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Only Two Involved
County Prosecuting Attorney Nelson Schwab calls upon all citizens to maintain confidence the banking institutions here. He issued the following statement: "It essential to the wellbeing of the community that all of our citizens maintain absolute confidence in our banking institutions. cannot too strongly upon the citizens of Hamilton County that my investigations show that only two banks are involved in the manipulations by Amor W. Shafer, and these are the Cosmopolitan Bank and Trust Company and the Brotherhood of Railway Clerks National Bank." when the stock market collapsed, carrying Cities Service stock into monster slump. It was said that Shafer would take stock certificates to the two bank officials and have them sold through two Cincinnati brokerage firms for his account at the bank. These stocks were "ordered out," that they were ordered to be sent to New York and transferred on the books of the company to the new purchasers. Other stocks, however, were ordered to be retained in the brokerage account collateral, and not to be transferred on the company's books in New York. These certificates carried attached powers attorney, their use collateral. The slips were pinned to the certificates. It has since that the stocks ordered out legitimately signed stocks sold for customers, but that the stocks in the account with attached powers of torney had been forged with the names of the certificate holders, alleged. This, was said, explained why number of customers having dif ficulty in obtaining delivery their stocks from the Cincinnati branch of the Doherty Company. In some cases where customers went to the company and insisted upon delivery stocks. that particular stock would be removed from the collateral list the brokerage firms and replaced with certificate for the same number of shares. The "power of torney" would be removed and the original certificate would be delivered to the customer, who had no idea it had been used as brokerage collateral.
Took Profit In Sales. It also was reported that Rosenblum and Norris had been working with Shafer in these negotiations. Shafer would turn over stock to them under the market price to be sold, was learned. They would sell the stock at the market price, take two three point profit for and credit with the balance. This explains made $60,000 from their deals with him, was said. When the Cosmopolitan Bank failed to open more than weeks ago and Shafer's name was brought into the case block of 10,000 shares of the Shafer stock held by one brokerage firm was sent to New York for transfer. then was discovered that the names had been forged. The Doherty Company informed the brokers, who in turn informed the bank. Since the bank in the course of its business had guaranteed the signatures of the customers on these certificates and handled the stock it became involved. The Federal officials were called into the case and nationbank examiners began immediate examination of the books. They found the large contingent liability on the part the bank and brought it to the attention of the directors.
Resignations Are Tendered. Last Monday the Directors went the with the result that the Brotherhood of Railway Clerks, which owns 51 per cent the bank, put up $300,000 backed $750,000 in collateral. Castellini, President of the bank for several years, put up $100,000 and then tendered his resignation President and Director. Rosenblum and ris put up $100,000 in property they held and also resigned. In addition the bank carries forgery bond for $150,000, making total of $650,000 immediately available to overcome the contingent liability. Also, the Brotherhood agreed to up $200,000 more necessary. The double liability of stockholders, which can be imposed if necessary, would add another $400,000, carrying the total available well over $1,000,000. This, it was said, is sufficient insure depositors of the bank against loss. Officials the bank believe they will be able to pay 100 cents on the dollar when the bank's affairs are liquidated. Receiver Takes Charge. The liquidation will be in charge of Ira Fulton, National Bank Examiner at Cleveland, who becomes the receiver of the bank. He took immediate charge of the bank yesterday, shortly after the official closing notice, written on bank letterhead, had been posted on the front of the bank. Although rumors were current for several days that the bank was volved through Shafer's operations, was not until yesterday that the actual situation known. The notice, signed by Fulton, read: "This bank has been closed by resolution the Board of Directors and the assets placed in the hands the of the Currency the United States for liquidation. National Bank Examiner Fulton in charge.' Before the notice was posted, police notified and detail on hand to guard against any demonstrations. Although of depositors and stockholders came to the bank during the day, when its plight became known, there was little need for the police, it was said. During most of the day only one patrolman was duty there. At the time that Norris and Rosenblum were removed officials of the bank, formal announcement was made that they had resigned, but no explanation was made. Nothing was said time about the resignation Mr. Castellini as President. Rumors began to appear, however, immediately afterward, and this brought two-day run, which took out of the bank Tuesday and Wednesday, The directors found that loyal friends of the bank, some with
