid to H. L. Lamb, Aug. 29, 1876 ' 721, 2011 25. Letter from G. W. Reid to H. L. Lamb, August 30, 1876 766, 2011 26. Letter from G. W. Reid, to H. L. Lamb, Sept. 2, 1876 722, 2011 27. Letter from G. W. Reid to D. C. Ellis, September 20, 1876 722, 2011 28. Letter from G. W. Reid to D. C. Ellis, September, 23, 1876 : 724, 2011 29. Letter from G. W. Reid to D. C. Ellis, October, 7, 1876 724, 2011 30. Letter from G. W. Reid to D. C. Ellis, September 9, 1876 723, 2011 31. Letter from G. "W. Reid to D. C. Ellis, December 15, 1873 725, 2012 32. Certificate of the register of the city and county of New ' York, relative to record of mortgages 725, 2012 33. Order appointing S. B. White receiver of Trades' Savings Bank 767, 2013 34. People v. Third Avenue Savings Bank 781, 2013 35. Schedules C. D. E. F. K. put in evidence 793, 2013 36. Report of the Peoples' Savings Bank, July 1, 1873, with letter of Chas. F. Rodgers, secretary and vouchers, 825, 2013 37. Special report of examiner of Peoples' Savings Bank, September 4 and 5, 1873 829, 2014 Exhibits — ( Continued). Page 38. Judgment roll, People v. Peoples' Savings Bank. Septem- ber 22, 1873 837, 2014 39. Answer of Fred. Olmstead, in suit of People v. Peoples' Savings Bank, October 23, 1873 841, 2014 40. Stipulation of Fred. Olmstead, in suit of People v. Peo- ples' Savings Bank, October 23, 1873 841, 2014 41. Letter of Chas. T. Kodgers, secretary, to Superintendent of Bank Department, October 3, 1873 843, 2014 42. Letter of Obas. T. Kodgers, secretary, to Superintendent of Bank Department, October 3, 1873 844, 2014 43. Letter of Ohas. T. Kodgers, secretary, to Superintendent of Bank Department, October 23, 1873 844, 2014 44. Report of Peoples' Savings Bank, January 4, 1874, and schedules 846, 2014 45. Report of Peoples' Savings Bank, Feb. 1, 1875. . . . 860, 2015 46. do do do July 1, 1875. ... 864, 2015 47. Letters from G. W. Reid to D. C. Ellis, Nov. 10 and 11, 1875 867, 2015 48. Telegram of 0. T. Rodgers to D. 0. Ellis, February 23, 1875 892, 2016 49. Special examination of Peoples' Savings Bank, Oct. 9, 1874 905, 2016 50. Letter from D. 0. Ellis to Attorney-General, Nov. 4, 1875 ' 918, 2016 51. Report of Mechanics' and Traders' Savings Institution, January 1, 1876 927, 2019 52. Corrected report of Mechanics' and Traders' Savings Institution, January 1, 1876. 929, 2019 53. Appointment of G. W. Reid as examiner of Mechanics' and Traders' Institution, and his report, March 7, 1876 946, 2020 54. Letter from G. W. Reid to D. C. Ellis, March 11, 1876, 946, 2020 55. Letter from G. W. Reid to D. 0. Ellis, March 15, 1876, 952, 2020 56. Letter from G. W. Reid to D. C. Ellis, May 26, 1876, 1019, 2020 57. Letter from G. W. Reid to D. C. Ellis, June 14, 1876, 1019, 2020 58. People v. Mechanics' and Traders' Savings Institution, order appointing Wm. J. Best receiver 1034, 2021 59. Receiver's report of sale, the People v. Mechanics' and Traders' Savings Institution 1039, 2021 Yl Exhibits — ( Continued). Page. 60. Order confirming receiver's sales in same suit. . . . 