The state chronicle., 1893-05-16
His Scheme Like Romance.

ants who are at work upon the
books of the defunct Columbia Ma
tional Bank have even themselves
become amazed at the enormity OF
the wild cat banking scheme they |
have unfolded to public gaze. Never
in the history of this city, and sell
dom in Wall street, the hotbed OF
such dealings, has a similar one
been concocted and carried out so
successfully as this. Zimri Dwig-
gins, the president Of the Columbia
National Bank and chief executive
of over hundred smaller institu
tions in Ohio, Indiana, and Illinois,
has also been proven by them to be
Napoleon of finance of no mean
ability, as the scheme referred to is
without doubt one of the shrewdest
ever perpetrated.
Dwiggins' career is almost as re-
markable as his scheme. Years
ago he was a small banker in All
obscure Ohio town, when he met
j. NJ. Starbock and George ".
Wiley, with whom he organized the
bucket shop firm of Ssarbuck,
Wiley & Go. Then IS customers
were wary through lack Of bank
references, they organized the
United States National Bank" in
Chicago with a capital Of $4,000.
The firm made money, and upon
deciding to get into something
more respectable than bucket shop
keeping, Dwiggins unfolded a
plan to acquire wealth which start
led his hearers
! The plan wes: The United States
Bank was to be reorgsnized as 8
national bank. Country bsnks
were to be organized on wind, the
United States Loan and Trust
Company was to be organized on
paper, and the stock Of the country
bank was to be placed with the
company. Bonds were to be issued
on these stocks and cold to who
ever would buy.
This was the plan, and experts
say it was one Of the shrewdest ever
devised to charm the dollars out O.
! the pubiic's pocket Some of tn,
directors were dubious, but Dwig
, gins, Starbuck and Others carried
the day.
The Columbia National Bank
capital 81 100000, blossomed out a
= the successor of the United State
Bank. A few local stoekholder
- were secured, as some of the stoc
. went to the country, but Dwiggin
y and his associates held most Of it.
y The rise of the Columbia Ma
- tional was signal for banks t
- spring up like mushrooms over II
: diana, Ohio, Michigan and Illinoi
y The usual mode Of procedure wa
to induce two or three local cap
. talistEsia each town to tske stock
- and positions OF trust in the ne
- bank. The prestige Of the backin
y of the big Columbia National We
= dwelt upon aud the promoters hs
very little difficulty to organize q
= the banks they desired.
10 The capital stock of these banl
- varied from $2O,OlO to $75, 600, an
~ only the examiners can now te
20 how much was paid up The loc,
capitalists certainly paid for the
stock The Colnmbia Nation
IA would advance $4,000 to ne
bank, and this, with the local CAP
W tai put up, was enough with whit
ut to begin business
at The promoters took most of Il
of stock. The Columbia National VI
w. appointed reserve agent, and Il
II reserve of the new bank, usual
IA amounting to $4,000 or more, W
ct put in the Columbia Banks vaul,
or In this roundabout way the Colul
n bia National got it's money bac
Dir was ahead all the stock it had ca
ne tured.
ng The country bank then ran alo,
ne on the capital invested by the loc
et- men, and the money put in by d
lot positors. Either Dwiggins or Sts
III buck was made president, and OF
ne ne rations were directed from Chicas
NJ, Practically no capital was requir
kle in the promotion business, and
oo business Of starting new banks
buying old ones seemed capable
indefinite expansion.
"n Then the Columbia National Ba
his became loaded down with coun,
ev. bank stock. But Dwigglns had To-
.ry seen this, and was prepared for |
a]s emergency. The trust oompa
blossomed out. "The United Sta
10 Loan and Trust Company, incor]
inc rated under the laws of the Sta
hi Zimri Dwiggins, president. Capi
m and assets, $1,00O,00O," is the "
,ri- it is emblazoned on the letter he \
9TH This trust company gathered
II all the country bank stock,
ind sued debenture bonds, and g.
,rt- the bonds to whoever wo,
buy. The literature of the &C
pany was a series of glitter;
promises. It represented that ur
the oasis of the country bank sto
,ts yielding s, 10, and II per cent. &
be idends, 5 and 6 per cent, debent
eot bonds would be issued, the secu,