The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-07-26
Directors of the Defunct New York in
stitution Decide to Raise the
Amount to S2,50O,OGO.
INQUIRY BY GRAND JURY
DIRECTORS CHARGED WITH MAKING
UNTRUTHFUL REPORTS.
Bill of Complaint Also Filed I'm Be-
half of IA Cleveland Bank
for n Large Sum.

NEW YORK, July 25.-With the federal
grand jury in session investigating their
affairs, the board of directors of the Sew
enth National Bank met to-day and de-
cided on a plan for the reorganization of
the defunct bank. The capital stock is to
be increased from $1,000 " to 50, 600. and
the additional issue of s. ,Oo0.oD in stock will
be sold at $3.50 per share, with first purchase
privilege to the present stockholders. The
cash proceeds of the assessment on the
existing stock and the sale Of new stock
will. it is claimed, pay all present obliSa-
tons and completely restore solvency. Ex-
listing stockholders are TO be required TO
pay the assessment ordered by the con-
troller of the currency. Edward r. Thomas.
Edwin Gould, William Nelson Cromwell
and Frank Ray. William Fl. Taylor and
Edmund X. Stale have been constituted a
committee of subscribers with plenary
power to carry out the plan. They are TO
receive subscriptions and represent the
stockholders in ali matters relating TO the
bank and receivers. The present directors
and officers are required 10 tender their
designations. and a majority under the new
SUBSCRIPTION will elect their successors.
The plan is made binding upon all sub
scriberS when 90 per cent. of the stock is
subscribed and 80 per cent. OF the assess
mSNC Is paid. A subscription form eflDOuy-
ing the main features of the plan or reor-
ganization was also drawn up and APP
proved. A substantial amount of the new
stock has already been subscribed.
United States District Attorney Henry l..
Burnet says the plan to reorganize the
Seventh National Bank will not affect the
investigation by the federal grand jury.
William Z. ID. Stokes, who is a stockholder
of the Seventh National Bank, has taken
out summOnses In the Supreme Court
against the directors of the bank, President
Thomas and Receiver Raynor. The COM
plant charges the directors with making
reports TO the stockholders 10 the effect
paired, when, as q matter of fact, II was
already insolyent. 1t further charges that
the directors utterly failed and neglected
TO perform their official duties and that
they suffered and permitted the accounts
of said bank TO be kept in an inaccurate
manner, which failed to show the true
character of its affairs"
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, AL of which was well known
charged them with having given loans TO
insolvent persons and corporations without
adequate and valid security. the complaint
goes on: That the said directors defend
ant herein 50 negiigently and carelessly
conducted the said bank ard the business
and affairs thereof that their entire capital
and surplus, and much OF the property and
much effects thereof have been lost and
stock of said bank rendered worthless and
SlOcklOlQcTS lIeIeOI IeIueTeQ liable Tor a
large sum OF money on account of debts
of the said bank remaining unpaid" The
p~laintiff then demands judgment for the
OF the bank and the costs of the suit.
1t is alleged, further, that F. S. Heath.
vice president OF the Seventh Nationai
Bank. sent a telegram to the plaintiff read
ing as follows: do not believe news
paper stories concerning US. Our state
Subsequently, on. the afternoon OF the 26th.
a telegram was received from George w.
Adams. cashier of the Seventh. as fol-
lows: Referring to published rumors, we
are meeting all obligations, as usual"
1t is ALLEGED that these telegrams were
f 6aesi,ve and We're sent With the intent to
they were received the plaintiff could have
taken steps TO prevent the acceptance or
payment of these drafts. 1t is further al
legged that on the appointment of Forrest
Raynor as receiver, the complainant mott
fed him by telegram to return these drafts
for $29, 69S, not having been collected at
the time. On the following day, June q,
the draft having been turned over to the
receiver and collected by him, he was noti-
fed In writing by the attorneys for the
Coal and Iron National Bank to turn over
TO them the proceeds. and not to mingle
the same with other funds in his posses
sion. The court is asked to direct that
the defendants pay over to the Coal and
Iron Bank the amount of these drafts.
with interest, and that a writ of iriunc-
ton be issued restraining the defendants
from intermingling the funds obtained from
the collection of these drafts with other
ulluS III lItlI DOScCSSlOn. from COllGCtl0G
the draft for &,614. or from using these
funds for the payment of other accounts.
A bill of complaint was filed to-day in the
United States Circuit Court by Wing. Put
nam & birmingham, as counsel for the Coal
and Iron National Bank of Cleveland. o.,
against the Seventh National Bank and
Forrest Raynor, receiver OF the bank. In
the complaint il IS alleged that the plaintiff,
prior TO the 25th of June last was a Gus
toner of the Seventh National Bank and
on that day mailed to the defendant a draft
for the sum of S29.69s. drawn by the Bank
of Commerce National Association of
Cleveland on the American Exchange Ma
tional Bank of this city in favor of the
Coal and Iron National Bank. Inclosed
with this draft We're others on the Amer
lean National Bank which. together with
the first-named Iraft, amounted to the sum
of s35. 262. All those drafts were collected
with the exception of one for 81. 614 on the
Western National Bank, payment Of which
was refused. Instructions were sent to col
lect those drafts and place the proceeds 10
the credit of the plaintiff. On the evening
of the same day reports were published TO
the effect that the Seventh National Bank
was unable to meet a large c-lea
balance and that the firm of Maruuand e
Co. were indebted to 1t in an excessive
amount.