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Ohio Man to Face Charges CINCINNATI, O., June 13 (By A. P.)-A. W. Shefer, whose failure to regain n lost fortune by gambling in the stock market resulted in his alleged manipulation of $1,000.000 in checks and forced the closing of the Cosmopolitan Bank and Trust company, was under indictment tonight for embezzlement of $210,152.50 from the Henry L. Doherty company. Shefer was manager of the company's Cincinnati branch.
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BROTHERHOOD BANK CLOSES IN OHIO Run on Institution Follows Sudden Change in Official Personnel Cincinnati, June 26.-(P)-The Brotherhood of Railway clerks National bank failed to open for business today. William Taylor, Cleveland, federal bank examiner, recently completed an audit of the Brotherhood Bank and on last Monday two changes were made in the official personnel of the bank shortly after directors said the institution was in sound condition. Michael G. Heintz was named vice president succeeding Lyman Norris, resigned, and William L. Luebbe, was appointed assistant cashier in place of Harry Rosenblum, who also resigned. Closing of the Brotherhood bank came 16 days after another Cincinnati bank, the Cosmopolitan bank and Trust company, was forced to close on account of the $1,000,000 peculations of A. W. Shafer, former district manager of the H. L. Doherty company. Deposits at the bank were said to total $4,800,000. After the change in officials was made Monday, the board of directors said, depositors withdrew over $1,000,000.
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National Institution of Railway Brotherhood Closes After Days Run. Cincinnati, June The national bank organized the Brotherhood Railway Clerks closed after million dollars in ded one had been withdrawn. deposits the bank followed The run on of two bank the resignation ficials three days ago. Rumors difficulties were at the bank soon reported the Cosmopolitan Bank Trust closed its doors sixteen company The latter bank days result of the insolvent came dollar peculations of million Shafer, discharged trict managed of the Henry Doherty company. Council Grove has number of of members, but not believed of them are any stockholders in the bank. Percy Dreese, man of the at this point, statthis that he knew of none who held stock.
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MANY LABOR DEPOSITS Cincinnati, June The Brotherhood of Railway clerks national bank failed to open for business notice posted on the institution's door saying the bank was closed, was signed by national bank examiner William Taylor, Cleveland, federal bank examiner, recently completed an audit the Brotherhood bank and Monday two changwere made the official personnel of the bank shortly after directors said the institution was in sound condition. of the bank came 16 Closing days after another Cincinnati bank the Cosmopolitan Bank and Trust Company, forced to close on account the $1,000,000 speculations of Shafer, former district manager of the L. Doherty Company. Deposits at were said to total and after the (Turn To Page Ten)
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CINCINNATI FAILS TO Heavy Run on Deposits Given Today as Cause; Is Second to Close. United Press CINCINNATI, June Brotherhood Railway Clerks National Bank here failed to open its doors today. typewritten notice posted the bank door said: bank has been closed by resolution of the board directors and the assets placed in the hands the of cur the United States for liquidation. National Bank Examiner Fulton is charge." Though capitalized at only 000, the bank, according to financial issued June 14, had assets of $5,849,010 with deposits The bank was the second to close here in recent On June the Cosmopolitan Bank and Trust company, private institution, closed its doors after the arrest of Shafer, district sales manager of Henry Doherty Company, on charges of embezzlement. Shafer's alleged speculations taled more than the bank said be involved either directly indirectly to the extent of In statement issued following the closing of the bank, Haveth Mau, district said: investigation of the bank's affairs thus far indicates the bank should pay out satisfactorily. "Unusual heavy withdrawals the past three days than one million dollars cessitated closing of the institu-
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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
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dorsements. It was this stock, reported to amount of between $225,000 and $375,000. that involved Norris and Rosenblum. The Brotherhood bank came under the scrutiny of federal investigators June 10 when it was learned the bank carried an account for Shafer. On that day the Cosmopolitan Bank & Trust Co. closed because of an alleged shortage of $623,000 in Shafer's accounts and Shafer was arrested on charge of embezzling more than $210,000 from the Doherty Company, his former employers. The removal of the three officials of the bank also resulted in withdrawal of $1,000,000 by depositors, although a statement was issued saying the institution was in good condition. Directors said closing of the bank was the best way to protect depositors and investigators said every obligation would be met. The Provident Savings Bank & Trust Co. also experienced heavy run yesterday. but kept open overtime to satisfy depositors. State Director of Commerce Edward D Schorr announced no other banks were involved by Shafer and the Cincinnati Clearing House Association promised support of all the rest of the county's banks. The Brotherhood bank was established in 1923 by the Brotherhood of Railway & Steamship Clerks and 51 per cent of the stock was owned by members of the union. It was capitalized at $400,000, and had deposits of $4,800,000 and total resources of $5,639,363.
