After the Fall

With two of his banks in north-central Kansas failing within weeks of each other in 1893, Aaron S. Everest could count on his hometown Atchison newspaper, the Champion, to put the best face on what should have been an embarrassing situation.

The bank of Courtland, Republic county, Kan, and the Bank of Jamestown, Cloud county, Kan., have gone to the Wall.  Both institutions were wrecked by the officers investing the funds in mining stocks which turned out to be worthless. Col. A. S. Everest was interested in both concerns and it is said that he will make it warm for the officers of the institutions.  The cashiers of both banks have skipped out, leaving no money to pay creditors.

Unfortunately, the same newspaper had already spilled the beans a year earlier.  In the process of doing Everest a big favor by touting the unmatched garden spot he had discovered almost halfway across the state, the Champion revealed exactly what Everest’s banks in Courtland and Jamestown were up to.

The State Exchange bank was reorganized in February, 1892, under the new state law, since which time the deposits exceed $25,000.  This bank handles a large amount of money for eastern investors besides owning considerable real estate...

No one would ever report finding worthless mining claims littering the vault of either bank.  Both institutions were instead busily engaged in finding fertile farm land to be matched with Eastern mortgage money.  As for those officers for whom Everest promised to "make it warm,” two of them appear to have been Everest himself and his trusted lieutenant in Jamestown, cashier F. P. Kellogg, “a young man of fine business qualifications, and has succeeded where thousands have failed,” according to the Champion in 1892, assuring potential investors that they “have ample capital, and do a safe, conservative business.”

By August 1893 the rumor mill was humming in Republic County.  The editor of the Belleville Democrat wrote, “From reading the Courtland Register, we should judge that the affairs of the Courtland Bank, which failed, is very rotten.”  At the same moment back in Atchison the Champion was still trying to quell the worst gossip.  The cashier at Courtland indeed may have absconded, but at Jamestown young Frank Kellogg “was here from the commencement of the trouble to the suspension, and proposes to stay here until the matter is settled, there is no foundation for the idle rumors published in the daily papers about the State Exchange Bank of Jamestown.”

A year later Aaron S. Everest was dead, his estate was being sued by the receiver of the Jamestown bank, and idle rumors had been replaced by headlines in the Daily Capital.

KELLOGG BOUND OVER.

 

A Bank Cashier Likely to Pay the Penalty of Thievery.


F. P. Kellogg, who has been having his preliminary examination here on the charge of accepting deposits in the State Exchange bank of Jamestown, of which he was the cashier, after the institution was in a failing condition, has been bound over to the district court.  A great many drafts were also issued by Mr. Kellogg on a correspondent bank in which no funds were on deposit, but he manipulated this portion of the steal so adroitly that it is not likely that he can be prosecuted for it.

A story in the Atchison Champion that Thomas Lovewell was suing Aaron Everest’s widow for $6,000 is somewhat misleading.  Thomas was merely the point-man, the designated receiver for a long line of depositors whose money disappeared from the Courtland bank.  The injured parties included Thomas Lovewell himself, his boys William Frank and Stephen, their old White Rock neighbor Willard Woodruff, and several other individuals, banks, businesses and institutions, including the M. E. Church.  By 1896, this group was owed a total $8,498.78, including accumulated interest.  The receiver of the State Exchange Bank of Courtland admitted that this was the amount lawfully owed them by the failed bank, and the court agreed.  However, whether any of them ever saw a penny of it is another matter.

According to F. A. Lane, Receiver of the State Exchange Bank of Jamestown, as Everest's banks and his health began to fail, Aaron Everest sprang into action, putting his years as a railroad lawyer to effective use.  Naming his wife Marie his heir and executrix of his estate, he wrote a flurry of promissory notes to his son Frank.  “One day after date I promise to pay to the order of Frank Everest thirty-two thousand five hundred dollars, with interest at six per centum payable annually.  Value received,” one read, a note written a week after the Courtland bank closed, and ten days before the Jamestown bank failed to meet its obligations.

F. A. Lane pointed to a string of notes representing funds "...wrongfully converted to his own use by Aaron S. Everest during his lifetime, while acting as agent and attorney in fact for Frank Everest, and claim therefor, and damages on account of such wrongful conversion duly assigned to Belle Everest…”  Lane complained that Mrs. Marie Everest had never given a proper itemization of her husband's estate.  Citing about $2,500 in claims already leveled against it, she asked to be bonded for that amount, not for the tens of thousands of dollars which should have been at stake.

Bank assets?  Marie Everest didn’t know anything about that.  Oh, there were a few promissory notes lying around the house, secured by some farms in the vicinity of Courtland, but those notes were her husband’s personal possessions, and had nothing at all to do with the operation of any bank.  In January 1895 Frank Everest’s wife, the supposedly-damaged and indignant Belle Everest submitted a claim on the estate for $78,013, and a dizzying game of three-card monte was on, a charade probably designed to insure that Aaron Everest’s ill-gotten fortune remained in the family.  From all appearances, most of it did.

If bilked depositors from Courtland received any satisfaction, it was from what must have seemed like Divine judgment on crooked banking practices.  The Brown County World from Hiawatha, a paper that had curtly eulogized Aaron Everest as the man “who got our people to vote Missouri Pacific bonds," noted the passing of his son, 38-year-old Frank Everest, in its August 26, 1898 edition. 

Frank Everest, at one time a man of rare promise, a son of Aaron Everest, the lawyer for whom the town of Everest was named, died at St. Louis Tuesday.  Wine, women and song killed him.  He deliberately sought his fate.


© Dale Switzer 2016  dale@lovewellhistory.com