The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1924-09-20

~ Charles G. Dawes Is banker
He is at the head of the Central
Trust Company Of Chicago.
cago.
There is some discussion concern
ing the connection of Dawes and his
bank with William Lorimer and his
bank. Lorimer was expelled from
the Senate After his expulsion he
started in 1910 the La Sale Street
National Bank in Chicago.
William Lorimer was president
and Charles B. Munday vice presi-
cent of the bank, which started with
a supposed capital and surplus Of
1.250000. This bank opened May
10, 1910. During that year and early
in 1911 examinations of the bank
were made by the Chicago Clearing
House Association, and as a result
the bank was unable to obtain mem
bership in the association. After
May, 1911, it was denied the privi-
lege Of clearing through other banks.
Lorimer and his associates later
determined to change the national
bank into a State bank, to be known
as the La Sale Street Trust and
Savings Bank, with an advertised
paid in capital and surplus of ST.
$50 900, by turning over to the new
bank the assets of the national bank
subject to the national banks LA
bilities. but without putting up any
more money. Much Of the national
banks money had been loaned To
Lorimer and Murday, their asso-
cites, and speculative enterprise in
which they were interested.
Had to Have Money
Before the Lorimer Savings Bank
could open it's doors it had to have
permission from the State The Hi.
nois law requires that there must be
exhibited 70 and counted by the State
auditor Of public accounts, or his
agent, the actual cash representing
the paid-in capital and surplus
But Lorimer's bank didn't have
the $3.50. 600. Most Of the money
Of the national bank had been loaned
to the directors, Lorimer. Munday
ana their associates and their spec
ulatlve enterprises So Lorimer's
national bank could not turn over 10
is State bank the cash.
Not being able to get the cash
-ewhere, Lorimer appealed to his
friend Dawes The result was an
agreement between Lorimer and
Dawes whereby the Dawes bank.
the Central Trust Company. was TO
provide the s1.250,000 cash long
enough for the agent Of the State
auditor Of public accounts to look
at it and count 1t.
This agreement was carried out
A cashiers check Of the Lorimer Ma
tioual Bank for 81 $50 900 was drawn;
the auditors agent and Lorimer went
TO the Central Trust Company and
presented It for payment, and the
cash was delivered TO Lorimer in
the presence Of the auditors agent.
and by Lorimer handed over 70 the
agent. who counted it and handed
it back 70 Lorimer, The money was
returned to the Central Trust Com
pany, the cashiers check taken up,
a certificate issued TO Lorimer's saw
Inks hHiik ana Il Aot '}AAt tifAltE " MN
thereupon began doing business. 81
State Closes Bank
All this happened on the afternoon
Of Oct. -, 1912. On June u. 1914,
the Lcrimer State Savings Bank,
which Dawes had so generously
helped launch, was closed by the
State auditor A receiver was ap-
pointed and the court found the
bank insolvent and dissolved it. Its
assets were found TO he insufficient
by more than 100000 to satisfy
the claims of It's deposItors and other
creditors.
At the time the bank closed there
were over 1000 depositors. OF these
about 5000 were savings or other
depositors whose average deposit
was less than $500. The solvent
stockholders, many OF whom We're
people of moderate means. lost not
only the money they had invested
in the bank but had to pay in adj
dition amounts equal to the par
value OF their stock.
Subsequently the Central Trust
Company was sued for the benefit
of the Lorimer banks creditors fer
the $3.50 900 which the Dawes bank
had permitted the State officer to
count as the cash capital and sur
plus. Judgment was given against
the Dawes bank for the full amount
plus interest. being in all 81 49,
854.36. on appeal the Supreme Court
Of Illinois held that the Central
Trust Company had made itself
liable for the $3.50 900, but was en-
titled to credit for the Lorimer Ma
tional Bank capital stock of oct. -,
1912, IL 1t had any value; and the
case was remanded to determine the
value Of that stock, If it had any.
Master Makes Ruling
The matter was referred to a mas
ter in chancery, who reported finally
that the capital stock of the Lori
mer national bank at the time Of the
change to State bank had a value
of $1,170,303. So This was done by
finding that all Of the Lorimer and
Munday notes in the bank were as
good as cash. Although Munday
was ipsolvent on Oct. IL, 1912, the
master found that he was then worth
$3.50 ,958.26 over and above his liabili-
ties, and that. being solvent, his
paper in the bank was as good as
cash. He also found the Lorimer
paper to the amount of 215,299.33
was as rrOOd ae cash