Omaha daily bee., 1896-12-22
ECKELs EXPLAINS THE FAILURE.
National Bank of Illinois the Victim
of Grnns Nismnnngnment.


WASHINGTON, Dec 2l.-Comptroller
Eckels today gave out the following state
ment concerning the failure of the National
Bank OF Illinois:
81 am advised by Bank Examiner McKeun
that the National Bank of Illinois has closed
it's business and is now in his hands for the
comptroller Of the currency In order to
prevent trouble in proving claims against the
bank and to obtain for creditors at an early
date the largest part of the amount due
them | have appointed Mr.. McKeon tempo
rary receiver, with telegraphic Instructions to
publish notice of PROOF of claims at once.
The clearing house committee Of Chicago
has advised me through the examiner that
the clearing house viii Immediately advance
70 per cent of the face o, approved claims
and thus give creditors OF the bank i'm
mediate relief and prevent unnecessary dis
turhance OF business. | have also directed
the receiver while securing all loans OF
doubtful character to exercise the utmost
caution so as not to work any hardship upon
the business interests of those dealing with
the bank and depending upon 1t. The ad-
vance made by the clearing house. il is To be
understood, is not in payment OF such claims
In full but simply loan Of such an amount
with the certificates as collateral security.
The failure Of the bank is due to inju-
dicious, reckless and imprUdent methods fol-
lowed by the officers and not checked by
the directors, although their attention had
been individually called TO the same, and
over their individual signature they had
promised to remedy the weak points in the
banks condition. The largest source OF
failure Is the banks holdings of the Calumet
Electric railway stock, the full amount of
which cannot now be stated, for it is dis
covered that a part Of such holdings were
not made TO appear on the books, but con-
cealed in another account This and other
large and doubtful loans had been called by
special letter to the attention Of the officers
and directors, and specific improvement
promised year since. In June last, on the
surface there had been an Improvement
made, but when Bank Examiner MckCOn,
on November 80, examined the bank, he
found that the books showed that the loan
TO the Calumet Electric company and other
similar loans had been increased, and the
promises of officers and directors had not
been carried out. Upon this report | pre-
pared letter, addressed to the president
and directors. which / sent to the examiner
on December II, to be read to them at a
meeting called for the purpose This letter
reviewed at length the condition of the
bank, ana the failure Of the promises made
to be fulfilled. 1t emphasized the position
taken by the Office that decided and radi-
cal change had to be at once made and
notified the directors with a fun and com
plete analysis on the part Of the examiner
OF the matters in the bank demanding at
tenton.
"a large amount OF difficulty can be
prevented II those depending on the banks
OF Chicago and elsewhere, affected by the
banks failure, will use good judgment and
do not work themselves into a state OF
panic Other banks can be made to fail
only through those having funds with them
becoming frightened and making un-
necessary demands. On the other hand. the
banks ought to be careful and prudent In
not unnecessarily calling In the loans OF
their business customers"