Lake County State Bank (North Chicago, IL)

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NORTH CHICAGO BANK CLOSED BY STATE AUDITOR

The Lake County State bank of North Chicago was closed yesterday by State Auditor Edward J. Barrett at the request of the board of directors. The bank $758,206 on deposit, listed capital of $100,000 and surplus of $50,000. We closed to conserve the assets of the bank," President William R. Dalziel said. collections are too slow keep up with the demands the bank. The loans are good and in time and with an improvement in conditions the bank should liquidate dollar for The bank had robbed twice in the last two In 1930 robber took but was captured and placed on parole. Five gunmen took $2,000 in in Sep. tember, 1932. Three of the gunmen have sentenced to terms of one year to life, fourth is awaiting trial, and fifth has not been captured.

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BANK RECEIVER COOKING SCHOOL REMOVED TODAY SESSIONS BEGUN

Receiver For Lake County Initial, Gathering Held At State Bank Temporarily Out O'clock Today In Roller Rink; On Judge's Order. Hear Lecture.

William O'Connell. Chicago attorney, today removed temporarily receiver the Lake County State bank North Chicago Circuit Judge Edward Shurtleff. The court signed order calling for such after spent more hour during the morning hearing Attorneys Przyborski and Harold Tallett plead for leave to file intervening petition asking for the removal O'Connell. the noon adjournment came Judge Shurtleff entered order calling termination all ceivership actions in the bank Considered Injunction At first agreed porary injunction the ceiver from any further business and then he withdrew this on plea Attorney John Noll who court for his brother Charles Noll, attorney general. asked for time to get touch with the office of the torney connection the request the temporary and Judge Shurtleff allowed him o'clock On of however, ordered the bank work on the was construed by Tallet and Przyborski the equivalent of temporary junction The attorneys then prepared the draft order calling for the ouster Connell

Petition Filed The intervening petition was allowed filed In the petition was contended that Edward Barrett, state audipublic accounts. ursurped judicial rights appointing receivwas contended the auditor's office comes under the executive division and not judicial argument was along the line the decision Superior Dennis Sullivan. of Cook county, who (Continued on Page Column 6)

The first daily session of the NewsSun Cooking school was scheduled o'clock this under Miss Ruth Chambthe Roller Rink. Belvidere Jackson streets Hundreds housewives were expected be hand to the demonstrations and hear Miss Chambers lecture. The hostess for today was to past the Illinois Institute. and active Woman's and Through co-operation of Joseph Simons manager the lines, street cars and busses give transfers the Cooking School busses, which leave Washington and Genesee street intervals for an hour before the Cooking School. special staff of workfor two assisting Chambers getting the Roller Rink for the ing Home bought and home sold equipment will used entirely during the 4-day sessions Free recipe books will be given each woman attending the school

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BANK RECEIVER CASE DELAYED

Judge Shurtleff States He Will Rule On North Chicago Receivership Tomorrow.

Counsel out of the office of Attorney General Otto Kerner today moved to strike the intervening petition brought behalf of depositors in the Lake County State Bank of North Chicago asking for the removal of Attorney William O'Connell. of Chicago, as receiver. After hearing arguments for more than an hour Circuit Judge Edward Shurtleff. before whom the matter is pending, said he would take the case under advisement until tomorrow when he announced that he believed he would be in position to rule. He said he wanted time to read more law on the question. The intervening petition was presented by Attorneys Harold Tallett and Max Przyborski Tuesday and Judge Shurtleff entered a temporary order compelling the receiver to cease all work and impound the records of the bank with Circuit Clerk L. J Wilmot. Tallett and Przyborski attacked the legality of the appointment of O'Connell because was made by State Auditor Edward J. Barrett, Tallett argued. usurped the powers of the court in making the appointment. Kerner's men made the motion to strike the intervening petition in behalf of Barrett

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O'CONNELL IS REPLACED BY COURT ORDER

Judge Shurtleff Decides On Removal Of Chicago Lawyer; Holds State Auditor Wrong In Making Appointment.

Attorney William of today removed the Lake County State bank North Chicago by Circuit Judge Edward Shurtleff who held Auditor Edward Barrett judicial power making such James of Lake pointed receiver Judge Shurtleff Attorney George Reed Lyon, for attorney prayed appeal opinion the case can go before the supreme court early April

Reads Opinion The court opinion from 13-page typewritten opinion After discussing the and reciting cases many others handed supreme court Illinois, axiomatic that the receiver with the power and section act judicial power and hold the title others can only be effected and brought about the exercise judicial powers. axiomatic the term receiver' used judicial and can only be used judicial the operation the purposes intended section the judicial fice and can only be appointed and proceedings court. used section said wherever said merely the inspection visitations auditing officer agent auditor public accounts and used judicial under the powers granted section the or the powers porting be granted said section. those intended comprehend judicial powers and judicial powers said Claim Rights Usurped Attorneys Harold Tallett and Max intervened removal the position that the office was the executive of rather than judicial. and that Barrett the the argued for Barrett number case head and agents under him each great Shurtleff cited the national Judge system receivership example and added also in this nection that the system and national banks has most grossly oppressive, fruitful and subject the very grave by reason managed and the entire controlled from books kept and information confined capital our government thousmiles from the seat the trouble. No information can cured by interested in nected such bank without being made Washington journey and the assistance of United States senator high government official enlisted fraction of information about the affairs

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SHURTLEFF REPLY STANDS BY DECISION

MAKES ANSWER TO PETITION OF STATE AUDITOR TO ILLINOIS SUPREME COURT HOLDS TO HIS OPINION THAT THE COURTS, AND NOT STATE AUDITOR, HAVE RIGHT TO NAME BANK RECEIVERS.

