The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1929-02-16
Hope Financier, Trusted
and Admired, Admits
Huge EmbezzIement.
BRANDED MONEY MAD
Relatives Rally to Aid OF
Banker, Now Free on
$4,000 Bond.
BY GEORGE SCOFIELD
Times StafT Correspondent

Times Stan Correspondent
HOPE, Ind, Feb. 16.-Money mad
ness! Two words explain the down.
fall of Herman Stewart, trustee, re-
spected, loved Hope bank cashier.
Stewart, for twenty years cashier
of the Citizens National bank OF
Hope, is at liberty under $4,000
bond while the federal grand jury
probes a charge that he embezzled
$45, 900 of his banks funds. He
surrendered in Indianapolis Thurs
day, four hours after the bank closed
its doors.
His is an old story, and yet a new
one.
Born. and reared here in Hope.
forty miles southeast of Indianapolis.
he early won the respect and love
of the entire community.
Beginning his career as a school
teacher. he taught for twelve years
in the Hope schools. Then he mar
ried the daughter of Bartholomew
county's wealthiest citizen, Joseph A.
Spaugh, founder and at that time
president of the Citizens bank.
Wins Way to Cashier
Soon after, he entered his father
in-law's bank, and rapidly won his
way to the position of cashier.
Under his management the bank
grew rapidly and paid its stockhold-
ers much higher dividends than they
ever before had received.
The banks directors and its presi-
dent turned complete control of the
institution over to Stewart. Three
children we're born; he led many
civic activities; he was active in
church work; he became known as
the towns most shrewd business
man. He was a success
Then-Ynoney madness.
That, in SO many words, is what
Spaugh and other directors of the
bank blame for the crash.
Too much power, too much free
dom in handling the banks funds
he was not accountable to the d.
rectors, for they had given him COM
plete control-~and too many friends,
is Spaugh's analysis Of his Son-in-
laws downfall.
Had No Bad Habits
"I have no idea what Herman did
with the money" said Spaugh. Il
know only that he had no bad
habits, never gambled and never
drank. He wanted too much power,
wanted to show people he could
make unusually large profits for the
bank"
1t generally is believed that Stew
art began to juggle the banks funds
about five years ago. Tt was then
that he had the first of a series Of
arguments with Spaugh about loans.
He Stubbornly insisted on making
loans that I told him were poor
risks" the former bank president
said. eve had several arguments.
but his judgment proved good and
I let him handle the banks affairs,
The banks new president, elected
a year ago when Spaugh retired, is
Mart Holder. Since Holder took Of
flee Stewart is believed to have be-
come involved heavily.
His shortage, estimated at first at
,0J0, will be near $1o0,000 Holder
said today. National bank EXAMINE
ers, under direction of John F. UT
of indianapolis are checking the
books
Attempt to Repay Losses
Meanwhile Stewart, his wife and
three children, and the father-irl-
law, are making every move TO repay
his shortage to the bank.
Stewart was out of town today.
making arrangements to convert his
real and personal property into cash.
according to his wife, while Spaugn
said he was prepared to make good
part of the banks losses.
Mrs. Stewart, heart broken, ex-
pressed her determination to sacri~A
flee everything she owns to aid her
husband.
81 don't know what has happened.
although am certain Herman could
not do real wrong. He has told lis
nothing about 1t and the news Of his
arrest came as a heart breaking
shock to me. We shall do anything
to help him. she said.
Stewart, his wife, ard a daughter,
Marcile, live in beautiful country
home two miles from Hope. He has
two sons, Marlin and William, the
latter an assistant cashier in the
bank.
Fortune win Be Sacrificed
The home, the farnily's two auto
mobiles, and a 200-acre farm owned
by Stewart viii be sacrificed, hrs.
Stewart said.
The little town of Hope was
shocked to its very foundation by
the news OF the banks closing and
Of the charges against its cashier.
Stewards integrity never had been
questioned, and his reputation was
spotless.
Virtually every business man In
the town is steadfaSt in his belief
that a sincere effort TO save deposi-
tors, money prompted Stewart TO
manipulate his accounts.
CHARLEYS RESTAURANT open
for Sunday dinners, 5 to 8 b. uls--