St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-07-21
INSIDE HISTORY.
A Law Suit Brings to Light More
of Kennedy's Rascality.

VI .
PHILADELPHIA. July 2O.-The Ma
tional Bank of the Republic, of New
York. recently entered suit in the conf
mon pleas court here against Ephriam
Turland to recover amount due on
certain prOmissOry note held by the
bank, of which Mr.. Turland was the
maker, the note having been delivered
to the Spring Garden National bank,
now suspended. Mr.. Turland to-day
filed his affidavit of defense, in which
he gives an interesting history of the
making of the note. He said that he
never received any value of any kind
for the note received, the paper having
been obtained from him by fraud, deceit
and MISREPRESENTATION on the part of
Francis w. Kennedy, president of the
Spring Garden bank.
Mr.. Turland alleges that he was at
that time one of the directors of the
bank and also stockholder and depos-
itor therein, but not a borrower of Il
dollar for years. That in December
last there was notorious stringency in
the money market. and the banks of
Philadelphia and New York adopted
system of issuing loans to each other
through the Clearing House association
that Is to say, that by deposition in
the Clearing House association certain
bank assets other than cash. any bank
could procure temporary loans in cash
through the clearing house, thus en-
abling such banks to command suffi-
cient currency for immediate wants
without a sacrifice of their assets; these
loans being paid off and renewed as
emergency required by banks in healthy
condition through period of several
months from December, 1890.
Continuing, Mr.. Turland alleges that
Francis w. Kennedy represented to
him that the Spring Garden National
bank was in a sound and healthy condi-
ton, and swore to the fact that all of its
loans were well secured; that the busi-
ness was flourishing and profitable, and
that it was earning more than 6 per
cent, which was declared dividend on
the capital stock of S750,0O0, which was
unimpaired, and also that the bank had
a surplus fund of S130,000; that Ken
nedy also represented to Mr.. Turland
that, owing to the stTingency of the
money market, the bank was borrower
of cash, temporarily, from the clearing
house until its assets matured; that the
loans would be repaid in the course of
business, and that, in view of this fact,
1t would be wise for the bank to
strengthen lll6 lOduS DN Q0pOSlI VI
special commercial paper; that, for this
purpose, Turland made the note at
Kennedy's request. the understanding
being that the paper was to be protected
at maturity by the Spring Garden Ma
tional bank and returned to Mr.. Tur-
land.
The defendant states further that
under the representations of Kennedy
he was induced to execute notes for
many thousands of dollars, among them
the note in suit. Mr.. Turland also
alleges that Kennedy's allegations were
false, that the loans and securities were
not as represented, that there was no
surplus fund, that the capital stock was
heavily impaired, that the bank was
fraudulently insolvent and had been for
a long time, and that there had been a
Misrepresentation of funds, Kennedy
having loaned to himself $3.50. 900 of the
capital stock of the bank, and two other
directors having borrowed 100000 and
100000 respectively, all of which was
unsecured, and in conclusion that the
books of the bank were criminally falsi-
fed in order to deceive the United States
bank examiner. In view of these cir
cumstances Mr.. Turland does not be-
lieve that he is responsible for the pay
ment Of the note.