Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1905-12-27
THREE BIG FINANCIAL
INSTITUTIONS IN CRASH
Chicago National, Home Savings and
Equitable Trust Suspend
Troubles Due to Shaky Enterprises Of
John r. Walsh
Depo sitors Will Not Lose and Business
World Will Not SUITE.

Chicago, Dec 19.-Three of the Iarg.
est financial institutions in the west,
the Chicago National bank, the Home
Savings bank and Equitable Trust COM
pany, all controlled by John R. Walsh
of this city, and in great measure
owned by him suspended operations
yesterday, Their affairs will be liquid
ated as rapidly as possible and they
will go out of business.
Walsh, who was the president of the
Chicago National and of the Equitable
Trust company, and all other officers
and directors of the Chicago National
resigned. National Bank Examiner
BOsworth succeeded ash at the head
of the Chicago National, and the places
of the directors have been filed by
men appointed by the Chicago clearing
house. Back of the new management
stand allied banks of Chicago who
have pledged their resources that
every depositur shall be paid to tn"
last cent, and that no customer of any
one of the three institutions shall lose
anything by reason of the suspension.
Loaned Too Much Money.
Had not this acIIULI ueeu taken by
the banks of the city disastrous panic
must have followed in the financial
world. AS it was, the only effect or
the financial world in this city was =
decline on the local stock exchange OF
21a in the price of the national biscni'
common stock. The biscuit company
had employed the Equitable Trust &c
transfer agent, and had besides deal
ings with the Chicago National but il
is not affected by the failure in the
slightest degree. The closing of the
to banks mad an effect also of shut
ting off all demand on the local ex
change for bank stock, none of them
being purchased.
The immediate cause of the collapse
of the institutions controlled by Walsh
is said to De the large amount of money
which they have leaned various private
enterprises of his, notably the Southern
Indiana railway and the Bedford Quar-
ries company Of Indiana. Walsh claims
that if he could have had a little
more time and have been left untram
meled in his operations he could have
savea nls Danhs and made enormous
profits for himself and his associates.
tie ba ses this statement on his esti-
mate OF the value of the bonds of the
Southern Indiana railroad. The comp
troller, state auditor, and members OF
the Chicago clearing house committee
placed the value of the bonds at one
half of ,Walsh's valuation and it was
their refLsal to accept his valuation
that caused suspension of the banks.
The liabilities of the three institutions
are estimated at S26,000,000. Against
this amount the banks and the trust
company have resources that are, On
conservative estimate, worth $16,000,-
600. The bonds of the Southern Indl-
ana railroad are estimated by Walsh at
$16,000,000. They are considered by
he comptroller, state auditor and the
clearing house committee to be worth
little more than half that sum. Their
value is a matter to be determir ed in
the future and presidents of the loca
is found correct, the two banks and
trust company will not only pay all OF
their debts but leave surplus besides.
The directors of the two banks and
Walsh who had turned over all of his
private property as well as that stand
ing in the name Of Mrs. Walsh, have
pledged real estate and securities val.
ued at s5,0O0,0OO, estimating the raj
road bonds at sS,O0O,0O0 more, making
a total of S29,0O000O assets against
$26,000,000 liabilities.
Did Not Keep Promises.
For some time there have been diff
ferences of opinion between the of.
GERS of the Chicago National bank and
Controller Ridgely regarding the meth
cd of conducting the affairs of The
bank. The comptroller took exception
to the large loans made by the bank
to Walsh's private enterprises and de-
clared that portion of them must be
called in. Assurances were given him,
he declared. that this would be done
but promises We're not kept Finally
an incentive to a close scrutiny of the
affairs of the Chicago National aad
Home Savings banks was given by a
banker in New York who had been re.
quested to take part in a syndicate to
furnish a loan of s6,000,000 to Walsh
for the purpose of further expenditures
on the Southern Indiana railroad. The
bonds of the company, however, die
not sell as rapidly as was expected and
the state and national examiners were
appraised of the failure Of the loan
Up 10 this time the banks had been e. I
amined separately which enablen
them to transfer the securities back
and forth. 1t was decided that the
state examiner and national examine
should make a simultaneous inyesuga.
ton. This showed that the instita.
tons had loaned a large amount, esti.
mated all the was from S10,000,000 to
S15,000.000 on the securities Of the rail-
roads owned practically by Walsh
alone. II IS said the paper for these
loans vas signed By clerks and that
they were substantiated by bonds or
Walsh's railroads. the southern Indi
ana and the Chicago Southern which is
an extension OF the southern Indiana.