14227. Hobart Trust Company (Passaic, NJ)

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: trust company
Start Date: July 1, 1929*
Location: Passaic, New Jersey (40.857, -74.128)

Metadata

Model: gpt-5-mini
Short Digest: 3d5ea9c0

Response Measures

Full suspension, Books examined

Other: Receivership appointed; grand jury and criminal investigations followed. Clearinghouse issued statement depositors would be paid in full.

Description

State examiners closed the Hobart Trust Company and two branches after a months-long loss of confidence (withdrawals/seepage) linked to internal manipulation and the mysterious kidnapping/disappearance of an officer (Willard/Willard H. Elliott). Temporary receivers were appointed and the bank later reopened under new management (reports of reopening in September 1929). OCR errors in articles corrected (e.g., Elliott spelled variably).

Events (4)

1. July 1, 1929* Run

Cause: Bank Specific Adverse Info
Cause Details: Loss of public confidence caused by revelations of inside financial manipulation (Davis committee findings, Weinberger scandal) and publicity around the kidnapping/disappearance of vice-president Willard H. Elliott; resulted in steady withdrawals/seepage.
Measures: None specific to counter the run mentioned; state examiners and police were posted and later the Department of Banking closed the bank to conserve assets.
Newspaper Excerpt: There has been no run on the bank, but recent publicity ... has caused a seepage and affected the standing of the institution.
Source: newspapers

2. July 24, 1929 Suspension

Cause: Bank Specific Adverse Info
Cause Details: State examiners found impairment of capital from unsecured notes, overvalued real estate and questionable paper; combined with loss of confidence and prior internal manipulations revealed by investigation, the department ordered closure to protect depositors and conserve assets.
Newspaper Excerpt: Hobart Trust Closed By Bank Department ... The banks were closed before the opening hour. ... the state department of banking and insurance took the banks to conserve its assets.
Source: newspapers

3. July 25, 1929 Receivership

Newspaper Excerpt: Receivers Named for Holding Company of Three Closed Banks ... John Stamler, Nicholas La Vecchia appointed temporary receiver the Jersey Bankers Securities Company ... the bank and its two branches closed yesterday by the State Department of Banking and Insurance ... receivers appointed by Vice Backes .
Source: newspapers

4. September 11, 1929 Reopening

Newspaper Excerpt: PASSAIC BANKS OPEN ... Hobart Trust and branches open under new management (reported Sept. 11, 1929).
Source: newspapers

Newspaper Articles (21)

1. November 15, 1928 Courier-Post Camden, NJ

Article from Courier-Post, November 15, 1928

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STATE THREATEN TO DELVE BONDING FIRMS Comissioner Reiterates Denial Hague Influenced Granting of Charters CHECK-KITING CHARGED ance of the state's investigation into the Department of Banking and Insurance and the alleged "peddling" of brought from the Davis Legislative Committeee threat to Investigate the conduct of number of bonding companies, large and small. throughout New Jersey The name of Mayor Frank Hague Jersey City, linked with the probe of alleged bank crimes huring the tea timony of Bank: Commissioner Edward recent statement taht politicians had exerted Influence issuance Jersey charters, so far as concerned He admitted that Hague had Inter with him for charter for the Trust But he insisted that the part taken was that of vouching for Riddle of the sponosrs of the proposed whom the mayor seemed to have much confidence. Defends Action He defends the department's action granting this an report from one of To questions fired him by Frederick Burnett, son said the granted cause thought the bank would succeed and our judgment seemed be vindicated the bank flourFurther about alleged committed the operating of the Hobart Trust Passale These explained by the probe as check kiting and aberrations to $250 and the of Harry W. Wineberger, president of the Maxson admitted while he might be officially responsible he had no crimes. proceedreferred the the Maxson that had informed him "matter resignation Hobart directors He inquired no Defied by Directors Maxson had demand the resignation the and days Wineberger, he also had asked to Had punished them officially the only thing the to the that may have great to the stockhold he When asked by effect the removal these would have had on the bank, he replied ploded the the was withdrawn by depositors two This quiet run on the bank was stopped. and the is stirred the that loans certain banks guided by political substantiate their charges. So decided to proposed inquiry in that direction. To Probe Bonders The to large panies which carried great proportion the business public work One of these is the Liberty Bank & Insurance and Bugbee are interand the Jersey which Theodore Brandle, labor leader and Mayor tenant, is said to be the guiding But know of being to get their bonds from before being public volunteer needed information feared the committee will be unable to acThe hearing will be continued Friday of The state to speed up the order to have It completed by September 10. WRECKS Nov. Sezger, 55, of was jail for 60 after he broke display in the takery shop of Joseph Bruce during drunken quarrel with the proprietor. He arrested Constables Borden Kelly and John Voll and committed by Justice of the Peace Zane Britton.

