Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-10-20
HEAVY FAILURES
At Baltimore Shake the Whole
Financial System.
Maryland Trust Co. and the Union
Trust Co. Go Under.
Receivers 3 Appointed-Hoped Tha
Matters Can Be Strengthened.

Baltimore. Oct. 19.-The Maryland
Trust CO. and the Union Trust Co., two
Of the best-known banking houses of
this city, went into receivers hands.
today. Except to a few inner financial
circles. the announcement Of the Mary
land failure came like a thunderbolt
from a clear sky. The suspensions
caused the greatest excitement, but
fears were somewhat allayed by the
favorable assurances of banking inter-
ests.
The day began with the announce
ment Of the failure Of the Maryland
Trust Co. The cause given, was ina
bility to market Mexican railway secu-
rites, which the bank held in large
amount. Added to this was the failure
don.
While business men were anxiously
discussing the suspension of the Mary
land Co., another shock was given the
financial community by the suspension
of the Union Trust Co.
It was agreed among the leaders that
there is nothing alarming in the finan-
cial situation in this city. AS one of
the most lHllucIIlldl DdihCAo III A~~AeA
more put it: "Our financial institu-
tons are strong and have placed them
selves in a position to Withstand any
assaults upon their credit standing"
Or, as another leading banker. per-
haps the most prominent in Baltimore,
put 1t: ut all depends upon how the
people of Baltimore act. If they do not
lose their heads, the trouble will blow
over in time and nobody will be hurt,
but If they become panic-stricken, the
consequences will be serious"
Allan McLane third vice president
of the Maryland Trust Co., was APP
pointed to take charge of the affairs of
that company as soon as the suspen-
sion was announced, and Miles White.
Jr., first vice president of the Union
Trust Co., was appointed receiver Of
that institution. Mr.. McLane gave bond
in the sum of 100000 and Mr.. White
gave bond in the sum of S1,000,000.
The last statement Of the Maryland
Trust Co. issued, June 80. 1903, showed
capital stock of 81, 200, surplus ST.
437,5OO and undivided profits of $677,-
1886. The company has demand and
time deposits amounting to $5,773,-
S17.15.
The Union Trust Co. at the close of
business on March 81, 1903, had $1,000
900, surplus Of $25O,OO0 and undivided
profits of $159,6S7.55 The Union Trust
Co.has deposits amounting to nearly
$2.OO0,00O. The filing of the first appli-
cations for receiver for the embarrassed
companies was followed by petitions
for co-receivers for both companies.
rsx.I~. IL
panies exceed $10.OO0,O0O. The cause
of the Maryland Trust Cos. failure was
due as is set forth in the statement of
Receiver McLane to the investment of
the assets of the company in Mexican
railway securities which could not be
marketed.
Receiver McLane is now engaged in the
preparation of detailed statement set
ting forth all the material facts explana-
tory of the failure.
News of the suspension was calmly re-
ceived on the Stock Exchange. It was Of
ficially given to the members of Change
through the following letter which was
read by President Orrick:
III. A. Orricl;. President Baltimore St3cl;
Exchange:
conditions which nave existed in the mon
ey market for some time past and the in
ability to realize upon loans or to make
ready sales of securities, the executive
committee of the Maryland Trust Co., at
ter conference with the leading financial
interests in the city decided to place the
company in the hands of receivers in or
der that the assets might be conserved for
the benefit of the depositors and stock
holders 1t is proper to state that the
difficulties of the Maryland Trust Go. are
peculiar to itself and do not in any way
affect any other trust company or finan-
ciQl institution in this city.
yours truly,
FALLEN McLANE.
'"Third Vice President"
The Union Trust Co. failed because OF
a run on it's banking department, about
$l50.000 having been withdrawn by depos-
itors. today; but the real trouble of the
company had its origin in the organiza
ton of the South and Western Railway in
Virginia, in which capitalization of
about $4,000 600 was contemplated The
Union Co. was the fiscal agent for the
Virginia enterprise just as the Maryland
Co. was the fiscal agent of the Mexican
Though these two failures followed SC
closely. it can be stated on unquestioned
authority that there was no connection
whatever between the two 1t may also
be stated that neither company manag ed
trust estates.
There have been other financial troubles
In Baltimore within a recent period. but
1t Is not believed that they were in any
manner the forerunners of today's suspen-
sions.
The city of Baltimore has $780, COO In.
vested with the Maryland Trust Co. and
this Is secured by three bonding compa-
MES of this city and the finance commits
sioner's report.
While the events of the day have pro-
vOked inevitable uneasinesS, the feeling
in financial circles at the close of bust
ness was one of confidence that there will
be no more failures in this city, and that
after a brief period of unrest business will
settle down to its accustomed channels OF
security.
baltimore, Nd, Oct 19.-Allen Nc
Lane was, today, appointed receiver
for the Maryland Trust Co. Mr.. Nc
Lane gave bond for s2,0O0,00O.
The receiver was appointed on appli-
cation of John S. Citing & Co., bank
ers of this city.
Receiver Allen McLane issued the
following signed statement. this after
noon. explanatory of the failure of that
company:
..Tne whole cause Of the embarrasss-
ment is the fact that it has loared to
the Vera Cruz and Pacific Railroad Co.
in Mexico very large sum of money
as security for which it holds on depos-
80