The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-07-18
Doors of Peoples State Closed
This Morning.
Bad Cattle Paper and Irregular
tiles Given as Cause.
MAY REORGANIzE The BANK
None of Details of Failure
Given to Public.
Many Prominent Kansans at
Head of Institution.

Another chapter of the book OF Sa-
lima bank troubles was written today
when Frank H. Foster. state bank
commissioner, closed the doors OF the
Peoples State bank of that city. Bad
cattle paper and irregularities in the
handling of accounts by Z. McChes-
ney former cashier, were reported to-
day to be responsible for the trouble.
An effort will be made to reorganize
the bank thru assessments against the
stockholders.
None of the details of Irregularities
of bank management were made pub
lie thru the state department today.
altho it was admitted that directors
had recently forced the resignation OF
Cashier, McChesney. He is reported
to have mismanaged bank affairs ana
to have made a number OF bad loans.
The bank was also caught with big
block of Texas cattle paper
Under Guaranty Law.
The bank operated under the state
| bank guaranty law. Its losses are ex-
pected to exceed $4,000. J. H. SAM
| dell, assistant state bank commission
or, denied, tho, that the loss would
| reach 100000. He expressed surprise
| at the closing of the bank today. Thas
! the institution was in trouble ana nao
planned a stock assessment was known
! by the department for some time. NO
complaint has been filed against NC
| Chesney. He left the bank several
weeks ago. Since that time carefui
ichecking up of accounts is said to have
been under way.
| In its sworn statement as to condi-
tions June 30-date of the last state
! bank report-the institution showed
! $31371.20 in oyerdrafts. This situa-
ton is considered due to the carrying
| of a number of cash items against
/ ;ota ~ N
posit of funds. The bank also reported
is2S.S91.O3 worth of collections in
transit.
Prominent Kansans in Bank.
Prominent Kansans were at the
head of the bank, which was one OF
the comparatively new Salina institu-
tions 1t had made a rapid growth
and until the slump in markets during
the last few months was considered
lon strong earning basis. The carfiS
was correspondent for NUMBER o.
small ller-bapks in the Fifth and sixth
its report was made it showed depos-
its of other banks and bankers
amounting to s192,0se.4o.
Assets of the bank were $1,361,-
741.64. 1t was capitalized at $1OO.-
600, had surplus of $4,000 and un-
divided profits of $1O,756.01. Loans
and discounts amounted to $S77,-
636,37. Individual deposits subject to
check were s759,323.54. while addi-
4 tional depository items brought the
total of funds in the bank for safe
keeping and investment to more than
$1,100.000.
Many SaIina Business Men.
Officers of the bank include a num-
Der of well known Salina business and
professional men. c. E. Robinson
was president. Its vice president in
4 cluded F. r. Fitzpatrick, wealthy Sa-
L.. Tr.T Nn~s.sN
/ Fitzpatrick, newly appointed United
States marshal, and c. w. Burch,
prominent lawyer and brother of JUS
tice Rosseau A. Burch OF the Kansas
supreme court. other directors were
H L. Robinson, w. o. Lyter, r. J.
w. Seitz and c. L. Cramer. Since Nc
Chesney's resignation Cramer had
been cashier of the bank. G. p. Brown
was assistant cashier and signed the
last report
Commissioner Foster at SaIina.
State Bank Commissioner Foster
went to Salina Sunday to go over af-
fairs of the bank with it's officers.
This morning notice was posted in
the window of the institution an
inouncing that it had been turned over
to the state banking department pend
ing reorganization.
Reports in Topeka are to the eff
feet that the bank had recently been
| sold or was in process of being
transferred. According to this report.
| Guy T. Helvering. former Fifth dis
trict congressman, was planning to
buy the bank. Helvering is already
associated with Walter L. Payne.
former state treasurer, and Fred W.
; Knapp, former state auditor, In the
ownership of a Salina bank. This
bank was started little more than
year ago. 1t is seemingly apparent
from action OF the state banking de-
} partment today, tho. that the deal to
! sell the institution had not been
closed or had failed.
May Appoint Receiver.
It is probable that a receiver VIII
! be placed in charge of the institution
by the state department. Commis-
i sioner Foster, tho, had made no di-
! rect statements as to his plans
Closing of the Peoples State bank
: today follows within the last several
years failure of the Kansas State
bank and the financial troubles of the
Broeker-Lefferdink interests. The fact
, that the Peoples State operated un-
. der the state bank guaranty law in-
, sures its depositors against loss in
event the bank is not ultimately re-
, orgarized as going concern.
! Chinese Famine Spreads.
DaLir0 I1Iv 16-The national