The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-07-10
ANOTHER BUBBLE
Is PUNCTURED
Fraud Order Against Peoples United
States Bank.
VICTIMS FED WITH PROMISE
LEWIS HAD A GET-RiCH-oUICK
SCHEME.

Washington. July 9.-Postmaster
! General Corteiyou tonight announced
/ the issuance OF q fraud order against
the Peoples United states bank OF ST.
/ Louis Mo- it's officers and agents and
! f.. g. Lewis publisher effective july
| g The action bars the company from
the use of the mails. after IN investiga-
ton by The postal authorities as to the
details Of the business of the institu-
| ton. The postmaster general, in his
/ announcement tonight, says:
! 1T is understood that the funds of
| the bank which have not been Dor
| rowed by Mr.. Lewis and his enter
! Drises amounting to about two-thirds
of the total amount RENTED, are de-
1 posted in banks and Will be available
toward reimbursement of the stock
holders. who number upward of $1,000.
1t is the intention of the officers of the
| postofIice department to cooperate
| with the secretary of state of Missouri
i'm every proper way for the interests
Of the investors and depositors."
Failed 10 Keep His Word.
The announcement of Mr.. Cortelyou
says that although i'm early articles in
/ his magazine Mr.. Lewis represented
| that he would subscribe TO the capital
| stock a dollar for every dollar sub
| scribed 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 dol
4 lar he had, and his publishing business
| in this banking enterprise, and that his
subscriptions would exceed million
| dollars, the inspectors found that MI
Lewis had not co-operated to the extent
/ of a single dollar of his own money,
| although the bank had been in opera
| ton several months and had a paid-up
| capital stock of two million dollars
Admitted the Fact.
Continuing, the statement says:
| The inspectors found that Mr.. Lewis
had made an admission to that effect
to the bank examiners on April 3. 1905
/ The inspectors and their office force
/ in st. Louis made a careful checking
of the subscription books, finding that
! en- March Is. 1905, Mr.. Lewis had re-
/ ceived and held as payment for shares
Of stock in the bany $2,2S9 044 and had
Accounted to the bank in an amount not
exceeding s.. 204. 1894 This showed that
every cent of the 81 900 900 capital
stock which had been paid in was paid
out of subscription money received by
! Mr.. Lewis from the public. and that
none Of his own money had been in
] vested in the enterprise This was
! found to be the fact, although Mr.
/ Lewis had stated in writing to the in
/ spectOrs that Sa95,750 of the $500, 900 paid
| in at the original incorporation of the
! bank were his personal funds Suisse
{ quently It the hearing before the as
i sistant attorney general Mr.. Lewis ad-
mitted that that money was received by
him from the people and was not his
| own. Although asked to do so at the
hearing. Mr. Lewis f~Sled TO produce
any evidence whatever that any of his
! personal funds had gone into this en-
| terprise. Mr.. Lewis stated at the hear
ing that the directors had never re-
fused to make a loan he requested.
/ Committee on Loans.
'The- most important of. the nepresen-
tatiOns were that all Of the funds of
l.
mittee composed of three directors each
from the five principal banks of St
| Louis.
The evidence showed. and Mr. Lewis
admitted it, that hundreds OF thou
sands of dollars We're loaned to himself
and his various enterprises; that no
committee of fifteen had been estab-
lished, but that the loans had been
made practically at Mr. Lewis will
On March 10. the day after the inspect
/ ors began their investigation the
bank, Mr.. Lewis placed in its assets
two notes, one for $4,000, signed by
himself alone. without collateral, the
! other for SI46.376 signed by the board
/ of directors. Mr. Lewis received no
money from the bank al that time, the
notes being put into the bank TO cover
p money previously expended by Mr.
Lewis The Iast mentioned note. Mr.
Lewis claimed. covered money spent in
promotion of the bank, but as the sec
/ rotary Of state of Missouri declined to
allow the item. it stands as a personal
! loan to the directors.
A Big Borrower.
con March Is Mr.. Lewis had loaned
j / from the banks funds to himself and
his enterprises 1894. sos the pald-in cap
- itaI stock of the bank then being half a
million. On March %, when $2OO0,O0O
T + capital stock had been paid in, state
. ment furnished by Mr.. Lewis at the
/ / hearing upon request showed ne had
, loaned to himself and his enterprises
7 5 $gOI53 These loans include Sl46.316 to
1 ( the directors. $3.50. GOO TO the Lewis Pub
5 fishing company. 1916. 1920 to the Uni
- versity Heights Realty & Development
: company and $25. 900 to +. O. LEWIS AT
u / that time Mr. Lewis had 3.f30 OF the
4 banks money invested i'm stocks and
u bonds of his enterprises The evidence
further showed that Lewis had agreed
to loan s66 So of the banks money Oh
?, am unsecured note. but was prevented
~ from doing so by Secretary OF state
u / Swanger The University Heights
Realty & Development company. which
had borrowed from the bank $346.l6,
and the stock of which to the extent ol
1.277 shares Mr.. Lewis sold to the bank
- is shown to have assets consisting toI
n the most part in land purchased foi
Z $500 900 as a speculation in suburban
4 property and upon which Mr. Lewis
: stated about $4,000 had been expended
in Improvements Its liabilities are
o shown to be 1914, 700. on April 8. 1903
the cashier of the bank told the inspec-
!, tors that 4.3S1 shares of the increased
capital stock had been issued and IN
o every instance the shareholder hac
= signed proxy appointing Mr.. Lewis
: to vote the stock.
Failed to Pay Loans.
June 5th last John r. Swanger, see
rotary of the state of Missouri. made a
n number of demands upon Mr.. Lewis "a
TO the future conduct of the bank
which corroborated the report of the in
spectoTs as TO the condition Of affairs
above outlined. Since these demands
Il which among other chings required i'm
T. mediate return 20 the bank OF all funds
z borrowed by Mr.. Lewis and his enter
e prises Mr.. Lewis has failed 10 pay th'
IS loans Mr.. Lewis is receiving a large
n number of remittances for stock in TIT
bank in his own name 1t further ap
pears that il is the intention Of tn
/ bank TO increase its stock to $1,000 .0OO
/ and remittances are being asked for OIL
q that account. 1t is impossible to sep
l. arate the bank from Mr.. Lewis in thi
is matter.
l. The announcement quotes an opinion
e of the attorney general, to whom tn
&Sstmaster genera submitted the mat
- sustaining the action announced to