Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-12-23
STOCK SPECULATION
Alleged as Reason for Asking for Re-
ownership for This Bank.


for Il receivership for the Windham
County National Bank of Danielson,
was presented in the superior court
before Judge eager by Mrs. Ella S.
Russell of Killingly, widow of Former
Congressman Russell, today, alleging
that the president of the bank and Ger
tain of the directors have been using
he funds of the bank for stock specu-
lation TO such an extent that it is
doubtful if the capital stock of the
bank is equal TO the outstanding in
debtedness. She further alleges many
fraudulent acts by the bank officers
whom she named.
BY the judges order, the bank was
closed until Jan. Il, ii notice to that
effect having been posted on the doors
of the institution.
In her complaint Mrs Russell names
rs defendants Comfort Starr Burin-
game of Brooklyn, Conn the bank
president, Charles p. Backus, the
cashier. and James Perkins, John
Payne and Albert D. Putnam, direc-
tors, all of killingly.'
In the complaint presented by Mrs.
Russell she says that she represents
others as well a herself, she being the
owner of 10 shares of the stock Of the
bank. She alleges that the defendants
formed syndicate for the purchase
of and speculation in stocks on Dor
rowed money and that they borrowed
and used for this purpose money OF
the bank to considerable amount.
1t is alleged further thai Burlingame,
the PRESIDENT of the bank. spent Il large
part of his time in New York directing
the speculation which was on the whole
unsuccessful, that Burlingame by tele-
phone or otherwise communicated with
Eackus at the bank or elsewhere the
necessity of raising money to answer
calls of stock brokers for margins and
that Backus thereupon called in other
directors OF the bank who were men,
bers of the syndicate and that the five
directors of the bank she alleges con-
epireu together to borrow of the bank
large sums of money to meet the ne
cessities of arranging notes With diff
ferent makers.
TO avoid difficulty with the bank ex-
aminer in some cases where it was i'm
possible under the law to borrow any
more money on notes made by any OF
tho pei sons Interested, it is alleged they
voted as directors to loan funds on
notes signed by outside persons whom
they knew to be without pecuniary re-
sponsibility. we'll knowing that these
funds We're to be used. byt speculative
Larthe rShips. .,.
1t is further alleged that the amount
of money so borrowed in pursuance of
alleged conspiracy on the defendants
aggTJ gates at the present time q very
large sum which the plaintiff is inform
ed and believes exceeds the amount OF
the capital stock and that only Il small
prt OF the indebtedness described is
secured
1t is alleged that the FIVE directors
nave borrowed large sums of money OF
other banks in Windham county and
are, in the belief OF the plaintiff. most
if not Ill OF them insoivent 50 that the
bank is likely to lose a large amount Of
the sum borrowed. The complainant
further alleges that the defendants
have been for some time paying inter
est on notes. by new notes which they
knew We're not good and that they have
carried these notes at their face value
on the books of the bank in order to
make it appear that the capital of the
rank was unimpared.
Il is aleeed th3t the five directors have
voted to pay dividends to stockholders.
when they know that the capital stock
of the bank was serious impaired, and
that by the ownership of stock ANA theii
personal influence over other stockhola-
ers they have been and are able to con
tfol the stockholders meetings and CON
time their control OF the directorate.
IN conclusion the plaintiff says she be
licres. chat one or more Of the direcstols
are now arranging to file petition IN
the district court at the United States for
the district of Connecticut to be adiudged
voluntary bankrupts.