The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-07-26
ECHO OF BANK FAILURE
STOCKHOLDERS OF SEVENTH Ma
TIONAL FILES SUIT
Says Directors Were Incompetent or
Worse in the Discharge of Their
Trust-PIan for Banks
Reorganization.

NEW YORK, July 25.-With the fed
eral grand jury in session in an inves-
tigation of their affairs, the board of
directors of the Seventh National bank
met today and decided upon a plan for
the reorganization of the defunct bank
The capital stock is to be increased from
100000 to S2,500C00 and the additional is
sue Of $2,C00O0O In stock will be sold at
$50 per share, with first purchase privi-
lege to the present stockholders The
cash proceeds Of the assessment of the
existing stock and the sale of new stock
will, it is claimed, pay all present OBJ
legations and completely restore soIvency.
Existing stockholders are TO be required
to pay the assessment ordered by the
comptroller of the currency Edwin r.
Thomas, Edwin Gould, William Nelson
! Cromwell and Frank Hay, William Tay-
Tor and Edmund Stall have been consti-
tuted committee of stockholders
with power TO carry out the plan They
receive subscriptions and represent the
stockholders in all matters relating to
the bank and receiVership. Tn present
directors are required to tender their
designations, and a majority under the
new subscription viii elect their success
ors. This plan is made binding upon
all subscribers when 80 per cent of the
new stock is subscribed and 50 per cent
of the assessment is paid
A subscription form embodying the
main features Of the plan of reorganiza-
ZION was also drawn up and approved.
substantial amount Of the new stock
has already been subscribed.
United States District Attorney Henry
i. Burnett says the plan to reorganize
the Seventh National bank will not affect
the investigation by the federal grand
jury.
Fred ID. Stokes who is a stakeholder
IN the Seventh National bank. has taken
out summons in the federal court against
the directors, President Thomas and Re-
celVer Raynor. re charges the directors
with making reports to the stockholders
10 the effect that the capital of the bank
was unimDaired while as a matter OF
tact it was already insolvent He further
charges that the directors utterly neg
lected to perform their official duties"
tnat they permitted the accounts Of the
SAID bank to be kept in an inaccurate
manner, which failed to show tbe true
state Of its affairs"
IN the complaint the directors are fur
ther charged with having employed in
competent persons as officers of the bank.
VINO were unable to properly and ef-
| hclently discharge their duties all Of
which was well known to the directors"
AFTER having further charged them with
having given loans to insolVent persons
anu NOIpOfdl4OuS without ADEQUATE and
valid securities, the complaint goes on:
That the said directors, defendants
herein, so neglected and carelesslv con-
Quoted the said hank and the business
and affairs thereof that the entire capitaI
and surplus and much of the properly
ana efccts thereof have been lost and
stock Of said bank rendered worthless,
ana the stockholders thereof rendered
liable for large sum of money on ac-
count of the debts Of the said bank re-
naming unpaid"
The plaintiff then demands Judgment
for the total amount Of his loss as a
stakeholder Of the bank and the costs Of
the suit
= Complaint was filed in the United
states circuit court today by Wing Put
nam and Birmingham, as counsel for the
Coal and Iron National Bank OF CleVe-
lard, Ohio, against the Seventh National
bank and Forest Raynor, as receiver, to
restrain them from paying the proceeds
Of certain drafts forwarded by the Cleve-
land bank on the day before the failure
of the Seventh National bank The COM
plant also prays that the defendants be
restrained from intermingling these funds
with other funds in their possession.