Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-12-19

IN syndicate to furnish a loan of
SG,W0,0OO to Mr.. Walsh to further ex-
penditures on the Southern Indiana
Railroad. The bonds Of the company,
however, did not sell as rapidly as ex-
pected and state and national bank ex-
aminers We're appraised of the fall
ure of the loan.
Up to this time the banks had been
examined separately which enabled
them to transfer securities back and
forth. 1t was decided that the state ex-
aminer and the national examiner
should make a simultaneous investiga-
ton. This showed that the institutions
had lent large amount, estimated all
the way from $10,000000 to SIS, 600, 900 on
the securities of the railroads that
We're owned almost entirely by Mr..
Walsh. 1t is said that the paper for the
loans were signed by clerks and that
the collateral was the bonds of Mr..
Waish's railroads, the Southern In
diana and the Wisconsin and Michigan.
When the examiners had concluded
their report Mr.. Walsh asked for time,
saying that he could raise the money
to straiShten out everything. He was
not rs successful in this as he hoped
to be. When Comptroller Ridgeley was
informed of the situation he came at
once to Chicago.
Comptroller Ridgeley called a meet
ing of the members of the Chicago
Clearing House and informed them Of
the situation. The meeting was held in
the Office of the president of the First
National Bank and continued from 3
o'clock Sunday afternoon until o'clock
this morning. 1t was then announced
by the comptroller in the following
statement that the banks had suspend
ed and that all depositors would be paid
in full by the other banks OF the city:
1.-The action Of the Chicago Clearing
House banks in coming to the aid Of
the Chicago National Bank. the Home
Savings Bank and the Equitable Trust
Co. has relieved q most critical situa-
ton which, if it had not been taken
properly in hand, might have led to
very serious consequences, not only in
Chicago, but elsewhere. The action Of
the Clearing House banks makes it abb
solutely certain that all the creditors Of
the three institutions will receive their
money Immediately and should thus re-
lieve any apprehension on the part Of
the public in regard to the financial
troubles in Chicago. The critical situa-
ton in which these three concerns
have been placed has been due to the
large loans made to the railroad, coal
mining and other enterprises owned and
controlled by John r. Walsh. This
again emphasizes the danger of the
managing officers Of banks being inter-
ested in outside institutions requiring
large amounts Of money. The cOmptrol-
ler's office has for sometime been criti.
cizing the condition of the Chicago Ma
tional Bank and calling upon its officers
and directors to reduce the amount OF
these loans and the investments in the
bonds Of Mr.. Walsh's corporations. In
spite of repeated promises that this
should be done, these items have been
continued in the bank and in order to
prevent further entertainments it was
necessary for the comptroller to take
radical action. The comptroller's Office
has for sometime been endeavoring to
make an examination Of the Chicago
National Bank simultaneously with an
examination Of the state institutions by
the state bank examiners, but was not
able to bring this about until a few
Continued on Page Twelve.)