Rensselaer Republican, Volume 28, Number 17, Rensselaer, Jasper County, 31 December 1896 — BIG BANKS GO. DOWN. [ARTICLE]

BIG BANKS GO. DOWN.

NATIONAL OF.ILLINOIS CAUSES OTHERS TO FAIL. I Eckels Scores Officials—Comptroller Says the Suspension Is Dne to Reck* „■ less Methods Managers Received Warning* Three Banks Closed. ’ Thg National Bank of Illinois at Chicago failed to open its doors to the public Monday morning. This action was tEe sequel 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 Wnsmansdorff, Heinemaun & Co., two private banks clearing through the Illinois National, were forced to make application in court for a receiver. So far as can be ascertained by Chicago advices, the trouble is not likely to reach beyond these three banks, ahd in every case'it is stated that depositors wiil'be paid in full or nearly so. Not since ’73 has Chicago bankitig circles been shaken up as they were when the news of the closure of the National Bank of Illinois was made known. It lias 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 tro ( ublous times of ’93 with a clear recordi 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 jn 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 hands. 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. S. Dreyer & Co., who in turn had spread their capital pver 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 intention of the clearing-house, a week or 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 tp demonstrate that the management of the bank had been drifting into merit—ods 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 bfest policy would be to make a clean breast of the whole*business and the credit of the clearing-holts'# itself, to suspend the bank from membership pending a report by the government bank examiner.