A Bank Failed With $25,975 of City Money Inside. Who Pays?
When the North End Bank closed its doors in September, the city's deposits closed with it. Ex-Treasurer Adolph Krug's guarantors made Seattle whole — and now they want the bank's assets and the city's claim to go with it.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The sureties on ex-City Treasurer Adolph Krug's bond, through C. G. Perkins, their trustee, began suit yesterday in the superior court against the North End Bank and the city of Seattle, to recover judgment against the former for $25,975.68, that being the amount of city funds on deposit in the bank on September 14, when the bank closed.
In his petition the plaintiff alleges that Krug's bondsmen, by reason of the bank's failure to pay over said sum to the city, were compelled to and did pay to the city the amount of the city's deposit in the bank, and that thereby they became subrogated to the rights of Krug and the city against the bank. Krug assigned his claim to the bondsmen's trustee, but the city has refused to do so, and therefore it is made a party defendant and the court requested to declare that the trustee be subrogated to the rights of the city against the bank.
“That being the amount of city funds on deposit in the bank on September 14, when the bank closed.”
The Panic of 1893 knocked over banks across the country, and Seattle's North End Bank took nearly $26,000 of public money down with it — something like a million dollars today. The question of who eats the loss when a bank holding public deposits fails, the bankers, the treasurer who chose it, or the sureties who signed his bond, is exactly the argument that follows every modern bank collapse.
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