The Wichita daily eagle., 1894-01-28

KANSAS CITY, Jan. 2.-Ihe grano jury
now in session here, has for several days
been investigating deliberate scheme to
defraud the National Bank Of Commerce
out of $50, 600. and it is known that two
indictments have been returned, and that
capiases for the arrest of the offenders are
in the hands of the marshal. The fraud.
which caught banks in several CONNER
cial centers in the United States, was
brought to light by its Kansas City rami-
fications. Its extent, SO far as traced, is
between $50, 600 and 5000, 600, with all the
details not yet ascertained. The parties
charged with fraud are the lumbe firms
of j. II. Bemis & Co. of Jefferson.
and other points in the state of
Texas. Banks in Connecticut, Missouri,
Tennessee, Kansas, Nebraska, and Illinois
are known to have been defrauded, bnt
the full extent of the fraud is not yet fully
known. In Kansas City the National
Bank of Commerce was caught Tor $50, 900.
The manner in which the swindle was
perpetrated was not a complicated one.
Each firm drew Accommodation" drafts
on the other, due principally in thirty,
sixty and ninety days, respectively. The
firm on which draft was drawn would
make the amount in odd dollars and cents,
for the purpose of giving it the appear
ance of draft drawn for a sale or pur-
chase of lumber in the ordinary course of
business, and not for accommodation, a
draft which is almost certain to be for an
amount in round numbers. These drafts
were issued several months ago, when the
firms had coed credit, but were really in
failing circumstances. The next step was
TO 90 to the banks, aud. under false repre-
sentations, get the drafts cashed About
the time the drafts became due the firms
failed. The fact that the drafts were time
drafts prevented the attaching of the bill
of lading to the drafts, as Is usual In sight
drafts, and covered up the fraud in regard
TO the Misrepresentation that the paper
was for accommodation, and not Tor an
actual sale of lumber.
Among the banks which got some OF
this paper were those in Dallas. Galveston
and Houston, Memphis, Chicago, Atchi-
son, St. Louis and Omaha, and some in
Connecticut, by rediscounting western
banks paper. 1t is also stated that some
found its way to Boston.
G. j. White, cashier of the National
Bank of Commerce, was reluctant to give
any information regarding the matter to Il
reporter, but consented to answer one or
two questions.
"Was the National Bank of Commerce
defrauded of $50. .00Os"
Eyes; that was the original amount, but
some has been paid back. They wanted to
compromise the matter, and have asked US
several times to do SO, but we refused.
The Bemises have certainly used us mean
ly. We charge them with getting money
by false pretenses."
The notes and papers are now on file in
the criminal court.
1t appears that Bemis, with his two
sons in the tTeXas firms, contrived and
carried out the scheme by which the
swindling was accomplished. Bemis was
the owner of several companies in Texas,
and in the course Of the transactions
would draw drafts on one or the other of
them. As the companies went under diff
ferent names, it was not generally known
that Bemls was at the head of them, and
in this way he was enabled to carry on the
irregularities for long time before being
detected. The Bank of Commerce of this
city recovered 40 per cent of the losses,
and have paper which Will make 40 per
cent more, thss losing but 20 per cent of
The original sum jt WAS swindled out Of
The First National of Kansas City is said
TO be short $40, 600 on the deal.
Lateral late hour tonight the at
torDeys for the Bank of Commerce and
the Missouri Pacific railway state that the
frauds committed by Bemis and his sons
will reach s450000. 1t is known that
several other banks in this city, including
the First National, AS well as concerns in
Philadelphia New Haven, Louisville and
Cincinnati, were also caught, but to what
extent is not known.