The Portland daily press., 1896-03-14

l1sh system of banks throughout the
country, gradually extending the field
until all the United States would come
to borrow money from Dwiggins. In ten
years he might have Pierpont Morgan on
his stRff-if prices held. Consider for
a minute the money institutions which
Dwiggins organized, or of which he
gained control in two years. When the
Columbia balloon was Inadvertently
placed upon tack and collapsed, hanks
in five states went into liquidation in
consequence.
Dwiggins' plan, as has been said, was
the
SUBLIMATION OF SIMPLICITY.
He or his representative would go to a
town which seemed to require admins
tering upon, and proceed to organize.
The capitalization agreed upon might be,
for instance, $40, 200. Dwiggins and
Starbuck would subscribe for half and
tho merchants and farmers of the par
ticular town snd vicinity would take the
rest. Then President Dwiggins of the
Columbia, of Chicago, extend
credit to the amount of--the stock sub
scription to the new bank, and there you
are 1t has not been offered in evidence
that the officers of the Columbia made
it q condition precedent to- giving credit
to the country bank that the stock be
fully paid up. The subscription list fur
nished the basis of tho credit in each
case.
Among sophomores the proposition
that q chains strength is measured by
the resistance of it's weakest link is fanlil-
lar. 1t is one of the illustrations given
in the systems of Logic taught in the col
leges. The same holds in the banking
system. One of the links in the Dwigg-
ms chain gave way. The deposits of the
Columbia-$1,5 800, 900 in the aggregate
were invested in securities that depended
largely on the future for value; mortgage
es on real estate, estimated above its
worth, and loans to individuals. One
day market prices failed to advance the
customary notch OF two, and some de-
positors came in and withdrew their
funds. Stocks went down, and further
drafts came upon the institutions created
by the unhappy Zimri. Upon an evil day
the Chemical Bank, of Chicago, found
itself with an empty cash drawer, and,
lacking ability to transact further bust
meas, locked the front door before 3
O'Clock of the afternoon. The depositors
of the Columbia could not form in line
fast enough, for the Columbia was new
bank and its managers unseasoned and
unknown. The ones who had blindly
taken in their money to be held were as
unreasoning in their attempts to get it
out. They were wise in their efforts. but
it was the wisdom of instinct. With re-
sources depleted and agents out attempt
ing to raise money on Ineffective seouri-
ties, the Columbia received draft from
the Union Trust Company, of Sioux
City. The sum called for was $35, 600,
The curtain was drawn and the doors
closed. Zimri Dwiggins caused this noti-
fication to be posted on the door of the
counting room:
There being a constant run on us for
couple of days, in order to protect the
deposltors and all interested the board of
directors has decided to close for the
present
Side by side with this was another SEN
tentious proposition. 1t was:
The business of the Columbia Bank of
Chicago is suspended and / am in charge
in the interest of comptroller of the
currency.
JAMES D. STURGES.
What royn zinc &c ,noroIv q N, q fap IF do
tails. The cases, now before the court
are part of these details. Shortly after
organizing the Columbia, Mr.. Dwiggins
had obtained L. Everingham, a Board
Of Trade man, to take the presidency.
MI. EyerinRham had wide acquaint-
anoe. Three months before the break he
had withdrawn in the interests of his
other business, and Dwiggins again be-
came president. After the Columbia
went the country banks could do no less
than make assignments. This they &C.
cordingly did, and the reproachful voices
of the country depositors could be heard
almost as far as Chicago. The patrons of
the CITY institution held meetings of in
dignation and appointed committees of
investigation. W. G.. Niblack became
receiver Of the assets of the bank. In
quiry showed the condition of affairs to
be almost hopeless Among other things
it became evident that Mr.. Dwiggins
and Mr.. Starbuck were heavily indebted
tosthe concern. The estimated amount
began at $500, 600. 1t grew until it
reached nearly $500, Ooo Dwiggins owed
the greater part. Among his investments
was the Mecca Hotel and observation-disclosures
out In State street. The travelling and
visiting public did not flock as tumultu-
ously to this resort as they do toward
the original of the name.--~
Meanwhile assertions came up from In
diana regions that besides an absence of
business sense Mr.. Dwiggins also lacked
strict moral perceptions. His methods
were described az illegal and the state
ments verified an oath. In February of
1894, the sheriff of Benton County came
to Chicago with warrants for Mr. Dwig-
gins arrest. The f2ancier was variousIy
charged with grand larceny, embezzle-
1T L.. Il