The Billings gazette. [volume] (Billings, Mont.) 1896-1919, 1905-12-19
CHICAGO HAS
BAD FAILURE
Banking Concerns Controlled by
Walsh Go Under.
TOO MANY TAILS TO KITE
Resources Of City's Allied Banks Pledged
to Secure Creditors.
by Associated Pressl

/ and the clearing house committee to
be worth a little more than half that
sum. Their value is a matter to be
determined in the future and the pres
idents of the local banks admit that
II the estimate of 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.
The directors of the two banks and
Walsh, who has turned over all of his
private property as we'll as that stand
ing in the name of Mrs. Walsh, have
pledged real estate and securities
valued at $5,OOO,OOO making a total of
$1S.OO0,000 assets, estimating the rail.
way bonds at $S,OOO,O0O, against s2S,.
100000 liabilities. ...s
Banker Drops Hint.
For some time there has been
difference of opinion between some of
the officers of the Chicago National
bank and Comptroller Ridgeley regard.
Ing the method of conducting the af-
fairs of the bank.
The comptroller took exception to
the large loans made by the bank to
the private enterprises of Walsh and
declared that portion of them must
be called in. Assurances were given
to him, he declares, that this would
be done, but the promises were not
kept Finally the incentive to a close
scrutiny of the affairs of the Chicago
National and Home Savings banks
was given by banker in New York,
who had been requested to take part
i'll 6 syndicate to furnish a loan of
$6,OoO,OOO to Walsh for the purpose
OF further expenditures on the South
eln Indiana railway. The bonds of
the company, however, did not sell as
rapidly as possible and the state and
national bank examiners were ap-
prised of the failure of the loans.
Sharp Practice Exposed.
Up to this time the banks had been
examined separately, which enabled |
them to- transfer securities back :.n.! |
forth. 1t was decided that the state
examiner and the national examiner
should make simultaneous investi-
cation. This showed that the insti-
tutlons had loaned large amount. es-
tlmated all the way from $4,000, 900
to $15,O0O,OOO, on the securities of the
railways that were owned practically
by Walsh at one time. 1t is said that
the paper for these loans was signed
by clerks and that they were substan-
tlated by the bonds of Walsh's rail-
ways, the Southern, the Chicago
Southern which is an extension of the
Southern Indiana, and the Wisconsin
and Michigan.
When the examiners had concluded
their report Walsh asked for a little
time, saying that he could raise the
money to straighten out everything.
HE was not as successful in this as he
to be and when Comptroller
was informed of the facts he
came at once to Chicago. He called
meeting of members of the Chicago
clearing house and informed them of
The situation. The meeting was held
in the office of the president of the
First National bank and continued
from O'Clock, yesterday afternoon
until o'clock this morning. 1t was
then announced by the comptroller
that the banks had practically sus-
pended and all depositors would be
paid in full by other banks of the Eity. !