Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1891-03-26
LIBERALITY LEADS TO RUIN.
Fhe Washington National Bank at New
York in the Hands of Receivers.

York in the Hands of Receivers.
New YORK. March 23.-The official
announcement was made tonight that the
Washington National bank at No. |
Broadway would net open its doors to-
morrow The banks resources have been
loaned out by the president to two friends
and the discovery of the condition was &C
cidentally made,
The bank is not member of the clear
ing house association but clears through
the Gallatin National bank. Under the
rule of the clearing house which
went into effect January /, banks
clearing in this way must submit
their accounts to examination by the clear
ing house. Today Bank Examiner Hop
burn, representing the clearing house. ap-
peared at the Washington bank to exam
inc It's affairs. He soon discovered that
It's capital was impaired; as soCn as this
announcement was made President Sher-
man, who has been In charge of the bank,
was FRUSTRATED, but recovered sufficient t.
inf Jrm the directors he had been too liberal
in lending money to his friends. Two &C.
counts have been discovered footing up
Sl2l 900 that are probably total losses.
One Is for $4,000 secured by d poor and
worthless collateral, and the other a draft
for SOL 900 on John Silvia, which has been
cashed by the president and ''hung on the
hook 1t is said Silvia has promised to
make this draft good tomorrow. The
bank had capital of $500, 900 and depos-
its of 100000. The only officers present
when complete announcement was mace
by the bank examiner were cashier J. T..
Granger and director Sidney Tighman.
The president has gone away, no one
knows whele. The president of the Gal
latin bank at once gave notice that his
institution would no longer clear for the
Washington bank This news will pre-
vent any attempt being made to make up
the losses.
Director Tilghman said: The bank
will be placed in charge Of Bank Exam
iner Hepburn, and will most probably be
wound up. am positive every depositor
will be paid in full
Cashier Granger said the Developments
were a surprise to both himself and the d.
rectors None of them had any idea that
the president was involved in any irregu-
lar transactions, and he could Say nothing
about the details of the method by which
the funds were withdrawn.
Director Tilghman said he discovered
some slight irregularities about a week
ago. An investigation disclosed the i'm
pairnent Of capit i in the neighborhood of
5000. The officials of the Gallatin Ma
tional were very friendly and prom
ised to continue to clear for
the bank if the impairment was made
good. Tilghman was about to
pay in check for $4,000, when Presi-
dent Sherman disclosed other things which
had been concealed, increasing the impair
ment fully 100000. Under these circum-
stances, Tilghman did not see how the
bank could continue. 1--WE began bus
iness last June, he said, with a paid up
capital of 100000. The directors
all had confidence in President Sher-
man and it did seem as though
man who has been cashier of an active
New York bank for number of years
which had capital and deposits amounting
to S7,0000 900 would be able to run sue
cessfully small bank starting with a
$500, 900 capital The directors have held
regular meetings aud given consi 1erable
attention to the details of the bank,
but it seems it was not possible
to follow the inticacies Of a
we'll conceived plan for hiding facts in re-
gard to the condition of the bank. Cur
net deposits at the present time are only
about 5600000 Our capital, although
only 100000, | feel sure is more than
enough to secure every depositor. | am
positive every depositor will be paid in
full without any call on the stockholders
President Sherman was seen this even
ing. He feels keenly the closing of the
bank, and said that it was unnecessary
and that ali would have been right if the
directors had left him alone. Answering
the accusation that he had given great
| latitude in loans and accepted undesirable
securities, he said the first loan was made
! to cover an overdraft because he wanted tc
save the bank from loss and the man from
failure. He hoped ito recover the money
in short time, but admitted that the secur
ity was not first class collateral. Thai
| the overdraft was between $4,000 and
! $4,000. The second transaction was
where the man opened continued account
by depositing checks on out of tow
banks and drafts en- his principal:
in Bridgeport, Conn. One or two O.
the drafts were refused but as the Bridge
port correspondent reported that the firm
was good ne (Sherman) continued tt
honor the paper, because he feared TIT
man might be embarrassed and he believed
he would eventually make everything
good. Some of the drafts had been pait
quite recently. The directors, he said
knew of this transaction which amounted
| To $40 000