First National Bank (Grinnell, IA)

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Receiver for Grinnell Bank

Washington, July 27.-The comptroller of the currency has appointed E. B. Shaw, a national bank examiner, as receiver of the First National bank of Grinnell, Ia., capitalized at $100,000. A statement of the condition of the bank, as given in its last report dated June 9, shows surplus and undivided profits $26,562; deposits $321,992.

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Spencers having suicided are not born out as matters were left in no state of preparation such as a man would naturally leave them in if he had planned his end. Washington, D. C., July 27.-The Comptroller of the currency today appointed E. B. Shaw national bank examiner as receiver of the First National Bank, Grinnell. Iowa, whose doors were closed by directors yesterday. The following statement of the condition of the bank was made June 9:Resources, loans and discounts, $389,700. Overdrafts, $2,500. United States bonds, $25,000. Banking house, $1.600. Due from bank, $32,100. Cash. $41,400. Redemption fund, $1,300. Total, $473.600. Liabilities: Capital, $100,000. and Surplus undivided profits, $26,600. Circulation. $25,000. Deposits, $322.000. Total, $473,600.

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COMPLICATIONS FOLLOW DOUBLE DROWNING Banker and Son Succumbed Though They Were Good Swimmers GRINNELL, Iowa, July 26.-The First National bank of Grinnell, whose leading director, H. C. Spencer, and Cashier W. C. Spencer, father and son, were mysteriously drowned here last week, has closed its doors pending an investigation by national bank examiners. The bank has been closed since the drowning, but no reason was assigned until today, when notice was posted stating that an examiner had been called for by the directors. It is known that there is a shortage due to the Spencers, but its amount will not be known until the examiner reports. The stockholders of the bank, however. will be abundantly able to take care of all deposits. The drowning of the Spencers. who were good swimmers, is a mystery which is still unexplained.

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GRINNELL'S FAILED BANK E

B. Shaw, a National Bank Examiner, Appointed Receiver. Washington, July 27.-The controller of the currency has appointed E. B. Shaw, a national bank examiner, as receiver of the First National bank of Grinnell, Iowa, whose doors were closed by the directors yesterday.

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APPOINTS RECEIVER

Comptroller Names Bank Examiner to Handle Grinnell Bank's Affairs. Washington, July 27.-The comptroller of the currency has appointed E. B. Shaw. national bank examiner, as receiver for the First National bank of Grinnell, Iowa, whose doors were closed by the directors yesterday.

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Grinnell, In. July 28.-Since the tragle double drowning of H. C'. Spencer and son. the doors of the First National bank of this city have been closed, awaiting an examination and a reorganization under a new cashier. It is learned that some Irregularities, including complicated book entries, have been discovered and the directors have decided that the only safe plan would be to await an examination by a bank examiner. Either Examiner Shaw or Examiner Miller is expected today. The doors are still closed, with this notice posted: "By an order of the board of directors this bank will be closed until the national bank examiner has made an investigation of the bank's affairs." Public Is Nervous. The public is nervous, naturally. and all sorts of runiors are rife, but this much is certain, there will be a serious shortage but it will not be large enough to affect depositors, the directors even hope that what now appears to be a deficit may be explained away by the examiner. The national banking law holds all stockholders liable for an assessment equal to the amount of their stock besides the loss of the stock itself, which will amply protect depositors. The First National was capitalized at $100,000. Its surplus was $27,500, and its deposits ran about $300,000. Its list of officers included J. P. Lyman, president; David Vanderveer, vice president: W. C. Spencer, cashier, and W. C. Statt. assistant cashier. Its directorate was composed of J. Childs, C. F. Childs, II. K. Edson, W. S. Hendrixson, J. P. Lyman. L. F. Parker, C. H. Spencer, H. C. Spencer and D. Vanderveer, all of whom were heavy stockholders in the bank. One-fourth of the stock was owned by the Spencers, and H. C. Spencer has considerable property that can be applied to the liquidation of any liability. Old Affair Recalled. It will be recalled that when Charles H. Spencer was killed about ten years ago, there was talk of an alleged deficit or unsecured liabilities to the bank of $20,000. The directors were made to believe that this was fully settled. It is now claimed that securities were substituted and carried as assets, and that H. C. Spencer kept up the interest on them. The stockholders of the First National are pioneer settlers, who knew the Spencers years ago. The directors are men of known probity and character. They are men who will surrender every dollar they have in the world rather than wrong any creditors. Whoever suffers they will suffer the most. Every one of them had the most absolute confidence in their cashier. Should the worst develop in the examination the mystery of the drowning accident may be explained.

