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CLOSES FARIBAULT BANK Examiner Takes Action But Gives No Reason For lt. Washington, Jan. 3.-The First National bank of Faribault, Minn., has been closed by the bank examiner. Lyman B. Baired was appointed receiver. The comptroller of the currency stated no reason was given for the closing.
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Minnesota Bank in Trouble WASHINGTON, Jan. 3.-The First National bank of Faribault, Minn., has been closed and a bank examiner has been appointed receiver.
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by the report of the temporary receiver in deciding whether the First National Bank of Faribault shall be permitted to reopen. Receiver Baird will consult stockholders and report in a week or ten days. -Walter E. Clark.
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FARIBAULT BANK CLOSED. The First National of That City Fails to Realize on Securities. The First National Bank of Faribault has closed its doors and suspended operations. The controller of the currency has appointed Bank Examiner Lyman D. Baird of Austin, receiver. J. B. Clement is president of the bank and T. M. Whitney is cashier. Officers of the bank hope to be able to open the bank again in a few days. The bank was the óldest one in the city and its suspension has caused a sensation. The failure of the bank is believed to be due to injudicious investments in stocks. The amount of bonds and securities in the bank is $128,575, or more than double its capital and reserve fund of $10,000. Those familiar with the situation believe the depositors will eventually be paid, basing their conviction on the character of the bank's directorate. Judge Buckham, who is said to be a millionaire and the richest man in Rice county, is its vice president, and other prominent stockholders are K. D. Chase, G. W. Batchelder, T. B. Clement, H. C. Theopold, Donald Grant and A. W. McKinstry.
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Looks Bad for Bank Special to The Globe FARIBAULT, Minn., Jan. 10.-No statement has yet been made of the condition of the First National bank, recently suspended. However, there is reported to be reason to fear that affairs are more involved than was at first supposed. Among the enterprises in which this banking institution was interested were orange farms in Florida, mineral lands in Orinoco, a local electric light company, and it had invested besides in mill property and other real estate which at the present is not marketable. It is stated that at the last meeting of the directors immediately prior to the suspension, the president of the bank, T..B. Clement, turned over to the bank all his property except his homestead.
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# HOW CLUB HELPS FARIBAULT Work of Business Men's Organization Reviewed by President Quinn. FARIBAULT, MINN.—At the annual meeting of the Faribault Commercial club, the president, T. H. Quinn, reviewed its work of the past two years. It has secured for Faribault several manufacturig industries, including a shoe factory employing 150, and a company which makes the best gasolene engine on the market. It has added $50,000 a year to the wage-earning opportunities of the city; has protected shippers from undue exactions by railroads and tax-payers against unjust assessments, and prevented the imposition by express companies of a proposed exorbitant rate. It has besides brought the business men of Faribault together and established between them relations of mutual respect and confidence. In closing, the president referred to the recent suspension of the First National bank as follows: "There is but little that can be said about this unfortunate occurrence at present, for little is known; but this we can say: It did not come about thru any default or failure of the city or its people. "In the face of this disappointment, the Commercial club gives the order to close up ranks and march close together; let our needs, our pleasures and our extravagances, if these must be, be made to contribute to our city's support." At the close of the president's speech, he was presented by B. B. Sheffield on behalf of the club with a gold-headed ebony cane, suitably engraved. Officers were elected as follows: Thomas H. Quinn, president; K. D. Chase, first vice president; D. W. Grant, second vice president; B. B. Sheffield, third vice president: Isaac Brockman, secretary; George Pease, treasurer; E. T. Kelly, H. C. Theopold, E. H. Loyhed, D. I. Phelps and P. H. White, directors. Preliminary arrangements were made for a reception to be given in the near future. Samuel Freed of St. Peter intends opening a drygoods store here about March 1. The Faribault Woolen Mills, closed down for a few weeks, will start up again next Monday. The following officers were elected by the Farmers' Elevator company at its annual meeting: Theodore Thom, president; C. Lowe, vice president: L. Petters, secretary; E. Kaul, treasurer; S. J. Leehy, C. T. Monahan, Fred Lemke, George Weston and George Woods, directors. The city council appointed officers of the fire department as follows: E. F. Kelly, chief; Joseph Brandes, first assistant; H. C. Fredette, second assistant. At its annual meeting Tuesday the Rice County Medical association elected officers as follows: Dr. F. M. Rose, president; Dr. W. A. Hunt, Northfield, vice president; Dr. Huxley, secretary: Dr. Robilliard, treasurer.
