Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1905-12-19

geSt financial institutions in the west,
the Chicago National Bank, the Home
Savings bank, and the Equitable Trust
Co.. all of them controlled by John
r. Walsh of this city, and in great
measure owned by him, suspended op-
erations today Their affairs will be
liquldated as rapidly as possible and
they will go out of business.
Mr.. Walsh, who was president of
the Chicago National Bank and of
the Equitable Trust Co.. has resigned.
National Bank Examiner c. II. Bos-
we'll has succeeded Mr.. Walsh at the
head of the Chicago National Bank,
and the places of the directors hdvt
been filed by men appointed by the
Chicago clearing House.
Back of the new management stand
the allied banks of Chicago, who have
pledged their resources that every de-
positor shall be paid to the last cent
and that no customer of any one ot
the three institutions shall lose any
thing by reason of the suspension.
Had not this action been taken by
the banks OF this city disastrous
panic must have followed in the fiuln-
cial world. AS it was, the oniJ effect
in this city was the decline on the To-
cal stock exchange of 212c in the price
of National Biscuit common stCcl;
Trust as transfer agent and had be-
side dealings with the Chicago Ma
tlonal bank but it is not affected by
the failure in the slightest degree.
The closing of the two banks had tine
effect of also shutting off all demand
on the local exchange for bank
stocks, none of them being purchased
The immediate cause of the collapse
of the institution controlled by Mr.
Walsh Is said to be the large amount
of money loaned to various enterprises
of his---notably the Southern Indilna
rl'aslTay and the Bedford Qtarrios
company of Indiana. Nc. Walsh
claims that IL he could have had a lit
tie more time and been left uptram-
meled in his operations ne could have
saved his banks and made enormous
profits for himself and his associates.
He bases this statement OF his esti-
mate of the value ui ne bOuds Of the
Southern Indiana Railway company.
The comptroller the state auditor and
members of the Chicago clearing
house committee place the value Dt the
bonds at one-half the valuation of
Mr.. Walsh, and 1t was their refusal to
accept his valuation that caused the
suspension of the OankS.
Liabilities Arc Enormous.
The liabilities of the three lDstitu-
tions are estimated in the dggre gate
at $26, 600, 900. Against thatamount the
banks and the trust comnanies have
resources that are ON a conservative
estimate worth S16,000.000. The
bonds of the Southern Indianl Pail
way company are estimated by Mr..
Walsh as being worth $4,000. 900.
They are considered by the comptrol-
Ter and clearing house committee to be
worth a little uDOppFTbAn half .llt
sum. Their value Is matter 10 I've
determined in the Future, 4nd the
presidents of the lDcal banks admit
that IL the estimate of Mr. Walsh IS
found to be correct tlln tMO banks
and the trust COMPANY will not only
pay all Of their debts but lepve a sur
plus besides. The directors bf the two
banks and Mr. Walsh iwlo Aas turned
over all of his properly as we'll as that
standing in the name Of his wife, have
pledged their real estate and securities
valued at $4,000, 900. and estimating
the railroad bonds at $4,000 900 more,
making a total of $29,O0O,000 assets
against S26, 900. 900 liabilities.
Dispute of Long Standing.
For some time there has been diff
ference of opinion between the officers
of the Chicago National bank and
Comptroller Ridgeey regarding the
method of conducting the affairs OF
the bank. The comptroller took ex-
ception to the large loans made by
the bank to the private enterprises of
Mr.. Walsh, and declared that a por-
tion of them must be called in. AS
surances were given to him. he de-
clares, that this would be dohc, but the
promises were not kept Finally the
incentive to a close scrutiny of the af-
fairs of the Chicago National and
Home Savings bank was given by Il
banker In New York who had been
requested to take part in syndicate
to furnish loan of $6,0O0,0O0 TO Mr.
Walsh for the purpose of further eN-
penditures on the Southern Indiana
railroad. The bonds of The company
however did not sell as rapidly as
expected and the state and national
examiners were apprised of the failure
of the loan. Up TO this time the ra1ks
had been examined separately which
enabled them to transfer securities
tack and forth.
Examiners Investigate.
1t was decided that the state exam
iner and the national examiner
should make a simultaneous investiga-
ton. This showed that the institu-
tIons had loaned large amount, es.
tiTated all the way from $4,000, 600
railroads that were owned practically
by Mr.. Walsh alone. IL is said thai
the paper for these loans was signed
by clerks, and that they were sub
stantiated by bonds of Mr.. Walsh's
railroads. the Southern Indiana, tht
Chicago Southern. which is an exten-
sion of the Southern Indiana. and the
Wisconsin and Michigan. When the
examiners had concluded their report
Air. Walsh asked for a little time, say
ing that he could raise the money tC
strlighten out everything He was not
as successful In this as he hoped. anc
when Comptroller Ridgeley was In
formed Of the fact he came at once &C
Chicngo.
He called meeting of the members
OF the Chicago Clearing house and In
fo.r,ed them Of the situation The
meeting was held tn the office OF the