14055. Mechanics and Laborers' Savings Bank of Jersey City (Jersey City, NJ)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: November 4, 1878
Location: Jersey City, New Jersey (40.728, -74.078)

Metadata

Model: gpt-5-mini
Short Digest: 1febfc9b

Response Measures

Partial suspension, Books examined

Other: Receiver appointed and criminal prosecution of officers; ninety-day rule suspension invoked.

Description

Newspapers report depositors clamoring and the bank closed its doors under the ninety-day rule in early November 1878 amid state investigation and revealed insolvency. The bank suspended and was later treated as defunct with a receiver/examiner appointed; criminal indictments of officers followed. Sequence: run → suspension → permanent closure/receivership.

Events (3)

1. November 4, 1878 Run

Cause: Bank Specific Adverse Info
Cause Details: Depositors reacted to fears about the bank's solvency and an ongoing state investigation into the institution's affairs and deficiencies on the books.
Measures: Invoked the ninety-day rule (temporary suspension of payments) and closed doors; officers cited fear of a run.
Newspaper Excerpt: The Mechanics and Laborers' Savings Bank of Jersey City closed its doors to-day under the ninety-day rule. Many of the depositors collected and clamored at the doors of the bank for their money. The suspension is paid by the bank officers to be due to a fear of a run on the institution.
Source: newspapers

2. November 4, 1878 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank had been under investigation by state authorities and was insolvent (missing cash, nonexistent bonds, worthless mortgages); directors had been concealing insolvency while declaring dividends, prompting suspension when failure became apparent.
Newspaper Excerpt: The Mechanics and Laborers' Savings Bank of Jersey City closed its doors to-day under the ninety-day rule.
Source: newspapers

3. December 11, 1878 Receivership

Newspaper Excerpt: Chancellor Runyon, of New Jersey, has appointed a Master in Chancery to examine the affairs of the defunct Mechanics and Laborers' Savings Bank of Jersey City.
Source: newspapers

Newspaper Articles (8)

1. November 5, 1878 The New Orleans Daily Democrat New Orleans, LA

Article from The New Orleans Daily Democrat, November 5, 1878

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National commercial Convention prn-on of a Jersey City vings Bank. NEW YORK. Nov. 4.-The United States Board of Trade hold n. national convention in this city November 13, at which delegates from the Chambors of Commerce, Board of Trade. comm. r'clai exchanges and other mercantile interests will be pre-ent. There will be n. banquet at Delmonico's on evening of the same day. The Mechanics and Laborers' Savings Bank of Jersey City closed its doors to-do; under the inety-day rule. Many if the depositors colleeted and clamored at the doors of the bank for their monoy. The suspension la paid by the bank officers to be due to a fear of n run on the institution. It is stated. however, that the bank has been under investivation by the State authorities for pometime. The liabilities will reach $250,000. Some of the officials are said to be largely indebted to the bank. and other failures may follow the t uspension.

2. December 1, 1878 The New York Herald New York, NY

Article from The New York Herald, December 1, 1878

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JERSEY CITY BANK TROUBLES. The announcement in the HERALD of the complaint against the directors of the Mechanics and Laborers' Savings Bank of Jersey City created considerable excitement in that city yesterday, and caused a suspension of the rush of depositors to the bank to sign. the proposition of the directors to prevent the appointment of a receiver. Several directors, when interviewed as to their view of the complaint, said that Mr. Furey, the complainant, should have waited until the Grand Jury had begun its session and laid his charges before that body instead of bringing the matter into such prominence as he did. Judge Meehan, who issued warrants for the arrest of the directors and placed them in the hands of Constable Feeley for service, was found in his office last evening. He said that no arrests had been made, but that several directors had been notified that war-. rants had been issued for their arrrest and they promised to present themselves with bail. Constable Feeley says that he visited the residence of the former president, Mr. John Halliard, and also the office of the State Insurance Company. but failed to find him. In the evening Mr. Gilbert Collins, Mr. Halliard's counsel. visited the Judge and said that Mr. Halliard would furnish whatever bail was required to-morrow. Although the Judge assured the reporter that no arrests had been made Mr. James Furey, the complainant, later in the evening just as positively stated that several of the directors had been arrested and had given bail. A director of the bank and member of the Execufive Committee said that there was even now underhand work going on in the institution. A meeting of the depositors was held last night at Glaser's Hall, on First street, which was presided over by Mr. Henry Markham. A large number of the poorer depositors were present. A motion was adopted providing for the appointment of a committee to secure able counsel and learn in what manner the greatest amount of the bank's assets could be secured to the depositors and to take steps for the appointment of a receiver.

