Omaha daily bee., 1905-12-19
WALSH BANKS QUIT
Three Chicago Financial Institutions &c
Into Liquidation.
STEP ORDERED BY the COMPTROLLER
Leans to President Declared to Be Entirely
Too Large.
CLEARING HOUSE COMES TO RESCUE
Announcement that Depositors Will Be
Paid in Full Averts Psnis'
LIABILITIES ABOUT TWENTY-SIX MILLIONS
Money Advanced TO walsh Invested
In ousrries, Coal Mines and
RsiIresds-Assets About
s2o,oOO,OOo.
LIABILITIES ABOUT TwENTy-SIx MILLIONS

CHICAGO, Dec. ls.-Three of the largest
financial institutions in the west the Chi
cago National bank. the Home SAVING
bank and the Equitable trust company, all
of them controlled by John r. Walsh OF this
city and in great measure owned by him,
suspended operations today. Their affairs
will be liquidated as rapidly as possible a''d
they will go out Of business
Mr.. Walsh, who was the president OF the
Chicago National bank and of the Equitable
Trust company and all the other officers
and all tho directors of the Chicago Ma
tionai bank have resigned. National Bank
Examiner c. II. Bosworth has succeeded
Mr.. Walsh at the head Of the Chicago Ma
tional bank and the places of the directors
have been filled by men appointed by the
Chicago clearing house. Back Of the new
management stand tho allied banks Of Chi
caRo. who have pledged their resources that
every depositor shall he paid to tho last
cent and that no customer of any one of III"
three institutions shall lose anything by
reason of the suspension. Had not this ac-
tion been taken by the banks of the city
disastrous panic must have followed in tho
financial world. As It was the only effect
In this city was the decline on the local
Stock exchange Of 2A in tho price Of Ma
tional Biscuit common stock, which has
employed tho Equitable Trust company qs
transfer agent and had besides dealings
with the Chicago National bank. hut IL -
not affected by the failure In the slightest
degree. The closing Of tho two banks had
the effect also Of shutting on all demand on
the local exchange for bank stocks. none Of
them being purchased.
Large Loan. to President.
The immediate cause Of the collapse ot
the institutions controlled by Mr. WALSH Is
said to be the large amount Of money which
they have loaned to various private enter
prlses Of his-notably the Southern Indiana
railway and the Bedford Quarries company
OF Indiana. Mr.. Walsh claims that II he
could have had little more time and been
left untrammeled in his operations he could
have saved his banks and made enormous
profits for himself and his associates. He
! bases this statement on his estimate OF the
J value of-shrs bonds. of the. souttfcrn INDIANA
Railroad company. The comptroller, the
state auditor and the members of the Chi
cago clearing house committee place the
value Of the bonds at one-half the valua-
tion ~ Mr. Walsh, and It their refusal
20 accept his valuation that caused the sus-
pension of the banks.
The liabilities OF the three Institutions
are estimated in the aggregate II $2s,JOOoO.
trust company have resources that are on
a conservative estimate worth S16O1hOO0
The bonds OF the Southern Indiana Rail-
road company are estimated ny Mr. Walsh
being worth 100000 They are con-
sdered by the comptroller. state auditor
and the clearing house committee to be
worth little more than half that sum.
Their value Is a matter TO be determined
in the future and the presidents al the
local banks admit that II the estimate of
Mr.. Walsh is found to be correct. the two
banks and the trust company will not only
pay all Of their debts but leave surplus
besides.
Assets s20. .OO0, 200
The directors of the two banks and MIR.
Walsh, who has turned over all of his pri-
vate property as well as that standing in
the name of Mrs. Walsh, have pledged
real estate and securities valued at So,Ur,-
Ooo more, and estimating the railroad bonds
at 100000, making a total of SG9GpOI
assets against S26,H0,OO0 liabilities.
For some time there has been a differ
ence of opinion between the officers of the
Chicago National bank and Comptroller
Ridgely regarding the method of conduct
ing the affairs OF the bank. The comp
troler took exception to the large loans
made BY the bank to the private enter
portion of them must be called in. Assur,
ances were given TO him, ne declares, thai
this would be done, but the promises wer,
not kept. Finally the incentive to a clos,
scrutiny Of the affairs of the Chicago Ma
tlonal and Home Savings banks was giveI
by a banker in New York. who had beer
requested to take part In a syndicate e
furnish a loan Of Sc 10000 to Mr.. Walsl
for the purpose Of further expenditures on
the Southern Indiana railroad. The bond,
OF the company however, did not sell a!
rapidly was expected, and the state anC
national examiners were apprised OF tn,
failure of the loan. Up to this time tn,
banks had been examined separately
which enabled them to transfer securities
back and forth. II decided that IN,
state examiner and the national examine
should make a simultaneous investigation
This showed that the Institutions ha,
loaned a large amount and estimated al
the way from 100000 to Sl5.OO0OcO on IN
securities OF the railroads that were ownc,
principally by Mr. Walsh alone It 4
said that the paper for these loans wa
signed by clerks and that they were sub
stantisted by the bonds Of Mr. Walsh
railroads, the Southern Indiana the Chi
oago Southern, which is an extension o
the Southern Indiana and the Wisconsin
4 Michigan Southern. When the examiner
had concluded their report MI. Walls
asked for a li,tle time saving that n
could raise the money to struiehteu ou
everything He was not successful (
this as he hoped to be and when Comp
troller Ridgeley was informed of the FAC
he came at once to Chicago. lie called
meeting OF the members ~ the Chicag
clearing house and informed them Of IN
situation. The mectils Was held in IN
once of the president uf the First Nation,
bank and continued from o'clock Suuda
afternoon until o'clock this morning.
statement hy Comptroller.
II was then announced by The conn
troler in the following statement that n
banks had practically suspended and tia