14924. Union Bank (Brooklyn, NY)

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: March 1, 1910*
Location: Brooklyn, New York (40.660, -73.951)

Metadata

Model: gpt-5-mini
Short Digest: ed449458

Response Measures

None

Description

The Union Bank of Brooklyn is repeatedly described as a defunct institution, went into suspension and was liquidated/placed in receivership after a second collapse (references to the panic of 1907 and a second collapse around March 1910). The coverage focuses on criminal malfeasance (Sullivan's misconduct, dummy companies, false statements), liquidation by the State Banking Department, and long-running receivership. There is no clear description of a depositor run in these articles; the primary cause of suspension/closure is bank-specific adverse information (fraud/asset concealment). Dates are approximate where only a month/year is inferable from context (e.g., the false statement of March 15, 1910 is cited in trial coverage).

Events (5)

1. March 1, 1910* Suspension

Cause: Bank Specific Adverse Info
Cause Details: Second collapse tied to fraudulent/false statements of assets and concealment of assets (dummy companies, improper mortgages) leading to suspension/closure two days after false report (trial evidence references March 15, 1910).
Newspaper Excerpt: false bank report of March 15, 1910 ... second collapse of the institution
Source: newspapers

2. July 30, 1914 Receivership

Newspaper Excerpt: Protesting against what they term the Tammanyizing of the defunct Union Bank of Brooklyn ... He explained that the bank's affairs would be placed in charge of the liquidating bureau of ... the State Banking Department in charge of the institution's liquidation was Daniel W. Quinn, jr., special Deputy Superintendent of Banks, who is in charge of the institution's liquidation. (articles dated 1914-07-30 and 1915-03-20).
Source: newspapers

3. October 28, 1914 Other

Newspaper Excerpt: Sullivan managed to conceal in a similar manner more than $1,000,000 of the bank's assets ... David A. Sullivan, now serving a sentence in Sing Sing prison for the part he played in wrecking the Union Bank of Brooklyn, had frequently been outside the prison on automobile rides. (criminal investigation / conviction coverage).
Source: newspapers

4. June 9, 1915 Other

Newspaper Excerpt: evidence purporting to show that several dummy concerns operated in connection with the defunct Union Bank of Brooklyn ... mortgages ... were identified ... used for giving dummy notes secured by bank collateral ... to deceive (trial evidence describing asset manipulation).
Source: newspapers

5. February 22, 1916 Other

Newspaper Excerpt: State Superintendent of Banks Richards by a decision ... is permitted to sell approximately $200,000 in collateral for notes put up by the late F. Augustus Heinze with the broken Union Bank of Brooklyn ... as receiver. (court authorization to sell collateral during liquidation).
Source: newspapers

Newspaper Articles (10)

