The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-05-22
Rnked in 100000 on Forged Paper
and 100000 More from Unsus-
pecting Country People
THE MONEY HAS DISAPPEARED
WARRANT OUT FOR THE BANKER,
WHO WILL BE ARRESTED TODAY.
Sexton at Bedford Denounced as
Travesty ON Justice.



LOGANSPORT, Ind. May 21.-Develop-
ments in the State National Bank failure
show that not only has there been the
grossest msmanagement of the affairs OF
the bank, but that the president, John F.
Johnston, has been guilty of forgery, en-
bezzlement and misrepresentation of the
funds of the institution The funds of the
bank which have been appropriated TO the
use of the president will amount to more
than $500 000 while he has obtained on his
personal paper the additional sum of $780,
eco or more. The latest estimate of the
shortage is between $50O000 and $600,O00. OF
this amount over 100000 was obtained on
forged paper, on bogus certificates of de-
posit, funds of the bank embezzled or per-
sonal accounts transferred to the account
of the president.
Over $780, 600 was obtained on the personal
signature of Mr.. Johnston from farmers re-
siding in the county and from depositors
whom he induced to loan their money to
him instead of depositing it, case in
point where a depositor was induced to
loan the money personally to the president
is cited Mrs. John Tam, wife of a con-
tractor and builder of this city, had a
legacy left her by relative. She took the
money about $6,00O to the State National
her to loan the money to him on his per-
sonal security, telling the woman that 1T
would be better for her to loan the money
and draw interest on it rather than have
it lie idle in the vaults of the bank. There
are numerous cases of this sort coming TO
light and the full extent of his stealings
in this manner will not be known for some
time. In addition to being the head of the
bank Mr.. Johnston owned heavy stock of
hardware and was part owner of a grain
elevator and did large business with the
farmers of the county. 1t is known that
there are large amounts of his paper in the
hands of farmers over the country, but the
aggregate can only be guessed. The hard.
ware stock is estimated to be worth $4,000
and the other property almost $4,000, and
in addition Mr. Johnston has turned over
to the directors of the bank property in
Chicago valued at $4,000.
The national bank examiner, George B.
Caldwell, is more willing to talk to-day
than he was yesterday. His investigation
has progressed so far that late this after
noon he filed an affidavit and information
before United States Commissioners George
". Funk charging President Johnston with
ernbezzlement, misappropriation of the
funds of a national bank and forgery. Mr..
Caldwell says:
1.-THE DEVELOPMENTS in this case will dis
close one of the most stupendous frauds
ever perpetrated in a city the size OF
Logansport and in bank of the class OF
the State National. Two weeks ago, when
/ first visited the city, on my tour OF IN
vestigation / discovered some indications
of irregularities and last Wednesday, when
began a thorough search of the banks
paper, the whole truth came out in heap.
1 charged Mr.. Johnston with msappropria-
ton Of the banks funds and with embezzle-
ment and he made a full and complete
confession This confession was repeated
at meeting of q few OF the directors
with myself on Thursday morning. and
without making his statement SPECIFIC as
to amounts Mr.. Johnston admitted that he
had appropriated to his personal use over
$500 900 of the funds of the bank. / imnle-
diately took steps TO secure the deposltors
to as great extent as possible, and be-
fore making any charge against Johnston
of a criminal nature [ secured his signature
to the transfer of all his available prop
erty which will amount TO about $125,0D
This with the $780, 900 in cash in the vaults
of the bank and the good paper held by
the bank will amount to $225OCO out OF
over S500,00G as shown by the statement or
the bank and 1t is believed will enable the
payment of the depositors in full.
How about reorganization? was asked.
81 am not prepared to say, but in the
interest OF the stockholders, l sincerely
hope that it may be possible. | have had
johnston under SuTNelildilCt SlliCe COii-
fesson was made, and his arrest VIII fol-
low in due time
Have you not filed an affidavit and in
formation before the United states commits
sioner. Mr. Caldwell, charging Johnston
with violation of the federal statutes re-
latng to banking?" was asked.
Yes the affidavit has been filed, but the
arrest has not yet been made. Johnston
cannot get away and the filing OF the af-
tidavit was merely preliminary measure.
The arrest will be made probably to-mor-
row. The case against him Is clear and in
fact he does not deny his guilt"
Late developments tonight Indicate that
the case against President Johnston is con-
elusive. United States Marshal Kercheval
and District Attorney A. w. Wlshard have
morning. Mr.. Johnston will be arrested
and taken before United States Commis-
sioner Funk and arraigned on the charge of
embeZzlement He Will waive preliminary
examination and the commissioner will fix
his bond The bond Will probably be $4,000
to $50 600 and failing to give the required
security Johnston will be taken to Indian
apolis and incarcerated
The indications are that it will be a hard
matter for Johnston to meet the required
bond. The developments of the past two
days have so shaken the confidence of his
friends that ii is not probable he could
secure bonds for any amount.
AS the details are brought to the sur
face the case becomes more complicated
and II is feared that I'm the fall of the State.
National a number of other business firms
will suffer greatly. a meeting OF the stock
holders in the bank will be held in the
early part of next week after the examiner
has made his report and If possible there
IL will save a number of firms from fall
ure and will also give the stockholders an
opportunity to save themselves from utter
loss.