“A Swindling Business"

A few weeks ago I commented that small-town newspaper editors in 1893 were much more reluctant to give details about that year’s banking scandals when the crisis hit close to home.  Their reticence makes sense, since any details of wrongdoing were likely to offend at least a few local subscribers - relatives of the accused, for instance.  In Courtland, Kansas, some readers of the Cortland Register were already threatening to cancel the paper unless the editor changed the spelling of the town’s name on the front-page banner, to agree with the misspelled sign prominently displayed on the railroad depot.  Editor and publisher George Litsinger couldn’t afford to put many more noses out of joint. 

In my previous posting, I shared an item that was reprinted around the state, even in the nearby burg of Belleville, the county seat of Republic County - although it apparently never appeared in the Courtland paper.  The statement about State Bank Commissioner Breidenthal’s visit to the ruined State Exchange Banks at Courtland and Jamestown admitted rather delicately that, “Mr. Breidenthal is inclined to believe that their business has not been conducted on a strictly legitimate basis,” perhaps the understatement of the year.  The longer story of Breidenthal’s visit, as published in the Topeka Daily Capital, pulled no punches.

The managers of the banks have left the state and very little money was found with which to pay depositors.  The banks borrowed money from each other and it looks as if they had been doing a swindling business.  Mr. Breidenthal says they took the money of the bank to speculate in Colorado mines and of course they were stuck.  Colonel A. S. Everest of Atchison was a backer of the two banks, but discovered last week that they were shaky and he immediately gobbled up all the available assets.  The deposits are not large in either bank.

The amounts may not have been gargantuan, but after giving the culprits plenty of time to make amends voluntarily, the receiver at the Jamestown bank finally sued Aaron S. Everest’s estate for nearly $70,000 in lost deposits, nearly $2 million in today’s money.  The loss must have hobbled a farming village the size of Jamestown, especially with an economic depression settling in to stay through the remainder of the decade.  Thomas Lovewell’s personal loss from Aaron Everest’s bank at Courtland was only $1,200 - equivalent to some $30,000 today.  While not a fortune, it was surely a tidy retirement nest egg which might have been expected to grow at 7% interest.  Instead, it evaporated overnight, along with funds deposited by his sons, his neighbors and his church.  The resulting lawsuit, brought against Marie Everest, the Colonel’s widow, executrix and heir, was for $6,000 - something on the order of $150,000 in 2017 dollars.

For a scandal that must have been the talk of Courtland, unsavory details concerning the local bank failure appeared rarely in the pages of the local newspaper.  When George Litsinger, who had succeeded his brother Joe at the helm of the Register, reported on the story in some detail on August 18, 1893, it was to defend Joe from scurrilous rumors.

We have been pained this week to hear the report that our brother, Joe A. Litsinger, had skipped the country.  He left for Kansas City and Atchison last Friday night to use his efforts with influential men to have the depositors of the late Exchange Bank of this place paid in full and promptly.  This he did in the interest of depositors in particular, and Courtland in general, at his own expense.  He informs us that he was successful to the extent that influential men closcely connected with the bank in a business way, have assured him that depositors will be paid in a short time, dollar for dollar. 

Mr. Litsinger had no cause whatever to “skip the country.”  His every interest is identical with the best interests of the town, and since he first came to the town his efforts have been continually used to build up the place.  He has never been charged with wronging any one, and those who took part in circulating the report did so without any foundation whatever, and in doing so have shown their capability and desire to wrong an innocent party.  Men who circulate rumors have no interest whatever in such matters other than their propensity for giving persons repeated kicks when they imagine they are down.

Joe A. Litsinger is still doing business at the old stand, and has not nor will not skip the country, the puerile* tale tellers to the contrary notwithstanding.

Besides the shakeup in state-chartered banks, there was also a changing of the guard in the newspaper business.  Six weeks after coming to his brother’s defense, George Litsinger handed over the keys of the Register office to a new publisher, H. A. Hoyt.  It may be only a coincidence, but the New Era, published in nearby Jamestown, where another Everest bank had been emptied of cash before the doors were padlocked, ceased publication altogether that same month.  

Whether there was truth to the rumor or not, the former publishers of both papers may have seemed just a bit too chummy with those shady out-of-towners who had been in the swindling business.

* What the Register actually printed is “puile,” which was most likely a misprint.  There appears to be no such word.

© Dale Switzer 2023  dale@lovewellhistory.com