People's Pilot, Volume 3, Number 10, Rensselaer, Jasper County, 25 August 1893 — FEATHERED HIS NEST. [ARTICLE]

FEATHERED HIS NEST.

K. M. Donaldson Loots Han j Banka k Kansas, Missouri and lowa and Floes to Mexico with About 6300,000 in 11lGotten Gains. Kansas Mo., Ang. 22.—From school-teacher to Napoleon of finance and thence to a defaulter is the story of E. M. Donaldson, late of this city, secretary and manager of the Union Trust company of Sioux City, la., president of the First national bank of Marion, Kan., and of eleven lowa banks, who fled Tuesday, presumably to Mexico, and left behind him a record as an art’Stic looter of banks that is seldom surpassed AU of the'institutions he was connected with are in receivers hands. He is supposed to have taken with him about SBOO,OOO of other people’s monfcy. From the Union Trust company alone he took $600,000. From the Kansas and lowa banks $200,000 is a conservative estimate of his stealings. Forgery is one of the many charges against him, and a deputy marshal is now on his trail in Mexico armed with a warrant for his arrest for erasing his indorsement to a note for $5,000. Donaldson’s story is unique. It begins in 1885 when he left school teaching to go into the real estate business in Marion, Kan. Associating himself with prominent men of the city he was soon coining money for them, as Kansas was then in the height of its boom. Eastern people became interested with him, notably Joseph L. Hosmer, of Suncoolr, N. H., who established a branch office in New Hampshire and began placing loans with New England people for them. In 1887 Donaldson organized the Union Trust & Mortgage company of Marion, Kan., with a capital of $150,000, which began business successfully. Up to this time Donaldson was honest and successful, and his marked abilities and smooth tongue carried everything before him, but the bottom began to drop out of the Kansas boom and that started his troubles. But he never lost his nerve. He got his eastern backers to help him organize banks to relieve the situation. The Union Banking company, capital $250,000, was started, and with its money the First national bank of Marion was bought, and the Union Banking company of Greensburg, Kan., Union Banking company of Jetmore, Ivan., Union Banking company of Holt, Kan., were organized as branches of the First national of Marion. I But this scheme failed. His business began to dwindle. So he went to Sioux City, organized the Union Trust company in the latter part of 1888 with an authorized capital of $1,000,090, paid up $600,000, with Hosmer as president and | himself secretary. This company suc- ! ceeded to all the assets and liabilities iof the Kansas concerns. In connection ! with this company the following lowa | banks were organized:

First national bank, Ida Grove; First na-| tional bank, Hol3tein; Sloan state bank, Sloan; Danbury state bank, Danbury: First Ute bank, Ute; Woodbine savings bank, Woodbine; 1 Cushing savings bank, Cushing; Castana sav- ] ings bank, Castana: Scballer savings bank, I Schaller: Aurelia savings bank, Aurelia; Bank of Module, Module. At first this seheme was successful, but like his Kansas venture it, too, began to fail. Then he started a big ranch near Marion, Kan., and spent thousands of dollars on it. This broke the Union Trust company. About this time Donaldson began to see that ruin was inevitable. So he moved here and organized his cattle company into a branch of the Union Trust company. Then he began to plunder. Two of the lowa banks were sold and an attempt was made to sell the others, but the financial stringency stopped him. Thereupon he laid hands on all the assets of all the banks and the trust company and disposed of them. Within the last ninety days all of, the banks and the trust company have gone into receivers’ hands James Doughty, of Sioux City, was appointed receiver for the trust company and the lowa bartka about June 28. In July the First national bank of Marion was closed and Special Bank Examiner W. A. Latimer took charge last Tuesday. The same day Donaldson fled. The examiner says he is $24,000 short at that bank.

Indianapolis, lnd., Aug. 22—Monday afternoon Theodore P. Haughey, president of the wrecked Indianapolis national bank, was arrested at his home near this city on a warrant sworn out by Receiver Hawkins charging him with embezzlement and misappropriation of funds and credits of the bank from January 1, 1892, until July 24, 1893. Simultaneously with the arrest of President Haughey the federal officers arrested his son, Schuyler G. Haughey, president of the Indianapolis curled hair w orks and the Indianapolis glue works A little later Francis A. Coffin, president of the Indianapolis Cabinet company; Percival Coffin, vice president of the company, and A. T. Reed, treasurer of the same concern, were gathered in. Young Haughey, the Coffins and Reed were charged with having aided and abetted the elder Haughey in the embezzlements and misappropriation of credits charged against him. The arrests were made as quietly as possible and the arrested men were taken before United States Commissioner Van Buren, who released them on bonds furnished as follows: Theodore P. Haughey, $10,000; Schuyler C. Haughey, $10,000; Francis A. Coffin, $5,000; Percival Coffin, $5,000, and Albert T. Reed, $5,000.