Article Text
THE NEWS
VOL. XXIV (NUMBER 124) — FOURTH EDITION
CAPITAL BANK FAILS
Notice of Its Suspension Posted On Its Doors.
Direct Cause Due to the Failure of the Chemical National Bank of Chicago.
Directors of the Capital at a Meeting Decided Upon the Course — The Statement Made of the Affairs of the Concern — Details.
The Capital National Bank closed its doors this morning. A note was posted on a front window of the bank in the Commercial Club Building, South Meridian street, announcing:
CAPITAL NATIONAL BANK SUSPENDED.
This was posted a few minutes after 9 o'clock. Coming without warning to the public, the announcement was hardly credible, but it was of course official and fell with sickening effect upon the community.
The direct cause of the suspension was the failure of the Chemical National Bank of Chicago. The Capital of Indianapolis had about $80,000 there, and made some of its clearings through that institution. Country banks learning of that, immediately began to draw out their balances from the Capital, and a heavy drain started which could not be stemmed.
THE BANK'S LAST STATEMENT.
The bank's condition was supposed to be good. The official statement, published yesterday, indicated this. It was as follows:
REPORT OF THE CONDITION of the Capital National Bank, at Indianapolis, in the State of Indiana, at the close of business, May 4, 1893:
RESOURCES.
Loans and discounts: $1,007,916 85
Overdrafts, secured and unsecured: 334 12
U. S. bonds, to secure circulation: 50,000 00
Stocks, securities, etc.: 39,114 90
Due from approved reserve agents: $106,037 15
Due from other national b'ks: 54,658 54
Due from State banks and bankers: 39,754 61 — 200,450 30
Banking house, furniture and fixtures: 8,774 52
Current expenses and taxes paid: 16,079 59
Premiums on U. S. bonds: 6,000 00
Checks and other cash items: 6,180 82
Exchanges for clearing-house: 17,783 78
Bills of other banks: 72,030 00
Fractional paper currency, nickels and cents: 1,502 41
Specie: 8,040 00
Legal-tender notes: 45,000 00 — 150,517 01
Redemption fund with U. S. Treasurer (5 per cent. of circulation): 2,250 00
Total: $1,541,537 29
LIABILITIES.
Capital stock paid in: $300,000 00
Surplus fund: 30,000 00
Undivided profits: 36,865 49
National bank notes outstanding: 45,000 00
Individual deposits subject to check: $407,324 10
Demand certificates of deposit: 139,181 06
Certified checks: 35 00
Due to other national b'ks: 305,734 72
Due to State banks and bankers: 223,406 43 — 1,075,681 31
Notes and bills re-discounted: 53,990 49
Total: $1,541,537 29
State of Indiana, Marion county, ss:
I, CHAS. J. DOHERTY, cashier of the above-named bank, do solemnly swear that the above statement is true to the best of my knowledge and belief.
CHAS. J. DOHERTY, Cashier.
Subscribed and sworn to before me this 10th day of May, 1893. CHARLES MOORES.
Correct — Attest:
M. B. WILSON, N. S. BYRAM, N. F. DALTON, Directors.
NEWS OF THE SUSPENSION.
News of the suspension spread rapidly on the street, and at 10 o'clock there was a small group of people in front of the bank. Before the suspension was officially announced, many depositors had gone into the bank and presented checks for payment. These were taken one by one to the officers in the meeting with the query, "Shall we pay it?" Waiting for an answer, customers accumulated, and the crisis was at hand. The bank either had to pay or suspend. It had in its vaults something over $75,000 in cash, and could have paid all those who were in waiting. Among these was a foreign banker with a claim for $15,000, and another man with $9,000. President Wilson had just come back from Chicago, where he had been inquiring into the future of the suspended Chemical Bank. A report had reached the bank that the Chemical would resume business to-day. If that should prove to be true, the Capital would have the $80,000 tied up in the Chemical, and might be able to continue business. A hurried telegram was sent off to the Chemical, but no answer came. The depositors pressed for an answer. The directors, in consultation with the representatives of other banks in the city, were forced to the conclusion that something had to be done at once, and the only thing that could be done was to suspend. This was the unanimous opinion of all those in authority, and of their advisers, and the bulletin was placed upon the window. The depositors filed out, the curtains were pulled and the doors were closed and locked.