1. July 30, 1914 New-York Tribune New York, NY

Article from New-York Tribune, July 30, 1914

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WANT TIGER TAKEN FROM UNION BANK Depositors Angry Over Tammany Men Placed in Charge. RICHARDS DEFENDS HIS APPOINTEES Protests and Accusations Made at Meeting-Fear for Property. Protesting against what they term the Tammanyizing of the defunct Union Bank of Brooklyn, two hundred depositors of that institution let Eugene Lamb Richards, State Supervisor of Banks. know yesterday that they were afraid to trust the liquidation of the bank's affairs to the Banking Department under present conditions They vigorously applauded their spokesmen, all of whom asserted that politics should not enter Union Bank affairs and that the efforts of the Bank R Department should be to protect depositors and not to create jobs The meeing was a lively one from the start When Mr Richards tried to explain his plans for saving money for the depositors he was interrupted irequently with cries of: "We want our money! We don't want a gang of politicians to run our iffairs." The excitement reached R high pitch when Milten J Gordon, president of the Lamont Realty Company, and 8 de positor, demanded to know what confidence the depositors could have in him when he placed Matthew T Hor gan in charge of the affairs He denounced Horgan as the member of 8 political ring and made many other charges which caused Horgan to demand an opportunity to reply Gordon continued his charges against Horgan and the other politicians whom Mr. Richards wants to put in charge of the bank's affairs Horgan then took the floor and went over his entire record. telling of the arious places he had held in the city and the state government and he asserted that he was the man who exposed the use of rotten meats in the city hospitals "I'll stand on my record!" he shouted. "and in three months I will show surplus instead of a deficit to you depositors Mr Richards explained his plan for the liquidation of he bank's affairs in detail He declared that by cutting down salaries and making other economies he could effect 8 saving of about $34,000 8 year, which would give the bank a surplus instead of a deficit One of the things Mr. Richards DUTnosed to do was to dismiss Edward L. Dodge. the special deputy now in charge He referred to the faci that Louis H Goldstein an Assistant District Attorney in Brooklyn, was draw ng $7,200 from the bank as counsel This brought 8 reply from Mr. Gold stein, who declared that Governor Dix was familiar with the situation when he was appointed € Mr. Goldstein defended the present management of the bank's affairs, and declared that the figures submitted by 1r Richards were misleading especiallv the statement that the institution had cash on hand of $348,000 four years ago, which this year had dwindled to $87,000 Thomas G Clark, former president of the Brooklyn Safe Deposit Company, aserted that the people no longer had any confidence in the State Banking Department. He criticised the selection of Mortimer J Brown. which, he said, was a political appointment: also the naming of George Stonaker who, he supposed. belonged to one of Mr. Richards's political clubs on Staten Island All of the speakers pleaded to be let alone They were satisfied with the way the bank's affairs were being conducted. they asserted. and they did not want the State Banking Department to interfere Most of them even went 80 far 88 to declare that they did not want the salaries of the employ reduced. Mr Richards suggested that the depositors get together and appoint a committee to confer with him This . they did, but when the com ttee to look for Mr Richards to had disappeared. The depositors learned that Mr. Richards would be in his of fice this morning, SO they arranged to storm his office once more Mr Richards in his talk to the depositors declared that be wanted to get them their money He explained that the bank's affairs would be placed in charge of the liquidating bureau of

2. October 28, 1914 New-York Tribune New York, NY

Article from New-York Tribune, October 28, 1914

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would not be another train along for some time, Sullivan feared he would have to spend the night outside the prison walls. ### Helped Him Find Warden. Patrolman Ford, however, was able to find the warden before he returned to Ossining. Another member of the Yonkers Police Department will be on hand to substantiate Ford's story and give additional information. Further evidence that Sullivan, whilc supposedly behind the bars at Sing Sing, was mulcting the Union Bank was put in possession of District Attorney Cropsey yesterday. It was in the form of a check for payment of interest on a mortgage formerly held by the bank, which bore Sullivan's signature as indorsement. The check was paid by the rabbi of a synagogue at 228 Christopher av., East New York. The amount of the mortgage was $2,500, and the check was made out to Mrs. Sullivan. It bore Sullivan's signature, however, and was cashed, it is said, by Miss Burkhardt. Mr. Cropsey believes he is on the track of other mortgages of the Union Bank, which disappeared mysteriously. Some of them were recovered from the Joralemon Security Company, organized by Sullivan, of which Augustus F. Gardner, clerk, served as dummy president. When the Union Bank failed, mortgages held by the security company were assigned to Sullivan, who has since been collecting the interest which should appear as part of the assets of the wrecked financial institution. It has been estimated that Sullivan managed to conceal in a similar manner more than $1,000,000 of the bank's assets. The report of the Governor of Superintendent Riley, in which he exonerated Warden McCormick of granting unusual privileges to Sullivan and said the ex-banker was selected to drive the warden's car because he was the only convict at Sing Sing familiar with the operation of an automobile, elicited a great deal of jocular comment yesterday. A pedigree of all prisoners is taken by the clerk of the court in which they are sentenced, and sent to the warden along with the prisoner. At the prison another pedigree is taken and tre man's former occupation learne', for purposes of determining the work to which he may be most advantageously assigned. An investigation by The Tribune yesterday of the records of convictions from New York County alone, shows that there are a great many chauffeurs at Sing Sing. In all, there are within the walls about 400 men capable of running automobiles.

