The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1905-12-30

statutes prohibiting a national bank
from making loan In excess OF
limited amount OF its resources-10
per cent OF its capital stock--to any
one Arm or corporation. II also Is
complained OF as an evil. although
not expressly forbidden by statute.
that managing bank officers some
times are interested In outside enter
prises that tempt them to negotiate
loans from their own banks.
Although reports Of the conditions
prevailing In connection with the Chi
cago National reached Washington.
the subsequent examinations by fed
eral bank examiners showed nothing
wrong. And the reason was. accord
ing to bankers, that when the federal
examiner visited the bank TO perform
Ills duty. sufficient number OF the
Walsh securities 10 reduce the visible
loans TO his enterprises to a minimum
would be transferred TO the Home
Savings and TO the Equitable Trust,
and In place OF them there would be
found securities TO balance. taken
from the two subsidiary institutions.
Likewise. when the state examiners
looked into the affairs OF the incor-
porated institutions. the securities be-
longing 10 them. which would have
attracted unfavorable attention, were
exchanged temporarily for securities
OF other character from the Chicago
National.
Examiners Work Together.
But the see-sawing process met n
sudden check last week. when the fed
eral and state examiners. conducted
their respective examinations stimuli
taneously. Then the true condition OF
affairs was brought into full relief.
the danger signal was run up and
Comptroller OF the Currency Ridgely
came hurrylng to Chicago from Wash
ington as fast as steam could bring
him.
Several days ago the inner circles
of the banking world learned OF the
conditions prevailing in the Walsh
group OF the big financial institutions.
and joined with the federal state au-
thorities in instituting a thorough in
vestigation. From the disclosures
made by the authorities OF the govern
meat receiyership for the Chicago
National would have been warranted,
Lut the result would have been disas-
trous TO the public in many ways. II
would have tied up nearly 100000
OF funds belonging TO the city. the
County OF Cook. the drainage district
and the park and other public funds.
to say nothing of the accounts and
savings OF individual depostors and
business firms. for not copper cent
could have been touched except
through a court order.
Bankers Take Action.
The banking week closed Saturday
with not the suspicion OF cloud on
the financial horizon save TO such as
had been given knowledge TO look be-
yond. Sunday morning the members
OF the clearinghouse committee quiet
~ assembled with the directors OF the
Walsh institutions. and then hogan a
session at high tension that dragged
along through the day and into the
night. The hours sped away, and long
after midnight the financiers delyed
and figured and planned. and not a
word escaped from the room In which
the bomb that was to startle the city
YVES spluttering.
II was past o'clock Monday morn
ing when the sleepless members Of
the clearinghouse committee. having
agreed on their plan OF action and hay-
Ing satisfied Comptroller Rldgely of
the wisdom OF the scheme, ISSUED a
bulletin as omipous as IL was brief:
ITO the Public: Depositors OF the
Chicago National bank. Home Savings
bank and Equitable Trust company
are respectfully advised that their de-
posits Will be paid in full upon de-
mand.-Clearing-House Committee OF
the Chicago Associated Banks"