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Show ml raw cm umm. mxm 'mm CALLED BY IS- Investigation of Affairs of Merchants Bank Ordered by Judges to Begin November 1 8 By Ira C. Tichenor DEVELOPMENTS in the unsavory un-savory affairs of the Merchants Mer-chants bank since. The To leg ram took the initiative a few days ago are coming faster with each succeeding day, until now It are ma an abaolute certainty that any blame which may b attached In connection with the operation and final craah of the Institution will be placed by a court of Justice. Power which. frr on reason or another, an-other, seemingly has been latent, la being- called Into aervlce, with the expected expect-ed result that every move that will be made will add to the precarious position posi-tion of anyone who may be found to be wrongfully Involved. GRAND JURY ACTION. Within the next three weeka a grand jury will meet to consider the question L of returning Indictmnets, and these. If k rendered may be followed by federal Today The Merchants bank, as the result of the sale by the' receiver of Its fixtures and vaults, became as much of a memory as a portion of the mora than a million deposits would appear to be. That part of the money will be restored re-stored to trusting depositors Is Indicated Indi-cated by the statement of the receiver that a JO-per cent division soon will be made. FEDERAL ACTION. Not only has a grand jury been aura- moned for the special purpose of Investigating In-vestigating affairs of the Merchants bank but there Is a possibility jhe long and strong arm of the government will reach out from Washington and grab any or all of the officials of the bank, should It be proved they accepted deposits de-posits knowing the Institution to be Insolvent. It la reported thAt evidence now ta being collected with the expectation of proving to the satisfaction of the federal government that the lawa making mak-ing it a felony to use the mall in furtherance fur-therance of a fraud have been violated. KNEW OF INSOLVENCY. Thla alleged violation of tho postal lawa consisted. It la declared, in tho . uae of the mail to solicit deposits at a time when. It will be claimed, the officials of the bank knew tho institution insti-tution to be Insolvent. It is stated that It haa been decided hy government authorities that ahould auch a situation be proved it would bo a baaia for federal prosecution. BUM M ON GRAND JURY. That there 'will be a thorough Investigation In-vestigation of the bank's affairs waa assured by the action, late yesterday afternoon, of the five Judges comprising compris-ing tho bench of this district. In summoning sum-moning a grand jury for th special purpose of considering tho bank'a affairs, af-fairs, and for the purpose. If ths evidence evi-dence la decided to be sufficient, to k return Indictments againat several of the officials of the defunct Institution. The action of the Judges wu tsken at tho request of District Attorney ale- Carthy, following the receipt of a suggestion sug-gestion for auch a move by Governor Bamberger and after a conference la aald to have been held with representatives, representa-tives, eelf-appointed or otherwise, of tho depositors and their counsel. PETITION PREPARED. Thla conference was among tho eev-ersri eev-ersri alluded to yesterday as being held following the exclusive announcement In Thursday's Telegram that a petition had been prepared for presentation to tho presiding Judge of this district, asking for, i be summoning of a special grand Jury. Thla petition used ths name of W. K. Kvans, bank commissioner of Utah, it the plaintiff, and waa sworn to by ono of tho depositors, and, as stated in yesterday's Telegram, it contain! the charge that tome of the bank officials had been granted loans in excess of tha legal restriction, that they were aware of he Insolvent condition of the institution, insti-tution, and that they accepted deposits with tho knowledge that tho bank waa tneolvent. AUDITOR'S REPORT. Presumably, aa tho result of this conference, con-ference, the filing, of the petition was decayed and the announcement waa made by those having charge of the affair that it would be eeveral days, If not weeks, before the petilicn mould bo filed. These interests also provided District Attorney McCarthy, it is stated, with copy of the report of the auditor a it. ployed by tho federal reserve bank. " at the requeet of the Halt Lake lear-Ing lear-Ing House sssoclatlon, to investigate (Continued on page REPORT PREPARED IN MAY SHOWED BANK'S WEAKNESS I. R Ecclea. Ogden. 7 shares; payer, $13,000; tndoreer. none. A. B. Apperson, Halt Itke, 10 shares; payer. $3497.20: Indorser, none. James K, Burton, Ogden. 7 shares; no obligation. James M. Peterson. Richfield. S5 shares; no obligation. TOTAL IS LARGE. The total liabilities as payer of all the directors wss given as $M8,813 and of liability as indorser $89,794.70. As to the various opera tiona of this character char-acter the report said: "Loans to officers and directors and to corporations In which they are interested, in-terested, aggregating $20S.&78.84, are not only excessive, but In many Instances In-stances represent investments which are of a more or less speculative nature. na-ture. These obligations should be ma-tenallv ma-tenallv reduced CAPABLE MEN. Regarding the affairs of the bank as a whole the report aald: I "The board of directors is composed of prominent and capable business men. but their stock interests In the bank Is small The active managers. Mr. Pfngree and Mr. Ford, are experienced experi-enced and resourceful bankers. They have done more than could reasonably have been expected toward the rehabilitation re-habilitation of a bank that ahould long ago have been liquidated, and would have been If the atate bank commissioner commis-sioner had done hfa plain duty. "Various corporations have been organised or-ganised to take over the aaseta of Insolvent In-solvent borrowers and the notes of theae corporations substituted for those of the