Springfield, III., Apr. 17-Pointing out that he has held unconstitutional the section of the banking act, permitting the state auditor to name receivers for closed state banks, Judge Edward D. Shurtleff, of the 17th judicial circuit, filed his answer with the supreme court today in the mandamus proceedings filed against him by State Auditor Edward J. Barrett. The case originated when Judge Shurtleff ousted as receiver for the closed Lake County State bank at North Chicago. William L. O'Connell, named by Barrett as receiver for all defunct state banks, and appointed James H. Clendenin as receiver for the bank in question. Barrett has secured permission from the high scourt to file petition for writ of mandamus to compel Judge Shurtleff to replace Clendenin with O'Connell. Judge Shurtleff in his answer declared that other parties in the case had held Connell to be Incompetent and unqualified to act as receiver as "he is without any experience in the business of banking. is wholly unfamiliar with the business methods of the Lake county bank, is not a resident of Lake county, and evenin if the disputed section of the banking act is constitutional, has no power to name an assistant receiver, and that naming of such a person would throw an unfair burden on depositors and creditors in the bank. Judge Shurtleff asked the court to dismiss the state audit-

HOME FROM EAST Mrs. C. H. Mackey of North State street returned this mornIng from a winter's sojourn at points in Pennsylvania and New York.

Mr. and Mrs. Fred Perkins were up from Springfield over the week-end. Ted Johnson returned today from a visit of a few days at Mr. and Mrs. Dell Fassett of Poplar Grove spent relatives here.

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SHURTLEFF REPLY STANDS BY DECISION

MAKES ANSWER TO PETITION OF STATE AUDITOR TO ILLINOIS SUPREME COURT HOLDS TO HIS OPINION THAT THE COURTS. AND NOT STATE AUDITOR, HAVE RIGHT TO NAME BANK RECEIVERS.

Springfield, III., Apr. 17-Pointing out that he has held unconstitutional the section of the banking act permitting the state auditor to name receivers for closed state banks, Judge Edward D. Shurtleff, of the 17th judicial circuit, filed his answer with the supreme court today in the mandamus proceedings filed against him by State Auditor Edward J. Barrett. The case originated when Judge Shurtleff ousted as receiver for the closed Lake County State bank at North Chicago. William L. O'Connell, named by Barrett as receiver for all defunct state banks, and appointed James H. Clendenin as receiver for the bank in question. Barrett has secured permission from th high scourt to file a petition for writ of mandamus to compel Judge Shurtleff to replace Clendenin with Connell. Judge Shurtleff in his answer declared that other parties in the case had held O'Connell to be incompetent and unqualified to act as receiver as he is without any experience in the business of banking, is wholly unfamiliar with the business methods of the Lake county bank, is not a resident of Lake county. and evenin if the disputed section of the banking act is constitutional, has no power to name an assistant receiver, and that naming of such person would *hrow an unfair burden on depositors and creditors in the bank. Judge Shurtleff asked the court to dismiss the state auditor's proceedings.

HOME FROM EAST Mrs. C. H. Mackey of North State street returned this mornIng from winter's sojourn at points in Pennsylvania and New York.

Mr. and Mrs. Fred Perkins were up from Springfield over the week-end. Ted Johnson returned today from a visit of a few days at Wheaton. and Mrs. Fassett of Poplar Grove spent relatives here.

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NOR CHICAGO NEWS Personals SEEK RETENTION column North Chicago calling may Mr published De Yoe this OF CLENDENNIN Phone North Chicago 1236 before and

Depositors Of Closed Lake County State Bank Sign Petitions For Retention.

Approximately two-thirds of the ereditors of the closed Lake County State bank of North Chicago have signed petitions asking the retention of James Clendennin of Lake Forest as receiver, members of the depositors committee have revealed. Clendennin was named receiver by Circuit Judge Edward D. Shurtleff when Receiver William O'Connell of Chicago was ousted. but unless sufficient names on petitions are secured, there is possibility of Clendennin being ousted the supreme court reverses Judge Shurtleff's rultng that the state auditor cannot appoint state bank receivers total of 2,750 creditors, it is understood. have signed the necessary petitions within the past week The final decision as to whether Clendennin will be retained as receiver will not be known until the higher court rules on the decision of Judge Shurtleff Paul Heerens chairman of the depositors' committee of the bank. has announced that if the supreme court reverses the Lake county circuit court opinion. the petition can then legally be presented to State Auditor Barrett for the retention of Clendennin

