St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-01-31
FINANCIAL FRAUDS.
A Syndicate OF Spectators
Succeeds in Wpecking
Two Banks,
The Gigantic Schemes Of Ives
and Stayner Are Totally
Eclipsed.
Sharks Secure Control Of Gilt
Edged Institutions and
Steal the Surplus.
One Is Now in Jail and Sew
epal Others Will Be
Soon.

New YORK. Jan. 30.-The LenoX Hill
bank suspended payment this morning.
1t is controlled by the same parties who
last week bought the control of the
Sixth National bank of this city, which
had already been closed by the bank ex-
aminer. The knowledge of the relations
of the two institutions caused run on
the LenoX, which it was unable to meet.
The president made an attempt to obtain
funds in Wall street, to make payments
but was unsuccessful. The clearing
house association to-day acted on the
Sixth National and decided to drop it
from the association. There are all
kinds Ofrumors in regard to the Sixth
National bank, one being that its new
officers, who have only been in charge
a few days, had sold out its securities
as soon as they obtained pos
session. Its president, P. j. Claa-
sen, is said to have been con-
nected with mining schemes in Lead
vile, a number of years ago. The rep
reSentatives of the bank examiner state
that deyositors will certainly be paid in
full. The Equitable bank has also been
affected in connection with the other
two institutions. Its president makes
the following statement:
The owners of the Sixth nation al have
minority interest in the Equitable only, an
he bank is not q affected.
The suspension of the two banks was
widely discussed in Wall street, but
brokers appeared to think that the
effect would be confined to stockholders
losses, and although the bear traders
depressed stocks at the opening, the
market easily recovered. and some
stocks made decided advances. Wall
street this afternoon looks upon the
attempt to dispose of the 100000
in bonds owned by the Sixth National
bank, as simply case of highway rob-
berry. 1t seems that President Claasen,
after abstracting the bonds from the
safe deposit vault, turned them over to
George II. Pell, broker of unsavory
reputation, who attempted to dispose of
them in the street. representing them to
be the property of his wife. Mr.. ColSen,
the cashier of the bank, learning Of the
action of Claasen, notified the
clearing house and the bank
examiner. The latter began an
investigation yesterday afternoon. He
soon learned enough to cause him
to close the bank and call on Claasen
for the return of the S622, 200 in securi-
GlSSs 1uS cAdulIueIs UH HIS plOllpG dC-
ton, succeeded in getting back S201.000
of the bonds. In lieu of, or on account
of, the rest of the distracted bonds,
ClaaSen handed the bank examiner
checks for S3S2,OOO. These checks fell
short of the market value of the alb
stracted securities $4,000. None of
the checks, however, have been paid
and they were protested this morning.
This evening Mr.. Hepburn, the bank
examiner, who is in charge of the af-
fairs of the Sixth National bank, made
statement of his examination up to
that time. He said that the missing
bonds
HAVE NOT YET BEEN FOUND.
Their par value is 421,000 and the
market value S4S2,466 Upon that had
been paid $4,000, leaving deficit on
account of bonds of S432, 1866. He has
discovered In his examination that there
is in the bank loan of 100000 secured
by $4,000 of Equitable bank stock,
which he states is practically worthless.
Another loan of $4,000 secured by $780,
800 of Lenox Hill bank stock, which
it was stated was doubtful and
still another loan of 100000, secured by
$50 shares of Equitable bank stock,
S23, 200 worth of Empire Gas and Elec-
trio Light company bonds, S11, 900 in the
SIOCh vi GIlC Sb. l1OuIS, N6W anu
Ocean Canal and Transportation Com
pany of New Jersey, $4,000 in Carolina
Central second mortgages and $4,000 of
Carolina third mortgages. The amounts
to be realized on these loans. Mr.. Hep
burn said, are problematical. In addi-
tion to these loans, Mr.. Hepburn found
on hand SSS.000 in protested pa
pers of Pell and others of the
alleged syndicate, of which amount
S5S.000 came from the LenoX Hill bank,
and for which the Sixth National
cleared. The other assets are reported
to be all right. this being a statement
Of the bad assets. Mr.. Hepburn expects
to complete his examination tonight,
and will at once make a specific report
to the comptroller at Washington. After
that is done the usual course of appoint
ing receiver will be pursued. Mr..
Hepburn says that after his examina-
ton he cannot see that the depositors
are In any danger. Even if they were,
he said, Charles H. Leland, the express
ident of the bank, has authorized him
to state that he
WILL MAKE GOOD ANY DEFICIT
In the accounts of the depositors. The
examiner was very strong in his re-
marks concerning the manner in which
the steal was concOeted and carried
by saying that it was the most scandal
Gus case of bank wrecking in the his
tory of the finances of the city. 1t was
virtually gilt-edged institution, and
only week ago its surplus amounted
to S500,000. The stockholders of the
bank are liable to the amount
of their stock. and for an assessment of
an amount equal to the par value of
their holding. While Mr.. Hepburn was
imparting this information, United
States Marshal Jacobus and Deputy
Marshais Berhardt and Kennedy en-
tered the bank and were taken into a
private compartment, where a consulta-
ton Of half an hour was held. MIR,
JacObus talked very earnestly and his
deputies scribbled frequently in their
note books. When the marshal came
from the compartment he was very
reticent regarding the object of his
visit to the bank. At first he would
not state whether he had made any ar
rests or intended to, but finally ad-
mitted that he had several warrants, and
tn at he would catch the men they were
issued for as soon as possible. How
many warrants he had or who they were
for he would not say, but from another
source it was rumored that Pell and
Claasen were the men the marshal was
after. In the afternoon state bank ey-
aminers Charles M. Peyton and vii.
liam Trenhoime came to the city to
look Into the affairs of LennoX Hill
and the Equitable banks. Late in
the evening they said, the LenoX
Hill bank was taken possession of i'm
meQiately after it SUSPENDED PAYMENT.