The Savannah morning news. (Savannah, Ga.) 1900-current, 1901-07-26
SEVENTH NATIONAL
NEW YORK's BROKEN BANK TO BE
PUT ON IT'S FEET.
TO HAVE S2,5O0,000 CAPITAL
BUT THIS WILL NOT STOP INQUIRY
BY GRAND JURY.

Directors Decide 70 Increase Capital
From the sale of the New stock
and the Assessment of the Old TO
he Used i'm DefrRying the Banks
Indebtedness-Wil Il. stokes
Makes Serious Charges Against
the Officers and Directors.
New York. July 25.-With the Fed
eral grand jury in session on an inves-
tigation of their affairs, the board of
directors of the Seventh National
Bank met to-day and decided upon a
plan for the reorganization of the
bank. The capital stock is to be in
creased from $50000O to 81, 500 900. and
the additional issue of 81 900 900 in stock
will be sold at $3.50 per share with first
purchase privilege to the present stock
holders. The cash proceeds of the as
sessment on the existing stock and
the sale of new stock will, it is claimed
pay all present obligations and COM
pletely restore solvency. Existing
stockholders are to be required to pay
the assessment ordered by the control
Ter of the currency.
Edwin r. Thomas, Edwin Gould,
William Nelson Cromwell, Frank Ray,
William II. Taylor and Edmund X
Stale have been constituted a COM
mittee of subscribers with plenary pow
ers to carry out the plan. They are
to receive subscriptions and represent
the stockholders in all matters relat-
ing to the bank and receivership. The
present directors and officers are re-
CURED to tender their designations and
a majority under the new subscription
will elect their successors. The plan
is made binding upon all stockholders
when 80 per cent. of the new stock is
subscribed and so per cent. of the as
sessment is paid A subscription form
embodying the main features of the
plan of reorganization was also drawn
up and approved. A substantial
amount of the new stock has already
been subscribed.
VIII Not Stop InvestIgation.
United States District Attorney Hen
ry l.. Burnett says the plan to reor-
ganize the Seventh National Bank will
not affect the investigation by the fed
eral grand jury. William T.. Stokes,
who is stockholder of the Seventh
Natiinal Bank, has taken out sum-
monses in the Supreme Court against
the directors of the bank President
Thomas and Receiver Raynor. The
complaint charged the directors with
making reports to the stockholders to
the effect that the capital of the bank
was unimpaired when as a matter of
fact it was already insolvent 1t fur
ther charges that the directors utterly
failed and neglected to perform their
official duties" that they suffered and
permitted the accounts of said bank
to be kept in an inaccurate manner
which failed to show the true charac-
ter of it's affairs"
Employed Incompetent Persons.
In the complaint the directors are
further charged with having employed
incompetent persons as officers of the
bank, who were unable to properly
and efficiently discharge their duties,
all of which was well known to the di-
rectors."
After having further charged them
with having given loans to insolvent
persons and corporations, without ade-
quate and valid securities, the COM
plant goes on:
That the said directors, defendants
herein, so negligenuy and carelessly
conducted the bank and the business
affairs thereof, that the entire capital
and surplus and much of the property
and effects thereof have been lost. and
stock of the said bank rendered worth
less and the stockholders thereof rem
dered liable for a large sum of money
on account of the debts of said bank
remaining unpaid"
The plaintiff then asks judgment for
the total amount of his loss as a stock
holder of the bank, and the costs OF the
suit