The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1896-12-22

Ohicers and Directors of the Bank Sc
vereIy Criticised.

yereIy Criticised.
WASHINGTON. Dec. 21.--Controler Eek
els to-day gave out the following statement
concerning the failure of the National Bank
of Illinois:
Il am advised by Bank Examiner Nc
keon that the National Bank of Illinois
mas closed Its business ana 10 Is ,n now IN ms
In order to prevent any delay III proving
claims against the bank, and to obtain for
creditors at very early date the largest
part of the amount due TO them, i have
appointed Mr. McKeon temporary receiver,
with telegraphic instructions TO publish
notice of proof OF claims at once. The
clearinghouse committee of Chicago has
advised me, through the examiner. that
the clearing house will Immediately ad-
claims, and thus give creditors of the bank
immediate relief and prevent unnecessary
disturbance of business: l have al, also direct,
a doubtful character, TO exercise the ut
most caution, SO as not TO work any hard
ship upon the business interests of those
dealing with the bank and depending upon
il. The advance made by the clearing
house, it is to be understood, is not in pay
ment of such claims in full. but simply
a loan of such an amount with the certifi-
Gates as collateral security.
THE failure of the bank is due to inju-
dicious, reckless and imprudent methods
followed by the officers. and not checked by
the directors though their attention had
been individually called to the same. and
promised to remedy the weak points in
the banks condition. The largest source
Of failure s,r is the banks holdings ct Of the the
full amount of which carnot now be stated.
for it is discovered that a part of such
holdings not made to appear on the
books. but concealed i'm 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.
In June last. on the surface, there had
been an Improvement. but when Bank Ex-
bank he found the books showed that the
loans to the Calumet Electric Company
and other similar loans had been Increased
and the promises of the officers and d.
rectors had not been carried out. On this
report prepared a letter. addressed TO the
The. examiner on Dec. IA to be read to them
at "A meeting called for the 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 this office. that de-
| cided 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
demanding attention.
'On Saturday | received notice from the
| examiners that rumors of the bank s condi-
| ton had reached the clearing house com
mittee and they desired to nave his re-
| port read to them. / ordered il TO be
| done. but suggested that before doing SO
| he the officers of the National Bank
|
| This was obtained. and the vice president
| of the bank present with the clearing
| house committee. The condition revealed
! led to the resolution to suspend from the
| clearing house. Before action was taken
| however, the examiner telegraphed me: and
| i'm reply suggested that, in view of the large
| taken and even at the risk of taking some
| chances funds might be provided If 1t was
| deemed safe to do so. to afford voluntary
| liquidation. The affairs of the bank Wee
| examined and it's management. as ShoWi
| by the examiner considered and as con.
| clusion il decided that the bank should
funds not furnished for voluntary liqulda
| tion. Three OF the banks directors were
| present at these meetings.
| "In view of everything L am convinced
| that the clearing house committee acted ju-
| diciously. The management on the part ol
| the officers and directors has been. to state
| il mildly grossly negligent. The liabilities
| of the bank are large. but by careful and
| judicious management the loss entailed OF
| it's creditors need not be large, If any
| Every measure will be taken by the clear
| ing house and the controllers office TO pre-.
| vent other bank and business failures ano
| unnecessary monetary stringency- Alread,
| all outside banks having the National Banl
of Illinois as a reserve agent nave peer
| notified by telegraph of the 40 per cent
| clearinghouse arrangement. large
amount OF difficulty car be prevented y
| those depending upon the banks of Chicago
| and elsewhere affected by the bank failurt
use good Judgment and do not work them
| can be made to fail only through those
| having funds with them becoming fright
| ened and making unnecessary demands
On the other hand the banks ought 10 @ pe
| careful and prudent in not unnecessarily
calling the loans OF their business Gus
toners" Ii,
| was on Nov 30 the bank had capital o.
| 81 1OO0.0O0. a surplus of Sl.0OO.N0 UNDIVIDED
profits of s450.00o and total assets, inciud
| ing bonds, of $l5.046992. Its liaoiiities VII
| ha about S11 600 coo