3. October 29, 1914 Newark Evening Star and Newark Advertiser Newark, NJ

Article from Newark Evening Star and Newark Advertiser, October 29, 1914

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# WARDEN ADMITS # SULLIVAN WENT # ON MOTOR TRIPS Sing Sing Head, Under Suspension, Tells Governor's Investigator So at Probe. OSSINING, N. Y., Oct. 29.-T. J. McCormick, warden of Sing Sing prison, now under suspension, admitted today that David A. Sullivan, now serving a sentence in Sing Sing prison for the part he played in wrecking the Union Bank of Brooklyn, had frequently been outside the prison on automobile rides. Mr. McCormick's admission was made on the witness stand in the investigation started here today by Stephen C. Baldwin, of Brooklyn, Governor Glynn's special commissioner. McCormick testified that Sullivan had been detailed to drive the automobile and that the detail was in line with McCormick's policy of having all work done by prisoners wherever possible. According to statements declared to have been made to Assistant District Attorney Goldstein, of Brooklyn, while in Albany yesterday, Sullivan had enjoyed liberties before unheard of in the prison's history. He is said to have motored where he pleased, to have visited Broadway restaurants here and to have conducted business affairs of the failed Brooklyn bank, whose depositors are fighting to recover their lost savings. This last phase of Sullivan's case is the subject of inquiry by the Kings county grand jury. Coming on the eve of State and congressional elections, the charges against Warden McCormick have created a sensation throughout the State. The situation in Sing Sing will be the attack of politicians as a feature in all campaigning for the remainder of the week.

4. December 13, 1914 The Sun New York, NY

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The case referred to is that of E) M. Grout. lawyer, former City ' troller and once president of the Bank of Brooklyn, which seems to made trouble for every one who tx it. David A. Sullivan, the Sing joy rider. whose pastimes while S a prison term caused the dismis Warden McCormick of Sing Sin who has just been indicted on more counts in connection wit manipulation of the Union money. preceded Mr. Grout as h the wrecked institution. Grout was indicted before Mr. sey's incumbency began, but h only indicted for a misdemeano Mr. Cropsey caused his indictme a felony, charging that he com perjury in making a report to the Banking Department. It is allege Grout swore falsely to a statem the bank's assets and liabilities. in ing the former and decreasing the It was while District At Clarke. Mr. Cropsey's predecesso in office that the Union Bank. re tated after its suspension durin panic of 1907. failed again whi Grout was president. Mr. Clarke time was in Europe: Robert H. was Mr. Clarke's first assistant an in charge of the office. It was who caused Grout's indictment misdemeanor. In December, 1913, Mr. Cropse Grout indicted for a felony, and then the case has been in cou peatedly on various motions. Grout's prominence and the inte the public particularly deposite all the affairs of the Union Ba some one to ask Mr. Cropsey wi would put Mr. Grout on trial. and a reference to this in the speech the Fulton Street Board of Trad has caused all the commotion. This 15 what Mr. Cropsey said "Bomebody asked me when we gong to try another bank pro awaiting trial. I said we were go try him without fall. and in my and I am trying to get a handpicked. and one or rather a lap fri the man who is to be tried. and . who WITH at least give the pe for trial. I have reason to

