Discount & Deposit State Bank (Kentland, IN)

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INDIANA BANK IS CLOSED

Institution Once Headed by Governor May Reorganize.

KENTLAND, Ind., Oct. 13.—The Discount & Deposit State bank of this city, of which Governor McCray was president until shortly before his financial difficulties became public, was closed today.

Judge Darroch, who succeeded the governor as president, said a reorganization was contemplated.

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go out and investigate the Governor's financial status, bank by bank?" we knew nothing about embezzlement. we any "Of alleged course, ourselves. If had we would have been stuck Federal investigation of the affairs of the Discount and Deposit State Bank of Kentland will be made "in all probability," Homor Elliott, United States district attorney, said today. Meanwhile, a State investigation is under way of the affairs of the bank, which closed its doors Saturday. Governor McCray formerly was president of the institution. The Governor still was out of the city and persons close to him continued their refusal to tell where ne is. His absence led to persistent rumors that he was dead. "The Governor left Indianapolis at 3 p. m. Saturday," William P. Evans, Marion County prosecutor and son-inlaw of the Governor, said. "I know where he is, but I do not care to tell. He will be back in the city this afternoon." Prosecutor Is Still III Charles W. Moores, special prosecutor in charge of the Marion County grand jury investigation of McCray's affairs, still was confined to his home by illness. At his home it was said he was much better, but that the date for resumption of the grand dury investigation is Indefinite. In connection with the probability of a Federal investigation, Elliott dictated this brief statement "In view of the closin of the bank and the assertions made by some of its present officers in all probability a Federal investigation will be made." "I am not going to say another word about/it," he declared. McCray Paper Cared For The Discount and Deposit State Bank is a Federal reserve depository and as such would come under Federal as well as State jurisdiction. The investigation, if any, is expected to be made by agents working directly under the Department of Justice at Washington. William Darroch, president of the bank, said the situation concerning that institution is unchanged. "I have no idea when the bank will be reopened," he said. Darroch said, when the bank was closed, that it was closed for reorganization. Thomas D. Barr and Elmer Johnson, State bank examiners, are in charge of the investigation of the bank's affairs. The bank had a large amount of McCray paper, but it was understood this was taken care of through the "pool" headed by James P. Goodrich. Twenty-Three Suits, New Total It is, alleged in the bankruptcy petition now pending in Federal Court against McCray that the bank was made a preferred creditor. If the bankruptcy action is successful, it is believed the payment of money to the bank win be declared an act of bank. ruptcy. Under these circumstances the bank is in a position to lose heavily. It is understood the closing of the bank resulted from the withdrawal of deposits, including $60,000 of State money, since that institution became a storm center in the McCray tangle. Two more suits on notes have been filed against McCray at Kentland. One for $10,000 was field by the Delaware County National Bank of Muncie, and one for $3,500 by the Grand View Bank of Grand View. This brings the total of suits to twentythree and the amount involved to $116,000.

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PETITIONS TURNED OVER TODAY TO STATE BANKING DEPARTMENT

INDIANAPOLIS, Oct. 16.—Petitions for a receiver for the Discount and Deposit State bank of Kentland, from which Governor Warren T. McCray resigned as president recently, were turned over to the state banking department today by Edward M. White, deputy attorney general.

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McCRAY BANK SHAKY

KENTLAND, Ind., October 18.Petition for a receiver to take charge of the assets of the Discount and Deposit Bank of this city, of which Gov. McCray was president until recently, has been filed in the Newton circuit court by E. H. Wolcott, state banking commissioner. The bank closed its doors last Saturday. The court set October 24 for a hearing on the petition. The petition alleges that the bank is either insolvent or in danger of becoming insolvent and that the commissioner believes a receiver should be appointed. All the world loves a lover. And all the world hates a hater.

