New-York tribune., 1905-07-10
BANK FRAUD ORDER.
nIr. Corfelyon 1cts in-Case Of st.
= Louis Institution.


selyou tonight announced the issuance OF
fraud ORDER against the Peoples United States
Bank OF ST Louis, fits officers and agents and
a. q. Lewis. q publisher. effective July Q. The
action bars the company from the use of the
.snails after an investigation by the postal au-
khor1ties OF the details Of the business of the
institution The Postmaster General in his an
nouncement tonight says:
II is understood that the funds Of the bank
which have not been borrowed by Mr.. Lewis
znd his enterprises, amounting 10 about two
thirds OF the total amount RENTED, are de-
posted in banks and will be available toward
reimbursement of the stockholders, who number
upward OF $1,000. II is the intention or the
ofacers of the Postofice Department TO co,
operate with the Secretary Of State or missouri
:n every proper way for the interests OF the
investors and depositors.
The announcement Of Mr.. Cortelyou says that
although In early articles in his magazine ''Mr.
Lewis represented that he would subscribe 10
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 repre-
sented that he had pledged his entire fortune,
every dollar he had, and his publishing busi-
ness in this banking enterprise, and that his
subscriptions would exceed S1.o0oOo0 the in
spectors found that Mr.. Lewis had not coop
Grated TO the extent OF single dollar of his
own money, although the hank had been in
capital stock Of 100000" Continuing. the
statement says:
The inspectors found that AIr Lewis had made
admission to that effect TO Bank Examiners
Cook and Nichols April 3. 1906. The in
spectors and their Office force in St Louis made
a careful checking of the subscription books,
finding that on March Is, 1905. Mr.. Lewis had
received and held as payment for shares of stock
IN the bank S2.2S9O43 81, and had accounted
20 the hank in an amount not exceeding S2,a4.
SS4. This showed that every cent of S2,O00.000
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 invested in the enterprise. This was
found be the fact. although Mr.. Lewis had
stated in writing the inspectors that S495. 80
OF the 100000 paid in at the original incorpora-
tiOn Of the bank was his personal funds Sub
seQuently a the hearing before the Assistant
Attorney General Mr. Lewis admitted that that
money received by him from the people and
was not his Although asked 10 do so at
the hearing Mr. Lewis failed 10 produce any evl-
dence whatever that any OF his personal funds
had gone into this enterprise Mr.. Lewis stated
at the hearing that the directors had never re-
fused TO make loan he requested.
The most important Of the representation
We're that all funds of this bank would be
loaned by a committee composed of three di-
reetors each from the five principal banks OF
st Louis, etc
The evidence showed and Mr.. Lewis admitted.
that hundreds Of thousands of dollars were
loaned to himself and his various enterprises,
THAT the committee or hfteen had been estab-
nshed, but that the loans had been made prac-
tically at Mr. Lewiss viii. On March II. the
day after the inspectors began their inVesti-
cation in the bank, Mr.. Lewis placed in its
assets two notes-One for $4,000 signed by
himself alone, without collateral; the other for
Sl46.375 g. signed by the board OF directors.
Mr.. Lewis received money from the bank
that time, the notes being put into the bank
10 cover money previously expended 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 Mis-
souri, declined to allow the item, it stands as a
personal loan to the directors.
ha
banks funds TO himself and his enterprises
SSs4 6o4 65. the paid in capital stock OF the
bank then being $5O0,000. on March %, when
S2,0o0,O00 capital stock had been paid in, a
Statement furnished by Mr.. Lewis at the hear
ing upon request showed he had loaned to him
self and his enterprises S90I .53S s3 These
loans include S146.375 63 to the directors.
S39000o TO the Lewis Publishing Company.
S546. f63 20 10 the University Heights Realty
and Development Company and $4,000 to Z.
O Lewis. At that time Mr.. Lewis had S43 730
Of the banks money invested in stocks and
bonds of his enterprises. The evidence further
showed that Lewis had agreed to loan S66 666 &C
or the banks money on an unsecured note but
was prevented from doing by Secretary Of
state SWanger. The University Heights Realty
and Development Company which had bor-
rowed from the bank S:S46 163 20 and the stock
OF whlch, 10 the extent Of 1,ZI1 shares Mr..
Lewis sold TO the bank is shown to have as
Eets consisting for the most part Of land pur-
CHASED FOR S2OO,O00 as speculation in suburban
properly and upon which, Mr.. Lewis stated
about Sl50000 had been expended in improve
.lnents Its liabilities shown to be SEA-
bank told the inspectors that 43S1 shares OF
the increased capital stock had been issued and
IN every instance the shareholder had signed
proxy appointing Mr.. Lewis TO vote the
stock.
june o. last John +. Swanger Secretary
ul s,.ate OF missouri, made a number Of de-
sna2cs upon Mr.. Lewis to the future conduct
OF the bank, which COrroborated the report of
ane inspectors as 10 the condition Of affairs
hDoFe outlined Since these demands which
among other things, required immediate return
&c me bank or all funds borrowed by Mr.. Lewis
asao his enterprises, Mr.. Lewis has failed 20 paw
the loans. Mr. Lewis is receiving a large num-
Der or renittances for stock in the bank in his
own name. 1t further appears that il is the
intenuon OF the hank 10 increase its stock to
So.oO.oOO. and remittances are being asked for
ion that account. 1t is impossible to separate
she bank from Mr Lewis In this matter.
The announcement quotes opinion OF the
attorney General 10 whom the Postmaster
General submitted the matter sustaining the
action announced tonight. The order was is
sued on July 8, but the fact has been kept
secret until II took effect.