The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-02-16
READY TO SUE
BANK DIRECTORS
Committee Of Depositors Of Failed
Fa1ibault Bank Will Rec
ommend Actions.
Special to The journal.

Z ..E
Faribaault, Mimi, Feb: 1e:-T I Is
directors of the First National bank. It
has always been felt by large num-
Der of the depositors that if the direct
ors had exercised reasonable and prop
er supervision Of the affairs of the bank
it would never have failed. It is urged
that, lnasmuch as it's suspension is due
to their negligence or the unwarranted
they should be compelled to make up
itofs. N' az ~ ~ WV p'
1t is learned that this view is shared
by majority if not all Of the commit
tee men recently appointed to look after
the interests Of the depositors. They
have at all events been inquiring into
the legal aspects Of the case with
positors and it S said that they have
found that in the more recent decisions
OF the United States courts, it is held
that where directors fail to supervise
properly bank s affairs, they can be
held personally responsible for any loss
that may result from their negligence.
1t is said that in their report, to be
aae e. hs me T s on tas 35 bat ff
the. assets Of the bank are not
sufficient to pay dollar for dollar Of
the depositor's claims, action be taken
to collect from the directors sum suffi-
Gent to make up the total amount.
whether such an action can be main
tanned will, Of course, depend upon the
evidence adduced at the trial.
Invested on Clements Request.
There is one director at least on
whom such an action if successful
would seem to entail great hardship.
His connection with the bank came
about, in an unusual way. He never
intended to become permanent stock
holder and consequently was never at
any. trouble to inform himself as to the
bank 8 condition when he bought the
Chase took un D. W. Grant IS stock, only
few months ago and then at the per-
sonal solicitation Of Mr.. Clement, and
on his assurance that he only wanted
him to carry it for short time until he
himself was in position to buy it.
Mr.; Clement represented to Mr.. Chase
that the stock was worth at least $l75,
that he could get it for $3.50 and urged
him to take it as a personal accommo-
dation and to relieve him Of the neces-
sity of putting it upon the market,
which he was extremely unwilling to do
at that time.
Mr.. Chase expressed a. reluctance to
do SO as banking was not in his line
and he knew nothing about the bust
ness. Being further urged, and on Mr..
Clement repeated assurance that he
would soon relieve him Of it, Mr.. Chase
as personal favor to his friend CON
scented to carry the stock for short
time, and it was transferred to him.
Afterwards when Mr.. Chase reminded
Mr.. Clement of his promise to take the
stock off his hands that gentleman was
for one reason or another never in a
position to do SO, and Mr.. Chase was
still IN its possession with all the re-
bank closed its doors.
Two Doubly Involved:
But double liability attaches to at
least two of the Qrsectors for a part
funds deposited inN"fi it by the city of
Faribault. These amount to $8,571.1O.
Primarily, the city treasurer, G. A. Hill
is, responsible for the moneys com
mitted to his care, but as he is a poor
man, the loss will fall upon his bonds
men, who, it is said, consented to share
that responsibility with him at the SO.
licitation of Mr.. Clement in order that
the bank might be made the city de.
The directors thus involved are r. A.
Theopold and A.. W. McKinstry, and
while the former is amply able to bear
the loss, it is feared that with the
losses he has incurred, both as deposi
: tor and stakeholder of the bank, il
will prove source of embarrassment
!. to Mr.. McKinstry, one Of the oldest
newspaper publishers in the state.