Evening star., 1896-12-21
National Bank Of Illinois in the Con-
trolIer's Hands.
STATEMENT BY THAT OFFICIAL
He Ascribes the Suspension to
Gross Negligence.
INJUDIeIOUS LOANS ALLEGED

Bank Of Illinois, one of the oldest and best
known banking institutions in the city, and
with assets Of between twelve and fifteen
million dollars, closed its doors today The
following notice was posted on the doors
before the opening of banking hours:
This bank is in the hands of the ma
tional bank exchange. By order of the
controller Of the treasury
This action was decided upon at a meet
ing Of the directors of the bank last night
after the bank had been suspended from
the Clearing House Association Of Chi
cago at meeting of the clearing house
committee held earlier in the day.
OF the sixteen banks that cleared through
the National Bank of Illinois two closed
that institution. They are E. S. Dryer &
Company and Wasmansdorff & Heineman.
These institutions are mortgage, loan,
bank and saving companies in a small way,
and their failure is not expected to affect
any business house. The assets Of E.. S.
Dryer & Company are given at 81, 100000,
with liabilities Of $1,2OOOOO. The figures
for Wasmansdorff & Heinemann are ap-
100000. The Security Title and Trust
Company was appointed receiver for both
firms.
Six banks have made arrangements to
clear through other banks, and the balance
of the sixteen are making similar arrange
ments as fast as possible.
The failure was great surprise in fnan-
cial and business circles.
The cause Of the suspension as given in
the resolutions adopted by the clearing
house committee are "unwarrantable and
injudicious loans'' through which 1.-The cap
ital and surplus Of said bank is seriously
impsriled: Il not absolutely lost
the Mercantile National and the American
Exchange National banks Of this city, cor
respondents of the National Bank of H.
linois, say they will not be affected to any
important extent by its failure. The Amer
ican. Exchange has merely handled COL
lections for the Chicago bank, and is ac-
tuaily debtor to it. The Mercantile Ma
tional Bank people say that the Chicago
bank does not owe them except for notes
in their hands for collection, and express
deep sympathey for the officials of the Chi
cago bank.
Ffnapcinl Circles Not Disturbed.
One Of the leading bankers and finan-
ciers of this city at noon today said to an
Associated Press reporter: THE failure Of
the Bank of Illinois has created no dis
turbance of consequence in financial circles
here. One OF two private bankers, who
were really nothing but mortgage dealers
have failed; but this Is only natural con-
sequence of shrinking real estate values"
The statement was made that loan Of
about 81, 100000 to the Calumet Street Rail-
road Company, of which J. w. Farson of
Farson, Leach Co. is president had
caused the National Bank of Illinois to
suspend. Mr. Farson declined to make. a
statement Oh that subject, but stated that
the failure would not affect the Calumet
road. -, :
Heavy loans on real estate are also raid
.,O have beer. made. The last statement of
the bank showed: Deposits, $12 1876
loans, 81, 199, ,642; cash resources $4Ds3,.0a.
1t is thought probable that none of the
dApositors will suffer by the suspension as
h0.h u n nra anf q fhn
ing of the committee have recommended
for consideration the proposition to advance
10 per cent on all adjusted claims against
the National Bank Of Illinois In addition
to this they have agreed to use their inf1u-
ence 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 organ
ICED in August. 1871, with a capital stock of
&OO.OOO. which was subsequently increased
to $l,OU,OOO. 1t was regarded as one of the
soundest finahcial institutions in the city.
The Press Club Is one of the sufferers by
the suspension, all the proceeds of the ad-
vance gale of tickets for the foot ball game
between the Carlisle Indians and the Uni
Versity of Wisconsin eleven, which was held
under the management of the Press Club
amounting to over 5000, having been de-
posted Saturday.
1t was announced that the Drovers' Ma
tional Bank, which cleared through the
National Bank of Illinois, will clear through
the Commercial National. The West Side
Bank will also clear through the CONNER
cial National
The suspension had but little effect either
IN the wheat pit or on the stock exchange
Wheat, indeed, showed strength after the
opening 5-S decline, and the stock market
" as dull and only fractionally lower
Nelther the bank examiner nor any officer
OF the National Bank of Illinois will make
any statement ut present.
Controller EckeIs' Statement.
Controller Eckels today gave out the fol-
lowing statement concerning the failure of
the National Bank of Illinois:
am advised by Bank Examiner Nc
keon that the National Bank of Illinois
has closed for business and is now in his
hands ia Tor the controller Of the currency.
IN order to prevent any delay in proving
claims against the bank, and to obtain for
creditors at q very early date the largest
part .! the amount due to them, have ap-
with telegraphic Instructions to publish
notice OF proof OF claims at once The
clearing house committee Of Chicago ha ve
ADVISED me through the examiner that the
per cent Of the face of approved claims
and thus give creditors of the bank i'm
mediate relief and prevent unnecessary as
turoance OF business. l have also directed
the receiver while securing all loans of n
doubtful character to exercise the ntnnos.
caution SO as not to work any hardship
upon the business interests of those dealing
with the bank and depending upon ii. The
advance made by the clearing house. ii ia
to be understood. is not in payment Of sucb
claims in full. but simply loan Of such an
amount with the certificates as collateral
security.
Caused by Rad Methods
''The failure of the bank is due to in
tudfcious, reckless and imprudent methods.
followed by the officers and not checked by
the directors. though 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
street railway stock. the full amount of
which cannot now be stated, for 1t is dis-
covered that q part OF such holdings was
not made to appear on. the books, but con-
cealed In another account This and other
large doubtful loans had been called nv
special letter to the attention OF the Of
fcers and directors and specific Improve
ment promised year since. In June Last
on the surface there HAD been made an Inn
provement. but when Bank Examiner Nc
Keon, on November 80. examined the hank
he found that the books showed that the
loan OF the Calumet Electric Company and
other similar loans had been increased.