New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-01-31
A NATIONAL BANK CLOSED.
SECURITIES OF THE SIXTH DISPOSED OF
BY IT'S PRESIDENT.
TEMPORARY SUSPENSION OF THE LENox HILL
A STATE INSTITUTION THE EQUITABLE
ALSO INVoLyED-GEoRGE II. PELL, THE
BROKER, ARRESTED-A WARRANT
OUT FOR PRESIDENT CLAAsSEN,
OF THE SIxTH-A REMARK.
ABLY BOLD CoNSPIRACl


II OF THE SIXTH-A REMARK.
ABLY BOLD CONSPIRACY.
novel method of robbing bank has been ex-
posed by examination of the Sixth National
Bank by the National Bank Examiner at the
| request of the Clearing House Committee. Con-
troll of the bank was bought ten days ago by
| persons who prominent in the management
4 Of two small State institutions. the Lenox Hill
And the Equitable. The latter bank was or
ganized less than two months ago. The purchase
of majority of the stock of the Sixth National
at what is considered extremely high price
apparently indicates conspiracy to use its funds
in supporting the other institutions if for no
worse purpose.
Immediately on gaining possession Of the bank
the president proceeded to sell large lot of Sc
4 curities belonging to it, and the money was used
4 TO- reimburse the purchasers for their outlay
Neither the securities nor the money equivalent
could be found at the bank or furnished by the
4 officers, and Bank Examiner Hepburn took formal
possession late on Wednesday night.
Yesterday morning the bank suspended as
n member of the Clearing House Association
The deposits which amount to over two million
dollars will undoubtedly be saved, but the stock
will be wiped unless the securities can be re-
covered. The Lenox Hill Bank was forced to
close its doors soon after opening of business
but the Equitable was more fortunate and may
not be forced to suspend
Two deputy marshals arrested George II. PeIl,
Of the firm of Pen & Wallack. who acted as
agents in the sale of the securities of the Sixth
National Bank. at his home after o'clock
last night. The warrant, which was issued by
| United States Commissioner Shields, charged him
| with violating the United States banking laws
warrant was also issued for the arrest of Presi-
dent Claassen, OF the Sixth National Bank
The closing OF the Sixth National Bank, OF
which A. Il. Hepburn, National Bank Examiner
| took possession late on Wednesday night reveals
q new species of robbery. 1t is so nearly on the
same lines those followed by Henry 5. Ives in
his railroad career that it may be considered
doubtful whether he was interested in the scheme
or his example was merely an inspiration to less
brilliant followers. The method is so simple that
a child could work it, and certain to be exposed
that only fools or knaves would adopt it. The
attempted robbery was safer than burglary be-
cause it was accomplished in the daytime and
under the cover Of respectability. The thieves
who robbed the Manhattan Savings Institution
were forced to some Inconvenience, although they
secured the protection of policeman The new
plan consists simply of buying the controlling in
terest in a bank and then selling the securities in
moters of the scheme. The labor of breaking
into q safe is avoided, while the securities are
more easily negotiated.
THEIR GREED TOO GREAT FOR THEIR PRUDENCE.
1t is not possible, of course, to buy control of
every rich bank, and in this respect the burglars
have the advantage, but the selection of the
Sixth National proved considerable ability.
More than a half of the stock was held by one
,o IN rptir frOm fhp
business, and who was at the same time keen in
the pursuit of money. The bank had a large sur
plus and a high reputation, and the price which
might gain the control was a secondary consid-
Grafton The greed of the conspiratOrs was greater
than their prudence, and prompt division of the
spoils has virtually defeated the scheme. The
bank is ruined, but the conspirators have not
been able 10 get away with all the booty. In the
complication two small State banks, which were
controlled by the same persons, have been in
volyed, but it is not known that
they had sufficient surplus funds to satisfy
the ambition of the managers. Apparently the
purchase of the Lenox Hill and the incorporation
of the Equitable were steps toward a greater
conspiracy and more profitable venture.
THE SCHEME SIMPLE ONE.
| The story of the robbery is severely plain. On
| January 20 Charles H. Leland, president of the
| Sixth Annual Bank, announced to the directors
that he had sold his stock, which was little
more than one-half lie said the others could
obtain the same price, and most of them ac-
| cepted the offer. new Board was elected, con-
sisting of James A. Simmons, H. T. Cutler, J. L.
| Watson d. VI. Ripley, James Jourdan and ?. j.
| Claassen. Use last mentioned was elected pres-
dent, and the former cashier retained. Almost
the first act of the new president was TO remove
| fbo fa-d
stored securities of the par value of $622, ,OsO,
which were worth in the market near
| ~ $1,O0O,O00. The sale of these was
conided to Peu Il Wallack, insurance
brokers' at No. a. Liberty-st. The senior
member of the firm is George II; Peu who was
! formerly engaged in the stock brokerage business,
and who left Wall Street under cloud. Mr..
Pel was the medium through which the sale of
the banks stock was made, and naturally his
| employers gave him the fresh Job OF dlsposlng
| of the securities. From the proceeds the pur-
chasers of the bank reimbursed themselves, and
I perhaps less preclpltate action would not nave
| led 10 so speedy detection.
TIE CASHIER BECOMES ALARMED.
Andrew L. Colsen, cashier of the bank, was
alarmed by certain loans made BY the new
| directors, and on Monday evening he went to
| William A. Camp manager of the Clearing House,
| and in part revealed to him his fears. a few
members of the Clearing House Committee who
| could be got together decided at once tnat an
| examination of the bank should be made, and at
a late hour on Wednesday night the result of the
| examination had been such That The Bank
| Examiner was put in absolute charge. At
meeting of the Clearing House Committee yester-
| day morning the bank was suspended as member
| Of the association.
The principal inconvenience was caused by the
fact that the Lenox Hill Bank cleared through the
Sixth National and consequently a good many
checks on both banks could not be exchanged
They were generally small in amount, and such as
are given in the usual course of business. AT the
Clearing House there was no confusion nor com
plication By the prompt action of the committee
the closing of the bank was really without effect
except on the persons directly interested in il or
the other institutions managed In the same IN
terest.
In Wall Street and among downtown banks the
question of the responsibility of Mr.. LELAND was