Omaha daily bee., 1900-11-20
BIG DEFALCATlON ALLEGED
German National Bank Of Newport, KY,
Touched for Sl95,000.
COMPTROLLER WIRES TO CLOSE ITS DOORS
Examiaer Tucker, Who Discovered
Mig Deacit, Vow In Charge-Assist-
ant Cashier Brown to BE
Pursued and Arrested.

Tucker on the books OF the German Ma
tional bank at Newport, KY, place the
shortage of Frank NJ Brown, the missing
assistant cashier and individual book
keeper, at s19l 500.
According to reports from those who
were with Brown when he left last Tuesday
night he had less than $500 with him.
Browns salary was only $1,000 a year
Cases are now cited where he spent more
than that amount in one day. His bond
was for $4,000, and it is good as far as 1t
goes.
United States District Attorney Hill will
arrive from Louisville tomorrow. when It
is said criminal proceedings will be begun
The federal detectives have certain persons
under surveillance and there are reports to-
night about arrests that will follow on tho
arrival of District Attorney Hill.
During the run on the German National
bank last Saturday $500 900 was secured In
Cincinnati TO bridge over the trouble. This
was returned today and Receiver Tucker
had other moneys and papers also trans
ferrcd to Cincinnati. Browns system re-
quired a wonderful memory. The experts
say he carried in his head the figures that
enabled him to call off correctly a lot OF
false entries in u way to throw off the
track the clerks who were doing the
checking with him.
A deposltor would put in $780, Brown
would nrter the proper amount OF the de-
post in one look and enter 1t as 500 in
another. He would take the difference,
$4,000. himself. Then, when 1t came to
checking up, he would handle one of the
books
Another clerk would check and Brown
would call off. Instead of calling OFF $780,
which nppparpd n tho NJ 10 20
post on the book which he was handling
he would call it as $3,1O0, thus making it
correspond with the book in the hands Of
the other clerk.
He also, 1t Is alleged, worked IL In an
other way. A depositor would draw out
SlO0 Brown would make the proper entry
In one book and enter s3100 in another
When the deposltor had his account
che ecked up the figures were taken from the
book In which the correct entry had been
made. When the bank officials looked to
what amount was due the depositor
they were given their informaton from the
books which showed that s3,100 had been
withdrawn. Brown had memorized all the
individual accounts and the experts find 10
private marks of any kind on the books.
The general ledger was kept correct and
balanced with The cash, while the indi-
vidual ledger, 1t is alleged, was fixed to
suit Browns purposes, the former being
the one that the bank officials examined.
Bank Closed by ComptroIIer's Order.
This bank is closed by order OF the
comptroller of the currency.
(SignedD o. p. TUCKER.
National Bank Examiner"
The foregoing notice appeared on the
doors of the stately building OF the German
National bank Of Newport, KY, prior to the
time for opening today. Tho salient ;e cts
of the cause of the notice had been known
since Sunday morning and therefore there
were none of the usual scenes accompany
ing run on the bank by deposltors. The
alleged defalcation of Assistant Cashier
Frank NJ. Brown TO the amount OF about
5000, 600 was fact so overwhelming that no
depositor was foolish enough to suppose
that any good could be accomplished by
attempting to get money from the bank
today.
National Bank Examiner o. p. Tucker,
who is In charge, in an interview today
said that the alleged defalcation was not
discovered by him until 10 o'clock on Sat
urday night, that both he and the bank S
own experts had been unable to find any
thing wrong until that time. The discov-
cry was made in a comparison of Browns
individual ledger with the cashiers daily
checking up. Here, he said, 1t was found
that Brown had been forging balances from
day to day until the total of $780,, 900 had
been withdrawn from the funds of the bank.
The examiner further said that the matter
of criminal proceedings had been referred
| to United States District Attorney Hill
| of Louisville, who would cause warrant
| for Browns arrest to be issued. The ex-
! y,tn ,uaIf haA pnt oil .t1,
because he knew that Brown was absent.
The only bond which the bank holds is
that OF Paris c. Brown, the father OF the
assistant cashier, who is a well known river
man and president Of the Consolidated
Boat Store company. This bond is an open
one, conditioned to cover any shortage by
the son. 1t is said that though Paris c.
Brown has voluntarily offered his entire
property to meet the obligation, not more
than 5000 can be realized from this
source. The examiner stated that he prob
ably would be named as temporary re-
ceiver, but the appointment of a. permanent
receiver was in the hanls of the comp
troller of the currency. The stock, he says,
| Is of no value, as a double liability assess
ment must be made. Deposltors may re-
ceive a dividend as soon as the comptroller
Of the currency will authorize 1t, but this
| may DC Wcchb even iHOutu ue ue
positors will be notified Of the amounts OF
| their credits and they will be required to
make proof Of their claims. Bank Exam
iner Tucker said he would employ a full
force of clerks to arrange the business OF
the bank and make every effort to collect
| all the debts due the bank and in every way
discover the banks exact condition and
until that time he could not make a posi-
| tive statement as to the extent of the liza
bilities, which appeared to be s192, 900. The
bank was the depository OF nine building
associations and OF the adjoining corpora
tions of Bellevue. Dayton and other towns
as we'll as of about !, 500 individuals and
| firms.
| There are no indications OF an accom-
plice or of anyone knowing about Browns
departure or destination.
| Temporary Receiver Named.
| WASHINGTON, Nov. 19.--Comptroller Of
the Currency Dawes has appointed Oliver
p, Tucker. national bank examiner. tempo
rary receiver OF the German National banl
| of Newport, Ky. Mr.. Tucker telegraphet
| the comptroller that he had taken charge
owing to the discovery of a defalcatior
amounting TO about s195, 900 and thereupor
the comptroller appointed him temporar,
receiver The officials here consider Il
| astonishing that a defalcation amounting
to more than the reserve OF the bank coulc
-. .