Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-07-15
To Be Taken Against De-
funct Boston Bank
Officials By Receiver, Who Finds
Quantity Of Poor Paper.
Also Accuses Directors Of faIsihiag Re.
pors...$3,oo0,00o Liabilities.

Poston, July A.-Civil action was
brought in the United States circuit
court. today, by Frank d. Allen. re-
Ceiver. against the entire board Of di.
rectcrs Of the Central National Bank
which failed. Nov. 10. 1902, with liza
bili;ies of over s., 000, 900. Mr. Allen asks
the court that an account be taken, un-
der direction of the court, of all the
losses sustained by the bank, its stock
holders and creditors, by reason of in.
competent management. and that the
officers of the bank. or such of them as
may be found liable for the losses, be
decreed to restore to the bank the
money thus lost.
The documents submitted by Mr. AL
len in support of his case are volumi.
nous and, in them he severely arraigns
The bank officials. The suits are for the
ulpose of securing for the stockhold.
crs ana creditors an amount estimated
at between 100000 and $500, 600, which
represents the sum Mr. Allen was un-
able to collect on poor negotiable pa
per.
one OF the most serious charges made
against the directors is that they will
fully falsified their reports of the con-
ditlcn OF the bank to the comptroller
of the currency, procured j. Adams
Brown. the cashier of the bank, to bid
up the stock of the bank at a public
sale. and to buy it in with the funds
of the bank If it did not go high enough,
in order that no reflection should be
cast OH the credit or solvency of the in
stitrtion in the minds of the public.
rGn It,a.
severely criticized by the comptroller
OF the currency according to Mr.. Allen
for certain loans they had made and
in q letter to which he refers they
promised the comptroller that they
would make amends, while as matter
of fact they were constantly adding to
these Objectionable hans, and told
him that a certain loan was paid. when
the books showed that at the time of
the failure there We're several thou
sands still due upon 1t.
Otis II. Luke, president of the bank
is accused by Mr.. Allen, of accepting
personal bonuses from firms accom-
modated at the bank. either by extern
sion of time or by continuing loans or
overdrafts. The receiver -ays that $4,000
was raid to the bank president in this
manner Neglecting their duties, Mr.
Allen alleges. the directors permitted
Luke largely to control and manage
the affairs of the bank. to loan its
funds without security. to himself and
to other members of his family, to
friends and to clerks of the bank. for
his benefit, and also to other persons
known to Luke and to the directors to
be persons of little or no financial re-
sponsibility. which loans were ap-
proved by the directors without fur
Their inquiry or examination. that the
directors permitted funds of the banks
to be loaned by Luke to Howard L.
Porter. with whom he was engaged ir
business, the said loan being without
any security.
Mr.. Allen further alleges that by rea-
son of the conduct of Luke. suffered
and permitted by the directors. through
| neglect of their duty and their failure
| to correct known abuses in the man.
| agement of the bank and in the con-
duct Of its affairs by the president
| losses were sustained by the bank. and
for these losses he seeks to hold the
| directors liable.