The Wilmington daily Republican. (Wilmington, Del.) 1890-1902, 1896-12-24
CHICAGO BANK FAILURE
Alleged Shady Practices in tho
Banks Management.
HEAVY LOANS ON CALUMET STOCK.
A Friend Of W. A. Hammond, tho Second
Vice President of the Institution, De-
fends Him from the Charge of Deceiving
the Directors.

~>AH~~N--'
CHICAGO, Dec. CIV. A. Hammond
second vlco president Of the National Banl
Of Illinois, who has been charged witt
pulling the wool over the eyes Of the di
feotors Of tho defunct bank, would mo-
talk when seen in his palatial home al
Evanston. Through an intimate friend
however, he made q statement which /.
calculated to implicate several Of the di
rectors as we'll as two or three men who
are not connected with the bank,
Nv. A. Hammond Ia to bo made the
scapegoat Of the failure of the National
Bank of Illinois" said the friend. "Ham,
monu Is NOT any moro to blame for the
amount of money loaned on Calumet SC,
purities than are the members of the fl.
nance committee of tho bank and its d.
rectors 1t was necessary to the purposes
OF man connected with Che South Chi
cago city railway and an officer Of ono Of
the best known banks of this city to do
probate the Calumet electric road 8 stock,
and to this end these two men brought
about the wreching Of the National Banl,
Of Illinois.
"Of the bank funds 50, AS 900 had heon
loaned on the Calumet securities. The
plan for wrecking was brlllant-cause an
Investigation, deprcclate Calumet stock
and buy it,; then combine this valuable
property Of sixty-three miles Of new track,
equipment and franchise with tho South
Chicago railway, eventually combining
with the Chicago City railway, and make
q fortune of millions within five or ton
years.
"The truth of the matter is members Of
the finance committee and certain direc-
tors of the National bank of Illinois have
known the amount of the Calumet loan
and had hoped to make individual for
tunes on the success of the venture. -Four
years ago W. V. Jacobs, who started The
Calumet road, borrowed Sll5 900 and paid
1t up In full. After that the road passed
Into other hands and IL loan was made on
the securities with the full knowledge of
the finance committee of the bank and by
President Schneider himself
''It was the idea of a man connected
with the South Chicago City railway to
wreck the bank and the men who had been
backing Caullnet through the bank. 1t
has succeeded and tho probabilities are
that the Calumet Electric will be sold to
the South Chicago City railway man and
his friend the banker, who lent his name
TO this scheme to make fortune out of
the transaction himself
1.-THE officers Of the bank finding that
the bank examiner was aware of the sit
nation began to hasten the transactions
they had conceived for the sale Of the So
curities, and thus the clearing house be-
came alarmed. Gould the matter have
been delayed thirty or sixty days tho Cal
umet ELECTRIC securities would not have
been found among the bank assets. The
sale would have been effected possibly ut
. loss to the bank, but without disturb
ance to the public Or heavy loss to the
stockholders of the bank. But this course
was not agreeable TO the purpose of per-
sons desiring to control the Calumet Elec.
tric road,
'Threc years ago E.S. Dreyer alone owed
the bank Sl,0J0.0O0, and for three years
Mr. Hammond has been trying to reduce
Shat sum. 1t WAS lessened one half when
the Doors Of the bank closed and it was
due to Vice President Hammond that this
was accomplished If tho securities for
She loans to Dreyer and Weiss have disap-
peared, they disappeared Saturday. That
may develop later Ono director took
n2, 900 out Of the bank Saturday after
noon There was no excuse for falsidca-
tion Of accounts, for the directors knew
the amount Of the Calumet loan
After reading the above statement III.
rector Page said: Never did 500 ON the
book kept for the purpose OF informing
the directors Of the bank hs to who were
applicants for loans the name of the Cal
umet Electric railway"
Captain Schneider, president of tho Ma
tional Bank of Illinois, lives in rather
snowy brick residence at No. 20OD Michi-
gan avenue. He is 70 years old, and in
rather feeble health. When called upon
by u representative Of the Associated
Press he said he should have no statement
whatever to make, and hs seemed quite
broken by the calamity which has befalen
him. Thore is no prospect of the banks
resuming, and it is by no means certain
that 1t will pay its depostors in full, M
ut fist promised.
E. s. Dreyer and his partner, Robert
Berger, of the banking firm Of E. 5.
D,eyer & Co, which collapsed Monday as
, result of the closing of the National
Bank of Illinois and for whose arrest war
ran is were issued, gave themselves up yes
terday Arrangements had already been
made for bondsmen, and tho two bankers
were promptly released They are charged
with receiving deposit on Saturday last,
their bank WAS iusolvent.