14884. Kensington Bank (Brooklyn, NY)

Bank Information

Episode Type: Suspension → Reopening
Bank Type: state
Start Date: October 17, 1927
Location: Brooklyn, New York (40.660, -73.951)

Metadata

Model: gpt-5-mini
Short Digest: 8450e8db

Response Measures

None

Description

Articles describe discovery of large defalcations (~$319,000) in October 1927. State Banking authorities forced sale/absorption by the Municipal Bank; directors turned assets over to Municipal Bank to forestall any runs and the Kensington could not open as an independent bank on Monday, Oct. 17. It reopened immediately as the Kensington Branch of the Municipal Bank. No depositor run on this specific bank is reported; the suspension/closure of independent operations was effectually a forced takeover with prompt reopening as a branch.

Events (3)

1. October 17, 1927 Other

Newspaper Excerpt: the directors of the bank ... turned their assets over to the Municipal Bank of Brooklyn with the approval of Frank H. Warder, State Superintendent of Banks. The move was taken to forestall any runs upon the Kensington Bank. The Municipal Bank ... assumes full liability to the Kensington depositors.
Source: newspapers

2. October 17, 1927 Reopening

Newspaper Excerpt: On Monday morning we opened, but on the windows of our bank appeared 'Kensington Branch of the Municipal Bank.' It was not until several days later that news of the defalcations leaked out.
Source: newspapers

3. October 17, 1927 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Discovery of a defalcation/shortage of approximately $319,000 due to embezzlement/defalcations by cashier and others; State Banking Dept. would not permit the bank to open independently and forced sale/assumption by Municipal Bank.
Newspaper Excerpt: We were told our capital and surplus was wiped out by the defalcations and that we could not open the Kensington Bank that Monday morning, October 17.
Source: newspapers

Newspaper Articles (14)

1. October 21, 1927 The Brooklyn Citizen Brooklyn, NY

Article from The Brooklyn Citizen, October 21, 1927

Click image to open full size in new tab

Article Text

FOURTH ARREST EXPECTED IN BANK CASE Continued From Page One nothing. The hunch of a young bank examiner, whose name is withheld, is said to have led to the revelations. On Sunday, with the arrests imminent, the directors of the bank, although their loss was covered by insurance turned their assets over to the Municipal Bank of Brooklyn with the approval of Frank H. Warder, State Superintendent of Banks. The move was taken to forestall any runs upon the Kensington Bank. The Municipal Bank, with its resources of over $45,000,000 assumes full liability to the Ken sington depositors. It is said that the civic pride of the Municipal Banking heads as well as others prominent In banking circles here prompted the assuming of Nabilities, and so averted what might have been a small panic. Handrulis, a jovial, short. stocky man, could not speak English, but with the backing of friends he built small bocks of stores and littl ehouses in the then comparatively unsettled regions of Bay Ridge. With success beturned to erecting apartments and his largest ones were being constructed on Fourth avenue when he found himself in need of Max Herzfeld. of No. 65 Court street. for Handrulis, said that his elient borrowed money at the Kensing ton Bank. where he was a depositor, and paid large bonuses for the loans. But according to detectives. be and another depositor worthless checks to the two eashiers, who eashed them and sent them on to the banks on which they were pur ported to be drawn. R-turned unaccepted, the Kensington's losses are said to have been covered by more worthless checks. be to nibble away as much as possible from the increases already voted and cut the remainder from the subway construction program. At the most $10.000,000 can be deducte tro mthis, as if any more were cut would mean that the Mayor was consen ng to the abandoning of his subway ifinance program for the purpose of preserving the exist ing tax rate, program which he had no intention of following The jump of the budget from the peeted $517,000,000 to the sum adopted be exact. $524,922,331totally unexpected. Late yesterday afternono, at about 6 o'clock, the Board filed from executive session. and the Mayor moved the adoption of the $517. 000,000 budget. Aldermanic President McKee announced his intention of voting for it, if attempts would be made to cut it in the pereiod allowed for that purpose. The Mayor concurred. and turned to the Controller General Berry announced that he would vote against it. McKee objected to Berry's passing the burden to the other members of the Board, and the Mayor invited the Controller to specify his objections to the budget cannot vote for this budget because it is too large." said the Controller. "I would leave out the item of $20,210.000 voted to the Board of Transportation for ay construction. oppose the inclusion of that money in the budget on the grounds that there is already $40,000,000 in the budget with which to meet subway construction bonds. think it bad policy to provide an amortization fund before the bonds are issued. "Is that the only oberjtion you asked Walker BY "No," replied the Controller. The Room think there are somethings that should Manhatt be put into the budget as well as taken out. If we to have an honest bud IVERING gef, we should add $10,000,000. and I should apportion that sum follows HEALTH 000 to anticipate judgments and claims and $800,000 for the expenses of the deposit The Mayor, obviously angered by amou the Controller's objections, sprang the contract big surprise of the meeting. "All right. unit he said, "Let's make the budget tell the whole story Let's make it 100 per honest To that end to now withdraw my original and substitute the motion that the bud get proposed for adoption be fixed. Room 331 and that be there in ns suggested by the Controller. the $7,000,000 for removal, judgments Bidders and the Transit Commission. budget an imposition on THE the taxpayer," declared Berry. before the vote was taken LEGAL NOTICES 6959 THE York for of respectively presented and hereby this published testimony caused Surrogate said Borough the day

2. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Article from The Brooklyn Daily Times, November 23, 1927

Click image to open full size in new tab

Article Text

STOCKHOLDERS LOOTED BANK SALE Endorse Action of Kensington Directorate By 832 to 20; $30 a Share Surplus. Stockholders of the Kensington Bank, 741 Church which was absorbed by the Municipal Bank several weeks ago following discovery shortage of approximately $319,000. ratified the absorption last night at meeting held in the Beverly E. Church. Beverly rd. and East Eighth st. By vote 832 to 20 the stock. holders the action of the directorate of the bank in having Municipal Bank absorb the tottering institution. The dissenting 20 votes were cast by borough attorney whose motion to have read at the meeting the contract of sale with the Municipal Bank was defeated. outlined the meeting John the who mately share their stock final made when the This book per share which was the stock worth tion the Kensington Bank Municipal $30 share additional for good will. Liquidation by April 17. Liquidation expected to be comby April next year. which six from the absorption the Municipal Bank That the date on which pledges by Kensington directors are due. More than 100 stockholders meet. the first time since the crash for Mr. McDonald details heard the of the defalcations charged to Henry Hamm, former cashier, Michael Abramson, his sistant, and George Handrulis Joseph Bernstein. deposit ors, of whom are under indictMr. McDonald told the stock holders how the called the rectors was as soon shortage was discovered and with State ensuing ing officials in were told our capital and surplus was wiped out by the defalcations and that could not open the Kensington Bank that Monday October 17." he said. was imperative do two things first was for directors pledge our personal for tunes up the shortage. The to sell the bank immesecond was diately, as State Frank H. Warder advised Banking us could not open as could not stand run on the bank.' Tells of Purchase Mr. McDonald then went tell offering sell the Kensing ton Bank to the Brooklyn Trust Company and the Atlantic State Bank, neither which cared to purchase, and the ended Monday morning with the Municipal Bank agreeing to telling of the crash, Mr. McDonald declared that Handrulis admitted getting more than from the Kensington Bank, and that Bernstein was charged with about $150,000. The remainder of the falcations to have been shared by and 000 by Hamm and Abramson, together paid by bonding company which their integrity in addition to the $250,000 pledged by the expected the and the $30, good will payment to be shared among Following Mr. McDonald's recital rising vote of thanks given the directors for their right affairs the The resolution introduced by Municipal Court JusEdward Cassin. Simon Kugel, chairman of the Board of Directors of the Municipal Bank also spoke the meeting and lauded the work of the Kensington Bank in putting its af. fairs in Lambert Schmldt. former president of the Kensington Bank was not present.

3. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

STOCKHOLDERS O.K. LOOTED BANK SALE Endorse Action of Kensington Directorate By 832 to 20, $30 a Share Surplus. of at holders meeting An outlined John " the cholders mately when the final This per was worth tion the Municipal additional for Liquidation Liquidation which That made by due More than ing for the heard Mr the of the charged to cashier sistant Joseph of Mr holders how rectors ensuing ing officials surplus cations and that Bank the Kensing October was directors to tunes to make second was to the bank diately State Banking Frank we could not not stand run bank Tells of Purchase Mr ton Bank to the Brookly Trust Bank. neither of chase, and of the ended at Mor morning to take In telling M mitted getting more than from the Kensington Bank and Bernstein was charge falcations is believed to have been 000 by Hamm and Tame be paid by the bonding which insured tion the the directors expected to the defalcation and the 000 good will payment to share among stock Following Mr. rising vote of the directors for their forts to right reaffairs of the bank introduced by Municipal Jus tice-elect Edward Cassin Bank also the lauded the work fairs in dent of the Bank not present SMITH BOOSTERS TO ORGANIZE Peter ber of the Shawner Demor of the 13 D. meeting of will be appointed The purpose of the committee rest in the effort to have nominated for President

4. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

STOCKHOLDERS O.K. LOOTED BANK SALE Endorse Action of Kensington Directorate By 832 to 20; $30 a Share Surplus. Stockholders of the Kensington Bank 741 Church ave., which was absorbed by the Municipal Bank sev. eral weeks ago following discovery of shortage of approximately $319,000 ratified the absorption last night at a meeting held in the Bev erly M Church, Beverly rd. and East Eighth By vote of to 20 the stock holders the the directorate of the bank in having the Municipal Bank absorb the tottering institution The dissenting 20 votes were by borough attorney whose motion to have read at the meeting contract of sale the Municipal Bank was defeated As the meeting by John R. McDonald president the Kensington Bank who presided approxi mately $197 share for their stock when the final liquidation is made This book $167 per share was worth absorp tion Kensington Bank the Municipal Bank $30 share additional for good will Liquidation by April 17 $150,000 The remainder of the de be shared by and proximately $20 000 by and Abramson to absorption by Munic Apal Bank in on which pledges paid by The bonding company by are due More meet Non the pledged by the to take the the $30 000 good will to be shared Following Mr. recital rising of thanks was g the for their unselfish of to right the affairs of the bank The was by Muni Court Jus Cassin Simon Kugel chairman of the Board of of the Municipal Bank also spoke the meeting and lauded of directors of the Kensington Bank in putting its at fairs Schmidt former prest dent the Kensington Bank was not present

5. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

"Just Another Job" Faces Snyder-Gray Executioner Elliott, Callous Electric Chair Operator, Admits He's Uneasy About Killing Woman Slayer. "Well that's another job for me. was the comment of Robert Elliott Sing Sing Prison executioner today on the denial of the appeals of both Ruth Snyder and Henry Judd Gray Elliott who resides in Richmond Hill discussed the news when he visited Long Island City to obtain a street opening permit While talking with friends in front of the Municipal Building was imperative do two things The first WILS for directors to pledge our personal for tunes up the shortage The diately as State Banking H Warder advised we could not stand the bank Tells of Purchase Mr then went on to of offering sell the Kensing ton Bank the Brooklyn Trust Company and Atlantic State Bank neither of cared to pur chase and of the ended Monday morning the Municipal Bank agreeing to take In telling of the Mr. Me Donald that Handrulls ad mitted getting than from the Bank and that Bernstein was charged about Elliott was introduced to Edgar F Hazelton, for Mrs Snyder as the man who probably will throw the switch If she goes to the elec chair Hazelton who is an official of the Jamaica Savings Bank pointed out that the which Elliott will out Mrs Sny der might be deposited in his bank know more about you than you think do said Hazelton Your deposits money in my bank Although Elliott has maintained greatly he did not look forward executing Mrs Snyder Discussing his general attitude toward his work for prison he that he did not look upon as individual but as a tool of the State and Elliott who is State Exe utioner for New out the of the four Reid Ice didn't like that one NO much

6. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

BANK SALE Action of Kensington By 832 to 20; $30 a Share Surplus. of the Kensington Church ave., which was by the Municipal Bank ago following discovery shortage of approximately ratified the absorption last meeting held in the Bev. Church, Beverly rd. and to the endorsed the action the of the bank in having the Bank absorb the tottering The dissenting 20 votes by borough attorney motion to have read at the the contract of sale with Municipal Bank was defeated. outlined the meeting president Bank presided, approxishare for their stock final liquidation book of which was what the stock the absorp. the Kensington Bank by plus share for good will. Liquidation by April 17. Liquidation be comApril next months from the by the which pledges by Kensington directors are than 100 stockholders meetthe time since the crash Mr. McDonald recite details of the defalcations Hamm, former Michael his George Handrulls former depositof whom are under indict- McDonald told the how the called soon the was and of an with State Bankofficials in Manhattan. were told our and was wiped out by the defaland that we could not open Kensington Bank October said. imperative two things The first was for pledge our personal formake the shortage. The was sell the bank immeState Frank could not open we could stand run on the Tells of Purchase McDonald then went to of offering sell the KensingBank the Brooklyn Trust and the Atlantic State neither which cared to purand the which Monday morning the Municipal Bank agreeing take telling of the crash. Mr. Mcdeclared that Handrulis adgetting more than the Kensington and that was charged with about The remainder of the have been by Hamm and of $20,by Hamm and Abramson, toapproximately paid by the bonding company insured their integrity in addithe $250,000 pledged by the expected take and the good will payment to be shared Mr. McDonald's recital vote of thanks was given directors for their unselfish right the affairs the bank. of ratification by Court JusCassin. Kugel, chairman of the of Directors of the Municipal also spoke the meeting and the work directors the Bank in putting its afin Schmidt, former presithe Kensington Bank was present.

7. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

STOCKHOLDERS LOOTED BANK SALE Endorse Action of Kensington Directorate By 832 to 20; $30 a Share Surplus. Stockholders of the Kensington Bank, 741 Church ave., which was absorbed by the Municipal Bank several weeks ago following discovery of shortage of approximately $319,000. ratified the absorption last night at meeting held in the Beverly M. E. Church, Beverly rd. and East Eighth st. By yote of 832 to 20 the stockholders endorsed the action of the directorate of the bank in having the Municipal Bank absorb the tottering institution. The dissenting 20 votes were cast by borough attorney whose motion to have read at the meeting the contract of sale with the Municipal Bank was defeated. As outlined at the meeting by John R. McDonald, vice president of the Kensington Bank who presided, stockholders should receive approximately $197 share for their stock when the final liquidation is made. This represents book value of $167 per share which was what the stock was worth the time of the absorption of the Kensington Bank by the Municipal Bank, $30 a share additional for good will Liquidation by April 17. Liquidation expected to be completed by April of next which is six months from the date of absorption by the Municipal Bank That is the on which pledges made by Kensington directors are due. More than 100 stockholders meet. ing for the first time since the crash heard Mr. McDonald recite details of the discovery of the defalcations charged Henry Hamm, former cashier, Abramson. his assistant, and George Handrulis and Joseph Bernstein, former depositors, all of whom are under indictment. Mr. McDonald told the stock. holders how meeting of the rectors was called as soon as the shortage was and of an ensuing with State Banking officials in Manhattan "We were told our capital and surplus was wiped out by the defalcations and that we could not open the Kensington Bank that Monday morning, October 17." he said. "It not

8. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

"Just Another Job" Faces Snyder-Gray Executioner Elliott, Callous Electric Chair Operator, Admits He's Uneasy About Killing Woman Slayer. "Well. that's another job for me." was the comment of Robert Elliott. Sing Sing Prison executioner today. on the denial of the appeals of both Ruth Snyder and Henry Judd Gray. Elliott, who resides in Richmond Hill, discussed the news when he visited Long Island City to obtain street opening permit. While talking with friends in front of the Municipal Building was imperative we do two things immediately The first was for directors to pledge our personal fortunes make up the shortage. The second was sell the bank immediately. as State Superintendent Banking Frank H. Warder advised us not open could not stand a run on the bank." Tells of Purchase Mr. McDonald then went on to tell of offering sell the Kensington Bank to the Brooklyn Trust Company and Atlantic State Bank, neither of which cared to purchase, and of the negotiations which ended at M. Monday morning with the Municipal Bank agreeing to take over. In telling of the crash Mr McDonald declared that Handrulis admitted getting more than from the Kensington Bank, and that Bernstein was charged with about $150,000. The remainder of the falcations is believed to have been shared by Hamm and Abramson. of approximately $20.000 by Hamm and together to be paid by the bonding company which their integrity in addition to the $250,000 pledged by the directors expected to take care of the defalcation and the $30. 000 good will payment to be shared stock Mr. McDonald's recital rising vote of thanks given the directors for their unselfish efforts to right the affairs of the bank. The resolution of ratification was introduced by Municipal Court Justice-elect Edward L. Cassin. Simon Kugel, chairman of the Board of Directors of the Municipal Bank also spoke at the meeting and lauded the work of directors of the Kensington Bank in putting its affairs in order. Lambert Schmidt former president of the Kensington Bank was present. Elliott was introduced to Edgar F Hazelton. attorney for Mrs. Snyder as the man probably will throw the switch if she goes to the electric chair. you get the job it won't be Hazelton, who is official of the Jamaica Savings Bank, pointed out that the money which Elliott will receive if carries out Mrs. Sny. execution might be deposited in his bank. know more about you than you think said Your wife deposits money in my bank Although Elliott has maintained that do not worry him greatly. he admitted he did not "look forward toward executing Mrs. Discussing his general attitude his for the prison, he declared that he did not look upon himself as an individual. but "merely as a tool of the State and justice. Elliott. who likewise is State Executioner for New Jersey, carried out the of the four Reid ice bandits in last week. didn't like that one so much,' he observed.

9. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

O.K. LOOTED BANK SALE Endorse Action of Kensington Directorate By 832 to 20; $30 a Share Surplus. Stockholders of the Kensington Bank. 741 Church ave., which was absorbed by the Municipal Bank several weeks ago following discovery of shortage of approximately $319,000. ratified the absorption last night at meeting held in the Beverly M. E. Church, Beverly rd. and East Eighth st. By vote of 832 to 20 the stockholders endorsed the action of the directorate of the bank in having the Municipal Bank absorb the tottering institution. The dissenting 20 votes were cast by borough attorney whose motion to have read at the meeting the contract of sale with the Municipal Bank was defeated. As outlined at the meeting by John R. McDonald, vice president of the Kensington Bank who presided, stockholders should receive approximately $197 share for their stock when the final liquidation is made. This represents book value of $167 per share which was what the stock was worth the time absorption of the Kensington Bank by the Municipal Bank. $30 a share additional for good will. Liquidation by April 17. Liquidation expected to be comted by April of next year. which is six months from the date of absorption by the Municipal Bank. That is on which pledges made by Kensington directors are More than 100 stockholders meeting for the first time since the crash heard Mr. McDonald recite details of the discovery of the defalcations charged to Henry Hamm, former cashier, Michael Abramson. his assistant, and George A. Handrulis and Joseph Bernstein. former depositors, all of whom are under indictment. Mr. McDonald told the stock. holders how meeting of the directors was called as soon as the shortage was and ensuing with State Banking officials in Manhattar 'We our capital and surplus was wiped out by the defalcations and that we could not open the Kensington Bank that Monday morning. October 17." he said. "It

