The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1890-02-06
CROOKED FINANCES.

Wrecked Several New York Banks-The
Sixth National and the LenOx Bill
Closed, While the Equitable Ii In .
shaky Condition.
NEW YORK, Jan. 31.-A worthy sue
cessor of Henry S. Ives has arisen in
the person of P. J. Claassen, president
of the Sixth National Bank of this city,
and as result the Sixth National,
heretofore considered one of the strong
est financial institutions in the city,
is in the hands of the National
Bank Examiner, and the Lenox
Hill Bank, which was controlled
by the men in power at the Sixth
National, has closed its doors.
Rumors have impeached the integrity
of the Equitable, but its president
makes the following statement: 1.-THE
owners of the Sixth National
have only minority interest in
the Equitable, and the bank is
not affected" President Claassen
of the Sixth National is charged with
having deliberately wrecked that bank
and warrants were issued Thursday aft
ernoon for his arrest and that of George
H. Pell, broker, who is charged with
having aided him in the commission
Of the crime. Pell was arrested
Thursday night at his home in Fifty
fifth street and locked up in Ludlow
street Jail. A.rumor was current in the
afternoon that the St. Nicholas Bank in
the Equitable Life building on Broad
way was also affected, but denial was
made by w. ]. Gardner, the cashier
of that institution.
The methods by which the Sixth Ma
tional Bank was wrecked are almost
identical with those used by Henry S.
Ives in his dealings with the Cincinnati,
Hamilton & Dayton railroad. A few
days ago, through negotiations conduct
ed by Pell, Claassen and others bought
controlling interest in the Sixth Ma
tional by purchasing the interest of the
president, Charles D. Leland, at $50.
Frederick D. Tappen, president of the
Gallatin National Bank, tells the story
of the wrecking as follows:
after Mr.. Leland had sold his interest in tho
Sixth National Bank the directors were re-
quested to resign, which they did, one by one,
the vacancies being filled by other men. The
board Of directors, however, has not been
legally organized since. They could not legal
ly elect q president, because none of the
new directors had taken the oath Of Office.
The election of P. J. Claassen was there
fore void. Immediately on assuming the
ONCE OF president Of the bank Mr.. Claassen
made three loans of $50 OOO each secured by the
stock of the Lenox Hill Bank-a very poor
curity-and then went down to tho safe
deposit vaults of the National Park
Bank and distracted therefrom frst-class
railroad bonds of the par value Of $6s2 900.
These bonds he placed in the hands Of
George H. Pel for sale. Pell was formerly
partner in the firm Of Grovesteen & Pell, stock
brokers, who failed in August, 1887. The cash.
Ter Of the Sixth National Bank, Mr.. Colsen, be-
came alarmed at the extraordinary proceedings
Of the new president and directors and he came
down to the clearing house and gave them
the startling information narrated After
careful deliberation on the whole
matter the clearing house committee imme-
diately reached the conclusion that the bank
should be placed in the hands of a Government
official at once. A. B. Hepburn, the National
Bank Examiner, was sent for and the facts COM
municated to him, with the request that ho
would take charge of the concern the following
morning and investigate the charges made by
Mr.. Colsen, the cashier, against the officers and
directors. This examination took place yester-
day and fully confirmed the statements made
by the cashier. The clearing house commit
tee visited the Sixth National Bank late yes
terday afternoon, and after having verified
by personal examination the facts as already
stated tciegraphed to the Comptroller of
the Currency at Washington that the bank
would not be 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. To
sum up the case, it may be said that the
purchasers Of Mr.. Leland's stock paid for
it, evidently, with the money belong.
ing to the bank