The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1896-12-24
CHICAGO BANK FAILURE
Alleged Shady Practices in the
Banks Management.
HEAVY LOANS ON CALUMET STOCK

A Friend of w. A. Hammond, the Second
Vice President of the Institution, De-
fends Him from the Charge of Decoiving
the Directors.
CHICAGO, Dec CIV. A. Hammond
second vice president Of the National Bank
of Illinois, who has been charged with
pulling the wool over the eyes of the di-
rectors of the defunct bank. would not
talk when seen in his palatial homo at
Evanston. Through an intimate friend,
however he made statement which is
calculated to implicate several of the di-
roctOrs as we'll as two or three men who
are not connected with the bank
"W. A. Hammond is to be made the
scapegoat of the failure of the National
Bank of Illinois, said the friend. "Ham-
mond is not any moro TO blame for the
amount Of money loaned on Calumet Sc
curitios than are the members of the fl
nance committee Of the bank and its di-
rectors. 1t was necessary to the purposes
of man connected with tho South Chi
cago city railway and an officer of one Of
the best known banks of this city TO de-
preciate the Calumet electric road s stock,
and to this end these two men brought
about tho wrecliing of the National Bank
| of Illinois
"Of the banks funds 81, ,475, 900 had been
| loaned on the Calumet securities. The
| plan for wrecldng was brlliant-cause an
/ Investigation, depreciate Calumet stock
and buy it; then combine this valuable
| property of siXty-three miles of new track
| equipment and franchise with the South
/ Chicago railway, eventually combining
| with the Chicago City railway, and make
a fortune Of millions within five or ten
| years
"Ihe truth of the matter is members of
the finance committee and certain diroc-
| tors of the National bank of Illinois have
known the amount Of the Calumet loan
and had hoped to make individual for
tunes on the success of the venture Four
| years ago W. V. Jacobs, who started the
Calumet road, borrowed $4,000 and paid
it up in full. After that the road passed
into other hands and a loan was made on
the securities with the full knowledge Of
| the finance committee of the bank and by
President Schneider himself.
ut was the idea of man connected
with the South Chicago City railway to
wreck the bank and the men who had been
backing Caulmet through the bank 1t
has succeeded and the probabilities are
that the Calumet Electric will bo sold to
the South Chicago City railway man and
his friend the banker, who lent his namo
| to this scheme to make a fortune out Of
! the transaction himself
1.-THE officers of the bank finding that
the bank examiner was aware of the sit
uation began to hasten the transactions
they had conceived for the sale Of the Sc
curities, and thus the clearing house be-
came alarmed. Could the mattor have
been delayed thirty or sixty days the Cal
umet Electric securities would not have
been found among the bank assets. The
sale would have been effected possibly at
loss to the bank, but without disturb
ance to the pubic or heavy loss to the
stockholders Of the bank. But this course
was not agreeable to the purpose of per-
sons desiring to control the Calumet Eleo-
trlc road.
Three years ago E, 5. Dreyer alone owed
the bank 1000, 600, and for three years
Mr. Hammond has been trying to reduce
that sum. 1t was lessened one half when
the doors of the bank closed and it was
due to Vice President Hammond that this
was accomplished. If the securities for
| the loans to Dreyer and Weiss have disap-
peared, they disappeared Saturday. That
may develop later. Ono director took
| $l2, 900 out of the bank Saturday after
| noon, There was no excuse for fulsiflca-
| ton of accounts, for the directors knew
the amount Of the Calumet loan"
After reading the above statement Dl-
rector Page said: "Never did | sec on the
book kept for the purpose of informing
the directors of the bank as to who We're
applicants for loans the name Of the CAL
umet Electric railway"
Captain Schneider president of the Ma
| tional Bank of Illinois, lives in n rather
! snowy brick residence at No 1000 Michi-
gan avenue, He is 70 years old, and in
rather feeble health When called upon
! by representative OF the Associated
! Press he said he should have no statement
whatever to make, and he seemed quite
broken by the calamity which has befallen
him. There is no prospect Of the banks
resuming, and it is by no means certain
that 1t will pay its depositors in full as
at first promised
| Il. S. Dreyer and his partner, Robert
| Berger, of the banking firm of Il. S.
| Dreyer & Co., which collapsed Monday as
a result Of the closing of the National
| Bank of I...nois and for whose arrest war
rants w2c1 issued, gave themselves up yes
| terday, Arrangements had already been
were promptly released. They are charged
with receiving deposit on Saturday last,
| knowing their bank was insolvent
A Maine Bank Closes It's Doors.
AUBURN, Dec 2l-The American Bank
| ing and Trust company of Auburn closed