Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1914-07-11
Check Shown to Have
Been Capital When Ma
tional is Organized.
RECORDS MADE PUBLIC
Minutes Reveal Successful Ef-
fort by Promoters to De-
Ceive State Examiner.

Chicago, Ill, July 1.-THE amazing
tale of the metamorphosis of the La
Sale Street bank from a national to
a state institution was revealed yes
terday.
The La Sale Street Trust & Saw
ings bank was incorporated with a
capital and surplus of S1,25O, 900. A
new bank, under the regulations, must
show it's capital in the form of cold
cash to the bank examiner before it is
allowed to open. The La Sale started
business as a state bank with $780,
600 in actual cash and about S2,5OO,OOO
in questionable investments in the en-
terprises of William Lorimer and
Charles B. Munday, transferred from
/ the old national bank. a fictitious
showing of S1,25O,OOO in cash appear
/ ed on the banks books for but one
day.
Here's What Happened.
On that day. Oct 81, 1912. the marv-
elous Transformation of the caterpillar
to the moth was accomplished. The
records and minute books of the old
and the new bank indicate the opera
tions of the day to have been as fol-
lows:
10 a. m.-Meeting of directors of
national bank Present: William Lor-
inner, Charles B. Munday. Harry w.
Huttig, Z. ]. Potts, c. E. Ward, George !
c. Gunderson, Charles G. Fox, James |
z. Bennett, Thomas II. Mcdonald, II.
NJ. Liston, w. a. Gardner, John K. |
Seagrave, Abraham Levin, p. NJ. Han
ney, and F. NJ. Spohr. Lorimer, Mum |
day, Fox, Seagrave, Mcdonald, Levin, |
Ward, Hanney, Huttig and SPohr have |
given their notes for S125.000 each to |
the bank. Cashier c. G. Fox is direct |
ed to draw a cashiers check for ST. /
25O,0OO, representing the capital /
stock To balance the books, the 10 !
notes are entered as assets. A reso- !
luton then is presented TO sell the as |
sets of the national bank.
Organization Proceeds.
1O:45 a. m.-Meeting of subscribers |
to state bank stock is called. Same /
men present, but only Huttig, AIunday, |
Potts, Liston, Mcdonald, Lorimer,
Gardner and Ward vote. They repre-
sent 1850 shares of stock. 1t is NOV
ed to proceed with the organization |
of the state bank.
IL a. m.-Enter John II. Rife, state |
bank examiner. His duty under the
law was 10 examine the assets of the 4
Few bank pass upon its solvency, and /
then require the officers to turn over 4
to him the currency equal TO the capf-
tai of the bank. Cashier Fox and EX-
an.1ner Rife then take the cashiers
check to the Central Trust company
of Illinois, which delivers to Rife
the currency. He counts it. The
meeting adjourns until 4:45 p. m.
The Cash Is Counted.
4:45 p. m.-Meeting of subscribers.
Mr.. Rife reports that he has counted
s1,25O,O00 of cash. He therefore is
sues the certificate. Exit Rife.
Sis p. m.-Meeting of stockholders |,
of La Sale Street State bank. Hut
tig, Munday, Potts. Mcdonald, Lori
mer, Gardner, Ward, Gunderson and
Bennett chosen directors.
$50 p. m.-Meeting of directors.
Moved that ar cash, accounts receiv-
able. stock accounts bonds, and 9TH
er assets of the national bank be TAX
en- over by the state bank in consid-
sumed Cashier Fox is directed to
pay the check of S1.25O.OO0 to the
Central Trust company and cancel the
notes of the 10 stockholders. The
bank is ready for business.
Law Violation Seen.
District Attorney James II. Wilker-
son is endeavoring TO prove the ma
tional bank was insolvent when it
underwent this fake liquidation. IL
that can be shown, the national bank
ing laws have been violated.
States Attorney Hoyne is interest
ed in knowing whether the new bank
was solvent when it organized in or
der to find IL the officers and directors
OF the state bank may be prosecuted
for violating the state laws.
Bank Examiner Rife disclaimed any
knowledge OF the fictitious show of
cash