3. December 11, 1878 The New York Herald New York, NY

Article from The New York Herald, December 11, 1878

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SUBURBAN NOTES. The funeral of Captain John J. Houssman took place yesterday at Port Richmond, S. I. The Episcopal ministers of Northern New Jersey assembled yesterday in Trinity Church, Jersey City, and discussed the establishment of a cathedral system. Chancellor Runyon, of New Jersey, has appointed a Master in Chancery to examine the affairs of the defunct Mechanics and Laborers' Savings Bank of Jersey City. Sergeant Van Wagner and Patrolman D. Lowery, of the First precinct, Brooklyn, yesterday arrested Lindo Delemonte on the charge of carrying on the policy business. George Pfeiffer, a laborer in Balbach's smelting works, Newark, died suddenly yesterday, and as there are some suspicions of foul play an investigation will be made to-day by the County Physician. James Curran, Sr., a prominent citizen of Hoboken, died at his residence in that city yesterday morning. His death resulted from injuries received by accidentally falling down stairs. The deceased is the father of ex-Freeholder Curran. Philip Stuffel, Stephen McNamara, J. Gorman and John Davis were held by Judge Guck to answer a charge of highway robbery preferred by James Conway, who says they knocked him down and robbed him on Saturday night on Flushing avenue. Mayor Howell, of Brooklyn, was before the Kings county Grand Jury, yesterday, and gave testimony, it is said, concerning the Commissioners of the Board of City Works, against two of whom, it is alleged, indictments are being drawn for alleged misdemeanors. James England and Charles Merklee, the Jersey City boy burglars, were yesterday arraigned on three distinct charges, to which they pleaded guilty. England's father paid the costs and will undertake to reform his son. Merklee was sent to the Reform School. Judge Guck sentenced John McNichols to thirty days in the County Jail yesterday morning for wearing his National Guard uniform to his work despite the orders of captain: The punishment is for violation of section 114 of the Military Code, the Judge having no discretion in the matter. Coroner Dill, of Newark, yesterday empanelled a jury to hold an inquest in the case of Mrs. Maschy, whose sudden death in Dr. Ella Haines' office, in Newark, has already been described in the HERALD. After viewing the body the jurors adjourned till today, when the inquest will proceed at the Court House. The funeral of the late Caroline M. Freeland, wife of Collector James Freeland, took place yesterday from her late residence, No. 140 Columbia street, Brooklyn. A large number of friends of the family attended the services, which were conducted by Rev. Henry Ward Beecher, who spoke in eloquent terms of her charity and her many virtues. The remains were interred in Greenwood Cemetery. Police Inspector Waddy preferred formal charges yesterday against Captain Joel Smith, of the First precinct, four sergeants and two roundsmen of that precinct, for not discovering the existence of the faro bank which was broken up by the Inspector on last Monday night. Witnesses in the case were examined before the Board of Police and Excise Commissioners yesterday, and the examination will be resumed today. Jacob Murphy, of Roslyn, Long Island, on Monday night went to the post office, received his mail and started to return home. He was waylaid and beaten with a club, but his assailant, who said, "I'll have your money or your life," was compelled to run away by the approach of a wagon. Murphy had $90 in his pantaloons pocket. He was badly cut about the head and his right cheek was gashed from the eye down to the chin. The liquor store of J. J. Bolger, corner of Pearl and Plymouth streets, Brooklyn, was robbed yesterday morning of a quantity of liquor and several spoons. Subsequently Bernard Cannon, aged twenty-six years, was arrested by Detective Campbell, of the Second precinct. One of the stolen spoons was found in his possession. The prisoner was held for examination. Michael O'Neil, aged twenty-seven years, was also arrested on a charge of being an accomplice of Cannon.

