Omaha daily bee., 1906-08-10
Herring IS ARRESTED
Cashier Of Defunot Chicago Bank is New in
Custody Of Officers,
DENIES PRoFlTING BY LooTlNG CONCERN
Hs is Held Without Bail Pending Further
Investigation.
EXTENSIVE FRAUDS ARE DISCOVERED
Over Million Dollars Loaned to Company
\ Headed by PreEdent
rAculEp pPnniirEc cErpCT Irnccp
nENsWE FRAUDS ARE DISCOVERED
CASHIER PRODUCES A SECRET LEDGER
Large Loans Made to clerks I'm
stensIand's EmpIoy-Receiver Ap-
pointed for Personal Estate
of the President.

FORT WILLIAM, Ont. Aug. s-Ths
steamer America arrived at Fort William
today and cleared for Duluth. No arrest
of President Steinsland occurred here
CHICAGO, Aug. s-Henry w. Herring,
cashier Of the Milwaukee Avenue state
bank, which closed its doors three days
ago, was arrested today and will be re-
fused his release on bail until his connec-
tion with the disappearance Of nearly
H,OCOOOo Of the banks funds is cleared up.
Paul O. Steinsland, president Of the de-
funct institution, Is stlll a fugitive and
although nearly 100 detectives are search
ing for the missing president his where
abouts is as much Of a mystery as ever.
Herring was arrested this afternoon two
hours after the time he had previously an
nounced he would give himself up 4 He
was taken at once to the Office of Chief
of Police Collins and put through a thor
ough examination to his knowledge OF
President stensland's mismanagement OF
the institution Herring declared he did
not know where President Stensland was
and had had no communication with him
for over week. The cashier strenuousy
denied the charge that he Chimself) was
partly responsible for the failure OF the
bank. Herring maintains that II he is
guilty of breaking the banking laws of
! Illinois President Stensland is responsible,
as Herring in his examination declared he
never benefited a single dollar by, Prpsi-
dent stensland's peculiar system Of bank
ing.
Herring Refused BAIL
Bank Examiner James and Assistant
States Attorney Gleason were present dur
ing the examination Of Herring. Neither
they nor the police officials were satisfied
with the explanation given by Herring of
| his connection with the collapse of the
bank and it was accordingly decided to
refuse bail to Herring until the matter has
been further investigated.
Receiver SetEer reported to the superior
court today that a dividend Of at least g
per cent would probably be declared TO de-
positors in the bank within the next two
weeks. This is said will be followed by a
4 second dividend, although the receiver to-
night was not in a position 10 state how
much Of their savings the % 900 depositors
would recover from the defunct institution.
At a meeting OF the board of directors
Of the bank this afternoon resolution
was adopted appointing a committee to de-
| wise ways and means for apprehending
President Stensand and in Strengthening
out the affairs OF the bank. The directors
revenue from the property. assets etc, to
pay all the depositors in full
| At the conclusion of the examination OF
Herring at police headquarters he was taken
direct to the bank where, with Bank Ex-
aminer Jones and Assistant States Attor-
neys Fake and Olson, a thorough investi-
cation Of the banks affairs was made. In
this examination the representatives Of the
state are seeking evidence upon which TO
mr. kn
promised to show them and the bank ex-
aminer all records Of notes and transactions
whereby the bank was defrauded and when
the examination was begun It was said the
task would occupy much Of the night
Receiver for stensIand Estate.
The Chicago Title and Trust company at
II o'clock tonight was appointed receiver
for the personal estate OF President Stems
land. The estate is valued at t500. 600 The
| appointment was made by Bankruptcy
Referee Eastman on the petition OF three
| OF the creditors. II was feared that be-
cause Of stensland's flight from Chicago
he would transfer his estate and defeat his
creditors.
At midnight further examination Of the
books by representatives of the state,
assisted by Cashier Herring, postponed
until tomorrow. At that time all the avail
able books had been examined. Other
books were in the vault, which was locked
by a time lock, and could not be reached
until morning. Assistant State Attorney
Olson said many instances had been found
OF violation OF the state banking laws and
especially TO loans
Just how far these violations extend
cannot be determined until tomorrow. when
securities given for the loans can be ex-
amined.
Big Loans 90 Clerks.
Attorney Olson said that in many in
stances more than 10 per cent and in some
cases 25 per cent Of the capital stock had
heen loaned 10 persons connected with the
bank. It was discovered that President
stensland had loaned the Paul o. stensland
Real Estate company $500. 600. -Four loans
amounting 10 l.0OO had been made 20 as
many persons whom Il is said are clerks
In the Milwaukee avenue cooperative store,
one Of President stenslands ventures.
The most startling discovery OF fraudu-
lent work was a side" ledger which
Cashier Herring took from hidden drawer
This he is said to have admitted to the
investigators was kept from the state bank
examiner on his annual visits In Il. 90
far as the investigation was made tonight
( were found entries Of loans, practically
without security, aggregating $4,000,
store 20 BE Closed.
One Of the results Of Hering's reappeAr-
nnce will be that the cooperative store,
said 20 have furnished a channel for dis
sipatng nearly $4,000 OF the banks funds,
Will be closed Receiver John c. FetEer
said this morning that he will ask instruc-
tions OF Judge Brentano the disposition
OF the stock in the store. Another devel-
opment today is that the estate OF the
fleeing president Of an estimated value OF
5000 will be decided 70 the receiver by
4 Theodore Stensland.
2 Il am collecting the assets OF the bank,
I not running business enterprises" said Re-
ceiver FctzeT today. so the store will
be closed. The S30OO0O in cooperative store
p bonds mentioned by Cashier Herring were
discovered in the banks vault yesterday"
Receiver Fetzer declared that the hTst
! statement OF cash In hand al the bank