The herald., 1893-06-04
GOT CAUGHT IN THE SLUMP
The Oldest Private Bank in
Chicago Suspends.
One of the Firm Disappeared and
the Other Sick Abed.
A Bank Failure at Gladstone, Mich.
Prominent Indiana Bankers Iu-
dfcted-sundry BusinoBs
Failures.
BY the Associated Press.

BY the Associated Press
CHICAGO, June 3.-Hermann, 6chaeff-
ner & Co., private bankers, have made
an Assignment. The firm is the
largest private concern in Chicago OF
the northwest dealing exclusively in
commercial paper. The firm is also
about the Oldest OF its kind in Chicago.
No statement Of the banks affairs
was fled with the application for a re.
ceiver. The assignment was made to
the American Trust and Savings bank.
The cashier OF that institution, on vis-
iting the suspending institution's quar-
ters this morning, found large and
demonatrative crowd around the closed
doors. To add to the excitement it
was rumored that ,Schaeffner had com
mitted suicide.
An invests alton developed the fact
that the assignment was the direct re-
suit Of the disappearance OF Hermann
echaeffner, the senior member of the
firm. 1t is said the bank has been in
straits for some days, and that its
difficulties prayed very heavily on
Schaeffner's mind. He left the bank
yesterday afternoon and has not been
seen since, though diligent search has
been made for him. His friends say
mental alteration ia not unknown in his
family, and they fear his distress un-
balanced his mind and that some mis-
hap has befallen him. The police have
been notified to keep sharp lookout for
him. His partner, A. G. Becker, is 80
overcome by the train OF ills that he has
been taken sick and is now confined to
bed.
The representative OF the assignee
says the cause of the failure was too
much commercial paper. In this that
the firm was the largest in the country,
handling $35, 900, 900 worth last year.
There has been little market for it since
tight money came. It will take some
time to make up q statement OF the
assets and liabilities.
1t is said the firm was caught by sew
eral recent failures for sums ranging
from 100000 down. 1t Is further said
the bank when in need of money pledg-
ed commercial notes as collateral for
advances from other banks. There is
also the theory that Schaeffner was
caught in the recent great slump in
values on the local stock exchange. The
attorney for the bank has made state
ment in which he says it is expected the
suspension will be only temporary, and
was made only because Schaeffner's dis
appearance WAS likely to cause distrust.
The firm dealt in mortgages, which it
sold on their merits without endorse
ment, and is therefore not liable for
them. No bank in the country will lose
anything, and the attorney feels sure the
firm will pay In full.
Leaving Leaa94fh '50av tetbjRSpt tba afAlaye said; id;
sanity, the only way in which he could
account for Schseffner's disappearance
was that he had been disposing OF se-
curities without accounting for them.
II is reported that the liabilities will
not exceed 100000; assets more than
that. The failure was caused by tie IN
tense excitement in the stock exchange
and heavy transactions with rapid de-
clines. Many small holders OF local
street railway stocks are frozen out or in
serious difficulty as to margins.