The San Francisco call., 1896-12-22
COLLAPSE OF THE
ILLINOIS NATIONAL
Followed by the Failure of
Three Private Banking
Houses.
An Enormous Loan on Very
Poor Security Which Led
to the Suspension.
City and County Funds Tied Up in
the Vaults Of the Embarrassed
Institution.

Chicago, quickly followed by the failure of
three private banking houses, which did
business with it, caused furry of excite
ment in financial circles to-day and let to
runs on several banks by timid depositors.
A food OF rumors relative to other banks
and business firms added to the intense
nervousness which pervaded all classes of
people long after banking-hours and the
close of the courts.
The banks which were closed follow:
National Bank OF Illinois, capital 81 ,000,
600, liabilities $11, 600 600; Z. S. Dreyer e.
Co., bankers, mortgage brokers and real
estate dealers, liabilities 81, 500, 900, esti-
mated value OF assets 81, $50 600; Wasmans-
dorff & Heinemaun, bankers and mortgage
brokers. liabilities $416, 900, estimated value
OF assets $3.50, 900; .RoseIand Savings Bank,
Roseland, ILL.,. small capital, and assets
estimated equal to liabilities.
Ali the private banks that closed their
doors closed through the National Bank
of Illinois, and the big crash compelled
their suspension to conserve their assets
and protect creditors. Two private city
banks went into liquidation through re-
ceivership proceedings in the courts.
Reassuring action was taken at a largely
attended meeting OF the clearing associa-
ton, which was held after banking hours
this afternoon. The following resolution,
offered By ex- x-Comptroller of the Currency
Z. S. Lacey, president of the Bankers Ma
tional Bank, was una nimousy adopted;
THAT the Clearinghouse committee,
after calling to their aid such other per-
sons as they may desire, be requested
to formulate a plan which will enable
creditors of the National Bank of Illinois
TO avail themselves Of the offer of the asso-
ciated banks to make advances by way of
loans to said creditors TO the extent of rs
per cent upon properly proven claims"
The chairman of the Clearinghouse
committee stated that the readiness OF the
bankers to do this was so evident that it.
was not probable any formal organization
TO accomplish the object set forth in the
resolution would. be necessary, although
the committee appointed will give prompt
attention to the duty imposed on them.
William F. Dummer, president of the
association and vice president of the
Northwestern Bank, read the following
telegram which he had received from
Comptroller of Currency Eckels, dated
Washington:
81 have appointed Bank Examiner Nc
Keon temporary receiver of the National
Bank OF illinois and instructed him to
publish notice to creditors to prove claims.
He informs me that the Clearinghouse
committee will advance 70 per cent on
evidence of claims. Notice will be pub
Iished at once, and If claims are proven
Immediately 1 shall within thirty days be
able to pay very considerable dividend.
I appreciate the action of the Clearing
house in offering TO advance on such
claims"
The decision of the Clearinghouse COM
mittee to refuse clearing privileges to the
National Bauk of Illinois, and also to re-
fuse funds by which the bank could have
gone into voluntary liquidation, was
chiefly due 10 the astounding discovery
that the bank had loaned 50, 400, 600 to the
Calumet Electric Street Railway Company
on its bonds as sole security. This loan
exceeded the banks capital and surplus.
Another account which caused the bank
ers to hesitate was stated to be near
$500, 600, the debtor being E. S. Dreyer &
Co. Robert Berger, the only partner of
Mr.. Dreye-, is son-in-law of George
president of the failed National
bank. There were two other big loans,
which were considered poor collateral.
The necessary sequence TO this refusal to
lend aid or to continue clearing privileges
was that the big bank on Dearborn street
failed to open its doors this m orning for
public purposes. This was anticipated by
the action of the Clearing house commit
tee, but there was small knot of anxious
Il Z
the entrance when the big iron screen in
front of the doors rolled up at o'clock to
ad nit several clerks. At 10 o'clock a card
was hung on the grillwork, reading as fol-
lows:
This bank is in the hands of National
bank examiner, by order of the Comp
troller of the Currency"
This cherries announcement for de-
positors was quickly followed by the post
ing of notices that certain private banks
and business firms would clear through
other banks or pay checks which had been
given Saturday on the suspended insti-
tuition.
The following private and other banks
mace their clearances through the Illinois
National: E. S. Dreyer & Co.; Farson,
AOdC4 q OO.y OdI0Ch NAby 4'1AhAhS oAQ
Trust Company, Greenbaum Sons, E. K.
Haas & Co., International Bank; Leopold,
Mayer & Co., Oakland National Bank;
Oak Park State Bank, Roseland Savings
Bank, w. G. Stoughton & Co.; Wasmans-
dorff & Heinemann, West Side Bank;
Siegel, Cooper & Co.'S Bank, Adams Ex-
press Company's Bank, cashier checks on
Drovers' National Bank.
On the announcement of the Illinois
Banks suspension from the Clearing
house all the foregoing banks, with the
exception Of Dreyer, Farson- Leach, Was
mansdorff and one other, at once made
other arrangements for clearing. Dreyer
and Wasmansdorff's business passed into
,he hands of the Security Title and Trust |
Company as receivers. Farson, Leach q
60. continued TO do business and John
Farson, who is president of the Calumet
Railroad Company, which
secured the enormous loan from the failed |
bank, said there was no necessity or in
ention to do otherwise. He added that |
1is house would take care of the Calumet |
Electric through the breakers.
Il = IL hof th Na4inp pol hank nf !