Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-18
BIG BANK FAIL URE
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of the Northern Trust Company: c. X. @.
Billings and c. Fl. Bosworth-
No successor to Vice President Bfount
was elected
The officials named above will compose
a syndicate which will 1iquidate the affairs
of the bank and will pay all claims against
( it and the Home Savings Bank and the
Equitable Trust Company, II q - i e
d The following statement was issued by
Controller Ridgely: - 49,
"A misunderstanding seems to exist as
to- what has happened to the Chicago Ma
tionai Bank. This bank has not failed or
closed its doors. 1t has been embarrassed
by the investment of large amount of its
assets In unavailable securities, but the
banks of Chicago have come to the relief
and have guaranteed the payment in full
on demand of all the creditors of the Chi
cago National Bank. The bank is open
Tor business as usual today with these
guarantees behind it that it will meet all
--WHffam b. Ridgefy, controller of the
currency" t@s ss
Statement by National Bank.
The statement was issued at the offices
of the First National Bank. 1t is as fol-
lows ! go
The Chicago National Bank. the Home
Savings Bank and the Equitable Trust
company, which have been controlled. OFF,
cered and managed by John r. Walsh and
his associates have concluded to wind up
i their affairs and quit business in the,city
of Chicago. After a thorough and careful
examination of their affairs by the Chicago
clearing house banks, 1t is stated that all
of the depositors of these Institutions will
be paid In full upon demand. the Chicago
clearing house banks having pledged them
selves to this result. thus putting all rhe
resources of the Chicago banks behind the
depositors of these three institutions.
The difficulty with the institutions has
been that their investments have been
made In assets connected with the rail-
way and coal enterprises of John X.
Walsh.
These assets were not Immediately avail
able to meet deposits and have been taken
over on terms which will enable the three
institutions to pay their depositors in full
Mr.. RidgeIy, controller of the currency,
and Capt. Eubanks of the auditors depart
nent at Springfield. were seen, and express
cd themselves as greatly pleased at The
that it reflected great cridit upon the az
ISOLATED banks Of Chicago which have
again indicated their ability to meet any
emergency In manner entirely satisfac-
tory to the public
Controller Ridge1y's Statement.
The following statement concerning the
failure of the Chicago National Bank, the
Home Savings Bank and the Equitable
Trust Company was given out today by
Controller of the Currency William B.
Ridgely:
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 Company has re-
lieved a most critical situation, which, If it
had not been taken promptly In hand, might
have led to very serious consequences, not
loco hut a1cn Ntaa TOW,
of the clearing house banks makes 1t abso-
lutely certain that all the creditors of the
three Institutions will receive their money
Immediately. and should thus relieve any
apprehension on the part of the public in
regard to financial troubles in Chicago. The
critical situation in which these three con-
Germs have been placed has been due to the
large loans made to the railroad, coal min
ing and other enterprises owned and con-
trolled by Mr.. John R. Walsh. This again
emphasizes the danger of the managing Off
GERS of banks being interested in outside in
situations requiring large amounts of money
THE controllers Office has for some time
been criticising the condition of the Chicago
National Bank and calling upon it's officers
and directors to reduce the amount of these
loans and the investments in the bonds of
Mr.. Walsh's corporations In spite of re-
peated promises that this should be done
these items have been continued in the
bank. and In order to prevent further en-
croachments it was necessary for the con-
troller- to take radical action. The control
lers Office has for some time been endeay-
oring to make an examination of the Chi
cago National Bank simultaneously with an
examination of the state institutions by the
state bank examiner, but was not able to
bring this about unil a few days ago
The result of these examinations revealed
such serious condition that it was neces-
Sary to take Immediate action. The con-
troller telephoned from Washington, in
structing Bank Examiner Boswortf to bring
the matter at once to the attention Of the
clearing house committee, and left for Chi
eago on the first train. to be on hand to per-
sonally take whatever action was neces-
sary. On the arrival of the controller in
Chicago conference was Immediately had
with the state authorities and the clearing
mouse committee, which continued from 10
o'clock Sunday morning until ) o'clock Mon
day morning. In addition to the clearing
house committee, representatives of all the
clearing house banks were called into the
conference about o'clock Sunday evening.
The controller feels that great credit is
due not only to the clearing house commit
tee; but to all the other clearing house
the broad-minded spirit shown in meeting
this emergency"
History of the Banks.
The Chicago National Bank was organ
lied in November. 1881, with an authorized
capital of 100000 which was increased to
$4,000 in 1887, and 100000 In 1901 Its
ASS'hiSGS, oSSoioiS " the tdSI StdLement
filed with the controller of the currency
were S2l 600. of which nearly $II, 900, OUU
was In loans and discounts, with S4,OoO,OUO
cash on hand. The individual deposits are
about s14 100000 in individual accounts and
100000 due to other banks
The Home Savings Bank was organized
in 1867 with capitalization OF 100000 1t
existed for many years as an independent
institution, and about twelve years ago be-
came part of the Chicago National Bank.
1t was primarily a savings institution. It's
last report showed resources of 81 ;23o, 900,
for the most part in railroad and munich
pal bonds. The savings deposits aggregate
$3,9S3, eco
The Equitable Trust Company was char
tered in 1887 to act as administrator ex-
ecutor. trustee and to receive and execute
trusts of every character The capital
stock is S509.00o and the resources are$4,-
612. 600. The liabilities include 2,707, 563, of
which amount $454, eco are deposits in trust,
and $500 eco in certificates of deposit