1039, 2021 61. Eeport of G. W. Keid, examiner of Abingdon Square Savings Bank, December 1, 1873 1067, 2023 62. Eeport and schedule of Abingdon Square Savings Bank, January, 1874 1069, 2023 63. Letter from G. W. Reid to D. C. Ellis, December 27, 1873 1074, 2023 64. Report and schedules of Abingdon Square Savings Bank, July 25, 1874 1080, 2023 65. Report and schedule of Abingdon Square Savings Bank, January 1, 1875 1085, 2023 66. Report and schedules of Abingdon Square Savings Bank, January, 1, 1876 1092, 2023 67. Letter from G.W. Reid to D. C. Ellis, July 6, 1876, 1088, 2023 68. Letter from G.W. Reid to D.O. Ellis, July 19, 1876, 1096, 2023 69. Letter from G. W. Reid to D.O. Ellis, July 26, 1876, 1098, 2023 70. Letter from Samuel O. White, receiver of Trades Sav- ings Bank (per J.W. Gedney, dated July 30, 1877) in reference to certain questions of Senator Prince, 1156, 2025 71. Letter from Senator Coleman to D. 0. Ellis, March 7, 1876 1160, 2025 72. Letter from Senator Coleman to D. C. Ellis, March 21, 1876 1160, 2025 73. Letter from Charles Tracy to D. C. Ellis, March 14, 1876 1160, 2025 74. Opinion of Attorney-General, relative to Loaners Bank, April , 1876 1161, 2025 75. Letter of G. W. Reid to D. 0. Ellis, April 6, 1876, 1168, 2026 76. Opinion of Wm. Tracy, relative to Loaners Bank, April 13, 1876 1172, 2026 77. Letter of Dorr Russell to D. C. Ellis, April 13, 1876,1169, 2026 78. Report and schedules of German Savings Bank of Mor- risania, January 1, 1875 1213, 2027 79. Letter of G. W. Reid to D. C. Ellis, accompanying examination of German Savings Bank, September 24, 1875 1221, 2027 80. Letter of D. C. Ellis to president of German Savings Bank, December 25, 1875 1222, 2027 81. Report of German Savings Bauk, January 26, 1876, 1236, 2027 82. Report of German Savings Bank, January 1, 1876,1232, 2027 83. Letter of Ernest Hall to D. C. Ellis, January 26, 1876 1237,2027 yh Exhibits — ( Continued). rage . 84. Letter of D. C. Ellis to Jacob Held, president of Ger- man Savings Bank, December 25, 1875 1234, 2029 85. Examiners' report of the New York State Loan and Trust Company. February 5 and 6, 1875 1275, 2029 86. Commission of G. W. Reid and Willis S. Paine as ex- aminers, December 18, 1875 1273, 2030 87. Report and schedules of New York State Loan and Trust Company, June 30, 1875 1289, 2030 88. Complaint: People v. The People's Savings Bank. 1292, 2030 89. Report of Security Bank, January 1, 1875 1307, 2030 90. Commission and report of examiner of same bank, November 27, 1875 1309, 2030 91. Schedule G and E accompanying report of same bank for January 1, 1876 1312, 2030 92. Report of examiner of Mutual Benefit Savings Bank, December 1873 1337, 2030 93. Schedule G accompanying report of same bank, for Jan- uary 1, 1874 1343, 2031 94. Schedule G accompanying report of same bank, for July , 1874 1346, 2031 95. Schedule G accompanyiug report of same bank for January 1, 1875 1349, 2031 96. Report and commission of examiner of same bank, December ,1875 1352, 2031- F. Pairchild, Charles S : testimony of 512 Fischer, H. C : letter from, to D. C. Ellis, Nov. 11, 1874 221 Floyd, William: affidavit of 10 report of, on condition of Mechanics and Traders' Savings Institution 12, 118 testimony of 47, 959 Flynn, Thomas : complaint of, against Third Avenue Savings Bank 1516 French, Isaac V 8 ? 