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CITY OF GRINNELL FEARS THE WORST WILD RUMORS AFLOAT ABOUT ITS FIRST NATIONAL. Stories of Forgeries and Shortages Aggregating Over $200,000-Nothing to Indicate Clearly that the Spencers Were Suicides or that Their Accounts Are at Fault. Special to The Journal. Grinnell, Iowa, July 29.-The directors of the First National bank, whose cashier and bookkeeper were drowned July 20, decided to close the bank pending an investigation into its affairs, and requested that a bank examiner be sent by the government. The examiner took charge yesterday, and is engaged in going over the accounts. This action caused the wildest rumors concerning the condition of the bank. The town is nervous and apprehensive and stories of forgeries and shortages amounting to over $200,000 have found ready circulation and belief. There appears to be no adequate reason for the sudden alarm. The bank directors had trusted implicitly in Cashier Spencer, whose connection with the bank covered thirty-one years of service. His tragic death by drowning, together with his son, last week, gave the town such a shock as it has not had since the tornado of 1882. Whether the bank directors had any further motive than a natural feeling of prudence in requesting the investigation has not been made public. Since the examiner assumed charge he has given out nothing, and will not until his work is finished. While a shortage may be found, there is as yet nothing to indicate that the death of the Spencers was due to suicide, in place of accident, or that anything is wrong with the bank's accounts. No receiver has been appointed, and none will be until the bank inspector sends in his report. The city is in the grip of a blind unreasoning fear, and the most absurd tales gain credence.

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WEDNESDAY

Fire at Two Harbors, Minn., de strcyed the car shops and their contents of the Duluth & Iron Range Railroad Co. Loss, $75,000. Henry Holmes, a colored man, shot his mother, Mrs. Ellen Holmes, and af terward blew off the top of his own head at South River, 'N. J. His mother cannot live. Rear Admiral H. C. Taylor ,U. S. N.. who commanded the Indiana at the battle of Santiago, died at Copper Cliff General hospital, Sudbury, Ont., of peritonitis. W. E. Livingston, the American who was injured at San Sebastian, Spain, Sunday in the panic following a fight between a tiger and a bull, is pushing his claim for indemnity and has engaged counsel. The Steel Company of America, with an authorized capital of $3,000,000, was incorporated at Trenton, N. J., to manufacture and deal in steel and other metals. The incorporators are A. H. Henderson, A. T. Smith and E. C. Sicardi of Jersey City. The First National bank of Grinneli, Ia., whose leading director, H. C. Spencer. and cashier, W. C. Spencer, father and son, were mysteriously drowned here last week, has closed its doors pending an investigation by the national bank examiner.

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APPOINTS RECEIVER FOR IOWA BANK WASHINGTON, July 27.-The comptroller of the currency has appointed E. B. Shaw, a national bank examiner, as receiver of the First National bank of Grinnell, Iowa, whose doors were closed by the directors yesterday.

