Security Bank - New York, NY

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: May 10, 1877
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: 33f62b4d

Response Measures

None

Description

Articles from May 1877 report that thefts by the cashier were discovered, the directors resolved not to make up capital and to close up the business, and the bank was closed with depositors not losing. No run is described; closure appears voluntary/managerial after internal losses (thefts). Date assigned from the May 10–11, 1877 reports.

Events (1)

1. May 10, 1877 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Theft by the cashier discovered; losses significant enough that directors chose to close the business rather than recapitalize; depositors protected according to the report.
Newspaper Excerpt: In the case of the Security Bank of New-York, thefts by the cashier had been discovered by the directors; and they had resolved that, finding so much loss, they would not make up the capital, but close up the business. This was done, and the depositors did not lose.
Source: newspapers

Newspaper Articles (5)

1. April 24, 1877 New-York Tribune New York, NY

Article from New-York Tribune, April 24, 1877

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reignty of the Porte. The Russian Embassy simultaneously withdrew from Constantinople, M. Nelidoff having previously informed the Porte that diplomatic relations between the two Powers were at an end. Meanwhile the Emperor of Russia is awakening the ardor of his troops for the coming conflict. He made a warlike address on Sunday and is to hold two grand reviews to-day. This energy implies that he is as heartily in favor of the war as his subjects, who are exceed- ingly enthusiastic. The formal declaration of war is expected to-day, Prince Gortchakoff's circular announcing the approach of hostilities having been delivered to the French Foreign Minister yesterday. Austria and Great Britain are, of course, watching the march of events with feverish anxiety. It is understood that Lord Beaconsfield has resolved to send a fleet to the Suez Canal, and has asked the formal sanction of the Queen for that import- ant undertaking. It is evident from this and other manifestations that the greatest care will be needed to "localize" the war in the Ottoman Empire. The first day of the investigation of the charges against Superintendent Ellis is marked by the presentation of a series of accusations against him which seem overwhelming. They cover all, or almost all, of the savings bank failures of the past two years. The gist of the charge is the same in each case, viz., that Mr. Ellis, after being fully informed of the insol- vency of the institution in question, or after having learned enough of its condition to know that there should be no delay in closing it, allowed it to run on from bad to worse, knowing all the while that the bank was taking in the money of new de- positors ignorant of its condition and of old depositors who had learned to trust it. In the case of the Mechanics' and Traders' Bank, for instance, which is now under investiga- tion, the interval between the discovery of the bank's insolvency and its closing was nearly two years; in the case of the Third Avenue Bank, which perhaps, of all these failures, revealed the greatest amount of ras- cality and involved the greatest number of inno- cent people in disaster and ruin, the interval is placed at six months. In the latter instance, no less than 600 new accounts were opened during this period, and it is alleged that the officials made careful preparation, both for themselves and their friends, against the final crash. The charges with respect to the Security, Bond Street, People's, Trades, and other banks, are mainly repetitions of this same story, with more or less difference in detail. It is idle, of course, to say that if these charges should be substantiated, Mr. Ellis should be promptly re- moved. Removal would be a slight punish- ment for the official neglect which brought incalculable suffering upon the community which it was his business to protect.

2. April 25, 1877 The Sun New York, NY

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# There Shall Be One Law for All. TO THE EDITOR OF THE SUN—Sir: I find in to-day's SUN an account of the blood-curdling malediction and the appalling punishment which Recorder Hackett dealt out to a petty thief who appeared in his court yesterday. In another part of to-day's SUN I find the evidence before the Senate committee, and the message of Gov. Robinson, exposing the official career of Bank Superintendent Ellis. It appears that Mr. Ellis, after learning that certain savings banks were hastening to bankruptcy, allowed them to run on from bad to worse, knowing all the while that they were taking in the money of new depositors ignorant of their condition and of old depositors who had learned to trust them. In the case of the Mechanics' and Traders Bank, the interval between the discovery of the bank's insolvency and its closing was nearly two years; in the case of the Third Avenue Bank, which, perhaps, of all these failures, revealed the greatest amount of rascality and involved the greatest number of innocent people in disaster and ruin, the interval is placed at six months. In the latter instance, no less than 600 new accounts were opened during this period, and it is alleged that the officials made careful preparation, both for themselves and their friends, against the final crash. The charges with respect to the Security, Bond Street, People's, Trades, and other banks, are mainly repetitions of this same story. Now, what sentence will Recorder Hackett, or any other Judge, visit upon the parties guilty of these crimes, compared with which the petty theft I spoke about at the opening is nothing at all? Again, I find in to-day's SUN Mr. W. Allen Butler's extraordinary report upon the mismanagement and fraud of the officers of the Continental Life Insurance Company, which have caused widespread loss and suffering. Yet again, in Monday's SUN I saw an official report, charging ruinous cheating and perjury upon the officers of the Popular Life Insurance Company. What penalty shall be administered upon such men if a petty burglar deserved Recorder Hackett's sentence of twenty years in the State prison? But will these men receive any penalty under such law as is enforced in our courts? I see that one pompous newspaper goes so far as to say that Ellis ought to be removed from office! Now, what are we to think of laws and courts which deal with helpless men in one way, and with powerful men in another way? MOSES.