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MISAPPROPRIATION CHARGED. President of Defunct Minnesota Bank Under Arrest. Faribault, Minn., Feb. 7.-T. B. Clement, president of the suspended First National bank of this city, has been arrested on the charge of misappropriating the funds of the bank. The arrest of Mr. Clement was made by Deputy United States Marshal William Grimshaw, Jr., and the prisoner was taken to St. Paul and arraigned before United States Commissioner Spencer. He pleaded not guilty. His bond was fixed at $5,000 and was furnished. Mr. Clement, who is seventy-one years of age, is charged with three separate violations of the national banking act.
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MISAPPROPRIATION CHARGED. President of Defunct Minnesota Bank Under Arrest. Faribault, Minn., Feb. 7.-T. B. Clement, president of the suspended First National bank of this city, has been arrested on the charge of misappropriating the funds of the bank. The arrest of Mr. Clement was made by Deputy United States Marshal William Grimshaw, Jr., and the prisoner was taken to St. Paul and arraigned before United States Commissioner Spencer. He pleaded not guilty. His bond was fixed at $5,000 and was furnished. Mr. Clement, who is seventy-one years of age, is charged with three separate violations of the national banking act.
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FARIBAULT BANK REORGANIZATION Depositors' Committee Has a Plan to Rehabilitate the Failed Institution. Eighty Cents on Dollar Proposed in Payment - Depositors' Meeting Postponed. Special to The Journal. Faribault, Minn., Feb. 21.-The meeting of the depositors of the defunct First National bank, which was to have been held Feb. 25, has been postponed until March 4, in order that the committee may be in a position to report to the depositors the condition of the properties in Georgia in which much of their money is invested. Plan for Bank Reorganization. The members of the committee have a plan for the reorganization of the bank which they believe to be feasible and which they expect to formulate and to submit to the directors. The depositors will be willing, they believe, to accept 80 cents on the dollar as full payment of their claims, and they will also be willing to wait any reasonable length of time for their money. In making this concession they would cancel at once $100,000 of the bank indebtedness. It is proposed to ask the directors, whose ability to finance the business is not questioned, to agree to pay this 80 per cent, and all other claims. and reopen the bank. Of course, before this could be done, all depositors would have to agree in a some legal form to such settlement, but it is the opinion of the committee that this obstacle could be overcome. How the directors would regard such a proposition is not known, but there can be no doubt that there is not one of them who would not sacrifice to rehabilitate himself in the opinion of the public. Whether there is a method by which the receiver could/vacate his office and turn the bank over to the directors is 8 matter which has not vet been given much consideration, but if the claims of all creditors are satisfied there can be little doubt that some way could be found of reopening the bank. Want to Hear from Baird. Mr. Baird, the receiver, is making a personal investigation of the affairs of the De Soto Fruit, Agricultural & Man ufacturing company and of the Minne sota Lumber company of Georgia and is not expected to return before the end of this week. The committee ex pects to avail itself of the information he will acquire and present it to the de positors at the meeting on March 4. While the statement of the condition of the De Soto property, recently pub lished in T h J ur n al, has familiar ized the public with regard to its af fairs, the committee so far has only Mr Clement's statement of the business done and the property owned by the Minnesota Lumber company. This it members would prefer to have Mr Baird substantiate before they accept it as authoritative, and as representing the facts. This statement was givei the members of the committee in an in terview held at Mr. Clement's hous a day or two ago, and is of a very roseate character. Lumber Company's Showing. The Minnesota Lumber company owns two "lots" near Valdosta, which are represented as bearing a heav growth of timber, mostly pine. Each 0 these 'lots' centains 480 acres. Th company has also purchased stumpag besides that on its own property. has built into these lots temporary rail roads for the transportation of logs an has equipped them with suitable rolling stock. It has two sawmills, a shingl mill and a planing mill. It was turnin out at the time when the report wa made from which Mr. Clement quote to the committee, 25,000 feet of lum ber a day, and had more orders that it could