The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1911-07-07
Statement Of Defense sets Forth =,
Length Transactions In Wrecked
Bank.
STATUTES VIOLATED
IN MANY INSTANCES
oSerorafts and Loans Permitted for
eenedum Promotions In Excess
Of Laws Provisions.

h decree in the famous case OF
NJ. l.. Benedum vs.. the First Citizens
sank OF Cameron. which was handed
down last week at Moundsville by
Judge Frank w. Nesbitt. and which
held Benedum responsible for the
wrecking Of the bank. has attracted
intense local interest. BY the decree
Benedum is directed to return to per
sons who were depositors in the bank
at the time OF its failure various sums
~aggregating about $3.50. 900. A part
OF the record or the case that gives
a concise and Interesting history OF
the case was the statement OF the
case nled on behalf OF the defense.
and presents In detail charges as to
the financial transactions OF Benedum
and others that brought about the
failure OF the institution.
This suit exploits the failure in
1908 OF the First Citizens Bank of
Cameron the brief states. and ia
brought by VI. l.. Benedum. who was
president from It's organization until
it closed business. lie was also n
member of the board OF directors and
the discount committee. Mr.. W. NJ.
Kincaid was elected president in Mace
of VI. l.. Benedum on December %.
1908. The bank closed on December
%. 1903. and no other person except
-lr. Benedum acted as president from
Its organization until 1t failed"
Unlawful Financing.
The statement then AYERS that NJ.
l.. Benedum was a promoter. and
while with the bank promoted or as
sisted In promoting the Cameron
Glass company. the Cameron Pottery
company. the Upshur Glass
and the Wetzel Glass mpa He
became the president of all four COM
panies. while Cashier Fox. OF the
First Citizens Bank of Cameron. be-
came treasurer OF the Cameron Glass
company. These promotions. with
their ramiications. we're financed by
Benedum Il Fox unIawfully using
the banks funds. and at the time OF
the failure Of the bank the outstand-
Ing unpaid liability OF the companies
amounted 10 s~7i.S74.S3. every dollar
OF which. with interest. the defense
alleges should be repaid the bank by
Benedum.
h stock OF the bank was $4,000.
with 30 per cent unpaid. though an
EFFORT was made 10 have II paid by a
dividend declared by the stockholders
January 81. 1902. II is claimed that
al that time the bank had no money
available for dividends. having bills
payable Borrowed money OF $4,000
and an overdraft Of s36.455. The over.
draft included an overdraft OF the
Cameron Glass company OF SS.595.Ol.
and an ovedraft OF ID. c. Harkins OF
81 .S60.57. the latter being really the
overdraft OF the Cameron Glass com
pany real estate addition to Cameron.
another promotion OF Benedum and
Fox with D.. c. Harkins. The dividend
was declared out of a paper showing
OF undivided profits OF S5.716.O2 and a
surplus OF $500. At the time deposits
amounted TO s166.722.O1. and the
statutory overdraft could not exceed
; per cen Of the deposits. or Is 300.
yet the books showed an overdraft OF
nearly 200 per cent of the amount OF
the capital. or nearly 25 per cent OF
the deposits. II did not have on hand
the statutory reserve OF - per cent.
and owed for borrowed money SAL
600. Instead OF being able TO pay a
dividend. IL was claimed the bank was
insolvent when the dividend was de
clared and hat all should repay the
40 per cent.
On January II. 1903. the bank de-
clared one other dividend. u per cent
case and Is surplus. II is claimed
that at the time Fox reported earn
nRs OF 80 per cent for this action.
that the Cameron Glass company was
ovcrdrawn $t2.37s.46 and VI. l.. Bene-
dum's accoun was overdraWn Stl.
s4l.92. II this time the statutory
overdraft could be {12. 600. instead il
was $50 .Ss647.
$4,000 Owed 20 Bank.
When the bank failed the promo
lions Of Bencdum and Fox we're
thrown into the hands OF the re-
ceiver. with assets o. little value and
owing the bank approximately $1,000.
The bank had a rule on It's books
forbiddinR oyerdraits.
The statement OF the defense then
goes on TO name concerns that were
, permitted 20 carry big %overdrafts. In
each one Of which Henedum was in
terested They included d. G.. Har
kins for the Cameron Glass company
addition. 3. H Outward Farm OH
company. Hammot Farm OIL company.
J. a Ingram Farm OIL company. In
gram Farm OH company. Cameron
Pottery company. S r 5tricklin. trus
Nffs anu ltIrbUhl NN'NIlIh. VI NINHf
Oyerdrans. when the bank failed =.
D. Outward Farm OF company. Cam
eron Glass COMPANY and " L. Hcnc
dunn. as agent. accounts totalled
SiO.329.O ".
The bank had n law that not more
than a limited amoun az tho capital
stock could be- loaned 90 any one per
SON. Arm or corporation The by
laws we're lost. but one official testl-
fed that the amount was o. per cent.
The law az tho time provided total
liabilities should not exceed 30 per
cent ~ capital stock. surplus and un
divided profits. hat the ovcrdruu
should not exceed 3 per cent ~ d
deposits. and mo- -sfockh0ldcr should
be- permitted 90 borrow more than ~
per cent ~ tho capital % the bank
H%encdum. flnrkins and Fox are no
legged o. have violated the statute
Overdrst Violated Law.
IN addition iO the oycrdrar. tho
Cameron Glass company was permit
ted to borrow money ON its notes to
the extent OF 10000 with Sfs.Ouu
paid up capital in tho bank. 1O per
cent - that capital should have boon
tho limit The Marshall Window