Omaha daily bee., 1905-07-06
DEVLIN IS BANKRUPT
Kansas City Creditors File Petition in
Federal Court at Topeka,
WISH TO SET ASIDE RECENT TRANSFERS
Action viii Reduce Assets OF Topeka Bank
Many Thousands,
KANSAS FUNDS ARE ON DEPOSIT
Treasurer Kelley Contends that the State
KANSAS FUNDS ARE ON DEPOSIT
Treasurer Kelley Contends that the State
isa Preferred Creditor,
TWO ILLINOIS BANKS GO DOWN IN WRECK
Concerns Nenr Mines own, by Mis-
souri, Capitalist Clio heir
Doors md Are in u e
of Comptroller.

TOPEKA, Kan, July 5.-Arairs
failure Of the First National bank ass
a different phase today. when Kansas
creditors peutioned the United States
trict court to declare Charles J. Devlin
bankrupt, The petition was made return
able on July 20 and it's effect is to prevent
any further attachments of Devlin property
and TO set aside real estate valued at
100000 which Mr.. Devlin on Monday had
transferred to the failed bank Today's
action thus reduces the banks assets at
least temporarily to just that extent. The
action does not affect the life insurance,
which Is In Mrs Devlins name anc which
she insists be left among the assets of the
bank.
Mr.. Devln's business associates declare
that he is far from being a bankrupt and
still insist that the bank will be enabled to
pay dollar for dollar. Receiver Bradley,
who began delving into the books of the
bank today, announced that IL would be
ten days before he could make a statement
Of it's condition He announced that it
was doubtful that the state, which had
$4,000 in the bank, would be considered
preferred creditor. Governor Hoch stated
later that the executive council would to-
morrow consider the action of State Treas
urer Kelly in placing so much of the states 8
money in one bank.
VIII Get Money Back.
Receiver Bradley tonight announced that
the people who made deposits in the First
National bank last Friday and Saturday
would receive all their money as soon as
the proper arrangements could be made.
These deposits were kept separate by the
bank officials and will not be considered
with the regular business of the insttu-
tion.
A secret meeting of attorneys and others
representing different Devlin interests was
held here tonight. 1t was intimated that
some sort of statement would be made to-
morrow.
Allegations in Petition.
The petition was filed on behalf of
Thomas Lightfoot John A. Long and the
Long Brothers Grocery company of Kan
sas City, Mo, The claims of the petition
ing creditors aggregate about 5000.
The petitioners represent that when Mr.
Devlin assigned his property to the First
National bank OF Topeka on July 3 he was
then insolvent and that such transfer was
made with the intent to make the failed
bank a preferred creditor. The petition
will prevent the running of further attach
ments on the Devlin property. 1t is made
returnable on July 20. In the meantime
Mr.. Devlin may file confession of bank
ruptcy or file an answer denying the acts
Of bankruptcy and ask for a trial by jury.
The trustee in bankruptcy who will be
selected by the creditors will have power
to take charge of the affairs and convert
ing the assets into cash, apportion the pro-
ceeds equally among the creditors.
State Funds In Bank.
The status OF the $5OO,OOO Of state funds in
the First National bank is causing much
discussion among state officials A former
member of the Kansas supreme court.
talking today of the contention of State
Treasurer T. T. Kelly, that the money is
safe, because the state would be considered
preferred creditor. said:
The contenton Of Mr.. Kelly is partly
correct that Is II II can be clearly shown
that the money was in the bank for col
lection alone Put it may be difficult to
show this, especially since the bankruptcy
proceedings filed today.
Treasurer Kelly contends that as the
states money was left at the bank simply
in the ordinary course of collections. and
not as "A deposit upon which interest was
drawn it therefore became a trust fund,
which is bound to be considered a pre-
ferred claim
May Sell Property.
When the First National bank of To-
peka, which was controlled by c. ].
Devlin, failed on July 1t was known
that the Devlin estate owed both the Spring
Valley National bank of Spring Valley, H.,
and the First National bank of Toluca,
Ill. which closed their doors today and
the suspension of the latter institutions
was expected to follow as a natural result
Just what amounts the Devlin estate owes
to the two Illinois banks is not known, but
II Is stated that they became involved in
loaning money to build the Toluca, Mar
auette and Northern railroad small coal
structing to his mining property in that
state. This road connects with the Atchl,
son, Topeka & Santa Fe, the Illinois Cen
tTal. the Chicago, Milwaukee & st. Paul
the Chicago & Alton and the Indiana Hi.
nois & Iowa railroads. Negotiations are
already in progress, IT is said. to sell this
railroad property which is considered a
valuable asset.
Creditors DO Not Meet.
Runs on Topeka banks which started or
Monday following the failure of the First
National bank. had apparently stopped
when the institutions opened for busines,
today, A small crowd gathered about the
First National bank but there was no ex,
citement, All banks at which depositors
had withdrawn money on Monday had fur,
ther fortified themselves over the holiday
Of yesterday and at each bank the officials
stated they were in better shape than ever
to meet al demands.
Receiver Bradley of the First Nationa
bank went 10 work early today on IN,
books OF that concern. but no statement
was available for publication regarding its
condition ana none was expected for some
time yet.
c. s. Gleed and c. J. Histed were II
the city and held conferences with III,
bank oficials in an endeavor TO arrive a
the true state OF affairs OF the failed bank
Receiver Bradley said today that it woul,
be ten days before a statement Of IN,
banks assets and liabilities codld be made
public. He stated further that he did no.
think the state would be a preferred credI
tor, but would have 70 take us chance.
with other depositors IN the settlement.
Tomorrow Robert Lyons, an expert ac
eountant, connected with the comptroller 4
department. at Washington. will reach To