fill. The price of lumber wa good and was advancing. The company, Mr. Clement said, wa at that time making a net profit 0 $2,000 a month. Just why, when it wa doing so well, it was necessary to sen it in December, $71,000, Mr. Clement di not explain, altho he admitted that pos sibly some of it was used in the pur chase of the outlying stumpage th company has acquired. He still pro fesses to regard the investment as gilt edged and to think that under prope management the company will be abl to pay the bank all it owes. What It Had Planned. The committee has learned from othe sources that the lumber company ha extended, or at the time of the bank failure was about to extend, its opera tions into Florida and to add to it other industries that of the constructio of railroads. It has not yet all th facts in its possession, but the nature o the prospective contracts is known The railroad was to build thru Florid timber lands and in part payment fo its work the company was to be give alternate sections of the timber land which is traversed. Much of this timbe land is reported to be primeval fores and to be very valuable. The chairman of the committee ha written letters to friends in a positio to inform him as to the facts of thes alleged grants and expects by March to be able to make a full statement o them to the depositors. Many Loyal to Clement. It would be a great mistake to sur pose that any revelations of his method of doing business which have been mad have turned away from Mr. Clement a public sympathy or that he has alread been condemned in everybody' min by the ex parte statements of th
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HAS BAIRD'S OFFICE Knatvold Is Offered Position of National Bank Examiner 2 T. V. Knatvold, of Albert Lea, has been offered a position as national bank examiner for the territory covering parts of Minnesota and Wisconsin. Senators Nelson and Clapp are both said to be behind the appointment. Knatvold has gone to Washington to confer with the treasury department. He will succeed L. D. Baird, the national bank examiner who was recently appointed receiver of the defunct First National bank, of Faribault. Mr. Knatvold has had the management of an Albert Lea bank for some years, and is a lawyer by profession. He served in the state senate for eight years, and during four years was chairman of the senate finance committee.
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NAMES RECEIVERS FOR MINNESOTA LUMBER CO. Action in Georgia Resulting From Faribault Bank Failure VALDOSTA, Ga., March 1.-Judge Emery Speer of the United States district court, has appointed W. J. Butler of Macon and J. B. Coffee of Olympia joint receivers for the Minnesota Lumber company, which has large milling plants in Colquitt and Clinch counties. The receivers were appointed upon petition of the receiver of the First National bank of Faribault, Minn., which holds claims of $110,000 against the lumber company. The company's assets are put down at $160,000 and liabilities at $140,000.
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Calumet Baking Powder Health- Economy. # LUMBER COMPANY FAILS. Receiver Appointed at Request of Faribault, Minn., Bank Receiver. Valdosta, Ga., March 2.-Judge Emery Speer of the United States district court has appointed W. J. Butler of Macon and J. P. Coffee of Olympia joint receivers for the Minnesota Lumber company, which has large milling plants in Cloquitt and Clinch counties. The receivers were appointed upon petitions of the receiver of the First National bank of Faribault, Minn., which holds claims of $110,000 against the lumber company. The company's assets are put down at $160,000 and liabilities at $140,000.
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# Receivers of Lumber Company. Valdosta, Ga., March 2.-Judge Emory Spear, of the United States district court, has appointed W. J. Butler, of Macon, and J. P. Coffee, of Olympia, joint receivers for the Minnesota Lumber Company, which has large milling plants in Colquitt and Clinch counties. The receivers were appointed upon petition of the receiver of the First National Bank of Faribault, Minn., which holds claims of $110,000 against the lumber company. The company's assets are given at $160,000 and liabilities at $140,000.
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Receiver for Lumber Company. Valdosta, Ga., Special.—Judge Emory Spear, of the United States District Court, has appointed W. J. Butler, of Macon, and J. P. Coffee, of Olympia, joint receivers for the Minnesota Lumber Company, which has large milling plants in Colquitt and Clinch counties. The receivers were appointed upon petition of the receiver of the First National Bank, of Faribault, Minn., which holds claims of $110,000 against the lumber company. The company's assets are given at $160,000 and liabilities at $140,000.
