The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1896-12-24

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| Illinois, today, as to how such large
loans were made by the bank and osten-
sibly given with the sanction of the d.
rectors. Mr.. Page went on to explain
| how The business of the bank, as far as
! the directors were concerned, was con-
| Quoted. He said:
''1'he directors appointed among them
| selves what you might term, for conven-
| fences sake, an auditing committee. The
| plan was to let one director drop on.
| each month, some other taking his place.
Each day the committee would meet at
, the bank, its business being to pass UP
on the applica tons for loans. The rec
ord of these applications was kept in a
| book designed for the purpose. In this
| book was also kept opposite the name
| to each applicant a record of the COLA
teral 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 with it another book in which was
recorded the daily balance of the would
! be borrower and also the record of how
much he had previously borrowed"
You say that Mr.Schneider used to
bring this imp
almost invariably. Seldom was Mr..
| Hammond before the committee. At odd
| times he would be called in to answer
! some questions as to an applicant bust
ness or TO clear up point about some
collateral offered, but Captain Schneider
was always, almost, the bearer of the
books The committee would look over
the books carefully and In some instances
refuse to sanction loan, in others the
| loan asked for would be cut down and
cases where the applicant and security
was all right the accommodation was of
course granted.
did the committee never ask to see
the actual collateral offered or did il
simply take the word of Mr.. Schneider
or Mr.. Hammond that the security gas
actually in the bank and was actually
what it purported to be in the memoran-
! DUN book?''
I'VE had been in business with Mr..
! Schneider and Mr.. Hammond, many of
US, for thirty years. TIC have made such
a demand of them would have been a
personal insult
Were not the suspicious of the COM
mfttee ever aroused by the large sums
| loaned to the Calumet Electric?"
Then came the statement referred to
above: Never did / see the name of
the Calumet Electric railway appear on
| the books as an applicant for a loan"
What can you say abou 1.-THE publish
ed statements regarding Mr.. Hammond's
connection with the unexplained trans
actions?''
They are all true, every one of them.
1.-The loan was increased with the full
knowledge OF members of the finance
committee, and later on was made known
to the directors. Members of the finance
! committee and officers of the bank Were
! given stock and the purpose Of the deal
was to sell the roads and, besides paying
| the bank loan, make a good round sum
! for the directors.
There has been a severe contest be-
tween the General Electric and the South
Chicago City railway to secure control Of
the bonds Of the Calumet road and the
stocks which go with them, and it was
thought that the road could finally be
sold at something like So, 900 600 or 81, 600, :
! 900. IT was a brilliant idea for a man
connected with the South Chicago City
railway to wreck the bank. and the men
who had been backing the Calumet,
| through the bank. 1t has succeeded and
| the probabilities are that the Calumet
Electric viii be sold to the South Chicago
| City railway man and his friends. the
banker who lent his name to the scheme
! to make good pot out of the deal him.
| self.
1.-The part the banker took in the mat
| ter was safe ore. He called the atten-
| ton of the bank examiner to the fact
/ that the Calumet securities had disap-
! peared somewhere, intimating that the
| National Bank of Illinois had a good
| share of them and probably had them all.
! THE officers of the bank finding tina:
| the bank examiner was hot on their trail,
/ began 20 push the transactions they had
on foot for the sale of the securities and
! the clearing house became alarmed. Could
| the matter have been delayed thirty or
/ sixty days the Calumet Electric securi-
| ties would not have been found among
| the banks assets. The sale would have
! been effected, possibly at a loss to the
bank, but without disturbance 10 the pub
| lie or heavy loss to stockholders of the
, bank. But this course would not suit the
| proper purpose of persons trying 10 con-
! troll the Calumet Electric road.
Three years ago E. s. Dryer alone
| owed the bank s1.000,0e0, and for three
years Mr.. Hammond has been trying to
| reduce that. 1t was reduced one-half
| when the doors of the bank closed. and
| il was due TO Vice-President Hammond
| that this was accomplished. If the secu-
| rites for the loans of these two men
Rryer and Weiss-have disappeared
| they disappeared Saturday. That point
| may come out later. One director in the
| bank who has been talking great deal
since the condition of the concern became
| public, took sl2,00e out of the bank Sat
urday afternoon. There was no excuse
for Justification Of accounts, for the ,dfrec-
| tors knew the amount of the Calumet
| loan. You can't cover up 1890. 200 Ioa a
| III bank where directors do their duty:
The Illinois Trust and Savings bank
| withdrew today the sixty days notice
given 10 depositors Tuesday and paid all
| who called for their money. There was
4 no run whatever. Some of the other
savings banks also withdrew the notics
and the Others that gave il will do ike
wise. as the anxiety among depositors
has entirely abated.
DAYS NEWS OF FAILURES
| assignments. Receiverships. Foreclosures
and Financial Disasters Generally.