8 > 893 G. German Savings Bank of the town of Morrisania, New York city 337 extracts from minutes of proceedings at meetings of. 1253 Vlll German Savings Bank — (Continued). Page. letter from Ellis to President of < 1223, 1272 Attorney General Fairchild 1238 Ernest Hall, attorney for Bank to Ellis 1236 Geo. W. Eeid to Ellis 1221 report of, Jan'y 1, 1875 1213 1876 1222 for 1877 1230 Eeid, Examiner, April 24th, 1875 338 Witnesses : Best, "William J., testimony of 1248 Ellis, D. C, testimony of 341 Hall, Ernest, testimony of 344. Lamb, Henry L., testimony of 1212 Eeid, Geo. W., testimony of 1272 Smith, Isaac, witness in reference to 1245 Gormley, Bernard : witness 349, 352 Gould, A. A.: testimony of 109 Governor : message of, transmitting charges against Ellis 5, 550, 1990 message of, to the Senate 2048 proclamation of, convening extra session of Senate 1946 Gregory : report of, on condition of Mechanics and Traders' Savings Institution 12 118 testimony of 11, 20, 83, 143, 954 Gunther, John H : -j t designated as page 1948 H. Hall, Ernest: testimony of 344 Hencken, George: testimony of 401 Hubbard, Henry J. : testimony of 1278, 1283 Hun, Marcus T. : testimony of 1180 Hurd, Samuel H. : testimony of 394, 595, 623 J. Jackson, James M.: testimony of 64 James, John P.: Page testimony of 100 Journal of, senate 1945 to 2048 K. Kingsley, Hale : testimony of 499, 1034 L. Lamb, Henry L. : testimony of . . . 282, 291, 308, 312, 319, 472, 676, 716, 823, 836 860, 868, 916, 920, 1009, 1028, 1152, 1159, 1206 1212, 1273, 1501 Lansingburgh, Bank of : report of 315 witnesses relative to, Henry L. Lamb, testimony of 319 Letters : Bingham, Arthur, to A. T. Conklin Commissioners of Alabama to H. C. Fisher Conklin A. T., to D. C. Ellis 220, 221 Ellis, D. C, to A. T. Conklin 42 A. M. Leslie 289 Daniel Pratt, attorney-general, 473, 716, 846, 918 Frederick Olmstead 845 George W. Reid 516, 1161 W. D. Holt 718 J. P. Bellamy 88 Fisher, H. C, to D. C. Ellis '. 221 Lamb, Henry L., to Attorney-General Fairchild, August 14,1876 712 Lamb, Henry L., to Attorney-General Fairchild 311 Lamb, Henry L., to Trades' Savings Bank 717, 719, 720 Isaac Freese 719 Maclay, Moses B., to A. T. Conklin 240 Beid, George W., to D. C. Ellis. . . . 310, 472, 561, 583, 687, 700, 705, 723, 724, 725, 867 Beid, George W., to H. L. Lamb 707, 721, 722, 766, 770 Bodgers, Charles T., to Superintendent of Bank Depart- ment 843, 844 Russell, Dorr, to D. C. Ellis 1172, 2026 Tracy, Charles, to D. C. Ellis 1160 Loauers' Bank : relative to 331 letters from Senator Coleman to D. C. Ellis 1160 X Page. Loan ers' Bank — [Continued). letter from D. 0. Ellis to G. W. Keid 1161 Charles Tracy to D. 0. Ellis Opinion of Attorney-General Fairchild as to right to examine, 1161 William Tracy as to right to examine . . 1169 remarks of Senators on question as to right to examine, 1162-1168 Witnesses: Clark, Samuel H., testimony of 1183 Ellis, D. C, testimony of. 331 Hun, Marcus T., testimony of. 1183 Lamb, Henry L., testimony of 1159, 1206 Werner, Edgar A., testimony of. 1201 Whittingham, Jeremiah, testimony of 1174 Smith, Isaac, testimony of 1204 Ludlow, E. H.: testimony of 434 Lyon, John H.: testimony of 428 M- Macy, William H. : testimony of 468 Mallon, Edward : testimony of 351 Manning, John B. : testimony of 94 McDonald, Benjamin A. : testimony of 458 McGuire, J. : as counsel for the respondent 1949 remarks of, on admission of testimony as taken before the committee on banks 1 argument of, on behalf of the respondent 1805 McKeon, John : counsel for Mechanics and Trades' Savings Bank 5 Mechanics and Trades' Savings Bank : complaint in case of the people, etc., against 6, 7 letter from Ellis to Attorney-General Fairchild 1021 President of 42 George W. Keid to Ellis 1019 McKeon, John, as counsel for 5 order of court appointing