Federal Jury to Get^Bank Case
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A Special Back to School Section 1 •» t • ' Rain Possible lUM *tt!t rain periods pos- glble today and tonight. FINAL Cloudy, owl tomorrow. Red Bank, Freehold Long Brandt' (Be* DeUiU, EDITION Monmouth County's Home Newspaper for 92 Years VOL, 93, NO. 32 RED BANK, N. J., TUESDAY, AUGUST 11, 1970 16 PAGES TEN CENTS •ninni lilllllllllllfflllllllllllllllllHIIllllH Federal Jury to Get^Bank Case r EATONT0WN — A federal the bank was declared in- with interest within two against the bank as a creditor grand jury was expected to solvent Saturday and closed weeks. He said that govern- for any excess amount. He Begin hearing evidence today by the U.S. Comptroller of the ment bonds owned by the Ea- . said this could entail a wait of in connection with the loss Currency. The Federal De- tontown Bank were on deposit about two years. However, of pbout $4 million at the posit Insurance Corporation in a New York bank as colla- Hill said that in past bank liq- Eatontown National Bank. (FDIC), which insures ac- teral for the state deposits. uidations the rate of return to U.S. Atty. Frederick B. La- counts up to $20,000, was ap- Eatontown Mayor Herbert creditors has been up to 90 cey, visiting the bank yester- pointed receiver. Werner said the borough had per cent of what they had day afternoon, said he would Eugene V. Landy, vice $100,001) in the bank in a 31- coming. present evidence to the jury president of the bank, esti- day deposit certificate at 1% There are about 10,000 de- in Newark today. mated the loss at about $4 per cent interest and the positors in various types of Meanwhile it was disclosed million. Board of Education had a accounts at the bank. that the State of New Jersey He released a statement in similar amount on deposit. Hitselberger said the state had $350,000 deposited in the behalf of the bank directors He said the borough had is- has accounts, known as "se- bank while the borough and .that the regional federal sued a $200,000 check last cure time accounts," similar tlie Board of Education here comptroller of the currency week to buy two more 31-day to the one in the Eatontown had as much as $320,000 in the reported "that Douglas J. certificates at the bank, but bank, in more than 100 banks bank. S c h o 11 e , president of the the status of that check is un- throughout New Jersey. He The state expects to get all. bank, has improperly issued a. known. • said the accounts total about its money back because its substantial number of cash- Depositors with more, than $33 million, and all are back- funds were backed by about iers' checks payable to stock $20,000 could conceivably lose ed with'collateral. $600,000 in government bonds broker firms and other in- all their money over the in- Eatontown School Board • as collateral. - . , stitutions." sured amount. President William Schlosser AT THE SCENE — U.S. Attorney Frederick B.Lacey visited the insolvent Eaton- But Eatontown officials To Get Funds George W. Hill, an FDIC said the board had about $20,000 on deposit in the bank town National Bank yesterday afternoon, before, presenting evidence today to a said they did not know how Thomas Hitselberger, .exec- . liquidation executive, said the much of their largely unin- utive director of the State usuaL procedure for custom- in a checking account and feder-al grand jury in connection wiHi missing funds that led to the bank's demise. sured deposits would be re- T r e a s u r y , said the state ers with more than $20,000 ' -that amount was covered by (Register Staff Photo) turned or yvhen. > • would have its funds returned would be to file a claim the FDIC insurance. Rajik Users Calmed, Tax Deposits in Doubt By JANE FODERARO ttle borough "is in the time of year when tax Robert Dixon and Robert Stillwagon, met EATONTOWN,— Borough officials yesterday money accumulates." He said that the borough with the bank president. It was agreed that set out to assure area residents that help is at holds one certificate of deposit with the Eaton- the borough would accept sealed bids from banks hand for individuals affected:by the weekend de- town National Bank for $100,000. It was issued for deposits. mise of th¥Bafontown National Bank. in July for a term of 31 days with an interest rate HIGH RATE OFFERED At the-same time, however/they revealed.that of IVz per cent. The Eatontown bank came in with an inter- borough tax receipts amounting to $300,000 were CHECK DELIVERED est rate on deposits, that was one-quarter of one deposited'in the bank this summer and the status He said that a second certificate, for $200,000 per cent higher thaiNthe next highest bidder, of the deposit certificates remains in question. was ordered last week. A check, drawn on the Mr. Smock reported. While no immediate answers were in