5. December 23, 1914 The Sun New York, NY

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# UNION BANK 'MILKED,' # ASSERTS SULLIVAN Former President Says He Can Compel State to Pay Depositors in Full. # WANTS ONLY BETTER NAME Martin T. Manton has withdrawn as counsel to David A. Sullivan, now in Sing Sing for wrecking the Union Bank of Brooklyn, but he will continue to represent Sullivan unofficially and without pay, acting as intermediary between the former bank president and the depositors in the insolvent Union Bank. In a statement to the press yesterday Sullivan said he was willing to give testimony which would force the State of New York to pay the Union Bank depositors in full. This is the end toward which Dr. J. Ellis Rohrer and his depositors' committee have been working. Sullivan adds that he is a physical wreck, but that he is conserving his strength to aid the depositors. His statement continues: "I ask you to consider that after a receivership 'milking' the Union Bank opened in 1908 with $3,000,000 cash, clean assets of $5,000,000 and N. G. assets of more than $1,000,000. Subsequently on these clean assets $2,550,000 was borrowed by Grout. That makes $5,550,000 cash on 'Sullivan' assets, against $7,000,000 deposit liabilities, or about 80 per cent. "These are facts. The figures may vary a little, as I am drawing on memory, so you should correct from statement. Now what became of these assets is the real question. It has never been answered, and as all of them were created during the time I was president no one can more intelligently answer than me. "Since coming here I gave my testimony in litigations involving more than $500,000—all strongly in aid of the depositors. Did these depositors ever know that? "What little strength I have left I will cheerfully give to the depositors. I feel that I can collect more than $100,000 for them. "Before any board of claims my testimony will force the State of New York to pay depositors in full. "I ask nothing for myself. I am truly anxious to leave a better name to my wife and children than now exists." In a letter to Daniel W. Quinn, the State Banking Department representative who has been appointed to liquidate the assets of the Union Bank, Martin T. Manton offered the services of Sullivan in the attempt to collect the assets. "Mr. Sullivan can be of service in the collection of liabilities owing the bank by borrowers," Mr. Manton's letter said, "and can give you much material aid in the prosecution of cases now pending, both in the trial courts and on appeal. "Contrary to the impression that M. Sullivan is looking for clemency, I beg to state to you that he asks nothing in return for this offer of help except to be truthfully portrayed before the depositors and the public."

6. March 20, 1915 New-York Tribune New York, NY

Article from New-York Tribune, March 20, 1915

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DAVID A. SULLIVAN TO SELL INSURANCE Bank Wrecker, While Waiting for New Job, Assists Union Liquidation. David A. Sullivan, the Brooklyn bank wrecker, who was recently in the limelight because of his "joy rides" with ex-Warden McCormick of Sing Sing, has a new job. He will soon go to work writing policies for an insurance company. Meanwhile, however, he is devoting much of his time to straightening out the Union Bank's tangled affairs. Sullivan, who was formerly its president, will assist Daniel W. Quinn, jr., special Deputy Superintendent of Banks, who is in charge of the institution's liquidation. He appeared at the liquidation office yesterday and was soon assigned to a

