Wichita eagle. [volume] (Wichita, Kan.) 1886-1890, 1890-01-31
IMITATORS OF IVES,
The Lenox Hill Bank of New York
Closed by Crookedness.

ready been closed by the bank examiner.
The knowledge of the relations of the two
institutions caused run on the bank
which it will not be able to meet. The
representatives Of the bank state that de.
positors will certainly be paid in full.
Fred d. Tappen, president of the Gala
tin national bank and member of the
clearing house committee, made the fol-
lowing statement to reporter this morn
ing: ':After Mr.. Leland has sold his inter
est in the Sixth National bank, the direct
ors were requested to resign, which they
did, one by one, the vacancies be-
ing filed by new men. The board
Of directors, however, has not
been legally organized since. They
could not legally elect a president because
none of the new directors had taken the
oath Of Office which is requisite before any
legal action of any kind could be taken by
the board. Their election of p. j. COlsen
was, therefore, void. Immediately on as
Stunning the office of president of the bank,
Mr.. Colsen made three loans of S60, 900 each
secured by the stock of the Lenox Hill
bank, "a very poor security and then went
down 30 the safe deposit vaults of the Ma
tiunal Park bank and distracted therefrom
first class railroad bonds of the par value
of S622. 900. These bonds he placed in the
hands Of man named George H. Pell for
sale. Peli was formerly a partner in the
firm of GroYeston g. Pell, stock brokers,
who failed in 1887. The cashier of the
Sixth National bank, Mr.. Colsen, became
alarmed at the extraordinary proceedings
of the new president and directors and he
came down to the clearing house,
met the clearing house commit
tee and gave them the startling
information already narrated. After very
careful deliberation of the whole matter
the clearing house committee Immediately
reached the conclusion that the bank
should he placed in the hands of a govern
ment official at once. \. r. Hepburn, the
national bank examiner, was sent for and
the facts communicated 10 him with the
request that he would take charge OF the
concern the following morning end lnVes-
tigate the charge made by Mir. Colsen, the
cashier, against the officers and the d.
rectors This examination took place yes
terday and fully confirmed the statement
made by the cashier. | may state here
that the cashier, Mr.. Colsen, has acted
throughout in this matter thoroughly for
the interest of depositors and minority
stockholders and we owe it largely to him
that1yve are enabled to act so promptly.
His conduct is certainly deserving OF the
highest commendation.
The clearing house committee visited
the Sixth National bank late yesterday
evening and after having verified by Il
personal examination the facts DIS already
stated telegraphed to the comp
troller of currency at Washing
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 in
stitution.
''To sum up the case it may be said that
the purchasers of Mr.. Leand's stock paid
for it evidently with the money belonging
to the bank / don't know whether the
checks Mr.. Leland received were certified
or not, but the purchaser evidently man
aged to make the payment by 'kiting'
some checks back and forth in much the
same way as they tried to do with the
bank examiner yesterday.
'"The LenoX Hill bank and the Equitable
bank are staCe banks, that is, they are or
ganiZed under the laws of this state
Whether the state bank examiner has
taken any action with regard to them L
do not know. 1t is probable that they
will have to be closed up. | know nothing
of the men who are mentioned as the new
directors of the Sixth National bank |
1t is for the reason that Mr.. Lee
land turned the control of the bank
and all belonging to it over TO men uu
known in financial or banking circles that
Mr.. Leland is blame. d"
Mr.. Hepburn was at the bank early this
morning and was at work examining into
the securities and business, Abont noon
he made the following statement to the
reporters who had asked for it: "Mr Lee
land sold 1,035 shares of stock, control
ling interest, to the parties at present IN
control of the bank at $3.50 and gave them
possession January %. Januury % S622, 900
par value of high priced bonds belonging
to the band were delivered to Pell, Wal
liely G. nd iyar
Received New York, January %, 1890,
of the Sixth National bank the following
named bonds to be sold for account of said
national bank and accredited to its presi-
dent as he may demand.
There was no entry on the banks books !
to show any disposition of the bonds. The
stock book called for the original
amount. L found the $4,000 in
bonds gone aud demanded their
restoration or funds to represent their
market value | went with the president
to Pell, Wallick & Co., who said about |
$3.50, 600 of the bonds had been sold and
checks sent to the bank, and that the re-
naming bonds We're with different brokers |
for sale and that they would get and re-
turn them. They brought to me s2Ol. 600 |
The checks offered for the balance could |
not be found The above together with !
other matters affecting the bank rendered |
the temporary closing of the bank impera- |
tive. If the gentlemen IN charge |
carry out the promise on assurances given |
yesterday the comptroller will undoubtedly |
open the bank. | don't think the deposit |
ors will lose anything. The object in tax |
ing possession was TO insure that"
While reporter was in the Lenox Hill !
bank today Cashier ColseD. OF the Sixth |
National bank. entered and approaching !
the cashier OF the Lenox said; Are you |
the cashier OF the LenoX Hill banks
q am - ranlled the cashier OF the latter |
"Wei!," resumed Mr.. Colsen, Il am the |
cashier of the Sixth National |
and also the representative of !
tue United States bank examiner. |
have here two checks certified by you yes |
terday for S50,G00 each; Go you intend to |
pay them?n
The Lenox banks cashier replied: This |
bank is temporarily closed
Mr. Colsen asked: do you know the /
consequence OF certifying checks when yOu I
have not tue money 10 pay them. II you /
don't you had better consult your lawyer |
at once"
The Lenox cashier replied that he had |
not said yesterday that the money was /
not there, but was not il reasonable TO ex-
pec5 that he could obtain that sum OF |
money 50 early in the day
The conversation became general be- I
tween the two cashiers and IN the course |
OF it Mr.. Colsen said: There are fifty more /
checks certified like this
MIR. Colsen said TO the reporter: -Four |!
days ago | knew that this trouble was I
coming and sent to Washington and TO the |
clearing house for protection. / have been |
IN the Sixth National twenty years and | /
do not want TO see the depositors and my /
friends Swindled out of their money. lam |
not going to rest In this matter until some |
BODY Is brought to justice. Before this deal !
was finished / told Mr.. Leland that he /
eo