The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-02-25
NOT CENT OF CASH
State Bank of HOlyrOOd Found
without Funds.
Every Dollar of Deposits Had
Disappeared.
PRESIDENT ARRESTED
Byron L. Church Is Charged
With DefalcatiOn.
Directors Made Up the $4,000
Deficit.


sas City today OF Byron L. Church, late
president of the State bank of Holy
rood, Ellsworth county, charged with
embezzicment. is an interesting story
of how the bank commissioners office
saved the depositors in this Holyrood
bank the round sum of 100000.
Bryan L Church was placed under
arrest at Kansas City. No. by the
chief of police following telegraphic in
structions from the sheriff of Els
worth county. The charge under which
he was arrested was embezzlement.
The funds of this bank were dissipated
largely by a former cashier, F. w.
Thomas, by speculation and bucket
shops.
The recent examination showed the
bank to be out Of line so far as its ac-
counts were concerned. though the ex-
animation did not reveal the short
ages which existed as they had been
covered up by forgeries of the books and
notes.
AS a result of the examination made
by the regular examiner a special ex-
SINNER was sent to Holyrood to re-
examine tie bank with Instructions to
get at the bottom of affairs If it took
a month. AS a result of this examina-
ton it was discovered that there was
q shortage of something like $4,000 In
the bank which had been carefully COW
cred by manipulation of the books by
the cashier.
The commissioner Immediately pro-
ceeCed TO take necessary steps to protect
the depoSitOrs of the bank and sue
ceeded in getting from the officers and
directors Of the bank property amount
ing to practically $100,0 900 and was in
Strumental i'll opening up negotiations
which placed the bank in the hands of
responsible parties and thus secured
tc the depositors every dollar of their
money and this without the doors of
the bank having been closed for a sin
gle minute.
After this was done. complying with
the law governing such matters the
county attorney of Ellsworth county,
in which Holyrood Is situation, was in
formed Of the violation of the banking
Jaw by the officers of said bank and
warrants were issued for said officers
which has resulted so far in the ar
rest of Mr.. Bryon L. Church at KAN
sas City yesterday as above mention
cd. The present cashier is a son of ex-
President Church. The young man will
he arrested as soon as he is located
by the officers.
DoIIey's Clever Coup.
The above is the official statement
of the affairs of the Holyrood bank
count of it's reorganization. But be-
hind this is the story of how Bank
Commissioner Dolley carried out a
plan of guaranty of deposits of his
own. The guaranty law is still in full
force and effect so far as the bank
commissioner is concerned. "They
have declared the guaranty law uncon-
stitutional." said Mr.. Dolley today.
but will guarantee deposits If have
to sell the homes of every bank direc-
tor of a failed bank and send them to
the penitentiarv to do it,
When the special examiner went to
Holyrood to take charge of the bank
he found it's affairs in such bad condi-
ton that he wanted to close the bank
at once, but Mr.. Dolley urged him to
wait and try to make the directors
make good the losses to depositors
Had the bank been closed it would
hardly have paid ten cents on the dol
lar.
The examiner waited and stood of
depositors as best he could until the
papers had been drawn up whereby
the electors signed over to the assets
of the bank $1O0,0C) worth of proper
ty to cover the 100000 deposits showr
by the books of the bank. 1t was {
hard job and only the threat of the
penitentiary made some OF the dlrec-
tors dig UP che coin.
Mr. Dolley argued that his first duty
was to the depositors anG he acted or
that theory to the letter. He found
that the directors had been negligent
in their duties of looking after the af-
fairs of the bank. In other word:
they had allowed it to be looted anC
they should be made to protect the
depositors whose interests they had
signallv failed to protect. He did no
close the bank at all, but he made the
directors make good the sortage anC
then turned the bank over to another
bank in solvent condition. The de-
positors can therefore get their money
on demand.
saved the DepOsitors.
1t was a very unusual thing to do
the handling of this bank contrary tC
all precedent in like cases. but as i
turned out the affair reflects grea
credit upon Bank Commissioner Dol
ley. He had been advised by the at
torney general that under the new
state banking laws directors could bt
held responsible for gradual lootins
of banks by system covering year,
of time. The directors had in thi
case been criminally careless. There
fore they should be made to pay tn,
fiddler Had the bank been closed anC
q receiver appointed then the depos
itors would have had to wait through
the endless period of litigation. whicl
is uncertain at best. The bold cours
appealed to the bank commissions
and he followed it against the advic
of some of his friends and advisers
His course in this matter and its at
tendant success may establish a prec
edent for bank commissioners through
out the country. where they hav
strong banking laws to back them u
in taking drastic action. Mr. Dolley'
success in the matter of the Holyroo'
bank tends to do away entirely wit
the need of a guaranty law.
Heretofore the directors and ric
men connected with the organizatio
of a Sank have always had plenty O
protectors, while the depositors hel