The Topeka state journal., 1908-08-29
LET'S lit Fall ON kansas City Ce.-
tral National Bank.
Charges That Cashier Made
False Statement.
KEEP OUT OF KANSAS.
Forbidden to Act as q Reserve
Agent.
Trouble Preeipitated Over q
Small Kansas Bank.

The Central National hank Of
Kansas City. No. having failed to fur
niSh this department with truthful in
formation relating TO its business with
n state hank in kansas. which inf0r-
nation was requested for the purpose
CT enabling this department 10 deter
mine the sOlvency Of such hank. il IS
hereby ordered that the said Central
National bank Of Kansas City. No.
will not be recognized by this depart
mSnV as q reserve agent for any Kan
SSS state or private bank or trust com
pany- and all such banks. under the
supervision OF the Kansas banking
department having balances with the
Central National hank OF Kansas City.
No. at this time are hereby notified
that such balances viii not be con-
Sidered part Of their legal reserve All
interested banks Will take notice and
be governed accordingly
The above order. issued today by
John @ Royce. state bank commits
Sioner. is one of the most drastic or
ders which has emanated from the
department for years
The ground for the action Is that D.
Thornton. cashier of the Central Ma
tional bank of Kansas City. deliberate
" and wilfully misstated the facts TO
w T Watson. one of the Kansas state
bank examiners
Mr. Watson had been making an in
veS1igation of a small Kansas bank.
the affairs Of which did not look right
to the department The name OF this
bank is suppressed by the department
The cashier OF the small bank was
suspected OF Irregularities. and Mr.
Watson went to Kansas City to in
veSttgate the reserve which the CASH
- ,1,-w e. - he - al
National bank of that city He called
upon D. Thornton. cashier of the Cen
trai National of Kansas City, and ask
ed him whether or not there were any
notes or other offsets held by his bank
against the apparent reserve carried
BY the small Kansas bank MI
Thornton assured him that the bank
had no claims whatever on the re-
serve
Mr.. Watson returned to Kansas.
and as result of his Investigations.
compelled the small bank to remove
its cashier. At about the same time.
the Central National bank in Kansas
City sprung $1,000 personal note
from the cashier of the small bank as
an offset to the banks visible re-
serve" and when Mr.. Watson called
upon Mr.. Thorton to explain this. he
was shown a letter from the cashier
of the small bank in which an agree
ment was entered into that the Cen
tral National should take the S1.2OO
personal note of the small bank s
cashier and enter it to the credit of
the banks reserve under the con-
dition that it should not be drawn
upon, the object being to make the
reserve of the Kansas bank appear to
be $1,000 more than it really was
This letter gave Thornton authority to
offset this note against the banks
reserve at any time Mr.. Thornton,
according to the statement of the
bank commissioner, made no excuse
for having told Mr.. Watson that there
were no offsets to the apparent re-
serve of the small bank
The disclosure of the misrepresenta-
ton of course made the shortage of
the cashier of the small bank $1,000
greater than it at first appeared
All this happened about week
ago. The bank commissioner has not
Communicated with the Central Ma
tionaI bank officials. He investigated
the facts, and then determined upon
the infiction of the punishment APP
parently the only way the Central Ma
tional bank can square itself IS TO get
rid of the parties who were respon-
sible for the deception pract1sed upon
the Kansas department.
The ruling will be hard blow to
the bank, for it can not act as reserve
agent for any Kansas bank, and hence
is practically shut off from all Kansas
want to try do business with an insti-
tuition where their deposits can not be
counted in as part of their legal re-
serve.
The Central National of Kansas City
is new bank, having been establish
ed in 1907. Its capital is 100000. its
reserve $4,000 and its deposits about
one million. G.. NJ. Smith is president.
Section II of the Kansas banking
law, under which Bank Commissioner
Royce took action against the Central
National bank, is as follows:
1.-The bank commissioner may refuse
to consider as a part of its reserve bal
ances due to any bank from any other
bank or association which shall refuse
or neglect to furnish him with such
as he may require from
time to time relating to its business
with any bank doing business under
this act. which shall enable him to de-
termine it's solvency." =
This is the first time in the history
of the state, so far as known, that this