New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-06-04
A CRASH IN CHICAGO.
FAILURE OF HERMANN SCHAFFNER & CO..
PRIVATE BANKERS
MYSTERIOUS DISAPPEARANCE OF THE SENIOR
MEMBER OF THE FIRM-LIABIITIES
OF TnREE-QUARTERs OF
MILLION DOLLARS
[Br TELEGRAPH TO THE TnIBuyE.I

| Chicago, June 3.-Aftcr quiet for n couple OF
weeks trouble in financial circles here began again
yesterday with tn" failure Of Chcvcrton Martin 4
Co., private bankers. and this morning came the
startling news that Hermann Schafncr Il Co. had
gone UNDER and that Schafrner had disappeared.
They were among the oldest and largest private
bankers in the West To add 10 the excitement
came the report that Mr.. SchafIncr, one Of the
best known men in Chicago and one Of the most
popular Of the Hebrew race, could not be found.
the result Of the report being the rumor that the
banker had become insane over his troubles or had
taken his own life. The banking firm made
assignment in the county court to the American
Trust and Savings Bank and Cashier J. II. Chap
man took possession. placing sign on the door.
The sign was not there long until it was sur
rounded by q surging iostlinC, angry crowd. The
assignee said late this afternoon that definite
statement Of the banks affairs could not be pre-
pared to-day owing to the amount of paper that
had to he examined II is estimated by other
fnancicrs that the liabilities will reach $3.50 900
and the assets are nominany. at least thrcc-quar-
tcrs of a million. but OF class difficult to realize
upon readily.
Mr. Scharncr was Wholesale dealer in
mcrcial paprr lie bonght freely and relied upon
himself to find n market aftcrward for the
curities lie hypothccatcd this collateral and
thus became a heavy borrower from other banks,
thcy being secured. II" probably owes 100000
in this way. His line OF dHpostors was not
large not more than 400 in number and the de-
posits will not aggregate NOR" than S2OO.OOO.
Mr. Schafn,r lost 81 900 in the Demcl Broth
ers failure S25 900 in the Dalzicl newspaper fail
ure and large amount in the NJ r. Pag" col
lapse, bat the chief of his losses was In thr stock
Of the West Side Street Railway Company. lie
loaned large sums that stock. ana when thr
drop came was left with the collateral on his
hands at a point below the loan. lnasmuch az
street railway securities have fallen of 100 points
in year. and since Mr.. Schainer il thought 10
have had at least 1000 shares. his loss was large
Three months ago Mr. SchalIncr's wealth was rs-
timatcJ M abon. half a million dollars The
busincss of the bank had run from 81 ,5OO,Ooo 10
So 600. 600 u month"; and the concern was re-
putcd 10 be making money fast. Then IN" Drn''
era, ,h cam, and since that time the history oi ''
institution shows othcr misfortuneS
The suspension il il stated. was forced bN 'h'
disaupcarancc Of Mr. SchaTncr, who walked out
nf his oiiicc ,t noon yesterday ana mas not Si"o"
been seen, although dilg"nt sear"h mas p'eh
conducted Icy the polio" and priyat" detectives
Ills paria,r Mr. Becker, realizing that the news
of ,hc di.appcaranco would cause distrust in the
business world decided that the wlScst conrs"
yould / q. 10 make an assignment. and this wls
done Tor 4 number of days, the impending col
Iapsr has weighed on Mr. >chafncrs NINA, anu
as he left his oy.rcoai in III" Office when he went
ont. Saying that he only going on short
orrand and wonlG return soon th" Gravest ap-
prehcn~Ioa exists ~ 10 his fate. some lri'hus
,binl, he has committed suicide and Others think
hc only wandered away III a M OF mehtm
alteration. Iha, there arc good grounds for the
,,I i,-. clo fri.s
morning. who said that there is insanity in the
Schanncr family. and that sister oi the MISSING
banker u 80 afflicted.
The clearances OF Hermann Schanncr Co.'S
bank have been made through thr-, houses-th"
Merchants Loan and Trust Company, the Metro
poli,an National and the Illinois National banks.
AZ the Illinois National the officials awar"
Of the impending failure several hours b"for" TN"
assignment was made. They had been visited
by Mr. Becker and informed Of the eAact state OF
affairs An official in the bank said that they
held collateral for all Indebtedness OF Schanner.
"Mr Schanncrs credit is excellent" said this Of
fetal. but the mere fact that he has disappeared
under mysterious circumstances right at the time
when the money market is in the worst condition
il has been In for years has caused suspicion
which Mr. Becker is unable TO overthrow. Pos
siby the man could not have secured loans SUI
icient 10 tide them over Ii takes the best oil So
curity 10 obtain money now. II Mr.. Schaiincr
made requests for money 70 sustain him. and had
ieen refused II is not at all strange that he has
disappeared Under the circumstances the theory
Of suicide is tenable."
President Lyman J. Gage. of the First National
Pank. sees nothing in the failure of Hermann
SchafYner 4 Co, or in the numerous bank assign
ments of late 20 alarm the business world "Of
course these events invariably occasion surprise
among the people. but | see nothing in the pres
cnt condition o: affairs to caus" alarm. said he
to-day "Throuahout the entire country there
is . great deal of liquidation going on. and this
causes failure her" and there IL is not sur
prisng There is no occasion for Il panic.
Scha finer & Co.'S failure caused OF the
most exciting scenes ever. witnessed on the floor
of tn. Chicago Stock Exchange. From the open
inc 70 the clos. the bidding spirited and an
immrnsc number Of dcal- was put through.
Stocks declined with surprising rnpdity. and for
n tim. the oldest brokers were AZ n loss to 'Tti |
mate how long the sumping would continue |
~ result of ~" days trading many Of the
small holders Of West Ch,cago and Norm oHIcafo
meeting their margins What was most notice
able i'm the session was the lack Of support for |
North Chicago, which declined TO- 49, while |
Wc.t Chcaqo was very freely purchased for in. |
y,~tors in small lots. causing tn" market to react
several times from tn" lowest notch OF tho day. |
The brokers seemed 10 feel that nothing was
worthy Of attention outside Of the lcrkcs cable |
stocks.
A. a result OF the suspension H. Iachman,
crcditor 70 .he amount Of $500. appeared before
Judge Donnrly in the County Court and secured |
citation against Schannrr and l'cckner, sum |
moninp them into court for examination Zach |
mans ATTORNEYS are said to represent the other |
creditors to the amount Of 100000. who Will |
insist upon an examination Of the firms affairs
in court.
The news Of the Chicago failure did not reach |
Wall street yesterday until after the close OF The |
usual half holiday business hours. Most brokers' |
had hmm and
downtown Among these men the announcement
creatcd sensation. Increasing the uneasy feeling
regarding the financial situation which had been
growing all the week Further news VIII D" awaited
with interest. because Of the consequences whlch
NAV follow the failure II It should prove to be n
serious one old banking men could not r"prcs'
mcmorie. OF the disasters which followed the Folelt
failure here about twenty years ago. ana IN" "'oe
sprcnd distress which resulted from the collapse OF
Potter ILvcIl & Co., In EOston. Few years ago
schotrncr & Co. was one OF the Oldest concerns In
the country engaged In handling commercial paper
frh Tho anttt~