Funeral services for Mrs. Eleanor Baggon. held yesterday from the St tended both at the church and at the cemetery Interment was made in the Ascension cemetery A number of North Chicagoans attended the final concert of the Waukegan Civic Music Association at the senior high school auditorium in Waukegan last night G. E Schumann presented an operetta entitled. "The Mikado.' following the regular con-

Mr and Mrs H I. MacDavid of Ishpeming Mich are here visiting the former's uncle on Twelfth street The North School girls softball team defeated the Otto Paints of Waukegan 11 to last night at the North School diamond The local team is entered in the Waukegan playground league again this summer

The tennis court and baseball diamond at Foss Park are now in splendid shape for the summer season Members of the American Legion have re-decorated the interior of the Foss Park pavilion in preparation for the opening dance of the season next week North school seconds defeated the Holy Family team. 17 to 0. Tuesday in the school playground league

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He, Not Circuit Judges, Says Has Sole Power to Name Bank Receivers.

Springfield, Ill., June The Illinois supreme court today ruled that the auditor of public and not circuit court accounts, has sole to appoint judges, power closed state banks. receivers of ruled in favor of State The court Auditor Edward Barrett, who granted writ of mandamus ordering Circuit Judge Edward Shurtleff Marengo expunge from his court records the appointment John Clendenin receiver of the Lake County State bank. Barrett is permitted to reinstate William Connell of Chicago as ceiver for all state banks under liquidation. The court's decision was unanimous, with Justices Stone and Heard especially concurring in the opinion Justice Dunn. issue the suit was the conof the law permitting the state auditor name receivers state banks. In order to consolicontrol and on expenses Barrett appointed William nell Chicago as receiver for all closed banks. Judge Shurtleff ousted O'Connell from the Lake county bank, at North Chicago, and put Clendenin in charge. In effect, the decision gives the state auditor authority proceed with complete control months rett asked for the resignation receivers, announcing that many would be vacant in positions effort to reduce fee charges against assets of closed banks.

Affects Moline Bank. result of the decision of the upholding the right of the Illinois auditor public counts to designate receivers for closed banks, expected Paul Califf in Rock Island Judge court will deny filed asking of liam Chicago ceiver for the People's Savings Bank and Trust company of Moline. Judge after on the petition in the ple's bank deferred consideration of the matter pending the sucourt decision similar preme points those raised here. In the People's bank Ingelson and several other depositors sought removal of auditor's basing their appointee contention the claim that the banking act with reference the auditor's control of receiverships

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STATE AUDITOR UPHELD IN BANK RECEIVER FIGHT

Court Rules He Has Sole Appointive Power.

The Illinois Supreme court yesterday upheld the right of the state auditor to appoint receivers for closed banks. In its decision the court overruled Circuit Judge Edward D. Shurt leff of Waukegan, who had held that in appointing receivers state auwas usurping judicial function. In unanimous decision the Supreme court held the auditor is merely an administrative function in appointing receivers which is granted him by the state constituti The opinion of the court was written by Justice Frank K. Issue Raised in North Chicago. The Issue was raised when State Auditor Edward J. Barrett, in move to consolidate and save ex. appointed William L. O'Connell of Chicago as receiver for number of banks, among them the closed Lake County State bank of North Chicago. On March 10 Judge Shurtleff removed O'Connell and appointed James H. Clendenin of Lake Forest as receiver of the bank. The state brought an action for writ of mandamus to compel Judge Shurtleff to expunge his order of appointment. The suit involved the status of every appointed by the state auditor and the liquidation of hundreds of millions of dollars in the closed banks of the state. Had Judge Shurtleff been upheld the legality of every act of the receivers now in control might have been subject to attack in courts, lawyers pointed out.

Auditor Is Given Control.

The decision of the Supreme court gives the auditor control of bank liquidation activities, subject to approval of the courts. Several months ago Auditor Barrett asked for the resignation of all receivers, Ing that many positions would be left vacant in an effort to reduce fee charges against assets of closed banks. The decision leaves him free to pursue his plans.

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BANK RECEIVERS

In overruling the decision of Judge Edward D. Shurtleff in the case of the Lake County State bank of North Chicago, the state Supreme court has given Edward Barrett, state auditor, full power over the appointment of receivers for closed banks. Holding that the appointment of receivers matter for the courts, Judge Shurtleff had removed William O'Connell of Chicago ceiver for the North Chicago institution and had James H. Clendenin, Lake county man, to take his place. The Supreme court's rulapparently puts Clendenin Connell in, though depositors have petitioned to tain Clendenin. In his fight to gain control of the bank receiverships, Auditor Barrett advanced the argument of economy. Yet the actions of his pointee in the Lake County State bank of North Chicago were not conducive to economy or community support. When Judge Shurtleff's pointee took charge, he cut down the cost

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WORACK IN DENVER FOR AN APPRAISAL

Frank Worack. receiver under the stockholder's liability suit in the Lake county state bank of North Chicago. left for Denver, Colo., Saturday to appraise some property there for the bank's receiver, William O'Connell of Chicago. He expects to return to Waukegan next Friday.