The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-02-08
BANKS
TROUBLES THICKEN
Civil Suits in Store for President
Clement and Possibly for
Directors.
GRAND JURY MUST
SLIT CLEMENTS DoINGs
Kiting" Discovered as a Prac-
tice in Connection with
Southern Venture.
From a STAFF Correspondent.

From STAFF Correspondent.
F1tIbihsRal M inn r5o sb s%eDt
recent honored he head dno Of the p First y Ma
tional bank Of this city, and for the
board Of directors of that wrecked in
stitution.
The arrest and arraignment of Mr..
Clement Monday was but knot in the
frightful tangle in the affairs Of Mr..
Clement. in relation to the bank, and
only part of the swirl Of things in
which the directors find themselves.
The charges against Mr.. Clement are
not necessarily the ones for which he
will have to stand trial when the case
gets into court. They were based upon
conditions found in the looted bank,
but were taken at random almost, and
merely as sufficient ground for getting
the case before the federal grand jury.
They make 1t possible for the grand
ment 8 whole management of the bank,
and that seems to have been the pur-
pose back Of the movement for the
prosecution Of the aged banker.
Civil Suits Threaten.
Not only is Mr.. Clement open to
possible criminal prosecution which may
prove of much more serious import than
that implied in the specific charges
filed, but there is a likelihood Of civil
suits involving large amounts of money
left In his hands. The claimants in
these the .s suits will act, i they do act, upon
son to doubt this, however. One of the
directors Of the broken bank said to
the Journal correspondent today that
he believed Mr.. Clement had nothing
left. IF this be true, civil suits are
not likely to result in much but empty
judgments.
For the directors Of the bank, credit
ors in Faribault are also talking of
civil suits, based upon the allegation
that the directors neglected their duties
in leaving the management Of the bank
so much in the hands Of Mr.. Clement,
and are therefore personally responsible
to the creditors, not only for their le
gal liability but for the full losses sus-
tanned. The directors stoutly protest,
that they were not negligent, and in
they say they held Eve, beside num-
Der of informal meetings Of which no
minutes were made. In any event, not
a great deal is likely to be gained thru
such suits as are talked Of.
6 .tKiting', Was Practicst. ssssl
A now disclosure in Mr.. Clement =
management Of the bank is the extern
sive Hkiting', Of drafts. This seems
the h sout eeen On IS he pro oank
keeping up q line Of credit, thru a well.
timed exchange Of drafts, between two
banks. For example, if a Minneapolis
bank should issue a draft on San Fran,
cisco bank and deposit it in a Chicago
bank, the Chicago bank would credit
the Minneapolis bank with the amount
on the books Of the Minneapolis bank
as. an available cash asset. At the
same time, if the San Francisco bank
| should draw on the Minneapolis bank
| and deposit it's draft with a St. Louis
bank, the St. Louis bank would credit
the San Francisco bank, and the latter
would have so much more OF assets te
check up its books.
Have to Pay Notes Twice.
Some of the farmer creditors of the
bank here have double grievance
against the banks management. Ac
cording to a report current, they gave
their notes to the bank for consider
able sums, but Mr.. Clement, as man
ager of the bank, did not think the
|
to wealthy man in the city offering
to sell them to him. Report says the
man in question took the notes. Mr.
Clement, Of course, had perfect right
to dispose of the farmers paper, az
he did, but the farmers, knowing moth
ing about the sale, deposited theil
money with the First National bank
! pending the time when they SHOULD
draw on their accounts to pay the
notes at maturity. The bank wa
up, if not wholly lost, and their note!
are coming due in the hands Of thir(
party.
/ This same third party had som,
Christmas presents come back to hin
in most unpleasant way as result
; Of the banks failure Just befor
!! Christmas he purchased for cash a mum
! Der Of drafts as Christmas presents 70
sisters and cousins and aunts an,
mailed them. The happy recipient
cashed the drafts, of course, and nov
they have come back to the giver pro
tested, with face value to be paid owe
again, plus the cost Of protests.
Sorrow for Aged Banker.
While in some directions there is bit
ter feeling against Mr.. Clement, for tn
most part there is a feeling of sorrow
that he should, in his old age, hav
fallen under the misfortune Of bad judg
ment, for people regard his presen
plight as more the result of that thai
Of deliberate intention to loot his banl
Mr.. Clement IS faith in the southerl
! companies in which, he placed so niue
money is still mistaken. He, and tn
: others interested in the fruit compan
especially, look for large profits froI
peaches this year, this being the frs
year for their trees to bear. It canno
be said, therefore, that those primaril
!: interested in the fruit company wer
doing other than discounting their pros
!: poets in drawing as heavily on the Far
!: bault bank as the president of that il
stitution would allow them.