New-York tribune., 1903-07-15
A WHOLESALE PROMOTER.
Has CHAIN OF CONCERNS.
Ne5o-Jersey Officials MoUe against
Imb0den Institutions.
lar TELEGRAPH TO THE TRIBUNE. J

N. j.,
Carter, acting for David o. Watkins, State
Banking and Insurance Commissioner, applied
to the Chancellor to-day for the appointment of
a receiver for the Interstate Trust Company of
Jersey City The Chancellor signed order re-
straining the company from transacting busi-
ness pending the consideration Of a rule made
returnable before the Chancellor two weeks
from to-day. The Banking Department i'm
mediately took charge of.the companys affairs
with the ultimate object of having it put out of
business entirely
For several months the Banking Commits
soner has had the company under surveillance
and as the result of Investigations in this and
other States he charges in the bill of complaint
that the Interstate company is one link in
chain of trust companies and banks scattered
throughout the country which are using the
forms of the law to secure specious and false
credit for all OF the institutions. All of these
companies, the Commissioner alleges. have been
promoted and are controlled by Leonard I'M
boden. of New-York and his associates. Among
the institutions which the department alleges it
has discovered in this chain are the Fidelity
Title and Trust Company of Stamford Conn.
the Central Trust Company. of South McAllister
Ind. T.. the Cherokee National Bank of Enid
Okla, the Farmers National Bank of King
fisher, Okla; the National Bank of Commerce. of
Fort Worth Tex. and the Newcastle Trust
Company OF Newcastle. Del
The examiners of the department say they
have discovered that most of these institutions
have done little actual business, except to estab-
Iish line of assets by exchange OF stocks
and bonds and by alleged deposits with one an
other. 1t is asserted, however, that the Inter
state company. with practically no business.
proposes to float $2OOOO,O0O of collateral trust
mortgage bonds and to increase its capital
stock from 100000 to $4,000, 900.
The Interstate company organized last
December and at that time a deposit of $780,
600 in cash was made with the National City
Bank Of New-York. The Commissioner charges
that the deposit was soon withdrawn, and that
in fact none of the stock was ever actually
paid for. After protracted examination OF
the company's affairs. the department alleges
that on June 10 it's resources amounted to So'zlo
and its liabilities including capital stock to
$116,0OO, showing a deficiency of SlO9,lol.
THE TRIAL BALANCE PADDED.
A trial balance struck by the company on June
27 showed resources of $127 APO of which SllO-
$40 was given as consisting of stocks and bonds.
Investigation showed that the stock was 0oo
shares of the Fidelity Title and Trust Company
of Stamford carried at $64, $40, and 1885 shares
OF the Central Trust Company, carried at %io'-
300. The commissioner charges that all OF this
stock is worthless. and says of the trial balance
that It is false elusive and purposely padded
to deceive and rnislead."
r r $50 hat 81 81 a.009 alleged
10 haIA been 10 III for the capital stock was
furnished by Trindle, Weeden & Co, af New
York, q arm controlled by Imboden and his
associates and that it was afterward Withdrawn
by them and applied to their own uses Ihe
Fidelity company of Stamford. the Dill says
was promoted by Leonard Imboden & Co. OF
XI,a Int "a V.
undertook to underwrite and finance it. in re-
turn for which the Fidelity company agreed to
nav a commission of 10 per cent on its author
lied capital stock of $125.OOO. All that the
Interstate company has to show for this COM
mission is credit on the books of the I'M
boden company.
In charging that the stock of the Fidelity
company is worthless. the bill of complaint mar
ates that a report made by it on June shows
that it had on deposit $4,000. purporting TO De
from the following institutions Cherokee Ma
tional Rank $4,000: Farmers National Bank.
$4,000 National Bank of Commerce. Fort
Worth $4,000; Newcastle Trust Company, $15,
OOO
mo business reasons appear or can be as
certained" says the bill. why institutions To-
Gated so far distant from Stamford should de-
post such sums of money there and the same
cannot be and are not ordinary deposits made in
| the regular course OF business IN the rlueiIy
company"
The Fidelity company, on January %, 1t is
alleged carried on its depositors' ledger an ap-
parent deposit or credit balance due to the In
| terstate company of $4,000. while such de
| posit appeared from the books OF the Inter
| state company to have been made by it, nor did
| the books show any debit balance with the FL
| deity company. 1t is charged that the pre-
tended deposit of $75.OOO and many others like
| it, are entirely fictitious.
| At the Same date there was carried on the
| general ledger of the Fidelity company another
account with the Interstate company. in which
there appeared to be due from the latter TO the
! former a balance of $153.SOS. while the books
of the Interstate company showed only one ac-
count with the Fidelity company, on which there
appeared to be due 10 it a balance OF S203.SOS.
| Against the liability for the alleged deposits
! of $4,000 the Fidelity company asserts it had
! on deposit at the Central Trust Company, of
| which James A Hill partner of Imboden.
| was president $4,000 and also a credit of
| $4,000 with the firm of Imboden & Co. The
| Commissioner charges that this firm has no such
| esta bished credit as would warrant a deposit
of that size with it,
The Commissioner adds in the bill of COM
plaint
| The said banking examiner has made an ex-
animation of the personal anu HIdiai staLloiIis
| of said Leonard IInboden, the mead ana cohtrol-
| ling figure of the rm. as well as OF other other
! institutions mentioned with the result that the
suspicious created in MS fnlnu hS the AdCtS ahu
! circumstances surrounding the organization and
| operation of this chain of companies by lmboden
and his friends have been thereby increased
and Your orator shows and charges that the
| history. character and reputation OF said Leon
| ard Imboden are such that no banking lnstltu-
| ton receiving deposits of outsiders is justified
! in perntt-ing so large a sum $4,000 TO be
'inder the control and management Of his firm.