The herald., 1896-12-25
Local, Eastern AMI For.iy1
Commercial Dealings
WALL STREET SPECULATION
The Recent Bank Failures 10 Eastern
Cities
The Causes Which Led to the Collapse CT
the Great Monetary Institution
in Chicago.

Concerning the bank failures in the east
the Investor of the Gath says:
The closing of the National Bank of Illi-
nois at Chicago on the 21st instant has at
tracted wide attention on account of the
magnitude of the failure and also because
the disaster was not anticipated. The bank
had resources amounting to over fifteen
millions and its capital, surplus and undi-
vided profits on the Goth of November were
e, $50, 900; net liabilities about twelve and
half millions. The extraordinary feature
Of the failure is that the bank had 40 per
cent available cash on hand of the amount
Of its liabilities at the time It was Obliged
to close its doors on account of its suspen-
sion by the clearing house association. The
clearing house refused to furnish assistance
the shape Of funds for voluntary liqulda-
tion but agreed to advance % per cent on
all approved claims against the bank. The
offer thus rendered was a measure of self
protection for the other banks. while at the
same time the action proved that there was
no doubt about the ultimate ability of the
National Bank of Illinois to work out. The
existence of a strong feeling of jealousy
among the other Chicago banks against
the failed concern Is believed to have been
the factor that determined he refusal 10
extend the needed assistance.
The failure Is attributed by the comptroi-
Ter of the currency to 'th luxurious reck-
less and imprudent methods followed by
ors. though their attention had been IN
dividually called to the same. and over
their individual signature they had prom
ised to remedy the weak points in the
failure is the banks holdings of Calumet
Electric street railway stock. the full
amount OF which cannot now be stated.
for it is discovered that part of such hold
ings were not made 10 appear on he books.
but We're concealed in another account"
The loan to the Calumet Electric Street
Railway company amounts. ii is stated. to
about $2,4Oo.Coo. or more than the entire
capital stock and surplus Of the bank.
This: and other large and doubtful loans"
We're known TO the comptroller according
TO his own admission, for he states that the
attention OF The bank was called to them
and Specific Improvement promised
year since. With all respect 20 the comp
troller: we have grave doubts as TO the Wis
dom of such lerien trea .ment which points
in the direction or discrimination in favor
of large institution. 1t IS certain that no
national bank on this coast making
showing of It's distribution loans in pro-
portion to those OF the National of Illinois
would be allowed to continue unchecked
for thirty days.
1t is expected that a good dividend will be
paid shortly and that by careful manage
ment the loss of creditors need not be large.
IL any.
s. The failure has had the effect OF bring
Ing down several smaller concerns which
had business relations with the Natora:
of Illinois. hut It IS believed that these
smaller institutions VII he able 20 resume
soon. and the failures have caused little
excitement in banking circles and no dis
turbance in the markets. Some failures in
the northwest may be expo c;ed TO follow as
n consequence. but with these probable ex-
ceptions the disturbance vii be confined 10
its local connections.
Bank failures ar of two kinds. those
caused by genera, nmsrcial depres sion
and war; and those caused by thu rotton-
ness within the institution itself when
bank officials prove unfailhful o Their
trust. The rece Mt Lure Is one of the last
named class. ard Will its effects may
prove severe 20 these .mmcdia .ely interest
ed. the causts must not be attributed TO
other reasons than .he rea cnes which
show reckless and iuprudent methods
known to have been nractised BY the OIL
GERS and directors IL ths management of
the. bank.