The Paducah sun. [volume] (Paducah, Ky.) 1898-1906, 1905-08-24
THE WESTERN BANK
WAS ALMOST SAVED
BY Noon That Day IL Would
Have Had 800, 600.
Understood ~ 100000 Loan Caused
the Resignation of W. u. Smith,
Former President.
BANK EXPECTS TO REOPEN.

Two changes we're to have taken
place In the directorate of the West
ern National Bank on the day it was
closed by Examiner Garrett, and
preparations had been completed to
5 cure SiO0, 900 10 be used in raising
The reserve funds and insuring the
deposltors, Says yesterdays Courier
Journal. A meeting of the board of
directors 10 make these changes was
to have been held Monday morning
and at that time f. G. Hogan and A.
c. Montenegro were TO have taken
th-ir seats In the board of directors.
Mr. Montenegro aud Mr.. Hogan had
agreed TO furnish 100000 with
which TO bolster up the banks condi-
ton, aud the remaining 100000
was TO have been secured from three
banks. II is said that w. b. Smith,
the former president who is still a
member OF the board of directors,
had are d to furnish $4,000 OF This
amount.
Closing OF The bank by Examiner
Garrett came as a severe blow TO the
Officers and board of directors who
believed By yesterday that they
would have been able to reach the re-
quiied 25 per cent. reserve fund.
Among the directors who were to re-
tire in order that Mr.. Montenegro
aud Mr. Hogan might be admitted
was Or. j W. Fowler. secretary of
the board. The other director who
had agreed TO retire is not known.
Under the plans pr pared by MIR.
jefferson, Mr. Hogan, Mr.. Montene-
gro and other members of the board
OF directors, the bank was TO have
been in excellent condition not later
than yesterday morning. Three
Louisville banks had agreed to fur
nish $4,000 at the same time Mr.
Montenegro and Mr. Hogan were TO
secure the remaining S300, O00 not
later than yesterday morning. This
sum would complete the 100000
necessary to place the bank in a po-
sition to operate without difficulty or
question.
Mr. Garfetfs action was addition
ally a surprise from the fact that he
was present at the meeting Of the
board OF directors and heard the
plans for rehabilitation discussed
Tha cause Of his sudden decision to
close the bank before these plans
could be carried into effect Is un-
known.
Rumors have gained ground since
th1 closing of the bank that differ
ences over loan of 100000 had led
to the resignation OF the former pres
ident, W. B. Smith.
The sunNin question was loan OF
; SEQ. 900 which had beln made in
piece meal, but virtually all to one
iirma firm of tobacco manufactur-
ers. The members of the board of
directors held no sum should be
loaned TO any one firm or person in
excess of $40, ZOO, and when the loan
| In question reached 100000, the
| board objected Later Mr. Smith Is
| quoted as saying that his methods OF
| doing business did not seem satisfac-
| tory to many of the stockholders In
| the bank. Rumors of the difficulty
| over this loan had escaped, and are
said TO have been the primary cause
OF thu change in presidents.
| Since this loan was made, It Is
| said that it has proved absolutely
valid. Collateral furnished by the
i lahtorc H. eafd IN ha uoYfact and "A
| though an effort has not been made
To collect all the paper, 1t is under
stood that 10 can be taken up as soon
as IL falls due. So far IL was stated
by a member of the board of diree-
tors, the bank has been encountered
with but one piece of absolutely
worthless paper This was note foI
$4,000 given by an iron and junk
merchant named O'Brien, who later
became bankrupt. IL has been i'm
possible 20 realize anything on this
note
Under the regulations governing {
closed bank, the control of the insti
tuition has now passed from the boar,
OF directors. Examiner Garrett is il
u
absolute charge until Mr.. Thornton
the receiver. arrives. At that tim,
| Mr.. Garrett will surrender his pow
| er TO the receiver. who will attemp
| TO settle the business of the bank. 81
| far as an organization Is concerned
| the board of directors of the Western
| Nat .onal Bank does not exist, but tn
same body, Augmented by Mr.. Monte
negro, Mr.. Hogan and others who ar
interested in the institution, will hol'
a meeting In the next three days Il
devise ways and means of renewal
Not one of the board OF directors cal
be found who is not confident tina
the bank will again open its door
In its new building.