The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-12-24
WRECKED BY PLoTTERS,
National Bank of Iliinef. Looted In
Order 10 Pave the Way TO
street Car Deal


nncte6 with the South Chirago CITY Rail-
way and an 0sfcsr OF che % me lest
kno~n banks o. this city 70 eeDreciate the
Calumet electric reads stocks. and 10 IBIS
end these Two men brought about the
xrecklng % the Bank % Tiisn5is. o. the
banks funds s. fss.0 900 had BEEN loaned
or Calumet securities. The plan n 70
depreclate Calumet stock. and then buy
E.. then to combine this valuable prop
cry. with sixty-thFes miles 81 1ew rack.
equipment ard franchise. win tbe South
Chicago railway. eventually cSns4nlng
with The Chicago City railway. aud 20
make q fortune % millions WITHIN Eve or
tan years.
..Ivre truth OF the matter Is, members Of
the sinance committee ard certain direct
ors OF the National Bank Of Illinois have
known the amount Of the Calumet loan,
and hoped 10 make individual fortunes on
tie success OF the venture Four years
ago W. y. Jacobs. vino started the Caiu-
met road. borrowed s1ls.vao and paid Il up
In full. After that the road passed into
their hands. and loan was made on the
securities with the fgu knowledge Of the
finance committee OF the bank and BY
President Schneider himself. This loan
was too large. but IL had been supposed
10 be for a few weeks only. and the bank.
finding Itself involved. either had 10 take
the loss or go ahead"
National Bank OF Illinois. is 70 years OF
age and in rather feeble health. When
called upon today by a representative OF
the Associated Press, he said he should
have no statement whatever TO make,
and he seemed quite broken by the caiam-
ity which had hefaIlen him. There Is no
prospect Of the hanks resamins, and II Is
by no means certain that II viii pay its
depositors in full. as first stated.
Never did I see on the book kept for
the purpose OF informing the directors OF
rhe bank as 20 who were applicants Tor
loans, the name OF the Calumet Electric
Railway Company"
This statement was brought about in a
conversation with Director Page. OF the
defunct National Bank OF Illinois today.a as
TO how such large loans were made by
ttfe bank and ostensibly given with the
sanction OF the directors. Mr.. Page went
on 20 explain how The business OF the bank
as FAR as the directors were concerned was
conducted said he:
The directors appointed from among
themselves what you might term for con-
venience sake an auditing committee. The
plan vas 10 let one director drop out each
month. some other taking his place. Each
day the committee would meet at the
bank its business being - pass upon the
applications FOR loans. A record OF these
applications was kept In book designed
for the purpose. In this book also
kept. opposite the name OF each applicant.
a record Of the collateral offered TO effect
the loan When the committee was ready
for business. Mr.. Schneider would come
into the room. bringing with him this
book. and another book. IN which vas re-
-1rded the daily balance Of the would-be
/ borrow er. and also a record OF how much
ne had previously borrowed"
''Did the committee never ask TO see the
actual collateral offered or did II simply
take the weird OF Mr. Schneider or Mr.
Hammond that the security was actually
in the bank and was what K purported to
/ be 90 the memorandum oookss"
we had been in business with Mr..
Schneider and Mr. Hammond, many OF
Us. Cor thirty years. To have made such
a demand q them would have been per-
sonal Insult"
''Were lsol the suspicious % the commit
tee ever aroused by the .arge sums loaned
to the Calumet E2eeiricf''
Then came the statement referred 20:
Never did / see she name OF the CAL
umet Ege.gric Railway Company appear
on this book as al applicant Tor loan"
What have you 20 say about the pub
lshed statements REGARDING Mr.. Ham
rnonG's connection vita the unexplained
xrausActtonSf o.
They are al true. every one of them"
The Pest contains the following ac-
count:
The loan Vas increased wirh the fun
knowledge % members q tae finance
committee and later OF vas made known
70 the directors. Members - the hnance
cor guittes anG officers OF she bank were
given stock and the purpose ot the deal
MAS 10 sell ne roads and besides paying
the bank loan, make a good round sam
Tor the directors
There has been q severe contest he
tween the General Electric ard South
"a .
the bonds % the Calumet road and The
stocks witch 20 wifh them. ard 4 Vas
thought that the road could nnAlly be
sold for something like g, asa0 90 Or s4.oo
es. IL was a brilliant idct for man con-
uected wtEh the South chicago City rail-
way 70 wreck the bank ard tae men VINO
hsd been backing the Calumet through
the hank. IL has succeeded. snd the prob
abilities are that tire Calumet Electric
Nil ~ sold 70 THE South ChicaEo CITY
railway man aDd mis- friends the banker
who LENT his name "a the scheme 70 make
q good pos cat % the deal Tor almsef
The part the banker took 81 the nat
ter Was safe one. lie called the arten-
ton o. the A4nk examiner 30 tire tact
tAat Calumet securities bad disappeared
acuaeWheTC. lutin1ating thaf tee National
Bans % liarols had good share ot thtm
aaa proaab3y had tacm al. Tae officers
eg the bank. uualng cat that tns aAnk
examiner was hos 81 their tral. teEau to
rush the transactions they mad ou foog
fav the sa}e of fee securities ara she
clearing nol,sc became alarmed Ccul&
tire matter hAVe tssen DELAYED t45rsv or
sixty DAYS gae Calumet Eleclric secur4-
ties wou8 rot have oeen tour3 among
tAr hanks assets TAe sale gFoatl aaYe
been ssrecsesi possibly a loss 20 sae
bAuS blt ui,aeaG disturbance % ne
p1hl- or heavy loss 80 steckhslEers *
1ae hank
sBat ta.s coarse NeasG .2t salt the pgr-
pose o. persons trying - centre. tae cal
uanet k-ect~5c roa8 TAree years ago + =
prsyer aleae owss TIE caEk s. ss3.s90
ara fer tarse years Mr.. Hammond lad
been try1aE g. Te32-e taas- IL Sas re-
6ace5 e.e-aa1 waea the 1c1rs q he
bark closest, ana & AS due % N.ce Pres
denf Hammond sAas this VAS acc3nps asA-
81 II gne sec svltses Tor TIE 1oars - tAesa
40 mea. Drayer sa4 We.sa. save aasAp-
searei tsav disappeared saturday TaaG
gagnf nsY couae 9us later, one G4restar ln
tAs has. 10 has aeea g&@Gsag a xrvst ceAl
since tAs candsg.sn - lie Concern o~asEs
p.shlne rack s.. ~ e9t - 80 bark S4tzr-
cay AftsrroSs- TasTe z2s - excise for
fzsssscatscn * accents, Ter the 6srec tors
krew the auaGEt - ale Calumet ear.
Yes cant ccver ae p Sssa ga taaa IA A
bark wAe-e directors 60 tssir taty~
= : pTeysr AL HcoeTE Berger. - he