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LATER

At Sagamore Hill, President Roosevelt formally received and accepted the nomination of the republican party for president of the United States. The formal notification was made in an address by Speaker Cannon. The speech of the president will be circulated extensively in the campaign, as, aside from the letter of acceptance which he will issue in a few weeks, it will be his only public utterance during the campaign. The comptroller of the currency has appointed E. B. Shaw, a national bank examiner, as receiver of the First national bank of Grinnell, Ia., whose doors were closed by the directors. Twelve business houses were destroyed by fire at Mora, Minn., causing a loss estimated at about $70,000. George Stanley, of Cadillac, was nominated for congressman by the democrats of the Ninth Michigan district. Rear Admiral Philip H. Cooper, commander-in-chief of the Asiatic station will be retired August 4. The death of John Rogers, sculptor and designer of the famous "Rogers groups" of statuary, is announced. It occurred at his summer home in New Canaan, Conn. Russian refugees who have arrived at Chefoo report that theLieutenant Burukoff and two other Russian torpedo destroyers were torpedoed and totally destroyed by the Japanese on the night of July 25. The Japanese casualties in the fighting before Tatchekiao were 800. Hon. Cyrus P. Walbridge, of St. Louis, was nominated for governor of Missouri on the first ballot taken by the state republican convention in session at St. Joseph. Ex-Senator Davis, when asked for an expression of opinion in regard to the selection of Mr. Thomas Taggart, of Indiana, for natinoal chairman, refused to comment on the committee's action. Albert F. Dawson, private secretary to United States Senator Allison, was nominated for congress by republicans of the Second Iowa district. Justice Scott, of New York, has signed the formal decree of divorce, dissolving the marriage of Lillian Nordica, the singer, and Zoltan Doehme. There were 79 passengers and 840 employes of railroads killed and 1,590 passengers and 10,854 employes injured in accidents on railroads in the United States during the quarter ended March 31, 1904.

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DEATH MYSTERY CLOSES BANK Grinnell People Stirred By Drowning of the Spencers. ACCIDENT OR INTENTIONAL Death of Prominent Banker Followed By Closing-Bank Examiner Takes Stepsfor Investigation of the Affairs of the First National Bank. Grinnell, July 28.-Absolute ruinthat is the specter that confronts more than one stockholder of the First National Bank of Grinnell, whose affairs were brought to a woeful pass through the manipulations of Cashier H. C. Spencer, who met such a tragic death by drowning last week with his son, C. H. Spencer, a bookkeeper in the bank. So serious is the situation that a receiver has been appointed. While at first it was not believed that the shortage in the accounts of Cashier Spencer would be very large, perhaps not more than $25,000, it is now believed that that it will wipe out absolutely the $100,000 capital stock of the bank. and perhaps more. The stockholders will be required under the national banking act to make good any loss to the extent of twice their stock holdings, and this will deprive a number of them of all they have in the world. It is absolutely impossible to get definite information concerning the bank's condition from National Bank Examiner Shaw. who arrived here Tuesday to take charge. or from the officials and directors of the bank. They refuse tc talk. However, some of the stockholders have stated that the loss would be heavy and that they feared financial ruin for themselves in protecting the interests of their depositors. It is currently reported that evidence of forged securities has been found by officials of the bank in their investigations. No statement to this effect could be secured from the efficials. but the report is based upon statements by responsible stockholders. This forged paper, it is alleged, was used to cover up the shortage and in accounting for bank funds wrongfully abstracted from its vaults. If the full story of the wrongdoings of Cashier Spenctr is ever made known it is believed that it will tell the pathetic tale of a devoted son's sinning to shield an erring father from exposure. About ten years ago one of the officers of the First National bank was C. H. Spencer, father of the late Cashiom U.

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HAPPENINGS IN IOWA

EVENTS OF A WEEK THROUGH- OUT THE STATE.

Closing of the First National Bank of Grinnell Results in a Crop of Wild Rumors of Im- mense Shortage.

The directors of the First National bank of Grinnell, whose cashier and bookkeeper were drowned July 20, de- cided to close the bank pending an in- vestigation into its affairs, and request- ed that a bank examiner be sent by the government. The examiner took charge and is engaged in going over the accounts. This action caused the wildest rumors concerning the condi- tion of the bank. The town is nervous and apprehensive and stories of for- geries and shortages amounting to over $200,000 have found ready circu- lation and belief.

There appears to be no adequate rea- son for the sudden alarm. The bank directors had trusted implicitly in Cashier Spencer, whose connection with the bank covered thirty-one years of service. His tragic death by drown- ing, together with his son, last week, gave the town such a shock as it has not had since the tornado of 1882. Whether the bank directors had any further motive than a natural feeling of prudence in requesting the investi- gation has not been made public. Since the examiner assumed charge he has given out nothing, and will not until his work is finished.

