The sun., 1890-01-31
The Sixth National Ivesed
in "a Hours.
TWO STATE BANKS DISABLED
Peel Arrested and ClaaSSel Wanted
The LenOX Hill Bank Closes.

| 1AtIotrnp BeeuFithoe Eouno IN Flnoe Oh
the sIxth's Gilt-edged Bonds-The Raid
| of the New Unsworn Omeers Upon the
Overhowing Safe OF the Sound Ole Bank.
| The news Of the suspension Of the Sixth
| National Bank given by The Sun yesterday
| has for Its sequel q story Of bank wrecking
| which, in bodness OF conception and audacity
Of execution must take rank above even the
| sublime achievements OF Napoleon Ives With
the aid Of a comparatively small work.
| ing capital O gang of schemers gained
control OF three banks-the Lenox Hill,
the Equitable, and the Sixth National-and
In less than five days stripped them Of an
amount equivalent to twice their capital stock.
| The last bank to be seized. the Sixth National,
was paid for out OF the assets Of the institution
| itself, by using the other two banks to falsely
certify checks to the amount OF three times
their capital stock. Before these fraudulent
checks were presented sufficient money had
been raised on the assets of the national bank
to meet them. Discovery came through
Information given by faithful em-
ployee OF tho Sixth National Bank in
time to save some portion Of its property from
| tho wreckers. Prompt action by the National
Bank Examiner and the authorities secured
the recovery OF fraction Of the stolen securi-
| ties and the arrest OF some OF the implicated
persons. AS far as now appears the net amount
stolen is about $700000 which loss Dominslly
falls UPON the Sixth National Bank. The EQui-
table and the Lenox Hill are liable to the Sixth
National in the amount Of $l50,000 and $100, 600.
on checks which they oyercertiaed.
PLOTTING THE RAID.
The plot was Of recent hatching. and its exc.
cution began early in December. The first in
| stitution to come under the control OF the
| schemers was the Lenox Hill Bank, at Third
| avenue ana Seventythird street. This Is q
! State bank. about three years old, which had
an excellent standing. A new Board Of Direc-
| tors, with Charles Z. Wallack Of Pell, Wallack
Co.. as President, was put in charge about
! six weeks ago. At about the same time
the Equitable Bank was organized by the
same syndicate and began doing business
under State laws In West Twenty eighth street,
near Fifth avenue. In the case of each bank
some honorable men OF standing were asso-
ciated with the schemers In the management
| At the Equitable Mr.. Jacob B. Talman. who is
| q millionaire and In no way associated with
the wreckers In their schemes. was made
| President. But the executive man OF the insti-
! tuition until about week ago. was p J. Claas-
sen, the Yice-President who is now charged
with wrecking tho Sixth National in the five
| DAYS that he was its President.
| Early in the present month negotiations were
begun for the purchase Of a controlling inter-
est in the Sixth National by Claassen and his
associates. Charles Fl. Leland. its President,
personally owned majority OF its $200D00
capital stock. 1t was said at the bank yester-
day that P. +. Macdonald. a broker at So
Broadway acted as agent for the syndicate In
bringing about the sale. Others say that
George H. Pell Of Pell. Walack & Co.. insur-
ance brokers of AZ Liberty street. made the
negotiations.
THE TREMENDOUS PRICE LELAND GOT.
The Sixth National Bank was one OF the
soundest institutions In town. and the cash
value of the assets In its vault made its stock
worth $3.50 share. even II it should wind mp
its business and make q pro rata division Of
its property. For long time 1t has paid q
dividend OF per cent. annually. Claassen and
his associates finally offered Mr. Leland $500 q
share for the 1,035 shares which he held This
astonishing transaction is the most puzzlin9
feature Of the whole strange story. Tho offer
does not seem to have awakened the caution
of Mr. Leland. although at the price offered
the stock would net the purchasers as an in
vestment less than ~ per cent at the present
rate OF dividends Mr.. Leland is q wealthy man.
and members of his family have for some time
been urging him to retire from active business.
He accepted the fabulous offer OF the syndt-
cate. There is said to have been an intimation
to him that the real purchasers were an asso- !
citation of English capitalists. The terms Of
the bargain were cash on delivery.
On the morning of Dec 81 Messrs. Claassen.
James A. Simmons, and others passed over to
Mr.. Leland certified checks on the Lenox Hill
and Equitable Banks for the full amount, some
$650.000. and received In return the 1.086
shares Of stock and immediate possession Of
the Sixth National Bank.
CUTTING THE SAVE TO PAY LELAND.
Then took place some OF tho lveliest
financial gymnastics the town has ever heard
OF. There was really no money In the LenoX
Hill and Equitable Banks to meet those checks
for $3.50, 900 which had been certified through
who controlled the institutions. But these
pen knew that in tne 1fn yaIlts id ot the si16
Worth il Of gilt. in edged bonds. '0'0 -u'' '''''''
When Ives bogght % railrSad Z. d. he sometimes
chase Of banks, ,They, elected themselves d.
rectors Of the Sixth National as soon as the
transfer OF stock was made, and. forgetting
the preliminary necessary in national banks Of
being sworn ip, instantly set about raising
in which 70 do It. MIR. Leland deposited the
be presented for payment the next day. In tho
mean mean time M MGaasseni the pew new President ant Of the
sums from the banks cash on wildcat and
worthless securities; and put upon the market
the greater part OF the Gilt-edRed bonds in the
Ali their plans were successful. Their checke
were taken up when presented, and they had
q surplus In addition. They were In complete
control of three banks and were ready to 90
ahead with the execution OF their ultimate
designs.
GETTING NEW DIRECTORY IN.
just what their full plans we're nobody knows
but themselves. Timely xposure by Cashier
Andrew Z. Colston cut them short. This much
is known; simmons. Claassen. and their asso-
cateB control two or three railroads In the
south OF shady financial re puIation. and also
have contracts with the United states Govern
ment for dredgingin Harlem River. In New York
Bay. and In San Francisco harbor A great lot
OF securities OF the shaky railroads was foisted
upon tho bank as collateral for so-called loans
the very day they got control
In making up new Board OF Directors OF
the Sixth National they put upon the list the
names OF Gen. James Jourdan. President OF
the Kings County Elevated Railroad Company.
and II. 4. Cutler Of 2O3 Broadway Gen. Jour
dan said yesterday that Mr.. ClaAssen, whom
he know socially and as a comrade In arms
asked him, about ten days ago to become