original debtors. Assets of every description, good and bad. have ; been acquired. Most of them are en- j 1 1 rely improper aa bank Investments, but were the only salvage available." NEEDS DRASTIC ACTION. I The conclusion reached by the examiner ex-aminer was stated as follows: "While the condition of the bank no doubt shows an improvement over that of four years ago, when the present management took charge, there la no question in the mind of the examiner but what it la still Insolvent snd could not be liquidated without serious loss to Its depositors. As already stated, the management la composed of experienced ex-perienced and resourceful bankers, and It Is possible that they will eventually be able to get enough salvage from their miscellaneous assortment of assets as-sets to make good the present capital impairment Officers feel that they are making considerable headway and are confident that they will be able to place their Institution In a sound and solvent condition. "Although considerable Improvement haa been made In the general condition of the bank, the officers are subject to severe criticism for having paid dividends divi-dends to their stockholders during a pea-tod when the capital stock was actually ac-tually Impaired. Your examiner is of Continued fmm page 1.) the affairs of ths Merchants bank, and which report. It Is stated, was the direct di-rect result of the closing of the bank and tha appointment of a receiver. FOR NOVEMBER IS. With thla report and other data the dlatrlct attorney late yesterday afternoon after-noon appeared before the five Judges and presented his request for ths summoning sum-moning of a grand Jury. The request. It is stated, was Unanimously Unani-mously acceded to. but ths date of November No-vember 1$ was named as sufficiently remote to give the accountant appointed ap-pointed by the court time to complete his Inspection of the bank booka and make a report. This report. It Is expected, is)l be one of the strongest arguments to be - presented to the grand Jury In favor of the returning of Indictments against several officials of the bank. Also the prediction has been made that the publication of the facta now being gleaned by the auditor, who has been instructed to delve Into the history his-tory of the Institution from the day It began business until the hour It wss closed by the bank commissioner, will prove a veritable bombshell In certain political camps and In some business c Ire lea Interesting comment Is made upon ths fact, it Is stated, that the last grand jury summoned In this district was to Investigate the operations of a certain banker, who later was convicted con-victed and sentenced to a term In ths penitentiary. REPORT ON BANK. As the result of the developments , of the past few days. Interest has In- i creased In the report made last Msy by S. D. Sargent of the federal reserve re-serve bank on ths condition of the Merchants bank. This report, excerpts from which previously have been published, was made at the request of the Salt Lake Clearing Houae association, and It contains figures showing the alleged operations of some of the officials of the bank as affecting the finances of the institution. OFFICIALS LIABLE. It states that at the time the Investigation In-vestigation was made, between May t and May 13, President John Plngree wss liable as payer to the amount of $29,777.61, and as Indorser of guarantor guar-antor an additional sum of $27,222.36; that Vies President O. P. Soul wss liable as payer for $3000 and as Indorser In-dorser for $16,222.36; that Vice President Presi-dent Moroni Helner and Ca abler-Secretary George K. Ford each was liable lia-ble as payer for $9600 and as Indorser In-dorser for $12,100. . It Is declared that all of these were without bond and that their holdings of stock in their own namea were as follows: Plngree, fifteen ah area: Soule, ten; Helner, fifty, and Ford, ten. the opinion that the Institution is In a very critical condition and that the altuation demands prompt and drastic action if serious complications are to be prevented. This report was made In May. The bank closed July . . FIXTURES SOLD. After months of negotiations with firms and prospective buyers from all i over the West, the vault and flxturee I of the defunct Merchants bank were sold this morning for $7000 to the , Halloran-Judge company and will be used by them in equipping their new real estate offices to be Installed In the lower floor of tha Judge building. The purchase Includes all fixtures, furniture, typewriters and adding machines. ma-chines. A bid from tbe Traders bank of Teppiniah, Wash., of tltuO was rejected re-jected by the depositors In September, snd the Halloran-Judge offer was by far the largest received, according to Receiver S. H. Lynch. Owing to the scarcity of steel at this time and the Inability gto have orders -FANCY LOANS." ' In this connection, tha remark Is made In ths report that 'apparently It waa not necessary to own much stock In the Merchants bank to be a strong director, with considerable authority In the matter of securing fancy loans. - The report gives the following figures fig-ures as to the liability aa payer and Indorser of the directors other than thoae previously named, together with the shares of stock they owned: W. H. Card ley, Jo pi In, Mo Ten shares: no obligation. K. W. Price. Salt Lake Thirty share; payer, $1600; Indorser, none. l J. Cannon, Salt Lake Fifty-slg sharee: payer, none; Indorser, $7260. B. Blnnard. Salt Lake Fifty -three shares; payer, I21.7M.29; indorser, $14,000. A. H. Godbe. 6a It Lake. 1ft shares; payer. $C740; Indorser. 112.00. M. C. Packard, Springvals, I shares; j no obligation. I filled for six months at least, the purr chasers consider themselves fortunate In securing the vault and fixtures at this time, according: to statements made. By order of the court, ths receiver for the defunct bank will vacate tae ' bank building and seek lees expensive fiusrtera November 1. Tbe Iocs ties. haa not been decided. ' |