4526. La Salle Street National Bank (Chicago, IL)

View Charter #9750 on SPMC

Bank Information

Episode Type
Suspension → Closure
Bank Type
national
Bank ID
9750
Charter Number
9750
Start Date
July 1, 1914*
Location
Chicago, Illinois (41.850, -87.650)

Metadata

Model
gpt-5-mini
Short Digest
487c7111

Response Measures

None

Description

Multiple articles (June–July 1914) describe the La Salle Street National Bank as having violated national banking laws, being 'shaky', forfeiting its national charter and reorganizing as a state institution (La Salle Trust and Savings Bank) and then being in the receiver's hands. The coverage describes regulatory failure, fraudulent loans and misapplication of funds leading to the bank's closure and appointment of a receiver. There is mention of runs on related neighborhood banks and loans 'to help stem the run', but the corpus does not clearly document a depositor run on the La Salle Street National Bank itself prior to suspension; therefore I classify this as a suspension leading to permanent closure (receivership). Dates are taken from the June–July 1914 articles.

Events (6)
1. May 7, 1910 Chartered
Source
historical_nic
2. October 21, 1912 Voluntary Liquidation
Source
historical_nic
3. July 1, 1914* Receivership
Newspaper Excerpt
the La Salle Trust and Savings Bank, which is now in the receiver's hands; receiver W. C. Niblack discovered loan ...; it is expected receivers will be appointed ... for the ... banks which failed with the La Salle Street institution . . . . 'The La Salle Street National bank ... was shaky three years ago' and is now in the receiver's hands. (multiple articles, JuneJuly 1914).
Source
newspapers
4. July 1, 1914* Suspension
Cause
Bank Specific Adverse Info
Cause Details
Government accountants found violations of national banking law, misapplication of funds, large unsecured loans to insiders and substitution of good securities for worthless paper prior to charter forfeiture and reorganization into a state bank.
Newspaper Excerpt
It is expected receivers will be appointed Monday for the four neighborhood banks which failed with the La Salle Street institution.
Source
newspapers
5. October 8, 1914 Other
Newspaper Excerpt
William Lorimer was indicted late today by a federal grand jury on a charge of misapplication of funds of the La Salle-Street National bank, the forerunner of the La Salle Trust and Savings bank, which is now in the receiver's hands.
Source
newspapers
6. September 24, 1915 Other
Newspaper Excerpt
cross bill seeking recovery of $1,250,000 alleged by the receiver of the defunct La Salle Street bank to have been manipulated knowingly in an improper manner; alleges transactions used to show capital paid in when it had been returned to Central Trust Company.
Source
newspapers

Newspaper Articles (18)
1. June 24, 1914 The Day Book Chicago, IL
Article from The Day Book, June 24, 1914

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Article Text

THE BANK MESS United State's Att'y Wilkerson today entered the Lorimer-Munday bank mess and has two assistants going over the books of the old LaSalle Street National Bank. Receiver Niblack discovered loan of $b,000 to Ald. John Coughlin. The alderman sent check for interest on note. State auditor may be asked to appear before the grand jury. No witnesses appeared before Cook county grand jury today, but Hoyne announced four would appear on Friday. Att'y Gen. Lucey defended Brady in not closing bank at time Harkin made his first report. "The law clearly gives bank the right to time, before action is taken," said Lucey. Investigation will be made of loan of $2g,000 by LaSalle Bank to E. K. Kelley, with which amount he became director of Ashland-Twelfth Bank. Rumored that LaSalle Street Bank was in ba dcondition at time it liquidated from national. to state bank and that several former federal officials will be caught in mess. It is openly hinted that many Taft men aided Lorimer "get by." Reported that long ago $750,000 loans were made without security. $200,000 more said to have been dumped into Florida lands. While federal action was pending, State's Attorney Hoyne sprung surprise when he opened up grand -jury action. A summons was secured on Bank Examiner Harkin and the latter is said to have told a sensational story

2. June 27, 1914 The Seattle Star Seattle, WA
Article from The Seattle Star, June 27, 1914

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ELSEWHERE Women lawyers of Illinois organize bar association. Battleship Kansas will carry body of Senor Don P. Ezequiel Rojas, minister of Venezuela, who died at Atlantic City, to La Guayra. Final conference report authorizIng sale of battleships Idaho and Mississippi to Greece, filed in senate. Maj. Gen. Leonard Wood will go to New York, to assume command of the Eastern department of the army. Special U.S. grand Jury will probe affairs of defunct La Salle Street National bank, at Chicago. Work of reorganizing the dry goods firm of H. B. Claflin Co., which went into receivers' hands at New York, under way. Merchants and jobbers promise support Gen. G. N. Whistler, who invented smokeless powder, died at Pensacola, Fla. America's exports exceeded its Imports in the past year by $653,000,000. President will appoint I. N. Morris, Chicago packer, minister to Sweden or Denmark. Diving, George L. Clark, formerly well-known athlete, struck his head on a rock and was killed at Willets, Cal.

