The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1896-12-24
Chicago BANK FAILURES.
ONE BIG ONE AND TWO SMALLER
CONCERNS HAVE SHUT UP
SHOP.
THE NATIONAL BANK OF ILLINOIS
With Assets of Between $12OO0,OOO and
$15,0OO,00O Failed to Open Monday
Morning-Unwarrantable and
Injudicious Loans the Cause.

Chicago, Dec. 21.-The Nationa! Bank
OF Illinois, one of the oldest and best
known banking institutions in the city.
and with assets of between S12,O0O,OOO
and S15,OOO,OOO, closed its doors today.
The following notice was posted ON the
door before the banking hours:
This bank is in the hands of the
National Bank Exchange by order of the
comptroller of the treasury"
This action was decided upon at n
meeting of the directors of the bank last
night after the bank had been suspended
from the Clearing House association of
Chicago at meeting of the clearing
house held early in the day.
or the sixteen banks that cleared
through the National Bank of Illinois
two closed as a result of the failure.
They are Il. w. Dreyfus & Co.. and
Wasmandorff & Heineman. These two
institutions are mortgage loan banks and
savings in small way and their failure
is not expected to affect any business
houses.
The failure was great surprise in
business circles. The causes. as given by
the clearing house committee, are "un-
warrantntle and injudicious loans"
through which the capital and surplus
of said bank is surely imperiled, if not
absolutely lost.
One of the leading bankers and fnan-
ciers of this city at noon today said to an
Associated Press reporter:
The failure of the National Bank of
Illinois has created no disturbance of
consequence in financial circles here. One
or two private bankers have failed. But
this is only natural consequence of
such banking Of real estate values"
The statement was made that a loan
of ~, 10000 to the Calumet Street Rail
way company, of which ]. w. Farson of
farson, Leach & Co., is president had
caused the National Bank of Illinois to
suspend.
Mr.. Farson declined to make state
ment on that subject but stated that the
failure would not affect the Calumet
road.
Heavy loans on real estate are also said
to have been made. The last statement
OF the bank showed deposits, $l2,125,-
983, ,808 1t is thought probable that none
of the deposltors will suffer from the sus-
pension as the bankers who were present
at the meeting of the committee recon-
mended proposition to advance IS per
cent on all adjusted claims against the
National Bank of Illinois. In addition
to this they have agreed to use their in
fluence with all other members of the
Clearing House association to accept all
such claims as collateral at the same
ratio.
The National Bank of Illinois was or
ganized in August, 1871, with capital
stock of 100000, which was subsequent
ly increased to 81, 100000. 1t was regard
ed as one of the soundest financial insti-
tutions in the city.
Another suspension was recorded late
in the afternoon, growing out of the
trouble of the National Bank Of Illinois.
Judge Horton of the circuit court ap-
pointed John Nickols receiver for the
property of Frederick Weirsma, who
owns the Roseland bank, which IL sit
uated in Roseland. The assets are placed
at $4,000, and the deposits at $4,000.
The bank will resume business in Il few
days.
COMPT. ECKELS' STATEMENT.
Washington, Dec. 21.-ln regard to the
statement made today regarding the fail
ure of the National Bank of Illinois,
Comptroller Eckels said:
THE failure is due to injudicious, reck-
less and imprudent methods followed by
the officers and not checked by the di-
rectors, though their attention had been
individually called to the same, and over
their individual signature they had prom
ised to remedy the weak points in the
banks condition. The larger source of |
failure is the banks holdings in Calu-
met street railway stock, the full amount |
of which can now be stated, for it is dis |
covered that a part of such holdings was
not made to appear on the books, but car
ried in another account. This and doubt
full loans had been called by special let
ter to the attention of the officers and di-
rectors and specific improvement prom
ised year since. In June last on the
surface there had been made an improve
ment, but when Bank Examiner Nc
Ke0n, on November 30, examined the
bank he found that the books showed
the loans to the Calumet company and
other similar loans had been increased
and the promises of the officers and d.
rectors had not been carried out. Upon
this report | prepared letter addressed
to the president and directors, which |
sent to the examiner on December IA,
10 be read to them. This letter reviewed
At length the condition of the bank and
he failure of the promises made. en-
Dhasized the position taken by the Off
,ers that a decided and radical change
1ad to be at once made afiu notified the
directors with full and complete anal
isis on the part of the examiner of the
matters in the bank demanding atten-
ion. IN Saturday / received notice
rom the examiner that rumors of the