Birmingham state herald., 1896-09-11
CRASH IN NEW ORLEANS The Mutual National Forced to
 Close Its Doors. AT THE fuq.sSf ITS 1E7HER The Clearing q Refused to Advance on Its Last s der of coaterals. PRESIDENTF )WlaSAYslTWlLL PAY OUT Situation in uns Crescent City Relieved by the Action of the Treasury and
 the Worst Is Believed to
 Be Over.
AT THE ENQSf ITS TETHER
RESIDENTF )Wla SAYslTWILL PAY OUT

New Orleans, Sept 10.-The Mutual National bank closed it's doors this morn- ing. The effect of this banks suspension has been discounted as it was we'll known to be in bad way. Shortly after the American National bank failed a run was made on the Mutual, and the col- lapse of the bank at that time appeared inevitable. Luckily the run was started on Saturday, shortly before noon, and Saturday being a legal half holiday in New Orleans, Providence was on the side of the sore1y pressed institution. By Monday morning it had a chance to re- cuperate. The clearing house held meeting and the other banks of the city fearing panic came to the rescue and advanced money enough to meet all de- mands on that Monday. Large sums of monay came here from various sources and the United States sub-treasury was paying out the sugar bounty as fast as possible. Before noon on that day the run ceased and all was serene. The pres ident states that a steady drain has been maintained by depositors checking out their money.
 The unexpected failure of the Union National Wednesday aroused the sus- picions of depositors and another rush was made on the Mutual. The clearing house had on the first occasion advanced the Mutual $100,000, little more than $17OOO of which had been repaid. Last night the Mutual rendered the clearing house another lot of collaterals and ask ed for further assistance to the extent of $25 O00 This the clearing house refused and the suspension of the Mutual fol- lowed this morning.
 The president says: "The bank owes depositors $92,993.72, which we have am- pie assets to pay dollar for dollar
 President Baldwin of the clearing house says: "The officers of the bank foresaw what was coming, and as is cus- tomary in such cases called upon other banks to come once more to their assist ance. A bank in distress Is expecteds to hypothecate securities of such kind as will justify the other banks in lending the assistance. The security offered by the Mutual was not considered the proper quality of paper to justify the clearing house in making the loan and the assist ance was refused"
 The Mutual National was organized in 1871 with a capital stock of $500000 This was reduced in January, 1894, to $2O0,o In January, 1895, the Mutual absorbed tho Traders bank. Most of the stockholders of the Traders became interested in the Mutual.
 At meeting of the clearing house held last night the financial situation was earnestly discussed, and the following resolution was adopted:
 Resolved, That for the present the clearing house banks should not pay out on checks more than $10O to any one de- positor in one day-all other payments shall be made by certifcation of checks, which shall be received on deposit by the clearing house banks"
 This step was necessary as a precau- tion Employers of labor will be sup piled with money to meet their pay rolls. It was also agreed to adopt system of clearing house certificates similar to that utilized in New York and elsewhere dur ing the crisis of 1893. The savings banks also took steps to prevent a run by post ing the sixty day rule This is allowed by their charters. A depositor must give sixty days notice of his intention to with draw his deposit.
 There are no new developments in the case of the Union National. Presi- dent Chalaron is bitterly criticised today for his precipitate action in closing the bank without consulting the directors. He is in seclusion and will see no one. There are all sorts of rumors, one to the effect that two sets of books were kept by the Union National-one for the direct ors and one for the bank officers-and that there is discrepancy between these of an amount exceeding $600.OOO. Bank Examiner Johnson, temporarily in charge of the Union, was formerly con- fidential bookkeeper and agent for A. & V. Meyer whose failure seriously affect ed the bank. This fact has caused much comment. Today another bank examiner has been ordered here to take his place, a protest having been wired to Comp troller Eckels against MT. Johnson's con- tnuance in charge.