The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-03-24
| BIG BANK CLOSED.
Washington National, Of New
York, in Trouble.
rHE PRESIDENT IS TO BLAME.
He Permitted Ovesdfafts ana Lesne1
Money % Poor OBSERVATION-DISCLOSURES
VIM Have t. Walt for Money.

ment was made today that the Washing
ton National bank, at No. Broadway,
would not open its doors tomorrow. The
banks resources had been loaned ont by
the president to friends, and the discovery
Of the condition was accidentally made.
Tho bank il not . member Of the
clearinghouse association, but clears
through the Gallatin National bank.
The rules Of the clearing house, which
went into effect January I, provide
that banks clearing in this way must sub
NIT their accounts to examination by the
clearing house. Today Bank Examiner
Hepburn. representing the clearinghouse,
appeared at the Washington National
bank to examine its affairs. He soon dis
covered its capital impaired. As soon as
this was announced President Sherman,
who had been in charge Of the bank, was
FRUSTRATED, but recovered sufficiently to
inform the directors that he had been too
liberal in lending money to his friends. Two
accounts have been discovered, footing up
$121 600, 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 "hung on the
hook" It Is said Silva has promised to
make this good tomorrow. The bank has
a capital of $4,000 and deposits of $780,
O00 The only officers present when the
announcement was made by the bank
examiner were Cashier ]. T. Granger
and Director Sidney Tilghman. The presi-
dent had gone away, no one knew where.
The president Of the Gallatin bank at once
gave notice that his institution would no
longer clear for the Washington bank.
This news prevented any attempt being
made to make up losses Director
Tilghman said: "The bank will be
placed in charge of Bank Examiner
Hepburn, and will most probably be
wound up. am positive every depositor
will be paid In full" Cashier Granger
said the developments were surprise both
to himself and the directors. None Of them
had any idea the president was involved in
any transactions. He could not say any
thing about the details of the methods by
which the funds were withdrawn.
Director Tilgham said he had discovered
some slight irregularities, but as the inyes-
tigation discloses, the impairment of the
capital is in the neighborhood Of $4,000.
The officials sof the Galveston National
were very friendly and promised to con-
tinue to clear for the bank if the impair
ment was made good. Tilghman was
about to pay check for $4,000 today
when President Sherman disclosed things
which had been concealed, increasing
the impairment fully $4,000. Tn
der these circumstances Tilghman
did not see how the bank could continue.
1--WE began business last june" he said,
with paid-up capital Of $4,000. The
directors all had confidence in President
Sherman. and it did seem as though aman
who had been cashier Of an active New
York hank for q number of years which
had deposits and capital amounting to
nearly SO COX, GOO would be able to run
successfully small bank, starting with !
100000 capital. The directors have held
regular meetings and given considerable
attention to the details of the bank. but
it seems It was not possible to follow the
intricacies of . well-conceived plan for
hiding facts in regard to the condition Of
the bank. Our net deposits at the present
time are only about $6O0, 200. Our capital.
although $500, 600, is, am sure, more than
enough to secure every depositor. am
positive every depositor will be paid in
full ,without any call on the stockholders"
Another transaction was a loan of 300
secured by first mortgage bonds of the
Prescott & Arizona Central railroad to the
amount of $4,000. These bonds, he said.
were considered good. President Sher-
man said depositors would be all secured.
There would be some little loss, but that
would come out of the stockholders. The
depositors might have to wait a short
time because money had been lent on
notes which could not be collected now.
President Sherman was seen this eye-
ming. He feels keenly the closing of the
bank, and said it was unnecessary and
that all would have been right if the di.
rectors had let him alone. Answering the
accusation that he had given great lati-
tude in loans and accepted undesirable
securities, he said the first loan was made
to cover an overdraft because he wanted
to save the bank from loss and the man
from failure. He hoped to recover
the money in short time, but admitted
that the security was not first-class collat-
teral. That overdraft was between s73 O0O
and $4,000. The second transaction was
where man opened and continued an ac-
count by depositing checks on out-of.
town banks and drafts on his principals in
Bridgeport, Conn. One or two of the drafts
were refused, bet as the Bridgeport CORE
spondent reported that the firm was good.
he (Sherman) continued to honor the
paper because he feared the man might he
embarrassed and he believed he would
eventually make everything good. Some
of the drafts had been paid quite recentIv.
The directors, he said knew of this trans.
action, which amounted to $4,000
Schwab Bros, manufacturers of CLOAK.
and jerseys, Green street, have confessed
judgments aggregating $4,000. Attorney,
place the liabilities at $250, 900, with assets
sufficient to cover if time is allowed.
YORK, Pa, March 23.-Michael ScboI,
and James H. Donnock, trading as Scholl
Donnock, bankers, have assigned. The
liabilities and assets cannot be ascer.
tanned, but it is complete failure. with
the liabilities far exceeding the assets
ToLEpo, O., March 23.-The sheriff To-
day attached the old chamber of com.
merce building, formerly occupied bv the
produce exchange. A petition for ;udg.
ment on note of SOS, 600 and foreclosure
OF a mortgage securing the note was fled
by the Pennsylvania Mutual Insurance
Company against John B. Carson and the
administrators and heirs of James 4
Gamble. deceased. George Beckwith wa.
appointed receiver
BERLIN, Wis, March &C. A. Natbe-
of the defunct banking firm of c.
Nather Son, was arrested today, charged
with receiving deposits when he knew The
bank was insolvent. He was placed nnder
bonds of 81 900 until March 81.