The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1894-01-24
Prominent and Wealthy Maine Men
Haze One in Boston.
A WESTERN BANKS MILLION OF
PAPER ASSETS.

Scaled Down Since 1t Started.
There is included in the assets of
your bank, gentlemen, worthless paper
to the face value of from million and a
quarter to million and half of dol
lars.''
This startling announcement, couched
in language similar, if not identical with
the above, was made to party of New
England gentlemen in Boston, last Fri
day.
A number of Maine gentlemen, some
from Portland, were in the number, and
all were financially interested in the
bank, some quite heavily.
This bank is the American National
Bank of Kansas City, Missouri. It was
organized four or five years ago, when
Wendell P. Rice was in his glory. Its
capital stock of about S1,4OO,O0O was
subscribed to readily here in the East,
considerable sum being taken by men
in Portland, Biddeford, Freeport and
Augusta. These men were among the
ablest and wealthiest business men in
Maine, and they took the stock, feeling
sure that national bank in great city
could not prove an ephemeral invest
ment. The stock was paid for at par at
$1G0 a share.
Although W. P. Rice started the bank.
he is not connected with it at the present
time. Indeed, he is out of all of his
great ventures. and is acting as an insur-
ance solicitor in Chicago. It was about
two years ago that tho bank was first in
serious trouble. 1t was then found that
duringthe Rice regime the notes of MANY
of Rice's friends had been discounted. and
that they were of such doubtful charac-
ter as to cause great loss to the bank. 1t
was then represented to the stockholders
that an assessment of $50 share would
be necessary to repair the impairment of
the banks capital. So this sum was adj
vanced. A stakeholder who subscribed
originally for $4,000 of the stock thus adj
ded $1,000 to his original investment.
making it $4,000 in all. The whole as
sessment brought 100000 additional to
the banks capital, bringing the whole
amount paid in as capital, first and last,
up to $2,000,000, The stock of the bank.
however, did not remain at So, 600, 900,
but was scaled down to $1,OO0,OOO. This
made par value of $1,000 for the man
who started out by subscribing for $4,000
worth of the stock, and subsequently ad-
ded the $1,000 assessed.
After this assessment and scaling down
had been completed, the Maine stock
holders felt relieved. They thought they
had put the bank upon its feet, and that
thereafter it could go alone. A dividend
of three per cent, which the officials of
the bank declared soon after, confirmed
this satified feeling of the eastern stock
holders.
When the assessment and scaling
down had been completed, there had
been, moreover, an apparent surplus of
four or five hundred thousand dollars.
This surplus and the dividend seemed
indicative of good times.
The chagrin and disappointment of the
Eastern stockholders may we'll be imag-
ined when they learned not long ago that
the comptroller of the currency had or
dered the stockholders to assess them
selves Is per cent, or cut down the capt.
tai of the bank Is per cent.
Upon the receipt of this news the
Eastern stockholders sent committee
West to investigate. Judge Stewart OF
Vermont. was at the head of this com
mittee. They reported at the meeting
last Friday, at which President George
+. Putnam, of the bank, was also pres
ent.
The report of Judge Stewart may fair
ly be called sensational. His committee
had found in the assets of the bank
81 100000 worth of discounted notes. the
present value of whicheis problematical.
Judge Stewart thought from what in
vestigation he had made, that the whole
mass might be worth s350,oO0. Presi-
dent Putnam of the bank thought the
value might be 100000.
The committee also found that it was
costing $4,000 a year to pay the salaries
and other running expenses of their
bank. 1t is said that $4,000 will cover
the yearly running expenses of any ma
tional bank in Portland. The president
was receiving a salary of $4,000 year.
The salary of Portland bank preside ut
ic n, ara1v nominal
The stockholders were considerably
wrought up over this showing, and a
prominent one from Maine asked presi-
dent Putnam quite sharply if the bank
had earned the last per cent dividend
which it had paid.
sit had not was the reply
"Where did it get the money to paw
it?"
"Out of the funds of the bank
"Do you call that good banking?"
mo, | do not''
''rhen, why did you Go it?'
Il opposed it strenuously, but was ov-
Id L. IL