New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-03-24
A BANKS BRIEF CAREER.
DOORS OF THE WASHINGTON NATIONAL
CLOSED.
ITS CAPITAL HAD BEEN sERIoUNY IMPAIRED
WITHIN NINE MONTHS - PECULIAR
CHARGES AGAINST THE
PRESIDENT.

y
noon in statement by one of its directors. which
places the president, Evan G.. Sherman, in an
extraordinary position. lie is held responsible
for the collapse of the institution and is accused
OF effccting loans on bad securities without the
knowledge or consent of the directors and of hay
ing wel-conceived plan for conccaling the con-
dtion Of the bank from the directors Mr.
Sherman is also accused Of having been detected
in making rash loans in January, when he prom
ised that he would do so no more The breaking
of this promise It is said, led to the 6uspension
of the bank yesterday.
Upon the authority Of Sidcll Tilghman, the
director who gave the statement TO the press it
was announced that not even the cashier Of the
bank, j. 7. Granger, was aware Of the presidents S
transactions until recent developments uncov-
cred them. Mr.. Granger was commended as a
model officer, and Mr. Tilghman said that the
directors of the bank had held regular meetings
and had taken great interest in the details of
the institution. A. b. Hepburn. the United States
Bank Examiner, has been informed Of the banks
condition and will take charge to-day. Mr..
Tilghman said that the bank would probably be
wound up, but expressed the belief that every de-
postor would be secured.
The first intmaton that the Washington Ma
tional Bank was in trouble was report that the
National Gallatin Bank had refused to clear for
the Washington hereafter. This was confirmed,
and inquiry concerning il was made at the Wash
ington Bank. The officers wore distressed look,
and President Sherman had left the bank This
was at p. m lie had gone home at p. m. after
making disclosures to Mr.. Tilghman. There were
several hurried conferences among the officers and
directors present. after which Mr.. Tilghman Of
fcrcd the following general statement:
The reason Of the notice given by the Gaatin National
Rank that II would n clear for the Washington
National Bank occasioned BY examination OF the
anairs OF the Washington National Bank, which showed
that its capital impaired. The bank will not open
tomorrow and Will be placed In the hands Of National
Bank Examiner, Mr.. Hepburn, and most probably DO
wound up.
About one week since discovered some Sigh. irrcqu.
aritcs regard the Of bank which brought
the attention Of directors their last rcgunr meet.
Ing on Thursday last and a; request placed
In charge of the bank. legan Investigation which
disclosed impairment Of about $4,000 After cursory
examination Saturday 1S by rcprcs OF the
National GaatIn Bank and myself it found that the
impairment in the neghborhood OF $1,000. The
Gal!at n National Bank seemed 10 he very friendly and
perhaps lcni'nt, AID Informed that II the impairment
made good they would continue clear FOR Us.
then had an interview with I. d. Tappon nnd agreed
to poy my check for $4,000 this morning to make good
the impairment q tie capt a that would be satisfactory
u them TO continue our clearing agents feeling certain
that the other directors would approve Of action
they had placed In charge Of the bank. On coming
70 the lank this morning was me: By the president.
Mr. sherman, who disclosed that there other
thin~s thot had been concealed from me- ergrccating
about 100000. Upon receiving this information had
another interview with NJ. TapI"n, and Immediately
Informed him o' the fact AID told him that did see
how the bank could continue in business II seemed
impossible toll exactly what was the amount Of tho
mpai mrnt of capital.
The bank began business last June with paid UP
Df iirYtf all qt gpprda
In Mr.. Sherman. and II did a, though a who
had been the cashier Of active Ncv-York hank for a
number % years. which had deposits I'm capital amounting
nearly - 900 900 would be- able fully
snail lank starting with -50OUO0 capni The directors
held regular moetnC, and considerable attention
the detail, of the bank. but 10 seem, II possible
10 follow the ntfcaccs Of the w'lconc'Ncd plan for
hiding facts in regard tho condition Of the bank. Our
deposit, at the pr sent tim" only about 1000
our capital although only 100000 feel Is
than end> IN to secure every dep, sltot.
Mr. Tilghman was not willing to supplement- his
statement with specific details yesterday. He dis
cusscd some features Of the affair, however
What kind Of securities did Mr.. Sherman
get ?" was asked
Cat and dog" was the reply
Did he not have any notes."
Notes No: his securities were nothing; wind 4"
TO whom did Mr.. Sherman make the loans ~
ITO three people, whose names | will not give
One lives Outside of this city, and two live in it,
Continuing. Mr.. Tilghman said it was discovered
in January that Mr. Sherman was making loans
on risky security without consulting the directors
lie had promised 10 do no more, but had been
rash again.
DO you consider this a matter of criminal
p" was asked.
mo; but il showed remarkably poor Judgment
Still, the stock will be paid in in full, and the
dcpoSitors will he secured"
Early in the day the Washington National
Bank refused to take several deposits one for
$4,000. This was not generally known until late
in the day. Shortly before the bank closed Il
business man whose place Of business is near
No. ! Broadway sent boy with n check for
$4,000 to deposit in the Washington National.
The boy returned with the information that the
officers in the bank had declined to receive the
deposit, because they were too busy to take IT.
While the bank seemed to have been at its
busiest Mr.. Sherman went home. or at least left
the bank
Different reports were circulated about the
manner in which the impairment was discovered
From Mr.. Tilghmans statement it would appear
that lie made the discovery. and was responsible
for announcing il to the officers Of tie bank and
to Mr.. Hepburn, the United States Bank Examiner.
Mr. Shcrmans side of the story would indicate That
there were some internal disscEsons in the bank.
and that there was bad feeling between him and
Mr.. Tilghman.
Although the news of the failure came out
late in the day, there were still many banking
men in Wall Street who heard of it. One we'll
known president said that Wall Street had been
watching this amateur bank president as
he called Mr.. Sherman, for some time, with the
expectation that the bank would soon come 70
grief. A bank president, said he, is the
executive OF the directors. and that fact Is recoE-
nzcd in all banking circles. He il not privileged
TO do anything as president of his bank without
the knowledge and consent of the directors. 1t
is a colossal blunder. therefore. for bank prcs-
dent to make loan wiahOut making record of 1t
at least. 1t seems that even the cashier OF the
Washington National Bank knew nothing about