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FUND MUST PAY GUARANTY
ASSETS OF FAILED LEAVENWORTH BANK DWINDLE TO HALF VALUE.
And the State Savings Receivership Costs General Griffith Promises Thorough Probe.
BISHOP SAYS Copy OF AUDIT Is WITHHELD FROM HIM.
Associated Press. LEAVENWORTH, KAS., Aug. 10.-M. L. Bishop's comment today on the audit of the books of the receivers of the failed State Savings Bank of Leavenworth was: have nothing to except that the audit mentioned shows that carefully have accounted for and turned over every dollar collected by me. A copy of the audit has been withheld from me for some un known reason."
IN FEES, $38,120
Fees paid since the State Savings Bank of Leavenworth, Kas., failed: Bishop, salary $10,380 4,800 Lee Bond and Ben Endres, attorneys 13,500 Lee Bond, attorney 9,110 300 Total salary and fees to M. L. Bishop 15,180 Total attorney fees
TOPEKA BUREAU THE KANSAS STAR (By TOPEKA, Aug. 10.-How the assets of the failed State Savings bank of Leavenworth were dissipated to one-half the actual value and the state guaranty fund was forced to pay one-half the total deposits of the bank was revealed today in the report of public accountants Roy L. Bone, state bank commissioner, made public the complete re port of the auditors. have checked the report to the attorney general to advise what should be done," said Mr. Bone. "The report shows assets aggregating $450,000 were sold for $63,000. There is no way to tell the actual value of these assets. Some of the notes had not been collected in the two years of the receivership I have asked the attorney general what could be done." WAS TO BE COLLECTOR
M. L. Bishop. assistant receiver for been carried on the bank books at the bank, still is in Leavenworth, accord value of $46,304.72 After the receiver ing to the latest advices in the bank took charge of the bank. improvements commissioner's office. He is supposed had been made in the building at a cost of $1,029 be devoting his time to collecting the Another asset included in the Hayrents and notes R. F. Hayden purchased den purchase was the Heard farm near from him under a specific contract that Valley Falls, in Jefferson County, listed the assistant receiver should continue to as having value of $11,000 act as collection agent for the buyer Just before Mr. Peterson went out of office another big sale of assets of the of the assets while the receiver contin ued to draw a salary as a receiver. Leavenworth bank was approved by B. V. Curry, the general receiver, is in California and has been for some months. Mr. Curry was the first receiver for the bank Charles B. Griffith, attorney general, had not received the report of the ac countants today. don't know what can be done until after have checked all the items and studied the law on the questions,' he said. "It would appear that when the acts of the receiver in the sale of these assets had been approved by the bank ing department and then by the court there was not much that could be done unless we are able to show fraud.
THOROUGH INVESTIGATION
"That will be gone into just as thor oughly as it is possible for us to investigate all the transactions. Until the report is examined and checked we can not tell whether there can be criminal prosecutions or suits to go behind the actions of the former banking depart ment and the court." The State Savings bank had liabilit ies of slightly more than million dol lars when it failed. The directors put up $25,000 to wipe off some bad notes the bank owned. Sufficient assets were collected to pay the depositors 50 per cent of their deposits. and the state guaranty fund must make up the balance. Mr. Bishop has been dismissed as the assistant receiver of the bank and William Docking. the present receiver for the banking department, is handling the remaining assets. The receiver esti- service. mates approximately 5 per cent more will be paid. dollars. $1,233.31. Its assets exreeded 1 million The day the bank closed it had in dividual 612.92 deposits amounting to $316,Its saving deposits amounted to It had Christmas saving fund of $9 making total deposits of $434 485.79 It had in addition certificates of deposit amounting to $503,234.23 When the bank failed B. F. Curry, as sistant bank commissioner, was placed in charge of its affairs. Later Mr Curry became the receiver for all the failed state banks and M. L. Bishop took charge of the Leavenworth bank as Lee Bond and Ben F. Endres. prominent Republican lawyers and politicians of Leavenworth, were appointed attorneys to advise the receiver in legal mat ters and to bring suits to collect money on notes and other collateral held by the bank against borrowers. In the three years since the failure of the bank the following fees have been paid: Bishop salary $10,380 collections attorneys Bond attorneys Total salary and fees to Mr. Bishop There appears to be a mystery as to how Mr. Bishop received the $4,800 in fees, which he declares was per cent of his When he went in as receiver under Frank H. Foster who was the bank in the Allen administration, Mr. Bishop attempted to obtain an agreement with Mr. Foster for the pay ment of per cent on his collections Mr. Foster would not make the agreement After Carl J Peterson came in as bank commissioner under the Davis administration, Mr Bishop says Mr Peterson agreed to the per cent commission. Anyway Mr. Bishop paid himself this amount for collections until Roy L. Bone became bank commissioner. Mr. Bone stopped the practice. Mr. Endres appears to have dropped out of the case after Mr. Bone became commissioner It is said Mr. Bone looked over the of the bank and where Mr Bond and Mr. Endres had received $13,500 in fees. The attorney fees were paid in cash. Mr. Bone is said to have disnlissed Mr. Endres at the close of the last legislative session, in which Mr. Endres sat as the representative from Leavenworth County In addition to the amounts paid for fees and salaries, the audit calls attention to some of the transactions of the receivership December 20. 1924, just before Mr Peterson retired as bank commissioner assets of the bank listed at $272,189 were sold to R. F Hayden of Topeka for $48,000 in cash Among these assets was the bank building in Leavenworth. which had him. This sale was of assets listed as having value of $181,524.71. They were sold for $15,000. The last sale was made to T. I. Mains, formerly an officer in the Leavenworth bank, who had sold his interest before the crash came. Mr. Mains was allowed commission of $500 for making the sale to Shortly after this purchase, Mr. Mains established in Kansas City corpora tion known as the Bankers Investment Another irregularity pointed out by the audit as to Mr. Bishop's method of handling the affairs of the bank was that the Schaller Packing Company of Leavenworth sold its stock to holders of certificates of deposit the failed bank, accepting the certificates as pay. ment for the stock. These assigned certificates were used by the packing company to offset its indebtedness to the bank. It appears Mr. Bond as attorney was paid not only for each separate case he tried or filed in court. but received in addition to his fees $250 month as retainer For every trip made out of town. 80 far as the books show, Mr. Bond was given $25 expense money whether the trip was made to Topeka, Kansas City, Atchison or Valley Falls. The bank has paid to its depositors only 50 per cent in dividends A total of $413,693.23 has been paid to depositors.
