Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-11-21
BOSTON'S BUSTED BANK

The Modus operandi BY Which Weeks
Manipulated the Funds - Tho Central
National Bank Badly Squeezed, but will
Continue Business.
BOSTON, Nov. 20.-It is learned to-day the
entlre capital and also heavy assessment up
on the stockholders of the Pacific bank will
be necessary to cover the liabilities. It further
appears the banks dealing with Weeks are
not by any means the extent of the transac-
tions OF the same nature. They have
been, for instance, sustaining a piano
1orte manufacturing company. The fol
lowing was Weeks method of transact
ing business: he would deposit
at the Pacific bank his own or another bro
kers check, and receive certificate of de-
posit for the amount with the understanding
1t should not be returned for payment In GER
tain number OF days. In this way President
benyon secured the free use of money for
specified period, usually ten to thirty days.
weeks then sold upon the street or to another
bank, the certificates for what 1t would bring.
For instance, one certificate for 81 900
went begging at $3.50 discount, and was final
~ bought BY the bank itself at that rate,
they fearing the hawking of certificate at
the price on the street would iDjure the bank.
Louis w. Young, cashier OF the Central
National bank, is former associate of Ben
yon in the Exchange bank. Along in Sep
tember Benyon could get no market for his
certificates, which circulated to the extent of
many thousand dollars, and he went to Young
for aid. Young gave him cashiers checks on
the Central bank, paper of the same nature.
This was done without the knowledge of the
president or directors of the Central, and the
practice was continued until the amount be-
came very large. President Bishop of the
Central discovered his cashiers actions few
weeks ago and severel rebuked him. He tried
to reduce the amount, and as he supposed sue
ceeded in redeeming nearly all his Pacific bank
day, Young had been surreptitiously con-
tlnuing the practice, and that his
bank held claims against the Pacific
to the amount of $500, 600, including single
check for $4OO, GOO, accepted by Young from
Benyon few hours before. President Bishop
Immediately applied to Benyon for collateral.
Benyon seized what he could get hold of at
the time, and turned over as guaranty mis-.
cellaneous securities, which to day were fonnd
to haye face value of $25O,OOO. This is the
only security the Central bank has
for it's claim of $4,000 against
the Pacific bank. The Central has, however,
raised $500, 600 outside, and has called its quick
loans, so that with the cash on hand, and i'm
mediately available the-bank now has 5000, 600
ABOVE Wnat can be demanded by dep0SlbOrS or
other creditors, and business will be continued
as usual tomorrow. The directors publish
the following card: We, the directors Of the
Central National bank, of Boston, have caused
an examination of its books and assets
made, and with the single exception of its
claims against the Pacific National
bank of this city, its assets are good beyond
doubt. We believe its claim against the Pa
cifc National bank, with the collaterals held,
to secure the same, will ultimately result in
little if any loss to this bank. The bank will be
open for business as usual this forenoon;
prepared to meet its obligation. Cashier
Young's resignation has been demanded and a
new cashier will be on duty Monday morning.
Col. Needham, examining officer OF the
Pacific bank, is of opinion that capital of
which the stockholders can be drawn upon,
will pay depositors and other creditors in
full.