3. May 11, 1877 The New York Herald New York, NY

Article from The New York Herald, May 11, 1877

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at 1871 and before he was Sanator, in his 1870 bank and account amounts and the 1869, present time, as to names, exhibiting times, places the and amount of stating with amplest details and particulars. sources of He his detailed public income. service an and his and He penses, his property both to while have engaged been frugal in and economical. particular, both home, appear with emphasis and in every truth of any rumor conthe denied, charges in question attributing and mercenary also the motives or or statement to him in his official satisfied capacity. that those denials are of they duct Your committee would are do injustice alike to should the people simply the true, State and and they to Senator charges Woodin referred if to the report commit that the are report that the The committee therefore the charges so far testimony not proved. affirmati Senator lively Woodin, disproves and establishes that they they utterly affect without foundation are All of which IS respectfully B PLATT CARP SPRAGUE Jr. E. c. SCHOONMAK A. GEORGE B. BRADLEY. that moved ACTION OF the THE Senate SENATE. adopt the report Mr. concur Gerard in its conclusions by Messra. Gerard, Jacobs, Kennaand Alter eulogistic Starbuck remarks McCarthy, Cole vot and yeas 30adding Mr. Bixby hearty amen. day, the report Loomis, was adopted to bis by firmative unanimous vote the exclamaon action tion, With ..with the single neither ception house of did the anything Senate of consequence to-day. Woodin case Bank bill was referred to the Committee on and Finance Cowdin's of the RAPID Assembly. TRANSIT SKIRMISHING. continued all day The fight for rapid transit the effort was was made 10 advance Every reevening. Three bill times to kill rapid tactics transit. was their device the Hayes known to anti-rapid legislati transit came men very together near to instructed watch. Hayes sorted succeeding to. once, The vote having for Hayes got Rapid move Transit his Beach bill. bill was the Pneumatic instructed When all The boys were bill. on The the boys, to vote upposing for, it apported no moved him the bill it. and they had been the Pneum tic bill. the boys did The not understand are and prog ressed to kill rapid transit did not rally. organizer splendidly are Hare friends under of the rapid lead transit of Purdy, their Ecclesine enemies. and They tower are also of strength was more and than a match old for Tom Alvord, close who of is the session bill. a everybody reinforced in himself by made Near to the progress the wanted Hayes go motion 14, for The last dying House effort was in was suddenly confusion, sprung. and No in the under- of nays. home. stood it, The but peculiarly Purdy was his own ready called settled the the yeas matter and and The ot voice The explain so planation of of New the vote York city New triumphed. York was considreading. again the bill friends to move the the Whole to and ordered agreed to a to advise third amondm ered in Committee The Senate Committee of have the Code of the Remedial operaJustice. the passage the and code of recommend the for one year. bill suspending The "lawyers progressed, may rest be easy. tion of Excise bill came up full. and was It not lacked but again a and few The the House was will not be made to-morrow has been given a 10 put notice for that purposo. over motion votes cause of The effort call of the very House spirited the contest bill took place County tailroad of The friends repealing Committee the Queen's be of beaten the Whole. when Purdy, for the of West- yeas of the the in the first the bill appeared made the to adroit move, men bers by calling an opportunity motion The chester, explaining and nays, which their votes. gave are This greatly carried excited very great the bill, people of Brooklyn for its passage EDUCED. is and the TOLLS has been adopted by the Canal The reduced and gues toll into sheet operation immediately. SUPERINTENDENT Board THE ELLIS IN VESTIGATION. REGARDING SENATE ACTION OF THE INSTITUTIONS EXAMINED BY THE TO VARIOUS COMMITTEE-- AN ADJOURNMENT MEET IN NEW YORK. ALBANY, N. Y., May 10, 1877. the inresumed vestigation Senato Committee on Banking Superintendent Ellis charge the The of charges against relative to the Bank bank of to the morning and the up. The reports of were put in Superintendent this Lansingburg was taken for 1876 and 1877 evidence ever THE BANK OF LANSINGBURG. knowledge had of Henry L. Lamb testified that showing no that the methods capital of had been to the Superintendent that any illegal 1877. when come the bank was inflated, going or on until announced March 15, that the then business b president and cashier The Superintendent their the insolvent. them to repair bank was requisition upon and they closed stocks up. made or close notice up, of the kind of Mr. capital was no official to the department There the bank held sent requiring a schedule simply of such which Ellis had instituted a rule been the law it The was report of stocks. but is had measure never of his March, own. 1875, showed June surplus precautionary bank's condition in been $176,611; the in profits the the the profits to was have $150,000, and surplus was a divithe $53,229. In September profis $19,825, having the paid surplus re $150,000 and the July. In December 1876, profits on the 1st of $18,803; March, profits, mained dend na same; profits, $5,683; September, $6,786. $1,762; Senator St John said street. the $17,137; December, June, profits, surples, trouble $140.000 with profits, them was that and Shore they went into continued-They Wall bought quit Lake paying divi. Witness Central when those holding roads New Jersey and ceased Cenis oad stocks Michigan dends; they had also been been paying dividends prohibits them capi- from the tral, which nothing had also in the law with that the surplus depositors and had all The there investing according in rail to their 000 for last their report protection to erfere at tal; guarai rantee departi of ment $290, bank has no Investments authority charter until 18 being the violated. capital has with become regard THE im to aired LOAN or AND their Loan and COMPAN Trust committee. Company This was An New York State examined the of $1, 000.000. $268,000, the The next institution with 1875. pital showed boen deficiency done of examination company was but ID nothing February, charter. appeared The peared committee to have that waived Mr. Ellis an violation of examination its was as very it limited. authority extended in this Bank THE case LOANER'S was next name considered. BANK. of the This Pawner's the had deThe incorporated Loaner's nder admit the any authority Read to of examine so. been Bank, and would 18. not Mr. Emas sent not Mr allow nim gave to it do as his the partment the over directors would Mr. Charle Tracy no jurisdiction. into While hands. BANK. opinion it. Mr but Ellis that then question went the was department pending had the bank went thefts receiver's THE Security SECURITY Bank of by New the York directors, they In the case of had the been finding covered so much up loss, the busiby the they cashier had resolv up ed the that, capital, the but depositors close did not lose. Savings were would and ness. not This make was done GERMAN and VINGS the BANK German Hall. THE attornoy testified for that the Morrisania trustees some and whom Mr Ernest Morrisania, able citizens of confidence; and Ellis, among Bank of the most the repute depositors Held bad came to upon Albany which required time men alter May he and emselves with Mr. to the amount Ellis fused to thereupon witness had trustees a bound perfectly themseat safe; Mr the trustees made his intendent the to receive make their the of bank bonds, bonds and and mortgages OWD place dental ID order The to meet de December made assignm a mortgage surements upon of the the January the of the requited was made a good surplus in from closing ficiency there was The withdrawa that sacri and year such ities from up was depositors bank necessary to must have the present finally became save the secur got more under Mr. The