While a shortage may be found, there is as yet nothing to indicate that the death of the Spencers was due to suicide, in place of accident, or that anything is wrong with the bank's ac- counts. No receiver has been ap- pointed, and none will be until the bank inspector sends in his report. The city is in the grip of a blind un- reasoning fear, and the most absurd tales gain credence.

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BANK MYSTERY WHY DID THESE MEN END THEIR LIVES? Institution That Seems to Have Caused Three Deaths Now in Government's Hands. Grinnell, Ia., Aug. 1.-Three men, father, son and grandson, are victims of the First National bank of this city. There is a mystery in the violent deaths of these three men, all intimately concerned with the management of the bank which was closed on the day after the two last named died, whether by accident or suicide may never be known. Twelve years ago C. H. Spencer, founder and president of the bank, died by his own hand. Till now there has been no suspicion of irregularity in his management. His son, Henry C. Spencer, cashier, succeeded to the management and his son, in turn, was bookkeeper and confidential man. Ten days ago this father and son went in their launch to the middle of the little lake on the edge of town and jumped into the water. Both were drowned. Next day the bank closed. With a government examiner in charge absolutely nothing official as to conditions can be learned. But one story is that the original Spencer when he gave up the struggle twelve years ago, left the bank insolvent and that his son and grandson, covering up the fact, have struggled twelve years to restore solvency and finally, giving up, committed suicide together. This is the belief of most people in Grinnell. The bank is credited in its last statement with about a half million balance. Sensational developments are expected when the receiver makes his report.

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Examiner's Report Reaches Washington But ( ontents Are Kept Secret RIDGELY CALLS IT TOTAL WRECK Comptroller of Currency Says Spencers Would Have Been In Penitentiary Had They Lived - Grinnell Still Insists That Depositors Will be Paid, Few Stockholders Are Ruined. Washington, Aug. 10.-Examiner Shaw's report on the bank failure at Grinnell was received by the comptroller of the currency yesterday but there is a continued air of mystery about the affair yet and the officials refuse to make the report public. Comptroller Ridgeley says the bank is completely wrecked and that is all there is to it. "The report received today from Mr. Shaw," said Comptroller Ridgeley, "indicates that the affairs of the Grinnell bank are in an almost interminable tangle, and their unraveling may take many weeks. According to the report gross frauds have been committed, criminal in character. The report also shows that the Spencers, father and son, were the parties to the commission of the crimes, and they are dead. So far as I can ascertain there does not seem to be anyone left connected with the Grinnell bank who can in any way be held responsible for the fraudulent actions of the Spencers. It is a most remarkable case, and bids fair to be one of the most interesting that has been brought to the attention of the department for years." In this connection Comptroller Ridgeley said when he was appaised of the death of the Spencers, he went over to see Secretary Shaw, and in his office found Representative Hepburn. He explained that the Spencers had been drowned, but there was a suspicion of sucide due to certain elements of the affairs of the First National bank at Grinnell. Col. Hepburn. it is said, spoke up and assured Mr. Ridgeley that there could not be the slightest doubt as to the probity of the Spencers, as they were held in the highest esteem in the community in which they lived. "Subsequent events would seem to disprove Col. Hepburn's judgment," said Mr. Ridgeley, "as it appears quite evident that the Spencers' were entirely and alone responsible for the disasterous wrecking of the First National bank at Grinnell, and that thru methods, which, had they lived, would probably have landed them behind the bars. "This only proves," continued Mr. Ridgeley, "that a man having made a reputation for honesty and fair dealing in a community may do almost any fraudulent thing for years until some such catastrophe as overtook the Spencers bring home the fact that they have played upon the credulity of the public for dishonest purposes." Comptroller Ridgeley said that in all probability Bank Examiner Shaw would be held at Grinnell for some time to continue further his examination into the bank's affairs. As to the appointment of a receiver for the bank, Mr. Ridgeley said he could not under present conditions say whether such'an official would be appointed or not; he would await further advices from Mr. Shaw. The fact of the matter is the bank is completely wrecked and the wreckers are dead.

