The times., 1899-07-17
A ROMANCE OF BANKING.
Luck of Chicago Stockholders Twen-
ty Years After n Failure.

Luck of Chicago Stockholders Twen-
| ty Years After n Failure.
Chicago, July 16-More than twenty
years ago the Third National Bank of Chi
! cago formally closed its doors and a re-
ceiver was appointed to satisfy the de-
positors. Some of the stockholders feared
! an immediate assessment for the payment
of liabilities and offered to give their stock
to anyone who would assume its obliga-
/ tions. Today this stock Is held at nearly
double its par value, and IL is regarded as
/ gilt edged security. Within five years, al
though the bank has received no deposits
made no loans, issued no currency, sold no
| drafts, it has paid two dividends to its
stockholders and promises many more. The
very name of the bank has been forgotten,
except by few grey haired; men who are
| personally interested in its affairs. More
over, it is unique in being "a corporation
having large assets and no liabilities be-
yond the obligation to its stockholders.
The earliest report on the condition of
the bank, made by the receiver, Col Hunt
| ington W. Jackson, showed that the nom
| inal assets were about 81 800, 600, and the
| debts were nearly 81 600 900, leaving a nom
inal SS00000 to pay the stock liability of
/
couraging, but close examination showed
that many OF the loansgot the bank, made
in flush times, were secured nby collaterals
OF uncertain value, and real testate- sched-
uled at boom prices and taken as the only
available payment for nnpneyloaned. There
was too much tsiow" paper and notenough
| short paper. y-- ri las--e@' ..-.
OF the real estate, one tract of 100 acres
, lay on barren sand ridge near the lake
shore and nearly ten miles southeast OF
/ the City Hall, in a wholly unsettled part
| of suburb Another tract of forty-fve
acres was nearly as far to the west of the
| city on the bare, fiat prairie, where there
/ was little prospect of its ever being any
! thing more than a cabbage patch Still
/ another piece of property lay far out in the
| southwestern portion of the city, in
region as yet almost wholly undeveloped
and promising little immediate growth. ex-
| cept in taxes and special assessments.
| There was a score of other lots and parcels
of land, some in New York city, and a
great quantity of paper, much of it more
or less doubtful or worthless. In fact it
/ seemed to some OF the ninety stockholders
that it would hardly pay the bank to re-
! tain its property and meet the expenses
| of management.
By the process known as Squeezing"
and the sacrifice of some of the choicer
pieces of real estate the receiver managed
to pay before the close of 1851, the deposit
ors the face value of their claims. A year
later they received their interest in full,
and the stockholders were left, nearly five
years after the close of the bank, with
score of pieces of expensive real estate,
most of which had comparatively little
present cash value, and a quantity of
doubtful claims and lawsuits, the legacy of
| the panic.
But Chicago was growing The suburb
| in which the hundred acre tract was locat-
ed became a part of the city. A cable
line reached down and almost touched it;
an electric line dropped passengers imme-
! diately in front of it; an elevated rail-
road approached 1t within half a dozen
blocks. Early in the '90's the Worlds Fair
found root in Jackson Park, which adjoin-
ed the tract Immediately on the north.
A city OF great hotels, apartment houses,
and residences, sprang suddenly into ex-
istence around it, and Chicago was city
far out beyond the park.
In July. 1891. the receiver called the
| stockholders together and laid before them
an offer of s1,000,000 for the despised 100
acres of land, and the stockholders upon
mature deliberation. rejected itfeeling that
it would be worth much more few years
| later. If the offer had been accepted ii
would have paid off not only the entire
capital stock of s75O,00O but it would have
| left a comfortable S250,0O0 to be divided
among the stockholders for their patience.
In manner hardly less remarkable the
| forty-ive acre cabbage patch became val
liable. Car lines passed it, the suburb of
Oak Park, itself considerable city, grew
out around it, and every year has added
thousands OF dollars to its value.
| And so it happened that in 1893 the re-
ceiver was able to pay a dividend of 10
1 per cent to the stockholders and he fol-
lowed it in 1895 with second dividend OF
| . per cent.
And thus. by combination of good for
tune, shrewd management and patience,
the Third National Bank now presents the
spectacle. probably unequaled in finance,
of business institution for twenty years
defunct, and yet paying dividends on stock
worth nearly twice Its par value.