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Brotherhood Bank In Cincinnati Closes Its Doors Depositors Withdraw $1,, 000,000 In Last Three Days --Run Started Monday Cincinnati. O., June 26 (AP)-One of the country's largest labor banks. the Brotherhood of Railway Clerks National bank, closed today as dtrect result of the $1,000,000 check writing operations of A. W. Shafer, whose peculations also forced the Cosmopolitan Bank and Trust company to close 16 days ago. Fifty-one per cent of the Brotherhood stock was owned by 122,000 United States and Canadian members of the Brotherhood of Railway and Steamship Clerks, Freight Handlers and Station Employes. The Brotherhood bank board of directors voluntarily closed the institution after depositors withdrew $1,-
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Two Former Officials of Brotherhood of Railway Clerks Bank Arrested Cincinnati, O., June of the country largest labor the of Rallway Clerks National bank, closed today rect result of the $1,000,000 check kiting operations of W. forced Cosmopolitan Bank and Trust Co., close 16 ago. per cent of the Brotherhood stock owned by 122,000 United States and Canadian members the Brotherhood of Railway and Steamship Clerks, Freight The bank directors closed the the last three days. The bank followed the three high officials last Monday those former Liman Norris, vice president. officials and rested Harry on sworn by United District Attorney June 10. directors said bank That the date the locked its doors upon City Service securities was $623,000 account the Shafer deposited Cities Service collateral bearing forged The exact amount not disclosed was reported from Shafer besides being short with the Cosmopolitan short much the He
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CASTELLINI INDICTED IN SHAFER AFTERMATH CINCINNATI, Oct. Castellini, former president of the Brotherhood of railway clerks national bank, was named Monday in three indictments, returned by federal grand jury, for alleged violation of national banking laws. The action against Castellini was another chapter in the series of events which followed the 000 speculations of W. Shafer, whose stock market gambling operations led to closing the Cosmopolitan bank and trust company and the Brotherhood of railway clerks national bank. Shafer is serving ten-year term for embezzlement.
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TO CLOSE BANK BRANCH. Business Of Fifth And Walnut Of. fice Is To Be Transferred. Announcement was made yesterday by Edward F. Romer, Vice President of the Fifth Third Union Trust Company, that the accounts and business of the Fifth and Walnut office would be moved to the Fourth and Walnut office at the close of business Saturday, December The Fifth and Walnut office of the Fifth Third Union Trust Company formerly the main office of the Cosmopolitan Bank and Trust Company, and, when that bank was taken by the Fifth Third. it advisable maintain the fifth and Walnut office temporarily speeding up the tion of the former Cosmoplitan Bank and Mr. Romer stated that more efficould be to the fthe Fifth and Walnut office by the business of office to the commodious banking home the Fourth and Walnut office, where the customers will the benefit of the most The task of moving the equipment to the Fourth Walnut office be after banking hours Saturday and Sunday, that and after Monday, December the of the Fifth and Walnut office will be served without interruption the northwest corner of Fourth and Walnut Streets. All pertaining to the liquidation of former Cosmopolitan Bank and Trust will be handled in special quarters on the Seventh will remain in charge of Edward F. Special Superintendent of Banks of Ohio.