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SHORTAGE INCREASES FORGED PAPERS AMOUNTING TO $204,000 FOUND IN GRINNELL BANK. Grinnell, Aug. 9.-Forged paper to the amount of $204,000 has been found in the private accounts of J. C. Spen. cer, cashier of the First National bank of this city, which institution was closed shortly after he and his father were drowned in an artificial lake near this city a few weeks ago. The defalcations are so large that the bank will never be able to re-open. It will also undoubtedly financially ruin a large number of people in this vicinity. The theory that the Spencers committed suicide and were not accidentally drowned, is generally believed. The exact amount of the defalontions will not be known until Receiver Snaw has finished his examination of the bank's effairs.

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Criminal.

An unknown Italian who, it is alleged, attempted to kidnap Helen White, narrowly escaped lynching in Allegheny, Pa.

E. W. Johnson of Dunkirk, colored 70, has been arrested at Kenton, O., charged with murdering his first wife 28 years ago at Hillsboro.

A plot has been discovered by Foreman Griever to blow up the penitentiary, at Columbus, O. Warden Hershey says four or five prisoners are suspected.

Eight men who are charged with making spurious coin were arrested by federal authorities in a raid on an alleged counterfeiting den in a basement in Chicago.

Safe blowers wrecked the safe and building of the postoffice at New Sharon, Iowa, getting away with $250 in cash and stamps. Entrance was effected through a rear door.

William S. Denny was found bound with a rope and weak from the loss of blood at Marion, Ind. He had been in a hospital. He said two colored men robbed him and then mutilated his person.

Ten thousand two hundred dollars in counterfeit $2 bills were found by secret service agents in the house of Dr. Frank G. Sanft, a prominent Roxbury (Mass.) physician, after Sanft had been arrested by the police on a charge of having passed a bogus bill upon a street vendor.

Bank Examiner Shaw, who was appointed temporary receiver of the First National bank of Grinnell, Iowa, has finished his work and Mr. Work of Iowa City has been made permanent receiver. There was found $207,000 of fraudulent notes.

Two million lottery tickets were secured in Chicago in the detectives' raid on the Pan-American and Italian lottery companies. The promoters of the company were arrested and the cases continued. The place of business was in most fashionable quarter of the city.

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The first report of the receiver of the First National Bank of Grinnell, Iowa, was filed with the comptroller of the currency at Washington, Thursday. The comptroller authorizes the statement that owing to the large amount of forged paper among the assets, an assessment against the shareholders for their full 100 per cent. liability has been levied.

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SHAREHOLDERS HARD HIT.

Handred Per Cent Assessment Against Grinnell Bank Stock.

A Washington, D. C., special says: The first report of the receiver of the First National Bank of Grinnell, Ia., was filed with the comptroller of the currency Thursday.

The comptroller authorizes the statement that owing to the great amount of forged paper among the assets an assessment against the shareholders is necessary and has been levied.

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Stockholders Assessed

Washington: The first report of the receiver of the First National Bank of Grinnell, Iowa, was filed with the Comptroller of the Currency Thursday. The Comptroller authorizes the statement, that, owing to thte large amount of forged paper among the assets, an assessment against the shareholders for their full 100 per cent liability is necessary and has been levied.

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AROUND THE STATE.

Ex-Congres-man Joe R. Lane of Davenport has consented to take a two months vacation from nis business as an attorney and accept the chairmanship of the Second district congressional committee to manage the campaign of Candidate A. F. Dawson.

The democrats of the first congressional district have nominated as their candidate for Congress Jonn E Craig of Lee County.

A peculiar case in the district court at Fort Dodge is that in which one M. M. Wheeler sues the city of Fort Dodge for $20,000 damages for personal injuries sustained on July 4, 1933, being struck by a "slide for life" performer, who met her death there on that date by the breaking of the harness which she wore. The case involves a question of liability on the part of the city for the accident and the injury of the plaintiff, who was a spectator.

The receiver of the First National bank at Grinnel, is mailing notices to stockholders of the assessment that has been made against them of $100 per share to meet the deficit in the bank's funds. The language of the comptroller demands the fuil payment and directs the receiver to proceed "Dy suit or otherwise to enforce" to the extent of $100 per share the ind voual liability of each share holder.

