The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-02-08
DWIGGINS is WANTED
Benton County Authorities Secure
a RequisitiOn for the Banker.
He Will Be Arrested at ChicagO-Eight-
cen Indictments Against Him for
Forgery and Other Crimes.

A requisition issued on Tuesday by Gov
ernor Matthews for the arrest and return
to this State of Zimri DwigSins. the banker
OF considerable notoriety. was honored yes
terday by Governor AltgeId. of Illinois. and
the meteoric fnancier OF Chicago will be
taken into custody to-day by an agent of
Benton county. Indiana. Dwiggins will be
taken to Fowler to be tried on eighteen
indictments. one OF which consists of eight
cen counts. The fact that the indictments
were returned has been kept a secret, and
at the Governors office yesterday a like
secrecy was maintained. The name of the
agent of Benton county was not given out,
and the State authorities were ayerse to
talking about the matter until Dwiggins
should be arrested. Dwiggins had recently
dropped out of the public prints, although
his name was mentioned in a suit brought
in Cleveland, o.. a few days ago in con-
nection with a bill making sensational al
legations. 1t was not generally known that
the Benton county grand jury was making
an Investigation of affairs in which he was
mixed up.
The indictments i'm Benton county against
Dwiggins grow out of his connection with
a bank at Oxford that tumbled with the
crash OF Observation-Disclosures banks last sum-
mer. The chicago man is charged with
forgery. enlightenment, defrauding deposit
ors. defrauding stockholders and for vio-
lating almost every section of the State
banking law. not to mention several sec
tons of the criminal code.
THE DWIGGINS FAILURES.
The history of the Dwiggins failures
through Indiana is familiar TO the public.
The suspension of his feeble institutions
had much TO do with bringing about the
panicky feeling in this State last year. His
Chicago bank. the Columbia National,
failed on May II, 1893. Within a few min
utes afterwards Bank Examiner Joseph D.
Sturgis took charge of the institution under
authority of the Controller of the Currency.
The bank had been reorganized from the
old United States National Bank two years
before. 1t did a large business with country
banks. but was not held in much esteem in
chicago. After the collapse of the Chemical
National there had been a constant run on
the Dwiggins concern and it was unable
or the suspension, as given by DwiggipS
at the time. was the filing of q suit against
1t by the Sioux City Loan and Trust Com
pany. The trust company transacted its
Chicago business through the Columbia
Bank. A few days prior to the suspension
OF the bank the trust company had failed
and 1t presented a draft on the bank for
SIS, 200. the full amount of Its deposits with
the bank. The bank failed TO honor the
draft, claiming to have loans outstanding
against the trust company to Offset the de-
post. The trust company Immediately filed
suit against the bank TO collect the amount
of the draft, and the fact that the suit
was filed added to the feeling of uncer-
tainty IA to the banks solvency.
stane,d metn nc sbe aa%o a1,em, Gy N IWs,,gsanns w ana
novel and original. to say the least, and
old bankers were cautious in dealing with
the bank. The Indianapolis banks always
sent Danpr on The Columbia National to
Chicago by express on the day the paper
was presented; Dwiggins and starbuck
were bankers at Union City and Rensselaer,
before their venture I'm Chicago. Their
plan was to organize small banks In north
ern Indiana to be used as correspondents
Of the Chicago concern. Their scheme was
TO induce well-to-do farmers near the town
In which the bank was to be. organized 70
subscribe for stock. The Chicago bank
would take a like amount OF stock. but
instead of paying cash would give the new
bank credit in Chicago for the amount. BY
cash outlay TO organize a large number OF
small banks and secure an extensive
clientele throughout the northern part of
the State.
TRUST COMPANY SCHEME.
AS was to be expected. a few days after
the collapse of the Chicago concern these
little banks began to suspend. A number of
the failures came ON the day following the
suspension of the Columbia National. 1t
Nof thub a ltN VI GhC Vim vi oobA
lied by Dwiggins had severed their connec-
ton with the Columbia National and these
banks were enabled to weather the storm.
As the investigation into the business of
the Chicago bank progressed IL was learned
that their operations had been much more
extensive than was at first supposed, and
IL was found that the bank had a long list
of correspondents in Indiana, Illinois, Ohio,
Iowa ana Mlichigan-some fifty In all.
When the firms accumulation of country
bank stock reached such a limit as to be-
come burdensome Dwiggins organized the
United States Loan and Trust Company,
of which he was president The company
represented that upon the basis of country
bank stocks yielding from s to y per cent.
dividend 5 and 6 per cent. debenture bonds
were TO be issued. the company guarantee
ing payment of the bonds. The bank stock
held for this purpose amounted to several
hundred thousands of dollars.
Immediately after the Chicago failure
banks at Oxford. Greentown. Russiaville,
knox, Morristown. Rochester, Mooresville,
Hebron. Dunkirk and other Indiana towns
closed their doors. 1t was announced that
about twenty banks in this State and Illi-
nois and Michigan had been compelled to
suspend on account of the failure of the
Columbia National. About May Is some Of
the smaller banks began to resume Ex-
Governor Chase. John w. Paris. of this
city end a number OF others in Indiana
were badly embarrassed by the Dwigglns
system.