New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-08-09
TROUBLE IN A SMALL BANK.
ITS DOORS TO CLOSE TODAY.
IHE MADISON SQUARES CAPITAL SAID TO
BE IMPAIRED
OTHER INSTITUTIONS NOT AFFECTED.

HEAVY WITHDRAWALS OF DEPOSITS IN RECENT
WEEKS CAUSED THE TRoUBLE-THE BANK
WAS NOT MEMBER OF THE CLEAR
ING HOUSE AssoCIATIoN-AN IN.
vEsTIGATIoN MADE.
The Offices of the Madison Square Bank, at
Broadway and Twenty -ffth-st., were filed with
Clearing House committeeman and bank officials
and directors last evening To-day the bank Will
not open its doors Its cash on hand has been
sadly depleted By Withdrawals of deposits, and It's
capital has been impaired. What will be the out
come OF the trouble is yet uncertain.
The Madison Square Bank, which is State in
stitution il not member of the Clearing House
Association Had il been, its doors would not
have closed, and, as 1t is now, its SUSPENSION,
whether temporary or permanent, VIII signify
little, other than the general strain or the IMAM
cial situation before which individual institutions
may lind it perhaps hard TO stand, but against
which the associated banks rear their walls in
defiance This fact cannot he emplasiz'i 700
much The associated banks Of Ncw-lork CITY
have financed the country. On them Tor weeks
and months has been the burden of carrying the
financial interests Of every section and almost
every city. They have done it in a way that
has CHALLENGED the respect and admiration OF all
who have an understanding of the situation
Other banks of the city, not members of the Clear
ing House. do business or clear through some
one of the associated banks. As long as these ont
side banks are on a solid, conservative basis the
associated banks stand by them, and will often
carry them through times of great peril ms
feature il is that gives TO Ncw-Iork's iianancal
system its great solidity, characteristic that has
never been displayed to ereatc- advantage than IN
this summers crisis.
The embarrassed condition Of the Madison
Souaro Rank was made known last evening. In
vrstigation showed that the bank was undergo
ing an examination by the Clearing House Com
mittcc. II had been opened during the day MS
usual and had closed at the regular hour That us
condition was in any way crippled was unsIs-
pcctcd M that time.
Admission 70 the bank after closing hours. how
ever, wa, denied TO all save directors OF these
such number appeared as to establish beyond a
doubt the cxisenc. Of trouble. They were eN-
cited and would give no information concerning
the nature Of what was going on within. They
said they knew absolutely nothing.
All the Offices were brilliantly lighted aud il
conld I've seen that there wcrc a number of men
in consultation within, hut the doors were locked
and opencd 10 no summons.
Al o'clock the bolt of the Broadway door
WIS drawn and the Clearing lious' Committee
left the bank There was no statement to make,
they said but ore Of the committee lave TINS
account Of the embarrassment:
Jxa Madison S1nnrc Bank does It's clearing
through the ST Nicholas National Bank, and yes
ter,lny at ; o'clock the clearing bank refused
longer 10 act for the Madison Sqdar" Bnnk Inc
capital Of the Madison square Bank was under
stood 10 I've impaired 10 the extent of SSO,"oo'
and "A committee from the Clearing House Wa|
asked 10 investigate. That Investigation had
hecn made The result was not 10 be ilad" pub
lie a, present The impression given, however
was that the bank would meet all liabilities
Tho committee from the Clearing lIouS" which
made the investigation consisted of Frederick d.
T,pn.n pr.eident of ,he Gallaiin National Bank;
William 4. Nash. president of the Corn Exchange;
! Edward simmons. president Of the Fourth Ma
tional Bank and Henry w. Cannon. president oi
the has,' National Bank.
Later in thc evening = statement WIS mnd" by
W 4 Icnncr Mr.. Jcnncr appeared at In" door
Of the bank and said that he supposed IN" re-
por,er wanted 10 know something about III" meet
ing lie eiid that he was not an officer ot the
bank nor in any way connected with It, bur APP
pearcd for the dcpositors. Mr. Jenncr Is "A lawyer
Of no A. Wiam-st. He SAID that th' ~.
Nicholas National Rank had refused To clear Ior
the Madison Square Bank. aud that IN ronS'qu'''"
a committee from the Clearing llouS" had Deem
rooucs,cd "a examine the banks standing. That
was what had been done. III" committ"" was To-
orcsted 10 s,o particularly If the banks
securities were all right They had don"
So The dcpositor,, Mr.. Jenner said would all
he paid in full There was no doubt whatever OF
that The banks capital had been impaired 10
the extent Of between $4,000 and $4,000. but
the directors wore all wealthy men, and would
stand by the bank The question which the
Clearing House Committee had u consider was
simply whether the securities held by III" pahK
were good. Mr Jcnncr further said speaking Tor
himself that if the bank held 100000 of ms
own money he would have no fear as 10 its safety.
lie could not say, nor would any of the directors
make the statement, as to whether the bank
would he closed or opened to-day.
Joseph +. Blaut the president Of the Madison
Square National Bank, was seen last night M IN"
Hoffman House in company with several Of the
directors Of the bank, and was asked il Ii" would
not make an authoritative statement. lie re-
fused 10 make any statement, and referred all
uucstOncrS to Mr.. Jcnller who then iilade tllS
formal stltemcnt
represent number Of dcposltors who arr largely In
ercscd I'm the hanks ~oycncy and contnuanc" In bust
hess have advised Mr. Blaut rot to max" any state
nlcnt press II IL quite Obvious that any state
mcnt at the present would be prcmatur' ns IL would
necessarily anticipate AMI Therefore prejudice the acton
Of the directors ard advisers. you Will per-
wisdom Of thi- and therefor eNcn'e Mr. i'au
recognize always Right Of the to early AMI
accurate information.
All the directors and officers now in town were |
sought for by a Tribune reporter, but some were /
not at home, while those seen absolutely reius'u
to make any statement
Concerning tho history of the action taken yes .
tcrday, gentleman who was prosenf ut the meet
ing of the Clearing House Committee y'st'ruay
afternoon, said when seen last night:
The Madison square National Bank had on deposit
about s2oOO,OO0 unti two months ago, since whn "o'
~ 100 900 has been drawn out. on July ~ Deputy !
Rsnk Examiner Judson found the bank In good conuoh'
on Friday last he called In again ana founu the
cap,I wa. Imparad 10 IN. amount about $4,000 and
dL1cctnrs that would beter get ogethcr anu