The Saint Paul globe., 1905-02-20
CLEMENTS COURSE
SEEMS TORTUoUS
Depositors' Committee Oues.
tions Him With Unsatis.
factory Results
Special to The Globe

committee of the depositors of the
First National bank have been busy
during the past few days interviewing
the officers of the bank and endeavor-
Ing to secure from them an official
statement of the real value of the
banks assets, which are generally be-
heved to have been greatly under
stated by the receiver, and a history of
the transactions that have led to IT'S
insolvency.
The more the committee learns of
the way the bank was managed the
more it is convinced that President
Clement has pursued for many years
a tortuous course. Its interview with
the president occupied some hours. and
every effort was made by persistent
cross questioning to secure from him
some data which would shed light on
the affair.
Mr.. Clement, however. ill and feebIA
as he is, was more than match for his
lnqulsitors, and he made no admission
of any wrongdoing. He persisted in
the assertion that the charges on which
his arrest was recently ordered were
trumped up, and that the result would
show that there never was any ground
for criminal proceedings against him.
he LETT the committee impressed with
the view that he believed the bank
could pay dollar for dollar of it's in
debtednes if it were properly managed
ana that ne considered himself a very
much i'll used man.
With the directors whom thev inter-
viewed afterwards the members of the
committee were more successful and
1t is believed secured many details of
the BANKS transactions and the pecuI-
lar methods of its president, which
nave not hitherto reached the public
They were especially gratifed with
the result of their talk with f. A.
Theopold, the president of the Theo-
pold Mercantile company.
He was very frank and open with
US, said Capt. Hunter to The Globe
correspondent, "and helped us a good
deal in getting at the bottom of the
confusion in which all the banks af-
talrS and everything that Mr. Clement
had anything TO do with appear to be
involved. l regret that l am not at lib
erty TO give you the details of the in
terview which we have agreed to keep
under our own hats until the general
meeting of depositors next Saturday. [
expect that l will have to write the
report to be presented at that time,
and L can assure you that it will be a
full and complete statement of the
banks history and condition so far as
concerning Them
Warned Year Ago
1t was reported today that F. A.
Theopold had told the committee that
about a year ago suspicious were
aroused in his mind that everything
was not right with the bank and that
thereupon he approached Mr.. Batchel-
der, Judge Buckham ard Mr.. McKin-
stry his fellow directors and urged
upon them the advisability of making
detailed examination of the banks
securities. They ridiculed the idea, so
the story went, that anything could be
wrong with a financial institution that
Mr.. Clement managed, ard repeated
urging failed to spur them into action
or course, if this were true it would
throw an entirely different light on
the position of the directors, who have
all along persisted that they had not
the slightest suspicion of the banks
insolvency. ard that nothing had come
under their observation to arouse their
suspicious. Asked as to sthis rumor,
| f. A. Theopold said that there was
nothing in it,
The banks failure was" said he, "a
most unfortunate affair, and one which
cannot fail to have it's effect on busi-
ness interests in Rice county but [
| had not the slightest suspicion that
anything was wrong with the bank.
pletely deceived and knew nothing OF
the way the banks funds had been
thrown away until we received the
communication from the comptroller of
the currency at Washington"
Neither the depOsitoTs nor the COM
mittee which represents them seem in
clined, however, to regard the plea of
ignorance of the banks condition as
one which eXOnerateS the directors or
| relieves them of their responsibility.
What are directors for they ask,
"if it is not to inform themselves of
what the bank is doing and exercise
general supervision of the official con-
duct of the banks officers? Unless
they do that we might as well have no
directors at ALL"
The lack of information of the di-
| rectors is regarded by the great body
of the depositors as adding to their
culpability and there is a general de-
mand that they should be required 10
make up any loss the depositors may
suffer. Although it has not been said
so in so many words, there is no doubt
that in their report the committee Will
recommend that civil actions to re
cover all losses by depOsitOrs be begun
against the directors as soon as the
exact amount the bank is in default
can be learned. AS, however, this in
formation can scarcely be definitely OBJ
tanned for months and possibly years TO
come, it is possible by that time re-
sentiment will have cooled down and
the public will consider men to have
been already sufficiently punished by
loss of reputation, of stock, of penalty
and of deposits, whose chief offense
was in confiding too implicitly in a
man who was regarded by everybody
in this community as the greatest
fnancier Southern Minnesota could
produce.
1t has developed within the past few
days that owing to his peculiar meth
DDS Mr. Clement has managed to en-
tangle the affairs of two of Faribaults
most important industries, one OF
which has scarcely been established a
year. When the Faribault Manufac
turing company, which manufactures
gasoline engines, and which it may be
said in passing, already has orders
which more than taxes its capacity
to fill promptly, came to Faribault, it
secured a building and power from the
Polar Star Gas and Electric Light COM
pany, an institution which Clement
! backed financially and whose securi-
ties he held. The property was made
over to the Faribault Manufacturing
company. but in some way Clement
failed to have the transfer properly re-
corded with the register of deeds.
When the bank closed it was found