St. Paul daily globe., 1896-03-08

Of this, or $50, o,o0o BY this law neither Of
these factories could borrow more than $780,
600. They evaded this, however, by getting
their employees to make out notes for nve e. OF
works. Lew Haughey would then take the
notes to the bank, indorse them and get the
money. The employees, OF course, received
none Of It. They were men of no responsible
ity, and had neither money nor credit. Wag;
on drivers day laborers and clerks were used
in this way to obtain large amounts: Men
working at dollar day gave n4ses e tos $aU3
These notes generally ran ninety days and
the making and renewing OF them was large
part OF the business Of the employees OF the
other companies were organized. One was the
indianapolis Cabinet company, which was sup
posed to have branches in the different cities
of the United States and England. From these
branches notes would be sent in. The Indian
apolis Cabinet company would indorse them
and the bank examiner would be told that
they were good concerns, doing g large Dusl-
ness. This work continued until 1888 when
the bubble burst, and the Indianapolis Ma
tional bank failed, with liabilities OF $4,000, 600
and assets Of about $500, 900. 1t then had
of the curled hair company and Of the he glue aU
company amounting, all told, to SSl6,Oo0
Haughey and his sons were, OF course ar
rested. Their cases were set Tor trial IN issa
and Haughey pleaded guilty. He was sent to
the penitentiary 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 Haughey was acquitted, 1t Is
supposed largely through the sympathy
connected with his mother, who had no one
else to care for her.
KEYSTONE NATIONAL.
The keystone National Bank of Philadelphia
failed In 1891. with an Indebtedness OF nearly
81, ,00O 600. There have now been more than
four years of negotiation and litigation, and
less than 5000 900 have been realized. This
failure was caused originally by one OF the
H. T1I, NTCin n0
the bank funds to invest in seashore real es-
tate. He did this to the amount Of 100000
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 fed to
Brazil, where he is still at large. The assist
ant cashier did not receive cent from the
robbery OF the bank He merely tried to con-
ceal the acts of others, and for this he was
sentenced to prison for seven years. Another
adelphia, man named Beardsley. Beardsley
had q large amount of state funds on hand,
in addition to those of the city. He wanted
to get interest en- this money, and he loaned
1t to the bank These funds amounted to
more than million dollars. The money was
used by the bank for its own purposes, and
when it failed Beardsley was arrested, and
was given a sentence of fifteen years In the
penitentiary where he now is.
NEW METHOD OF ACCOUNTING.
1LO way NiAiSA IhO IACy SbOLO poAh SUI
ceeded in fooling the bank examiners and
in defrauding its creditors was by falsifying
it's books. For eight years it suppressed its
liabilities and padded is assets. Some of the
books showed that there were nearly 81, 400 900
dollars due to depositors, while the ledger
statement showed only ST. 100, 900. In the year
1886 the books were fraudulently changed to
the amount of $3.50, ,OOO the bank apparently
being solvent when it was really that much
behind. Two years later there was a diff
ference of more than 100000 between the
false and true statements of the banks con-
dtion. and there was a fraud of more than
$2260O0 In the deposits. In 1889 the deposits