As the news spread the throng about the bank increased. No one was able to see into the interior, except by climbing up on something and looking over the curtains. Within were seen the directors conferring over the books. At noon the News extra told of the failure and knowledge of the suspension became universal down town. One of the first things of which ample assurance was given was that no other bank here was in the least affected.
THE BANK'S CONDITION.
The condition of the bank has not materially changed (relatively) since the statement quoted above, of May 4. The totals are alleged to be about as follows:
Individual and other deposits: $450,000
Bills receivable and bonds (about): 1,000,000
Total assets: $1,300,000
Of these assets $80,000 is in the Chemical National, reducing the net total and assets to $1,180,000. It is believed that the Chemical will nearly pay out, and it is claimed that nearly all the Capital's paper is "gilt-edged." Of course the shrinkage, if any, will come under the item bills receivable and bonds, but the officers say they are pretty sure of the approval of the discount committee — N. S. Byram and N. F. Dalton, conservative men.
BANK OFFICERS' STATEMENT.
Directors' Meeting and the Official Announcement Agreed To.
The directors of the bank met this morning. After deciding to suspend the Controller of the Currency was notified by wire and the following statement was dictated for publication:
BANK OFFICERS' STATEMENT.
"The Capital National Bank was organized in December, 1889, with a paid-up capital stock of $300,000. It has done a profitable business from the beginning until now, and up to Tuesday morning, when the news of the failure of the Chemical National Bank, of Chicago, was received, there was nothing in the conditions of the business of the bank to cause any concern or apprehension for the future. The Capital National Bank, like other banks throughout the country, has pursued a conservative course, endeavoring to keep its discounts within prudent limits, and as the statement on the 4th of May by the controller of the currency shows, we had the reserve on hands that the banks of this city have prudently kept. The condition of the bank is good at this time. We had on deposit with the Chemical National Bank of Chicago, at the time of its failure, $80,000. It was known by the banks throughout the country, as recently ascertained, that the Chemical National Bank was our correspondent, and as the fact of its failure became known and created apprehension and caused heavy drafts to be made upon us. The balances were running against us so large that we felt that it would be impossible without material aid to stem this current any great length of time. There was no place where we could go at this time to secure the amount of assistance which the board of directors felt would be necessary to tide us over. It was, therefore, thought best to suspend before the payment of all the cash we had on hand. In other words to suspend before we were compelled to suspend. The bank has available assets at this time of over $200,000 not including the deposit with the Chemical National Bank. If that were at the disposal of the bank there would be no necessity for the step that has been taken. The loans and discounts of the bank have been conservatively made, and it is believed by the officers of the bank that they are of excellent quality. The assets and liabilities of the bank at the close of yesterday's business were $1,465,162.78. We believe the business is in such shape as to be readily settled up without injury to any of the business interests of the city of Indianapolis. There are enough available funds on hand to pay almost 25 per cent. of all sums to the depositors of the bank, and the paper is of such character as to be readily and easily realized upon, so that there need not be much delay in depositors getting their money."
The controller of the currency was immediately notified of the suspension of the bank and requested to advise the officers as to the course to pursue in all current matters connected with the bank. The bills received for collection will be presented as in the usual course of events, and funds arising from such payments will be held intact for the use of those on whose account they were kept.
THE STOCKHOLDERS.
Names of Persons Owning Stock And Amount of Their Holdings.
Following is a list of the stockholders of the bank, together with the amount of their holdings, as given in the sworn statement on file in the recorder's office:
Mrs. Angie Ames, Cleveland, O., fifteen shares.
Mrs. Clara Ames, Cleveland, O., five shares.
John S. Atkins, Carlisle, Ind., ten shares.
Mrs. M. L. Barnhart, Litchfield, Ill., five shares.
