Democratic Sentinel, Volume 20, Number 51, Rensselaer, Jasper County, 25 December 1896 — BIG BANKS GO DOWN. [ARTICLE]

BIG BANKS GO DOWN.

NATIONAL OF ILLINOIS CAUSES OTHERS TO FAIL. Eckel* Scores Official*—Comptroller Bay* the Snapenaion la Due to Reck* !*•• Method* Manager* Received Warning. Three Banka Closed. The National Bank of Illinois at Chicago failed to open its doora to the public Monday morning. Thia action was the nequel to the step taken by the committee of the Clearing-House Association, which Saturday evening decided to suspend the bank from clearing-house privileges. And as a result of this suspension E. S. Dreyer & Co. and Wasmanadorff, Heinemann & Co., two private banks clearing through the Illinois National, were forced to make application in court for a receiver. So far as can be aacertained by Chicago advices, the trouble is not likely to reach beyond these thsee banks, and in every case it is stated that depositors will be paid in full or nearly so. Not since ’73 has Chicago banking circles been shaken up as they were when the news of the closure of the National Bank of Illinois was made known. It has always been considered the second strongest national bank in the city. It was organized in July, 1871, passed safely through the Chicago fire, the panic of ’73, the troubles of ’77, and the troublous times of ’O3 with a clear record. According to Comptroller Eckels, "the failure is due to injurious, reckless and imprudent methods followed by the officers and not checked by the directors, though their attention had been individually called to the same and over their individual signatures they had promised to remedy the weak points in the bank's condition.” The essence of the trouble with the National Bank of Illinois was that the entire capital, $2,000,000, and surplus, $300,000, was practically loaned in one or two hand*. The bank had advanced some $1,500,000 on Calumet Electric Railroad stock, a property of momentarily, at least, doubtful security, while nearly $500,000 was loaned to E. 8. Dreyer & Co., who in turn had spread their capital over an expanse completely out of their power to handle. Other large loans to individuals more than completed the sum of the bank's capital and surplus. When these facts were brought to the attention of the clearing-house, a week of so ago, -a committee was appointed to investigate, in order if possible to discover some means of averting the failure. The result of the committee's investigation was to demonstrate that the management of the bank had been drifting into methods which no amount of bolstering up could offset, and that however willing the Chicago clearing-house might be to go to the assistance of the Illinois National, the most honest, safest and best policy would be to make a clean breast of the whole business and for the credit of the clearing-house Itsqlf, to suspend the bank from membership pending a report by the government bank examiner.