4. December 6, 1879 The New York Herald New York, NY

Article from The New York Herald, December 6, 1879

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JERSEY CITY'S BROKEN BANK. PROGRESS OF THE TRIAL OF ITS INDICTED OFFICERS-HOW THEY ARE ALLEGED TO HAVE CARED FOR THEMSELVES-IMPORTANT TESTIMONY FOR THE PROSECUTION. The third day of the trial of the officers and directors of the Mechanics and Laborers' Savings Bank of Jersey City, on indictments charging them with conspiracy to defraud the depositors by misrepresenting and concealing their insolvency, brought a much larger crowd to the Hudson county (N. J.) Court of General Sessions yesterday than has been in attendance since the case began. The defendants— President John Halliard, Secretary James W. Donelan and Messrs. Jeremiah B. Sweeny, Patrick Sheeran, Thomas C. O'Callaghan and Adam J. Dittmar, comprising the Executive Committee-were early in attendance, and occupied seats near their respective counsel, who are ex-Senator Abbett, ex-Judge Blair and Gilbert Collins. Judges Garrettson, Brinkerhoff and Fry occupied seats on the Bench, Washington B. Williams, receiver of the bank, continued his testimony. Prosecutor McGill handed him several statements which were admitted in evidence, the objections of the defence being overruled. The first paper, the witness said, was was a statement of the condition of the bank on December 1, 1878, prepared by Secretary J. W. Donelan while witness was making an examination of the bank's affairs. Senator Abbett objected to the admission of the paper, because he said it yas intended to use it as an admission of an alleged co-conspirator after the alleged conspiracy had ended, and he was of the opinion that it was not competent. The State said that by the paper they intended to show that the bank was insolvent and that one if not all the defendants knew of its insolvency long before its.suspension. The Court overruled the objection, and the witness, referring to the statement, testified that on December 1, 1877, the assets of the bank were $223.409 83; liabilities, $251 $251,887 887 07, showing a deficit of $38,477 24. Appended to the statement was a note declared to be in the handwriting of Secretary Donelan to the effect that some of the assets included in the above amount were wholly worthless, others partly worthless, and that the deficiency was much larger than shown by these figures; that it would reach over $100,000. The second paper read by witness was a statement showing a deficiency in the actual cash of the bank of $14,615, which had been carried along on the books since Donelan's predecessor retired from the office of secretary and also,the fact that $20,000 in United States government bonds, included in the assets, had never existed in fact. The next paper read by the witness was, he said, a copy of a report of the bank's condition, submitted by Secretary Donelan to the bank directors at their annual meeting on October 31, 1877, showing a surplus of assets over all liabilities of $7,104 91. The witness also read a paper, which he said had been given to him by Donelan, containing a list of the wholly and partly worthless assets of the bank, which amounted to $115,516 22. Auother paper which was read by the witness was a copy of a report declared to have been submitted to the bank directors at their semi-annual meeting, May, 1878, by Secretary Donelan, in which was reported a surplus over all liabilities of $6,478 91. In both the annual and semi-annual bonds the short cash and missing government bonds appeared among the assets. The Court at this point took a recess, and upon reassembling Mr. Williams was cross-examined by Senator Abbett for the defence. Counsel endeavored to get the opinion of the witness as to what his examinations had led *him to conclude as to the honesty and integrity of the defendants in the management of the bank, but the Court decided the questions incompetent. Counsel then asked witness it he had not reported to the Chancellor that from his examination he found nothing showing a lack of integrity or earnest desire to save the bank on the part of the defendants. The Court overruled this question also. BANK EXAMINER VAN CAMP'S TESTIMONY. The State then called Watson F. Van Camp. bank examiner, who testified that he resides in Trenton, N. J.; he made an examination of the condition of the Mechanics and Laborers' Savings Bank of Jersey City on October 7, 1878, and was assisted in the examination by Secretary Donelan; while making the examination he said Messrs. Halliard and O'Callaghan conversed with them upon the bank's condiexercised over Dr. was tion: greatly O'Callaghan Halliard's mismanagement, and said that he would give $10,000 himself to save the bank; he admitted that the bank was in a very bad condition, butsaid that Halliard was about selling some land adjoining the Catholic Cemetery to the Bishop, and if the sale could be consuminated the bank might be saved; Dr. O'Callaghan and Mr. Donelan asked the witness if he was obliged to present his report at once, and whether he could not withhold it for a time: witness told them that he would give the bank all all pos- possible opportunity to recover from its embarrassment, and did not present the report at once; subsequently he met Dr. O'Callaghan andJohn Garrick, counsel to the bank, at the residence of Secretary Donelan; at that time Dr. O'Callegham said to him that he was afraid the bank would have to close; he said that Bishop Corrigan had declined to purchase Halliard's property and they had found that it was more heavily mortgaged than at first reported; they had also made other discoveries which made them give up their efforts to save the bank; witness then presented his report to Secretary Kelsey; Dr. O'Callaghan had told witness that if they could get what Halliard owed them the bank could be saved; he said that when things came to a crisis the directors had forced Halliard to make over a settlement to the bank his indebtedness at that time-January 31, 1878-was $67 $67,095 73, and Hailiard, to settle this, assigned to the bank three life insurance policies of $5,000 each, a $20,000 mortgage on the property adjoining the cemetery, and gave his own demand note for $32,095 73; in making his examinations witness discovered on the stock and bond account an entry of $10,000 in United States government bonds; he never saw the bonds. The witness was not crossexamined. Jacob Dunning, an accountant, residing in this city, was nextsworn for the State. He testified that he was at present engaged in making an examination of the books of the Mechanics and Laborers' Savings Bank. He was directed to turn to the accounts of the defendants with the bank and state how they stood when the bank closed. He testified that on October 15 Patrick Sheeran bad a balance of $2 56 to hiscredit; the account of the firm of Sheeran & Lahane had been overdrawn $8 44; James W. Donelan, secretary. at the close of the bank had a lance to his credit of $210; Dr. Thomas C. O'Callaghan, on October 29, deposited $38 72 to cover an overdraft, and that balanced his accounts; Adam J. Dittmar had a balance of $1 to his credit: Jeremiah B. Sweeny balanced his accounts in 1875 and never had any account afterward: after completing his examinations of the special deposits he found the postings for the entire period of the bank existence as been have follows to $5,338, :-Deposits, :10

