New-York tribune., 1906-08-18
CHELSEA BANK CLOSED.
Loans to Directors Said to Haze
Caused Massachusetts, Wreck.

,-tsIsea. Mass, Aug. 17.-Following the off,
-, information given by Bank Examiner Ever
= ne Controller OF the Currency in Washing
- ,hat the failure OF the First National Bank
q rhelsea the doors OF which were closed last
s.,hs was due to excessive loans made 10 off,
s and directors OF the bank IL became un-
s.-s.ood to-day that the principal factor sn the
-s,ension OF the bank was a large indebtedness
!, sbe part Of its president. Sylvester B. Hincls-
,.- This indebtedness is unoficially estimated
- from 100000 20 100000, but statements
-,.se to-day by directors of the bank indicate
chat President Hinckley had transferred 20 the
institution his equity in large real estate hold
,,rs which, Il was expected. would provide for
ne payn1ent in full Of all depositors.
President Hinckley IS said 20 be fatally i'll ct
bIs home in Newton So ILL., IL is said. IS he, that
on Saturday last he was unable TO place his
signature TO the papers transferring his prop
erty 10 the bank. and it was necessary for him
10 resort 10 making his mark upon the docu-
rBent This proceeding was legalized by the
witnessing signatures OF his wife and son. 1t is
said that Mr. Hinclley had not been able to be
st the bank for four weeks.
Developments to-day indicated that Mr. Hinck-
Lev was involved In extensive real estate trans
actions. from which he expected TO realize
fpIendid profits for the bank as we'll as for him
self The failure OF his plans in connection with
his Illness as well as dissatisfaction on the part
of 81 least one of the director with the nature
az some Of the papers placed with the bank as
collateral accounts for the closing OF the bank
The director most active in bringing affairs
70 a crisis was Thomas Martin. formerly presi-
dent Of the bank who in an interview to-day
said that recently he discovered evidence OF un-
buslnesslike methods. and as a director began
pspers held by the bank were not what Mr.
Martin considered strictly commercial. He said
that the signatures in some cases needed ex-
planning" Mr.. Martin also said that sufficient
property had been transferred by Mr. Hinckley
70 the bank to insure the payment Of depositors
IN full. Examiner Ever having been appointed
temporarily receiver by the Controller. was In
charge Of the bank to-day. and with corps of
clerks was busuy engaged upon the accounts Of
the institution. Late to-day he was unable TO
Intimate when he should be able TO report
further 10 his chief at Washington.
During the morning throngs OF depostors ap-
peared at the bank, and at 10 o'clock more than
go people were assembled there. There was no
disorder. however. the police authorities having
taken precautions to send a dozen patrolmen TO
the scene 10 maintain order. Examiner Ever
permitted holders Of safe deposit vaults 10 enter
the bank and examine their property, but all
other persons were excluded.
The failure OF the First National was responsf-
bic for small runs on the Chelsea Savings and
Cooperative Provident banks this morning. but
The depositOrs at those institutions soon ceased
their money when IL was seen that
there was a plentiful amount Of cash on hand
The cities Of Chelsea and Everett and the town
Of Revere have funds deposited with the bank
About $4,000 Of the money belonsing "a the
Water Department comprised the deposit of Re-
Tere Everett had about $4,000 and Chelsea
about $500 in the bank.
Washington. Aug. 1.-THE following IS a
statement OF the resources and liabilities OF the
First National Bank OF Chelsea. Mass. at the
cate Of its last report OF condition, made TO thu
Controller OF the Currency June Is, 1906:
RESOURCES
Cni;ed States bonds 70 secure circulation 6o 0oS
Premium United States bonds 'Sg0
King hortuo and