New-York tribune., 1891-05-09
BANKS CLOSE THEIR DOORS
TWO INSTITUTIONS IN PHILADELPHIA
CEASE BUSINESS
COLLAPSE OF THE SPRING GARDEN NATIONAL
BANK AND THE PENN SAFE DEPOSIT AND
TRUST COMPANY CAUSES THAT
LED no THE AsMGNMENTs.

Philadelphia, May s.-The Spring Garden Ma
tional Bank closed its doors at IL o'clock this
morning by order OF National Bank Examiner
Drew. The following note was sent out by the
management:
We have this morning decided to place the bank
in the hands of Mr. Drew, the National Bank Ex-
amlner. This step has been forced upon us prinel-
financial srnseacy which began ~ last september and
the continued dulness Of business since. To meet
these demands on onr reserves II was NO o'ha a ImpOS pos
below in our reserve some weeks past and can see no
bsanoe b thpe csng Hosse committee for ont
standing loan certificates, payment OF which Is being
oi the past week, have caused increased uneasiness
on the part OF some Of our depostors together win
the weakening Of our credit with the other banks
FRANCIS W. REMEDY, President
The Penn Safe Deposit and Trust Company,
which has its Office in the Spring Garden Ma
tional Bank building, made an assignment this
afternoon. The Penn Trust Company is really
a part of the bank, but is said to be solvent the
assignment being simply for protection against
run.
The capital stock OF the bank is $750,000 fully
paid in. and by the February statement, the re-
serve fund amounted in round figures to 81 50,0 900.
On Tuesday last the bank declared semi-annual
dividend of 1-2 per cent and the stock sold at
1921, par being 800. The banks line of de-
of Philadelphia, which has 100000 locked up
in the broken Keystone Bank. again suffers to
the extent of Sl44,OOO. The Spring Garden
Bank was organized in 1870 as a State
Bank and in 1856 was nearly driven
into insolvency by heavy upon it.
When the run took place on the Keystone Bank
last winter a small run was also made on the
Spring Garden Bank but the bank met it without
difficulty.
Nelson F. Evans, president of the Spring Garden
Insurance Company who has been prominently
mentioned in connection with the recelvership of
the Keystone Bank, is one Of the directors Of the
Spring Garden Bank. 1t was said to-day that the
relations between the two banks were close, and
that the appointment of Mr. Evans was urged for
the purpose of aiding the Spring Garden Bank in
the event of embarrassing complications. The
exact relationship of the two banks is not known,
but it is supposed that the embarrassment Of the
Spring Garden is due to some extent TO the col
lapse of the Keystone Bank.
The excitement this morning over the latest
bank failure was at first great. Reports that other
banks were endangered at once became current,
and the fact that the Spring Garden National
Bank was a depository for city moneys contributed
TO the sense Of alarm. This evening it is not
believed that consequences of general Importance
will follow The Spring Garden National Bank
has not been supposed by those we'll posted to
be doing good business, nor was the weight of
its failure sufficient to cause special anxiety.
The anxiety has arisen solely from the now pro-
tracted course of involuntary liquidation by which
this city has been distinguishing itself ever since
last autumn, with scarcely a break. The failure
of the Spring Garden Bank and the assignment
of the Penn Trust Company may be said simply to
A. t,ila nfn noa6
evident that there was connection between the
keystone Bank failure and the closing Of the
Spring Garden Bank. Just what that connection
was is not yet apparent, though whatever it was
il can hardly cause further difficulty. The
keystone Bank, it will be remembered, was
made the subject Of a wholesale lootlng
by its now defunct president, John c. Lucas. II
it is largely in debt to the Spring Garden Bank,
the assets of the latter may be regarded as dlnln-
ished to that amount.
A certain interest attaches to the deposit Of city
moneys in the Spring Garden Bank as we'll as In
the keystone The course of City Treasurer
Bardsley in keeping the sum of 100000, the
legal limit, on deposit in the keystone. has been
severely assailed, and this, as well as certain
charges that the city money was used by nm TO
his own profit, is now the subject of an investl-
CATION by committee of Councils. lhe deposlo
of city moneys in the Spring Garden Bank was
compa ratively small, amounting to only Sl44,OOO,
of Which 81 10000 is stated to be intact" and
covered by certificate of deposit WIN
the treasurer" whatever that may mean.
maze S PSDiS PSStToer 'nis and 1d Mr.
Bar(lsIey brings out the fact that the IreasuLeI
has been advised to reduce his deposits wioii the
city banks TO amounts "below the legal Hmlt.
To this course the Treasurer agreed. IL mas not
been unusual for the full limit OF S40O,OVO
stated in the permissve, not mandatory, ordinance
of Councils under which the treasurer acts. 70
be deposited with individual banks. Such was
the case with the Keystone. There is now large
deposit Of city money with the third NatlOhal
Bank which at one time to-day was erroneousiy
reported to be affected by the Spring Garden
Bank failure probably though the impression
that an immediate withdrawal of the city fund
in its keeping was imminent. Of course no
precipitate demand will be made on any ae-
pOstOry The City Controller has made inquiry
of the various banks as to the amount OF Guy
moneys in their possession on the evening Oh
Wednesday last. but states that this was done
merely for the purpose of comparison with 11e the
returns of the City Treasurer just
what the losses of the city will be by the
two failures cannot be definitely calculated cal, at
be made up by the City Treasurers bondsmen.
But though no serious general consequences are
to be apprehended as the result t oi 5e cISas
and damaging disclosures as TO managerial NAL
feasance have undoubtedly created a strong
feeling Of distrust and DOUBT in Philadelphia.
institutions which have been struggling to over
come internal unsoundness, they TOO VIII be
forced into liquidation by the natural force OF
gravity IL s.;,,.o .o,o
Among the stories of the bank failures teie-
cronncd from the city to-day the failures OF the
Pennsylvania Trust and the Girard Bank were
mentioned There was no foundation whatever
Tor this The two institutions are among the
strongest of the kind in this city,
The law requires that National banks shalt
have a reserve fund of at least % per cent OF
their capital stock The last reserve OF me nne
was that reserve fuI1 Of $4,000 was on hand.
The latest statement filed at the Clearing House
was as follows:
CapitaI s75OOOO: loans and discounts &c. 900;
lawful money reserve a403 OO0 due from banks,
so 600 due to banks 81 O0O deposits, S1,719,O0O;
circulation. $4,000.
Tho full statement of the bank as made to the
Auditor on February &c last was as follows:
Resmrces-Loans ard discounts, S21lO,o25 -
nnsecurnl. s.l.ls N1. InlIe1