2. July 24, 1929 Passaic Daily Herald Passaic, NJ

Article from Passaic Daily Herald, July 24, 1929

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Hobart Trust Closed By Bank Department (Continued) from One) drastic, may be a move to protect both the depositors and the stockholders. have no criticism of the move and hope for a conference today with the chief examiner. *There has been no run on the bank, but recent publicity in connection with the Elliott kidnaping has caused a seepage and affected the standing of the institution. "When became president I took the position to sell out to private interests. The deal was almost consummated when the bank was closed, and don't know what effect this move of the bank examiners will have on Stockholders May Lose The brunt of the loss, if there is a big shrinkage, will be borne by the stockholders of the trust company. State bank directors are liable only for the for value of their stock; national bank directors double the value. will be paid first. Mayor John Roegner later today made another statement, more emphatic than his first, regarding the safety of depositors' money. It follows: president of the Hobart Trust Company I wish to assure the depositors that there is no cause for alarm and that they are amply protected. I have attended several conferences for some an endeavor to place the bank in the hands of a respectable local group and hope within hours to have an announcement to make that will prove beneficial to the bank and its depositors and of general satisfaction to the community.' Asked when the bank might be expected to re-open, Mayor Roegner said it might tomorrow if certain developments take place. He also stated that all depositors would probably get a full return of their Officers and Directors Officers of the Hobart Trust are Mayor Roegner, president: Michelino Grasso, Dr. Robert Armstrong. Michael Arthur Edward Hackett. Frederick M. John H. Directors are William W. Evans. Dr. Joseph Coen, John Bunevich, Dr. Lawrence Mr. De Mr. Anton L. M. Kane. John Schmidt, Dr. Benjamin SidShaw, William P. Walsh. Aaron Roegner, Dr. Wilensky, Mayor Mr. Grasso's Comment. Grasso, Hobart exdent of the the action of surprise at pressed the State the examiners "Two weeks ago Mr. Grasso the they "and after their was said the bank was to me this mornlearned of the closing. when wrong don't think anything in something has unless weeks of which have the last two no knowledge. of June 29. Hobart's Report published state. According financial condition ment, the at the Hobart Trust Company, the close of business on June 29, follows: loans and overdrafts, United States Government other stocks ties, and liability account banking executed. furniture and house, estate owned real $48.other than banking cash due from 346.20: other totalling Liabilities: capital stock. undivided 000: for profits, and due accured and including certified and to checks $14.cashier's demand time deposits, executed by other of this bank $54.banks for 014.11: other totalling $7,901 Guard request of State At Acting Chief Banking Lambert DeGroot six morning to licemen early themselves at the banks station had been closed in case they were needed to quell possible run. Patrolmen Michael Blake and Matthew Getchium are on duty front of the iron gates the Hobart Trust Company: Patrolmen Stephen Yatako and John McArdle duty the Service Trust Company, while Patrolmen Henry Berger William Healfront of the lon Merchants Bank and Trust Company the Eastside. While there considerable crowd front of the Hobart and Service banks avenue the throughout turbance any kind reported. The crowd was made up mostly of curious Only few came to inquire about the bank closing. On the Eastside, however, the crowd which milled outside the Merchants Bank gates were excited, tense and inquisitive. Many depositors could not understand the reason behind the bank closing They understood only that the iron gates were closed. Police Commissioner Benjamin F, Turner. later in the morning. requested Chief DeGroot to detail patrolmen to the Merchants Bank who could speak the language the foreign born This felt, would do much to help.

