Evening journal., 1890-01-31
BANK WRECKERS' WORK.
Two New York Institutions
Have Been Closed.
"ANOTHER IyEs.sTAYNER CASE"
The Sixth National and Lenox Hiu Banks
Ruined by Alleged Dishonest Practices.
Nearly HaIf MILTON Missing who
Has the Money!

Has the Money!
NEW YORK, Jan. STA most startling |
rendition Of affairs has been brought "a
light by United States Bank Commissioner
A. b Hepburn, who took possession OF the
Sixth National bank at Thirty-fourth street
and Broadway, and was busy examining It's
accounts all day. 1t has been discovered
that the now president Of the bank, p }.
Classen, who went into Office only two days
ago, has since attempted 20 dispose OF SO22,
600 Of the banks securities, consisting OF
gilt edged bonds Of market value Of over
ssO0,O00. All but s25O0OO Of these bonds
have been sold, and whore the money has
gone is yet unknown. Mr.. Classen repre-
sents the syndicate which last week bought
out the interest Of Charles H. Leland, the
former president OF the bank, and assumed
control on Tuesday.
A Significant Notice.
In the morning the bank was closed and
the following notice written ON a sheet OF
note paper was tackled TO the door.
have taken possession Of this bank as United
| States bank examiner IN behalf Of the controller
/ OF the currency az Washington, ID G., who VIII
give such further orders as may be necessary. a
careful examination Is being made OF the assets
and liabilities A. b. HEpnuRs,
United States Bank Commissioner.
The doors OF the bank were surrounded 10y
a crowd of panic stricken depositors all the
morning, and very little information could
| be CLEANED from tho bank commissioner and
| his assistants, who were at work inside as 10
the actual situation. At 80 o'clock Com
missioner Hepburn issued the following pre-
iiminary statement;
Examiner Hcphurn's Statement.
"Mr. Leland sold ,035 shares Of stock, a
controlling interest, to the parties at present
IN control Of the bank, at $50, and gave them
possession Jan % On Jan. %, s622, 900 par
value Of high priced bonds belonging TO the
bank wero delivered 70 Pell, Wallace a. CO.,
and a receipt taken reading as follows:
Received, New York, Jan. 25, 1890, Of
the Sixth National bank Of New York, the
following named bonds, to be sold for ac-
count Of said bank and accounted for TO its
| president as he may demand.
"T'here was no entry on the books OF the
bank 60 show any disposition Of the bonds.
The stock book called for the original
amount I found the SOP, 900 bonds gone
and demanded their restoration or funds to
represent their market value. went with
the president, r. J. Classen TO Pell, Wal
lace 4 Co, who said that about S400, 900 Of
the bonds had been sold and checks sent %
the bank, and thnt the remaining bonds
were with different brokers for sale, and
that thoy would get aud return them.
Nipped in the nud.
"They brought to me s25i 900 OF the
bonds The checks offered for the balance
could not be accepted. The above, together
with other matters affecting the bank, rem
dered the temporary closing Of the bank
imperative. If the gentlemen IN charge
carry out the promises or assurances given
the controller will undoubtedly reopen the
bank. do not think depositors will lose
anything. The object in taking possession
was to insure that Gentlemen, that IL all. y
, In addition to this Mr.. Hepburn stated
that the situation was further complicated
by the fact that not one Of the new directors
had yet qualified by taking the oath of oilic,
: as required by law.
History of the Bank.
The Sixth National bank was organized il
> 1864, and last week Mr.. LELAND, the presi
dent, disposed Of his interest 20 the syndi
cate which has been in control for the last
two days. The new board consists of T.. j.
Classen, stock broker, Of No. 45 Broad.
r. way; d. NJ. Ripley, president Of the Kings
Q County Elevated road; j. Kenneth Watson
= and H. T. Cutter, who recently bought on
! the drug store Of Alexander Hudnut il
e Broadway. The bank wns regarded as on'
r Of the soundest financial concerns in th'
t city, and had a very large surplus, accord
e ing to its last report Its stock very re
+ Gently sold as high as $3.50 a share in tbs
d market.
Il Discovered by the Cashier.
: Andrew d. Coison, who has been cashie
{ OF the bank for twenty-five years, was tn
+ first TO discover that any irregularities ha'
been going on, his suspicious being arousel
by seeing the receipt which is mentioned 4
Commissioner Hepburn's statement He a
; once notified the commissioner.
g They Were Audacious Bank Wreckers
Commissioner Hepburn stated last nigh
7 chat thus far the missing bonds, par valu
l. $4s1, 600, market value s4S2, 466, are stil
9 missing. There are loans of 1900, 70
II which the security on hand is very dubious
le There are also SsS, 600 Of protested notes q
70 Broker George H. Pell, who Is said by som
70 to have schemed the whole transaction. Th
r other assets seem to be all right. Mr. HeI
burns report to the controller Of the cui
rency viii be ready tonight, and the al
!. pointment Of a receiver will speedily follow
= He says it was the most audacious case
bank wrecking in the history Of this city.
= The Lenox Hin Bank Fails.
n The new directory Of the Sixth Nations
y bank is interested in the Lenox Hill bank
ic ], Pas Third avenue. In consequence Of Il
q trouble at the former bank the Lenox Hi
A. has failed. The president Of the Lenox Iii
Il bank is Charles E. Wallack, a son OF Il
late Lester Wallack. He went in with Il
new board Of directors on Dec 19. Thei
was $40, 900 cash on hand when the ban
r opened in the morning. By great eifo
Se S20, 600 more was procured. The entire SGt
1e coo had been paid out to depositors by noe
re and the cashier closed the doors.
re The Banks Condition.
ne The financial condition Of the bank
p about as follows: Deposits S270, 600; capitl
s paid in, 500, COO; loans and discounts, sS0t
600; amount due other banks, $4,000. III
directors are liable for twice the amount
their shares. 1t is stated that at the san
d time the Lenox Hill bank changed hands
to syndicate acquired control Of four institl
n tions-the Lenox Hill, Sixth National, Equ
cd table and St Nicholas banks. j. A. Sin
ed mons, who obtained controlling interest
is the Lexon Hill bank, was prime mover
nd the syndicate
a. Another Ives-stayner Case"
Frederick d. Tappan, president Of th
Gallatin National bank and a member Z
he the clearing house committee, says that th
ly proceeds Of the sale of stocks and securitie
ed belonging to the Sixth National bank wef
used to pay the certified checks which ha