10. November 23, 1927 The Brooklyn Daily Times Brooklyn, NY

Click image to open full size in new tab

Article Text

"Just Another Job" Faces Snyder-Gray Executioner Elliott, Callous Electric Chair Operator, Admits He's Uneasy About Killing Woman Slayer. "Well, that's another job for me," was the comment of Robert Elliott. Sing Sing Prison executioner today. on the denial of the appeals of both Ruth Snyder and Henry Judd Gray. Elliott, who resides in Richmond Hill, the news when he visited Long Island City to obtain street opening permit. While talking with friends in front of the Municipal Building was imperative we do two things immediately. The first for directors to pledge our personal for. tunes to make up the shortage. The second was to sell the bank immediately. as State Superintendent of Banking Frank H. Warder advised us we not open we could not stand run on the bank." Tells of Purchase Mr. McDonald then went on to tell offering the Kensington Bank to the Brooklyn Trust Company and the Atlantic State Bank, neither of which cared to purchase, and of the negotiations which ended at M. Monday morning with the Municipal Bank agreeing to take In telling the crash. Mr. McDonald declared that Handrulis admitted getting more than $100,000 from the Kensington Bank, and that Bernstein was charged with about $150,000. The remainder of the defalcations is believed to have been shared by Hamm and Abramson. of approximately $20.000 by Hamm and together to be paid by the bonding company which their integrity in addition to the $250,000 pledged by the directors is expected to take care the defalcation and leave the $30.000 good will payment to be shared among Mr. McDonald's recital rising vote of thanks given the directors for their unselfish efforts to right the affairs of the bank. The resolution of ratification was introduced by Municipal Court Justice-elect Edward L. Cassin. Simon Kugel. chairman of the Board of Directors of the Municipal Bank also spoke at the meeting and lauded the work of directors of the Kensington Bank in putting its affairs in order. Lambert Schmidt. former president of the Kensington Bank not present. Elliott was introduced to Edgar F. Haz for Mrs Snyder as the man probably throw the switch if she goes to the electric chair. "If you get the job. it won't be my fault," Hazelton. Then Hazelton. who is an official of the Jamaica Savings Bank, pointed that the money which Elliott will receive out Mrs. Sny might be deposited in his bank. know more about you than you think said Hazelton. Your deposits money in my bank. Although Elliott has maintained that executions worry him greatly. he admitted he did "look forward toward executing Mrs. Discussing his general attitude his work for the prison, he declared that he did not look upon himself as an individual but "merely as a tool of the State and justice Elliott. who likewise is State Executioner for carried out the of the four Reid ice cream bandits in Trenton last week didn't like that one so much,' he observed.

11. June 26, 1928 Brooklyn Eagle Brooklyn, NY

Article from Brooklyn Eagle, June 26, 1928

Click image to open full size in new tab

Article Text

Tiny Blimp Lands on Store Roof Mr. Kugel used "steam roller" methods to force adoption of the agreement after promising that on April every stockholder would be paid $166 per share, the admitted book value of the stock at that time, plus $30 per share for good will. When the agreement was read last night it was disclosed that it contained no such promise. Statement by Kugel. Mr. Kugel this morning asserted not only that this agreement was not read to the stockholders, but that they did not ratify it even if they believe they did. This agreement, he said was one by which the directors of the Kensington pledged themselves to make good the defalcation shortage and that was not a matter for the stockholders to pass upon. What the stockholders did approve he said, was resolution authorizing the sale the assets of the Kensington to the Municipal. This resolution he said was read by Brooklyn Municipal Court Judge whose name he could not remember and was discussed freely by the stockholders Assets and Liabilities. Fortified by the agreement of the Kensington make good the defalcations, Mr. Kugel said, this resolution was acceptable to the Municipal. The resolution, he said, piovided that the Municipal was to take over all assets and liabilities of the Kensington and credit it with $30,000 for good will. If the assets exceeded the liabilities, the excess and the $30,000 was to be turned over to the Kensington Bank and not to the stockholders. If, however, assets did not equal liabilities this $30,000 was to be applied to them. said. Mr. Kugel also denied flatly that he had promised either in writing or verbally to pay stockholders $166 share for their holdings, plus $30 share for good will. Some Pledges Paid. The agreement was that the directors of the would pay $250,000 by April 28 to good the defalcations and on Oct. 19, $113,000 of this amount was paid. Since that time, was said, large amount of the money pledged had been paid, but the exact amount is not known. However. the pledges which it was alleged, the directors did not want made public. as disclosed by the agreement April 28 did not include the cash payments as of Oct. 19, but were to be in addition to them. making a grand total of $250,000. This was on an estimated total defalcation of $300,000, since $50,000 had been paid by bonding Sale of Institution Forced. For the first time, too, it was revealed by Mr. Principe how the State banking authorities had forced the sale of the institution even after the directors had pledged to make good the entire amount of the defalcations. He told also of hectic efforts to get the Brooklyn Trust Company to buy the bank and other suggestions that appeals be made to the Mechanics Bank and the Atlantic State Bank Beads of perspiration stood out on the forehead of Mr. Principe, heavily bullt. serious Italian with large, turned-up mustache, as he painted word of that meet ing of directors last October when the defalcations were discovered- meeting that began on Saturday afternoon and continued until a.m. Sunday morning Struggling with emotion and the difficulties of the English language he pictured the directors, 'their backs against the wall. Describes Hectic Meeting. "After we had pledged to good the losses, said Mr. Principe, "the State Banking Department representative said Gentlemen, what has just taken place here cannot be kept secret. In a little while word of the defalcations will leak out. It makes no difference that you have pledged to make good the losses. When the defalcations become known there will be a run on the bank that you are not strong enough to meet The Banking Department must protect your depositors. You must find bank to buy your institution or cannot let you open your doors on Monday. "This was Saturday night Some one suggested trying to get the Brooklyn Trust to take us over. We got in touch with George V. McLaughlin, who had just been made president. The Brooklyn Trust people came. Finally at 10 p.m. they decided they didn't want us. "Mr. Pines kept suggesting that we get the Municipal Bank But others suggested the Atlantic State Bank and the Mechanics Bank. It was finally decided for various reasons that they could do nothing for us until Monday because their presidents were not likely to act without sanction the directors That would be too late. "Mr. Pines still was insistent on the Municipal We got in touch with the Municipal people and after session that lasted until 5 a.m. the agreement was made. On Monday morning we opened, but on the windows of our bank appeared "Kensington Branch of the Municipal Bank. It was not until several days later by Joseph Pines Principe 10,000 Lambert 50,000 Almeth Hoff Gernon Hothorn Nothing Evans Collins John McDonald Arnold Steinhardt The amounts pledged to be paid by

