The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1898-11-19
WHY GROSS FAILED
Story of the Fall of an His
toric Kansas Bank
DEPOSITORS' HARD LUCK
They Trusted Him In Face OF
Mountains of Evidence.

Fraoria Kan Nov. B-The talIure o.
+ha c,oss hank was the first IN the his
tory of Emporia- The people OF the town
ibsvs never before touched elbows with
"a Iil,e catastrophe. Il Is strange ana
overpowering TO them. The commence
OF &. lifetime in the Oldest bank ives. OF
Lawrence is broken
In the history OF the bank there IS
vein Of politics which makes the failure
more than of local interest
From away back in the sixties the
Crosses had started this bank. In the
early seventies Senator Plumb started
the Emporia National bank and took in
With him Calvin Hood, man who had
come from Michigan TO Emporia for MS
health and VINO found Il mere. Hood
brought 5000 with him and with this
he went into the cattle business and
later went into the bank with Plumb
Hood is now one of the richest men in
Kansas. The establishment OF Plumb's
bank was the beginning of the two polit-
teal banking factions Of this city and
county. In Greenwood county, in the
town Of Madison, at this time, was cat
sleman named William Martindale and he
owned the bank Of Madison Martindale
was an accumulation. He became too rich
for the little town Of Madison. and ne
branched out, opening a bank at Eureka,
the county seat Of Greenwood.
Marundale was a natural politician, He
had great political influence in his county.
Plumb was then a candidate for The sem
ate; had great political influence in En-
poria and this county and Cross looked
upon him with envy. Cross was not q
politician and he Thought it would be
Splendid thing 10 have a politician in his
hank to offset the influence of Plumb IN
the opposition bank, SO in the early sos
Martindale came up from Greenwood
county and went in with Cross in the
bank here.
In the meantime the great panic Of 1874
passed, when all banks in Kansas were
shaken To their foundations and many sus-
pended altogether. The banks OF Plumb
and Cross in Emporia were the only ones
in Kansas that did not take advantage of
the permission Of the comptroller given
10 all banks then to suspend payment for
thirty days. These two banks remained
open and weathered the storm. This gave
them high financial standing in the west
They became the deposit centers Of hun
dreds Of small banks throughout Kansas
because of their solidity. After the panic
came good times and easy money in Kan
sas and there began again the race be-
tween these two banks for business and
political supremacy.
After Martlndale came into the Cross
bank he schemed to get political control
away from Senator Plumb, who was fully
as eager to retain his supremacy. The
town and county took sides in the contro-
Fersy. One faction chung 20 Cross bank
with its money deposits and political sup
port. Another faction chung in the same
way 10 Plumb's bank When Plumb was
elected % the senate the acquaintance and
influence that brought him gave TO his
bank much OF the business from the In
dian territory and Texas and he got the /
financial edge over Cross bank Times /
were good money was plentiful and free /
and In those days almost anyone could 60 /
10 one OF the banks here and borrow /
money with only a personal note as Sc
curity.
Into mis- atmosphere OF money flowing
free was cared the boy Charles s. Cross. I
the only son Of the richest banker in the /
western country. lie was reared knee 1
deep in money. The first twenty years of 4
his life were spent with no idea Of the /
need or value Of money. On the other
hand. MaTtindale had been poor and had I
earned his money by money saving. So /
when the elder Cross died in 1892 and
Charles, the son, was put in his place, /!
as president, and Martindale was vice I
president. there was Charles with no idea /
OF the value of money and Martindale /
with his head turned dizzy because Of 4
the great wealth he was getting. and the /
money rolling in easier than he had ever /
dreamed Of
Under these conditions the bank ran on 1
with the valve wide open, after the death 1
of the elder Cross. After the boom mad I
subslded the Cross bank ran on under a .
boom schedule. instead OF easing Up.
Young Cross was Yet the most expensive /
liver in Emporia- The other men in the ,
other bank were wiser; they put on the 1
brakes and went slow. Hood stayed N 4
the bank and Plumb stayed in Washing 4
ton. each careful, conservative and watch I
ing ell corners. Hood was the hardest /
working man in town. He was AZ his 4
oesk every morning at half past O'Clock. !
the first man there, and he worked until 4
6 O'Clock at night, handling every piece i
Of paper that came in. The result has 4
been otlat the Plumb-KIood bank has paid
q 20 per cent cash dividend for the last /
Eight years.
The Hood bank stock IS worth s, 20 on
The dollar today. While the bank Of I
Plumb * Hood was going up the Cross +
bank was going down. Tbs was first
Visible 10 sharp-seeing fnanciers two I
years ago by the shortage in IFS cash. 4
Each OF these rival banks had about
a halt million dollars in deposits. but
the Cross bank had about SlO9 900 the most. /
Two years ago the ready cash sunplv
n The Cross bank began TO run dow, /
while in Plumb's bank il began 10 -rn
up In the quarterly statement Of the
Cross bank last May the per cent Of cash /
on hand ran down 10 I5la per cent. Of
within = Per cent OF me failing min. 4
that IS; the bank had half million dol /
lars deposits IN and had only S76geo IN 4
cash on band
The bankers throughout the state when 4
they sew this said among themselves (
How OF earth can they keep opsn?" In /
ths meantime each bank advertised a sur
plus fund o. 500. eeo The loans and dis
counts account OF each bank was abou.
the same on the face OF the statement.
but Cross bank had SCOUT = haif million
dollars out AZ interest and the published
statement showed TIA; less than $50 in
Interest was coming n quarterly. a most
astounding and ruiaous state OF affairs
This showed ina; - most OF The paper OF
tie Cross bank WIS utterly WORTHLESS
The statement % the Plum5-Hood hank
showed thai they We're taking II $50 a
quarter n interest. Hoods loans were
carefully made. BIZ; Cross and Ma~t.ada5e
were stiH running Win tla ter,e "a.