The Providence news. (Providence [R.I.]) 1891-1906, 1903-10-20


Trust company and the Union Trust COM
pany, two OF the best-known banking
houses OF this city, went into receivers
hands yesterday Except TO few inner
financial circles the announcement OF the
Maryland failure came like a thunderbolt
from a clear sky. TTne suspensions caused
the greatest excitement, but fears were
somewhat allayed By the favorable assur-
ances Of banking interests
The day began with the announcement
Of the failure OF the Maryland Trust COM
pany. The cause given was inability to
market Mexican railway securities, which
the bank held i'm large amount. Added TO
this was the failure to negotiate a $z.ooO,-
600 loan in LONDON.
While business men were anxiously dis
cussing the suspension OF the MARYLAND
company another shock was given the n
nancial community by the suspension of
tire Union Trust company.
IT was agreed among the leaders that
there was nothing alarming In the general
financial situation in this city As one OF
the most influential bankers in Baltimore
put IL:
sour financial institutions are strong
and have placed themselves In position
IN withstand any assaults upon their
credit standing
or. as another leading banker. perhaps
the most prominent in Baltimore, put II:
1T all depends upon how the people or
Baltimore act. III they do not lose their
heads the trouble will blow over In time
and nobody will be hurt: but IL they be-
come panic-stricken the consequences will
be serious"
=, WAS ONLY TEMPORIZING.
aa
for some time been able 10 go along with
out serious embarrassment. In spite of
having so much OF its money tied up in
the Vera Cruz and Pacific Railroad and
would undoubtedly have been able 10 wait
still longer time for a loan or sale
OF those securities were II not for the
fact that | find IL has a large line of
demand deposits subject to withdrawal
on call, and that during the past week
two large withdra walls were made upon
f. This rendered II absolutely neces-
cary for the conduct OF the business upon
an honorable basis to obtain temporary
loan upon certain OF the investments
owned by the company.
This latter loan was i'm process Of nego-
tiation with prospects Of favorable re-
suit when. on Saturday last. the third
vice president who owing 10 illness
and absence for the past six weeks OF
the president and first vice president, had
been compelled to take UP the entire
management OF the company. discovered
that the obtaining of such loan was
merely temporizing: that the obtaining OF
such q temporary loan. when taken in
connection with the proposed loan on the
Vera Cruz and Pacific securities. fell far
ehort OF enabling the Maryland Trust
company to continue TO conduct business
upon an honorable basis. In short, that
20 obtain the temporary loan In question
49, ~.
chance OF efecting sale OF the Vera
Cruz and Pacific road In order 20 make
itself absolutely solvent.
LIABILITIES sio,ooo,OOO.
Allan McLane. third vice president of
the Maryland Trust company. was APP
pointed 10 take charge OF the affairs OF
that company as soon as the suspension
was announced, and Miles White, Jr., first
vice president of the Union Trust COM
pany. was appointed receiver OF that in
stitution Mr.. McLane gave bond in the
sum OF $2.0000o0.
The last statement OF the Maryland
Trust company. issued on June 30, 1908,
showed capital stock Of s2.l2.o0o. surplus
S2.ts7 500 and undivided profits Of s677 9sS. Sc.
The company has demand and time de-
posits amounting to ss.77s,aIi5.
The Union Trust company at the close
OF business on March a. 1903. had capital
stock OF si.oO0.0o0, surplus OF $4,000 ana
undivided profts Of s159, 9,6S7.5. The Union
Trust company has deposits amounting
to neary s2,oo0,00o The filing of the first
Applications for receivers for the embar-
rassed companies was followed by petit
tions for co-receivers for both companies.
The total liabilities OF the two compa-
MES exceed sl0,00o.0O0.
The cause OF the Maryland Trust COM
pany's failure was due. as is set forth In
the statement OF Receiver McLane. 20
the investment OF the assets OF the COM
pany in Mexican Railway securities.
which could not he marketed. The state
ment is as follows:
The whole cause Of the emba rassment
OF the company Ia the fact that II has
loaned TO the Vera Cruz and Pacific Rail
road company I'm Mexico n very large sum
OF money. as security for which N holds
on deposit the entire issue OF first mort
gage bonds Cs.0o00cO) preferred stock
ttS.ooo.0oo), Of that road. and that owing
20 the unfavorable conditions Of the
money market II has been unable 10 effect
q satisfactory loan upon these securities
COULD NOT RUN RISK.
''In view Of this condition OF Affairs.
went TO New York Saturday night and
Withdrew the application for the tenn
pcrary loan and called together the mem
bers OF the executive COMMITTEES who
could ne reached 10 meet me Sunday
night upon my return from New York.
~ which meeting I laid before them the
situation Of the company. discovered by