Evening star. [volume] (Washington, D.C.) 1854-1972, 1891-03-24
LENDING TOO FREELY.
Luck OF Caution Brings q New York Bank
Into Trouble.

II tex OF caution Brings New YORK Bank
Into Trouble.
The Washington National Bank Of New York
is in difficulty, and was at late hour yesterday
afternoon placed in Bank Examiner Hepburn's
hands. President Sherman. who is sick ut his
home, said that the depositors would all be see
cured. There would be some little loss, but that
would come out Of the stockholders. The de-
positors might have to wait a short time, be-
cause money had been lent on notes which could
not be collected now.
The suspension is DUE for the greater part,
it is said to the undue latitude accorded friends
Of President Sherman in the way of loans. A
large amount of the securities deposited for
these loans have been of the "cat-and-dog''
class.
Mr. Sidel Tilghman. one Of the directors,
who is now in charge Of the bank. affords this
statement for the benefit Of the public:
about one week since discovered some ir-
Irregularities IN the affairs Of the Washington
National Bank, which brought to the atten-
ton Of the directors at their last regular meet
ing. held on Thursday. March 10, and, at my
own request. was placed in charge Of the
bank. / began an investigation. which dis
closed an impairment Of the capital stock Of
about s55 600.
''After a cursory examination on Saturday
last by representative of the Gallatin National
Bank and myself, it was found that the impair
ment was in the neighborhood of $4,000 The
officials of the Gallatin National Bank seemed
to be very friendly and, perhaps, lenicnt and
informed me that if the impairment was made
good they would continue to clear for us. l
then had an interview with Mr.. +. ID. Tappan.
president Of the Gallatin National Bank, and
agreed to pay my check for SIS, 600 this morn
ing to make good the impairment OF the capt.
tai. if that would be satisfactory to them, to
continue our clearing agents, feeling certain
that the other directors would approve Of my
action. as they had placed me in charge of the
bank.
Upon coming to the bank this morning was
metby the president, Mr.. Sherman, who disclosed
to me that there we're other things which had
been concealed from me aggregating about
$50, 600. Upon receiving this information l
had another interview with Mr.. Tappan and in-
medatey informed him of the facts, and told
him did not see how the bank could con-
unue In business, as 1t seemed impossible to
tell exactly what was the amount OF the inn
pairment of our capital. The bank began
business last June with paid-up capital of
$500. 900. The directors all had confidence in
the president. Mr.. Sherman, and it did seem as
though man who had been cashier of IN active
New York bank for number of years which
had deposits and capital amounting to nearly
-, zoo, OO0 would be able to run successfully a
small bank starting with $500 ,OO0 o..
The directors have held regular meetings
and have given considerable attention to the
details of the bank, but it seems it was not pos
slble to follow the intricacies of n well-cOn-
ceived plan for hiding facts in regard to the
condition of the bank.
The net deposits of the Washington Ma
tional Bank at the present time are only about
S6O0.000. Our capital, although only about
$500, 900. feel sure, is more than enough to
secure every depositor. 1 am positive that every
depositor will be paid in full without any call
on the stockholders"
Director Tilghman greeted Mr.. Hepburn on
his arrival and his first observation was that
Cashier j. L. Granger should be exOnerated
from all responsibility for the banks troubles
Mr.. Granger formerly lived in Washington and
has many friends here who will be glad to
know that he is Lot considered in any way re-
sponsible for the banks troubles.