3. July 24, 1929 The Daily News Passaic, NJ

Article from The Daily News, July 24, 1929

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Hobart, Merchants And Service Banks Are Closed (Continued from Page One) Securities Company. which was organized by Harry H. Weinberger, its deposed president, would be closed today. The banks were closed before the opening hour. and two police officers were stationed at every door. Word spread quickly, and crowds gathered, but the news was taken quietly, everyone seeming to realize that the action probably was for the best. No Other Passaic Banks Are Affected No other bank in Passaic in any way concerned in the situation. it was pointed out, and the Hobart has "dried up to such an extent, to use the phrase of Commissioner Smith. that relatively few persons are concerned. Weinberger Scandal Led To Present Situation The extent of this drying up process has been from the scandal, position the New Jersey Bankers and every with and the recent kidnsping of Willard H. then the Hobart's executive and resignation and that his the bank was responsible the act siolence combined hasten up process, that the past weeks Hodeposits have shrunk the extent of In statement Smith said that the of Hobart Service and the Merchants Bank decided upon of the covery the impairment of the institution's capital to the extent Commissioner Smith's Statement Commissioner Smith declined to say whether the banks would be closed under the supervision of Markley, chief of the staff, were making further today that the department would "proceed to collect and start paying depositors as soon as possible" The "drastic writeof real estate", which, in the opinion of his examiners, not worth the figures which carried on the banks Stocks bonds representing 32 per cent. of the total assets were Immesaleable, The total assets of the three banks were listed at approximately the The to close the banks was made conference in Trenyesterday. Chief Markley in charge of the banks today. President Statement Mayor president of the declared the closing the bank and its two came him. bank of the he "made examination the bank and still are making but the board of directors the Hobart Trust have received no report. far as depositors are protected. action of the banking while drastic, may be move to protect both the depositors and the criticism of the hope for today with the chief There has been run on the recent publicity with kidnaping has caused seepage and at. fected the standing the institution. president of the Hobart Trust Company wish to the assure depositors that there no cause for alarm and that they are amply protected have attended several conferences in an endeavor to place the in the hands very responsible within an to make that will prove very to the bank and its depositors, and of general satisfaction to our Resources Put At $7,901,689.39 The bank in its statement as of June listed its total resources Loans and counts were liabilities. capital surplus undivided profits deposits $3,852,060.34 nue demand deposits notices other two were operated as branches the them Trust, although under different They had no presidents for work three banks this morning were Soon home without gated notices were posted on the doors of the that the and affairs" the banks were taken over by the thew among them many weeping gathered the doors the but was offered them as, to reasons for the closing. Passaic Street Jammed Passaic Street, all the way from First to Third vicinity the Bank, lined all morning by men and weeping had hurried the scene immediately upon learning that the institution been Particularly in front of the bank was the crowd reaching the middle of Passaic Street Three police were on duty the Passaic and Second Streets traffic. Among the first arrive at the were of their bank books in who the entrance as to force open. Most of them unable the door, ting forth that the bank had been taken by the state authorities. When come along who could read he she was immediately by the mob and made to interpret its meaning. Shortly before noon the crowd grown such utterly impossible for vehictraffic to go through Passaic from First and beyond Third. except in second gear. At noon hour when several the Eastaide mills closed down for lunch hour, the Merchants Bank most the throng flocking to the instituout crowd paid more attention metropolitan newspaper taking pictures scenes than the bank. Scores of New York newspapermen came to Passaic this morning. Scene at The Hobart Employes and patrons were greeted the main office of the Hobart Company, Main Aveand Prospect Street, by the double revolving doors of the entrance, informing that order of State Department of Banking and Insurance bank property were the latter's hands. small crowd had congrefront of bank, while clerks and officers, detained in the bank, were peering out of the winOfficers Michael Blake and MatGetchius were detailed by Acting Chief De Groot maintain order at the entrance and these calm manner, informed men women that the "bank temporarily closed. not be One of the first at the Hobart entrance William Margolis, chairman of the Chamber of Commerce be held this Fall, expressed the hopes that the bank would not closed Treasurer William Walsh had made the Hobart depository for exposition funds. New Depositor Satisfied One man who just arrived Italy yesterday, that he had deposited $150 in yesterand passing the bank inquired what the crowd had congregated for. He calmed by the policeand then walked away apparently satisfied that everything would be all right. One refused to give her name tearfully informed the police her life savings the bank. She did not say how much the amount was Examiner Peer Arrives Shortly before 10 o'clock Bank Examiner Vernon Peer. had conducted inquiry into the Elliott kidnaping he had in conference with the latter two days before his mysterious arrived He showed his credentials was the admitted the bank by the policeman durthe morning. There was no excitement of any kind the Service branch the bank morning except called officials of that bank on the telephone

