The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-09-11
BANK BURSTS.
Mutual National of New Orleans
Closes It's Doors-Others VIII Fol-
low.

NEW ORLEANS, La, Sept. 10.-The
Mutual National bank closed it's doors
this morning. The effect of this bank S
suspension has been discounted, as it
was Well known to be in a, bad way.
Shortly after the American National
bank failed run was made ON the
Mutual, and the collapse of the bank
at that time appeared inevitable. Luck
lily the run was started on Saturday,
shortly before noon, and Saturday be-
ing a half holiday in New Orleans for
tune was on the side of the pressed in
stitution. By Monday morning it had
a chance to recuperate. THE clearing
house held a meeting and the other
banks in the city, fearing a panic,
came to the rescue and advanced
money enough to meet all demands on
that day. Large sums Of money came
here from various sources and the Uni
ted States Sub-treaSury was paying out
the sugar bounty as fast as possible.
Before noon of that day the run ceased
and all looked favorable. The presi-
dent states that a steady drain has
been maintained by depositors check
ing out their money. The unexpected
failure of the Union National Wednes-
day aroused the suspicious of the de-
positors and another rush was made
on the Mutual The clearing house
banks had on the first occasion ad-
yanced the Mutual 100000 a little more
than ST, 600 of which had been repaid
Last night the Mutual rendered the
clearing house another lot of collaterals
and asked for further assistance to
the extent of S25, 0C0. This the clearing
house refused and the suspension Of
the Mutual followed this morning.
The r1raSi0Prf saws.
'"The bank owes depositors 1872, 1892,
which we have ample assets to pay
dollar for dollar
President Baldwin of the Clearing
house says:
'eThe officers of the bank foresaw
what was coming and, as is customary
in such cases, called on the other banks
to come to their assistance. A bank in
distress is expected to hypothecate Sc
curities of such q kind as will justify
other banks in lending the assistance.
The security offered by the Mutual was
not considered the proper quality of
paper to justify the clearing house in
making the loan, and the assistance
was refused"
The Mutual National was organized
in 1871 with a capital stock of 100000.
This was reduced in January, 1894, to
5000 O00 In January, 1895, the Mutual
absorbed the Traders Bank and most
of the stockholders of the Traders
Bank became interested in the Mutual
AT a meeting of the clearing house last
night, the financial situation was earn
estiy discussed and the following reso-
luton adopted:
Resolved, That for the present the
clearing house banks should not pay
out on checks more than 500 to any
one depositor in one day-an other
payments shall be made by certifica-
ton of checks which shall be received
on deposit by the clearing house
banks
This step was necessary as a pre-
caution. Employers of labor will be
supplied with money to meet their pay
rolls. It was also agreed to adopt a
system of clearing house certificates
similar to that used in New York and
elsewhere during the crisis of 1893. The
savings banks also took steps to pre-
vent a run by posting a sixty days rule.
There are no new developments in the
case of the Union National. President
Chalaron is bitterly criticized today for
his precipitate action in closing the
bank without consulting the directors.
He is in seclusion and will see no one.
Bank Examiner Johnson, temporarily