Omaha daily bee., 1906-02-16
BANK OF AMERICA CLOSED
Court Appoints Receiver for New Chicago
Financial Institution.
SERIOUS CHARGES AGAINST OFFICIALS
President and Directors Accused of
Withdrawing Capital stock and
Making Large Loans 10
Themselves.
l0US CHARGES AGAINST OFFICIALS

CHICAGO, Feb. 15--The Bank of Amer
lea, Incorporated last December with
capital stock OF $4,000. was placed In the
hands of a receiver at 10 o'clock tonight
by Judge Chytraus OF the superior court
on complaint of John r. Kavanaugh, one
of the stockholders. The bill asking for
the recevership holds former Judge Abner
Smith. president and three other 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 hav-
ing so manipulated securities, mortgages
and notes and the stock OF the bank that
he has obtained amounts aggregating $146,-
COO The other three officials who, in con-
nection with President Smith, are held re-
sponsible for the alleged insolvency of the
bank are G. +. Sorrow, vice president;
jerome V. Pierce, cashier, and F. f. Creel-
man, a stakeholder and director. 1t is
charged against these officials. together
with President Smith, that they had abso-
lutte control of the bank and its funds.
officials Borrow Money.
The operations of President Smith and
the other officials mentioned in the bill are
said to have been begun before the bank
opened for business. Smith is said to then
have borrowed money and placed it in the
| treasury to deceive the state into believing
that the stock had been paid UP. President
| Smith was one OF the prime movers in
the forma tion of the bank, having sub
| scribed for $4,000 of the stock. In order to
| prevent II possible, panic and possible
| run on the bank. II decided to file the
bill for the appointment of a receiver late
tonight.
! Judge Chytraus and the clerk of the
/ superior court had been asked to be in
their offices and agreed to do so. Shortly
| before 10 o'clock attorneys representing
Mr.. Kavanaugh appeared with the petitions
| for a receiver Notice had been served
previously on President Smith, but he
did not appear either in person by
attorney. After reading the bill. the court
entered an order appointing Daniel j.
Healy, a stockholder. receiver. Bonds of
$4,000 were furnished and Mr. Healy took
charge of the bank.
Capital stock Withdrawn.
Among the specific charges made against
President Smith are:
That before the bank was certified by
the state auditor, President Smith Dor
rowed money and paid it into the bank
to caqss the ne REQUISITE amount OF sr9Gd
| on the books so that the full amount Of
| money represented ~ the capital stock
| was on deposit. That Immediately AFTER the
examination by the auditor and after the
bank had commenced to do business SnItn
and others depleted the stock by Withdraw
Ing for STOCK subscribed BY them That
| President Smith borrowed $4,000 from the
bank. giving in return notes signed by his
| clared to be of little value. That within
few weeks after the bank opened for
! business Smith secured S62,5OO from the
bank for himself, giving in return mort
cages on real estate which are said TO be
! Inadequate security.
entered into contract with F. Il. Creel-
| man, a stockholder, by which the latter
! and was 10 be permitted to withdraw $3.50
| OOO from the bank at any time he wished
/ This. IL is stated in the bill, was done anu
| Creelnan has withdrawn nearly S2OOOO'
! giving in exchange drafts on other cor
| porations he interested in. Many or
! these drafts, II is asserted, were sent p sto
unpaid, until Creelman owed the bank $780,
co.,
President Smith, against which the seri-
Gus charges are made, was member OF
the Cook county bench for many years,
having retired from the court in 1904
Mr.. Creelnan who is charged with UNI
loading a large amount of paper of ques-
| tionable value on the institution, Is Chi
cago lumber merchant,
Three Hundred Thousand Deposits.
The bank had about 100000 in deposits.
of which $4,000 was in savings accounts OF
working people.
Attorney Clarence Darrow, who is a
stockholder. paid up to the extent OF $l,Do
personally has come to the rescue or the
savings depositors. "All savings depositors
will be paid in full" said Attorney barrow.
ct will buy their books as they are pre-
| scented at the bank. The bank will be
opened In the morning under charge of
| pacetvar Hpaly"