4. May 11, 1877 New-York Tribune New York, NY

Article from New-York Tribune, May 11, 1877

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# THE ELLIS INVESTIGATION. CONTINUATION OF THE TESTIMONY BEFORE THE COMMITTEE. ALBANY, May 10. -The Senate Committee on Banking resumed the investigation of charges against Superintendent Ellis this morning, and the charge relative to the Bank of Lansingburgh was taken up. The reports of the bank to the superintendent for 1876 and 1877 were put in evidence. Henry L. Lamb testified that no knowledge had ever come to the superintendent showing that the capital of the bank was impaired, or that any illegal methods of business had been going on, until March 13, 1877, when the president and cashier announced that the bank was insolvent. The superintendent then made requisition upon them to repair their capital or close up, and they closed up. There was no official notice of the kind of stocks which the bank -held sent to the department. Mr. Ellis had instituted a rule requiring a schedule of such stocks, but it had never been the law; it was simply a precautionary measure of his own. The report of the bank's condition in March, 1875, showed the profits to have been $176,511. In June the surplus was $150,000, and the profits $55,229. In September the surplus was $150,000, and the profits $19,825, having paid a dividend on the 1st of July. In December the surplus remained the same; profits, $18,803; March, 1876, profits, $17,187; June, profits, $5.683; September, profits, $1,762; December, surplus, $140,000; profits, $6,785. They bought Lake Shore and Michigan Central when those roads quit paying dividends. They had also been holding New-Jersey Central, which had also been paying dividends, and ceased. There is nothing in the law that prohibits them from investing in railroad stocks with their surplus and capital. According to their last report the depositors had a guarantee of $290,000 for their protection. The New-York State Loan and Trust Company was the next institution exaained by the committee. The committee waived an extended examination, as it appeared that Mr. Ellis's authority in this case was very limited. The Loaners' Bank was next considered. This bank would not admit any authority of the department over it. Mr. Chas. Tracy gave it as his opinion that the department had no jurisdiction. While the question was pending, the bank went into a receiver's hands. In the case of the Security Bank of New-York, thefts by the cashier had been discovered by the directors; and they had resolved that, finding so much loss, they would not make up the capital, but close up the business. This was done, and the depositors did not lose. Ernest Hall, attorney for the German Savings Bauk of Morrisania, testified that the depositors must have got more under Mr. Ellis's actions than under the first proposition which he and Mr. Held had made. The committee will meet at the St. Nicholas Hotel, New-York, on Monday next, at 10 a. m., to continue the Ellis investigation. The management of the Third Avenue Savings Bank will be inquired into.

