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SMITH'S SENSATIONAL STEAL. RECEIVER FOR HIS BANKING COMPANY APPLIED FOR. Officers of the Institution Declare That the Company's Assets Are Worth $100,000 and It Owes Not Over $5,000-The Application For a Receiver Therefore Declared Wholly Unwarranted-The Petitioner Accuses Directors of the Company of Buying Land For $30.000 and Unloading It on the Company For $60,000. Atlanta, Ga., Feb. 23-There was another sensational development in connection with the defalcation of Otis Smith, the cashier of the Georgia Security and Banking Company, this afternoon. It was in the shape of an application for a receiver for that company and in the bill, which was set for hearing by Judge Lumpkin for next Saturday, some startling allegations are made. Attorney Clyde L Brooks filed the bill. representing Charles A. Sission and 8. D. Rambo, stockholders on the Georgia Security and Banking Company. They allege that the company is not only insolvent on account of the defalcations of Cashier Smith, but that it has been mismanaged by other officers as well as he The company was formerly a building and loan association, and was changed to its present plan five years ago. The stockholders who went in when it was started as a building and loan association were given paid-up stock in the new concern for what they had paid in which furmished the capital for Its operations. The most sensational allegation is that James W English, Jr., John Murphy and T B Paine, three of the directors of the company, bought a tract of land to be developed by the company known as Western Heights, this tract being the main property of the company, for $30,000 as individuals, and then turned around and sold this same land within a few days after they had bought it to the company, in which they were the controlling directers, for $60,000 It is alleged that this transaction was without the knowledge or consent of the stockholders, who had no idea the directors individually were making such a "spec." It is also further shown that since the formation of the company. no dividends have ever been declared, and also that one-half of the propetty comprising Western Heights, the development of which into a suburban town site was the business of the company, has been sold, but no accounting for these sales have ever been made to the stockholders. It is charged that the directors and officers not only allowed the company to be mismanaged by Cashier Smith. but that they also rented expensive offices with easy couches, electric fans, telephones, etc., and used these offices for their private business though the funds of the company were used to pay for them. The company is alleged to be totally insolvent and Attorney Brooks is confident that the receivers asked for will be appointed when the hearing occurs on Satunday. Officers of the company, after being served with a copy of the bill for a receiver, announced that it would be fought vigorously. The institution, they declare, is perfectly solvent. owing not over $5,000, and having assets worth $100,000. In addition to fighting the application for a receiver, Attorney Felder and Director James W. English, Jr., this afternoon declared that just as soon as the receivership matter is disposed of they will file a suit for damages against both the parties to the bill and the attorneys who brought " for them on the ground that there is no just presumption of insolvency against the institution and that therefore the application was not brought in good faith. Otis Smith. the defaulting cashier of the company, was this afternoon committed to the Fulton county jall, where he will remain for several days, pending a full investigation of his accounts. It has transpired that one of his methods of raising money as cashier of the Georgia Security and Banking Company was to Issue bogus certificates of stock. and it is not known how many of these there are outstanding, as he had charge of the stock book and could write one out whenever he wanted to. Very recently he issued a certificate for $1,000 and hypothecated it with the Atlanta National Bank for a loan of $500, $400 of which he has paid back. The issuance of these certificates is, of course, a forgery. Smith also forged the indorsement of several local firms to checks which had been signed by James W. English, Jr., and used the money secured on them. This adds the crime of forgery to that of embezzlement to which be will have to answer. To-day Smith's attorney, Mr. Colville, T. B. Felder and J. W. English visited the Leyden house on Peachtree street, where Smith had been boarding, for the purpose of looking over his private papers. On some of the prisoner's memoranda were found entries of expense items which gave some indication of the direction in which his cash had gone. There were pencil notes of dinner parties, theater parties, balls, hack hire. bouquets, jewelry and swell suppers, along with tailor bills too numerous to mention. He had sowed the wind and is now reaping the whirlwind. Among other things were several large packets of billet doux from society belies and debutantes. These were taken charge of by one of the gentlemen, and It is said each letter returned to the fair writer in order to save future embarrassments, SOUTHERN MUTUAL ASSETS.
