Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1906-08-18
Ties Up Half Million Of
Chelsea Banks Funds
Hundreds Affected by Failure
] d OId-estabIished Concern.
,h,i.r Of Institution Comes as Surprise to
The Business Comm unity.

chelsea Mass, Aug. 17.-FollowinG
mo official information given by BANK
rvaminer Ever to the National Comp
.,o,Ier of the Currency that the. failure
- Tho First National Bank of Chelsea,
,ho doors of which were closed last.
r,ght was due to excessive loans made
a. officers and directors of the bank,
!. hecamc understood today that the
,-;rcinal factor in the suspension OF
,ha hank was a large Indebtedness on
Tho mart of its president, Sylvester Is.
u,ncklev. This Indebtedness is un-
ofHcially estimated at from 100000 to
100000, but statements were issued
today by directors of the bank that
President Hinckley had transferred to
tho institution his equity in large real
estate holdings, which, it was expect
ed would provide for the payment OF
all dcposf,ors in full President Hinck-
ley is said to be fatally i'll at his home
In Newton.
Developments today indicated that
Mr.. Hinckley was involved in extensive
real estate transactions, from which
he expected to realize splendid profit
for tn" bank as we'll as for himself.
TIN failure Of his plans in connection
SfhDhiS Illness. as well as diSsatisflc-
ton on the part Of at least one of The
directors with some of the paper placed
with the bank as collateral, accounts
for the closing of the bank.
The director most active in bringing
affairs to Il crisis was Thomas Martin.
a former president of the bank. who
IN an interview today said that recent
ly he discovered some evidence of I'M
busncsslkc methods. and as a dire
Tor started an investigation which dc
yelOpcd the fact that paper held hy
the bank was not what Mr.. Martin con-
sidernJ strictly commercial. He said
also that the signatures in some cases
needed explaining"
Examiner Ever, having been appoint
ed temporary receiver by the comptrol-
er, was in charge of the bank today.
ROstun. Aug. 1.-THE business cOn-
munity of Chelsea was surprised when
tbecamc known that the First Nation
al Bank Of that city, one of the oldest
financial institutions in this section Of
the state had been closed and Bank
Examiner Alfred Ever placed in
charge. Many Of the small traGesmcn
have practically all Of their ready mon
ey tied up in the bank but it is eX-
lected that relief will be afforded by
The Wmnisimmct National Bank Of
Chelsea. which has offered to pay To
depesitors of the First National 50 per
cent Of their accounts. The remaining
hanks in Chelsea have but few thou
sand dollars to their credit at the First
National and will not be directly af-
lected by the difficulty.
At an early hour this morning Bank
Examiner Ever notified the police de
lsrtment that he would probably need
Inc services Of officers in front of the
FIRST National Bank this afternoon.
During the morning throngs of de-
poStTs put in their appearance at the
pank and at 10 o'clock more than 800
were assembled there. The employees
VI lhe bank reported for work at the
usual hour today and Bank Examiner
Ever used them in assisting him to
'1rh the condition of the embarrassed
Institution Mr.. Ever decided that
n'n'efS Of safety deposit vaults had a
snt 70 visit these vaults and examine
III" property there, but only persons
~. NY were able to prove conclusively
,a. uey had rented safe deposit boxes
" admitted to the bank
az was learned during the morning
,nat the closing Of the bank will en-
'afraSs hundreds of persons in addi-
IN '. a. 10 hose who placed their savings
"v institution. \ number of bus
oaor houses in the city kept sufficient
pS On hand in the First National
rnn 70 make up their weekly pay
/ ~, d,ld 1t was apparent today that
r;nI. OF shop and store employees
vaa,' oe compelled to wait until next
YEA lor their wages.
Vohtinued on Page Two.)