The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1893-08-22

KANSAS CITY, Aug. 21.-Henry Vol
Ssan, attorney for Special Bank Examine
". l. Latimer. acting as agent for tn
First National bank Of Marion, Kan to
day commenced garnishment proceeding
against George d. Galbraitb, special banl
examiner in charge Of the National baul
Of Kansas City, the National Bank o
Commerce and the American NatiOna
bank, to recover securities deposited Will
these banks by Z. N. Donaldson, president
Of the First National bank of Marion
Kan. 1t is charged that Donaldson Sc
cured loans from the bank Of which ht
vas president for his personal use withoul
giving adequate security. He has since
disappeared and the bank is short S23, ,0l2
Last Tuesday Examiner Latimer, sus.
yecting the condition of the First National
bank, made a trip TO Marion TO investigate
matters. Hearing of Mr.. Latimer's
arrival, Donaldson departed, and has not
been seen since. The examiner closed the
bank, and has now filed aR attachment
here, in the hope of protecting It, 1t is
not known what has become of Donaldson,
but Mr. LaJimer has good reasons TO be-
lieve that he is IN Mexico.
James Dougherty of Sioux City arrived
in the city today. After conference with
Attorney Wollman aud Bank Examiner
Latimer he swore out warrant for DON
adson's arrest, alleging embezzIement,
misappropriation and forgery. The facts
told by MIR. DougherCy make Donaldson's s
embeZZlement from the Marion bank ap-
pear simply a drop in the bucket COM
pared with the ex-banker's transactions
III Iowa.
Donaldson, in the SOS, besides owning a
majority of the stOcKof the First National
bank OF Marion, Kan, controlled Two state
banks. His transactions through them
were not successful, and in 1SS6-S7 when
be Kansas real estate boom dropped. he
e.osed out the TWO small banks, and, secur.
ny considerable money from his Marion
bank, started the Union Trust company at
Sioux City, la. AS feeders for the Union
Trust company. he established a chain of
banks In Iowa, eleven in number. His
ventures, however, did NOT deyeiop ac-
aoTdlng 10 his expectations. and from sub
seGuenI events IL became apparent that he
determined to realize what cash he could
and leave the country. Accordingly last
Hiuter he opened a branch Office here of
the Union Trust company OF Sioux City.
taking charge of 1t himself, and disposed of
large amount OF the securities and assets
Of Ills Iowa concerns.
1 he Union Trust company was among
the first financial Institutions TO go under
when the financial difficulties began last
spring. With it went down The. eleven
Iowa banks, AS follows: First National
LA Grove; First National bank, Holstein:
sloan State bark, Sloan; Danbury State
bank, Danbury: FIRST Ute State bank
Ote; W Noodblne Savings bank, Woodbine:
cushing Savings bank, Cushing: Castina
Savings bank, Castlna; Schutley Savings
bank, Schutley; Auria Savings GapS.
Aurlla, and Bank of McDa!e, McDale
The crash OF these institutions sent
donaldson into retirement atMarion. where
lie seems to have continued his tactics of
raising all the ready cash possible upon
hls assets. Then came the failure of The
Marion bank. Immediately after the
bank examiner made his appearance in
Marion donaldson disappeared, and with
him So, COO of the banks money.
Mr.. Dougherty of Sioux City. who was
Interested In the Union Trust COMPANY.
says that an examination of that com.
panys affairs and of the affairs of the
eleven Iowa banks shows a deficit of AT
least Soi0, 300 Donaldson is charged with
having got away with the money. Dur
ing the disposal of securities here he sold
paper TO nearly all the city banks. but the
buik OF hls transactions was with New
England banks.
iNDAANAfOlIS FRAUDS.
INDIANAPOLIS, Aug. 2l - Theodore
Haughey, president OF the Indianapolis
National bank, WAS arrested today on "A
United States warrant, charging him with
tmbeZzlement and Misrepresentation of The
tanks funds. AT the same time federal
pihcer also arrested his son, SCHUYLER &.
haushey, president of ths Indianapolis
Cufied Halr work, anu the INDIANAPOLIS
hiue works; Francis A. GOTTA president
OF the indianapolis Cabinet company:
PercIvaI Coffin, vice president, and A. Il.
Heed, treasurer OF the same company. The
latter are charged with being assesSorv TO
the embezzlemenJ. All We're released on
bonds.
The indianapolis National bank was
Closed on July %. The examiner placed
III charge soon discovered crookedness, and
receiver was appointed. The receiver !
discovered that Eaughey had loaned S4o0.- /
sN 10 ms son GA practically no security. |
SILne OF ms notes being signed by fictitious I
pames- lie had also loaned the Coilius /
bke amounts on the same fraudu!ept /
securities.