The Minneapolis journal., 1906-02-16
THE MINNEAPOLIS JOURNAL.
CHICAGO. J. | BANK B: IN
RECEIVER HANDS.
Bank Of America $ Head, a For
mer Judge, Is Accused Of
Irregularity.

- n ~
/ Chicago, Feb. 16.-The Bank Of
America, incorporated last December
with capital stock Of $250,OOO, was
10 o 'clock last night by Judge Chytraus
of the superior court, on complaint Of
John E. Kavanagh, one Of the stock
holders. The bill asking for the re-
5ceivership holds former Judge Abner
Smith, president, and three other Off
cials Of the bank responsible.
In the few weeks since the opening of
the bank President Smith is charged
with having so manipulated securities,
mortgages and notes and the stock Of
the bank, that he has obtained amounts
aggregating $l46,000 The other three.
officials who in connection with Presi-.
dent Smith are accused Of responsible
ty for the alleged insolvency Of the
bank are: G. F. Sorrow, vice president;
Jerome V. Pierce, cashier, and F. E.
Creelman, stockholder and director.
It is charged against all four officials
that they had absolute control of the
bank and it's funds; that they have
dominated the directorate; have done
as they pleased with the funds; have
voted themselves such salaries as they
desired, and have loaned the money Of
the incorporation as they saw fit.
Began Early in Deal.
The operations Of President Smith
| and the other officials mentioned in the
bill, are said to have begun before the
bank opened for business. Judge Smith
is said then to have borrowed money
and placed it in the treasury to deceive
the state auditor into believing that
the stock had bene paid up. President
Smith was one Of the prime movers in
the formation Of the bank, having sub
scribed for $4,000 Of the stock. +
The apparent insolvency Of the bank
Kavanagh and other stockholders three
days ago. When investigation seemed
to uphold their surmises It was agreed
to appeal to- the courts. In order to
prevent, if possible, a panic and a run
on the bank it was decided to file the
bill for the appointment Of a receiver
late last night. ,,-..-t = 49,.
The other subscribers to the capita
stock Of the bank besides Judge Smith
were Ferdinand W. Peck, G. F. Sorrow
+. E.. .Creelman, w. J. Morphy, F. M
! Savage, Alexander Harris, Frank Bill
ings, Daniel J. Healy, Jerome V. Pierce
Howe, who were appointed directors Q:
the bank. ...-.a
The Charges. -
Among the specific charges mad
against President Smith are: >.>.. r
That President Smith borrowed $40,
900 from the bank, giving in return
| notoc O. m, I1, bis and ~
in-law, which are declared to be Of lit
tie value.
That within a few weeks after tn
bank opened for business Smith secure,
$62, 500 from the bank for himself, Civ
ing in return mortgages on real estat
| which are said to be inadequate Sc
IT, It is also alleged that Presiden
efssHsn By ShSs The sttsr
: and was to be permitted to withdra,
} $4,000 from the: bank at any tim
: he. wished This, it is stated in tn
: bill, was done, and Creelman, has with
; drawn nearly $200,000, giving in eS
}. change drafts on sother corporations i
which he$was interested. Many Of thes
) drafts, it is asserted, were sent bac,
, unpaid and now 5Creelman owes tn
: bank $4,000. - l..5
: President Smith was a member O
the Cook county bench for many. years
He retired from the courts in 1904.
: Mr.. Creelman is a lumber merchant
The bank had about 100000 in depos
it's, of which $4,000 was in savings &C
counts. The Representatives Of the ban
declare that there is 40 per cent Of tn
cash on hand and a large amount o
, paper, the value Of which is unknown
} On this paper depends the chance o
the bank $ liqdidating in full, T
Clamoring for Money.
A crowd of depositors gathere
!; around the. door Of the Bank Of Anne
| lea as early as 7 O'Clock today in th
hope of securing their money. Anon
3 the number were many drug clerks, th
! bank having worked extensively thr
t the drug stores in all parts of the cit,
Y In many drug. stores notices had bee
a posted Informing the public that d
store for the bank, and offers of intere
n in the institution were held out to tt
a clerks as inducement to secure lars
|, deposits. - z,s,. z<..@,,,
:, The first official of the bank to D,
in a9 appearance was R.. 81. Howe, tt
assistant cashier He opened the door
: and q crowd OF. .depositors swarme
after him. Mr.: Howe made speet
. to the depositors, saying in substanc
"Within a week you will receive
to 40 per cent Of your money and II
80 balance within a few days after ths
a All depositors will be paid in full. v
= have 100000 in cash on hand and son
securities that will be disposed Of wit
( in a week: There is not the slighte
fear that any Of the depositors W
lose any Of their money!
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