J. L. Bayard, Vincennes, Ind., thirty-seven shares.
P. H. Blue, Sullivan, 205 shares.
John A. Butler, Indianapolis, ten shares.
N. S. Byram, Indianapolis, fifty shares.
B. Brockenbrough, Lafayette, Ind., thirty shares.
W. S. Brinton, Tuscola, Ill., twenty shares.
A. Burdsall, Indianapolis, ten shares.
Wesley Burford, Indianapolis, twenty shares.
S. N. Chambers, Indianapolis, thirty-eight shares.
E. F. Dalton, Indianapolis, ten shares.
J. J. Daniels, Rockville, twenty shares.
W. N. Dawes, Vincennes, ten shares.
J. W. Dittemore, Indianapolis, ten shares.
W. L. Dix, Sullivan, Ind., fifty shares.
Chas. J. Doherty, Indianapolis, 100 shares.
W. B. Dunlap, Mattoon, Ill., twenty shares.
Mrs. Anna Evans, Detroit, Mich., one hundred shares.
J. M. Fowler, Lafayette, Ind., twenty shares.
Bert L. Feibleman, Indianapolis, two shares.
F. S. Albreath, Seymour, Ind., ten shares.
John Gaugar, Lafayette, Ind., fifty shares.
E. C. Gregory, New Albany, Ind., one hundred shares.
W. F. Herron, Crawfordsville, Ind., fifty shares.
J. R. Hinkle, Sullivan, Ind., fifty shares.
E. S. Hutchinson, Richmond, Ind., ten shares.
John J. Harrington, Richmond, Ind., ten shares.
John C. Ingram, Indianapolis, Ind., twenty shares.
R. B. Jessup, Vincennes, Ind., fifty shares.
Mrs. Nellie B. Kensell, Mansfield, Mass., five shares.
Mrs. Sophronia Kensell, Waterville, Mass., five shares.
Frank Kern, Mattoon, Ill., ten shares.
J. A. Lemcke, Evansville, Ind., fifty shares.
Abraham Levering, Lafayette, Ind., twenty-five shares.
W. J. Lewis, Evansville, Ind., seventy-five shares.
I. P. Leyden, New Albany, Ind., fifty shares.
H. J. Milligan, Indianapolis, ten shares.
James Moorman, Farmland, Ind., fifty shares.
Thos. B. Milliken, New Castle, Ind., five shares.
W. C. Niblack, Chicago, Ill., twenty shares.
Mrs. M. E. Norton, Toledo, O., fifteen shares.
S. E. Pickens, Indianapolis, ten shares.
F. L. Powell, Madison, Ind., twenty-five shares.
W. H. Powell, Madison, Ind., twenty-five shares.
A. J. Pellera, Seymour, Ind., ten shares.
J. H. Reed, Vincennes, Ind., forty shares.
J. H. Rice, Indianapolis, eighty shares.
Mrs. Anna A. Roseman, Evansville, Ind., seven shares.
Miss L. Roseman, Evansville, Ind., five shares.
Emma W. Ryder, Vincennes, Ind., ten shares.
L. F. Sheerin, Logansport, Ind., fifty shares.
Allen Tindolph, Vincennes, Ind., seventy shares.
Mrs. Sarah M. Tindolph, Vincennes, Ind., thirty shares.
E. F. Whallen, Cincinnati, O., fifteen shares.
E. S. Wilson, Olney, Ill., 230 shares.
Luke F. Wilson, Kansas City, Mo., 100 shares.
M. B. Wilson, Indianapolis, 420 shares.
Mrs. M. B. Wilson, Indianapolis, fifty-four shares.
June Wilson, Olney, Ill., twenty shares.
Glen Wilson, Indianapolis, twenty shares.
Lee Wilson, Olney, Ill., twenty shares.
H. A. Wymond, Indianapolis, fifty shares.
Total value taxable, as entered at the auditor's office, is $219,182.
MAKING COLLECTIONS.
Cashier Doherty Says Such Were the Orders of the Bank Examiner.