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KENTLAND BANK RECEIVER CASE HEARING OCT

24 Next Step in McCray Money Tangle Is Answer in Federal Suit, Hearing on a suit for a receiver for the Discount and Deposit State Bank of Kentland will be held in the Circuit Court at Kentland next Wednesday. The suit was filed by the State banking department. In the petition for a receiver it is charged the bank either is insolvent or in danger of insolvency. The institution closed its doors last Saturday. Governor McCray resigned as president of the bank recently after the institution had become involved in the Governor's personal affairs. The next step in the McCray financial tangle will be filing of an answer by McCray's attorneys in the bankruptcy suit pending in Federal Court. The answer will be filed with the United States commissioner at Ft. Wayne. The Circuit Court at Kentland will hear suits on notes against McCray Oct. 29, 30 and 31.

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Bank Receiver Suit Hearing to Be Oct. 24

United Press Leased Wire

INDIANAPOLIS, Ind., Oct. 18.—Hearing on a suit for a receiver for the Discount and Deposit State bank of Kentland, of which Gov. McCray formerly was president, will be held in circuit court at Kentland Oct. 24, it was stated today at the office of the state banking commission. The petition charges that the bank is either insolvent or on the verge of insolvency. The institution closed its doors last Saturday.

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KENTLAND BANK RECEIVER CASE HEARING OCT. 24

Next Step in McCray Money Tangle Is Answer in Federal Suit.

Hearing on a suit for a receiver for the Discount and Deposit State Bank of Kentland will be held in the Circuit Court at Kentland next Wednesday. The suit was filed by the State banking department.

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Hearing on a suit for a receiver for the Discount and Deposit State Bank of Kentland will be held in the Circuit Court at Kentland next Wednesday. The suit was filed by the State banking department.

In the petition for a receiver it is charged the bank either is insolvent or in danger of insolvency. The institution closed its doors last Saturday. Governor McCray resigned as president of the bank recently after the institution had become involved in the Governor's personal affairs.

The next step in the McCray financial tangle will be filing of an answer by McCray's attorneys in the bankruptcy suit pending in Federal Court. The answer will be filed with the United States commissioner at Ft. Wayne.

The Circuit Court at Kentland will hear suits on notes against McCray Oct. 29, 30 and 31.

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MORE SUITS ON NOTES

Two Local Banks Seek to Recover on McCray Indorsed Paper.

The Continental National Bank of Indianapolis has filed two suits against the Discount and Deposit State Bank at Kentland, on notes endorsed by Governor McCray. William Darroch, temporary receiver for the Kentland Bank is made a co-defendant.

One note for $10,350 was dated Nov. 20, 1922, and signed by J. L. Williams. The other is for $2,000 and dated March 18, 1923, it is signed A. Mesman & Co. Both are indorsed by McCray, it is charged.

The complaint charges the notes were presented to the Kentland Bank for collection, but that the bank made no effort to collect them.

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McCRAY BANK RECEIVER GIVEN PERMANENT JOB

KENTLAND, Ind., Oct. 25.—William Darroch Wednesday was appointed permanent receiver for the Discount and Deposit State Bank of this city, which closed its doors Oct. 13. The appointment was made by Judge George A. Williams on application of the state banking department. Mr. Darroch became president of the bank following the resignation of Gov. Warren T. McCray several weeks ago and last week was appointed temporary receiver.

The publicity given Gov. McCray's financial difficulties and his connection with the institution resulted in a lack of public confidence which forced it to close, according to a statement made by Mr. Darroch when the bank first suspended business.

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M'CRAY BANK RECEIVER NAMED

Man Who Succeeded Indiana Governor as President To Serve

By The Associated Press Kentland, Ind., Oct. 24.—William Darroch today was appointed permanent receiver for the Discount and Deposit State bank of this city which closed its doors October 13. The appointment was made by Geo. A. Williams of the Newton circuit court on application of the state banking department. Mr. Darroch became president of the bank following the resignation of Governor Warren T. McCray several weeks ago and last week was appointed McCray's financial difficulties and temporary receiver.

The publicity given Governor his connection with the institution resulted in a lack of confidence which forced it to close, according to statement made by Mr. Darroch, when the bank first suspended business.

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PERMANENT RECEIVER FOR KENTLAND BANK

KENTLAND, Ind., Oct. 24.—William Darroch today was appointed permanent receiver for the Discount and Deposit State bank, of this city, which closed its doors Oct. 13. The appointment was made by Judge George A. Williams, of the Newton circuit court on application of the state banking department. Mr. Darroch became president of the bank following the resignation of Gov. Warren T. McCray several weeks ago and last week was appointed temporary receiver.