sight, no Central Jerseyt Bank, was made out last Wednes- George W. Hill, assistant chief of the Division one doubted that, eventually, there should be al- day and hand-delivered to Douglas Schotte, presi- of Liquidation of the Federal Deposit Insurance most total recovery of public funds. dent of the Eatontown National Bank. Corporation, said yesterday that he could not com- DEPOSITED IN JULY When news of the closing reached officials ment on an individual case. (Customers with more The irony is that borough funds were first .here on Saturday morning,, they stopped payment than the insured $20,000 file claims against the deposited in the Eatontown bank in July, less than on the check. However, they could not ascertain bank as a creditor for the additional amount; it a month after the bank's president, who allegedly yesterday whether the check had in fact been could entail a wait of two years.) figures in the bank's downfall, chided borough stopped. Mr. Kaufmann noted that he was told "Recent analyses," he said, "have shown leaders in a letter for "not supporting the only that Mr. Schotte was not present when Hie check relatively nominal tosses to public-fund depositors local bank in any way whatsoever." ••. was delivered and that the borough had not re- in closed banks." He said that recoveries have Previously, most public funds here were han- ceived a certificate of deposit. been "in excess of 90 per cent — well up in the dled by the Eatontown branch of the Central Jer- Council president Leon B. Smock revealed 90's." sey Bank and Trust Co., based in Freehold. that Mr. Schotte had sent a letter to the govern- He reported that Norman Davis, professional The deposits came to. light at a morning press ing body in June "berating" members for not do- liquidator, has arrived in Eatontown to take over conference cabled by Mayor Herbert E. Werner. ing business with the bank. disposal of the property. "He will be here two The purpose of We' meeting was to inform resi- In the letter, dated June 11, Mr. Schotte said: or three years if necessary," Mr. Hill said. Mr. dents that local banks, especially the Central Jer- "We tiave made repeated efforts to bid on local Davis previously headed liquidation of a Michi- sey branch, will try to alleviate problems caused bond issues and support the town in any way pos- gan bank.) by the sudden death of the Eatontown National sible. However, we are apparently bucking a DEFINITION A FACTOR Bank. However, the emphasis shifted when re- 'closed shop.' A careful check of all the munici- Mr. Hill commented that recovery of deposits, porters, about 20 in all, probed the whereabouts palities in this county reveals that not one does computed on ownership, may depend on "the le- of borough funds. not "••"iort their local bank where one exists." gal definition of multiple ownership and local Councilman Daniel Kaufmann, chairman of Subsequently, according to Mr. Kauffmann, law." the borough's financial committee, explained that v he and two members of the financial committee, (See Users, Pg. 2) -••se- Gas Trains FacelChallenge EATONTOWN' OFFICIALS — Leon B. Smock Jr., president of the Eatontown Bor- By The Associated Press ida's Air and Water Pollution can wreck and this one passed. crews at Griffin and was halt- ough Council, left, and rvfayor Herbert E, Werner confer at press' conference Two trains carrying nerve Control Board, said last night. can't." Watson Johnson, a carpen- ed a few minutes north of Ma- yesterday. They said fhe borough will try: to assist -depositors affected by the gas described by an Army The 418 concrete and steel Residents of many Georgia ter, said he had been waiting con for repairs to a broken sudden closing of the Eatontown'National Bank. • (Register Staff Photo) spokesman as "no more dan- jacketed vaults of nerve gas communities through which beside the tracks for about air hne before moving slowly gerous than a load of coal," rockets left yesterday from the train from Anniston seven hours "because it ain't through the city toward moved :across Southern states Army depots at Richmond, passed, yesterday seemed to every day that a body gets up Athens., today on their slow trips to Ky., and Anniston, Ala. ,for share the Army's confidence. close to something this promi- Changed Mind the sea. Sunny Point, N. C. Later in "Nobody is afraid of this nent." Mayor Ronnie Thompson of The Army's plans to dump the week the Army plans to train because back during The Lexington train was al- Macon, who had opposed the Manson Joins Attack the gas in the Atlantic 282 load the vaults aboard a World War II we all saw some most ignored by residents of shipment, then changed his miles east of Cape Kennedy, barge, tow it to sea and spookier things come down the Eastern Kentucky moun- mind, was among those Fla., apparently faced a court scuttle it.