It was reported by Meridian-street business men this morning that collectors for the Capital bank were trying to make collections after the bank had posted its notice of suspension. Cashier Doherty said that it was true that the messengers of the bank were out trying to collect on bank papers and that it was being done by order of the controller of the currency. "We have received from Controller Eckels a telegram stating that Bank Examiner Young, of Pittsburg, had been directed to come here and take charge of affairs. He will arrive here to-night. The controller also instructed the officers of the bank to take care of all bills for collection, as in the usual course of business. That is why our collectors were out this morning, and it is why they are out now. This money is not being collected for us, but will be turned over to the examiner when he arrives."
"How much of the paper of the Premier company does the bank hold?"
"We will not make public anything of that character until after the examiner is in charge."
"Will the failure of the Capital affect the solvency of the banks at Vincennes, Sullivan and Gas City, in which the principal stockholders of the Capital are interested?"
"By no means. The interests of any of the Capital Bank stockholders would not work that way, and the credit interests of these outside banks in the Capital are not large enough to affect them."
AT THE OTHER BANKS.
None of the Officials Feels Any Alarm About the Situation.
At the Bank of Commerce the door was standing wide open, and everything was as quiet as a Sunday. There was not the sign of a run.
"We shall have money enough to pay all that will be demanded of us. There has not been more than the ordinary demand for money. We have paid a few checks, but no large ones. The largest was $5,100 for the Indiana Steel Company, in the regular course of business," said William Mansur, the cashier.
"How much stock of the Premier Steelworks have you?"
"We have not much; and that is indorsed by C. W. DePauw. We have every desire to permit anyone, who so wishes, to come here and examine our condition. No one offers this morning of help, if we wanted it. We do not need help and have declined it. We shall pay all that will be demanded of us. We have no doubt here about our bank. Our balance in outside banks is about $5,200, and we have balances at some of the banks."
"Who owns the stock in this bank?"
"It is all owned by the W. C. DePauw estate, except $10,000. The estate is worth $3,000,000 and is not held liable for the business ventures in which the DePauw's are interested. We have about $100,000 in cash in the bank and less than $200,000 in cash deposits. Our entire capital is intact and we could pay without a cent of incumbrance on it. We have, besides, real estate on Alabama street worth $100,000. The DePauw estate alone have $400,000 bills receivable and it is all in the bank. We are not at all alarmed."
THE INDIANAPOLIS NATIONAL BANK.
Said President Haughey: "Everything is quiet around here. I can see no change, and there is, in my opinion, no occasion for any alarm. I am not at all nervous over the situation. We have drawn no money from the city or from the Capital National. We have been in business for twenty-eight years and have gone through many panics. I believe every bank in this city is in good condition. Our clearing-house is very strong and united, especially at this time."
INDIANA NATIONAL BANK.
William Otto, the cashier, said: "I have no doubt but every dollar will be paid. I think all the banks are safe and sound. Nothing unusual has occurred here, and there is, in my opinion, nothing for the people to be alarmed about."
MERIDIAN NATIONAL BANK.
W. P. Gallup, President — There is no occasion for great alarm over this affair, and I do not believe the failure will create much excitement. The banks of the city, I believe, are all strong, and the Meridian National will pay any check presented.
FLETCHER'S BANK.
A. M. Fletcher — The failure of the Capital National Bank is attributed to methods that do not conduce to safe and sure banking. Difficulties were anticipated when we saw the Capital leaving the clearing-house. This, I assume, the public is thoroughly advised of. The other banks are sound and judge of the present situation in its true light and upon its merits.
THE NEW STATE BANK.
Sterling R. Holt, president of the New State Bank, said this morning that the failure of the Capital was not a surprise to him. He said that the managers had made it a rule to be conservative and had money on hand to meet any demands that might come.
INDIANA TRUST COMPANY.
John P. Frenzel, President — The banks of Indianapolis are unusually strong, none of them having departed from the former rule of Indianapolis banks to keep a large cash reserve. This rule called for 33 per cent., being 8 per cent. more than required in New York city, and yet most of the banks have been running on 40 and 50 per cent. reserves. Beyond a few days' excitement among the timid, there will be no further trouble in my opinion.
