People's Pilot, Volume 2, Number 48, Rensselaer, Jasper County, 19 May 1893 — BANK FAILURES. [ARTICLE]

BANK FAILURES.

The Columbia National Bank, of Chicago, Zimri Dwlgffins, President, Closes Its Doors. H’rt* It a Number of Country Banki Go Dtcn-The Citioeno 1 State Bank, of Benooelaer, Io Safe. The main topic of conversation in Rensselaer and in fact all over the country the past week has been the failure of the Columbia National Bank, of Chicago, of which Zimri Dwiggins is president, and the subsequent failure of many country banks, of which the Columbia held much of the stock. From the fact of Mr. Dwiggins holding a few shares of stock in the Citizens State Bank, of Rensselaer, a constant run was made on the bank from Friday morning until Tuesday evening and over $40.000 in deposits was withdrawn from the bank, but it stood the test and confidence in its solidity is being rapidly restored. The Columbia National Bank suspended payment last Thursday and did not open its doors. Unexpected and large demands made by the numerous country banks with which the Columbia did business, coupled with a run on the bank by city depositors, exhausted the cash on hand. Failing to secure assistance from the clearing house or from the other Chicago banks, the officers of the Columbia decided to suspend. It is given out upon good authority that Zimri Dwiggins, the president, had been promised a loan of <IOO,OOO by other banks, upon security which was deemed good. With this the Columbia hoped to tide over the expected run Thursday, but when Mr. Dwiggins called for the loan in the morning it was refused. The doors were not opened for business, and at 10 o’clock the following notice was posted on the door: “There being a constant run on u« for a number of days, in order to protect the depositors and all interested, the board of directors have decided to close for the present. All depositors will be paid In full.” “ZIMHI Dwiuginb. President." Shortly afterward Bank-Ex-aminer James D. Sturges assumed charge of the Columbia’s affairs. He posted a notice that he was in charge in the interest of the comptroller of the currency. Mr. Sturges immediately held a consultation with President Dwiggins and began the task of investigation. The investigation has not yet been finished and until that is done the condition of the bank will not be known.

Mr. Dwiggins said that the immediate cause of suspension can be traced to a suit brought against the Columbia by the Sioux City Loan and Trust Company. The Sioux City company, one of the largest concerns with which the Columbia did business, made a draft on it for <35,000, its balance. When the draft was presented for payment by an lowa man the bank refused to honor it, explaining that it had loans outstanding against the Sioux City company which would offset the latter’s deposit. The company at once entered suit against the bank. The news of this affair spread and precipitated the bigs run which caused the suspension. Following the announcement of the failure of the Columbia came the news of the closing of the doors of numerous country banks in which the Columbia was largely interested in the states of Indiana, Illinois, Michigan and Wisconsin. A large number of them have since resumed.

A steady run was made upon the Citizens State Bank of this place upon receipt of the Columbia’s failure, but it was able to meet all demands and up to Wednesday morning <40,000 had been withdrawn from the bank. Mr. Sears, the president, being asked as to the condition of the Citizen’s Bank, replied: “The bank is perfectly solid and has paid all demands made upon it. We have plenty of money to pay all claims, but we have passed through the crisis and confidence is rapidly being restored.” “What connection has the Citizen’s bank with the Columbia?” “None at all. Zimri Dwiggins, the president of the Columbia, owns 15$ shares, and that is as far as his interest goes. The

Columbia was our correspondent, but we have now changed to the Metropolitan, of Chicago.” "The rumor that R. S. D wiggins and son Jay,” continued Mr. Sears, are connected with this bank, is unfounded. They have no interest at all in the bank. They own the Lowell and Hebron banks, however, which were forced to shut their doors. They have since re sumed business” "Was there much of a run on your bank?” "There was, from Friday until Tuesday evening. We paid out over $40,000 and .promptly met all demands. The reaction is now setting in and money is being redeposited. M. H. Hemphill, the county treasurer, had $lO,000 of county funds deposited with us, and owing to the uneasiness of his bondsm en, drew out the entire amount Monday.” B. J. Gifford, who has largo land interests in the county, has examined the books and is well satisfied with the condition of affairs. The Citizens State Bank was organized as a state bank several years ago and is examined quarterly by a state bank examiner. It is owned by a stock company, nearly all of whom are are resi dents of Jasper county, and solid financially. The board of directors are Zimri Dwiggins, Geo. H. Brown, Jr., Vai Seib, Berry Paris and F. J. Sears. The only.stockholder of tho Columbia National in Rensselaer so far as known, is Geo. K. Hollingsworth. "You may tell the people,” said Mr. Hollingsworth,” that the report that I have 67 shares, or $6,700 stock in the Columbia is a mistake. When the annual statement o” the bank was made in August o f last year, was the owner of 67 shares, but since that time I have been disposing of it and at the present time I own but a few dollars in stock. I thank the people for their sympathy, but it is not needed.”

The methods employed by the Columbia were not approved by the solid banking houses of the country and it was refused admission as a member of the clearing house, their methods ©i’ doing business not being considered as altogether sound. Ata meeting of the board of directors Monday it was decided to resume business as soon as the government gets through with its investigations. Many ugly stories have been afloat in regard to Dwiggins and Starbuck, the other principal member of the firm, but until the investigation is concluded, their truth can not be determined. The closing of the Capital bank at Indianapolis caused the closing of a great many Indiana banks, also. Its methods were similar to that of the Columbia. The Capital was run by Paris and Nave. Parisus Robert Paris, formerly of this place. Dr. I. B. Washburn, Mhe optician, handles the celebrated Trolley’s Kohinoor eye glasses, the best made. Attention is called to the ad, “See Again as in Youth,” in another place in this paper.