The Lake County times. [volume] (Hammond, Ind.) 1906-1933, 1907-11-09
TWO OUSTED BANKERS
NOW FACE INDICTMENT
Criminal Charges Against
Officials Considered by
u. S. Prosecutor.
SPECIAL PROBE BEING MADE
Examiners Finish Investigation OF
North American and Mercantile
National Institutions.

New York Nov. 9.-As a result of
special Investigations by actual bank
examiners. United States District At
torney Stimson is considering the adj
visibility of beginning criminal ac-
tons for violations of the banking law
against two former officers of national
banks in this city. One of the men
concerned was an officer of the Ma
tional Bank of North America and the
other was connected with the Mer-
camille National bank
1t was asserted yesterday that the
offenses charged had considerable to
do with precipitating the drastic ac-
ton by the clearing house in the last
week in October. One of the accused
men may be called on to answer a
charge OF having wrongfully trans
ferred certain securities, and it is
likely that there will be at least one
charge of generalization.
Mr.. Stimson refused yesterday to dis
cuss the alleged violation of the bank
ing law, and the bank examiners were
equally reticent.
Sleuths Long on Trail.
Clearing house bankers have, how
ever, known for some time that the ma
up clews in both the National Bank Of
America and the Mercantile National,
and that the evidence would be laid be-
fore the federal prosecuting officer
Some bankers used their influence
with the national banking department
to prevent any action on these alleged
| offenses until the banking situation had
cleared, but now that both Of these
banks are rehabilitated and in good
condition the district attorney has been
urged to act. Any losses that the banks
may have sustained in the alleged
transactions may have sustained in the
alleged transactions have been cleared
up, but that, so 1t is declared does
not absolve those who were respon-
sible for the alleged violations of the
law.
1t was reported that the federal off,
Gals had been trying, for one thing,
to find out If there had been any sub
stitution of collateral loans in the
Bank of North America shortly be-
| fore the clearing house committee be-
gan it's campaign. The substitution of
collateral Is a daily occurrence in
most of the big banks. but usually the
collateral substituted is as good or
better than the original. Also a sub
stitution is generally passed on by
more than one officer.
Old Convictions Recalled.
The offense of overcertifcaton was
| the one for which William s. Kim
bill, president of the old Seventh Ma
tional bank, was fined $1,000 in May
1908. For the same offense James D
| Fish, president of the Marine bank
which failed in the Grant and Ward
panic in 1884, was sentenced to prison
for ten years.
The federal authorities in the case OF
the Mercantile National bank have, II
Is said. been looking into the loans that
were made to men who were officers
| before the clearing house committee be-
gan its campaign. The law forbids any
officer of a bank to loan to one person
more than 10 per cent of the banks
surplus and capital. How the law
would apply in case where a mans
| friends or close business associates
borrowed, for his benefit, in excess OF
the 10 per cent is q question that may
have to be settled