12. June 26, 1928 Brooklyn Eagle Brooklyn, NY

Click image to open full size in new tab

Article Text

ENSINGTON BANK STOCKHOLDERS TO WAGE FINISH FIGHT Continued from Page 1. Mr. Kugel refused to read the time on the pretext would too long and inpledges made by directors to the which the direcnot wish made public, Speaker after speaker asserted that Kugel used "steam roller" methadoption of the agreeafter promising that on April stockholder would be paid $166 share. the admitted book value the stock at that time, plus $30 for good will. When the read last night it was that it contained no such Some Pledges Paid. disclose. however, that the of the Kensington had pay $250,000 by April 28 to defalcations and that $113,000 of this amount was Since time, it was said, a amount of the money pledged paid, but the exact amount pledges which, it was the did not want mement public as disclosed by the were A. Lehmann 8,000 5,000 Robert Collins 5,000 John R. McDonald. 7,000 5,000 Robert Edgerton. 5,000 Arnold Steinhardt 8,000 5,000 The amounts pledged to be paid by April 28 did not include the cash payments as of Oct. 19, but were to be in addition to them. making a grand total of $250,000. This on an estimated total defalcation of $300,000, since $50,000 had been paid by a bonding company. Sale of Institution Forced. For the first time, too, it was revealed by Mr. Principe how the State banking authorities had forced the sale of the institution even after the directors had pledged to make good the entire amount of the defalcations. He told also of hectic efforts to get the Brooklyn Trust Company to buy the bank and other suggestions that appeals be made to the Mechanics Bank and the Atlantic State Bank Beads of perspiration stood out on the forehead of Mr. Principe, heavily built, serious Italian with large, turned-up mustache, as he painted word picture of that meeting of directors last October when the falcations were discovered meeting that began on Saturday afternoon and until 5 a.m. Sunday morning Struggling with emotion and the difficulties of the English language, he pictured the directors, "their backs against the wall." Describes Hectic Meeting. "After we had pledged ourselves to make good the losses, said Mr. Principe, "the State Banking Department representative said to us: Gentlemen, what has just taken place here cannot be kept secret. In little while word of the defalcations will leak out. It makes no difference that you have pledged to make good the losses. When the become known will be a run on the bank that you are not strong enough to meet. The Banking Department must protect your depositors. You must find bank to buy your institution or we cannot let you open your doors on Monday. "This was Saturday night. Some one suggested trying to get the Brooklyn Trust to take us over. We got in touch with George V. McLaughlin, who had just been made president. The Trust people came. Finally at 10 p.m. they decided they didn't want us. "Mr. Pines kept suggesting that we get the Municipal Bank. But others suggested the Atlantic State Bank and the Mechanics Bank. It was finally decided for various reasons that they could do nothing for us until Monday because their presidents were not likely to act without sanction of the directors. That would be too late. "Mr. Pines still was insistent on the Municipal We got in touch with the Municipal people and after a session that lasted until 5 the agreement was made. On Monday morning we opened, but on the windows of our bank appeared 'Kensington Branch of the Municipal Bank. It was not until several days later that news of the defalcations leaked out." Criticizes Agreement. Mr. Principe and Mr. Hoepfner asserted that they would do the same thing over again under the same circumstances. Mr. Shirrmeister said he was not present at the meeting, had pledged nothing and intended to pledge nothing. "You could drive a horse and wagon through that agreement," he said. "Why should give my money 20,000 to the Municipal Bank 1,000 Mr. Shirrmeister expressed the opinion, however, that the stockholders should go after the Kensington directors who had not yet paid the full amount of their pledges and that then, perhaps, the Municipal officials would be ready to pay the $196 a share as promised by Mr. Kugel. Levin Not Optimistic. Mr. Levin was not 80 optimistic. He said the faith that he had and still retained in John R. McDonald, vicepresident of the Kensington, had led him to hold off Mr. Szerlip for two months in calling the stockholders meeting but that he now was convinced that Mr. McDonald could do nothing more "The Municipal Bank from purely business reasons," he said, "cannot afford to withhold our money. I believe that if strong committee will put the matter up to the president of the Municipal he will see the desirability of paying now. Such a demand, is necessary as a foundation for any equity action." Reads Kugel's Statement. Mr. Szerlip read from The Eagle this statement made by Mr. Kugel "We are not interested in stockholders' meetings because our contractual obligations are with the officers. Smiling grimly he commented: "Kugel says he doesn't know us today. But he us that night he got us in that church and begged us to ratify that agreement. Kugel is the last man in the world who can stand publicity Mr Levin, nevertheless, predicted that there would be a systematic publicity campaign waged by the Municipal Bank in an attempt to justify its stand Mr. Dorman told of his futlle atto as to the agreement from stockholders of the Kensington, Mr Kugel and the State Banking Department, and likewise commented on Mr. Ku. gel's statement in The Eagle that since the Kensington directors had not met their pledges there could be no complete liquidation. Points Possibility of Tricks. He said he had been told by "some one in the know' that would be a cold, hard winter before the stockholders got their $196. "What to prevent a Kensington director friendly to the Municipal to hold out indefinitely just as much as $100 of the amount he has pleaged? Then, to Mr. Kugel, there can be no to Kensington stockholders Or they could have note holder renew his note indefinitely. Consequently there could not be complete liquidation. Just before this crash. the Municipal wanted to get the Kensington at $230 a share." 1,000 Shares Outstanding. About 35 stockholders attended the meeting last night of the total of 164. The par value of the stock was $100 and the holders bought it at Oct. 50,000 Nothing