Wm. J. Best receiver of 1035 report of condition of, July 1st, 1874 73, 119 March 1st, 1876 1011, 1017 Mechanics and Trades' Savings Bank — {Continued). examination of, April 1st, 1874 927-937, 948-954 receiver of 1039-1063 schedule "A," statement of July 1st, 1874 7 "B," securities of 14 "0," expenses of 16 witnesses as to : Bellamy, Frederick P., testimony of 68, 1025 Best, Wm. J., testimony of IS, 102, 115, 252, 962, 972 Brinkerhoff, Wm., testimony of 112 Carman, J. S., testimony of 189 Conklin, Alfred T., testimony of 177 Ellis, DeWitt C, testimony of 194 Floyd, "William, testimony of 47, 959 Gregory, Ira W., testimony of 20, 143, 954 Jackson, James W., testimony of 64 James, John F., testimony of 100 Eingsley, Hale, testimony of 1034 Lamb, Henry L., testimony of 920, 1009, 1028 Manning, John B., testimony of 94 Moran, Daniel A., testimony of 46, 99 Beid, George W., testimony of 151, 1023 Seldner, Leopold, testimony of 106 Smith, Isaac, testimony of 982 Smith, Isaac, memorandum of 986-1003 Wyckoflf, J. N., testimony of 192 Message of the Governor on Ellis' case 5, 550 to the Senate 2048 Moran, Daniel A., testimony of 46, 99 Morgan, Homer, testimony of. ... 4, 31 Morrison, James M., testimony of 453 Mutual Benefit Savings Bank: report of, to Bank Department, July 1st, 1874 1347 January 1st, 1 875 1349 Aldrich, William F., testimony of 1359 Appointment of George W. Beid asexaminer, and report of. 1352 Commission of D. C. Ellis, appointing examiner of 1336 Beport of, examiner of 1337-1346 Smith, Isaac, testimony of 1336 New York State Loan and Trust Company : report of condition of June 30th, 1875 1279 report of Examiner Beid relative to condition of February 6th, 1875 327, 1273 XII New York State Loan and Trust Company — (Continued). p ag e. Witnesses, relative to : Ellis D. 0. , testimony of 329 Hubbard, Henry J., testimony of 1278, 1283 Lamb, Henry L., testimony of -. . 1273 Roberts, John H., testimony of 1292 Spaulding, Henry P., testimony of. 1287 o. Olmstead, of the firm of Tracy, Olmstead and Tracy appears as counsel 349 P. Pages : Connor, George; Gunther, John H 1948 Peoples Savings Bank : condition of October 9th, 1874 905 condition of September, 1873 829 condition of January, 1874 850 order of Attorney-General for the appointment of a receiver. report of examiners of November 10th, 1876 270 report of Bank July 1st, 1874 861 the People v. Peoples' Savings Bank 836, 837 Witnesses, relative to: Ellis, D. C 272 French, Isaac V 878, 893 Lamb, Henry L. 823, 841, 860, 916 Reid, George W 877 Smith, Isaac 870, 1296 Swaney, S. W 836, 917, 1294 Werner, Edgar A 920 Plumb, Edmund, M.: testimony of 672 Pratt, George N. : affidavit of 8 R. Reid, George W.: appointment of, to examine Security Savings Bank 1309 Third Avenue Savings Bank, 361, 378 Mutual Benefit Savings Bank, 1336, 1352 letter from, to D. C. Ellis 152, 472 Xlll Reid, George W. — ( Continued). report of, on examination of Third Avenue Savings Bank, April 14, 1873 358 report of, on examination of Third Avenue Savings Bank, May 17, 1873 361 report of, on examination of Third Avenue Savings Bank, March 22, 1875 375 testimony of 151, 353, 727, 877, 1023, 1272, 1325 Resolution : authorizing the clerk to furnish copies of charges to each senator 1948 authorizing appointment of H. 0. Tanner as stenographer to report the proceedings of the trial 2010 authorizing doorkeeper of senate to serve subpoenas. . 