The Indiana State sentinel., 1893-08-23

KANSAS CITY, Aug. 21.-Henry Woll-
man, attorney for Special Bank Exam
iner W. L. Latimer. acting as agent Of
the First ntional bank of Marion, Kas.,
filed attachments today against George
D. Galbraith. special bank examiner in
charge of the national bank of Kansas
City; the National Bank of Commerce
and the American national banks, by
E. NJ. Donaldson, president Of the First
national bank of Marion, Kas.
1t is charged that Donaldson secured
loans from the bank of which he was
president for his personal use, without
giving adequate security. He has since
disappeared and the bank is short $23,
O13.
Last Tuesday Examiner Latimer. sus-
pecting the condition of the First nation
al bank, made a trip to Marion to in
vestigate. Hearing Of Mr.. Latimer's ar
rival Donaldson departed and has not
been seen since. The examiner closed
the bank and has now filed the attach
ment here in the hope Of protecting it.
1t is not known what has become Of
donaldson, but Mr.. Latimer has good
reasons to believe he is in Mexico.
Last December Donaldson opened
an office here purporting to repre-
sent the Union Trust company of
Sioux City. He did not ap-
pear to do much business, however.
and closed his Office in June. James
Doughty Of Sioux City arrived in the
city today, and after conference with
Attorney Wollman and Bank Examiner
Latimer. he swore out a warrant for
DonaldsOns arrest. alleging embeZZle-
ment. INSTRUMENTATION and
The facts told by Mr.. Doughty make
D0naldS0nS embeZZlement from the
Marion bank appear simply as a drop
in the bucket compared with the eN-
bankers transactions In Iowa. Donald
son. in the SOS. beside owning a major
ity of the stock OF the First national
of Marion. Kas., controlled two state
banks. His transactions through them
were not successful, and in 1861. when
the Kansas real estate boom dropped.
he closed out the two small banks and,
securing considerable money from his
Marion bank started the Union trust
company at Sioux City, la. AS feeders
for the Union trust company he estab-
lished a chain OF banks in Iowa, eleven
in number. His ventures, however. did
not develop according to his eXpecta-
tions. and from subsequent events Ii
became apparent that he determined 70
realize what cash he could and leave
the country. Accordingly last winter
he opened a branch Office Of the Union
trust company of Sioux City. taking
charge OF il himself and disposed Of a
large amount OF the securities and assets
of his Iowa concerns. The Union trust
company was among the first financial
institutions to 60 under when the tinan-
cal difficulties began last spring. With
IL went down the eleven Iowa banks, as
follows:
First national Ida Grove; First ma
tional. Holstein; Sloan state. Sloan; Dan
bury state, Danbury; First Ute state,
Ute Woodbine savings. Woodbine; Cush-
ing savings. Cushing; Castana savings,
Castana; Schutler savings. Schutler;
Aurella savings, Aurelia, and the Bank
of Modale.
The cash OF these institutions sent
Donaldson into retirement at Marion,
where he seemed 10 have continued his
tactics OF raising all the ready cash pos
sible upon his assets. Then came the
failure Of the Marion bank. Immediately
the bank examiner made his appearance
in Marion, Donaldson disappeared and
with him $4,000 Of the banks money.
Mr. Doughty OF Sioux City, who was
interested in the Union trust company,
says the examination of that company's
affairs and Of the affairs Of the eleven
national banks shows a deficit Of at least
$500 000
Donaldson is charged with having got
away with the money. During the dis
posal of securities here. Donaldson sold
paper to nearly all the city banks, but
the bulk OF his transactions were with
New England bankers.