4. July 25, 1929 The Republican Springfield, MA

Article from The Republican, July 25, 1929

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JERSEY CLOSES PASSAIC BANKS FACING CRASH Forces Hobart Trust and 2 Subsidiaries With 5 Million Deposits to Suspend Passaic, N. J., July 25-The Hobart Trust company of Passaic and its two branch banks, the Service Trust company New Jersey and the Merchants bank of Passaic, which have combined deposits of more than $5,000,000 list of positors Into many thousands. were closed today by order of the state department of banking and insurance. This action followed the report of examiners that the bank had been running loss for months and that something like slow run on the bank had been started by public distrusti by the mysterious the former vicepresident. Willard Elliott, which was followed by vague rumors involvthe bank Bank examiners found that the loss of public confidence, originally greatly lation by the inside financial manipulation of the bank's affairs revealed by a legislative inquiry last year, was Tapidly "drying up" the bank, so that state was taken to conserve its assets. was asserted, however that the depositors probably would receive 100 per cent on the dollar. State Commissioner Frank H. Smith who ordered the bank and ts branches closed, said today that his examiners were mistic about the chances of paying dollar for dollar. The Passale clearing house issued this statement The clearing house met this morn. Ing and the that the depositors of the Hobart Trust company would be paid in full. There is no connection of the Hobart Trust company and Its branches with any other bank in the Passaic clearing Among the reasons for closing the bank the existence of unsecured notes of large amount and doubtful value and the sensational marking of the value of the real property of the bank Three years ago the bank valued its real property. used banking purposes, at only $10,000. Its value since then. but the present figure or $715,000 considered The assessed valuation of the today $236,300. of the bank own estimate Its Another of the bank's loss is said to be high

5. July 25, 1929 The Times Trenton, NJ

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Bankers Jersey DEPOSITORS PROTECTED, NOW BELIEF Receivers Named for Holding Company of Three Closed Banks CITIZENS OF PASSAIC MAY SUPPLY FUNDS (Associated NEW YORK, July -Examiners reports on which was based the closing of the Hobart Trust Company of Passaic and its two branches, show no evidence of criminal negligence Frank H. Smith, commissioner of the New Jersey State Department of Banking and Insurance, said in his offices here today. Pending detailed studies of the examiners' report and submission of plan of New Jersey citizens for rehabilitating the banks, Smith said he is "sitting tight" on the situation and deferring any moves until examiners complete their work. "But am willing to express the opinion that the depositors get money indicated that any plan for purchasing stock of the closed bank would him the were could ability rehabilitate the institution. criticized paper accounts that most the bank's paper slow and not easily Stocks and bonds held the bank representing 32 total readily The other 68 paper, partly doubtful and small percentage he In the last class some real estate paper which has been affected and over-valued on the books. NEWARK. July Stamler, Nicholas La Vecchia appointed temporary receiver the Jersey Bankers Securities Company. today wrote Mayor John Roegner, Passaic, president of the Hobart Gompany, requesting information group reported to sought the purchase of the bank The bank and its two in Passaic yesterday by the State Department of Banking and Insurance because of impairment capital of received no word directly from the peared before Chancellor morning shortly after ceivers The chancellor told the men to apply to the courts the receivers. Stamler heard them and does not know they are. EAST ORANGE July lard H. former president and treasurer of Hobart Trust Company of Passaic. which was closed yesterday and mysterious ago will be investigated by Passaic Grand tomorrow. today deposits the bank the of disappearance totaled Frank (Continued on Page Eleven)

