Business & Finance: Simple Men

What happens to bankers who drive their bank over a cliff and leave depositors 5 cents on the dollar? Last week a Federal and a New York judge, resorting to the novel expedient of holding court in the same room, provided an answer to that question.

Just six weeks after Clarke Bros., private bankers, failed in Manhattan (TIME. July 22), the four partners appeared before this double court, pleaded guilty, were sentenced. James Rae Clarke, senior partner, assumed full responsibility for the crash. He was sentenced by the Federal Judge to eight years in the overcrowded Atlanta penitentiary for using the mails to defraud and for conspiracy. Philip L. Clarke, John R. Bouker and Hudson Clarke Jr. each received a sentence of one year, one day. The state judge imposed the same penalties but suspended sentence declaring that the Federal sentences served the cause of justice.

The sentences were no heavier because the bankers concealed no assets, gave up their entire personal property, some $223,000, for the benefit of the depositors. Moreover it was acknowledged that the junior partners, although guilty parties, had gained little or nothing personally from the crash which was attributed mainly to bad banking.

Said Federal Judge Anderson in sentencing: “I don’t believe a set of as simple men as you ever before carried a banking institution to destruction. No brains or ability has been shown by any one of you from James Rae Clarke down.”

As a further mark of leniency, both judges suspended sentence on Hudson Clarke Jr. on his promise to lead “an honorable life” and try to support his crippled father, and the wives and families of the others, who are left destitute. He walked from the court, free, with $1.27, to start life over again.

Angry depositors, just told by the receiver that they might eventually receive 20¢ instead of 5¢ or 10¢ on the dollar, added four more items to the sum of what happens to bad bankers. Each item was an egg thrown at the three manacled convicts on their way to jail. One egg smashed on James Rae Clarke’s straw hat.