Pawtucket tribune. (Pawtucket, R.I.) 1890-189?, 1893-07-31
A TEMPORARY Loss
To Banks Through Bogus
Certificates.
CLEVER SCHEME WORKED.
Discovered MANY Days Ago, but
Guarded From the Public.

BosToS, July 81 a large number Of
banks in this city. throughout New Eng
land and ia New York have been defrauded
by duplication II grain certificates ISSUED
by the now-defunct Northern Pacific Ele-
yator company of minnesota. The amount
ia which New England banks are involved
Is between $4,000 and 10000, and the
total sum secured from banking institu-
tions by these frauds is probably not far
from al 2OQ0DO
The loss 20 the banks is believed To be
only temporary, for the stockholders OF
the elevator company, who are liable un-
der the laws o. Minnesota, have offered
20 reimburse the banks on q basis OF 90
per cent In cash and the balance I'm five
annual payments. IL Is believed that this
offer viii he accepted and the matter thus
adjusted, leaving the stockholders to deal
with the offenders.
AT first thought fraud on banks run
ming up 10 81. 10000 Ia times like these
seems like matter OF startling and mo-
mentous consequences, but there Is
No Reason TO Fear
that any Of the banks will be seriously AZ
fected The loss in New England Is said
20 be distributed among nearly three score
institutions 50 that the amount for which
each is caught IL very small, and the total
sum lost will he paid back eventually,
and more than half OF 1t almost mt once.
When the banks get the 80 per cent. In
cash, il will leave the amount which they
have TO do without for time only 40 per
cent, or between 100000 and s2500O0 In
New England. This makes the load on
each no more than frequently falls through
some small failure. Then again, the
swindle was discovered some time since,
and is no new complication for the banks,
although the secret has been so well
guarded that IL will be news TO the public.
1t is alleged that the fraud was perpe-
trated by employees of the elevator COM
pany, who
Issued Duplicate Certificates
for grain In the corporations elevators.
One set Of certificates was deposited as
collateral In eastern banks, and the others
dispo ed of ia the west. On the latter, the
grain was withdrawn from the elevators
and the financial institutions awoke to the
fact that their certificates were only so
much paper there being no grain back OF
them, The certificates were considered
good security, and were profitable paper
for the banks when everything was all
right
The Minnesota laws demand a rigid sys-
TEN of inspection Of grain In terminal ele-
vators, hat this government watchfulness
did not seem to be extended to the eleva-
tors along the railway lines, and IL was
during an investigation following the dis
covery II this fact that the frauds were
unearthed.
The Northern Pacific Elevator company
is corporation distinct from the railway
OF the same name, and owned over 100
grain elevators along Its lines. It was the
grain in these storehouses which
Was Doubly Certified To,
The stockholders of the COMPANY were
as much astonished as the holders of its
certificates when the swindle was discov-
cred. and made offers of settlement, as
mentioned above
The company was r. reorganized as the
Lake Superior Mining company. Many
Of the stockholders live in the east, and
George Cook sey,,,f ( David Dows a. Co. of
New York, was elected president He de-
clined, when asked about the frauds, to
discuss them, but admitted that the GER
tifcates had been duplicated.
A meeting was held in this city about 10
days ago, at which the banks interested
were represented and the matter was dis
cussed. The committee appointed to in
vestigate wa. composed Of President The
ophilus King ( the National Bank Of Re-
demption, President Ripley Of the Ma.
tional Hide and Leather, President George
Littletield Uf the First National of Provi-
dence.