As Banks Fail, Temptations Mount

During the times of yesteryear, more people and more businesses in Daviss County meant more banks — and more temptations for illegal gain, especially as hard times caused bank failures. Here are two examples, occuring nearly 25 years apart, where wrongdoing resulted in stints at the state penitentiary. In both cases those charged drew the maximum punishment provided by law.

During the times of yesteryear, more people and more businesses in Daviss County meant more banks — and more temptations for illegal gain, especially as hard times caused bank failures. Here are two examples, occuring nearly 25 years apart, where wrongdoing resulted in stints at the state penitentiary. In both cases those charged drew the maximum punishment provided by law.

In 1904 Lee Deford, the defaulting cashier of the Bank of Altamont, plead guilty to four counts of receiving money on deposit when the bank was known to be in failing circumstances. Deford was sentenced by circuit court Judge Alexander to 8 years in the state penitentiary.

The Bank of Altamont was closed by state bank examiners on Jan. 28, 1904, and an examination of its affairs revealed a shortage of about $8,000. Later Lee Deford, the cashier, confessed to having doctored the books to cover up part of the shortage and made a full confession, giving a memorandum of the amounts short on each deposit. This totalled up to nearly $20,000.

Immediately afterward, Deford left the country but returned Feb. 15 to surrender to R.J. Britton. He steadfastly refused to Divulge what he had done with the money. Britton claimed a $300 reward offered by the state for Deford’s arrest and conviction, but will turn the same into the assets of the defunct bank.

The failure of the bank involved Deford’s father, brother and uncle to the extent that they will lose everything they possess. The depositors will quite likely not realize more than 50 cents on the dollar. Another uncle was forced to make an assignment of his mercantile stock.

In 1928 a Daviess County jury found former Gallatin banker Dr. R.V. Thompson guilty of accepting deposits when the Farmers Exchange Bank was in insolvent condition. Thompson was sentenced to 5 years at the state penitentiary. The trial lasted 5 days but the jury deliberated little more than an hour to reach its unanimous decision.

Prosecuting Attorney Dean Leopard tried the case on the specific action of Thompson accepting a $350 deposit on March 4, 1926, from C.L. Hodges, guiardian of the Anna Scott estate. There was a mass of evidence and some of the witnesses were on the stand for an extended period of time. The charge against Thompson came through a grand jury indictment; a previous trial in the same circuit court on the same charge ended with a hung jury.

Dr. Thompson was cashier of the closed Farmers Exchange Bank and is the second official connected with this bank to receive a penitentiary sentence; Homer Feurt, president, was given a 4-year sentence by a jury in the Caldwell County circuit court.

There are other newspaper accounts citing more Daviess County bankers accepting deposits when their banks are in failing condition. Grand jury investigations led to charges against John H. Gillespie, president of the Bank of Jameson when it closed. Gillespie faced three counts in deposits totalling about $1,000. C.A. Lewis, cashier of the Commercial Bank at Jamesport, was indicted by a grand jury for accepting two deposits totalling $27.85 when the bank was in a failing condition. George W. Johnson, cashier of the Farmers Bank of Jameson, was indicted for accepting three deposits totalling over $500 when that bank was in failing condition.

Rewritten by Darryl Wilkinson from clippings of the Gallatin Democrat June 7, 1928, and April 21, 1904