The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-02-07
CREDITORS WILL
LOSE HEAVILY
All Glasses Are Affected, but IL
Farmers Are Hit the
Hardest.
THEIR MONEY IN A
SOUTHERN PEACH FARM
Inability to Realize on Bonds
Caused the Collapse-Di-
rectors Ignored.
From . star Correspondent.

rectors Ignored.
= stan Correspondent.
Faribault, Mimi, Feb. This pretty
and prosperous old city, stunned by the
failure Of it's First National bank, an
almost as old and consid-
cred quite as solid as the city itself,
is aghast over the arrest Of Thomas
Nothing less could have convinced the
hundreds of depositors that they might
not only lose, but lose heavily, for
Mr.. Clement has lived a long Inc hon
orable life in this community and was
thought to possess the very soul Of
honor. Mayor of the city, representa-
tive and senator, leader in good works,
lieve that in his old age he has been
guilty, as charged, Of gross fraudf
That the failure Of the bank is a
catastrophe is now all too apparent. 1f
the creditors receive half of what they
are talking of getting they will prob
ably in the end be satisfied. Some
of them are talking of getting dollar
for dollar. The Journal correspond
that the creditors will get less than so
per cent, and this is a very liberal
estimate.
All classes have suffered as a result
of the failure, but those who have suf-
fered most are the farmers around Fari-
bault and many of the well-to-do Of
the city, who are living on accumulated
savings. Many Of these have all their
tional bank. It will be months before
they can get anything back, and thes
dividend, when they do get it, will
probably be very small. In the mean
time there is sure to be much suffering,
both for the needs of life and for fnan-
clal purposes.
Unwise Investments.
The failure was the, result of unwise
Investments in a big peach farm in
Georgia, also in a lumber company in
bonds of the company to the extent of
$l75,000. These purchases were made
without the.aknowledge Of the banks
directors. The failure to realize
ithese bonds caused the bank to collapse
, and there is now revealed a tangled
Estate of affairs hard to conceive. The
bank. directors are at a loss to under
induced to embark the banks funds in
a venture which could not at the best
have made returns for. many months II
not for years.
The failure of the bank is only .
part Of the catastrophe. Mr.. CLEMENT
personal creditors, it is said, are numer-
GUS and hold large claims.
that stands a good chance Of being .
complete loss, Faribault is in a high
fever. Men who have always been
friends Of Mr.. Clement are beginning
to question whether their friendship
was well placed. And the old man will
find himself with few friends in his old
age if the charges against him are es
The confidence that citizens here
placed in this old man is amazing. They
simply insisted on giving their money
to him to keep for them. 1t was ike
throwing it at the birds. The people
are paralyzed, now, at the though that
they will get none of it back.
How the Failure Came About.
The trouble has it's roots in unwise
investments made years ago. MI.
Clement, instead of going to the direc-
tors and having them charge the losseS
to profit and loss, seems to AVE changed
his investment, covering up a bad IN
yestment, with q more hopeful one
Matters went on from badsto worse un-
til he became interested in the De Soto
Fruit, Agricultural and Manufacturing
company Of De Soto, Ga, and In the
Minneota Lumber company OF 9Veldos-
ia, Ga.
panies are DR.. A. C. Rogers, superin-
tendent Of the state school for the
predetermined of Faribault, and Herbert
element. son Of the president OF the
j bank. The fruit company In the past
year or two has planted $4,000 trees.
These have been fertilized at enormous
expense, the money apparently coming
from the Faribault bank.
ent authorized a bank in Georgia to
honor the credit Of his son and another
man interested in the fruit farm to the
extent Of $4,000 a week. Later 1t Y
said this limit was raised to .$l0,OUu
a week.
Directors In Ignorance.
| The bank invested from $150,000 70
!, $4,000 in the bonds of these com.
, panies. The directors say they knew
absolutely nothing of the investment
, They first discovered the situation from
[ the banks regular statement to the
Icontroller of currency and at once be
gan an investigation. Mr.. Clement was
r persuaded to reduce the number o.
d bonds the bank held. Later the banl
Q examiner reported that these bond'
were not safe security Tor the anloun
invested and the directors were SO In
i formed. They set about a general. ex
animation Of the bank aaaa and found tRat thing tbs;
in such a tangled condltlon Inas ens,
animation. The result was the closing
of the bank.
The movement was SO sudden that tn
directors themselves were unprepaxe
n for it. One of the directors had $500
IS deposited in the bank. He q ais
=. for them by check. These have nov
+ come back to him no protested ao 80 that md p
= than his deposit. As a bank director
a Claims against his bank are not pal
until after other creditors are paie
this director is likely to lose most 9
his claim against the bank, unless ]
pays more than those on the inside bt
r. iieve it will. One of the directors ha
$4,000 on deposit.
t., Clement Had Confidence Of All.
er T. B. Clement is ~ years old. b
4 =. .l..-s-- a. cHcon% %n1oxy of HE ~