Daily press. [volume] (Newport News, Va.) 1896-current, 1899-10-08
q ROMANCE OF BANKING.
nare Good Fortune of Chicago Stock
holders Twenty Years After
Failures.

More than 90 years ago the Third
national bank OF Chicago formally
closed its doors and Il receiver was APP
pointcd to satisfy the depnstors Some
Of the Stockholders feared an i1nEeli-
ate assessment for the payment OF la
blsities and offered to give their stock
10 anyone who would assume it's Oblig&-
lions. To-day this stock is held at near
~ double its par value, and it is re-
Fatded rs gI.d-cdgetl security. Within
i've years, although the bank has re-
ce'.vcd no deposits, made no loans, is
sued no currency, sold no drafts. it
has paid Two dividends to its stockhold-
ers and promises many more The
gerry name CT the bank has been for
gotten, except BY a few gray-headcd
aen who are personally interested in
it's affairs Moreover. it is unique in
being Il corporation having large assets
and no liabilities beyond the obligation
to its stockholders.
The earliest report on the condition
Of the bank, made by the receiver. Col.
Huntington w. Jackson, showed That
the nominal assets were about 81 ,SUO,-
100 and the debts were nearly 81 ,C00.-
100. leaving q nominal 100000 to pay
tie stock liability Of $3.50 coo. On paper
Shis looked most encouraging, but y
close examination showed that many
Of the loans Of the bank, made in flush
times, We're secured by collatcrals OF
uncertain valuc. and real estate schcti-
uied at boom prices and taken as the
only available payment for money
loaned. There was too much SLOW
paper and not enough short" paper.
OF Tie real estate, one tract of 100
acres lay on q barren sand ridge near
the lake shore and nearly ten miles
southeast Of the city hall, in a wholly
unsettled part of Il suburb. Another
tract OF 40 acres was nearly as far to
the west OF the city on the bare fat
prairie, where there was little prospect
Of its ever being anything more than
Il cabbage plant. Still another piece Of
property lay far out in the southwest
crn portion Of the city, in Il region as
yet almost wholly urdevcIopcd and
promising little immediate growth, ex-
ccpt in taxes and special assessments.
There was a score of other lots and
parcels Of land, some in New York city,
and great quantity Of paper, much OF
it more or less doubtful OF worthless.
In fact, it seemed TO some Of the 90
stockholders that it would hardly pay
the bank to retain its property and
meet the expenses Of management.
Ey the process known as ''squccz-
ing and the sacrifice OF some of the
choiccr pieces Of real estate the re
1civer managed to pay before the close
Of 1881 the depositors the face value
Of their claims. y year later they re-
ccivcd their interest in full, and the
stockholders were left. nearly five Years
nfter the close Of the bank, with a score
of pieces OF expensive real estate, most
Of which had comparatively little pres
ent cash value, and a quantity &C ;souot-
N! claims -.r,i lawsuits, the legacy of
Tire panic.
But Chicago was growing. The sub
urb in which i he hundrcd-acSa tract
was located became q i1lrt os The CITY
y cable line reached down and almost
touched it: an electric line dropped
passengers Immediately in front Of it:
m elevated railroad approached It
within half dozen blocks. Early III
the nincties the worlds fair found root
n jackson park, which aiicircd the
tract Immediately on the north. y city
OF great hotels, apartment houses ana
residences sprang suddenly into ex-
istence around it, and Chicago was a
city far out beyond the park.
III July, 1891, the receiver called tie
stockholders together and laid before
them an offer OF 81 COG0o for the lie
srisca 100 acres Of land, and the stock
holders, upon mature deliberation, re
Jected it, feeling that it would lie worth
much more few years later. IT the
offer had been accepted it would have
paid OF not only the entire capital
stock Of S150.0O0. but it would have left
Il comfortable S25o,0o0 to be divided
among the stockholders for their pa
aence. In manner hardly less re-
nlarkablc the 45-acre cabbage patch be-
came valuable. Car lines passed it, the
suburb of Oak Park, itself 4 consider
able city, grew out around it, and every
year has added thousands of dollars
TO its value.
And 50 it happened that in 1893 the
receiver was able to pay dividend OF
ten per cent. to the stockholders. and
be followed it in 1895 with second div
idcnd OF five per cent.
md thus, BY combination Of coed
fortune, shrewd management and pa
tience, the Third national bank now
presents the spectacle, probably I'M
equailcd in finance. Of q business inst-
'nton for 20 years dcfiEct, and yet
paying dividends on stock worth near
~ twice its par value.-Chicago Even
ing News.