The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1893-05-15
THE COLUMBIA BANK FAILURE.


The Conduct OF Dwigglns and staTbucl--
Story of Their R0prshensible Opera
tiOns,
New YoRK, May 1.-THE adyices
from Chicago indicate that tho collapse
OF the Columbia National Bank OF that
city will have far.reaching results at
the west, This is because OF the repre-
hensible methods OF Zimri Dwigglns,
president OF the Columbia, and his Rsso-
ciates. The chain Of country banks
which the DwigGins syndicate built
up around the Columbia has been
badly broken by the failure Of the CEN
trail institution. How far the methods
OF manipulating the stocks and deposits
OF these related concerns have impaired
their real strength may only be 70.
yealed by investigation aud further
disclosures, but bankers hero fear that
there will be widely distributed losses
In the little country towns OF Indiana,
Illinois, Michigan and Ohio. As the pc
culiar style OF the Observation-Disclosures.
dicate created many fictitious assets 1t
is believed that most OF the failures re-
sullng from the collapse OF the Col
umbia National will be bad ones. The
east, however, will not suffer from the
exposures. The damage will fall upon
the western communities that may
have been deluded by the Dwig.
gins schemes OF manufacturing
cash and credit out OF stationery
and painted signs. Bankers say that
tho failures ot this sort may do compar.
atively little injury to the legitimate
business interests at the west, but gem
eral regret ia felt at the hurt to conf
denco which may be caused by the
tumbling down Of the Dwiggins houses
OF cards.
Dwiggins and ]. NJ. Starbuck branched
out upon an extensive and ambitious
scheme for tho establishment OF q chain
OF country banks, A partial list OF the
institutions with which they are con-
nected shows six in Indiana, elk in
Illinois, two in Michigan, four In Ohio
and two or three in Wisconsin. In the
course OF time the Columbia National
became loaded with mass Of
country bank stock for which it
had no special use, and upon
which 1t was not earning as
much money as 1t should. Then the
United States loan and trust company
was incorporated under tho laws OF In.
diana, with Zlmri Dwiggins rs presi-
dent. Its prospectus represented that
upon the basis Of country bank stocks
yielding s, 10 and II per cent dividends,
and per cent debenture bonds would
be issued, the security in every case be-
ing worth at least 3S per cent more than
the face value OF the bond.
The United States Loan and Trust
Company guaranteed the payment OF
principal and interest. The matter was
vigorously exploited, and inquiry at the
Illinois Trust and Savings Bank re-
vealed tho fact that $260000 OF tho
United States Loan and Trust Com
pany's debentures had been registered
there. In this connection 1t should be
understood that tho Illinois Trust and
Savings Bank has nothing whatever to
do with the company except TO take
and hold in escrow the collaterals Of
fered as security for the debenture
bonds and to register such bonds.
The trust concern will in all probable
ity turn up as one OF the largest debtors
Of the bank. The United States Loan
and Trust Company has no rating at
the commercial agencies. Other facts
are also coming to light, going to show
that the Columbia bank was interested
either directly or indirectly In many
outside business enterprises.