13. June 26, 1928 Brooklyn Eagle Brooklyn, NY

Click image to open full size in new tab

Article Text

Tiny Blimp Lands on Store Roof Mr. Kuger used "steam roller" methods to force of the agreement after that on would be paid $166 share, the admitted book value the stock at that plus $30 per share for good When the agreement was read night was disclosed that it contained no such promise. Statement by Kugel. Mr. Kugel this morning asserted not only that this agreement was not read to the stockholders, but that they did ratify it even they believe they did. This agreement, he said was merely one by which the directors of the Kensington pledged themselves make good the defalcation shortage and that was not a matter for the stockholders to pass What the stockholders did approve, he said, was resolution authorizing the sale the assets of the ton to Municipal. he said was read by Brooklyn Municipal Court Judge whose name could not remember and was discussed freely by the stockholders. Assets and Liabilities. Fortified by the agreement of the Kensington directors make good the defalcations, Mr. Kugel said, this resolution was acceptable to the Municipal. The resolution, he said, piovided that the Municipal was to take over all assets and liabilities of the and it with $30,000 for good will. the assets exceeded the liabilities, excess and the $30,000 was to be turned over to the Kensington Bank and not to the stockholders. assets did not equal liabilities this $30,000 was to be applied to meet he said. Mr. Kugel also denied flatly that he had either in writing or verbally to pay stockholders $166 share for their holdings, plus $30 share for good will. Some Pledges Paid. The agreement was that the directors the Kensington would pay $250,000 by April 28 to make good the defalcations and on Oct. 19, $113,000 of this amount was paid. Since that time, it was said, large amount of the money pledged had been paid, but the exact amount not known. However, the pledges which, it was alleged, the directors did not want made as disclosed by the agreement were: April 28 did not include the cash payments as of but were to be in addition to them. making a grand total of $250,000. This was on an estimated total defalcation of $300,000, since $50,000 had been paid by bondcompany. Sale of Institution Forced. For the first too, revealed Mr. Principe how the State banking authorities had forced the sale of the institution even after the directors had pledged to make good the entire amount of the tions. He told also of hectic efforts to get the Brooklyn Trust Company to buy the bank and other suggestions that appeals be made to the Mechanics Bank and the Atlantic State Bank Beads of perspiration stood out on the forehead of Mr. heavily built, serious Italian with large, turned-up as he word picture of that meetof directors last October when the ing defalcations were discovered- meeting that began on Saturday afternoon and continued until a.m. Sunday Struggling with emotion and the difficulties of the English language he pictured the directors, "their backs against the wall. Describes Hectic Meeting. "After we had pledged to make the losses," said Mr. Principe, "the State Banking Department said to us: Gentlewhat has just taken place here men, kept secret. In little cannot be while word of the defalcations will leak out. It makes no difference that you have pledged to make good the losses. When the beknown there will be run on the bank that you are not strong The Banking Deenough to partment must protect your deposttors. You must find bank to buy your institution or we cannot let you open your doors on Monday This was Saturday night. Some one suggested trying to get the Brooklyn Trust to take us over. We in touch with George V. Mcgot Laughlin, who had just been made president. The Brooklyn Trust people came. Finally at 10 p.m. they decided they didn't want us. "Mr. Pines kept suggesting that we get the Municipal Bank But others suggested the Atlantic State Bank and the Mechanics Bank It was finally decided for various reasons that they could do nothing for us until Monday because their presidents were not likely to act without sanction of the directors. That would be too late. "Mr. Pines still was insistent on the Municipal We got in touch with the Municipal people and after session that lasted until 5 a.m. the agreement was On Monday morning we opened, but on the windows of our bank appeared "Kensington Branch of the Municipal Bank. It was not until several days later Pledged Paid Oct. Joseph Pines Principe 10,000 Lambert 50,000 Almeth Hoff James Gernon Hoepfner. 7,000 Nothing Robert Collins John Arnold 8,000 The amounts pledged to be paid by

