The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1906-02-17

RECEIVER APPOINTED AT
NIGHT TO PREVENT A RUN
President of Chicago Institution
Charged With obtaining"
Sl46, 900 in Few Weeks.

CHICAGO, Feb, 16,-Thc Bank OF
America, Incorporated last December
with n capital stock Of 325O.000. was
plnced in the hands OF receiver at 10
o'clock last night by Judge Chytraus or
tho Superior court on complaint Of John
u. kavanaugh. ono OF tho stockholders.
The bill asking for the rcCeivershlp holds
former Judge Abncr Smith, president
and three officers of the bank rcSponsl-
bic 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 tho stock OF
the bank that he has obtained amounts
aggrcG1ting $4,000. The other three Of
nccrs, who in connection with President
Smith, are held responsible FOR tho al
legged insolvency are G. F. Sorrow vice
president. Jerome Pierce, cashier. ard F.
Creelman, a stoCkholdcr and director.
1t Is charged against these officials, to-
Gether with President Smith, that they
had absolute control OF the bank and Its
Cunds.
Began Work Early.
The operations OF President Smith and
the officials mentioned in the bill are said
to have been begun before the bank
opened for business. Judge Smith is said
then TO have borrowed money and placed
II In the treasury to deceive the state
Auditor into believing that the stock had
been paid up. President Smith was one
Of the prime movers In the formation or
the bank, having subscribed for $4,000 OF
the stock. In order to prevent, II posi-
bic, pnnic and a possible run on the
bank, IL was decided to file the bill Tor q
receiver late tonight.
Judge Chytraus and the clerk OF the
Superior court had been asked to be IN
their onlce and agreed TO do so, Shortly
before 10 o'clock attorneys representing
Mr.. kavandugh appeared with the pctl-
tlon for receiver. Notice had been
served previously on President Smith, but
he did not appear either in person or by
attorney.
After reading the bill the court entered
an order appointing Daniel J. Healy. a
stockhoder. receiver. Bonds of $4,000
were furnished and Mr.. Healy took
charge OF tho bank
Deception From the Start.
Among the specific charges made
against President Smith are: That be-
fore the bank was certified by the State
Auditor President Smith borrowed
the requisite amount of stock subscribed
for by them 10 appear as paid on tho
books so that the full amount of money
represented by the capital stock was on
deposit
That Immediately after the exnminn-
tOn by the Auditor and aftc' the bank
and others depleted the stock by with
drawing tho money they had deposited in
payment for the stock subscribed by
them.
That President Smith borrowed $1,000
from the bank. giving I'm return notes
signed by his wife and brother-In-aw.
which are declared 10 DC or nltle Nalut.
That within few weeks after the
bank opened for business Smith secured
$62 500 from the bank for himself giving
In return mortgages on real estate which
are said TO be inadequate ns security
1t IL also alleged thai President Smith
entered into a contract with +. +. Crcel-
man. n stockholder. by which the latter
was TO subscribe to go shares OF the
stock and was 10 be permitted 10 with
draw $50 900 from the bank at any time
he wished This, II is stated In the bill,
was done and Crcclman has Withdrawn
nearly 500 OOO. giving in exchange drafts
on other corporations in which he was
Interested Many OF these drafts. 1t Is
asserted. were sent back unpaid until
Crcelman owed the bank $4,000
President Smith against whom the
serious charges are made, was "A NOM
Der Of the Cook county bench for many
years. having retired from the court in
1901.
Mr. Creelman, who Is charged with un-
loading a large amount OF paper OF ques-
tionable value on the institution, is a
Chicago lumber merchant.
The bank had about 500. 600 in deposits.
OF which S25 600 was In savings accounts
OF working people.
Attorney Clarence Darrow, who is n
stockholder. paid up to the extent Of $n,
oO0. personally has come to the rescue OF
the savings depositors.
IAN savings depositorS VIII be paid I'm
full" said Attorney Darrow. II Will buy
their books a they arc presented at the
bank The bank Will be opened In the
morning in charge OF Receiver Healy.'