7. May 25, 1915 The Sun New York, NY

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JURY TOTRY GROUT FOR PERJURY READY Completed After All Day Session-Cropsey Opens for State To-day. ERROR WILL BE DEFENCE The jury in the trial of former city Comptroller Edward M. Grout on a charge of perjury was completed at 4:45 o'clock yesterday afternoon after an all day session before County Judge Lewis in Brooklyn. Of twenty-seven men examined fifteen were challenged, five by the people and ten by the defence. Those selected were: Theodore Cramer, manufacturer, 96 Fenimore street: Ira W. Hardwick, advertising, 662 East Thirty-second street: Christian L. A. Gerken, meats, 453 Stratford road; Adolph Himmelreich, men's furnishings. 492 East Fifteenth street: Lawrence J. Gannon, hatter, 443 Prospeot place; John P. Euler, insurance, 2334 Tilden avenue; Bernard Ormont, chemical engineer, 558 Ninth street: Warren P. Edris, salesman, 1479 East Tenth street; John T. Meehan, furniture, 71 Van Buren street: Edward H. Cook, coal, 1061 Dean street: James M. Murphy, musician. 136 St. Mark's place, and Lester V. Harkin, clerk, 392 Pacific street. It will be for these twelve men to decide whether Mr. Grout. as president of the now defunct Union Bank. willfully swore to a false statement regarding the financial condition of that institution, or whether, acting unwisely perhaps but in good faith, he merely accepted statements passed on to him from the time when David A. Sullivan, the convicted bank wrecker, was president of the bank. Stephen H. Baldwin, attorney for Mr. Grout, laid much stress on this in examining prospective jurors. He pointed out that all but two of the items mentioned in the indictment were brought over from the Sullivan regime and wanted to know if the jurors would give this due consideration, If shown that Mr. Grout had no knowledge of them. Another point on which Mr. Baldwin dwelt was the possible duration of the case. He said it might last six weeks and asked each juror if he thought he could offer an open mind to the defence after the District Attorney had presented his evidence. The charge against Mr. Grout grows out of the second collapse of the Union Bank, formerly the old Mechanics and Traders. David A. Sullivan, recently paroled from Sing Sing. was president of the latter institution, which failed during the panic of 1907. It was reorganized under the name of the Union Bank, a name formerly borne by one of its branches, and Mr. Grout was made the reorganization president, partly hecause of his financial experience as city Comptroller and partly because it was thought that his name and standing in the community would help to offset the shadow that hung over the institution after Sullivan's rule. After the bank had closed its doors for the second time it was found that Mr. Grout had overstated its assets in sworn statements made to the State Banking Department. This led to two indictments, one charging a misdemeanor and the other felony. It is the felony charge that is being tried. The indictment was returned nearly seventeen months ago, after the first indictment. according to District Attorney Cropsey had been emasculated by Supreme Court Justice Marean. The Grout case has been before the public in one form or another for three years. It was only recently that District Attorney Cropsey, who will open for the State at 10 o'clock to-day, was the subject of investigation by a special committee of the Brooklyn Bar Association because of his reference in an after dinner speech to certain members of the Kings county judiciary as "hand picked" and as "lap friends" of Mr. Grout Judge Lewis, now presiding at the trial, was appointed after the speech was made

8. June 9, 1915 The Sun New York, NY

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CROPSEY DWELLS ON GROUT DUMMIES Counsel for Ex-Comptroller Denies Concerns Were Part of Union Bank. FIGHT OVER PROCEDURE Evidence purporting to show that several dummy concerns operated in connection with the defunct Union Bank of Brooklyn were actually part of the bank itself was contested yesterday by Stephen C. Baldwin. counsel for ex-City Comptroller Edward M. Grout, who is on trial before County Judge Lewis and a jury, charged with perjury in connection with a false bank statement sent to the State Banking Department just two days before the second collapse of the institution. The evidence consisted of several bonds and mortgages. the largest for $94,500. which were identified by witnesses as figuring in an intricate transaction where by the Union Bank secured funds from the Metropolitan Trust Company to pay depositors a percentage on their deposits as stipulated in the. reopening agreement. Mr. Cropsey tried to show that the property involved was owned by the bank, although assigned and reassigned to bank clerks and dummy corporations to avoid carrying It on the books as "real estate owned": that the mortgages, though second or third mortgages, actually exceeded the cost price of the property and therefore were utterly worthless: that the juggling was done to deceive: that the dummies were a part of the bank when they acted for it. and yet that a fraction of the debts incurred in this manipulation were carried not as debts but as assets in the false bank report of March 15, 1910. The two companies involved in this transaction were the Shetland and the Orr Construction companies. Mr. Cropsey showed that these companies were officered by bank clerks and their capital stock was owned by the bank. They were used, he held. for giving dummy e notes secured by bank collateral and for In covering real estate transactions. h objecting to the effort to bring this d before the jury Mr. Baldwin said: o "If the District Attorney is going to try to prove that these companies were a part of the bank we should have an d opportunity to meet the contention on d legal grounds. In this connection the y whole theory is erroneous. Each one v of these companies is a separate entity, organized and conducted according to law, absolutely distinct from the bank." Mr. Baldwin held that the practice f of organizing corporations as followed by the Union Bank is customary He g also objected on the ground that it had not been shown that Mr. Grout had h. knowledge of the transactions into S which the District Attorney was delving n Judge Lewis ruled that the fact would e have to be established before guilty e. knowledge could be proved. and per11 mitted Mr. Cropsey to proceed. Half e a dozen witnesses were ca: ed in an et ef fort to establish the fact. e The trial will go on to-day. 8.