3. June 27, 1914 New-York Tribune New York, NY
Article from New-York Tribune, June 27, 1914

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Methods of Concern While Yet National Institution Censured. BIG LOANS MADE TO POLITICAL FRIENDS Paynter, Who Voted Against Ousting Lorimer from Senate, Explains How He Got $40,000. Chicago, June 26.-A special United States grand jury will be called to investigate the affairs of the La Salle Street National Bank, the predecessor of Lorimer's La Salle Street Trust and Savings Bank, it was announced today by James H. Wilkerson, United States District Attorney. A preliminary report of government accountants has revealed that between $600,000 and $850,000 was loaned to companies in which officers of the bank were interested, to officers of the bank themselves and to political friends. A loan of $40,000, made to Thomas H. Paynter, former United States Senator from Kentucky, was reduced by payments, investigation showed, until his indebtedness to the bank is $2,646, which he says he will pay on demand. The La Salle Street National Bank, which was controlled also by William Lorimer and C. B. Munday, was shaky three years ago, according to a report made public to-day by Wilkerson. The port was that of a committee appointed by the Chicago Clearing House Association in February, 1911, acting on ap. plication for admission of the bank. to the association. The application was refused because of unethical banking. The committee requested the directors of the bank to replace huge sums in doubtful collateral with quick assets, and to cease loaning money to Lorimer and Munday and their enterprises as preliminaries to another application to the Clearing House Association. Efforts to trace the interest paid on city deposits of more than a million dollars thus far have failed. The receiver, W. C. Niblack, discovered that while the bank paid 3 per cent interest on these deposits, checks were made, apparently one for 2½ per cent and the other for three-quarters of 1 per cent. Frankfort, Ky., June 26.-Ex-Senator Paynter, who was a member of the first Senate committee that investigated Lorimer's election to the Senate, and voted in favor of Lorimer's retaining his seat, said to-day: "After my connection with the Lorimer committee had ceased I needed $40,000 to complete a business transaction. C. B. Munday told me he could take my four notes for $10,000 each and use them. Mr. Munday took care of them through the La Salle Street Bank. However, every dollar of the notes has been paid excepting $2,676, which will be paid on demand."

4. June 28, 1914 Evening Star Washington, DC
Article from Evening Star, June 28, 1914

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PROBE OF CLOSED BANK Chicago Institution Accused of Profiting From Use of Worthless Paper. CHICAGO. June 27.-Investigation of events preceding the change of La Salle Street National Bank to a state institution will be the keynote of the government's inquiry into the closed bank's affairs, District Atterney Wilkerson said tonight. Charges have been made. to federal offi-. cials that good securities were substituted for worthless paper in the vaults of the national bank to enable It to pass the last inspection of government exam-. iners. These securities were withdrawn. as soon as the examiners left the bank, it is alleged. Before time for another examination the bank forfeited its national charter and became a state institution. Uneasiness caused by the failure of the five Lorimer-Munday banks is believed to be the cause of a run late today on the North Avenue State Bank. By 9 o'clock about $15,000 in small accounts had been withdrawn. Business men in the neighborhood expressed confidence in th institution and endeavored to reassure depositors lined up in front of the paying teller's window.

5. July 3, 1914 Albuquerque Morning Journal Albuquerque, NM
Article from Albuquerque Morning Journal, July 3, 1914

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LORIMER BANK SAID TO HAVE VIOLATED LAW (BY MORNING JOURNAL SPECIAL LEASED WIRE) Chicago, July 2.-Government accountants today reported that they had discovered the La Salle Street National bank violated the National banking law in September, 1912. by not having the required amount of deposits on hand. E. J. Potts, vice president of the defunct Ashland Twelfth State bank, one of the Lorimer-Munday banks, is said to have admitted today to the state's attorney he borrowed $23,000 from the La Salle Street bank to buy stock in the Ashland Twelfth State bank at which was then being organized and that he gave the stock as security for the loan. He was formerly credit manager of the La Salle Street bank. It is expected that receivers will be appointed Monday for the four neighborhood banks which failed with the La Salle Street institution. Officials of the Illinois State bank, one of the five which have been closed, told the state's attorney that bonds and notes it owned valued at $75,000 had been appropriated by those in charge of the La Salle Street institution and pledged as security for a loan to help stem the run. The prosecutor said they possessed just the evidence he had been looking for and that "the case proved itself.

