The morning news. [volume] (Savannah, Ga.) 1887-1900, 1890-01-31
A BOLD RAID ON A BANK.
AN ILLEGAL PRESIDENT I1MEDI-
ATELY GRABS ITS FUNDS.

A Broken Bank Favored With Loan
o. $6O,OOo-Broker Pel Given $780,
900 Worth OF Git-Edged Securities
to sell-A Government Official, at
the Instance of the Clearing House,
Stops Further Conhscation.
New YoRK, Jal. 3l--The Lenox Hill
bank has suspended payment. 1t Is con-
trolled by the same parties who last week
bought control of the Sixth National Bank
In this city, which had already been closed
by the bank examiner. knowledge of the
relation of the two institutions caused
run on the Lenox which it was unable to
meet.
Frederick D. Tappen, president Of tbs
Gallatin National Bank, and member Of the
clearing house committee, gave the follow
ing statement to a reporter this morningf
after President Leland sold his interest In
the Sixth National Bank the directors were
requested to resign, which they did, one by
one, the vacancies being flied by new men.
The board of directors, however, has NOT
been legally organized since. They could not
legally elect president because none of the
new directors had Ia zen the oath of Office.
which is requisite before any legal action Of
any kind could be taken by the board.
Their election of p. J. Claasen was there
fore void.
CLAAsEN BEGINS TO GRAB.
Immediately on assuming the office OF
president of the bank Claasen made thres
loans of 100000 each, secured by stock Of
the LenoS Hull Bank very poor security).
d then went down to the safe deposit
ntatAs in. u.
stracted therefrom first-class railroad bonds
OF the par value cf s692,0O0. These bonds he
placed in the ha ds Of a man named George
Ill. Pell for sale. Pell was formerly a part
nor in the firm of Grovesteen 81 PelI, stock
brokers, who failed in August, 1881 The
cashier of the Sixth National Bank, Mr..
Colsen, became alarmed at the extraordl-
nary proceedings OF the new president and
directors, and he came down to the clearing
house, met the clearing house committee.
and gave tho startling Information already
narrated.
GOVERNMENT INTERFERENCE INVOKED.
after very careful deliberation of ths
whole matter the clearing house COMMITTEES
Immediately reached the conclusion that
the bank should be placed in the hands of
government official at once A. b. Hep
burn, national bank examiner, was sent for
and the facts communicated to him, with
request that he would take charge of the
concern the following mo ming and investi-
Colsen against tho officers and di.
rectors. This examination took place
yesterday / and fully confirmed tho
statements made by tho cashier. The
clearing house committee visited the Sixth
National Bank late yesterday afternoon,
and after having verified by perso lal ex.
animation the facts as already stated tele.
graphed TO the controller Of the currency at
Washington that the bank would not ba
permitted to exchange through the clearing
house this morning. and that the new board
OF directors should have no further control
over the assets Of that institution.
ACTION OF THE BANK EXAMINER.
"The bank examiner, on discovering thai
bonds for $622, 600 had been taken ont of
the safety deposit vaults, demanded of the
putative president, Mr.. Claasen, that they
should be at once returned, or their equiya-
lent in cash at their full market value. The
examiner, by his prompt action, succeeded
In getting back $201 900 Of the bonds. In
lieu, or on account Of tho rest OF the alb
stracted bonds, Mr.. Claasen handed the
bank examiner checks for $302, 600 These
checks fell short Of the market valui
OF the abstracted securities $4,000
None OF the checks, however, havd
been paid, and they are Being protested
hands Of a receiver. That is The only way
to protect the interest OF the depositors and
minority stockholders. or course the Gus
toners of the bank will be temporarily in
convenienced, hut the closing Of the bank
was the only way to prevent further de-
predations The comptroller of the cur
rency will appoint receiver, and all the
facts In the case will be laid before the dis
trict attorney to-day.
FINE STANDING OF TIE BANK.
"There was no bet er bank In New Yorh
than the Sixth National" continued Mr.
Tappen. 1T had 81, 900 600 OF deposIts and
a large surplus, the whole Of which was In.
vested in flrst-class securities. The market
value OF lis stock was about $400 per share
Mr.. Leland sold his stock, 1,035 shares oui
OF 1000, however. at the rate of $3.50 Del
share for it. He was paid S6500Ol
In round figures for his stock. Immediately
on the receipt OF the money. which was paid
In checks, he turned over the stocks and. at
the same time, as a consequences. co atroi of
the bank to the purchasers. The negotia-
tions for the purchase Of his sfock were
conducted by George H. Pell. Mr.. Leland
was before the clearing house committee
yesterday, and was pretty warmly scored
by them for his very impolitic conduct He
seemed to be much disturbed at the situa,
tion.
CLAAsEN WITHOUT AN EXCUSE.
"There was also very lively scene be-
tween the bank examiner and Mr. Claaseu
when the former demanded the return OF
the abstracted bonds or their equivalent in
money. Mr.. Claasen pretended TO be
entirely Innocent Of any ong-doing in the
matter, but could i've no satisfactory ex-
planation Of his extraordinary act in trust
ing so large an amount Of securities to q
broker for sale, or, indeed, any reason for
desiring their SALE"
EXAMINER HEPBURN'S STATEMENT.
Early this evening United States Ex.
aminer Hepburn. who is in charge of the
affairs Of the Sixth National Bank. made
of mis- examination up to thai
time. He said that the missing bonds nave
1ot yet been found. Their par value Il
s42l 600, and their market value S4S2. 466
Upon that had been paid S50,OoO. leaving
deficit or account Of the bonds OF s432. 466
He has discovered in his examination shaf
here is IN the bank loan of s61.O00
ecured by $685. of Equitable Bank stock.
inother loan of $4,000 secured Nv
$50, 500 Of Lenox Hill Bank stock. and srill
mother loan Of $4,000 secured bv 1sd
shares OF Equitable Bank st ok, 500. .0Ol
worth OF Empire Gas and Electric Liphs
company bonds, 81 900 in stock of the 81.