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A LAW TO SAVE BANK DEPOSITORS NEW SYSTEM SUGGESTED BY THE FAILURE AT FARIBAULT. Assessments Would Be Levied on All State Banks and an Insurance Fund Created for Payment of Losses-National Banks Expected in Time to Make Similar Arrangements. Special to The Journal. Faribault, Minn., March 9.-The failure of the First National bank has resulted, for one thing, in a demand for the creation of some system by which depositors will be insured against loss when similar failures occur. A bill embodying this principle has been prepared and will be submitted to next Saturday's meeting of the depositors of the bank for their approval. In the event that it is indorsed by them, Senator Buck, who heartily approves the measure, will introduce it in the senate. The bill provides that an assessment shall be levied on all state banks, the amount derived from the assessment to form a fund from which losses shall be paid. When this fund has reached $1,000,000 or $1,500,000, the assessments will cease until a failure occurs, in which event another assessment will be made to cover the deficit in the fund. The money belonging to the fund may be invested in municipal or school bonds or other first-class securities. It will be in charge of the state, which will be the guardian of the fund. When a state bank fails, the state will appoint a receiver, as is now done with national banks, who will settle its affairs, and, after realizing all he can on the bank's assets, if they prove insufficient, will draw on this insurance fund to pay the depositors their claims in full. "If this bill, or a bill similar to it, becomes the law," said a prominent Faribault capitalist interested in the measure, "we believe that it will not only insure depositors in state banks against loss, and force private banks to become incorporated under the state law, but it will be a strong influence to compel national banks to make similar arrangements. It stands to reason that where a depositor is absolutely assured against loss, he will generally choose the state bank, and that if the national bank wishes to remain in business at all, it will have to make similar provision for the safety of the deposits which it solicits. "We had at first thought of having this bill introduced in the federal legislature to apply to national banks, but Washington is a good way off and we are not in as close touch with our representatives there as here at home. They have a system of bank insurance with some such provisions as we have incorporated in our bill in force in Canada, and there a bank failure is unknown. I see no reason why the government should not afford our people similar protection."
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Receiver for Lumber Company. Valdosta, Ga., Special.-Judge Emory Spear, of the United States District Court, has appointed W. J. Butler, of Macon, and J. P. Coffee, of Olympia, joint receivers for the Minnesota Lumber Company, which has large milling plants in Colquitt and Clinch counties. The receivers were appointed upon petition of the receiver of the First National Bank, of Faribault, Minn., which holds claims of $110,000 against the lumber company. The company's assets are given at $160,000 and liabilities at $140,900.
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Judge F. E. Oldham, attorney of the controller of the currency, has returned to Washington from Faribault, Minn., where he consulted with Receiver Bird of the defunct First National bank and the stockholders' committee regarding the condition of the bank. Judge Oldham said there was no development of public importance as a result of his trip, but he might have something to give out in the course of a month.
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# BANKERS ASK FOR # UP-TO-DATE LAW NATIONAL ACT NEEDS AMENDING IN MANY PARTICULARS. Second District Group Men Meet at Faribault and Discuss Vital Phases of Business and Law-System of Exam- inations Held Up by Some Speakers as a "Mere Formality." Special to The Journal. Faribault, Minn., May 24. -The second annual meeting of the third district group of the Minne- sota Bankers' association was held here yester- day, the delegates being the guests of the Citi- zens' National bank and the Security State bank. The subject of the first paper read at the af- ternoon session was "Bank Examinations and Re- ceiverships," by Lyman D. Baird, receiver of the First National bank of Faribault. To the di- vision of his subject relating to the receiverships he gave but small attention, merely enumerating some of the duties an official acting in his ca- pacity has to discharge. He had more to say, however, about bank examinations. In his opinion the present system of paying the examiners by fees is not calculated to pro- duce the best results. The office of bank exam- iner should, he said, be a salaried one. To exam- ine properly a bank with $500,000 deposits will take at least two days. It is not enough for the examiner to count the cash and see that the books balance. It is even more important that he should carefully scrutinize the paper which represents its loans and discounts. He should as far as possible assure himself that the signa- tures on notes are those of responsible persons. Mr. Baird advocated the establishment of a system of insurance for the benefit of depositors. Fifty cents on the $1,000 of deposits would cover all losses by bank failures in the past forty years. On this basis a bank having $500,000 de- posits would be required to pay $250 annually, which is small in comparison to the benefits re- ceived.
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TRIAL OF BANKER CLEMENT. Case of Faribault Financier Set for June 21. St. Paul, June 15.-Thomas B. Clement, president of the suspended First National bank of Faribault, will be tried on charges of embezzlement and maladministration of the bank's business before the United States district court June 21. His counsel, George N. Baxter, made a gallant fight to induce the court to continue the case until the December term, but failed. The aged banker was arraigned in the district court at 10 a. m. To seventeen of the counts he pleaded not guilty in a firm tone. To the other ten he demurred on the ground that each of them specified more than one offense. This demurrer was overruled and Mr. Clement then pleaded not guilty to the ten counts.
