The news & observer., 1905-12-29
Merchants Trust Com
pany First to Suspend.
DEPOSlTORSARE SAFE
Such is the Declaration Of Officials Of
Both. Institutions. American Saw
ings Bank, the Second Institu-
tion, Dominated by Directors
of the First Named.
(By the Associated Press.)


Memphis. Tenn. Dec. 27.-Antici-
patton of a heavy run on the Mer-
chants Trust Company. II Madison
street. preliminary intimation of
which was given by the withdrawal of
many deposits Tuesday afternoon,
was the immediate cause of the sus-
pension of that bank and the appoint
ment of receiver today.
The American Savings Bank and
Trust Company, 176 South Main street
which is dominated by the directors
of the Merchants Trust Company,
fearing that the failure of the other
institution would cause a run on its
own deposits, also suspended payment
until the affairs of the Merchants
Trust Company shall have been ad-
justed. The American Savings Bank
and Trust Company. it developed, re-
Gently absorbed the Merchants Saw
ings Bank, at Main and Calhoun
streets and took charge of the latter
company's business. It is stated by
the officials of both institutions that
the depositors will be fully protect
ed and paid dollar for dollar.
The stock holders of the Merchants
Trust Company, it is said, will suffer
TO the extent of 90 per cent on the
capital invested as the liquidation OF
the banks finances are expected to
entail a slight loss
The assets of the Merchants Trust
Company greatly exceed the liabili-
ties.
The American Savings Bank and
Trust Company, according to it's latest
statement, is in excellent condition
and carrying more ready cash then is
usual for an institution of its size,
The Merchants Trust Company has
on hand only $4,000. the remainder
of it's capital having been loaned out.
The fact that the bank had overloaned
and the stringency of the New York
money market are given as the direct
cause of the suspension.
John p. Edmondson, a prominent
attorney of this city, and one of the
directors. has been appointed receiver
for the Merchants Trust Company. a.
Y. Allen, cashier of the American
Savings Bank and Trust Company
has been appointed receiver of that
institution
The decision not to open the doors
of the Merchants Trust Company to-
day was reached after an all night
session of the board of directors.
Says the Bank is Solvent.
Felix T. Pope. president of the
Merchants Trust Company, gave out
the following statement:
1.-THE bank is solvent and every
depositor will be paid in full.
''The stockholders will undoubted-
ly realize a large percentage of their
investments.
"The Merchants Trust Company had
loaned too much money and was un-
able to realize on its loans fast enough
TO meet the demands.
''I am not in position to make a
statement now as to reorganization or
future plans"
w. A. Percy, attorney for the Mer-
chants Trust Company, and the direc-
tors of that institution make the
statement that all depositors of both
the Merchants Trust Company and
the American Savings and Trust Com
pany will be paid in full.
Statements of the financial status of
the closed banks at the close of busi-
ness December 26:
Merchants Trust Company, assets,
$3,66s,055; liabilities. s2,132,319;
American Savings Bank, assets, $685.
1888: liabilities, $75S,703. The deposits
in both institutions exceed $2,0O0,000.
c. w. Schulte's Statement.
C. w. Schultz, president of the Mem
phis Clearing House Association, made
the following statement in behalf OF
the association:
Fifteen days ago the Merchants
Trust Company applied to the Mem
phis Clearing House Association for
help. The Clearing House Association
appointed committee to investigate
the matter. The committee went over
the assets of the Merchants Trust Com
pany are carefully as the limited time
allowed and the association advanced
through the Merchants Trust Company
the sum of 100000.
Subsequent investigation revealed
the fact that while it was the opinion
of the members of the Clearing House
Association that the depositors of the
concern are safe. yet it would take
an extraordinary large sum to pay all
immediate demands. In the interests
of the city and the depositors, and OF
the various institutions of the city,
which for the last month had antici-
pated some such movement, 1T was
deemed wisest to allow the concern
to close its doors.
Representatives of the large banks
of New York, Chicago and st. Louis
are in the city with great quantities
of money in furtherance of the legiti-
mate business interests of the city.
"O1d and experienced bankers and
members of the Memphis Clearing
House Association have the situation
we'll in hand. No danger is appre-
hended and the commercial Interests
of the city are competent to meet any
situation that is liable to arise.