5. December 9, 1879 The New York Herald New York, NY

Article from The New York Herald, December 9, 1879

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JERSEY CITY'S BROKEN BANK. ITS OFFICERS DECLARED TO HAVE PAID DIVIDENDS WHILE INSOLVENT-DEPOSITORS IN TEARS. As the trial of the officers and directors of the Mechanics and Laborers' Savings Bank of Jersey City for alleged conspiracy to defraud the depositors progresses the attendance at the Hudson County Court House increases. Yesterday, the fourth day of the trial, a very large crowd was present and much interest was manifested in the proceedings. There was a large number of females among the audience and many of them were in tears during the entire day over the loss of their money. One of the women, when spoken to by a reporter, burst into tears and said that she had $1,300 in the bank. She was a widow, with a large family to support, and knew not what to do to save herself and family from starvation. DIVIDENDS AND DEFICIENCIES. At the opening of the court Jacob Dunning, the expert, resumed the stand. His testimony, which occupied the Court all day, was confined to his examination of the books of the bank. He testified:Besides the liabilities given by him on Friday there was a loan account of $24,950; to the account of bills payable a note of $7,000. for which the bank had become responsible, and credits not ou the books of the bank. but appearing on the books of the depositors, amounting to $498 92; the total liabilities were $251,844 9 and the total assets, face value, $225,313 61 deducting the passbook entries from the liabilities the total deficit shown from the face of the assets is $26,032 58; the books of proft and loss show a further deficit of $10,643 91. and a deficiency in the cash of $15,887 39, which had been carried along on the books since the present secretary was elected. The witness testified thatsithough these matters were known for years the bank continued ou declaring dividends until the institution was closed by the Chancellor; when a dividend was declared October 31, 1877, the deficit from the face assets was $4,751 29, and at the dividend on April 30, 1878, the deficit was $5,676 39; according to the daily cash balance books there was a deficiency nt the time of these dividends of $15,000, and on the general ledger a false balance of cash was carried from be. ginning to end: the deficiency in the cash on April 1878, was $16,291 90; the daily cash book shows $9,436 06 actual cash, while the general ledger called for a balance of $26,530 60; the amount of the dividends declared was:-May, 1877, $6,611 09; October, 1877, $6,923 and the May dividend of 1878, $6,350 81. THE CROSB-EXAMINATION. After recess the witness, upon cross-examination, testified that the total amount of savings deposits was $2,199,635 of this amount $91,751 49 repre sented dividend and $2,107,884 07 money deposits; the profit and loss account contained a statement of interest good and accrued, but not collected; on the book of investments there appears the entry, under date of October 31, 1872:-"$20,000 United States five-twenty bonds," and the following, in brackets, "Paid by bond and mortgage, J. c. Sweeny, dated April 19, 1877," on this account, there being in reality no such bonds, but charged in that name by order of John Halliard, president; witness was of opinion that from the entry Sweeny's mortgage was not an investment but had been used to pay off part of Halliard's indebtedness; interest in the bonds had been carried up all the same, so that on January 1, 1878, it amounted to $2,898; John Vau Vorst's account with the bank began in 1869, and in April, 1873, he took up $25,000 in notes and replaced them with bonds and mortgages; on October 31, 1873, the actual cash deficiency was $15,524 95, and on November 1, 1878, the date of suspension, the actual deficiency was $15,887 39, showing an increased deficit of $362 64. At this point the Court adjourned for the day.

6. December 10, 1879 The New York Herald New York, NY

Article from The New York Herald, December 10, 1879