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# TRIAL OF BANKER CLEMENT. Case of Faribault Financier Set for June 21. St. Paul, June 15. -Thomas B. Clement, president of the suspended First National bank of Faribault, will be tried on charges of embezzlement and maladministration of the bank's business before the United States district court June 21. His counsel, George N. Baxter, made a gallant fight to induce the court to continue the case until the December term, but failed. The aged banker was arraigned in the district court at 10 a. m. To seventeen of the counts he pleaded not guilty in a firm tone. To the other ten he demurred on the ground that each of them specified more than one offense. This demurrer was overruled and Mr. Clement then pleaded not guilty to the ten counts.
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# TRIAL OF BANKER CLEMENT. Case of Faribault Financier Set for June 21. St. Paul, June 15. - Thomas B. Clement, president of the suspended First National bank of Faribault, will be tried on charges of embezzlement and maladministration of the bank's business before the United States district court June 21. His counsel, George N. Baxter, made a gallant fight to induce the court to continue the case until the December term, but failed. The aged banker was arraigned in the district court at 10 a. m. To seventeen of the counts he pleaded not guilty in a firm tone. To the other ten he demurred on the ground that each of them specified more than one offense. This demurrer was overruled and Mr. Clement then pleaded not guilty to the ten counts.
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# A QUESTION OF ASSETS ATTORNEYS GO THRU TEDIOUS SIEGE OF QUESTIONING IN THE CLEMENT CASE. There were no particularly interesting developments in St. Paul today, in the trial of Thomas B. Clement, president of the suspended First National bank of Faribault. The prosecution tediously examined various witnesses, endeavoring to prove the making of a false entry, by Clement, in the bank's books, Oct. 23, 1904, by listing a piece of land entered as a "Barton farm" as a bank asset, when it was simply a security for a note of $3,000 of Charles S. White. In November, 1902, L. A. Northrop contracted to buy the land and gave notes of $500 and $2,850 in payment White was present at the sale. M. S. Tolman of Walker later assumed the Northrop contract, giving new notes. For some reason the Northrop notes were allowed to remain in the bank and the Tolman notes were never entered on the bank books. Tolman eventually paid his notes and received title. The testimony tended to prove the Northrop notes and also the farm were listed as assets of the bank. Clement seems to stand the strain of the trial well, remaining most of the time as yesterday, with his face resting in one hand and his eyes closed.
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# CASHIER CHANGED FIGURES He Declares, Tho, that He Did It on Clement's Orders. Charles M. Whitney, cashier of the suspended First National bank of Fari- bault, testified yesterday afternoon in St. Paul at the trial of Thomas B. Clem- ent, that he had changed the figures in the teller's cashbook, from which the amount of cash on hand was reported to the controller of the currency, and that this was done under the express direction of the bank's president, Mr. Clement. This testimony was given under the fourth count in the indictment, charg- ing Mr. Clement with havng made a false return to the controller.
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Reports received here from Receiver Baird of the First National bank of Faribault indicate that the trust is being closed up in the ordinary manner, SO far as the collection of outdi oounts is
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BANK DIRECTORS PAY UP Officials of Fairbault, Minn., Bank Forced to Atone for Neglect of Duty. ST. PAUL, Minn. Jan. 4.-The suit of Lyman D. Baird, as receiver of the First National bank of Fairbault, Minn., against the eight directors of the bank for alleged neglect in their official conduct was settled in the United States circuit court today upon the agreement of four of the directors to pay $100,000 in full of all claims. The First National bank of Faribault failed in January, 1904, and the president, Thomas B. Clement, a short time after the failure was arrested and later indicted by the federal grand jury on charges of embezzlement and misapplication of the bank's funds and with making false entries in the reports to the comptroller of the currency. He was convicted and sentenced to serve eight years in the state prison. At the time the affairs of the bank came into the hands of the receiver it is alleged the assets were $619,883. of which $328,770 is alleged to be of a doubtful character and $203,882 is alleged to be absolutely worthless. The debts and liabilities. It is alleged, exceed the assets and resources by $400,000. including in the assets the liability of the stockholders.