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Say Bank Passed Test Of Solvency
2 Tell of Federal O. K. of Douglaston Institution Before Holiday
The Douglaston National Bank of Douglaston, closed by the Presiorder for the bank holiday March and never permitted to was passed solvent national bank examiners month before the holiday," Judge Mortimer W. Byers was told in Brooklyn Federal Court today The statement was made by George A. Turley, counsel for Albert Blauvelt, 40, 112-03 160th Flushing, president of the bank, and Frederick Muller, 45, 149-08 41st Flushing, the cashier. Indicted Tuesday, were held today for trial Oct.
Capital 'Dissipated'
The bank being liquidated order the Controller of the rency According Assistant FedAttorney Henry Singer, $100,000 of capital and $25,000 surplus were dissipated and "probably not more than 20 percent of its $180,000 deposits' will be saved for the depositors. Turley told the court that economic over which the defendants had no control were sponsible for the bank's present dition. Securities which loans were made at their then value had so depreciated as to cause all the trouble.
Charges False Entries
"Be that as it Singer responded, "we found 13 false entries in the books: as many false reports to the Controller the Currency in concealment of improper loans; loans to dummies to circumvent limitation on the amounts that could legally have been loaned any one borrower: $60,000 loans cleared through 40 corporations in one office. "They were given an opportunity explain, and refused to do so the ground that it would tend to incriminate them." In plea for low bail. Turley said both defendants lived quietly and were eminently respectable men. He said Blauvelt had been Federal bank examiner for eight years and president of the bank Baldwin, had received only $5,000 year salary. Muller, the cashier, he said, was paid "only $20 to $25 week for his services."
