The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1905-12-30
CH|CAGO BANKS
IN LIQUIDATION
Financial Institutions Con-
trolled by John R. Walsh
Are Embarrassed
IN CHARGE OF CLEARING HOUSE
Bankers Guarantee Payment to oepos-
itors and Accept Securities Fur
nished by President and Directors
Of Concerns Under Cloud.

Chicago. Dec. 1.-THE Chicago Ma
tional Bank. the Home Savings Bank
and the Equitable Trust Company. the
string OF financial institutions domi-
mated by John X. Walsh, went into
liquidation Monday after examinations
ny the comptroller OF the currency,
clearing house committee OF the As
ISOLATED Banks OF Chicago.
Twenty-six millions OF dollars In de-
posits OF public funds and private ac-
counts are involved In the crash,
which, through the prompt action OF
the conservative banking interests OF
Chicago, claims for its victims only
Mr.. Walsh, multi.millionaire financier
and railroad magnate. and his imme-
ciate associates In business.
The city awoke TO gasp In amaze
ment. with visions OF topping walls,
but in the second long breath calm
came through the assurance that IL
was o zone man" failure, and that
every depositor would be paid dollar
for dollar, without the intercession OF
courts and the delays OF receiyerships.
In the forenoon, a crowd, more or
less excited and under guard OF a big
squad OF policemen, was massed in
front OF the banking building in Mon
roe street, and long lines OF men and
women clutching bankbooks were
stringing from the windows OF the
raying-tellers out to and along the
pavement.
Clearing House Takes Charge.
One by one President Walsh and
his fellow directors resigned. and as
each stepped down and out his place
was filled by member Of the clear
ing house committee, until the insti-
tuition was in the hands OF n regency,
SO TO speak. pledged to go to the linn
banks OF the city in making up any
deficiency in the assets necessary 10
meet the demands OF every depositor.
great and small, In all three of the
involved banks.
BY night every danger that furry
would extend TO the strongholds OF
finance had been allayed. over the
counter of the Chicago National be-
tween s2,2o0.000 and S2.4O0.00O had
been paid TO depositors at the close
OF the banking day nc 3 o'clock.
Through the windows OF the Home
Savings department. in the vestibule
Of the national bank about $400.000
had been returned 10 patrons. and
there were huge heaps of shining gold
and paper currency awaiting another
day, when the task OF closing the
career OF the institutions will be re.
sumed
Guarantee Banks Against Loss.
Before retiring the members OF the
on board Of directors turned over To
the new board 100000 in gilt-edged
securities 10 guarantee the Associated
Banks agnins possible loss through
the pledges TO pay depositors. MIR.
Walsh personally turned over $2.500,-
600 OF this amount. II was declared
that none OF the institutions was In
solvent. but in checking up the assets
the clearinghouse committee put the
minimum of valuation on the so-called
Walsh securities. allowing for a net
depreciation OF $4,000 ,0O0-the differ.
ence between the valuation at which
Mr.. Walsh listed his own securities
and That placed upon them by the
committee brought the assets $1,000
600 under the liabilities
This depreciation. therefore, is more
than covered by the securities put up
by the former directors.
A mixture OF legitimate banking
and railroad building, in which the
personal interests OF a single indiyid.
uaI were involved In double man.
ner. brought about the downfall OF the
Chicago National. with It's million dol
lars OF capital and equal surplus and
nearly twenty millions OF deposits, and
it's allied banks. Fierce battling be-
between railroad kings drove one OF
the monarchs TO the moneyed fortress
OF his own financial institutions. The
consequences brought him into con.
fiict with the regulation prescribed
by the federal statutes for the con-
duct OF national banks. and violated
the safeguards provided for banks Ia
corporated under the state laws.
Long ago. II was brought out
through the developments OF an event.
full day, Comptroller OF the Currency
Ridgely was made aware that the Chi.
cage National Bank was making un-
usually large loans TO the railroad,
coal mining and other enterprises
owned and controlled by it's president.
and repeated warnings had been Civ
on to decrease the amount OF such
loans.
There Is n provision in the federal
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