The Washington times., 1901-11-14
suit BY BANK RECEIVERS.
Affairs of the American Savings
Institution in Court.
4 Petition to Have Certain Trans
action Declared Noid-The Truns-
fer of Assets Alleged to BE Fraud
uIcnt-S:cps to Protect DepOsitors

| The history Of the organization OF the
1 American Savings Bank was briefly told
yesterday in a petition filed by the recelV-
ers recently appointed by the local court
! in which the Union Surety ana GnacahtE
| Company and William Oscar Room' the
| President of the Savings Bank, are asked
| to show cause why "A certain TRANSACTION
| should not be declared null and void In
| the petition the receivers declared that
| the American Savings Bank was insol-
vent at the time of its organization, and
| that Roome. its president and the Union
| Surety and Guaranty Company We're well
| aware of the existing conditions.
An order was signed requiring the de-
| PENDANTS to show cause on the 22d instant
why the petition of the receivers should
| not be granted
In the petition filed yesterday, the Su-
preme Court of the District is asked by
| the receivers of the American Savings
Bank to declare the transfer by the
bank of promissory notes. debts, due bills,
and chooses in action to the Union Surety
and Guaranty Company 70 have been in
fraud of the depositors and other credit
ors of the bank. and there
fore null and void. 1t is
stated that on November 10. 1897. VIII
liam Oscar Roome, the cashier of the
an architect, and Charles W. Powers were
among the principal organizers of the
American Savings Bank, at No. 1901
Street. The directors were the persons
named, who it is alleged, assumed the
entire management and control of the af-
fairs OF the corporation.
II is further stated that the entire cash
capital of the bank consisted of 500, the
remainder OF the supposedly cash
capital OF $4,000 being made up
of the demand notes aggregating
Si9,1oo. consisting Of Roome's note
for S2I,0O; Haller's, for $4,000, and
Powers, for $2O0e. and others for various
amounts. ii is alleged that continued
oYerdrafts by Roome, which, it is said.
began three days after the bank COM
menced business, and the discounting for
mis- personal credit of alleged worthless
demand notes of his own and of his
friends and associates. the bank was
practically insolvent from the date of its
organization.
1t is further stated that Roome was the
local vice president of the Union Surety
and Guaranty Company. the Offices of
which were located in the building of the
American Savings Bank. In April, 1900,
it is alleged that the Union Surety and
Guaranty Company opened the first OF a
number of running accounts as depositor
with the American Savings Bank. which,
from time to time, acted as financial
agent of the surety company. 1t is fur
ther stated that the Union Surety and
Guaranty Company, the American Saw
ings Bank, and Nicholas Haller co-ope-
rated in this business transaction in the
following manner:
Haller either personally or through an
agent would secure vacant land and then.
upon the assurance that he would furnish
bonded security for the performance of
his contract would obtain from third par
ties loans for the purpose of erecting
buildings on the land. The Union Security
and Guaranty Company would then offer
themselves as surety for Haller upon the
condition that the money which. accord
ing to the custom of business. is usually
retained by the lender to be disbursed as
the work progresses. should be deposited
with the American Savings Bank to be
disbursed under the control and supervi-
sion of its own local vice president and
attorney in fact. the defendant, William
Oscar Roome.
In one instance, 1t is alleged. S2,e00 was
deposited in the American Savings Bank
by Eugene Carusi and NJ. T. Davis, trus-
do made by the Union Surety and Guar
anty Company. through William oscar
Roomc, its local vice president, the seal
OF the Union Surety and Guaranty Com
pany being attached thereto. The trus-
tees, 1t is stated, were solely induced TO
deposit funds in bank through the afore-
said means. they having previously refus-
ed 10 deposit the funds in the American
Savings Bank upon their own response
bility. The records OF the American Saw
ings Bank, it is stated. show that on
the date of its suspension the trustees
were credited with $500.
The bank became more and more in
Volved by the withdra wal Of deposits
and on August 10, 1901. it IS said Roome
procured the passage of resolution en-
powertng him TO borrow money in the
name of the bank in his discretion and
10 pledge the securities and other prop
critics Of the bank as he might deem ad-
visable. On the day preceding the adJp-
tion OF the resolution the balance 10
Roome's credit was $2i52G and on that
day he, IT is said drew out 81 Ol3G0 over
drawing his apparent balance SL,76S34
From that time, it is stated, he con-
tinued to increase this OVerdraft by draw
ing out the deposftors' money as f,I-
lows: August I. 500; August 10, 81 15g
August %, Sl,GlJ, August p. 81, 60; August
., 5000 September 6, Sl.OD0, and Septcm-
Der II, SZeD, all aggregattng $3.50
During the entire period Of these over
drafts, continues the petitioner, the
said koome well knew that said bank
was insolyent and without funds or real
assets with which to pay the amount
due the depositors In said bank
Shortly after the American SAVINGS
Bank had suspended payment on SepteIn-
ber . last, II is said, certain officers OF the
Union Surety and Guaranty Company. In
response to an urgent telegram from IFS
Washington attorney, who was also th.
attorney for the defendant bank came ;tt
once to Washington and demanded of
William Oscar hJOme that the balance
due the surety company should be turned
over to them or that the disappearance |
Of the said balancf be satisfactorily ac-
counted for TO their.
The result Of the pressure brought to |
bear upon the said William Oscar Roome
as president OF the said bank and as |
vice president and attorney in fact of |
the surety company, was the surrender |
by ROome to his fellow officers of the |
remaining assets Of the bank. consisting |
of notes aggregating $l5,507.Oj."
AT the time the said notes were handed |
over to the said officers Of the defendant |
surety company, it Is alleged, certain of |
the accounts of the latter showed an |
overdraft In one case of $1,000; in another !
OF S2H.25, and IN a third Of S16Ln."
After the delivery of the notes by |
Eoome, purporting to act as president Of |
the American Savings Bank ii is stated |
he executed certain written agreement |
in which the notes of the bank were to be |
taken in payment by the Union Surety |
Company to the extent only to which |
they might prove finally collectible. and |
in the event that they should not the |
surety company should preserve an the |
rights which ii should have FOR the colIec- |
tiol and enforcement Of it's debt against |
the Amer rican Savings Bank
II Is further stated that at the time Of |
its organization the American Savings |
Bank was insolvent and that Roomc, as |