By Donald F. Dearness Almost any way take the year 1930 surfeited with in Greater Cincinnati calambank failures, financial disasters, crime, unemployment, pestilence, miniature golf, and, depending on how you look at it, the rout ganization. the Republican orpall hung over Cincinnati the the bells and whistles new year, for less than hours before, death Charles Phelps Taft. publisher the and the city's out standing of the and patron Scarcely two months later. on March death laid low Cincinnati's most famous William Howard Taft. the only man who served his country both S. and justice of the Court On the first day 1930. death took two victims of auto accidents, the first of about 200 who succumbed during the year in injuries suffered in motor vehicle for Crime before got away to flying start, the year three hours old, Cincinnati Street Railway car barn and made off with $1134. The day entirely itous, for the rose 52 the any Year's 1916 Russell Wilson sworn mayor by his Murray with Stanley Joseph Woeste, John Druffel Alex Pat terson. Julian Charles Rose Meredith and Edward Imbus business depression was when the began carried along which ranged more less approximately failures the Cosmopolitan Bank & Trust Co., the Brotherhood National Bank and numerous and business houses Two "other banks, the Bank "Trust Co., Bank Trust peril but were by the Cincinnati Clearing House Association and their by the Central Trust The year dealt knockout blow Republican organization the Citizens mittee cessful county elections 1926 and 1928, made clean Nov with the result that Robert Gorman become prosecutor Thursday and the following filled later by his Beckman: auditor, Robert Heuck: cororner, Dr. M. Scott Kearns. Benjamin who figured sensational ne was cashier Madeira bank, was sentenced Feb. years in Ohio after he $2000 the bank's money weeks later Jack Kennedy, Dayton who been after his conviction on charges and the free Henderson had Kennedy falsely as one of his On 20. Dr. William H. Peters health in the Four days were fied of drilled Co. Fourth-st tied blew safe escaped with worth of February had the new Louis Eighth and opened Feb 26. and the next laid for the Cincinnati Suburban beautiful new building at Sevand Elm-sts. Calamity March for William Taft and Edward Dempsey mayor and Common the March witnessed the first major busifailure of the year when R. Beaman Co. with liabilities totaling $529,000 fires out March the Theater, Fountain-sq. James operator, was burned death in his booth The next day Christine Cincinnati leaped to from the story of York hotel. Her buried several days later in Spring Grove Cemetery Zwick. at least his name, reappeared March $7500 bank robbery Germantown. Other obtained $2500 March and $4000 March 29 from the Clifton branch of the Second National Bank Three men were killed March 28 when large Sixth-st and and two their March rocks the Bald Knob blasting State-av the middle the month first mention was made of Jamaica poisoning. the malady which sent and of women for relief paralysis legs and arms. Results of returns from Cincinnati in the Literary Digest nation prohibition poll showed the Queen six one in repeal or against of present The major business announce. March was that Albert H. was elected president Kroger Grocery Baking Co. succeed William H. became chairman the board. the first important event April the reappearance Zwick's name in connection with robberies April which the same was reported $50,000 and short time later $8418 The day the Brotherhood National stirred the public's interest and invoked other banks announced would pay per interest on savings banks continued to per The which played considerable part in year's made take notice throwing few August days The rose 90 ting an April heat record in Probably the most important busof the month was the sale of most the Libson theatrical Louisville and Dayton the RKO the Albee, Capitol, Strand, Family, Palace and treaters On April about 25,000 of the faithful witnessed the opening Nabaseball game, the Reds Pirates. one of the defeats that landed team in seventh place, just ahead of some obscure club fgrom the east. On April 22 Sherrill, city manager, to become the Kroger The day Cincinnati looked with desperate concern the nation's greatest disaster the year occurred the Ohio penitentiary fire About 36 Cincinnati were among the 322 lives out. The month of May was the properiod of calm that preceded days of when the the stormy Cosmopolitan and Brotherhood and temporarily danger real and May Day troubles failed materialize the city At Christ Church Episcopal dignitaries from thruout the country for the consecration Rev On May which in the Republican debacle was started meeting at Hotel. On the the Heberle was the 28th the Church began its General Assembly in Taft Auditorium. its total contributions about $35,000 short of the $2,076,894 quota. few days later the Census Bu1930 population was 447,650. On June 10. about 37,000 depositors of Bank and its seven branches were thrown into by the news that the had failed and had been seized by the state banking department milled the Dorger holder and the bank's dominating Amor W. Shafer district manafor Henry Doherty on charges money ed Shafer's had drained the Cosmopolitan Bank forced its closing. Subsequent showed the deficit to be about $2,000, 000. Word soon around that ShaBank and that uneasy forced the bank June 26. Harry cashier, and Lyman H. Norris, by charges conspiring violate the national banking Depositors in other anks became and worried. Several banks the House the