5. May 30, 1877 The New York Herald New York, NY

Article from The New York Herald, May 30, 1877

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DECISIONS. SUPREME COURT-CHAMBERS. By Judge Barrett. Spetlmann vs. Helienstein.-Motion dismissed, with $10 costs and stay vacated. Jocket VS. Cull.-Motion for a receiver granted, with $10 costs. Pentz vs. Guilfoyle.-Motion granted, with costs, and $10 costs of motion, unless plaintif, within five days, pay $10 costs of motion and stipulates to reter the action to a referee to be agreed upon or to be named by the Court and to proceed de die in order be1ore such referee on five days' notice. Wilson vs. Barney.-Report confirmed and account approved. Francis VS. Republic Fire Insurance Company.-Order of May 22 set aside, without costs, and motion granted. Morgan vs. Jeremiah.-Motion granted on the payment of the costs which have accrued since the original answer was interposed and $10 costs of this motion and stipulating to ask no delay of the trial in conse. quence of the amendment. Matter of Sands, &c.-Report confirmed and order granted. Vogle vs. The Mayor, & - Motion granted on payment of $10 costs of opposing the motion. Gabel vs. Gabel.-I think the plaintiff has now com. pleted his case and will be entitled to a decree upon complying with the late law as to his own innocence, to be found in the Daily Register of May 10. Gillian vs. Mitten.- am unwilling to make this without knowing something of the condition of the fund-now much the receiver has received and dispensed, and what for, and some testimony as to value as well as necessity. SUPREME COURT-SPECIAL TERM. By Judge Van Vorst. The Security Bank vs. Warren, &c.-Case and amendments settled. SUPREME COURT-CIRCUIT-PART 3. By Judge Larremore. Strong, &c., vs. Taintor.-Case settled. SUPERIOR COURT-SPECIAL TERM. By Chief Justice Curtis. Beyer and another vs. Amatel.-Undertaking on order to arrest approved. Conover et al. vs. Conover, &c.-Order and consent extending time. The North River Savings Bank VS. Foran et al. -Or. der of reference to Daniel Lord, Jr. Thurber VS. Hughes of sureties. Rust vs. Hauseit.-Order making judgment of Court of Appeals judgment of this Court. The North River Savings Bank V3. Foran et al.Judgment of foreclosure and sale. Savery vs. Feyh.-Order substituting attorneys. Beltany vs. De Forest and another.-Order amending pleadings and discontinuing as to M. J. O'Reilly. Green vs. Turnbridge.-Mouson for confirmation of referee's report granted and ordered that plaintiff file security for costs. The Nassau Bank vs. Rockett.-Order for reference. COMMON PLEAS-CHAMBERS. By Judge J. F. Daly. Dongan and another vs. Meyer.-Motion granted, without costs. States vs. Brander.-Application dismissed, with $10 costs. Matter of Casady.-Allowance of $60 per month. Leach vs. Henderson and Brockway vs. Doyle.-Motions granted, with $10 costs. SUPREME COURT--GENERAL TERM. By Judges Davis, Brady and Daniels. Sturgis, &c. vs. Drew et al.-Give notice of setticment for the 1st of June at half-past ten o'clock A.M. Ordered by Judge Brady. MARINE COURT-SPECIAL TERM. By Judge McAdam., Deitz VS. Casey.-Discontinuance allowed on payment of $10 costs. See Marine Court appendix, p. 44. Scott vs. Watts.-Hand in proposed order appointing receiver. Myers vs. Flynn.-Motion granted as per order filed. Beadelston vs. Weyrich.-Amenument allowed nunc pro tune, without costs. Fish vs. Goulding.-Mr. George W. Gibbons appointed receiver. Loomis vs. Morrisson; Adams vs. Perkins; Fanning: vs. Lindsay.--Motions denied.