St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-01-29
MANY BANKS DEFRAUDED.
GIGANTIC SWIYDLE KNOWN As THE
II SKIING DRAFT RACKET.
WORKED BY LUMBER FIRMS.
Kansas City National Bank Of
Commerce Caught for 100000
- Banks in Chicago, Omaha,
ST. Louis, Atchison md Other
Cities Lose a Portion of Their
Surplus.
From the Sunday Globe.

surplus.
From the Sunday Globe.
q, KANSAS CITY, Mo-, Jan. 7.-The
grand jury now in session here has for
seueral days been investigating de-
lberate scheme to defraud the National
Bank of Commerce out of $50, 600. and 1t
is known that two indictments have
been returned. and that capiases for the
arrest of the offenders are in the hands
OF Marshal Stewart.
The fraud, which has caught the
banks in several commercial centers in
the United States, was brought to light
by its Kansas City ramifcatons. Its
extent, as far as traced, is between
$4,000 an dS200,O 900, with all the details
not yet ascertaned.
The persons against whom indict-
ments were found are j. II. Bemis and
one of his sons. both of the lumber firm
of j. II. Bemis 81 Co., of Jefferson, Tex.
Banks in Connecticut, Missouri, Ten
nessee, Kansas. Nebraska and Illinois
are known to have been defrauded, and
the full extent of the fraud is not yet
fully known. InsKanSas City the Ma
tional Bank of Commerce was caught
for 100000.
The manner in which the swindle was
perpetrated was not complicated one.
The Jefferson City firm would draw
drafts on other business concerns
which Bemis controlled, but which it
was not known he controlled. In other
words, Bemis and his son would draw
drafts OH themselves.
THE DRAFT WAS DRAWN
up so as to make the amount in odd
dollars and cents for the purpose of
giving it the appearance of draft
drawn foI the sale or purchase of ium-
Der in the ordinary course OF business,
and not for an accOmm odation draft,
which is made simply when one person
with good credit desires to indorse for
another for accommodation, and which
is almost certain to be for an amount in
round numbers. These drafts were is
sued several months ago, when the firms
had good credit. but were really in fail
ing circumstances. The next step was
to go to the banks, and, under false rep
reservations, get the drafts cashed.
About the time the drafts came due the
firms failed.
The fact that the drafts were time
drafts and not sight drafts prevented
attaching the bills of lading to the
drafts, as is usual in sight drafts, and
covered up the fraud in regard to the
representation that the paper was
for accommodation and not for the act
ual sale of lumber.
Among the banks which got some of
this bad paper were those in Dallas,
Galveston and Houston. Tex. {; Memphis,
Tenn; Chicago. Atchison,s Kan; st.
Louis, Omaha, and some in Connecticut
by rediscounting Western banks paper.
1t is also stated some found its way to
Boston.
George W. Howell moved here from
Atehison. lie was involved as defendant
ina
CRIMINAL PROSECUTION
for violation Of the interstate commerce
law, and was sentenced to the peni-
Tertiary. HowelPs offense consisted in
bribing Edward Tibbits, railway en-
ploye at Winthrop. Mo-, opposite At
Gibson, to make false weight entries on
freight consigned by Howell tor ship
I1ONSJl WAS lOullu gully. anu
sentenced to the penitentiary Dec. 81,
1892. Tibbits was also convicted. Both
were pardoneu by President Harrison
just before lie left office.
When Bemis became involved two
years ago, Howell came to Kansas City
from Atchison on the morning that re-
ports that Bemis was involved came
out, took special train at the union
depot, which he had chartered by tele-
graph. and made flying trip to Tex
arkana to lend his name to the aid of
Bemis.
c. j. White, cashier of the National
Bank of Commerce, was reluctant to
give any information regarding the
matter to a reporter.
1.-The marshal has requested me not
to talk Of this matter until the men are
arrested" he said. He consented, how
ever, to answer one or two questions.
WAS the National Bank of Com.
merce defrauded of $50, OOO?" was asked.
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 have refused. The SBemiSeS have
certainly used us meauly. We ch, rye
them with getting money by false pre-
lenses.
The notes and papers are now filed
with the criminal court"
AT late hour tonight attorneys for
the Bank OF Commerce and the Missouri
Pacific railway state that the frauds
committed by Messrs. Bemis and How
ell will reach $780, 600. 1t is now known
that several other banks of this city.
including the First National, as we'll as
concerns in Philadelphia. New Haven,
Louisville and Cincinnati. were also
caught. but to what extent is not
known.
ST. LOUIS, Jan. 27.-Attorneys for
the Bank of Commerce here state that
the total swindingS of BemS and How
ell. the "lumbermen" mentioned in the
Kansas City dispatch tonight, will. &C
cording to their adYices, reach total of
SiSn n0O