The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-12-19

CHICAGO, Dec. 1S.--Three OF the
u largest financial Institutions I'm the
west, the Chicago National bank,
She Home Savings bank and the Equi-
table Trust company, all of them CON
Volled by John r. Walsh of this city,
and IN great measure owned by him,
suspended operations today Their
affairs viii be liquidated as rapidly as
possible ana they viii go out of bust
ness.
Mr.. Walsh who was president of the
Chicago National bank and of the
Equitable Trust company, and an the
other officers ana all the directors Of
The Chicago National bank have re-
sisued. National Bank Examines g.
n. BosWorth has succeeded Mr. Walsh
las the head of the Chicago National
bank, and the places ,of the directors
b2aVe been filled by men appointed by
rhe Chicago clearing house.
Backed BY Clearing House.
Back Of the new management stand
The allied banks of Chicago. who have
pledged their resources that every de-
pcSitor shall be paid TO the last cent.
and that no customer of any one of
the three institutions shall lose any
thing by reason of the suspension
Had not this action been taken by the
banks OF the city disastrous panic
must have followed in the financial
. world As it was the only erect in
this city was the decline on the local
stock exchange OF . II i'm the price OF
National Biscuit commno stock which
has employed The Equitable Trust as
Nranster agent and had beside dealings
. with the Chicago National bank but il
Is not affected by the failure i'm the
. slightest degree The closing Of the
two banks had the effect also of shut
ting OF all demand ON the local ex-
change for bank stocks none of them
being purchased.
Cause of the Collapse.
The immediate cause Of the collapse
OF the institutions controlled by Mr.
/ Walsh is said to be the large amount
Of money which they have loaned to
Various private enterprises OF his
. notably the Southern Indiana railway
ana the Bedford QuaTries company OF
Indiana. Mr.. Walsh claims that If he
could have had d little more time and
been left untrammeled I'm his opera
items, he could haze Sd ed his banks
and made enormous profits for himself
and his associates, He bases this
statement on his estimate OF the value
oI the bonds of the Southern Indiana
Railroad company. The comptroller
The state auditor and the members Of
the Chicao clearing house committee
place the value of the bonds mi one
hall the valuation OF Mr. Walsh. ana
ii was their refusal to accept his valu-
alton that caused the suspension Of
the banks
Liabilities $26.ooo,ooo.
The liabilities Of the three iustitu-
TiOns are estimated ia the aggregate
ar $4,000. 600. Against this amount the
banks and the trust company have re-
sources that are 90 a conservative eS-
n .Halr worth Sl6.00JOo0. The bonds Of
NJ, Southern Indiana Railway COM
IT, are estimated by Mir Walsh as
| II as worth Sl6000tO0. They are con-
&ered 10y the comptroller state audi
cor and the clearing house committee
To be worth a ljttle more than half
that sum. Their value is q matter to
De determined in the future, and the
presidents Of the local banks admit
that il the estimate Of Alr. Walsh is
found 20 be correct the two banks and
the trust company viii not only pay
al OF their debts. but leave surplus
. beside The directors or the two
banks and Nh. 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 5000 0o0. and esti-
mating the railroad bonds at SS.005.O00
more. making a total of $50 ouo 600
assets against S26.O0GUUJ liabilities.
Promises Were Not Kept.
For some time there has been a diff
4 ference Of opinion between the officers
o. the Chicago National bank and
ComptrOller RidEely regarding the
method Of conducting the affairs OF
the bank. The comptroller took eN-
ceptiou 10 the large loans made by the
bank 10 the private enterprises OF Mr..
! Walsh. and decided that q. portion or
them must be called in. Assurances
were given 10 him, he declares. that
This would be done. but the promises
were not kept Finally the incentive
leo close scrutiny Of the affairs of
lthe Chicago National and Home Saw
ings banks was given by "a banker I'm
New York who had been requested 10
take part in a syndicate 20 furnish a
loan of So 100000 10 Nh Walsh for The
purpose Of further expenditure on the
Southern Indiana railroad The bonds
OF the company however. ola not sell
as rapidly as was expected and the
state and national examiners We're ape
prised OF the failure OF the loan Uni
10 this time the banks had been exam
fned separately which enabled them TO
transfer securities back and forth n
sMas decided that the state examiner
and the uaaional examiner should
make a simultaneous Investigation. {
This showed that the institutions had
leaned a large amount estimated ali
lna way from 100000 To SlJ,0o0, 900 on
'tfA securities of the railroads that
were owned practically by Air Walsh |
alone.
Paper Signed by Clerks.
II is said that the paper for these !
loans was signed by clerks and that
they were substantiated by the bonds /
OF Air. Walsh's railroads. the Southern |
indiana, the Chicago Southern, which |
s. an extension of the Southern Indi- |
ana and the Wisconsin and Michigan |
When the examiners had concluded I
their report Mr.. Walsh asked for a /
little time. saying that ne could raise /
the money 20 straishten out every /
thing He vas not as successful III /
this as he hoped 10 be- and when
Comptroller Ridgley was informed Of I
Oh fact he came at once 10 Chicago.
De called a meeting OF the members /
Of the Chicago clearing house and in I
kormed them OF the situation The |
meeting was held in the Offices of the /
president ol the First National bank /
and continued from . o'ciorE sunday Il