Click image to open full size in new tab
Article Text
NO RUN ON THE BANK. THE NINTH NATIONAL IS SOLVENT. THE DEFAULTING PRESIDENT HOWEVER, HELD THE INSTITUTION'S REAL ESTATE UNTIL JUST BEFORE HIS DEATH-WHAT BECAME OF HIS STEALINGS! A. Barton Hepburn, National Bank Examiner. finished his investigation of the affairs of the Ninth National Bank yesterday. He found nothing to make him alter his opinion of the condition of the bank. which he expressed in the statement he gave out on Tuesday evening-that, in spite of the unfortunate defalcation of $400,000 by its former president, John T. Hill, the bank "Is perfectly solvent. and is entitled to and should receive the support of its depositors and of the public." This statement and the similar one of the Clearing House Committee had a reassuring effect on the public. There was no run" on the bank. Only a few of the smaller depositors were led by limitity to withdraw their balances, and the money paid in more than covered that paid out Business went on in the usual methodical fashion. There was no excitement either inside or outside the partition which separates the customer from the officials and employes. Only new point of any importance reached the reporters, and that was that the eighty-five acres of land which the bank owns in the Twenty-third and Twenty-fourth wards, and which, Mr. Hepburn said in his first statement, had been charged off and had not appeared in the assets of the bank for many years, but which is now restored." had stood in some danger of slipping out of the possession of the bank, with the death of Mr. Hill. IT WAS A NARROW ESCAPE. Because National banks are not allowed to own real estate for other than banking purposes, and when taken for debt. not longer than for five years. Mr. Hill to held the property as its owner. He deeded it over the bank not two months ago, and C. Henry Garden, who succeeded him in the presidency, said yesterday, that but for this timely transfer the bank might have been in bad fix. The property was originally owned by Thomas A. Vyse, who was president before Mr. Hill. In 1878 the bank was in trouble. It had met losses and It was said that Mr. Hill had made Injudicious loans, one in particular to Vyse & Co., the senior member of which firm was Thomas A. Vyse. The capital was scaled down to $750,000, and the uptown property came into the possession of the bank, actually, but of Mr. Hill, apparently But Mr. Hepburn said yesterday that this form of evasion of the law was commonly practised in New-York, and was thought nothing of. Nevertheless, if Mr. Hill had died insolvent with that property in his name. and the bank having nothing to show for its claim on it. it would have been awkward for the bank. Mr. Hill did not make the transfer of his own motion, but at the solicitation of Mr. Garden, who was vice-president, and who became worried about Mr. Hill's solvency when he found that the president had only voted 600 shares of stock instead of 750 at the January election. Mr. Garden asked him if he had been selling stock, and he said that he had not. But he did not speak the outright truth. because it has been learned that he really absolutely owned only ten shares at the time of his death, having pledged all the others. There was no fraud in his vote of 600 shares, because pledged stock can be voted. But the apprehensions of Mr. Garden revived when he saw the shadow of death in the face of the president, who was wasting away with consumption, asand though Mr. Hill querulously sured Mr. Garden that he was solvent, the transfer was made for the consideration of $1. HILL WAS PRACTICALLY THE BANK. Mr. Hepburn assented when a Tribune reporter suggested that to all intents and purposes Mr. Hill had been the bank. Hill was man with masterful will and of tyrannical ways. His word was law. His actions were unquestioned. He inspired his fellow officers and his subordinates with reverence and awe. Mr. Garden calls him 'a clever man: a wonderful man." He was the autocrat of the Ninth National Bank; and this happily dispels all doubts and suspicions as to the possible complicity of anybody. He would not confide in anybody. The Czar of Russia would as soon take a moujik into the secrets of his administration as President Hill would a subordinate. Mr. Hepburn said yesterday: "My statement last night covered everything unless you went into detail I have positive instructions from the Department not to give out any information about anything except to the Controller himself. The condition of the bank was fairly stated in the papers this morning. The bank is perfectly solvent. There is not any question about that. It has got considerable real estate, more than it wants. But probably it will dispose of its uptown property pretty soon." ABOUT PROMMISSORY NOTES. " Do you look for promissory notes in connection with loans?" Mr. Hepburn was asked. "Always." " And you don't find them?" "We criticise. Has the Ninth National Bank ever been under criticism?" "Yes. Mr. Hill recognized the force of the criticism and said it would be attended to. He said it was a matter of carelessness on the part of old a customers. It is very bad banking not to take note." But Mr. Hepburn did not attach much importance to the absence of notes in connection with Hill's loans, for he said philosophically that man who built up a reputation for probity throughout many years and then set about deceiving people, would do it anyhow. To have provided notes would have been a little more embarrassing for Hill, but he would have overcome the difficulty. Mr. Hill always looked out for one thing-lie kindly let the bank have all the interest on the loans, while he swindled it out of the $400,000 principal Mr. Hepburn added that the bank had $1,600,000 in cash yesterday morning, and that Hill, he found, held 340 shares of stock in the bank and 5,000 shares of out-of-town electric light stock. The $400,000 had been already charged off by the bank: and with its valuable building and its land, it could bring its surplus up to $320,000. the figure at which it stood before the discovery of the big loss. SHARP LOOKOUT IMPOSSIBLE. Mr. Gardner, president of the bank. was asked by the reporter why the directors did not keep a sharper lookout on Mr. Hill's transactions "It was impossible for the directors to do anything of the sort,' said Mr. Garden. We met every week Then Mr. Hill would read us off a list of transfers, loans and other business. No one could expect the directors to look into every one of them, because they would have had to stay there all the week to do it. As Hill read off the list of loans and transfers, if anybody objected to any name the name would be dis cussed. But It was seldom that anybody objected to name if the president said it was all right. Most of a the loans which lost us the $400,000 were call loans to brokers, for which Hill received no notes. Then he took out the bonds and sold them. a proper thing to make loans without receiv ing notes?' Oh, you have got to do it. Millions worth of of loans are made every day without notes. Some the call loans were left in the bank five or six years. "What was Mr. Hill's salary My impression is it was $10,000." What was the particular reason of the transfer of that property by Mr. Hill two months ago ?" a Because he was going to die." It was not because the bank directors discovered that he was peculating1" Oh, no. Supposing he had died without deeding that property, we should have had devil of job.
