New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-03-25
EVERYTHING AILS THE BANK
ASTONISHING CONDITION OF THE WASHING
TON BANK.
THE EXAMINER SAYS THAT UTTER DISREGARD
OF BUSINESS PRINCIPLES MARKED THE

MANAGEMENT OF THE INSTITUTlON'
The doors of the Washington National Bank:
In the Washington Building. at No. Broadway
were shut yesterday in accordance with the de'
clsion Of National Bank Examiner A. B. Hep
burn, after a preliminary examination Of its
affairs made by him at the instance OF Sden
Tighman of Tilghman, Rowland & Co., prom
inent Stock Exchange firm. who is one OF tho
directors. Mr.. Hepburn was not able to give
the enlre day to attendance at the bank but
his deputies were busily engaged in examining
the books and late in the afternoon Mr.. Hepburn
made public a statement causticay criticising tho
management of the institution His report went
to Edward S. Lacy, Controller of the Currency.
last night, and the appointment of receiver
will probably be announced to-day. The capital
of the bank is impaired to an extent OF at least
80 per cent? but the protection Of the depositors
seems to be assured by the wealth OF the stock
holders, among whom is said to be Cornelius
Vanderbilt.
In some respects the failure presents most TO
markable features. The president, Evan q.
Sherman is charged with the most reckless and un-
businesslike methods in making loans on securi'
ties which were practically worthless, and in per.
mtting and cancelling overdrafts on the part OF
certain individuals. fragrant instance Of reck-
lessness in lending was the loan of $4,000 TO
Captain Francis L. Norton, who put to sea In
steam lifeboat of his invention, with his vile,
about three months ago, and who has never
been heard from. Captain Norton was the OF
ganizer OF the Norton Naval CONSTRUCTION
and Shipbuilding Company, which has an once
in the Welles Building, at No. Is Broadway. The
security furnished was stock Of the lifeboat COM
many. a security not commonly recognized az
"gilt-edged' in financial circles.
The larger part of the Impairment OF the banks
capital is ascribed by Director Tilghman to tho
overdrafts allowed to John 5. Silver, VINO
achieved notoriety as one Of the directors OF the
American Loan and Trust Company. when that
institution was compelled to 90 to the wall MIR.
Silver, according to the statements given out by
Director Tghman, was able to deposit any drafo
on an out-of-town bank in his account at the
Washington, and without waiting until it was col
lccted have his checks Immediately certified to
any extent that did not overdraw his account as
strengthened by the deposited drafts. The drafts
of Mr. Silver were sent to the out-of-town banks
for collection with instructions not TO protest"
them il they were not paid. The result is that
Mr. Silver's account at the Washington Bank Ia
said 30 be overdrawn $4,000. Mr.. Silver is q
member of the firm of Burns. Silver q Co., manu-
facturers of car-springs at Bridgeport, Conn. lie
is president of the Sumter, Charleston and North
ern Railroad, a road not generally known to
railway men, and said to consist of strip or
100 miles somewhere in Darkest South Carolina"
lie was made president of the Decatur, Chesa-
peake and New Orleans Railroad when the Ameri-
can Loan and Trust Company found that its adj
vances to the construction company building that
road needed protection Mr. Sivers financial
| transactions with the American Loan and Trust
| Company have never been explained TO the pub
lie. but it was said yesterday that his loans from
| that concern before its collapse have been fully
secured. Mr.. Silver could not be found at his
Office in the Borcel Building nor could any one
he found to explain his position. Surprise was
expressed yesterday by several financial men that
he could have obtained the credit which he COM
marGed at the Washington Bank Yesterday
Judgment was entered against him for S9,7s6 in
favor of Adolfo IIegcwisch, receiver OF
the United States Rolling Stock Company
corp.tation which suspended in Novem.
Der because il could not realize upon
It's assets. It. is alleged that Mr.. Silver in
dolsed" a note for 50 $685. made by the Decatur
and Nashville Improvement Company, dated
October T. $780, payable in sixty days, to the order
of the Rolling Stock Company for cars furnished.
| The note went to protest. and on February 10,
! 1891. suit begun against him as indorSer.
In connection with recent developments an in
cident at the Stock Exchange is of interest.
broker sold 800 shares of the stock of the Louis
| vile, Texas and 81. Louis Railroad Company.
| breaking the price from about l5alG. the last
| quotation, to D. At the latter figure 200 shares
| were purchased by broker, who a few moments
| aftcrward sid the stock out az 10. lie cleared
81 900 by the transaction, and his fellow-brokers
| hailed him as The next president of the Stock
Exchange. 1t was stated by person who should
know the facts that the 800 shares sold were the
property of Mr. Silver
The statement made by Mr.. Tilghman shows
| that there is another creditor of the Washington
Bank to the amount of $4,000. of which only
81 900 is secured by collateral. This name is
| carefully concealed.
| THE BANK EXAMINERS STATEMENT.
Mr.. IIepburns statement of the banks affair Is
as follows:
on saturday last the request o. Mr. Tappen. went
| with him TO the Washington National Bank. where We
made an informal examination OF all the assets OF uso
reached the conclusion that tncre was an i'm.
plirm mt Of capital OF losses upon its
loans and my the amount OF $4,000. This
amount NJ Tighman and Mr. Granger proposed on Mon.
day to make good We were assured by the cashier Mr
Granger hot the item due from banks contained only
Ultimate collections The pending question was whether
/, ,,s ,,o for the Gaatin continue 10 clear Tor
III, washington In View o. the forthcoming $4,000 Mr.
Tappcn thought it was, and the matter was allowed T"
stand over Monday awaiting developments
ON Monday morning further examination disclosed the
fact that there was loss probably In the Item aus
from lanks. chat amount, the item due from bahks'
- 4, ,,hch croosdnc,s i usually found, II crookedness
| .xl.t, in a bank II a something that we always
,or,tv m making examinations by taking Iist OF 'he
amounts claimed TO h. due from each parucua, o'ns
and verifying the amoint by core'poh''"ee WIN go
', I, val be necessary TO do that now before w
know certainly tn Io's "'''" ~ ~
through that ltcm. =, ,x.
The Washington National Bank ree'lNeu ous 49,. u
-, on, ,hn,, forward TO the places whore payable
,rkd them no protest and Instructed tne
,,nk 70 hold them. subject the orders o the
National Bank At the same time they cei""eu -
n.Ls NJ thelr deposO5s against these COLLECTIONS "
, ..nt forward. With checks ieccii6d ana sehs
,orard under such instructions. notice OF payment ) e
, -, which the bank could receive. All checks
o' Arodt OF those deposltos helo