The Black Hills union and western stock review. [volume] (Rapid City, S.D.) 1904-19??, 1906-02-16
WRECKED BANK.
President Smith. of Chicago institu.
ton. Said to Have Taken $4,000
Of Banks Funds,

Chicago, Feb. 1.-THE Bank Of Amer
ica, incorporated last December with a.
capital stock OF, $250;O0O, was placed iE,
the hands of receiver by Judge Chy-'
traus. Of the superior court, on COM:
plant of John L. Kavanaugh, one Of
the stockholders. The bill asking for
Abner Smith, president, and three 9TH
err officials of the bank responsible for
the insolvency OF the institution.
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
aggregating $146,O00. The other three
officials. who. in connection with Presi3
dent Smith, are held responsible for
the alleged insolvency of the bank, are
g. +. Sorrow, vice president; Jerome "
Pierce, cashier, and F. F.. Creelnan,
u stakeholder and director.
1t is charged against these officials
that together with President Smith,
they had absolute control of the bank
and its funds. The operations OF Presi4
dent Smith and all other officials Inen
toned in the bill are said to have be-
gun as soon as the bank opened for
business. Smith is said to then have,
IOWeu lNOllCS anu IluScu IL Ill
treasury to deceive the state into be7
lieving that the stock had been paid up;
President Smith was one of the primei
movers in the formation OF the bank
having subscribed for $4,000 Of the
vtock. In order to prevent. If possibles
II panic and Il possible run on the bank.
it was decided to file the bill for the APP
pointment Of q receiver late last night.
Judge Chytraus and the clerk OF the
superior court had been asked to be in
their Office, and agreed to do so. Short
~ before 10 o'clock attorneys represent,
ing Mr. Kavanaugh appeared With the
petition for receiver. Notice had been
served previously on President Smiths
but he did not appear either in person
the court entered an order appointing
Daniel J. Healy, a stakeholder, receiver,
Bonds OF $150.000 We're furnished and
Mr. Healy took charge of the bank.
Among the specific charges made
against President Smith are
That before the bank was certified
by the state auditor President Smith
borrowed money and paid it into the
bank to cause the requisite amount Of
stocks subscribed for by them to APP.
pear as paid on the books. SO that the
full amount of money represented by
the capital stock was on deposit.
That Immediately after the exami-.
bank had commenced TO do business
Smith and others depleted the stock byl
withdrawing the money they had del
posted in paying for stock subscribed
by them.
That President Smith borrowed $70,-
600 from the bank, giving in return
notes signed by his wife and brothers.
in-law which are declared to be Of lit
lie value.
That within few weeks after the
bank opened for business Smith Sc
cured $62,500 from the bank for HIM.
Belf giving in return mortgages on real.
| estate which are said to be inadequate
as security.
1t is also alleged that President,
Smith entered into contract with FL
T.. Creelman, a stakeholder, by which,
the latter was to subscribe to $50
shares of the stock and was to be per-,
mitted to withdraw 100000 from the
bank at any time he wished This, it
is stated in the bill. was done, and
Creelman has withdrawn nearly $780,
300. giving in exchange drafts on other
corporations he was interested in.
Many of these drafts, it is asserted,
were sent back unpaid until Creelman
owed the bank $4,000.
| President Smith, against whom the
serious charges are made. was men,
Der of the Cook county bench for many
years, having retired from the court in
| tqO4