Charles Anderson, aged 17, of Iowa City was run over and suffered a crushed right leg and a concussion of the brain, which resulted in his death three hours later, while jumping a freight train in the switch yards.

E. O. Sou.e the cashier who embezzled over $50,000 from the Home Savings bank at Iowa Falls, has been taken to the penitentiary at Anamosa to serve cut a sentence of eighteen mouths. A few years ago a man who stole a bicycle in the same county was sentenced to the penitentiary for three years and the bicycle was recovered.

After a short but hot fight between the silver and the gold democrats in the Ninth district convention, Hamilton Wilcox, a wealthy farmer of Griswold and a well-known anti-Bryan democrat was nominated for congress.

A couple of hundred coal miners employed by the Colfax Consolidated Coal company in its mines at Andersonville and Seevere, mining camps just over the line from Polk. to Jasper county, quit work because the company would not provide them with free transportation to and from the coal mines.

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Secretary of the Treasury Leslie M. Shaw, who spent Wednesday in Grin nell, to consider the petition of depositors of the First National bank, who are dissatisfied with the appointment of Receiver Swords, the present incumbent, arrived in the city at 4:53 Wednesday evening, and left at 5:29 for Denison, where he will remain for a short time before returning to Washington.

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'Phone Company Reorganized

Special to Times-Republican. Grinnell, Dec. 21.-At the reorganization of the Newburg and Grinnell Telephone Company, whose affairs have been in the hands of a receiver and the property sold at public aution, the following officers were elected: President, J. L. Burroughs; vice president, N. W. Cox; secretary, Thos. Mason; treasurer, A. H. Palmer. Trustees-J. M. Campbell, E. P. Bonsall and John Newcomer. Thirty-one members signed the constitution and by-laws and the company is ready for a prosperous business. The depositors of the First National bank have received about $40,000 since the first check was given out about 3 o'clock Saturday afternoon. T. R. Cessna drew the first check given out, and, so far as known, J. F. Wilson drew the smallest, one, calling for 22 cents.

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Many Opposel to Prevailing Bank Examinations, But Cannot Devise Better Substitute

STATE BANK EXAMINER TALKS

M. A. Buchan, of Grundy Center, Says Much of the Criticism of Present System Comes From Thoughtless People Who Do Not Know Duties Involved and Overestimate Them.

Special to Times-Republican. Iowa City, Sept. 30.-"I have talked with a great many bankers and finan- clers during the past few years," de- clared M. A. Buchan, state bank exam- iner, whose home is in Grundy Center, to a T.-R. correspondent, "and though nearly every one of them was opposed to the present system of bank examin- ation at the start, they confessed that they could devise no better before we had finished the subject. Our present system of bank examination, both state and federal, is faulty like our jury sys- tem, but up to the present time there has been no substitute, equally good, suggested for either."

"A great deal of criticism of our present system comes from thought- less people who really do not know what our duties are, and therefore largely overestimate them. You must understand that we are not supposed to pass on the validity of securities held by the bank. Thousands of dol- lars worth of forged notes can be placed in our hands by a dishonest bank president, and unless they look especially suspicious and we make a special investigation of them, we never would detect the fraud. That is what your bank directors are elected to of- fice for. It is their work and theirs alone to pass on the validity of the se- curities in the safe of the bank. Yet when a bank fails as that Grinnell Na- tional bank did, where the president used the devise just mentioned, to con- ceal his embezzlement, the bank exam- iner is blamed for not checking his work sooner.

"We do protect our clients, however, from a great many of the frauds that could be engineered under their very noses, such as the alteration of books, and the manipulation of foreign cred- its. These acts are very readily de- tected and when the criminal is caught he is very promptly punished. Fully fifty per cent of the men who are de- tected, however, are never publicly ex- posed. There are several reasons for this action on the part of the board of directors. If the loss is small and there are believed to be extenuating cir- cumstances in the case, these men as a usual thing like to give the fellow an opportunity to straighten up again. Publicity might also cause a run on the bank, which is always feared. I hard- ly think a better system will be devised in several years."