Click image to open full size in new tab
Article Text
to supply For Hobart the bank and upon Under Consideration frozen, cash itself from bank and make the assume manage capital impairment place be sacrificed ridiculously low bank should not at the good will
Neither believe that every dollar due the depositors will be paid. reached this who have made this offer the (meaning group by Henry fied with the Bank and Trust Company) should Peoples officials were not believe the offer complimented even though the Downtown
Asks For Time Consider Offer would ask and, fact, urge the court that we give extended time to consider the offer or any other offer that
Backes said that he was agreeably prised at the report of the condition of the bank.
"Depositors Want To Know Money the whole situation continued the court. sure that "Knowing am handed the would not want their back immediately. group depositors money If would require to be know their safe. they were assured They want to money that their money safe, and they reasonably can be, they most important of would not draw who have been the more important feel that our receivers appointed to the of Hobart must receivers, are striving every way preserve bank and the of the The decision of bank, the of the assets property business The Hobart make another offer holders. This entirely proposition. But Hobart As late as Bank has bad cold. Circulation has stopped. back feet, the other reached. was well and on its same as any again Peoples Bank
Offer Follows Long Conferences conference yesterday, and night Following an Frank H. Smith Banking last Arthur Hughes and Henry C. Plainfield evening. the Passaic of bankers affiliated with head, representing group Bank Trust appeared before Peoples Company, cellor John H. this prepared with offer of dollars share for the 30,200 controlling ten shares of Hobart Trust Company and its Service Trust Merchants Bank. owned by New Jersey Bankers Securities the status of which concern also to be decided by the supposed that the would be presented to ViceChancellor Backes this but the ViceChancellor. instead of receiving at once, began an examination the status of Hobart, and the actual offer in open court be until this afternoon. postponed The called Banking Commissioner Frank H. his chief examiner, Vernon Peer. to the stand. and them, despite exceptions from counsel. who wanted to consider the sale of the Hobart. Peer Reports Discrepancies Totaling Mr. Peer at length regarding his questioned great port to his superior. He said that he figured the bank's liabilities were greater than its assets on June compared to the bank's statement that its assets were than its liabilities, the date of the greater on closing. The examiner said that the $800,000 discrepancy between the due "disallowances" he had figures was to many such as bad notes, overvaluation of real estate and other matters. Examiner Peer also testified that the Hobart was run net profit of $181,036.39 during the year 1928 and for the first six months of this year the net profit was $43,504.22. also said that during the on the bank total of run $2,675,000 withdrawn by depositors. The more than $800,000 between the bank's figures and those allowed by Mr. Peer, the examiner, were accounted for in his testimony by reduction the book value of loans and discounts and $415,000.00 duction in the value placed on the books for the value of the buildings in which the banks are located.
Offer One Per Share..
The offer of the Passaic presented and group, which virtually solicited by John Stamler, co-receiver of New Jersey Bankers, by Backes, and by Counsellor Jacob Jaffe, the and approved principle, not in terms, by State Banking Commissioner Frank H. Smith, was one of ten dollars share for the 30,200 shares of Hobart owned by New Jersey Bankers Securities Company. In cash, this offer of $302,000. It compares with the offer of $604,000 made by the same group week ago yesterday, at $20 share, which was accepted by New Jersey Bankers, but blocked by Mr. Stamler and the compares, also, with the offer of $1,359,000. at $45 share, made by the same group six months ago, before the shaken condition of Hobart became and republic property, jected that time the directors of New Jersey Bankers.
Reasons Why The Bid Was Reduced
The reason for the reduced bid offered today explained strong statement made in behalf of the by James group H. Walden. of Peoples Bank and Trust ComThis offer of ten dollars share, which Mr. Walden pany. explains the only sound offer that can be made, due to the actual conditions, and to the stipulations laid down Banking Commissioner Smith to be complied with before such permitted. Commissioner Smith's stipulations include the following: The capital stock of Hobart and its branches must be reduced one half. In other words the 30,200 shares for which the group offers ten dollars share, must be cut to 15,100 shares, which automatically brings the price to the purchasing group back to twenty dollars share. But the cash for the stockholders of New Jersey Bankers cut half, being reduced from the $604,000 offer of last week to the $302,000 offer of today.
