The herald., 1896-09-12
NEW ORLEANS BANKS BREAK
And Heavy Runs Threaten to
Close Others
ENORMOUS DEFALCATIONS
Explsin the Late Failure Of the Union
Bank
Dishonest Clerks Keep Two Sets Of Books and
Oct Away With Half Q
rlilIlou Dollars
Associated Press Special Wire

Associated Press Special Wire
NEW ORLEANS, Sept. 1.-THE Bank
of Commerce, which everybody thought
would be able to weather the wave of
distrust and suspicion which followed
the recent wreck Of the American Ma
tional bank, was compelled to close it's
doors this morning. There was large
crowd outside the bank, and all manner
of surmises and opinions were being
freely aired by the crowd, but sum and
substance seemed to be that the Bank
of Commerce had adopted the only
course left to it.
President Nichol gives the following
explanation:
lowing to the unprecedented run on
the bank the past six weeks, and the
impossibility Of realizing with suffi-
cient rapidity on assets, and after con-
sulting with the vice president Of the
clearing house, submitting a statement
to them, deemed it advisable in order to
protect the interests of depositors, SO
that they might be paid in full in
short while, as well as the stockholders,
to take steps toward liquidation, step
which none feel more than we do"
The Bank of Commerce was founded
in 1887 with a capital of s10O,O0o The
plan was to do general banking busi-
ness, to furnish accommodations to all
classes of patrons, from men of millions
to wage earners, and also do a general
collecting business. 1t found a fruitful
field and its success had been such as
inspired the highest confidence in its
founders.
At 1870 this afternoon there was a
lively run on the Peoples bank; so many
people were in line hat it extended into
the streets. There is considerable ex-
element but no trouble of any kind.
The officials of the ePople's bank do not
seem worried over the run and all checks
for $100 or under are being rapidly
cashed.
The bookkeepers of the Union bank
were arrested today.
Colombo was not taken into custody,
as he was too sick to leave his home.
He is under arrest, however, at his res
idence. Leefe was arraigned and held
in $4,000 bonds for hearing. His bond
was Immediately signed. He refused to
make d StdLeIleIlt. 1WO SelS OL DOUhS
were kept. The defalcation purported
to be in the neighborl1ood of half
miiion dollars.
The arrests were made in order to hold
the men pending a further investiga-
ton. The total defalcations as far as
discovered, amount to over $470,000 and
the Justification of the books, if not done
to cover up the actual losses of the bank
by the failure of prominent commercial
firms which occurred enght or ten years
ago, shows that the stealings have been
going on for some years. The govern
ment believes that there was outside
collusion and expects the tracing up of
the accounts doctored, together with the
evidence saught, will reveal the conspir-
acy and result in the arrest of a number
of other parties, some very prominent.
Bookkeeper Colombo took dose of
morphine this morning and has been
unconscious all day,which prevented his
actual arrest. President Baldwin of the
clearing house says that the crucial test
has been passed and he expects that
there will be no more trouble among the
local bankers.