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EVIDENCE ADDUCED BY THE PROSECUTION YESTERDAY TO PROVE THE CONSPIRACY-THE WORTHLESS ASSETS OF THE INSTITUTION-A GLIMPSE OF THE LINE OF DEFENCE. The trial of the officers and directors of the Mechantes and Laborers' Savings Bank of Jersey City ou the indictment charging them with conspiracy to defraud the depositors was continued yesterday before Judges Garrettson, Brinkerhoff and Fry. in the Hudson County Court of General Sessions. At the opening of court Jacob Dunning again took the stand and his cross-examination was continued. He testified that he had been examining the books of the bank since the 30th of April last, and that, with assistance, he could complete his examination in four months more; he further testified that at the close of the bank John Halliard, president, had a balance of $308 89 more than any other defendant. The first glimpse of the case for the defence was obtained when Senator Abbett asked, "Could a person not a bookkeeper, from an examination of the bank books, understand the condition of the bank?" "No, sir," answered the witness. On the redirect examination Prosecutor McGill asked, "Would not an ordinary person, after looking the books, discover that the bank was insolvent?" "A child could see that," answered the witness. SOMETHING ABOUT MORTGAGES. Mr. Frank C. Hollins was then sworn. He testified that he was a broker in this city, and that for the past nine years he had been in the brokerage business in Jersey City; he remembered a visit paid him in October last by John Halliard, president of the Mechanics and Laborers' Savings Bauk, who told him that he bad some mortgages to sell; I volunteered to take $20,000 of them it they were good; I found that they were only second mortgages, and took but $2,000 worth ot them: Ispoke to Halliard and subsequently to Secretary Doneian about the condition or the bank and the mortgages, and remarked that the latter were bad investments: Halliard answered that it made no difference; I next heard of the mortgages when Halliard and Donelan called at my office and told me that the bank had some mortgages upon which they wanted to raise some money; Donelan gave me a packet of mortgages for inspection; Dr. O'Callaghan also called upon me, and after telling me that he had been elected president of the bank said he wanted to close the special deposit account and needed $4,000 to do it; he expected to raise that amount by disposing of some mortgages; I offered to take $70,000 in mortgages, but after examining them I took only $4,000 or them, being all that I could find among them good for anything and secured; Dr. O'Callaghan subsequently told me not to trouble about the bank, as it had suspended; he said he knew two years ago that it was insolvent, but had hoped through subscriptions to set it right; Mr. Donelan also told me that he knew or the bank's insolvency; I examined $112,145 of the bank's mortgages, and at the time told Halliard and the committee that $42,670 were doubtful or worthless: the bills and bonds of the bank examined by me were in a very bad shape; I saw a bond of Mr. Halliard's for $15,000, to secure the bank from loss; it was in the names of Hugh W. McKay, Harold Henwood and J. c. Sweeney; Messrs. McKay and Henwood had refused to sign the bond, and the only signature to it was Sweeney's; at a meeting of the committee, at which Father Senez and Father De Concillio were present, Dr. O'Callaghan suggested that the bond be returned to Mr. Sweeney, and Mr. Donelan remarked that if any one removed that bond he (Mr. Donelan) would leave the bank; the $20,000 mortgage given by Halliard on the property adjoining the Catholic Cemetery was included in the mortgages regarded by the witness as worthless. "UNABLE TO RAISE A DOLLAR." The witness here volunteered the remark that he did not believe that Dr. O'Callaghan wanted to close the special deposit account. "Why did you not believe it?" asked Mr. Collins. "Because I knew the bank's condition." answered the witness, "and knew that it was unable to raise a dollar." "What reason have you," said Mr. Collins, "for saying that?" "Because that time," answered the witness, "I knew that Dr. O'Callaghan and Mr. Donohue had urged an acquaintance of mine to make a $1,000 special deposit in the bank." Counsel warmly asked the witness if the decrease in the special deposit account did not indicate that it was being closed, and the witness as hotly retorted that to him it appeared as if the bank was seeking sufficient deposits to meet the demands of those who were withdrawing their money. Mr. Michael Mullane, proprietor of the Argus, and Mr. z. K. Pangborn, of the Evening Journal, testified that the bank advertised dividends in their respective papers in 1877 and 1878. and the banking house advertisement was published during that time in the papers. The Court then adjourned. Many of the female depositors who were in the court room were in tears half the day, and their sobs were distinctly heard all over the room.

