This blog reports events and interesting tidbits from Rensselaer, Indiana and the surrounding area.

Monday, March 26, 2018

Infamous


Charles Halleck is clearly the most famous person to have called Rensselaer home—I can think of no one else even close. There is, however, competition for the most infamous or notorious Rensselaerian. In his day Thomas McCoy, the first mayor of Rensselaer, was so intensely hated after he embezzled funds from the McCoy Bank that someone dynamited his house on Milroy Avenue. A previous post reviewed the life of Elmer Dwiggins who defrauded investors of war bonds and served time in a federal prison. He should rate higher than McCoy because his actions received national publicity. However, my candidate for Rensselaer's most infamous citizen is a different Dwiggins, Elmer's uncle Zimri.

The name Zimri Dwiggins appeared in newspapers throughout the United States in May, 1893 when the bank he headed, the Columbia National Bank of Chicago, failed. Dwiggins had emerged from obscurity in the 1890s to build a large financial system. He somehow gained control of a small bank in Chicago, renamed it, and expanded it. Below is an ad that appeared in an Indianapolis paper in 1887.
In the process of expanding the bank, he organized many small banks in Indiana and the surrounding states. He would get prominent locals to put up capital to establish the bank and then, if I understand correctly what he was doing, would gain partial ownership by giving the new bank deposits at the Columbia Bank. The Columbia National acted as the correspondent bank for the small allied banks, making financial transactions for the smaller banks that they could not do for themselves. 

Unfortunately the large financial structure that Dwiggins erected had a very small foundation. Too much of it was built on debt so the storms of the Panic of 1893 quickly toppled it. Some accounts say that many of the assets of the Columbia Bank were assets that declined in value as a result of the Panic, so its problem was not illiquidity but insolvency. The Columbia Bank, however, was not the first Chicago Bank to fail in the Panic. That dishonor went to the Chemical National Bank. After it failed on May 9, people lined up to withdraw deposits from other banks, especially the Columbia Bank, which was new and had no track record. The final straw was a request from Sioux City Loan and Trust company of Iowa for its $35,000 of reserve funds so it could meet the demands of its depositors. Columbia refused, probably because it did not have the cash to comply, but giving as an excuse that the Sioux City Loan and Trust owed them an equivalent amount. The Comptroller of the Currency stepped in on May 11 and seized control of Columbia National Bank, shutting it.

Many of the small banks that had reserve funds deposited at Columbia National Bank closed because they could not access these funds. Some of these banks eventually reopened but others did not, and the people in the communities they served lost money. 

Zimri because infamous almost overnight as newspapers throughout the country reported the quick collapse of the his financial empire. A place on the Internet where one can find samples of those newspaper reports is the Library of Congress site, Chronicling America(An even richer source of newspaper articles on the Dwiggins is the Hoosier State Chronicles, but it is limited to Indiana newspapers.) Many items note his unusual name. A humorous example is this from the Mexico (Missouri) Weekly Ledger of 5/25/1893: " 'Everything happens for the best.' Had the financial dreams of Zimri Dwiggins materialized thousands of boys might have been compelled to stagger through life with that name around their neck."

Dwiggins' penchant for establishing undercapitalized banks led the Washington Post (reported the Indianapolis Journal, 5/23/1893) to quip, "The Zimri Dwiggins brand of nerve would incorporate a fog bank." The Indiana State Sentinel (5/24/1893) reported (and I suspect this was meant to be humor), "The papers generally credit President Zimri Dwiggins of the Columbia bank of Chicago to Attica, but that is a mistake. He was reared on a farm in Jasper county, Indiana, and studied law with his brother, the Hon. R. S. Dwiggins, and formed a law firm known as R.S. & Z. Dwiggins. He married one of the Rensselaer's most beautiful girls, and many of his and his wife's people live here. They are all excellent people. After practicing law here a few years he and his brother engaged in the bank business here, but afterward both went to Chicago. Zimri Dwiggins belongs to Rensselaer, not Attica."

After the failures, there were lawsuits. Zimri was indicted, but I found no mention of a conviction. A note in February 1894 says that a court ordered him to pay depositors $120,000, a sum he certainly could not obtain. It seems the failures were not due to fraud but rather to the poor judgement of taking on too much risk.  Also caught up in the aftermath of the failures were two associates, John Paris and Ira Joy Chase. Paris was also a native of Rensseler, the son of Berry and Sarah Jane Paris. His mother's maiden was Dwiggins and, yes, she was the sister of Zimri. Paris organized four banks in Indiana using the methods of his uncle and at least one failed, leaving depositors with losses. Ira Chase was the governor of Indiana from November 23, 1891 to January 9, 1893. He lost the bid for election and joined Paris and maybe Dwiggins in organizing banks. Both Paris and Chase were indicted in 1894 but I do not know if convictions resulted. The short bios of Chase that I have found on the Internet make no mention of his bank-organizing activities. 

After 1894 Zimri's name fades away in newspapers but had revivals in 1897 when the brokerage firm of his nephews failed, in 1907 when he died in Lincoln Nebraska, and a final revival in 1917 when nephew Elmer was sent to jail.  The 1897 article notes he was living in Storm Lake, Iowa. In the 1900 Census he was in Lincoln, Nebraska selling insurance. He did not give his name as Zimri but rather as Louis. It appears that seven years after his fall there were still many people who had bad associations with the name Zimri.
Zimri (1848-1907) is buried in Weston Cemetery with his wife Estella (1855-1938) (who remarried after his death), three children: Ona (1881-1886), Elma (1885-1885), and Linda Dwiggins Thompson (1885-1961), and a granddaughter, May Thompson Trammel (1917-1976). His son Frank became a medical doctor and is buried in Texas.

1 comment:

Grey Friar said...

A person on the 'famous' rather than 'infamous' list is Rensselaer born author Edson Marshall. He was born in Rensselaer on August 28, 1894, but grew up in Medford, Oregon. I remember reading his last novel "The Viking" when it was brand new during my senior year at RHCS in 1965. A couple of his novels were made into movies. Here is his Wikipedia biography:

https://en.wikipedia.org/wiki/Edison_Marshall