The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-10
GIGANTIC FRAUD,
One Has Been Developed by
Secretary COrtelyou.
In Connection With the Peoples
q. s. Bank Of st. Louis.
SHUT OUT OF MAILS.
A Receiver for the Concern Has
Been Appointed.
An Immense Business Conducted
on Others Money.
SHUT OUT OF MAILS.

| VI 0ecreldry OF state SWanger OF Mis-
souri,, Judge McEIhinney of the ST.
Louis circuit court today appointed
former Judge SeIden P. Spencer re-
ceiver. for the Peoples United States
pank' against which a fraud order has
been issued by the federal postal au-
thorities.
| Judge Spencer Immediately quail
| fed, furnishing a S250,000 bond, and
| at once proceeded to the headquarters
| OF the concern, where he took charge.
| The Peoples United States bank was
| organized by Edward G. Lewis of ST.
Louis in 1904 and has a capital stock
of $2,500,000. The banking business
was conducted along new lines, the
| greater part of the subscriptions for
stock and the deposits being solicited
and received by mail.
| Secretary of State Swanger made
| the following statement today in re-
gard to the banks assets,
The Peoples United States bank
has various sums on deposit with diff
/ ferent cities of the United States, the
total amount of cash being about ST.
| 100000 It also has $4,000 in gov
| ernment bonds. There are also Sc
curities of the University Heights
property and of the Lewis Publishing
company amounting to 100000"
| The Peoples United States bank was
| incorporated November IA, 1904 with a
capital stock of one million dollars. The
| capital stock was increased March Is,
1905, to $2,50O,0OO, of which 100000 was
paid in.
The original capital was divided into
| 10000 shares, 1915 of which were held
by E. G. Lewis. The remaining IS
| shares were shown to be held by seven
| teen others, each of whom held five
| shares.
| The men chosen for the first board of
directors were Edward G. Lewis, Frank
J. Cabot, Augustine P. Coakley, Eugene
| W. Thompson and Guy A. Arbogast.
E. G. Lewis began advertising the
bank in the February, 1904, edition OF
| the Womar's Magazine, a publication
which he owned and controlled, and
which he had been publishing in ST.
Louis at the time for about a year. This
publication has continued to carry the
| advertisements of the bank since that
time.
Early statements regarding the bank
were filled with hope and promise. In
the Woman's Magazine for July, 1904,
1t was stated by Lewis:
"Since my article appeared in our last
issue over 10000 subscriptions to the
capital stock of our bank have been
received.
81 am arranging to turn nearly every
4 thing 1 have into cash, outside of my
stockholdings in my present publishing
business, and expect to subscribe for at
least 81, 100000 of the stock of our bank.
I must pay cash, exactly the same as
you do. for my stock, as there is no
| promoters stock in this bank, but
| when it opens it's doors there will be a
dollar in cash in the vaults for every
dollar of capital stock and every dollar
of my profit will go to increase the re-
serve of the bank each year
Already the enormous success of the
bank is assured. One banker of Chicago
has offered to place a million dollars of
our stock in a single day. A San Fran
cisco banker subscribed for 100000 of
the stock. but was permitted to have
only $500, and if any of my readers fail
.1T r1I- IL
scribed, 1 shall not let this banker have
the $500 of stock
Details of Fraud Order.
/ Washington, July 10.-A fraud order
against the Peoples United States bank,
its officers and agents as such, and E.
G. Lewis of st. Louis, Mo-, was issued
by Postmaster General COrtelyou on
July g. The decision of the Postmaster
general was reached after a full hearing
of the case by the assistant attorney
general for the postoffice department,
who recommended the issuance of a
fraud order, and upon an opinion of the
attorney general dated July 6, holding
that the postmaster general was legally
justified in issuing the order.
Postmaster General Cortelyou in an
nouncing the issuance of a fraud order
against the bank officers and agents
and E. G. Lewis, a publisher, effective
July g. said:
.'It is understood that the funds of
the DdIk WHICH HAVE HOl DGSn DOIlOWCO
by Mr.. Lewis and his enterprises,
amounting to about two-thirds of the
total amount remitted, are deposited in
banks and will be available toward re-
endorsement of the stockholders. who
number upwards of 5000. It is the in
tention of the officers of the postoffice
department to cooperate with the secre-
tary of state of Missouri in every proper
way for the interests of the investors
and depositors."
E0 ovid In I7af f7saC g nd a
Mr.. Lewis used the mails as his prin-
cipal agent in promoting the sale OF
stock in his bank and securing de-
posits in the bank. The Peoples
United States bank was organized to
transact all of its business by use of
the mails. The plan was to receive
savings deposits, carry on certified
check system and do exclusively a
mail order banking business
Foundation of Fraud Order.
Mr.. Lewis began the promotion OF
this bank in the Woman's magazine for
February, 1904, and has in all subse-
) quent issues of the Woman's magazine
extensively advertised this bank
sentations and promises which the
: postmaster general found Mr.. Lewis
had made in the promotion OF his
: scheme were those relative to the
: amount of capital stock which Mr.
: Lewis had subscribed and would sub
scribe: representations relative to the
independent, strong, capable men who
would compose the board of directors
? representations and promises that al
| funds of the bank would be loaned by
la committee composed of fifteen dfrec-
2 tors of the principal banks in St Louis
Il and that the funds would not be loan.
E ed to himself or other directors
The postmaster general found tina
4 | in his early articles in the Woman
2 Magazine and in his other advertising
literature about the bank, Mr.. Levi