Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1896-12-22
ECKEIs MAKES A STATEMENT.


Failure "Due to Injurious. Reckless and
Imprudent" Ranking Methods.
A Washington dispatch also has the
following from Comptroller EckeIs about
the failure: THE failure of the bank
is due to injurious. reckless and i'm
prudent methods followed by the off,
GERS and not checked by the directors,
though their attention had been in
dividually 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 hold
inss Of the Calumet Electric street rail-
way stock, the full amount of which
cannot now be stated, for 1t is dis
covered that a part of such holdings
were not made to appear on the books.
but concealed in another account. This
and other large and doubtful loans had
been called by special letter to the at
tention of the officers and directors and
specific improvement promised a year
since.
I'm June last on the surface there had
been made an improvement, but when
Bank Examiner McKeon, on Nov. 30,
examined the bank he found that the
books showed that the loan to the Calu-
met Electric company and other SINH
lar loans had been increased, and the
promises of officers and directors had
not been carried out. Upon this report
I prepared a letter addressed to the
president and directors. which 1 sent
to the examiner on Dec. IA. to be read
to them at a meeting called for this
purpose.
This letter reviewed at length the
condition of the bank and the failure
of the promises made to be fulfilled.
1t emphasized the position taken by
the Office that a decided and radical
change had to be at once made, and
notified the directors with a full and
complete analysis on the part Of the
examiner of the matters in the bank de-
manding attention. On Saturday / re-
ceived notice from the examiners that
the rumors of the banks condition had
reached the clearing house committee,
and they desired to have his report
read to them. I ordered 1t to he done,
but suggested that before doing so he
| see the officers of the National bank of
Illinois and obtain their acquiescence.
This was obtained. and the vice pres
ident of the hank was present with the
ton revealed to the resolution to sus-
pend from the clearing house. Before
| action was taken. however. the ex-
| aminer telegraphed me and in reply
I suggested that in view Of the large
| interests involved, great care should be
| had, and even at the risk Of taking
| some chances funds might be provided.
| If il was deemSa safe to do so. to afford
| voluntary liquidation. The assets of the
bank were examined and its manage
ment as shown by the examiner consid-
| cred, and as a conclusion it was de-
| cided that the bank should be sus-
/ pended from the clearing house and
funds not furnished for voluntary
| liquidation.
| IN view Of everything / am con-
sinced that the clearing house commit
tee acted judiciously. The manage
mept on the part of the officers and di-
ree.Srs has been-to state it mildly
grossly negligent. The liabilities Of the
| hank are large. but by careful and
iudicious management the loss entailed
on creditors need not be large, if any.
!, Every measure will be taken by the
| clearing house and the controllers Of
fee to prevent other banks or business
failures"
As a result Of the Illinois national
banks troubles three other financial
+, concerns have gone down They are
all small affairs and are a. follows:
E. S. Dreyer 4 Co., Wasmansdorf Z.