The record-union., 1896-12-22

ON Discovery That the National
Bank Had Loaned Over Two Mill
ions on Street Railway Bonds.
CHICAGO, Dec. 21.-The closing of
an institution which was considered to
be the second strongest national bank
in Chicago, quickly followed by the fail
ure of three private banking houses
which did business with it caused a
furry of excitement in financial circles
to-day and led to runs on several banks
relative to other banks and business
firms added to the intense nervousness
which prevaded all classes of people
long after banking hours and the close
of the courts. The banks which We're
closed follow: National Bank of Illi-
nois, capital ST 100000, liabilities SILL
OOO, 900; e. S. Dreyer & Co., bankers,
mortgage brokers and real estate deal
ers, liabilities 81, 100000; estimated
value Of assets 81 800, 900; Wasmans-
dorff & Heinemann, bankers and mort
gage brokers, liabilities S416,0 900, esti-
mated value of assets $500, 900; Rose
land Savings Bank, RoSeland, ILL.,, small
capital and assets estimated equal to
liabilities.
All the private banks which closed
their doors cleared through the Nation
al Bank of Illinois, and the big crash
compelled their suspension to conserve
their assets and protect creditors. The
private city banks went into liquidation
through receivership proceedings in the
courts.
Reassuring action was taken at a
largely attended meeting of the Clear
ing House Association, which was held
after banking hours this afternoon. The
following resolution offered by ex-
Comptroller of the Currency e. S.
Lacey, President of the Bankers Ma
tlonal Bank, was unanimously adopted:
That the Clearing House Committee,
after calling to their aid such other
persons as they may desire, be required
to formulate a plan which will enable
itof~ Of .he National Bank of Illi-
nois to avail themselves of the offer of
the Associated Banks to make advances
by way Of loans to said creditors to the
extent of 10 per cent upon properly
proven claims
The Chairman of the Clearing House
Committee stated that the readiness of
bankers to do this was so evident that
it was not probab BILE any formal objec-
ton to accomplish the object set forth
in the resolution would be necessary,
although the committee appointed will
give prompt action 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 the Currency Eckels,
dated Washington:
Il have appointed Bank Examiner
Mckeon temporary receiver OF the Ma
tional Bank of Illinois and instructed
him to publish notice 10 creditors TO
prove claims. He informs me that the
Clearing House Committee will advance
- per cent. on evidence of claims. No
tice will be published at once, and if
claims are proven Immediately I shall
within thirty days be able to pay very
considerable dividend. | appreciate
the action Of the Clearing House in
offering to advance on such Gel tiff
Gates
The decision of the Clearing house
Committee to refuse clearing privileges
to the National Bank of Illinois, and
also to refuse funds by which the bank
could have gone into voluntary liqui-
dation, was chiefly due to the astound-
ing discovery that the bank had loaned
S2,ooo,00 to the Calumet Electric Street
Railway Company on it's bonds as sole
security. This loan exceeded the bank S
capital and surplus. Another account
which caused the bankers to hesitate
was stated to be near S500,000 the
debtor being f. S. Dreyer & Co. Robert
Berger, the only partner of Mr.. Dreyer
is son-in-law of George Schneider
President of the failed national bank
There were two other big loans which
were considered poor collateral.
The necessary sequal to this refusal tC
lend aid or to continue clearing priv
ileges was that the big national bank or
Dearborn street failed to open it's doors
this morning for public business. This
was anticipated by the action of the
Clearing house Committee, but there
was small knot of anxious depositors
waiting on the marble steps of the en-
trance when the big iron screen in front
OF the doors was rolled up at 8 O'Clock
to admit several clerks. At 9:30 O'Clock
card was hung on the grill work read
ing as follows:
This bank is in the hands of a Ma
tional Bank Examiner By order of the
Comptroller of the Currency
This cheerless announcement for de-
positors was quickly followed by the
posting 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 institution
1t is reported that the National Bank
of Illinois has on hand about 45 pei
cent. of it's deposits of S11 .000. 900, and
there is general confidence that deposi-
tors will be paid in full in short time
The officers and stockholders of the
bank unite in saying so. The last re-
port of the bank, November 30th, placed
the surplus at S11 100000, undivided
NthD iNb nd fpfa