Telegram-herald., 1891-03-25
WRECKED THE BANK.
The Washington National OF New York
Forced to suspend Because Its Presi-
deaf Loaned Nearly Half OF Its Capital
on Worthless Securities.

The Washington National OF New York
Forced to suspend Because Its Presi-
dent Loaned Nearly Half OF Its Capital
on Worthless Securities.
NEW YORK, March 24--Oficial an
nouncement was made late Monday
night that the Washington national
bank at No. 1 Broadway would not
open its doors to-day The banks re-
sources have been loaned out by the
president To two friends, and the dis
covery of its condition was accidentally
made. The bank is not a member of
the Clearing house association, but
clears through the Gallatin national
bank. Under a rule OF the clearing
house which went into effect January
l the banks clearing in this way must
submit their accounts to examination
by the clearing house. Monday Bank
Examiner Hepburn, representing the
clearing house. appeared at the Wash
ington bank to examine its affairs
He soon discovered that its capi-
tai was impaired. As soon as
this announcement was made Pres
ident Sherman, who has been in
charge of the bank, was Frustrated,
but recovered sufficiently to inform the
directory that he lad been too liberal
In loaning money TO his friends Two
accounts have been discovered that
foot up sl2l, 900 that are probably total
losses. One is for $4,000, secured by
poor and worthless collateral. and the
other, draft for $4,000 on John
Silva, which had been cashed by the
president and ''hurtk on hook" 1t is
sad that Mr.. Silva has promised to
make this draft good to-day. The bank
had capital of $500, 900 and deposits of
5000. 900.
Cashier Granger said that the devel-
opments were surprise to both him
self and the directors. None of them
had any idea that the president was in
vofved in any irregular transactions,
and he could say nothing about details
of the method 10y which the funds were
withdrawn. Mr.. Tilghman. a director
of the Washington national bank. says
the impairment of the capital is in the
neigh borhood ~ Slss, 900.
President Sherman said:
Il wish 70 have 10 understood that Z alone
bear the burden of responsibility. II was i'm
possible for me ~ stotd the overdrAft. and
after IL was made could do no better than
20 make I, a loan Permitting . man to open an
account by depositing out-of-town drafts and
drawing against them was error OF Judgment
a very unfortunate error. No one friendly has
been benefited By the transaction. nor WAS
there any real attempt 10 conceal the affairs OF
my adm inistrs.ion az the institution from the
directors Th-y we're fully informed of the
transfer Of the overfrafs TO . loan. The
reason only, aud that vas that hoped
thst the man. ~ his dsfseuti-s we're not
nois~d abroad would be able 10 cover his short
age. 4 have shown too much sympathy A
bank offcer las no right TO have heart or 70
try 20 save \ man who is In difficulties. Still Is
Is hard - see worthy man go down without
81 EFFORT being made TO save him.
lie admitted that the security was
not first-class Wall street collateral.
but he hoped to recover the money in
short time He did not believe. and
does not believe now. that the account
will he lost But the security he had
taken. he said. would not stand the
scrutiny Of the clearing house. This
overdrafs was between $4,000 and
$50
Director Sideil Tilghman gave the
names OF Two persons - Wnofo fresl-
dent sherman gave unsecured loans
Oue was John : Silver. formerly a
trustee Of the defunct American
Loan and Trust Company. The sggre-
gates OF whose drafts were 81. 0ao. An
other was Capt = : Norton who re-
Gently sailed across the Atlantic in his
life boat and Is believed 70 be lost
Ten thousand dollars was loaned
absolutely worthless Tn, third man
was not named He OWES the bank
So. oe0. u which only ss.0oo IS secured.
TilThman spesss verv bitterly Of the
loose way in which The banks affairs
have been conducted and Il - believed
that sensational developments are forth
r,su,sur