Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-18
BIG BANK FAIL URE
Three Chicago Concerns Are
Forced to Quit Business.
CONTROLLERS ACTION
DIFFICULTIES DUE LARGE LOANS
BY JOHN r. WALSH,
Who Dominated Affairs of the Chicago
National, the Homes Savings and
Equitable Trust Company.

CHICAGO, December 1S.-Action has
been taken by Controller of the Currency
William B. Ridgely that will compel the
three large financial institutions-the Chi
cago National Bank. the Home Savings
Bank and the Equitable Trust Company
dominated by John R. Walsh of this city
to wind up their affairs.
The other national banks of the city have
come to the rescue, and 1t is declared on
the authority of the clearinghouse asso-
citation, the controller and also by the Off
GERS of the Chicago National Bank that
not single depositor will lose cent.
The difficulties of the three banks, which
practically branches of the same in
stitution, are attributed by the controller
of the currency to the large loans made
by the Chicago National Bank to the rail-
road, coal mining and other private enter
prises controlled by Mr.. Walsh.
Some time ago the controller called the
attention of the officers of the bank to
the fact that they Were making loans to
these enterprises of Mr.. Walsh which. in
his opinion, were too large for the safety
of the institution. Repeated promises were
made that the situation should be recti-
fled, but no action satisfactory to the
controller was taken. Three days ago he
came to Chicago for the purpose of making
an investigation into the affairs of the
three banks. and found them in such a
condition that he judged immediate action
TO be necessary. Some trifling delay had
ensued because of the inability of Mr..
Ridgely to meet the officers of the bank
and officials of the state auditors Office.
Two Under State Supervision.
The fact that the Home Savings Bank
and the Equitable Trust Company are
under state supervision made the pres
ence of the latter official necessary Off
cials of the different Chicago banks We're
told of the situation, and a hurried call
was sent out for a meeting of representa-
tives of the Chicago Clearing House AS
sociation, as well the officers of the
city banks. The meeting was called to
order in the office of President Forgan of
the First National Bank at o'clock yes
terday afternoon. and was in continuous
session until o'clock this morning
A careful canvass of the situation re-
vealed that the Chicago National Bank
had deposits to the amount of $4,000 900.
the Home Savings Bank had savings de-
posits to the extent of 81 ,0oO, 600, divided
among about 5000 depositors
The liabilities of the two banks and of
the Equitable Trust Company were
roughly estimated at 100000 The as
sets of the three institutions made up
about $50, 100000 of this amount and the
directors and officials of the Chicago Ma
tional Bank came to the front with secu-
rites amounting to about SO. .o0O, 900 more
A Deficit of Three Millions.
This left a deficit of about $4,000, 900 TO
he nd ha han
sented at the meeting declared at once
that they would meet the situation and
care for the deficit If it proved neces-
sary to advance any more than $4,000 600
to meet all demands the banks pledged
themselves to make up the amount, what
ever it might be.
The great difficulty confronting the
bankers in the meeting was to arrange a
legal settlement of the case In the piti
fully short time at their disposal before
the hour OF commencing business this
morning.
1t was finally arranged that. in addition
to winding up the affairs of the three
financial institutions, the allied bankers
should take all of Mr.. walsh's private
enterprises, including his coal mines and
railroads and stone quarries
Clearing House Statement
At the close of the meeting tbts 49,,
ing the following statement was tSs,,na
by the Chicago Clearing House Associa-
ton:
The names of the committee who drew
up the statement are: James b. Forran
president of the First National Bank cbafr
man; John j. Mitchell president of the MI
rois Trust and Savings Bank; Orson B.
smith. president of the Merchants Loan
and Trust Company; James H. Eckels
rrec nf tha
Bank; Ernest A. Hamill. president of ,hs
Corn Exchange National Bank
ITO the public: Depositors of the Chi
csgo National Bank, the Home Savings
Bank and the Equitable Trust Company
are respectfully advised that their deposits
Will be paid in full upon demand"
John r. Walsh president OF the failed in
stitutions. was very busy at his residence
this morning and declined to be disturbed
when called up over the telephone. His
daughter. however. quoted Mr.. Walsh as
stating that all information concerning the
faliures for the present at least would ps
given out by the Clearing House Associa-
ton.
The Financial Status.
The Chicago National Bank was organ
ized In November. 1881 with an author
ized capital of 100000 increased to $500 ,ooO
In 1887 and to 81, 600 goo in 1901
Its resources. according to one of the
latest reports made TO the controller of
the currency, are 81 100000. OF which near
ty s11. 100000 are loans and discounts, with
100000 cash on hand. The liabilities in
clude nearly $14.000,00Q in individual de-
posits and s4.700.000 due to other banks.
The Home Savings Bank was organized
originally in 1867, with a capitalization of
100000.
A late statement of the resources shows
an aggregate of "a. .232 271, of which S3 1872
0Oo Is reported as being held in municipal
railroad and other bonds. The savings
deposits aggregate 81. $50, 653.
The Equitable Trust Company was char
tered by the state OF Illinois August 20
1887 to act as executor. administrator
trustee, guardian, assignee or receiver
and to receive and execute trusts OF every
character The capital stock Is $500,Ooo
res resources are $4,6l2. 361. The liabilities
1cluds 81. 707 .563 Of deposits In trust. s4o4.