7. December 11, 1879 New-York Tribune New York, NY

Article from New-York Tribune, December 11, 1879

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INSOLVENCY HIDDEN BY DIVIDENDS. The trial of the indicted directors and officers of the suspended Mechanics and Laborers' Savings Bank of Jersey City, on a charge of conspiracy to defraud the depositors, was resumed Monday in the Hudson County General Sessions. Jacob Danning, an expert, who has been in the employ of Washington B. Williams, the receiver. testified that at the time the bank sus pended there was due the depositors $498 72 more than was shown by the balancesheet. The loans due amounted to $24,950, and the bills payable to $7,000. The liabili. ties footed up $251.845, and the assets $225,313. The witness testified that although the bank has been insolvent for years the Board of Directors had declared a dividend every six months. On April 30. 1877, the deflciency in the funds of the bank was $18,986. The books showed, he stated, that on October 31, 1872, the bank purchased $20,000 in United States bonds, and yet an entry in the ledger indicated that the bank never owned any such bonds, but that the $20,000 was charged to the purebase of United States 5-20 Government bonds by the order of ex-president John Halliard, one of the defendants. At the time the bank suspended, it held a note for $15,000, signed by John Van Vorst, formerly a wealthy property-holder in Jersey City. Mr. Dunning testified that according to the b oks Mr. Van Vorst gave the bank a note for $25,000 in settlement or sums of money loaned to him. and that he had subsequently paid $10,000, leaving a balance due the bank of $15,000; but as he had not examined the account he refused to testify as an expert to that fact. The cross-examination of Mr. Dunning was continued Tuesday, and he testified further that there was $369 due ex-president John Halliard when the bank suspended. Francis C. Hollins stated that in 1877 he wanted to invest about $30.000 in bonds and mortgages, and at the request of Mr. Halliard he examined those owned by the bank. He found that many of them were worthless. After the bank suspended, Dr. O'Callaghan, one of the defendants, the person who was elected presider in place of John Halliard, told the witness that the bank had been insolvent for over two years. Holtins examined the assets of the bank after its suspension and found that the total amount of the securities in bonds and mortgages was $112.145. Certain mortgages which were entered on books of the bank. he was told, could not be found. He also testified that he knew that the bank was paying off some of its special depositors shortly before it suspended, although money was being received on deposit to the other accounts.