Must Assets
The purchasing group required to write off $760,187 of heretofore assets of apparent real estate values, and of worthless notes. Smith's demand in this his respect public admission of the true of seriousness the financial of Hobart and branches. The purchasing also, the group, required by Com- the bank. its with upon cash assets of $2,500,000 order to meet all demands made maintain its solvency under whatever situation may then develop, pending the liquidation of the bank's assets. The supplying of this amount reason why higher bid cannot be made. Further, pointed out. the group's reduced cash offer, which amounts, fact, to the restoration of the present of $300,000, made by all that necessary taken the week, and by the disappearance past the group supposed was buying. Commissioner Smith nor Receiver Stamler could morning. in advance of the presentation of the Whitehead and Arthur Hughes, but the located. They were in conference private Club in Newark. and the information there that they could not be disturbed.
Group Meets With Smith
Commissioner Smith met last night conference with resentatives of the Passaic group in the office of his counsel, Judge Hetheld. Plainfield. The representatives included Arthur Hughes, Robert Benson. Andrew McLean. and Henry C. Whitehead. At this conference, believed. the was and Smith detailed memorandum of conditions he fulfilled. There were number of these stipulations, three of the which are enumerated above. Another of stipulations that all the was present be retired. the to accept the solicitation to group was the result of all-day conference. an last night definte conclusion had been stated by Mr. Whitehead at his office in the Building that time.
BANKING SMITH CALLED TO STAND
When Commissioner Smith ordered take the said thought cerned present negotiate The replied that called primarily decide the been business great loss Smith testified that he had dered the bank closed by his partment under the direction Examiner Peer. The examination made durperiod 1928 and June examiners Peer said that he had ported his chief its bilities same deficit determined the value the assets? The continued that including bad from the middle 1928. assets by him There was notes past due Beth Israel Hospital for due from the notes $64,158.58 and formed He that there were shortand other real
$500,000 "SURPLUS" IS NOT ALLOWED
The bank's own figures, of the date closing, 24. showed assets liabili surplus more than figures allowed Mr. Peer. Deposits on last day the bank open given showing of on which H. Elliott kidnaped. In Peer's deposits to certificates time deposits, Club amounts, certifide mortgages guarantee, $386,300; acceptances
SOME OF THE MANY OTHER announced that he wished represent?" am Harry Weinberger. myself. stockholder the Hobart Trust Company. you appear myself, New Jersey Bankers Securities Company and the Hobart Trust Company." replied the stick strictly case want to know what the bank worth raise any legal questions.'
MR. WEINBERGER PUTS PEER THRU
Mr. Weinberger did not make but grill Peer his examina- sent to Passaic the weren't asked former Jersey Bankers head. the bank examiner went Passaic locks doors banks?" Mr. Weinexamination. the negative, further explanathat were charge banks Backes Halts Mr. Weinberger Weinberger continued his the the same Backes interrupted. don't want any those questions, to know how much the bank Here Mr Weinberger asked Mr. Peer his report deductions estate values the bank properties. Peer unable produce court the minutes later sent Mr another aminer. the court, apparently "Did arbitrarily lower the values?" fired Weinberger. The court objected familiar with question refuse allow former Bankers head asked the the but the that there need phase the case was being court stenographer was takthe entire also warned Weinberger again argue only on point in did get your figures, asked ing had reliable real estate bankers business the bank examiner respond-
AMONG THOSE AT THE HEARING TODAY
Among the prominent particithe today Jacob Jaffe. the depositors' Henry Whitehead. counsel for the group, which offer the bank: Arthur Hughes, member the group made the offer; Judge Walter Hetfield, Union County, BankFrank Smith: the ceivers the New Jersey Bankers Securities Company and president the New Jersey Bank Trust Arthur Newark lawyer, counsel Jacob former Senator Peter McGinnis, Harry Weinberger and Leber representing Newark furnidealer: Nicholas the New Jersey BankSecurities Company: Banking Frank Dominick minority stockholders the HoTrust and Thomas heavy depositor the Hobart
