The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1891-11-03
BOSTON,S BROKEN BANK.

BOSTON'S BROKEN BANK.
The Maverick National Closed by Order Of tho
Examiner-Action of the Clearing-Hou
BosTON, Nov. 2-The doors of the Maver-
lex National Bank bore two notices this
morning. One read: CLOSED by order OF
National Bank Examiner Ever" 1mmedi-
stely beneath was the following: Notes
due at this bank to-day will be found at
the Second National Bank" There was no
excitement and but few people sought en-
trance to the banking rooms.
At the meeting of the Boston national
banks. at the clearinghouse this morning,
the following resolutions were unanimously
adopted:
Voted That it is the jud gment of the clearing
house that all banks constituting the associa-
ton should at once combine TO relieve the ne
cessities of the depOsitors OF the Maverick Ma
among themselves 10 advance money to such
depOst0rs upon the security OF the assignment
of their claims against the said Maverick Nation
al Bank.
Voted, That committee often representatives
Of the banks be appointed by the chair who shall
have full power To execute the ioregoins vote.
and details IN the premises, ana 10 call upon the
banks of the assOciasion for such sums OF money
as may be necessary. provided deat th; ane panks
age loans as reported to the clearing house for
the month of April. 1891.
Every bank was represented ut the meet
ing. Messrs. Thomas p. Beal, Franklin
Hahn. jr.. A. L. Newman. Phlneas Pierce.
Moses Williams, N. Aldrich. j. I. Birr,
John Carr. j. b. Care, G. Il. Vaille and
George Sipley were appointed q committee
to carry the resolutions into effect. It was
faI bof Mav Ok al N a
expelled from the association.
Col. Jonas II. French said this morning
that ne fully believes that il the affairs of
the Maverick National Bank are managed
with wisdom and prudence by the receiver,
stockholders and depositors Will get back
all the money they have intrusted in the
banks care.
Mr.. Lewis Lombard, second vice-presi-
dent and Eastern manager OF the Lombard
Investment Company. says that the deposit
of the company in the Maverick Bank
was immaterial, and that the concern
would not be affected by the suspension
OF the bank, except so far as to cause
little temporary inconvenience In the mat
ter of keeping accounts. All customers
who held checks on the Maverick Bank. on
return of the same, would be given checks
on other banks. in which the Lombard COM
pany has deposited. Several such checks
were presented this morning and redeemed.
Arrangements will soon be made that
checks against depositors in the Maverick
National Bank Will be hOnored at some
convenient bank, where the committee will
mako its headquarters.
LOSSES PUT AT TWO MILLIONS.
The losses of the Maverick National
Bank are estimated ct upwards of s.. .0O0. 600.
which wipe out the reported surplus and
undivided profits of S1.Oo0.OO0. the capital
of 100000 and all Of the 100 per cent. as
sessment that the stockholders may be
called upon to contribute. But as nearly q
majority of the bank shares were owned
by President Potter, some of which he had
pledged with savings banks, etc.. it is
doubtful If the full assessment can be col
lected. The depositors, however, should
only lose a fraction of their deposits. The
Irregularities of the Maverick Bank extend
back over period OF more than two years.
President Billings says that when he was
bank examiner, ten years ago. the bank
was sound except for the fault of over
loaning or doing too much business upon
its capital. Cashier Eddy quietly resi- gned
from the bank several years ago.
While the law requires eleven directors
for a bank, and the Controller of the Cur
rency notifies banks with nine directors to
fill their vacancies the Maverick Bank has
never filled its board vacancies, except to
maintain the existence of the bank by hav-
ing five directors. but all, save one or two
of the five. were practically dummies. 1t
has been for many years one man bank.
Itwas singularly free from known losses.
and Mr.. Potter has been accounted the best
Judge of business paper in Boston. The
failure has caused more active demand
for call money. Business in time money
has for O moment been suspended. except
deuosltors' transactions at their own
banks. The general opinion is that the
action of the associated banks In re-
lieving depositors by advancing on their
claims will avert any disastrous effects
from the failure. The amount so advanced
may be 80 per cent. or more of the net de-
posit, dependent III measure on the
strength of the borrower. Loans due the
bank by the depositors must be first ad-
justed.
ARRESTED FOR EMBEZzEMENT.
Asa P. Potter, president, Col. Jonas H.
French and Thomas Dana. directors of the
the Maverick National Bank were arrested
by the United States marshal tonight.
the former at his summer residence
in Cohasset, and the two latter at their res
idence in this city. The warrants. it Is un-
derstood, charge embeZzlement and viola
tion of tie United States banking laws
which forbid loans by a national bank
to any single individual amounting to more
than 10 DER cent of its capital stock.
by law the officers OF a national bank
arc dllOWcu W uoIIo" Ohiy ~ Vci Ccht. VI
the capital stock on the same collateral.
In this case it is said that Asa Z. Potter
owes 1.300 600. Joseph III. French, sSO0,00
and Thos. Dana. 100000 or total of g.
500. 600, although under the law only S40,-
coo could be properly loaned to any one per-
son.
About S5.0 900 of the firemen's relief fund
was placed with the Maverick Bank. but
the bulk of the fund is securely locked up
in the city treasurer's safety vaults
In, the Maverick was also the
to some $1,000. 1t was reported
to-day that the Boston & Maine railroad
has 100000 on deposit at the Maverick
Bank to cover their November dividend.
General Manager Furber said this after
noon that the amount would reach this
figure, but stated that the road had $780,
coo at the time of its suspension.
President Potter has made an assign
ment of his individual estate to Post
master Thomas \. Hart and Henry ID. Hyde.
Postmaster Hart says 1t will be impossible
as Mr.. Potter is Ill at his house. He has no
idea of the extent of Mr.. Potter's peronal as
sets and liabilities. Mr.. Potter's property at
Cohasset stands in his own name and is
free from all membranes. 1t is esti-
mated that this property has cost him $780,
coo. The Commonwealth-ave avenue property
stands in the name of Mrs Potter. The
property is valuable. Mr. Potter has a
very heavy life insurance, the aggregate
amount of which Is said to be In the
neighborhood of 100000 Outside of his
Cohasset property, his bonds and his Dict-
ures, il is not known that Mr.. Potter hat
| any property in addition to his investments
III speculative securities.
| The Boston Banks have voted to assess