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BANK DIRECTORS FORCED OUT I I I I , I 1 I 1 I a & e I | . 1 e I ( Date I I Y # a 1 I A I 1 , I . I B . 1 Insurance I I . 1 I . I I I i I i I 1 | I i I $ I I I I I i I I I I I 1 I I i I 1 I $ . I . I I of the Wontern Pacific and the only Gould Form I I I I I $ I I 1 I I I I I 1 I Mr Ridgely entigned to any I I I $ I 1 I s I Information I I I 1 I I Rever BEEN Items | I E I I @ I I I i duet of the hand and Byev will also have the I 5 I E ing Housen in acquiring the controlling interest in the stock Mr Ridgely married . daughter of Senstor Shelby M. Cullom of Illinois and 11 --- considered reasonable to suppose that he will also hring strong backing from the West. Whatever the names of the individuals, it was said, the bank would certainly be controlled by internate independent of those with which it has latterly been concerned in the Banking field F Augustus Heinze at the Waldorf last night threw a discordant note into the negotiations for the transfer, though it in believed that he has already given an option on a large part of his holdings have not sold 18. share of my stock. said Mr. Heinze "and am still in control of the Mercantile Bank. The whole miserable situation is the result of the action of the Clearing House committee Instead of coming out with a statement saying that the bank was entirely solvent they made lot of remarks about the impairment of a surplus and started a run on the bank in the nope of attracting deposits to their It was institutions. pointed out by a prominent banker after the Heinze utterances were quoted that the expressions hardly comported with the tender of Mr Heinze's his resignation as director and the acceptance of the as resignation as president Moreover, accusations of selfish motives on the part of the Clearing House committee were declared to be absurd. The situation, it was said, was perfectly apparent to every The Clearing House had to take one hold in order to keep the bank open and protect the interests of its depositors. Without Clearing House help it for would have been closed yesterday morning. the bank was short of funds to meet its clearances. As a final and entirely conclusive refutation of the charge it was pointed out that if the other banks had wanted business they would have let the Mercantile fail Mercantile's debit balance to the The $745,000 Clearing House yesterday was The debit balance came on top of a debit balance of $600 $600,000 Thursday morning. The latter the bank was able to pay but aid was extended to it vesterday morning the extent of $400,000 by way of helping to to meet the second debit balance Memhers of the Clearing House committee were present at the Clearing House when saw the clearances were in progress and assistance was given promptly that As the stated yesterday the Clearing House committee found the bank entirely solvent, The though its surplus was impaired deposits the examiners found to be a bit than $11,000,000 as compared with more more than $19,000,000 when the HeinzeThomas party acquired control. The loans about $18,000,000, practically the same were ortedinlast week bank statement The deposits were reduced to a small amount The amount of the surplus and undivided profits reported in last week bank statement was $5,043,000. To just how great an extent this fund was impaired not even the examiners could say definitely, for the reason that it was represe represented in part by securities not readily marketable Excluding all these securities, the amount the depreciation was about $4,000,000. of would have been unfair of course to but it Eventually report any such shrinkage. the securities might be worth the face value the $4,000,000, as has been found the case, of notably in the liquidation of the Ninth National Bank, on several occasions in the past The examiners found loans to F. AugusHeinze or his brokers. Other directus of the bank, it was reported, had loan tors accounts with it. The amount which under the banking laws a bank may loan to any individual is 10 per cent. of the comone bined capital and surplus provided that amount does not exceed 30 per cent. of the bank's capital In the case of the Mercantile with a capital of $3,000,000 and surplus $4,000,000 the largest individual loan of would thus be $700,000 It was said by a prominent Clearing House banker that the aggregate of these loans to a few directors approximately $2,000,000. Some loans was the bank it was said. were secured by in United Copper and other stocks in which Heinze party is interested but it was not the declared that the loans of the directors were such collateral. It was recalled that on on Tuesday F. Augustus Heinze said that nited Copper had been accepted at the bank as collateral. None of the loans of the bank was a call or in Wall Street banking parlance a loan, "street loan. Unlike most banks in or near financial district the loans were time the loans entirely and not collectible instantly The aggregate of loans, $18,000,000, exthe deposits $11,000,000. by $6,000,000. in ceeded addition to which the bank had resources its 000 $3,000,000 capital and surplus. Even in conceding a depreciation in the surplus there was not the slightest doubt that the bank had a balance of several millions on the right side of the ledger "The Mercantile is in a fine position, declared acting President Miles M. o O'Brien, "and solid as a rock. Representatives of the firm of Otto Heinze & Co., suspended from the Stock liabilities Exchange the previous day said that the of the firm would be about $2,000,000 In this estimate, it became known. there is not included the $500,000 claimed by Gross & Kleeberg or the claims of some other The Gross & Kleeberg claim was brokers virtually repudiated. One of the attorneys for the Heinze firm announced that f the creditors next there
