Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1905-07-10
FRAUD ORDER AGAINST BANK
st. Louis Concern Managed by E. @. Lewis
Barred from Use Of Mails.
STATEMENT OF POSTMASTER GENERAL
Promoter Has Received over Two
Millions in subscriptions and
Loans Nearly All to
Himself

WASHINGTON. July 9.-Postmaster Gem
eral Cortelyou tonight announced the issu-
ance of a fraud order against the Peoples
United States bank of st Louis, Mo, its
officers and agents, and E. G. Lewis, a pub
Usher, effective July 9. The actions bars the
company from the use Of the mails after an
investigation by the postal authorities as to
the details of the business of the institution
The postmaster general, in his announce
ment tonight, says:
1t is understood that the funds Of the
bank. which have not been borrowed by
Mr.. Lewis and his enterprises amounting
to about two-thirds of the total amount re-
mitted, are deposited in banks and will be
available, toward reimbursement of the
stockholders, who number upwards of 65,-
goo. II is the intention of the officers of the
the secretary Of state OF Missouri in every
proper way for the interests of the invest
ors and depOstors.
Promises of Promoter.
The announcement of Mr. Cortelyou says
that although in early articles in his mag
azine, Mr.. Lewis represented that he
would subscribe to the capital stock a dol
lar for every dollar subscribed by all
others, so that he would own half of the
capital stock, and that later he represented
that he had pledged his entire fortune,
every dollar he had, and his business in
this banking enterprise, and that his sub
scription would exceed 100000, the in
spectors' found that Mr.. Lewis had not CO.
operated to the extent of a single dollar of
his own money, although the bank had
been in operation seven months and had a
paid up capital stock of 100000"
Continuing. the statement says:
The most important of the representations
were that all funds of this bank would be
loaned by committee composed of three
directors each from the five principal banks
of st. Louis, etc.
Loans Money to Himself.
The evidence showed and Mr.. Lewis ad-
mitted that hundreds of thousands of dol
lars were loaned to himself and his various
| enterprises, that no committee Of fifteen
mad been maze practically at Mr. Lewis
will. On March Is, the day after the in
spectors began their investigation in the
notes, one for $4,000, signed by himself
| alone, without collateral and the other for
l46'S15.6S, signed by the board of directors.
Mr.. Lewis received no money from the
bank at that time, the notes being put into
| the bank to cover money previously ex-
pended by Mr.. Lewis. The last mentioned
note Mr.. Lewis claimed covered money
spent in promotion of the bank. but as
the secretary of state of Missouri declined
to allow the item II stands as a personal
loan to the directors.
on March is Mr.. Lewis had loaned from
terprises ter sss4 solss the paid in capital % stock
of the bank then being $4,000. On March
29, when 81, 900 capital stock had been
paid in, a statement furnished by Mr..
Lewis at the hearing upon request showed
he had loaned to himself and his enter
prises 1901, S.S3, These loans include $46,-
1858 to the directors, 1890, 600 TO the Lewis
Publishing company, $S46. 20 to the Uni
| versity Heights Realty and Development
company and $4,000 to f. g. Lewis. At
that time Mr.. Lewis had $43,730 of the
banks money invested In stocks and bonds
of his enterprises.
The evidence further showed that Lewis
| had agreed to loan 1856, 666 66 of the banks
money on an unsecured note, but was pre-
\ vented from doing so by Secretary OF state
Swanger.
June last John f. SwangeT, secretary
| OF state of Missouri, made number of de-
| conduct OF the bank, which corroborated
| the report of the inspectors as to the con-
dition of affairs above outlined Since
| these demands which among other things
| required immediate return to the bank OF
all funds borrowed by Mr. Lewis and his
| enterprises Mr. Lewis has failed to pay
! the loans. Mr.. Lewis is receiving large
| number Of remittances for stock In the
| bank in his own name. 1t further appears
| that II is the intention of the bank to In
| crease it's stock to 100000 and remit
| 1t is impossible to separate the bank from
| Mr.. Lewis in this matter.
The announcement quotes an opinion of
the attorney general, to whom the post
master general submitted the matter. sus-
tanning the action announced tonight. The
order was issued July 6, but the fact has
been kept secret until 1t took effect.