Omaha daily bee., 1902-09-05

Hgleb luhL NeIe Kept IN hhc hoAe case ny
dispose OF them to the local hanks. After
the bank was closed Thursday afteraoon he
went to this ease and found that none Of
the paper was Negotiable. All Of the notes
we're either past due or Of such condition
that thoS could not be sold.
The bank weathered the storm on Fri
day with the outward indication Of being
as strong as ever, but at the closing OF
the days business there was only t5S left.
The clerk saw that II would be useless to
open the bank next day and notice OF the
state Of affairs was sent TO the State Bank
ing board. Attorney General Prout, who
was the only member Of the board in Lin
coin al the time, instructed the chief clerk
Of the banking department to come here
and take charge Of the institution. He ar
rived Saturday morning and was followed
q few hours later by Bank Examiner Hart
we'll. The clerk had posted a notice on
the door in the morning to the effect that
the bank would remain temporarily closed.
Made the Loot Complete.
II appears from a close examination Of
the books and records Of the bank that
Chamberlain had been unlawfully manipu-
lating the banks funds for some time, pos
sibly two months. II has been found that
Chamberlain not only took a large block
of securities, but several thousand dollars
of cash and sight exchange as well. the
exact amount OF which, however, has not
been determined. Chamberlain was an ex>
pert bookkeeper. Numerous cases have
been found where he took three notes for
a single loan. All Of these notes he nego-
tiated with different Institutions. Some Of
the money received from the sale Of these
duplicate notes he would turn Into the
bank, crediting one account and debiting
another In a manner which completely baf-
ned the bank examiner and others who
inspected the books and records prior to
the failure.
The patrons Of the Chamberlain banking
house had implicit confidence in the cashier.
This IL shown In his inducing them to Sign
duplicate notes. He told the customer that
he wished the second or duplicate note to
keep In the bank. the original having been
negotiated. He said this was necessary to
meet the rigid requirements OF the bank
examiners. The unsuspecting patrons signed
the duplicates, which were afterwards sold
to other banks. None Of the borrowers ques-
toned the motives OF the cashier. nor ala
they notice that the second or third notes
they signed. were made out In original
form, with nothing upon them to show
CHAT they were duplicates.
svvindIes y Trusting Farmer.
1several months ago Charles White. a
farmer residing six miles from Tecumseh.
was summone to the once Of Cashier
Chamberlain. Mr., White was a borrower
OF the bank.
"As an accommodation wish you to give
ne a mortgage to SECURE your Loan" said
Chamberlain to the farmer. II don't de-
mand this as surety for myself. 1t Is sim
ply because 1 wish to negotiate the note
and II will be easier to do that with the
mortgage than without It."
Chamberlain had the mortgage prepared
and Il was duly signed ny White. the loan
was for $1,000 and the mortgage was for
the full amount. The property listed was
cattle, supposed by White to be the prop
erty Of Chamberlain. In looking over the
assets the mortgage was found and upon
investigation It was learned that the cat
tie listed therein was the property OF Fred
HaIstead and had been since several months
before the mortgage was signed. White as
serts tina the brand Of the cattle was in
serted by Chamberlain without his knowl-
edge or consent. He says he supposed
Chamberlain really owned the stock, else
he would not have signed the document.
Many Interested.
Representatives Of the National Bank OF
Commerce Of Kansas City, the Union Stock
Yards National bank OF South Omaha and
the First National bank of Council Bluffs
have been here investigating securities
purchased from Chamberlain. james II.
Arnold Of the Kansas City bank is stin in
Tecumseh tracing a quantity Of notes and
mortgages. ]. H. Chambers, Fremont Ben
jamin and 7. g. Turner Of the Council
<Bluns bank were also here several days.
The notes held by these banks and a few
in other institutions aggregate 500, 900. II
is claimed by the representatives Of the
banks that nearly all Of them are rein.
forced by additional security, upon which
they, can easily recover any loss that
might otherwise be sustained.
Chamberlain kept a discount register in
the bank. as required by law. but 1t IL
known now that he frequently negotiated
notes without recording them or making
any record whatever Of the transaction
The notes Chamberlain took with hin
when be left the bank last week we're re-
placed by past due, cancelled and worth.
less securities. It is evident that the
cashier often kept notes after the loans
were paid back to the bank, for a large
number OF the notes found in the pile have
been charged on IN the bank' books. IN.
stead Of returning the notes SO charged
on to the customer. he either retained
them In his personal possession or negu.
'tiated those which we're not yet due.
Several men have been found who &C,
eepted Chamberlain's personal receipt II
lieu Of the notes. To these men Chamber,
lain explained that the notes were in tn,
hands OF other banks. but would come bacl
in a few days and then be returned. TIL,
receipts were accepted as temporar.
certificates Of the payment.
Extent OF the Deposits.
On June 8. the day Of the last Statement
70 the Board OF Banking, the Chamberlain
banking house. had sl00, 800 OF deposits
The amount dwindled 70 about SEC. zoe. tn
week Chamberlain left and IL Is said tina
the deposits now in the bank, exclusive O
the credits OF the branch banks In era
and Vesta. amount TO not over SSs. 900. Tn
banking house and fixtures are listed 4
the statement at $4,000, but are said b
competent authorities to be worth not owe
half that amount. The assets, besides IN
$4,000 Of stock. consist exclusively ef Ii
$4,000 Of notes retained by the bank, /.
large portion OF which are already know
to be worthless; the banking house an
fixtures and approximately tI2,O 600 ~i
stocks and bonds, which are also suppose
to be nearly Valueless. ~
The Chamberlain Banking House wac IN