The publicity given Gov. McCray's financial difficulties and his connection with the institution resulted in a lack of confidence which forced it to close, according to a statement made by Mr. Darroch when the bank first suspended business.

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At the Statehouse a report was current that I. Newt Brown, secretary of the State board of agriculture, had been summoned to appear. Davies and Urbahns, the latter carrying a large package, presumably containing records, went into the grand jury room shortly before 10 a. m., and remained until noon. They reappeared at the afternoon session. Davies Statement Recalled. In connection with the appearance of Davies and Urbahns, it was recalled that Davies made a statement to the Republican State committee Oct. 1 to the effect that a check for $10,000 was given McCray to be deposited to the account of the State in the Discount and Deposit State Bank of Kentland and that the check was deposited to the personal account of McCray. Reports that the jury would go into the financial transactions of the State board of agriculture were current. The board was involved in the McCray tangle when Governor McCray, in answer to a bankruptcy petition, declared he had borrowed $155,000 from it. This was denied by officials of the board, who insisted the money was deposited in the Discount and Deposit Bank. William Darroch, receiver for the bank, later denied any of the money ever had been deposited in the bank. The State board of accounts is planning to go into the books of the board of agriculture which have been closed to public inspection. Charles Ziegler Subpoenaed Among witnesses who are known to have been subpoenaed is Charles Ziegler, chairman of the State highway commission. Ziegler is president of a bank at Attica. It was reported after it became known Ziegler had been subpoenaed that the jury would investigate reports the commission had bought crushed stone from a company in which McCray is interested. Stock in the company was listed in a schedule of McCray's assets filed in the bankruptcy case, but the Governor insisted he had disposed of this stock. Reports also were current that James P. Goodrich, former Governor of Indiana and president of the National City Bank, would be called as a witness. Goodrich headed the "pool" in which $350,000 was collected to meet pressing obligations of the Govert.or. A number of witnesses besides Davies and Urbahns appeared during the morning session. Among those who were seen to go into the room were Felix M. McWhirter, president of the People's State bank; William Fogarty, president of the Fidelity Trust Company, and Clyde E. Robinson, president of the Marion County State bank. Robinson was before the jury Monday. Charles D. Renick, president of the Indiana National Life Insurance Company, Indianapolis, has been appointed receiver for McCray's 740-acre farm in Johnson County. Suit was filed against McCray Oct. 29 by the InterSouthern Life Insurance Company to foreclose a $100,000 mortgage on the property. The farm was bought by McCray from the Service Realty Company of Indianapolis.

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ILLNESS OF JUROR HALTS M'CRAY QUIZ Investigation Expected to Be Resumed Monday, The Marion County grand jury investigating financial affairs of Governor McCray did not meet today on account of the illnes of a juror, Frank McNeeley. Special Prosecutor Clarence W. Nichols said the investigation would he resumed Monday. Criminal Court Investigator Claude Worley went to Kentland, Ind., today. It was indicated Worley would get for the grand jury records of the Discount and Deposit State Bank, now in receivership, of which McCray formerly was president. Worley's trip follows appearanace of State Bank Commissioner Eben H. Wolcott before the jury Thursday. Wolcott's department investigated the bank. The jury may not meet again until Monday, Nichols having announced it had been planned to be in session only until noon today and then adjourn over the week-end.

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NEW KENTLAND

BANK PROPOSED

Backers of Institution Call Upon Governor.

Arthur A. Bishopp and Thomas H. Dixon of Kentland, Ind., were in Indianapolis today taking preliminary steps in the organization of a new bank in Kentland to succeed the Discount and Deposit Bank, of which Governor Warren T. McCray was president. The Discount and Deposit Bank has been in the hands of receivers several weeks.

Dixon and Bishopp conferred with Governor McCray and petitioned the State charter board for a charter. They gave $50,000 as their capital with $5,000 as a surplus. Thirty stockholders will be members of the new organization, they stated.

No name was given for the bank and the prospective owners declined to state whether they would take over the business of the Discount and Deposit Bank. Both men have had banking experience, they said.