WHAT THE DIRECTORS SAY.
Future and Even-Handed Justice — Believe All Will Be Paid.
President Wilson was asked if he could give any assurances additional to those in the official written statement, that the bank would pay out. He said:
"My belief is, that every dollar of deposits will be paid. We could have paid to-day a dividend of 25 per cent. on all claims. We did not wait until all the money had been drawn out before suspending. We wanted to do even justice to all. The stockholders will never be called on because the bank funds are ample without recourse to them."
Director N. S. Byram was at the bank early in the forenoon. He said that the first notice of the present condition of the bank came to him only yesterday. He was confident that no large firms would be seriously damaged by the failure, and he felt that the inconvenience would be only temporary. The local banks that would happen. He believed that the bank would pay out within a comparatively short time.
Smiley N. Chambers, one of the directors of the bank, said:
"We would have to-day $330,000 in available assets if the Chemical National Bank had not failed. But knowledge of the fact that we had $80,000 tied up in that bank spread among our customers; and they began to draw out their money. By to-day we would have had $62,000 of remittances to make, and Cashier Dougherty says that the daily output to-day would have been swelled by current demands to about $100,000. Other large amounts would have been due in a day or two. It was the future, and the desire to do justice to all, that caused us to take this step."
ASSOCIATED BANKS' STATEMENT.
Called in This Morning, They Agree That Suspension was Inevitable.
The associated banks of the city this forenoon, at the call of President Haughey, of the Indianapolis National Bank, and Vice-Presidents, and President John P. Frenzel, of the Merchants' National, was selected to make a statement to the public. He said:
"Representatives from the clearing-house banks and the other banks were called to the office of the Capital National Bank this morning. All the banks of the city but one were represented. A statement was there made by the officers and directors of the bank as to its condition and the cause of its suspension. The conference was necessarily a very hurried one, the time for the opening of the bank being close at hand. Indeed, before much had been said 9 o'clock arrived, and a large number of people had flocked into the bank to draw their deposits. After a careful canvass of the situation it was unanimously resolved that in the interests of all of the creditors and as a matter of justice to all, the bank should suspend. There was no time to examine the assets of the bank with a view of determining if moneyed assistance should be given.
"It was the opinion of the bankers and the conviction of the directors of the suspended bank that all of the depositors would be paid in full in course of time."
The Clearing-House Banks.
Subsequent to the early meeting of the bank presidents at the Capital office, the banks of the clearing-house met in the city to canvass the situation. The Capital National Bank is not a member of the clearing-house, having left the same soon after joining, several years ago, because the other banks insisted that a more liberal policy should be pursued. It was not thought that the clearing-house bank policy is responsible for the suspension. The banks resolved to stand by each other and to do everything possible to maintain the immunity of the city for accommodations in the shape of loans.
ANOTHER FAILURE AT CHICAGO.
The Columbia National Bank Suspends — Liabilities $1,500,000.
CHICAGO, Ill., May 11. — The Columbia National Bank, of this city, suspended to-day. It has its principal offices in the Insurance Exchange. Its deposits were $1,400,000 and the capital $1,000,000. Rumors that the institution was in trouble have been current for nearly a week. It was not a member of the clearing-house banks and was not in esteem with the other banking concerns of the city. Those who are familiar with its business, should know, say that collections on loans have been poor.
Notices announcing the suspension of the Columbia National Bank were posted on the doors, and a few moments later Bank Examiner J. D. Cook arrived and assumed control in the interests of depositors, and under authority of the controller of the currency. The Columbia National was reorganized two years ago out of the old United States National Bank. Those who are familiar with banking affairs make this showing: Assets — Deposits, $1,400,000; capital stock, $1,000,000. Total, $2,400,000. Liabilities, $1,500,000.
A constant run on the bank since the announcement of the Chemical suspension caused the directors to close the doors. A call for help was made, but as the bankers were not notified until this morning, no sufficient time was allowed for an investigation, and the request was refused.
The Columbia was not a member of the clearing-house. The statement is made by the clearing-house that, to the best of his belief, admission to the association was asked about
