Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1890-04-05
A Bank Wrecking Syndicate

"A btlnh nfeCAiiiSs SJ udiCdIS.
The ambitious American boy has an
other lesson on how to make great fort
une in a short time. The illustriouS
deeds of some more Napoleons of finance
are to be chronicled.
If you would learn the bank wrecking
business, listen: In December P. j.
Claas3en, George II. Pa eli and one or two
other persons obtained control of small
state bank in New York city, the Lenox
Hill bank. The real brains of the party
werc Said to be in the skull Of James A.
Simmons, an Englishman. They called
themselves syndicate" and speedily
organized a new state bank, the Equita-
BILE. The Lcnox Hill had some assets,
the other almost none at all, but that
was of no consequence to syndicate
with unlimited cheek.
The conspiritors were bravcly launch
ed now, with two banks at their beck.
They went to the president of the Sixth
National bank, an old and solid institu-
ton, and offered to buy him out. The
president Of the Sixth National, Charles
J. Leland, owned a majority Of its stock,
which was worth $3.50 share aud PAID
IS per cent. year in and year out. The
Napoleons offered President Leland $3.50
share. Leland declares that he never
suspected anything wrong even Wien
this absurdly extravagant price was Of
fcred. He sold the bank and delivered
the goods
The Napoleons paid for the Sixth Ma
lioual stock with certified checks on
their two other banks, the Lenox Hill
and Equitable, the checks being certifi-
,ates of cash that did not exist. They
knew the checks would be presented for
payment next day, as in fact was the
case. But in the safe of the Sixth Ma
tional lay securities that were as good as
United States bonds to the amount of
SS00,000. 1t did not take more than fif-
teen minutes for the new syndicate to
elect themselves bank directors. Then
they got into that 100000 as o mouse
invades cream cheese. They replaced
the good paper with worthless securities
Of their own, and sold the stock on
which the Sixth National depended for
its existence. When the checks they had
given to ex-President Leland came in for
payment they met them. All this SPLEEN
did financiering was accomplished in
twenty-four hours.
The conspirators had thus wrecked
three banks. Enough of the plumber
was left over even after paying Leland
to net them a comfortable sum. What
they meant to do is not clear. They
would have had time to join long line
Of illustrious predecessors in Canada in
few hours more.
But connected with the Sixth National
bank was faithful cashier of long
standing, Andrew j. Colsen. The new
management governed the bank FIVE
days. On the fourth day Cashier Col
sen went to the manager of the New
York clearing house and told him the
story, also that the new bank directors
had gone into office without one of them
taking the oath prescribed by law to
bank directors. This oath requires that
they shall faithfully protect the interests
of stockholders and depositors and that
they shall certify correctly to the condi-
ton of the bank.
Colsan's information was acted on at
once, Next day saw three banks with
their doors closed and their shutters up
and Claassen and Pell arrested. This
story teaches the ease with which clever
knaveS can fool old business men who
want to make little more money.