Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1893-05-16

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that was necessary. The moment the
business barometer in Wall street pc
gan to fall and confidence and credit
we're attacked the other people rushed
for their money. They did not get IL.
Then DwigEins went down. He was
a man with pull, and he pulled down
twenty banks to keep up the Columbia
National Company. All over the
Hoosler State little banks are giving
uo the ghost. It is all they have to
give up,
IN THE BUCKET-sHOP BUSINESS.
pwiegin's methods were strange.
Gross Irregularities are charged, ana
there will be nothing left for the cred
itors.
Ten years ago DWiggins was mod
est banker in Attica, Indiana. j. NJ
Starbuck was druggist at Union City,
in the same State. George w. wigs
and J. NJ. Starbuck established buck
et-shop here and entered into business
relations with Dwiggins'S bank at Atti-
ca. Dwiggins then branched out into
the bucket-shop business, and all three
opersted a chain OF estaolishm ents un'
der the name Of Wiley, Staronck & Co.
The bucket-shoDs were winners, aud
as suitable bank references for effect 90
country rpeculators were not always oe-
tainacle IL was determined TO start
hank. The United States National Bank
OF Chicago, with capital OF $4,000
was accordingly established, and us
name thereafter appeared in glaring
tyne on the bucket-shOD literature.
In the course Of few years wigs
became millionaire, aud, under gen
eral amnesty, was admitted 10 MEMBER
shin on the Board OF Trade. tie con-
Hnued In the bucket-shOp business,
however, and was finally indicted. de
inferred a plea Of guilty and was fined.
Then the Board Of Trade suspended
him and the bucket-shOp business was
abandoned.
pwIGGIN's ''sLICK" SCHEME.
Wigs went to New Mexico, where
he bought a silver mine with big slice
OF the banks money. be expected TO
sell the mine to an English syndicate,
but the deal fell through and the bank
was stuck.
About this time DwigginS uniolded to
his associates plan for getting rich
that fairly electrified them. This was
the plan: The United States Bank was
TO be reorganiZed as national bank.
Country banks were 10 be organized on
wind. the United States Loan and Trust
Company was TO be organized on paper,
and the stock OF the country banks was
10 be placed with the company. Bonds
were 10 be issued on these stocks and
sold TO whoever would buy.
This was the plan and experts say II
was one Of the "stickieSt" ever devised
10 charm the dollars out OF the public's
pocket. Some OF the directors were
dubious, but Dwigglns, Staronck and
thaothers carried the day.
ftle Columbia National Bank, capital
! 81, 900, 600. blossomed out es the sue
cessor OF the United States Bank. A
New local stockholders were secured, as
home OF the stock went to the country,
1nt Dwigglus and mis- associates held
Most OF il. Now the creditors are ask
whether the capital stock repre-
Is money or water.
HOW THE PLAN WORKED.
e rise Of the Columbia National
signal for banks to spring up like
shrooms over Indiana, Ohio, Michi.
m aud Illinois. The usual mode OF
yprocedure was to induce two or three
local capitalists in each town 70 take
stocks and positions OF trust in the new
bank. The prestige of this backing Of
the big Columbia National was dwelt
upon. and the promoters had very little
difficulty to organize all the banks they
desired.
The capital stock Of these banks
varied from $50, 900 10 SIS, 600, and only
the examiners can tell how much was
paid up The local capitalists certainly
paid for their stock. The Columbia
National would advance $4,000 to
new bank, ard this, with the local capi-
tai put up, was enough with which TO
begin business.
The promoters took most Of the stock.
The Columbia National was appointed
reserve agent, and the reserve OF the
new bank, usually amounting 70 S1O,O 900
or more, was putin the Columbia Banks
vaults. In this roundabout way the
Columbia National got its money back
and was ahead all the stock it had cap
tured.
The country bank then ran along on
the capital invested by local men and
the money put 10 bY depositors. Either
Dwiggins or Starbuck was made Presi-
dent, aud operations were directed
from Chicago. Practically no capital
was required IN the promotion business,
and the business OF starting new banks
or buying Old ones seemed capable Of
indefinite expansion.
ISSUING BONLS on THE STOCKS.
In the course of time the COlum bia
got loaded up with a mass Of country
bank stock for which lt had no special
uss and upon which Is was not earning
much money. Country bank stock Ia
not q collateral that can be suddenly
and promptly converted into cash. II
was here that the NapoleOnic charac-
teristics of Mr.. DWigEins were shown.
He had foreseen this difficulty from the
start, aud be had provided for II by
creating the United States Loan and
Trust Company. The name was enough
90 inspire confidence. 10 had q govern
ment flavor about it that was enticing.
THE United States Loan and Trust
Company, incorporated under the laws
Of the State Of Indiana. Iimri Dwig-
gins, President. Capital and assets,
81, 100, OO0." is the way II is embaZoned
on the letter.heads. This trust COM
pany gathered in all the country bank
stock, issued debenture bonds aud sold
the bonds TO whoever would buy.
The literature Of the company was q
series Of glittering promises. 1t repre-
sented that upon the basis OF the cOnn-
try bank stocks yielding s, 10 aud ~
per cent. dividends, 3 and per cent.
dahentnre bonds would be issued. the