6. July 26, 1929 Bayonne Evening News Bayonne, NJ

Article from Bayonne Evening News, July 26, 1929

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Grand Jury to Untangle Affairs of Three Banks DISAPPEARANCE OF OFFICER IS BEFORE JURORS Kidnaping of W. H. Elliott Will Also Come Before County Body Paterson, July 26- Faced with literally a maze of charges and countercharges and strange circumstances which include the unexplained disappearance of bank official, a grand jury here today will be asked to untangle the affairs of the New Jersey Bankers Securities Company and find the reasons why its subsidiary, the Hobart Trust Company of Passaic, was closed by the state. It is the disappearance or, as he has describel in detail, the kidnaping, of Willard H. Elliott, until reits cently vice-president and treasurer of the Hobart Trust and its two branches, that will receive the first attention of the jury. Although the venireman have been called, belatedly as several legislators have charged, to act on the findings of the Davis investigaby ting committee which about a year ago delved into the workings of the Bankers Securities, it is Elliott who authorities believe holds the key to the situation. Elliott himself has said that he was kidnapped for six days, from June 26 to July 2, because of his bankin gconnection. That will have to be explained. He has also said that he suspected a narcotic and bootleg ring had tried over his protest to secure loans from his bank under the guise of legitimate business ventures. There was another occurence that will receive close attention, Elliott disappeared on the day state examiner was making routine examination of the Hobart Service Trust Company, a branch. Elliott was to have gone over books with him. Five days after his disappearance, bank examiner Peer showed Mrs. Elliott papers apparently signed by Elliott in "palsied handwriting. Sre de- ing clared her husband wrote firmly and clearly and coudn't have been the signer although the signature was identical, except for the wavering lines, with his. Frank Campbell, a director of the bank and life-long friend of Elliott probably will be called. He advised Mrs. Elliott to refrain from the informing authorities when her husband disappeared. The Sunday fol. lowing his disappearance, according to Mrs. Elliott, he suggested her told him they were hired to keep him out of the way for short time. Their statements will be checked. Elliott was reported ill at his East Orange home and it was said there he might not be able to come before the Grand Jury for several day. But there will be plenty of work for the jury even if they put off questioning witnesses concerning the Elliott disappearance untitl he can appear. The jury inquiry is a direct outgrowth of the evidence presented by the Davis committee. Senator Davis and Senator Joseph G. Wolber have criticised the prosecutor's office for no bringing action on the evidence secured from their investigation of the Bankers securities before this. Acting Prosecutor James M. Dunn, in calling the special session of the jury, announced his intention of thoroughly going into that evidence and of finding, if there is one, the link between Elliott's disappearance and the impairment of the bank's capital which brought about suspension. The center of the investigation into the Bankers Securities is Harry H. Weinberger, former New York criminal lawyer and eminently suecessful in Jersey banking moves. He probably will be one of the forty witnesses known to be summoned Davis. The Davis Committee found that Weinberger had caused the Hobart Service Trust, of which he was then president, to buy 2,000 shares of the Hobart Trust company at $600 from Frank Campbell. Campbell had bought the stock the same day for $500. Then the bank sold the stock to an unnamed purchaser for $650. Weinberger organized the Bankers Securities which bought the shares from him for $899.50. Weinberger is said to have netted about $600,000 in the various organization deals. After the Davis committee inquiry, Weinberger resigned and at the present time, former Senator Edward I. Edwards is president. John J. Stamler, president of the New Jersey National bank and Trust Co., who reorganized the Bankers Securities after the inquiry, is now receiver with Nicholas La Vacchia of Newark, for the holdcompany. But Weinberger asks a few questions himself, and is anxious to appear before the grand jury, waiving immunity, "Who times the grand jury action with the closing of the banks He asks. "Who was behind the Davis inquiry "What was the object of publicity ?" Weinberger calls all the action in connection with the Bankers Securities and the bank it owns "political." Weinberger also intimates that There are also several persons who claim to have sen Elliott in Passaic an dother places when he was supposed to have been captive to a group of Chicago gunmen who by many to have started run on the bank, may have been plotted by the same "conspirators," who sought to discredit the institution. The progress of the sale of the

7. July 27, 1929 Asbury Park Press Asbury Park, NJ

Article from Asbury Park Press, July 27, 1929

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PREPARE ON BANK'S RECEIVERS SHORE HEARING (Continued from page one) Vecchia were appointed receivers by Vice Backes. Frank Smith, belief positors of the Hobart Trust company would their money full. Woman Depositor Is Suicide Yesterday Mrs Frances Doroshi, Tenth Passaic, of the positors whose life savings the Hobart Trust, her Her informed police he believed that she feared her swept away the found of her home, door and disconnected gas tube the ported the woman had about the request that be given the stock the Hobart Trust to group Passaic citizens, made last night group the three met in agreed protest the and in an attempt have the was stated that interest the the should be opened for Committee Attend Hearing was before Vice Backes and petition him remove and Arhas have Passaic today Monday for purpose the Hobart Trust and its the Meeting of the Clifton Civic gressive held for the purpose of to William for the office cent Barnitt now Europe No was upon letter from Acting who that the play by the until Barnitt restated the action was to be taken on grounds Barnitt's failplace alleged the stock and funds the the after he had adthe before the Davis legislative committee

8. July 27, 1929 The Bayonne Times Bayonne, NJ

Article from The Bayonne Times, July 27, 1929

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00 IN PROTEST GAINST NAMING BANK RECEIVERS Passaic, July 27.-More than 500 ositors of the suspended Hobart ist Company and its two branchgathered at 11 o'clock this mornto sign a protest addressed to e-Chancellor Backes against nampermanent receivers when the porary receivership esday. this was the only scheduled deopment today in the events folHing #he closing of the bank. The nd jury investigation of evidence sented by the Davis InvestigatCommittee charging manipulain the New Jersey Bankers urities Company, owners of the is adjourned until Monday depositors met last night and ed the action they will take to to give them an opportunity to fer with financial groups in the of having them buy the bank continue them in business. The porary receivership blocked nelations by Passaic group to buy bank and permanent receiverwould probably end that pos- overnor lity. Larson will also be petied to use his offices to prevent appointment of the receivership committee of twelve with Jack attorney, will draft the reso- famed in the charge to the jury bitterly assailed "those who use trust funds,' Harry H. Weinger, organizer of the Bankers urities, again reiterated his rge of "political conspiracy" inst him and went ahead with plans for a threatened $5,000,suit against the governor and state officials.

