The Red Cloud chief., 1905-12-22
WALSH'S BANKS FAIL
THREE CHICAGO INSTITUTIONS
FORCED TO THE WALL.
Had Been Putting Assets Of Chicago
National, Home Savings and Equita'
BILE Trust Into misunderstanding
House Saves Depositors.

Chicago, Dec. 19.-Three Of the
largest financial institutions In the
west, the Chicago National bank, the
Home Savings bank and the Equitable
Trust company, all OF them controlled
by John X. Walsh of this city and In
O great measure owned by him, have
suspended operations. Their affairs
will be liquidated as rapidly as pos
sible and they will 90 out of business.
Mr.. Walsh, who vas the president
of the Chicago National bank and OF
the Equitable Trust company, and all
the other officers and all the directors
Of the Chicago National bank have
resigned. National Bank Examiner
G. II. Bosworth has succeeded Mr..
Walsh at the head Of the Chicago Ma
tional bank and the places OF the d.
sectors have been filed by men ap-
pointed by the Chicago Clearing
house. Back OF the new management
stand the allied banks of Chicago.
who have pledged their resources that
every depositor shall be paid to the
last cent and that nc customer OF any
one Of the three institutions shall lose
anything by reason OF the suspension.
Had not this action been taken by the
banks of the city, a disastrous panic
must have followed In the financial
world. AS 1t was, the only effect
in this city was the decline
on the local stock exchange OF 2a
In the price OF National Biscuit
common stock, which has employed
the Equitable Trust as transfer agent,
and had besides dealings with the
Chicago National bank, but 1t Is not
affected by the failure In the slight
est degree. The closing OF the two
banks had the effect also of shutting
off all demand on the local exchange
for bank stocks, none Of them being
purchased.
Cause of the Crash.
The immediate cause OF the col
lapse of the Institutions controlled by
Mr.. Welsh Is said to be the large
amount OF money which they have
loaned to various private enterprises
Of Historically the Southern Indiana
railroad and the Bedford Quarries
company of Indiana. Mr.. Walsh
claims that II he could have had a lit
tie more time and been left untram-
meled In his operations he could have
saved his banks and made enormous
profits for himself and his associates.
He bases this statement on his esti-
mate of the value OF the bonds of
the Southern Indiana Railroad COM
pany. The comptroller, the state aud
&tor and the members of the Chicago
Clearing house committee place the
value of the bonds at one-half the val
nation Of Mr.. Walsh, and it was their
refusal to accept his valuation that
caused the suspension of the banks.
The liabilities of the three institu-
lions are estimated in the aggregate
at $26, 900 900. Against this amount
the banks and the trust company have
resources that are, on a conservative
estimate, worth SIC, 000, 900.
The directors Of the two banks and
Mr.. Walsh, who has turned over all
of his private property as well as
that standing in the name of Mrs.
Walsh, have pledged real estate and
securities valued at So. 0O0. 900 and es.
timating the railroad bonds at SS,-
100000 more, making a total OF S27,
100000 assets against S26, 900 900 liza.
Silities.
Promises Not Kept.
For some time there has been a
difference OF opinion between the Off
p GERS of the Chicago National bank
and Comptroller Ridgely regarding
the method of conducting the affairs
of the bank. The comptroller tool
exception TO the large loans made by
the bank TO the private enterprises Of
Mr.. Walsh and declared that a por
tion OF them must be called in. AS
surances were given TO him, he de
%Clares, that this would be done. bu
the promises were not kept. Finally
the incentive to a close scrutiny O
the affairs OF the Chicago Nationa
and Home Savings banks was givel
by a banker in New York, who ha,
been requested TO take part in a syn
dictate to furnish a loan of Sc, 200, 90
30 Mr.. Walsh for the purpose of fuI
sher expenditures on the Southern Ir
diana railroad. The bonds OF tn
company, however, did not sell q
rapidly as was expected, and the stat
and national examiners were al
prised Of the failure OF the loan. U
to this time the banks had been e,
amined, separately, which enable
them IN transfer securities hack An