Reprints: 1915 – Grand jury returns indictment against town founder Mary Miller

Boulder Jury Scores Drach

Bank Commissioner is Blamed for Permitting Two Insolvent Banks to Continue

Public attention which was centered last night upon the fact that T. A. McHarg and O. A. Johnson has been indicted in the Oles case as well as Mrs. May Oles, became focused today on the report of the grand jury which scores State Bank Commissioner E. E. Drach for “insufficiency and neglect of duty” for failing to close the Louisville bank sooner than he did.

Another interesting fact which developed this morning was that the two indictments returned against Mrs. Mary E. Miller, pioneer resident of northern Colorado, for subscribing to a false bank statement, were rendered invalid by the failure of District Attorney Russell W. Fleming to sign them.

No Warrant for Mrs. Miller

They were accepted in this defective form by Judge Graham and ordered filed, and no process by warrant of any kind can be issued upon them while in their present form.

The mistake is generally believed to have been intentional. Mrs. Miller is more than 70 years of age and while nominally a director of the bank, she has not take an active part in its management for years.

Four years ago she was the nominee of the Prohibition party for United States Senate, an honor that was accorder her because through her, liquor was excluded from the original town of Lafayette.

She at one time owned the greater part of the land on which the town stands and when it was laid out into town lots, she made it a condition of purchase that liquor should never be sold on the premises.

Banks in Appalling Condition

After reviewing the correspondence that had passed between the office of the state bank examiner and the officers of the Lafayette and Louisville banks at frequent intervals since 1910, the report of the grand jury says:

“The foregoing statement shows that both of the banks named had been in appalling condition for a long time prior to the consolidation or merger, which was entered into on Dec. 12, 1914, but it particularly shows that while the Louisville bank was hopelessly insolvent, the Lafayette Bank and Trust Company was in far worse condition.

“The present bank commissioner took office on or about the first day of January, 1914. At that time he had in his office all of the records, prior reports and correspondence with reference to these two banks.

Duty to Close Banks

“It is the opinion of the grand jury that there was no moment from the time the present bank commissioner took office and until these banks closed, when it was not his duty under the state to close both of these banks and thereby save the situation as far as possible.

“Instead of performing his duty, he permitted these banks to continue in business. Thus for every day of the year 1914, he permitted these banks with false pretences of solvency to receive money from depositors which, unless immediately drawn out, must inevitably be lost and permitted these banks to defraud the communities they were intended to serve.

“It is the opinion of the grand jury that so long as the present bank commissioner is in office, the public is wholly without protection on account of his inefficiency and apparent neglect of duty.

Permitted Bank Mergers

“The bank commissioner further permitted the merger of the Louisville bank with the Lafayette bank to the injury of the depositors of the Louisville bank, because, while in the opinion of the grand jury, the bank could not have paid out in full, taking on of the Lafayette bank decreased the possible dividends it might pay to its depositors.”

The indictments in the bank probe were returned against J.P. Miller, cashier of the Lafayette bank; Irving Elberson, cashier of the Louisville bank; George W. Jackson, cashier of the Lafayette bank, and Frank C. Greenlee, John Tovado, Thomas H. Faull, William Barrowman and George I. Miller, directors in one or both institutions.

Reprinted from the Sept. 28, 1915 Rocky Mountain News