8. December 16, 1879 The New York Herald New York, NY

Article from The New York Herald, December 16, 1879

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JERSEY CITY'S BROKEN BANK. CONTINUATION OF THE CONSPIRACY TRIAL-TESTIMONY FOR THE DEFENCE. The third week of the trial of President Halliard, Secretary Donelan and Messrs. Sheeran, Dittmar, O'Callaghan and Sweeney, officers and members of the Executive Committee of the Mechanics and Laborers' Savings Bank of Jersey City, who are charged with conspiring to defraud depositors, began yesterday in the Hudson county. N.J., Court of General Sessions, Judge Garrettson presiding. Mr. Collins concluded his opening for the defence, and called Washington B. Williams, receiver of the bank, to the stand. He testified that, speaking generally, he thought the mortgages held by the bank were at the time they were taken worth their face value, if not more; he had known John Halliard for ten or fifteen years, and knew him to have been engaged in extensive real estate transactions. The defence sought to prove by the witness the reputation of the president for honesty and integrity in the community, but the question was excluded by the Court. George R. Ewan, a clerk in the Court of Chancery. was then sworn, and produced the original papers in the suit between John P. Stockton, Attorney General, complainant, and the Mechanics and Laborers' Savings Bank, defendants, which turnished a complete history of the bank's insolvency. The record was admitted in evidence. Joseph Warren, the next witness, testified that at the request of Dr. O'Callaghan and Mr. Sweeney he made an appraisement of the property belonging to John Halliard, adjoining the Catholic Cemetery; he valued the land at $125,000; at the time he made the valuation he was not aware that Bishop Corrigan was thinking of purchasing it. WHAT THE LAWYER DID. John Garrick, the legal adviser of the bank, upon being sworn, testified that in the winter of 1876-77, he had been consulted about Halliard's deficit in the bank, and had urged the directors to compel him to make a settlement; he was also requested to see Halliard about a missing $20,000 government bond; Halliard told him that the bond had been pledged to procure some money in the Secaucus property, owned by Bishop Corrigan: the Bishop wanted to have the original owners take the property back, and in a short time the negotiations would be closed and the bond returned; the matter of the bank's difficulty came up at a meeting just previous to the failure; the committee then discussed the ability of Halliard to make good the deficiency; all seemed to have entire confidence in him, and it was suggested that if the bank closed the assets would have to be sacriticed and the depositors would surely lose; witness told him that they were bound to take the same care of the bank and the depositors as they would of their own money, and that they must exercise their best judgment in the premises; they came to the conclusion that it would be best to give Halliard a chance, and asked witness if they were justified in regarding the president's indebtedness as assets of the bank; he told them that they were justified in declaring a dividend if they believed they could realize on the assets. Witness found a mortgage of $130,000 given by Halliard to John Winner on the cemetery property, and Halliard said he had reduced it to $30,000; when asked to get a certificate of that fact from Winner he produced a torn piece of paper which was not satisfactory to the committee, and counsel was directed to see Mr. Winner; the latter told bim that if Halliard said the mortgage had been reduced it must be so; Halliard then gave the bank his bond for $20,000 on the property. BISHOP CORRIGAN'S POSITION. Witness was directed to go to Bishop Corrigan and urge him to buy the property, as the sum required ($100,000) would go to the bank; also that he need not pay the cash: that Dr. O'Callaghan, Mr. Sweeney and others would advance him the money and wait ten years for it; the Bishop told the witness that he could not take the property, and that Halliard had already involved him in considerable debt by the purchase of the place at Secaucus at a cost of over $100,000; witness told the Bishop that Halliard had bought the Winner property for cemetery purposes, and the Bishop replied that Halliard had not been authorized to do anything of the kind; after the result of this interview was communicated to the directors they said the bank must close. Other witnesses were examined, but their testimony was of no importance, and the Court adjourned until to-day.