9. July 30, 1929 Asbury Park Press Asbury Park, NJ

Article from Asbury Park Press, July 30, 1929

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(Continued from page one) lasted until o'clock, Peer was the witness. Willard Elliott, former vice presitreasurer the Hobart Trust company. kidnaped and captive did not appear. James Burnett, the presenting the grand announced not banker the illness which has confined his his reappearance He Elliott fore the grand jury either today of 12. appointed by the the Trust they appear Vice Backes today in the the and addition that the Jaffe, chairman had the petition be presented the signed by Vice Chancelor Bentley and Hobart Trust before Vice ChanBackes stockholder the Hobart Trust, obtainorder. Weinberger. who charged was the victim damages for the failure the company the closing nounced appear Backes effort avert the pointment permanent secure the removal the temporary receivers. Elliott to Kidnaping July Elliott. vice the the his the Passaic grand jury being physician appear two very weak an attack grip. insisted upon the trip Acting telephoned morning inquire his condition he the grand jurors immethe house readily and that the room was sent Elliott.

10. August 1, 1929 The Daily News Passaic, NJ

Article from The Daily News, August 1, 1929

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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

11. August 2, 1929 The Daily News Passaic, NJ

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Receivers Are Studying Offer For The Hobart John Stamler and Nicholas La Vecchia, for the New Jersey Bankers Securities Company, owner of the majority stock the Hobart Trust Company and its branches. Merchants Bank and Service Trust Company, are today delving deeply the offer of $10 per share for the 30. 200 shares made the Passaic group bankers before ViceChancellor John H. Backes yesterday. The hearings now on before the being closely watched by the receivers, who are also making close study of the Hobart Bank's actual financial status. as set forth in the bank examiners' reports. One the first steps in connection with the offer for the Hobart. will be notification of the 15,000 stockholders of the New Jersey Bankers of the offer that has been made for the chief assets of their corporation. Decision of Backes on the offer made by the Passaic group will come at hearat 10 o'clock next Thursday he ing

12. August 8, 1929 The Herald Statesman Yonkers, NY

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MANY OFFERS Chancellor Prepares To Re-open The Hearings On The New Jersey Securities Company Newark N. Aug merous for the control of the suspended Hobart Trust of Passaic, were as Vice Chancellor John H. Backes prepared open the of New Jersey Securities Company, owner of the bank, here today. The Chancery Court has already an offer $10 per share for ed itself the price Neither John Stamler nor NichLa Vecchia, temporary the Securities denied favored sale the as de positors Both they support the Commissioner Frank H. Smith that only responsible group that should be as pur chasers. When it was reported several days ago that group men formerly Securities planned make for the bank, Smith said he would "more stringent safeguards' the bank any such group obtained control. He explained that their associawould cause an immediate run on the bank when reopened Minor matters of routine occupied the court and was indicated there would be delay before the Bankers Securities case could be The vice chancellor is scheduled to further arguments on motion by depositors to lift the receivership and an order cause the Hobart Trust should not be sold to the which has offered $10 the stock held by the Securities Several Passaic delegations said represent prospective pur When the was called, former Senator Peter McGinnis, attorney of Harry H. Weinberorganizer bankers securities now indictment for conin connection with the grand spiracy made plea that the be lifted He said he the stockholders and the present porary terminated McGinnis admitted the Hobart Trust Company had suffered some losses, said the Bankers Securities had quantity of securities if given chance would get the bank financial basis in the near future. Continued receivership would ruin the company he declared Referring again gilt-edged securities, McGinnis pany had barrel them but said he was willing admit there "few roten apples in the barrel One of was Hobart Trust Company and another the note of Weinberger These, said, did not warrant continuing the He urged the court accept some proposal which would result in the "weeding out" the "rotten apples" so the company could go ahead. Depositors the bank and stockholders the company crowded courtroom. was evidenced that Vice-Chancellor Backes has intenof ruling the reputed offers for the bank the on the receivership are concluded.