1009, 2020 as to the order of summing up 2038 designating Robert Mclntyre as janitor 2019 designating Saratoga Springs as the place of holding the trial 1948 designating the officers and employees 1947, 1954 directing the president and clerk of senate to make arrange- ments for meeting 1948 for the employment of counsel by the Governor 1947 instructing judiciary committee to prepare rules 1947 providing for the payment of witnesses 2007 removing the injunction of secrecy from executive session . . 2048 that additional testimony be taken 1949 that the front row of seats be reserved for ladies 1971 to discharge the committee on judiciary and refer same to committee on banks 5 to print 500 copies of Ellis' case 3 . Riger, Jacob : testimony of 35 Roberts, John H.: testimony of 436, 1292 Rules : amended 1970, 1976, 1977 report of judiciary committee on 1950 Russell, Dorr : letter from, to D. O. Ellis 1172, 2026 s. Security Savings Bank ■ 335 appointment of George W. Reid as examiner and his report. 1309 report of condition of, January 1, 1875 1307, 1317 xiv Page Witnesses : Banks, William M., iestimony of 1326 Ellis, D. 0., testimony of 335 Eeid, George W., testimony of 1325 Seldner, Leopold: testimony of 106 Seller, A.: testimony of 398, 445, 597, P,02, 641 Smith, Isaac: statement made by 834 testimony of 624, 647, 870, 9S2, 1204, 1245, 1296, 1320 1336, 1370 Smythe, Frederick 452, 599 Spaulding, Henry F.: as a witness 1287 Stenographer: employment of 5 Stewart, John H.: testimony of 437 Swaney, S. W. : testimony of. 31 3, 836, 917, 1294 Subpoenas: doorkeeper of Senate authorized to serve. 1009 T. Tanner, H. 0., resignation of, as stenographer of Senate. ...... 2008 Testimony before committe on banks to be used before the Senate, 555 Third Avenue Savings Bank : action against sundry persons commenced by S. H. Hurd, receiver ' 781-882 Attorney-General, notice of motion for injunction by, and appointment of a receiver 1591, 1592 bond of trustees of 447, 448, 450, 776, 778, 1780 judgment-roll, People v. Third Avenue Savings Bank. .500, 781 letter from Ellis to Attorney-General, Sept. 29, 1875 473 Eeid to Ellis March 24, 1875 472 report of July 1, 1873 474, 649 January 1, 1874 482 July 1, 1874 490 January 1, 1875 '. . . 491 Ellis, March 30, 1876, in evidence 402 examiners of March 23, 1867 576 April 14. 1873 358, 557, 1554 March 22, 1875.. 375 Tracy, Olmstead, and Tracy, eounsel for Mallon 349 Third Avenue Savings Bank — ( Continued.) Page ' Witnesses : Aldrioh, William P., testimony of 400, 664 073 Dunn, Adolph G., testimony of , .' 455 Ellis, DeWitt C, testimony of 515 Fairchild, Clias. S., testimony of 512 Gormley, Bernard, testimony of - 348, 352 Hencken, George, testimony of 515 ; 401 Hurd, Samuel H., testimony of 394, 595, 623, 674 Kingsley, Hale, testimony of 499 Lamb, Henry L., testimony of 470, 676 Ludlow, E. H., testimony of 434 Lyon, John H., testimony of 428 Ma,cy, William H., testimony of 468 Mallon, Edward, testimony of 351 McDonald, Benj. A., testimony of 458 Morrison, James M., testimony of 453 Morgan, Homer, testimony of 431 Plumb, Edmund M., testimony of 672 Eeid, Geo. W., testimony of 353 Eiger, Jacob, testimony of 350 Boberts, John, testimony of 436 Sellers, Abraham, testimony of 39, 445, 596, 602, 641 Smith, Isaac, testimony of 624, 647 Smythe, Frederick, testimony of 452, 5V9 Stewart, John H., testimony of 437 Vrooman, Isaac H., testimony of 629 Thompson, Prank: witness 1134 Tracy, Charles : argument of, on behalf of the people 1538 letter from, to D. C. Ellis ., 1160 Tracy, Mr. : remarks of 1 Tracy, Olm stead & Tracy: appear as counsel for Mallon 349 appear as counsel for the State 1949 Trades' Savings Bank : examination of, Jan'y 1st, 1874 684 examination of, by Geo. W. Eeid,Jan'y 13th, 1876. . . 