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REACHES NO DECISION ON KENTLAND DEPOSIT

State Finance Board Hears Bank May Pay 75 Per Cent.

WILL LOOK TO BONDSMEN

What action is to be taken by the state board of finance or the state treasurer to recover $90,000 of state money on deposit in the Discount and Deposit State Bank of Kentland, now closed, has not yet been determined by the board or the treasurer, according to Ora Davies, state treasurer. Governor McCray was president of the bank, which the directors announced was

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A new bank to be known as the Newton County State Bank has been organized at Kentland and, it is reported may take over some of the assets of the closed bank. The new bank received a charter on the same day a charter was requested and on recommendation of the Governor.

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M'CRAY LAND ATTACHED Kentland Bank Gets $42,358 Judgment Against Governor. All of Governor McCray's land in Chippewa County, Michigan, has been attached by the Discount and Deposit State Bank of Kentland, of which the Governor formerly was president. The bank, in receivership, has closed its doors. The land was seized for judgment of $42,358.11 granted the bank on notes owed by McCray. The land is valued at between $85,000 and $40,000. Opinion was expressed here that judgment could not be executed pending settlement of the bankruptcy case against McCray.

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BANK ASSESSMENT CUT McCray Bank Receiver Says $95,000 Figure Is Too High. Assessment of $95,000 placed on the Discount and Deposit State Bank of Kentland, now defunct following financial difficulties of Governor McCray, has been reduced to $3,000, William Darroch, receiver, told the State tax board that the financial condition of the bank was not shown accurately in its 1923 statement.

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BANK ASSESSMENT CUT

McCray Bank Receiver Says $95,000 Figure Is Too High.

Assessment of $95,000 placed on the Discount and Deposit State Bank of Kentland, now defunct following financial difficulties of Governor McCray, has been reduced to $3,000, William Darroch, receiver, told the State tax board that the financial condition of the bank was not shown accurately in its 1923 statement.

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GOVERNOR TO GET

COPY OF LETTERS

IN BANK TAX CASE

Davis Praises Board in One Note-Condemns It in in Another.

Copies of correspondence and documents in the controversy over the State tax board's reduction of the assessment appraisal of the Discount and Deposit State Bank, Kentland, are to be made and sent to Governor McCray, John J. Brown, chairman, said today.

McCray asked information concerning the board's action in cutting the appraisal from $95,000 to $3,000 when he received a protest against the board's action from John G. Davis, Newton County auditor, his brother-in-law.

Stock Value Negligible

William Darroch, the bank's receiver, had asked the reduction. Appraisal was made on furniture and fixtures alone. Stock value was negligible, Darroch said. McCray was former president of the bank.

The correspondence, made public today, showed that Davis, in a letter Feb, 13, 1924, complimented the tax board for "saving" the township (Kentland) $32,099 on three roads, "thanks to a live State tax board."

In his protest to the Governor on the reduced appraisal a few days ago he was in favor of abolishing the tax board.

Erroneous Statements

Concerning Darroch's statement to the tax board asking for a reduction, Darroch wrote to his attorney, N. K. Todd, Ft. Wayne, that Davis and the Newton County treasurer "admit the truth of what the statement shows but they hesitate to sign any papers. "You understand," he said, "campaign year is on and that they are all candidates for re-election and are timid about signing papers."

Darroch's statement to the board charged the bank officials made an "erroneous and excessive" appraisal statement to the board March 1, 1923. McCray was president at that time.

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ECHO OF M'CRAY CASE

Suit Filed by Bank Receiver to Collect Morris' Bond.

Robert Bracken, State auditor, today received notice from the clerk of Newton County Circuit Court to summon the National Surety Company of New York to answer a suit in Newton County on the bond of Amos D. Morris, former cashier of the Discount and Deposit Bank, Kentland.

Morris recently was sentenced to eighteen months at Federal prison, Atlanta, Ga., on charges of violating national banking laws. He pleaded guilty to the charge upon which Warren T. McCray, former Governor and former president of the bank, also was indicted. McCray was sentenced to ten years at Atlanta on a charge of using the mails in a scheme to defraud.

According to the notice received by Bracken, William Darroch, receiver for the bank, is pushing the suit to collect Morris' bond.