13. August 15, 1929 The Washington Times Washington, DC

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A SHEER WASTE OF WORDS By. Herbert Kaufman LL isn't gold that glitters." There's nothing new either " A in that phrase or in the phase of human nature which suggests the trite aphorism. So long as greedy credulity confides cash and expectations to guerilla finance, they '11 get little more than promoter's brass for their pains. There's no certain system to speed the multiplication of money. The law of gravitation rules Wall Street as well as physics. What goes up comes down. And when securities rise at blue-sky rocket speed an empty shell always descends. As witness, the wreck of the Hobart Trust Company in Passaic, the stock of which has just been picked from a court bargain counter at $14 per share, after a hectic joy-ride to $700, with bankruptcy and receivership at the end. This revealing episode, coupled with the Clarke debacle and the general lamb slaughter of August 9, will be forgotten in another month. And the next shell artist and bucket-shopper who happen along with a get-rick-quick outfit will find the usual number of ninnies ready to bet against stacked odds. The exposure of "520 Per Cent Miller" didn't save a single sucker from Ponzi's cruel hooks. Certain folk, incurably obsessed with the notion that there are royal roads to wealth, are never cured of the delusion until they graduate from the Spank Academy. Postoffice inspectors, vigilance societies and advertising censorship do their combined best to safeguard the country from flim-flam artists, but rogue banking and hot-air peddlers continue to raid the national income to the tune of billions annually. Federal and State supervision never entirely protect public depositories from defalcation and mismanagement. Or private pockets from Fagin skill. A dollar without common sense is bound to land in trouble. Speculation is an expert's specialty-amateurs can't hope to pit wits against the careful surveys and organized statistics of Livermore, Cutten, Durant and the Fishers, plus their vast resources and intimate contacts. A tip is only as valuable as the accuracy of its source-and, even when confirmed, isn't necessarily reliable. Insiders can give the Sphinx cards and spades on keeping mouths shut. They play lone hands backed by shock-proof cash reserves, and win in the long run because they can't be wiped out by unexpected Federal Reserve rates, temporary panics or depressing news. And they don't deposit in banks which offer excess interest rates. Small shipping should stick close to harbor and limited means to first mortgages, guaranteed yields and conservative statements. The winds of chance soon founder tiny craft that venture beyond their depth. Especially those without spare sails in the locker. And if Patrick Henry was right, all this is a sheer waste of words.

14. August 16, 1929 The Record Hackensack, NJ

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GRAND JURY MEETS TODAY IN PASSAIC FINANCIAL TANGLE Expectations are that One More Indictment will be Returned by Body-Eliiott Kidnaping to be Taken Up. DAMAGE SUIT WITHDRAWN (By Associated Press.) Aug of the County gathered today further testimony the of Jersey Bankers' Securities Company Having already returned three In. dictments, expected least will handed up before tion H. Elliott, -president and treasurer of the Hobart Trust of Passaic, who told thorities he was his conwith the bank had something to do with his abduction. BANKS TO REOPEN. The Hobart Trust chief of the securities company, and its two branches closed by Department of Banking and surance because alleged ment of capital of Yesterday Passaic the of the 40,000 shares Hobart stock owned by they expected the banks be time Frank H. set requirements which must met by chasers permit reopening All the grand jury has Harry Weinberger, former securities of the true bills, he and Frank charge of The indictment charges the company Joseph fixed at $100,000. His brother and Campbell secured their from $450,000 and $100,000 granted by has announced he will dismiss the LEGAL ERROR Yesterday Prosecutor James M. Dunn agreed with Joseph Weinberger consent order under which Harry Weinberger and Campbell would surrender, the habeas corpus, provided the two men surrendered to the sheriff this ernoon for Dunn would whether he intended to that ball be fixed at the original In announcing he would dismiss the writ, Bentley would also entertain other application for reduction ball, which The said he had fallen "legal error" in granting the writ before the men had actually surrendered. One of the witnesses before the grand jury today will be Frederick vice-president of the Hobart Trust Supreme Court Justice Black has approved the request Vincent Barnitt, prosecutor counto and D. the Davis legis. lative investigating to prosecute the indictments returned by the grand jury. Barnitt was Europe when Dunn started the Investigation and returned last Monday. SUIT DISCONTINUED. Harry H. Weinberger has discontinued his suit for damages against John receiver of the company. and others. Reason for the has The was filed the Supreme Court July 30 shortly after the closing of the Hobart Trust company and Its two branches Passale and the appointment of Stamler