280, 703 order appointing Samuel H. White receiver of 767 order to examine Aug. 3rd, 1876 708 sundry papers in relation to, put in evidence 1153 XVI Page. Trades' Savings Bank — {Continued). statement of 277, 770 Witnesses : Ellis, DeWitt 0., testimony of 286, 292 Lamb, Henry L., testimony of 282, 291, 716 Reid, Geo. "W., testimony of ^27 White, Samuel B., testimony of 738, 1156 u. Underhill, Edward E. : Employed as stenographer 5 V. Vrooman, Isaac H. : Testimony of 629 Vote on removal of D. C. Ellis as Supt. of Bank Department. . . 2046 w. Witnesses : Aldrich, William P., testimony of 400, 664, 673, 1359 Banks, William M., testimony of 1326 Bellamy, Frederick P., testimony of. 11, 68, 1025 Best, William J., testimony of . . . . 1, 14, 98, 101, 105, 111, 252 962, 1066, 1248 Brinkerhoff, Wm, testimony of 112 Carman, J. S., testimony of 1 89 Cisco, John J., testimony of 1127 Clark, Samuel H., testimony of 1183 Conklin, Alfred T., testimony of 177 Dunn, Adolph G., testimony of 455 Ellis, DeWitt 0., testimony of.. . . . 194, 260, 272, 286, 306, 311 329, 331, 335, 341, 515, 1371 to 1501 Fairchild, Chas. S., testimony of 512 Floyd, William, testimony of. 47, 959 French, Isaac B., testimony of. 878, 893 Gormley, Bernard, testimony of. 349, 352 Gould, A. A., testimony of. 109 Gregory, Ira W., testimony of 11, 20, 83, 143, 954 Hall, Ernest, testimony of. 344 Hencken, George, testimony of 401 Hun, Marcus T., testimony of 1180 Hurd, Samuel H., testimony of 394, 595, 623, 674 Jackson, James M., testimony of. 64 James, John F, testimony of 100 Kingsley, Hale, testimony of 499, 1034 XV11 Witnesses — ( Continued). Page ' Lamb, Henry Lr, testimony of. ... . 282, 287, 309, 312, 319, 472 676, 716, 823, 916, 921, 922. 1009 1067,1152,1206,1272,1294, 1501 Ludlow, E. H., testimony of. 434 Lyon, John H., testimony of 428 Mallon, Edward, testimony of 351 Manning, John B., testimony of. 94 Maey, William H., testimony of. 468 McDo-nald, Benj. A., testimony of. 458 Moran. Daniel A., testimony of 46 99 Morgan, Homer, testimony of 431 Morrison, James M., testimony of 453 Plumb, Edmund M., testimony of 672 Pratt, George N., testimony of 8 Eeid, George W., testimony of. . . 151, 353, 727, 877, 1023, 1272 1325 Eiger, Jacob, testimony of 351 Eoberts, John H., testimony of 436, 1292 Seldner, Leopold, testimony of 106 Sellers, Abraham, testimony of 398, 445, 596, 602, 641 Smith, Isaac, testimony of 624, 647, 870, 982, 1204, 1245 1296, 1320, 1336, 1370 Smythe, Frederick, testimony of 452, 599 Spaulding, Henry F., testimony of 1287 Stewart, John H., testimony of 437 Swaney, S. W., testimony of 313, 836, 917, 1294 Thompson, Frank, testimony of 1134 Vrooman, Isaac H. , testimony of , 629 Werner, Edgar A., testimony of 920, 1201, 1503 White, Samuel B., testimony of 738, 1155 Wnittingham, Jeremiah, testimony of 1174 Wyckoff, J. N., testimony of 192 Werner, Edgar A., witness 920, 1201 White, Samuel B., witness 738, 1155. Whittingham, Jeremiah, witness 1174 Wyckoff, J. N., witness 192 '# *. 3 i*