6. July 3, 1914 Tulsa Daily World Tulsa, OK
Article from Tulsa Daily World, July 3, 1914

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LORIMER BANK HAD VIOLATED THE LAW The Deposits in the Year 1912 Did Not Come Up to the Required Standard. CHICAGO, July 2 Government accountants today edported they had discovered the La Salle Street National bank had violated the national banking law in September, 1912, by not having the required amount of deposits on hand. In that month, the accountants said. deposits were approximately $3,000,000 and the books showed the cash on hand was $230.000. The law requires that the bank keep 25 per cent of deposits in its vaults. It is exected receivers will be appointed Monday for the four neighborhood banks which falled with the La Salle Street institution. Officers of the Illinois State bank, one of the five closed, told the state's attorney that bonds and notes it owned, valued at $75,000. hod been appropriated by those in charge of the La Salle Street institution and pledged as security for a loan to help stem the run. The cashier of the bank sent the note to the La Salle Street bank for collection, he says, and with them the collateral to be returned to the borrowers. It is charged that officials of the La Salle Street bank added about $55,000 worth of other paper to this collateral and obtained on it a loan of $100,000.

7. July 3, 1914 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, July 3, 1914

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LASALLE BANK VIOLATED LAWS Chicago, July 2.-Government accountants today reported they had discovered the LaSalle Street National bank violated the national banking laws in September, 1912, by not having the required amount of deposits on hand. In that month, the accountants said, deposits were approximately $3,000,000 and the books show the cash on hand was $230,000. The law requires that the bank keep 25 per cent of deposits in its vaults. It is expected receivers will be appointed Monday for the four neighborhood banks which failed with the LaSalle street institution.

8. October 9, 1914 The Richmond Virginian Richmond, VA
Article from The Richmond Virginian, October 9, 1914

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CHARGE LORIMER WITH MISUSE OF FUNDS OF BANK Former Senator From Illinois Indicted by Federal Grand Jury for La Salle Bank Failure Chicago, Oct. 8.-William Lorimer was indicted late today by a federal grand jury on a charge of misapplication of funds of the La Salle-Street National bank, the forerunner of the L Salle Trust and Savings bank, which is now in the receiver's hands. Mr. Lorimer was president of the national bank and president of the State institution into which it was reorganized under the Illinois State laws. J. P. Gallagher, associated with Lorimer in the Lorimer & Gallagher Construction company, was also indicted. charged with aiding Lorimer in the misapplication of the funds. The indictments were returned before Federal Judge Carpenter. Other indictments were also returned against C. B. Munday, vicepresident of the bank; Charles G. Fox, as cashier. and Thomas McDonald, assistant cashier, charged with making false entries. Judge Carpenter fixed the bonds of Lorimer at $15,000 and those of Gallagher at $10,000. The three other defendants are now at liberty on bonds fixed when they were originally indicted.

9. September 25, 1915 New-York Tribune New York, NY
Article from New-York Tribune, September 25, 1915

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LORIMER IS ACCUSED AGAIN IN BANK CASE Cross Bill Charges Improper Use of $1,250,000. Chicago, Sept. 24.-An echo of the crash of the La Salle Trust and Savings Bank, the institution of which William Lorimer was president, came to-day with the filing of a cross bill in the Circuit Court seeking the recovery of $1,250,000 alleged by the receiver of the defunct La Salle Street bank to have been manipulated knowingly in an improper manner. The action is against the Central Trust Company of Illinois and ten individuals. The bill alleges that when the La Salle Street National Bank, the first Lorimer banking venture, was about to withdraw from business and the La Salle Trust and Savings Bank was about to be organized, ten stockholders of the state bank, including William Lorimer, C. B. Munday, H. W. Huttig and others, each gave his note to the La Salle Street National Bank for $125,000, a total of $1,250,000. With these notes in its possession, the bill alleges, the national bank gave its banker's check to the Central Trust Company of Illinois, for which they received in cash $1,250,000. This money was exhibited, it is charged, to the state bank examiner to satisfy the state officials that the capital stock and surplus of the state bank had been fully paid up as required by law. After the La Salle Trust and Savings Bank had received the state auditor's certificate permitting it to commence business, the cross bill alleges, the fund was returned to the Central Trust Company in exchange for the $1,250,000 check.

