Evening star., 1896-03-07

false letter of credit for OOOGO, and he
thought that through these amounts he
could consummate his wheat deal. The
money, however, was not delivered in time.
II was one day late and wheat fell. 1t
dropped from 10 cents to 70 cents, and
Harper and the Fidelity Bank went up
with the bursting bubble There was inn
menSe excitement. The bank examiners
We're called in and the doors were closed.
After time Harper and mis- confederates
were brought to trial. Josie Holmes turned
states evidence and escaped. Harper was
sentenced 10 ten years in the Ohio pen;-
tentiary, but in 1888 President Harrison
commuted his sentence and pardoned him
on the ground that he was physically
broken down. AS above stated, he is again
a broker in Cincinnati / am told that Asa
Potter. the president Of the Maverick Ma
tional Bank of Boston, Is now doing busi-
ness In New York. This bank was ruined
through loans to its directors, and its fail
ure resulted In the loss Of $2.00000D.
S2.OOO.OOO Lost I'm Indianapolis.
One of the biggest hypocrites among these
national bank presidents who have failed
was Theodore p. Haughey who was the
president of the Indianapolis National
Bank Haughey was member of the
Methodist Church and an active worker in
the Sunday school, where he had a class
which he called his poor class" He was
hypocrlte of hypocrteS, and was uD to
all sorts Of rascality. His bank failed to
the amount of about $2OO0,OOu, and this
money was scattered among a great many
small creditors. The bank had, all told,
about 5000 creditors, and among these We're
many school teachers and poor church
members. Missionary societies, aid societies
and benevolent associations We're all in the
bank as depOsitors. and Haughey boosted
tnat he was the friend of such organizations
A large part of his sWindles were carried on
by getting draymen, porters and clerks to
sign fraudulent notes, which he accepted
in bank and used as assets. AT one time
when lie was about getting a draynan to
sign one of these notes he overheard a
young boy who had caught his finger in
some machinery swearing. He had him at
once called up and discharged, saying that
ne could not have any one in his business
who would use such language
Companies Aid in Bank Stenlfnss.
The Indianapolis National Bank of which
this man was the president, was one of the
first of the kind organized. 1t was in a bad
way In 1881, but at this time it issued some
new stock, and. among others, got ex-Vice
President ColfaN TO put s27, 800 into it. At
this time Haughey's biggest swindles be-
gan. He started several fictitious COM
panies. One was glue factory. of which
his son, Lew Haughey, was head. He also
started hair works, and put another son,
Schuyler Haughey, in charge of that
Neither Of these enterprises ever paid nor
pay. Their chief business vas the issuing
of paper to he discounted by the bank The
capital of the bank was S3OOOU0, and the
limit of the loans to a single borrower un-
der the law WIS 10 per cent of this, or
S5o,G'. BY this law neither of these fac
tories could borrow more than $4,000.
They evahed this. however, by getting their
employees 10 make out notes for five or ten
thousand dollars each, payable to the glue
works. Lew Faughey would then take the
notes to the bank, indorse them and get
the money. The employees, of course receve
zone of it, They were men of no respon-
slbility, and had neither money nor credit.
Wagon drivers, DAY laborers and clerks
We're used in this way 10 obtain large
amounts. Men working at a dollar a
Gay gave notes for 10000 and Lew
Haughey would get them cashed. These
notes generally ran ninety days, and the
making and renewing OF them was large
part of the business of the employees OF the
glue and hair works. In addition to this
other companies were organized One was
the indianapolis Cabinet Company, which
was supposed to have branches in the off
ferent cities OF the United States and Eng
land. From these bra n,has notes would
be sent in. The indianapolis Cabinet Com
pany would indorse them, and the bank ex-
amirer would be told that they We're good
concerns, doing large business. This
work continued until 1SB, when the bubble
burst. and the indianapolis National Bank
failed, with liabilities Of S2,:OO,OU0 and as
sets of about S}33,03). Ii then had notes
of the Indiana polls Cabinet Company, CT
the Curled Hair Company and of the Glue
Company amounting, all told, to sSI5,GGO.
Haughey and his sons werS of course ar
rested. Their cases were set for trial in
1884, and Haughey plead guilty. He was
sent to the penitentia:y for six years and
is now serving out his term there. He is
seventy-five years old, and is said to be
much broken in health. Lew Hau;,hey was
acquitted, it is Supposed largely through
the sympathy connected with his mother.
u, haI ole N fn,.
The Keystone National Bank.
The Keystone National Bank of Philalel-
phia failed in 1891, with an Indebtedness of
nearly S2,60o,WU. There have now been
more than four years of negotiation and
litigation and less than $Go0.OO0 have been
realized. This failure was caused originally
by one of the presidents Of the bank. John
I. Lucas, using the bank funds to invest in
seaShOre real estate. He did this to the
amount of $GO0,OOO, but died before he could
replace the money. The next president of
the bank was Gideon w. Marsh, who was
at the head of the bank at the time of the
failure. He saw that he could not withstand
the storm, and fled to Brazil, where he is
still at large. The assistant cashier did not
receive cent from the robbery of the bank.
he merely tired to conceal the acts of others,
and for this he was setenced to prison for
seven years in the penitentiary of Phila-
delphla. Another man who suffered was
the treasurer OF IhllaQeipnla, a man named
Beardsley. Beardsley had a large amount
of state funds on hand. in addition to
those of the city. He wanted to get interest
on this money, and he loaned it to the bank
These funds amounted to more than mil
lion dollars. The money was used by the
bank for it's own purposes, and when it
failed Beardsley was arrested, and was
given sentence of fifteen years in the peni-
tentiary, where he now is.
A New Way of Keeping Accounts.
The way in which the keystone Bank
succeeded in fooling the bank examiners
and in defrauding it's creditors was by
falsifying its books. For eight years it
suppressed its liabilities and padded it's
assets. Some Of the books showed that
there were nearly fourteen hundred thou
sand dollars due to depositors, while the
ledger statement showed only eleven hun
dred thousand dollars In the year 1886
the books We're fraudulently changed to
the amount of $6S0,000, the bank apparent
ly being solvent when it was really that
much behind. Two years later there was
a difference of more than 5000, 900 between
the false and true statements Of the banks
condition, and there was fraud Of more
than S226,0OO in the deposits In
1850 the deposits were understated to
the amount of s53O.OOO and the bank ex-
aminer found several hundred separate
items. The Justification of the accounts
was done by dropping the thousands here
and there. For instance, a balance of
81. 4.26 appeared on the sheets as $53426.