9. July 10, 1915 The Sun New York, NY

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# BOOKKEEPING CITED # IN GROUT'S DEFENCE Claims Methods He Introduced in Bank Show He Tried to Conceal Nothing. # MANY SACRIFICES MADE Ex-City Comptroller Edward M. Grout, in continuing his festimony before County Judge Henry Lewis in Brooklyn yesterday at his trial for perjury, made the claim that his inuocence of the charge is at least indicated by the improved system of bookkeeping which he introduced into the Union Bank as president. When he succeeded David A. Sullivan he found a loose leaf system and no letter press book. Had he continued this system much of the evidence, as he pointed out, would have been lost to District Attorney Cropsey, notably that read into the record from the letter press book. It would have been easy too under the old system to do away with loose leaves containing incriminating evidence. The reverse happened. The records of the bank were intact and Mr. Cropsey applied them to the alleged false bank report in the test of accuracy. Since then they have served as a main issue in his case. Mr. Grout argues that he would never have left such evidence behind him had he intended to violate the law. In the latter event the loose leaf system would have suited him better than the system he introduced. With this exception Mr. Grout held to the general outline of his testimony of the previous day, particularizing and elaborating the assertions that he did not want to become president of the Union Bank; that he accepted the presidency as a matter of public duty that he lost money thereby, and that he had depended upon subordinates, all experienced bankers, for the general accuracy of the reports and the character of the items therein. Mr. Grout said too that he firmly believed to the very last that a good stiff fight would pull the bank out of its difficulties, and that he made that fight to the best of his ability despite the pessimistic views of his vice-president, Edwin J. Stalker, who has testified against him as to warnings given long before the second collapse. Such was his faith that he traded on his own reputation and on his friendships with bankers, he said, to the end that $3,000,000 of the $7,000,000 deposits were paid off during his tenure of office. In cross-examining Paul Grout, the defendant's brother, Mr. Cropsey had tried to make it appear that the Grouts were anxious to have the bank reopened in order to save stock of that institution owned by them. Anticipating a similar attack on Edward M. Grout, Stephen C. Baldwin, his counsel, asked: "Did you regard the Union Bank stock as worthless?" "I did not." "Did you own any stock in the bank?" "Yes; my brother and I held stock which cost us something like $43,000," the witness replied, "My wife held twenty-five shares, which she had inherited from her mother." Mr. Grout said that the stock held by himself and his wife was not worth more than $14,000 when the bank reopened and that it had nothing to do with his accepting the presidency of the institution. The difficulties of the reopened bank and his own efforts to separate the good assets from the bad were described by Mr. Grout. Referring to Sullivan's visits, Mr. Grout pointed out that he feared that these visits might be misconstrued. If the latter paid frequent visits to the reorganized institution people might say, "Sullivan is still running the bank." In order to avoid this Mr. Grout had mail relating to the Sullivan loans sent to his law office in Manhattan and it was there that Sullivan consulted with his successor. The direct examination of Mr. Grout will be resumed on Monday.

10. February 23, 1916 New-York Tribune New York, NY

Article from New-York Tribune, February 23, 1916

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# CAN SELL HEINZE STOCK Court Allows Richards to Dispose of Collateral Held by Union Bank. [From a Staff Correspondent of The Tribune.] Albany, Feb. 22.-State Superintendent of Banks Richards by a decision of Supreme Court Justice Chester to-day is permitted to sell approximately $200,000 in collateral for notes put up by the late F. Augustus Heinze with the broken Union Bank of Brooklyn. The collateral represents shares and mortgage bonds of the United Davis-Daly and Ohio Copper Companies. When Mr. Heinze put up the securities he gave the bank permission to sell them, but later alleged that he had made a subsequent oral agreement with David C. Sullivan, the bank's president, now serving a term in Sing Sing prison, to keep the securities from being sold. Litigation resulted, first with the bank and, after the bank's failure, with the State Superintendent of Banks, as receiver.