The Montgomery advertiser., 1905-09-26
BY
 LOANS MADE Kansas City State Bank Closes Doors. VOLUNTARY LIQUIDATION Step Taken to Untangle a
 Bad Mix-up. Justification Had Advanced Too Heavily in Favor of Salmon & salmon,
 Who Went Under at
 St. Louis, Mo.
VOLUNTARY LIQUIDATION

Kansas City, Mo, Sept 2o.--The Kansas City State Bank, Wiley o. Cox. President, failed to open it's doors to- day, having gone Into voluntary liqui- dation. The bank had loaned $16S,0o0 to the bank of calmon 6 Salmon at Clinton, Mo, which failed last July catching depositors for several thous- and dollars.
 The Kansas City State Bank was or ganized in 1888 and had a capital of $2oo. .o00. The last statement showed loans of s4,00o,o0O; deposits, sf.7so.ooe: surplus, si4.ooo.
 The following notice was rosted on the door at the opening hour today:
 This bank has gone into voluntary liquidation through the Fidelity Trust Cimpany. Checks drawn against the bank will be paid on presentation fo the Fidelity Trust Company at Ninth and Walnut Streets. Wiley c. Cox. President"
 The Fidelity Trust Company. which Is capitalized at $i.e00,000, is considered one of the strongest banking institu- tions in the Southwest.
 The Kansas City State Bank holds $567,o0o of the city's money. Wiley Q. Cox. President of the Kansas City State Bank, is one of the oldest and best known bankers in Missouri. Ha has lived in Missouri since 1868. In lS72 he was a clerk in the First Na-
 
 to Kansas City in 1881. From 1884 to 1888 he was engaged in a general nnan- cial and loan brokerage business. He organized the Kansas City State Bank in 1888 and has always served as its President. In 1896 he bought the kan- sas City Times, venture that did not prove successful, and in 1899 he sold the paper.
 At the Fidelity Trust Company -5ank cheeks on the Kansas City State Bank were honored as far as presented. There was no show of commotion and Charles Campbell, Vice-President of the. Fidelity Trust Company, stated thAe ali checks drawn on the closed bank would be paid on demand.
 Mir. Campbell declined to talk of tho causes leading up to the closing of the Kansas City state Bank.
 Wiley 0. Cox. President of the Kan sas City State Banks made the follow ing statement. to the Associated Press:
 Presidents staaemenf.
 The retirement of the Kansas City State Bank from active business is vol- untary Our business has. not been growing for sometime and we. found tt hard to hold our own with the larger institutions. In fact 1t looks as the banking business as we'll as all other lines is concentrating in the larger ones,
 'Srhe condition of business was thor ouRhiy gone over by the board of d. rectors and the conclusion was reacneu that 1t was not prospecting as 1t ought to in order to be profitable and 1t was decided to go into voluntary liquida- tion. One plan which might have been adopted to do our own liquidation. pay inc depositors on demand and taking on no new business. This would naNo proved very expensive. as 1t would nave involved borrowing large sum of mon- ey on the banks paper in order to pay denositors at once, while the force or clerks of1ce rent, etc, would continue probably the same as though the bank was running In the usual and ordinary way. Accordingly negotiations looking to the liquidation of the business through some other active banking m stItution were begun and have nnaIly resulted in the consummatlon or Iorna whereby the Fidelity Trust Compa- nv has taken over the business of the bank and is paying our depositors m the ordinary way
 The Fidelity Trust Company voiun- teered to pay the City Treasurer the amount of the city's funds on deposit in the Kansas City State Bank put the money was not withdrawn.
 The decision to liquidate was reached following a meeting of representatives of the clearing house banks. A thor ouRh investigation of the accounts or the bank had been made, carefully prepared statement of the resources and liabilities checked in every detail and the colIaterals held for loans appraised by financial experts. This was done at the request of the banks officials who were seeking a way to close the bank without placing in jeopardy one dollar of the depositors' money.
 Ever since the failure of the Salmon and salmon Bank. at Clinton Mo, ths 6ad a Many large depositors withdrew their accounts because of the fact that tho bank had advanced the Salmons more than S900, 900 on collateral that Is now said by bankers to be silt edged. At that time the value of the collateral was problemstIcal and timid deposit ora hastened to close their accounts. This caused a heavy drain on the re- sources of the bank and in order to avert trouble the oficers of the insti- tuition decided upon liquidation as the easiest way out of perplexing finan- ctaI tnnRle,