15. August 16, 1929 The Daily Record Long Branch, NJ

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PASSAIC Another Indictment Expected Before Kidnaping of Elliott Is Probed. Aug again members the Passaic County grand jury gathered today to consider further testimony in the alleged irregularities of the affairs of the New Jersey Bankers' Securities Co. Having already returned three dictments expected that least more will be handed before the grand jury turns its tion the kidnaping of Willard Elliott, former vice president and treasurer of the Hobart Trust of Passaic, told authorities convinced connection bank had something to his abduction The Hobart chief asset the securities company and branches. closed the state department of banking and surance alleged impairment capital Yesterday group Passale business purchased Twelfth Big permanent Union Attend Our money Mark chiffon. top top

16. August 16, 1929 Press of Atlantic City Atlantic City, NJ

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WILL REOPEN PASSAIC BANKS IN SEPTEMBER Hobart Trust Purchasers Will Meet Commissioner's Conditions Aug. 15 (AP). today that the bart Trust company two Trust company and which closed 24 by state banking the 40,000 shares Hobart New Jersey Bankers' Securities showed company that they prepared meet, the Frank Smith for reopening the The stock purchased from the temporarily receivers.

17. September 11, 1929 Press of Atlantic City Atlantic City, NJ

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PASSAIO BANKS OPEN Clouded Hobart Trust and Branch New Management 10 The Hobart and for The and

18. February 5, 1930 Asbury Park Press Asbury Park, NJ

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CONSPIRACY BEHIND Receiver Tells Chancery Court Both Were Deceived by Group Which Pur- chased Stock. TO PRESENT EVIDENCE AT HEARING Feb. Stamler, the receivers for the Jersey Bankers' will before Vice Chanon Feb. evidence porting to the and the court chanvictims Hobart Trust comPassaic. letter read in court yesterday group persons for the misleadthe and the court the for the He did not the alleged cononly pressed the did he say the ferred those of the Hobart Trust. Stamler's request that the court the and advise the upon the they take was denied by Vice Backes, told submit him Feb. when will conduct hearings matters the securities comStamler, with Nicholas la Vecchia, receiver for the summer after Hobart had closed the department of banking surance following investigation affairs brought the alleged William Elliott, president The Hobart was the chief the efforts by the receivers reorganize the bank, offer share for shares headed by Henry WhitePassaic was accepted by the receivers approved by the banking commissioner and Vice Chancelor Backes. The stock had been carried on the books securities company Before bank's bles started, offered. After they had begun but before the company receivership, the Whitehead group fered After bank the same group offered $10 Others in the group represented Whitehead Arthur Hughes, James Dow Dow Andrew McLean and Robert hearing was on the plication the receivers for authority dividend Bankers' Securities payment fees the and their petition the newly officers the the Action all points was withheld by the the chancery room when Stamler read were several officials the securities indictment for their included president. others under indictWeinberger's brother, Joseph and Frank Campletter was follows: matter the New Jersey Bankers' Securities have examination number the dence disclose facts the that group persons had purchased from the ceivers made this court, act and but for purpose the receivers court making orders the such securities. "The receivers, respectfully request submit dence their possession special counsel appointed by this should make study of the evihand advise the receivers what they should do in the premises receivers further ask receiving advice, permitted commence such action counsel

19. April 11, 1930 Press of Atlantic City Atlantic City, NJ

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Chide Bank Receiver Scoring Passaic Men Grand Jurymen Call Allegations Case Unjust April the of of the New Jersey Bankers' Securities against group of Passaic citizens was returned today by the Passaic county grand The allegation. that the Securities the victim of conspiracy the of the Hobart Trust of Paswas placed before grand by Prosecutor Dunn after utterance John Stamler in chancery Stamco-receiver Nicholas the Securities firm. To criticism the grand jury added the charge that the receiver the pany his failure to approve of offer share for the stock the Hobart Trust The stock later sold by Securities company for share. group Passaic bankers purchased control the Hobart Trust company after institution and branches closed by the State Department Banking and because The banks and opened by the group, which includand former Arthur James H. WalHenry Whitehead Robert Henry Robert Benson, William Stephens. FREE SCION IN CRASH April Norman wealthy business acquitted supreme here today charge second degree manslaughter growing of the automobile accident of Paterson. Red Hook. Mersereau's demolished Staubach The prosecution charged Staubach driving excessive rate speed the side the wrong

20. February 1, 1931 The Daily Missoulian Missoula, MT

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21. December 5, 1931 The Daily Missoulian Missoula, MT

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