14. June 26, 1928 Brooklyn Eagle Brooklyn, NY

Click image to open full size in new tab

Article Text

World's Largest Sub Tested Lehmann McDonald Steinhardt The amounts pledged to be paid by April 28 did not include the cash payments as of Oct. 19, but were to be in to making grand total of was estitotal of $300,000 since 000 had been paid by bonding company Sale of Institution Forced. For the first time, too, it was revealed by Mr. Principe the State banking authorities had forced the sale of the even after the directors had pledged to make good the entire of the defalcations He told also of hectic efforts to get the Brooklyn Trust Company to buy the bank and other suggestions that appeals be made the Bank and the Atlantic State Bank Beads perspiration stood out on the forehead of Mr Principe, heavily built, serious Italian with large, turned-up mustache as he painted word picture of that meeting of directors last October the were discovered meet ing that began on Saturday afternoon and until am Sunday Struggling with emotion and the difficulties of the English he the directors language their backs against the wall Describes Hectic Meeting. "After we had pledged to make good the said Mr Principe, "the State Banking Department said to us Gentlemen, what has just taken place here be kept little cannot while word of the defalcations will leak out. no difference that you have pledged to make good the the become known there will be run on the bank that you are not strong to meet The Banking Deenough partment must protect tors You must find bank to buy your or we cannot let you open your doors on Monday "This was Saturday night Some one trying to get the Trust to take us over We got in touch with George MeLaughlin, who had just been made president. The Brooklyn Trust people came Finally at 10 p.m. they decided they didn't want us. "Mr Pines kept that we get the Bank But others the Atlantic State Bank and the Bank was decided for various reasons that could do nothing for us until Monday their presidents were not likely to act without sanction the directors. That would be too late "Mr Pines still was insistent on the Municipal We got in touch with the Municipal and after session that lasted the agreement was made On Monday morning we but on the windows of our bank appeared Kensington Branch of the Municipal Bank. It was not until several days later that news of the defalcations leaked Criticizes Agreement. Mr. and Mr. Hoepiner asthat would do the same thing over again under the same circumstances Mr said he was not present at the meeting had pledged nothing and intended to "You could drive 8 horse and wagon through that agreement he said "Why should give my money to the Municipal Bank Mr. Shirrmeister expressed the opinion, however, that the stockhold. ers should go after the Kensington directors who had not yet paid the full their pledges and that then. the Municipal officials would be ready to pay the $196 share as promised by Mr. Kugel. Levin Not Optimistic. Mr He said the faith that he had and still retained in McDonald. vicepresident of the Kensington, had led him to hold off Mr. Szerlip for two months in calling the stockholders meeting but that he now was convinced that Mr. McDonald could do nothing more "The Municipal Bank from purely business reasons, he said "cannot afford to withhold our money lieve that if strong will put the matter up the president of the Municipal he will see the desirability of paying now, Such demand. is necessary as foundation for any equity action.) Reads Kugel's Statement Mr Szerlip read from The Eagle this statement made by Mr. Kugel "We are not interested in stockholders' meetings because our contractual obligations are with the ofSmiling grimly he commented "Kugel says he doesn't know us today. But he us that night he got us that church and begged us to ratify that agreement Kugel 15 the last man in the world who can stand publicity Mr Levin, nevertheless, predicted that there would be systematic pubcampaign waged by the Municipal Bank in an attempt to justify Mr Dorman told of his futtle atto as to the from stockholders the Kensington, Mr. Kugel and the State Banking Department and likewise on Mr. Ku. gel's in The Eagle that the had not met pledges there could be complete Points Possibility of Tricks. He said he had been told by some one in the would be cold hard the holders got their $196 to Kensington director to the Municipal to hold out indefinitely just as as $100 of the amount he has pledged? Then, to Mr there can be no payment to Kensington Or they could have note renew his note indefinot be Just this crash, the Municipal wanted get the at $230 share." 1,000 Shares Outstanding. About 35 stockholders attended the last night the total 164 The par value of the stock was $100 and the holders bought it at