The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-07-10
RAN THE PEOPLES U.S.BANK
rpID ORDER ISSUED AGAINST
sr. LOUIS CONCERN.
,,s Promoter Used the Mails IN securing
sales OF stock and soliciting Deposi"
uc cot S2 .Oth, .thDO From the Public
and / oanrd a Third OF II TO Himself.

ah"' r,... and agents as such, and Z. s.
,.,. %, St Louis, Mo, was issued by
Cotelyou on July o.
~ ,al. effect tomorrow morning Inc
'o,;s;oo Of the Postmaster-General was
,aoched after a full hearing OF the case by
leo ,i-,ul Attorney-General for the
Pos, ONJcr Department.
T., r..,,,p,e to citation to show cause
fraud order should not he Issued
,,ai,.t them the Peoples United states
p1rL and +. :. Lewis appeared before the
,",;,,,n, ACKNOWLEDGEMENT for the Post
,,a,a, nonortment on June IS, in the per-
'''' -, George Shield and Shepard Bar
'I'' o,,o,ev-, and f.. s. Lewis
r",l. i cabot and II. l.. Kramer,
,,d made answer to the charges
,t'h, evidence in the case showed that
We LOWS used the mails as his principal
,,,, in promoting the sale OF stock ana
touring deposits in the bank.
,rIs p.opIes United States Bank was
c,paniled TO transact all OF It's BUSINESS ny
,bs Use Of the mails. The plan was TO re.
,eiye savings deposits carry on certiheu
,tooI system and do exolusiv ely mail
order banking business. Mr.. Lewis began
,,e promotion Of this bank In the Womans
uoga,irc for February. 1904. and has In
.u Snhs,o,,ent issues Of the Worndn's Maya
.,r, extensively advertised this bank.
,norr the false and fraudulent repre-
,or,ations and promises which the. Post
master. General found Mr.. Lewis had made
in tbe promotion Of his scheme were those
,aIatiye to the amount OF capital stock
which Mr.. Lewis had subscribed and
would subscribe. representations relative
TO the independent, strong capable men
wb, would compose the board OF directors,
concentrations and promises that all funds
~ the bank would be loaned by COM
mt,ee composed of fifteen directors OF the
r,rinciDaI banks in st, Louis, and that the
fund. would not be loaned to himself or
other directors.
The Postmaster Genera! found that in
his early articles in the Womdn's Mdsn-
zine and in his other advertising
literature about the bank Mr.. Lewis
represanted that he would subscribe to
the capital stock dollar for every dollar
subscribed by all others, 40 that he would
own half of the capital stock, and
that later he represented that he had
pledged his entire fortune every dollar
he had and his publishing business in this
banking enterprise. and that his subscrip-
tjons would exceed a million dollars. These
representations were found to be false and
made with intent to deceive.
The inspectors found that Mr.. Lewis
had not cooperated to the extent OF a single
dollar OF his owu money although the bank
had been in OPERATION seven months. and
had a Maid up c,apital stock of 1000 900.
The INSPECTORS found that Mr.. Lewis had
made an admission to that effect to Bank
Examiners Cook and Nichols on April 3, 1905.
The inspectors and their office force In
ST Louis made careful checking Of the
Subscription books, finding that on March
IS 1905 Mr.. Lewis had received and held
a. payment for shares Of stock in the bank
s., $50 Oh. 81. and had accounted to.the bank
in an amount not exceeding 81 ,204 ,s03.05.
This showed that every cent OF the
g 900 900 capital stock which had been paid
in was paid out OF subscription money re-
c lived by Mr. Lewis from the public, and
tina, none of his money had been invested
in the enterprise. This was found to be
the fact. although Mr. Lewis had stated IN
writing TO the inspectors that $495 $50 of the
100000 paid in at the original inoorpora-
ton of the bank were his personal funds.
Subsequently, at the hearing before the
Assistant Attorney General, Mr.. Lewis
admitted that that money was received
ly him from the people and was not his
own, Although asked to do SO at the
hearing Mr. Lewis failed to produce any
evidence whatever that any of his personal
funds had gone into this enterprise or that
he ever intended to subscribe, or was in
financial condition to subscribe for the
large amount Of stock which he represented
he would take.
On March IL Lewis had loaned from the
! ank funds to himself and his enterprises
1894 6O4.S? the paid in capital stock of the
ank hen being half million. On March 20,
when So 600, 900 capital stock had been paid
in, a statement furnished by Mr.. Lewis
at the hearing showed that he had loaned
to himself and his enterprises s9O7, $685.
The University Heights Realty and
Development Company, which had Dor
rowed from the bank s346 1920 and the
stock of which to the extent OF PIT shares
-hl If"lS Solu 10 lHt DUNN, lIdS dSec'S
consisting for the most part Of land pur-
chased for 100000 as speculation in
suburban property, and upon which Mr..
Lewis stated about $3.50, 900 had been ex-
PENDED in improvements. Its liabilities
are shown to be 1914, 7OO.53.
II appears further that Lewis endeavored
TO Obtain proxies from all stockholders APP
pointing himself to vote the stock. which
proxies should remain in force for three
years at least and in case revocation was
desired in that time Mr.. Lewis was to have
opportunity to purchase the stock.
On April s. 1905, the cashier of the bank
told the inspectors that 4,3sl shares Of the
increased capital stock had been issued
and in every instance the shareholder had
signed proxy to the above effect.
1t appears that it is the intention Of the
hank to increase its stock to IS, 900 900 and
remlttances are being asked for on that
account
1t is understood that the funds OF the
rank which have not been borrowed by
Lewis and his enterprises. amounting to
about two-thirds Of the total amount re-
United, are deposited in banks and will be
available toward reimbursement of the
ttockholders, who number upward Of 85 900.
~ Is the intention of the officers of the Post
orice Department to cooperate with the
Secretary of State Of Missouri in every
l.' per way for the interests Of the investors