The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-12-23

mist which has overhung the affairs of
the collapsed National Bank of Illionis
began to clear UP yesterday. it be-
came evident that the institution had
been wrecked by w. A. Hammond, its
second vice-president
Mr.. Hammond, so the light investiga-
/ ton shows, has played the role of
''kiter' and SPECTATOR with other peo-
pies money. He is a man who has de-
ceived his own directors and deposit
ors; a man who has violated, wilfullv
and deliberately. the law which is
supposed TO protect the public from the
operations OF such as he.
WITHOUT PRECEDENT.
Bank Examiner McKeon, who is act
| ing temporary receiver of the National
Bank OF Illinois. told a friend yester-
day that the failure was the largest in
! the history of the United States under
the national banking law, and probably
the largest in the history of the coun-
try In the way of cash, the failure is
without precedent. The bank has more
than the total amount of reserve now
in its vaults and, had its statement
been printed yesterday, its cash reserve
would have been highly satisfactory.
| In this respect the failure is unique.
| The INK was Rot wrecked in
week or a month, but in the years dur
! ing which its funds and prestige had
been used to bolster UP the farreach-
| ing speculations of its second vice
president and chief executive officer.
Bank examiners and directors alike
were hoodwinked into the belief that
cautious. safe business was being
done.
FOOLED THEM ALL.
Not only was the directory COM
pletely fooled in the. daily sessions, but
old tellers, who invested their savings
in the stock of the institution, were
not aware of what was going on right
under their eyes, and they suffer along
with the most ignorant of the deposit
crs.
The falsifications. of accounts, which
astounded the directors last week and
caused the warmest of words to pass
between them and the second vice
president was no new thing to Ham
mond's system. AS long as four years
ago, when he first embarked upon the
sea of financing the Calumet Electric,
it was stated how the comotrolIer of
the currency called for statement
from the bank just at the time when
Hammond had allowed overdrafts to
the amount of $4,000. He rose to the
occasion, and by carrying the over
drafts to foreign exchange" the state
ment was made to appear entirely in
nocent.
HOW HE BEGAN.
Hammond's business began in the
bank He was the son of Rev. II. L.
Hammond. prominent for many years
in the Congregational church, and the
nephew of Colonel Charles Hammond,
for a long time general manager of the
Burlington railway. He went to the
National Bank Of Illinois when it was
organized and took a humble position
as clerk. He was good clerk and
saved his money. No one would have
supposed then that the quiet young
man who worked away on the books
all day was to become the future die
tator of the institution and be the
cause of it's ruin. Fifteen years ago
he ventured forth from his ways of
careful living and invested some of his
earnings in mining shares. Contrary
to the usual outcome of such dealings, /
Hammond made a good sum. He did !
not continue his mining ventures, but /
put every dollar he could raise in the |
stock of the bank, which was at that |
time being increased.
What he could not pay for, his !
friends carried for him, and at one |
jump the clerk reached the position of |
teller. Then he rose TO be cashier, and |
later on second vice-president. As a |
banker he was careful and those who |
came in contact with him in that ca
pacity speak of his judgment and |
shrewdness in buying commercial pa
per and in making loans directly.
TEMPTATIONS TOO GREAT.
But the temptations of the important /
place as chief executive officer of the |
second largest national bank of the i
west were too great for the young
man who had grown up with the bank"
as he was referred to by the directors.
He learned that his position had the
key to the ground floor to many
schemes requiring capital for their sue
cessful manipulation. There is no evil
dence at hand to show how many loans
were made to such enterprises. or what
losses were incurred. Probably most
of them came out all right, but the /
total of $S1S,OOO in small bad loans be-
ing in connection with Hammond's ad-
mitted capacity as a banker, indicates
most clearly there must have been
many lapseS, when the second vice
presidents sight was blinded by an in
terest more potent with him than the
guardianship of the banks funds.
THE EXPLANATION.
The explanation of the peculiar state
of affairs at the bank, which was dis
closed to the directors last Friday, and
later to the clearing house, is that
Hammond deliberately allowed the ac-
counts of Weiss & Berger, the sons
in-law of President Schneider. to pass
all bonds in order to close the lips of
the venerable head of the institution to
own transactions. Mr.
Schneider had reached his 10Th year.
and was no longer able to give the
close attention to the affairs of the in
that he had given in his
days. His bustling second
vice president, who looked after every
thing. virtually took the reins in his
hands. While no official action ap-
peared on the records of the directory,
the active control really passed into
the hands of Hammond, which per-
mitted him to carry out his schemes
with no one to hinder except the direc-
tors. who did not prove troublesome.
as his reports from day to day were
always satisfactory. The directors now
believe these reports had little relation
to the transactions they pretended to
represent. and that they were fixed to
suit the necessity Of the case.
OF course some of the reports must
have been correct, for the bank was