tide and the other banks' The again set record in June. On the temperature to Three persons died of the effects of the heat. Otherwise the month was more except the 12th. when C. Dykstra took as city and on the river Greene, the Ann from Fernbank Dam Coney Island. July saw the Central Trust Co. take over Brotherhood Bank and the Fifth Third Union Trust Co. the Thruout the month Hamilton-co suffered the wrought parts the nation Record was reported July Lack water in many the territory became acute July The month also witnessed the beginning legal troubles for Dorger family. On July Gilbert sued Frank Dorger his Clardaughters, Ruth and Martha various double liability on their Cosmopolitan stock. During hearings before Judge Stanley Struble Common Pleas Court Frank and Martha Dorger filed in bankruptcy and was placed the charge the Western Ruth Dorger promised to pay her asOn July 21 Frank and Clarence Dorger, Russell mopolitan cashier, and Herbert were dicted on and other charges relating to the bank's failure. After the Brotherhood Bank was taken without loss depositors, Dominick recover given the bank in payment for forged worthless disposed of by Shafer. Other July events robthe Loveland Bank, which bandits about and the would build $8,000,000 freight terminal on the site bounded Fourth John and Mill streets During July the $33,000,000 Starat Fifth, Race and the phone except interiors and the finishing touches outside Considerable progress also had been made union railroad terminal project. August brought chiefly more trouble for the Dorgers, more weather drought and the sweeping county and Robert four other Democratic candidates for United States in the Aug 12 primary election. On Aug. the Dorgers were named more score ditional Other Cosmopolitan officials and employes named. On the 25th Shafer pleaded guilty to the was sentenced to ten years in Ohio penitentiary. During the month the G. A. R. held its annual and the American Legion its state Many Cincinnatians were shocked Aug. 12 by the news that Samuel Lipp. and former state legislator, had death from near Little Falls, On Sept. the city sounded off and the bell in Hall tower rang for first in years Costes and Maur Bellonte, French Cincinnati had about end of the month when Ford reliability thundered across city visited Lunken Airport Earlier in the Cincinnati was the focal the American Chemical Society The city suffered another shock Grover Smith committed suicide. October was featured by the beginning the Frank and Clarence Dorger on the another freakish weather the 20th, when the fell 26 degrees, low record for that of the On Oct. 30, Dr. Frederick T. Vall known opthalmolo gist, died election Nov. 5. brought about the the county and Democratic victory which Y. Cooper the governorship and Bulkley overwhelmed Roscoe Republican candidate for senator. Two days later investigation trregularities here began. On heels the announcement Nov. banks would an increase to savings decame the news that banks identified with had closed and others, includthe Bank Trust Covington, the Market & Trust the Co., CinHouse Association came these rescue the Central Trust Co. took over the Brighton and the and Clarence Dorger were found counts of Nov. 22, after week' On Nov. William J. Williams, of the Western & SouthInsurance died in Johns Baltimore. Day phenomena, official temperature and the defeat of the Miami University football team by the University of Cincinnati Bearcats opened with the holdup Railway Co. truck three robbers and their with about $14,000. Two later the Commercial Tribune publication. On Dec. 10 four Republican election officials were indicted on elecfraud Frank and Dorger 15 Judge Charles Bell Criminal Court to 10 in Ohio penitentiary and fined $5000 each. On Dec. 10. street car and CinRailway Co. bus near the end Eighth-st Viaduct, injuring 19 perAnnouncement was made Dec. 19 that Fritz had resigned director the Cincinnati Symphony Orchestra, effective at the close of the and that Eugene would replace him year and in direct the May Festival spring.
CINCINNATI BANKERS PLEAD FOR REVIEW Columbus, O., Aug. state supreme court was asked to review the case of Frank J. Dorger and Clarence A. Dorger on charges "rowing out of the closing 01 the Cosmopolitan Bank and Trust com"iny, Cincinnati of which they were officials. Each was sentenced 10 years In Onio penitentiary and fined $5,000.
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10-Year Suit Lost By Bank International News Service Wire CINCINNATI O., July 9.-Ending the longest court case in -Cincinnati's nistory, United States District Judge Robert R. Nevin today had awarded Henry L. Doherty & Co. of New York a judgment of $526,645 from the Fifth-Third Union Trust Company. The award includes $498,364 as a general claim against the Cosmopolitan Bank and Trust Company, of which the Fifth-Third is successor plus interest. The suit was filed by the late Henry L. Doherty, utilities magnate, against two banks in 1932. The action grew out of transactions between Doherty's Cincinnati branch of Cities Service and the Cosmopolitan Bank between 1928 and 1930. Cosmopolitan suspended business in 1930 and sold its assets to the Fifth-Third. Judge Nevin held that the Cosmopolitan Bank acted "wrongfully and in conspiarcy in carrying out a plan" to defraud Doherty. A counter claim by Cosmopolitan was dismissed. The defendants were ordered to pay the cost of the proceedings. Approximately 85,000 documents were entered in the proceedings in the decade-long battle, and the case record contains 20,000 pages.