Evening star., 1901-06-27
BIG BANK FAILURE
Seventh National in New York Sus-
pends Payment Today.
OTHER BANKS WITHDREW ACCOUNTS
Heavy Deficit in the Clearing House
This Morning.
STATEMENTS OF OFFICIALS

NEW YORK, June 21.-The Seventh Ma
tional Bank was closed at 1O:45 today.
When the banks doors were closed the
following notice was tackled up:
. This bank is in the hands of the con-
troller of the currency.
(Sgned) FOREST RAYNOR,
National Bank Examiner"
At the same time William N. Cromwell,
the banks attorney, gave out the follow
ing statement:
I'm justice to the depositors and stock
>holders of the Seventh National Bank.
William n. Cromwell, the banks attorney.
has advised the bank to suspend pay
ment-''
This action was taken after a protracted
conference in the directors room of the
bank. which was participated In by the
new president, Edward R. Thomas; ex
President William H. Kimball. Edwin
Gould. Lorenzo Semple, who is one of the
directors, and several other members of
the board
The bank opened for business as usual
today, but at 1913 the doors were closed
by Cashier Adams, who announced that
the bank had suspended. .He said the ac-
tion was resolved at the meeting of the
board of directors, depositors and William
n. Cromwell, attorney for the bank, held
this morning.
Last Weeks Statement.
The statement of the Seventh National
Bank for the week ending June %, 1901, to
the clearing house was as follows: Capital,
1916 600: net profits S234, 400; loans, s4,407,-
100; specie, j57.7OO; legal tenders, $777,1OO;
deposits S5,712 400. Percentage of reserve,
. 4-1o
After the suspension of the bank the fol-
lowing statement was made at the clearing
house:
AT the clearing house this morning the
Seventh National Bank came in debtor
S644 10S-95 The clearing house committee
has heen in session since 9:30 am. awaiting
the results of the clearing. When it was
found that the debit balance heavy
the committee communicated with the off,
GERS of the bank, and was informed that
the board of directors was in session. and
THAT a decision would be arrived at within
fifteen or twenty minutes as to the action
of the bank In consequence OF this state
ment the clearings were held back twenty
minutes At 1O:45 am Mr.. w. n. Crom-
well. Mr.. Edwin Gould and Mr.. Thom-
as. president of the bank, came into the
clearing house and informed the commit
tee that In view of their heavy debit bal
ance. and for other reasons. it was con-
sidered wise that the bank should tenn
porarily suspend.
The clearing house committee thereupon
directed the manager of that institution to
eliminate from the clearings all operations
Of the Seventh National Bank"
A member of the clearing house commit
tee says that at this mornings meeting the
name of institution other than the
Seventh National Bank was referred to.
Custodian of Post ONCE Funds.
The Seventh National Bank was the GUS
todian of the funds of the New York post
office. Assistant Postmaster Morgan said
when he heard the news Of the banks sus-
pension:
THE post office Is amply protected
ba III
up S25O,OOO in government bonds securi-
ty. The present state of the post Offices
account with the bank l do not know, but
! am Investigating it
At IL % o'clock the officials of the en-
barrassed bank posted the following no.
tice:
"Checks drawn by the Manhattan State
Hospital will be paid at the Chase National
Bank Drafts drawn by the St. Lawrence
County Bank. Canton, n. Y: will be paid
at the Chase National Bank"
Among the institutions having close busi-
sness relations with the Seventh National
was the stock brokerage firm of Marquand
d Co After the suspension of the bank
Frank B. Poor of the firm of Marquand &
Co. the condition of whose account with
the bank is said to have precipitated the
troubles of the latter concern with the
clearing house Tuesday. was asked
Whether his firm would continue
From the outlook just now said he, 81
think were going At the same time we
cannot tell. Just now everything is uncer-
lain in the business world, but L believe we
Siii get through
Postal Deposits Secured.
Later it was learned from an authorita-
eive source that the bank has on deposit
$4,000 of postal funds. all of which is
amply secured by bonds
The announcement of the SUSPENSION
caused only a ripple in the stock market.
The hrst selling of stocks which followed
the announcement of the suspension inter-
rupted a recovery in prices and caused
If one two, aY,l tRts
in some of the principal stocks. The offer
ing of large sums of money on the exchange
at per cent and large buying orders placed
in the market rallied prices and left the
stock market dull. but somewhat feverish
until noon.
In banking circles it was said that the
Seventh Nationals heavy debit balance to-
day was the result of the news of the banks
. embarrassment Tuesday being tele-
sraPhed throughout the country. Interior
institutions having money deposited with
the Seventh drew on the bank, and these
drafts all coming in at the same time were
too much for the institution.
The suspended institution is now in the
hands of the controller of the currency,
who has appointed Forest Raynor as tenn
porary receiver. Mr.. Raynor's examination
of the loans of the bank are understood to
have proved that the collateral back of
them was weak in some instances.
The objections of the bank examiner to
these collateral securities is said to have
decided Mr.. Cromwell to advise the sus-
pension
Mr.. Oakley ThOrnes Statement.
President Oakley Thorne of the North
American Trust Company, which had some
business relations with the Seventh Ma
tionaI. said his corporation was not any
way affected by the suspension of the Sew
enth National. When asked as to the eff
feet of the failure. he said:
Il don't know anything about any con-
Germ except our own and that, can assure
you. is all right IL any asks refer
ence on the subject l can refer him to the
state bank examiner. His statement will,
j am sure, be taken. l know there ru-
mors connecting with the trouble of the
Seventh National, but they merely ru-
mors l am happy to say We are all right"
At noon President Tappen of the Gallatir
National Bank. and chairman of the clear
ing house committee, said he did not think
that any firms or banks, even small Ones
would fail a result Of the Seventh Ma
tionals suspension
President AIvah Trowbridge of the Ninth
National Bank reiterated his denial of