10. November 3, 1915 Vernon County Censor Viroqua, WI
Article from Vernon County Censor, November 3, 1915

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FORGAN STOOD BY MUNDAY. Chicago Financier Says He Did All in Power to Avert Failure. Morris, III., Oct. 29.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

11. November 4, 1915 The Greenville Journal Greenville, OH
Article from The Greenville Journal, November 4, 1915

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FORGAN STOOD BY MUNDAY Chicago Financier Says He Did All in Power to Avert Failure of LaSalle Street Bank. Morris, III., Oct. 29.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

12. November 4, 1915 Wood County Reporter Wisconsin Rapids, WI
Article from Wood County Reporter, November 4, 1915

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FORGAN STOOD BY MUNDAY. Chicago Financier Says He Did All in Power to Avert Failure. Morris, III., Oct. 29.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution; despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

13. November 4, 1915 The Manitowoc Pilot Manitowoc, WI
Article from The Manitowoc Pilot, November 4, 1915

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# FORGAN STOOD BY MUNDAY. Chicago Financier Says He Did All in Power to Avert Failure. Morris, Ill., Oct. 29.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

14. November 5, 1915 The Jasper Weekly Courier Jasper, IN
Article from The Jasper Weekly Courier, November 5, 1915

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# FORGAN STOOD BY MUNDAY Chicago Financier Says He Did All in Power to Avert Failure of LaSalle Street Bank. Morris, Ill., Oct. 28.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

15. November 5, 1915 Northern Wisconsin Advertiser Wabeno, WI
Article from Northern Wisconsin Advertiser, November 5, 1915

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FORGAN STOOD BY munday. Chicago Financier Says He Did All in Power to Avert Failure. Morris, Ill., Oct. 29.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

16. November 6, 1915 The L'anse Sentinel L'anse, MI
Article from The L'anse Sentinel, November 6, 1915

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FORGAN STOOD BY MUNDAY Chicago Financier Says He Did All in Power to Avert Failure of LaSalle Street Bank. Morris, III., Oct. 29.-James B. For. gan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared be did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

17. December 3, 1915 The Jasper Weekly Courier Jasper, IN
Article from The Jasper Weekly Courier, December 3, 1915

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FORGAN STOOD BY MUNDAY Chicago Financier Says He Did All in Power to Avert Failure of LaSalle Street Bank. Morris, III., Oct. 28.-James B. Forgan, president of the First National bank of Chicago, in testifying at the trial of Charles B. Munday, charged with bank wrecking, declared he did all in his power to avert the financial ruin of William Lorimer and Munday while the LaSalle Street National bank was on the road to destruction. Forgan warned them several times, he testified, and even when this advice was unheeded he stood by them and succeeded in prolonging their affiliation with the Chicago Clearing House association. Forgan went so far as to say that his bank might help liquidate the Lorimer-Munday institution and thus save the depositors' money. Forgan proved a valuable witness for the prosecution, despite efforts of the defense to show he was responsible for a "run" on the Lorimer-Munday bank just before it failed.

18. February 11, 1916 Evening Public Ledger Philadelphia, PA
Article from Evening Public Ledger, February 11, 1916

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LORIMER BANK TRIAL ORDERED TO PROCEED Demurrers Overruled and Fraud Charges Will Be Aired in Court CHICAGO, Feb. 11.-If the Central Trust Company played the part In the La Salle Bank reorganization which it is alleged to have taken, there is no doubt fraud was committeed, according to a ruling today by Judge Windes. All the demurrers entered to the suit for the recovery of the money were overruled by the Judge. The trial will now proceed. The Central Trust Company is charged by William C. Niblack, receiver for the La Salle Street Bank, with having been a party to the transactions by which the La Salle Street National Bank was reorganized into the La Salle Street Trust and Savings Bank, a State institution, which subsequently failed. The capital stock of the national bank had been entirely lost, the receiver alleges, and a subscription list was prepared and a plan devised for obtaining a State certificate authorizing the new bank to do business without paying in any part of the new capital and surplus. This was accomplished, the bills allege, by the action of 10 men, including William Lorimer, Charles B. Munday and H. W. Huttig, in giving their notes to the national bank for $125,000 each. The Court said: "With these notes in its possession the La Salle Street National Bank gave its banker's check for $1,200,000 to the Central Trust Company, receiving a like amount in cash. This money was exhibited to the State bank examiner to satisfy him that the new bank's capital had been paid up and then returned to the Central Trust Company."