The Mankato free press., 1905-02-17
Civil Suits Are Threatened
Against Clements.
But 1t Is Doubtful If Anything
Would Be Gained.
Not Thought That He Has Much
of Anything Left.

Faribault, Mlnn., REQ. 9.-lfouDles are
thickening for Thomas B. Clement, re-
cent honored head of the First Ma
tional bank of this city, and for the
board of directors of that wrecked in
stitution.
The arrest and arraignment of Mr..
Clement Monday was but a knot in the
frightful tange in the affairs of Mr..
Clement in relation to the bank, and
only a part of the swirl of things in
which the directors find themselves.
The charges against Mr.. Clement are
not necessarily the ones for which he
will have to stand trial when the case
gets into court. They were based upon
conditions found in the looted bank,
but were taken at random almost, and
merely as sufficient ground for getting
the case before the federal grand jury.
They make it possible for the grand
Jury to sift evidence involving Gle
ment's whole management of the bank,
and that seems to have been the pur-
pose back of the movement for the
prosecution of the aged banker.
Not only is Mr.. Clement open to
possible criminal prosecution which may
prove of much more serious import than
that implied in the specific charges
filed, but there is likelihood of civil
suits involving large amounts of money
left in his hands. The claimants in
these suits will act, if they do act, upon
the theory that Mr. Clement is per-
sonally rich man. There is good rea-
son to doubt this, however. One of the
directors of the broken bank said to The
Journal correspondent today that he
believed Mr.. Clement had nothing
left If this be true, civil suits are
not likely to result in much but empty
judgments.
For the directors of the bank, credit
ors in Faribault are also talking of civil
suits, based upon the allegation that
the directors neglected their duties in
leaving the management of the bank so
much in the hands of Mr.. Clement,
and are therefore personally responsible
to the creditors, not only for their le
gal liability but for the full losses
sustained. The directors stoutly protest
that they were not negligent, and in
stead of only two meetings last year
they say they held five, besides num-
Der of informal meetings of which no
minutes were made. In any event, not
a great deal is likely to be gained
through such suits as are talked of.
A new disclosure in Mr.. Clements
management of the bank is the exten-
sive Exiting" of drafts. This seems
to have been carried on with bank in
the south. Exiting" is the process of
keeping up line of credit, through
we'll timed exchange of drafts, between
two banks. For example, if Minneapo-
lis bank should issue a draft on a San
Francisco bank and deposit it in Chi
cago bank, the Chicago bank would cred
| it the Minneapolis bank with the
amount of the draft, and the credit
would show on the books of the Mime
apoils bank as an available cash asset.
At the same time, if the San Francisco
bank should draw on the Minneapolis
bank and deposit it's draft with st.
Louis bank, the st. Louis bank would
credit the San Francisco bank, and the
latter would have so much more of as
sets to show if the examiner should step
in to check up its books.
Some of the farmer creditors of the
bank here have a double grievance
against the banks management. Ac-
cording to a report current, they gave
their notes toEthe bank for considerable
sums, but Mr.. Clement, as man
ager of the bank, did not think the
bank cared to carry them, so took them
to a ewalthy man in the city offering
to sell. them to him. Report says the
man in question took the notes. Mr..
Clement, of course, had a perfect right,
to dispose of the farmers paper, as
he did, but the farmers, knowing moth
ing about the sale, deposited their money
with the First National bank pending
the time when they should draw on
their accounts to pay the notes at ma
turity. The bank was closed, and now
their money is tied up, if not wholly
lost, and their notes are coming due in
the hands of third party.
This same third party had some