The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-03-09

D~AhA AS1PVHSs ehss ASauA AcSfsiotiOh IN SsAe
States.
The report of the Commissioners to investi-
gate the condition of the Bank of Pennsylvania
is probably the last of the scandalous exposures
to which the failure of that institution has given
rise. This report, which appears to be charac-
terized by great fairness and candor, shows that
the failure of the bank was caused, in the Ian
guage of the Commissioners, by dividends
declared, not earned, and taxes on these divi-
dends, amounting together to more than half of
the capital of the bank back standing taxes
due the commonwealth, and attorneys fees in
litigation of the same, over 100000; lavish
prodigslity in the ordinary and extraordinary
expenses of the bank; usurious interest paid on
deposits; enormous losses paid on the sale Of
the bills discounted of the bank loss on cou-
pom bonds of the State of Pennsylvania and city
loans overdraws on the individual ledger dis
counts paid on uncurrent MONEY; loss on
foreign bills of exchange, stock OF the bank,
and bad debts and loans now in possession of
the bank" A pretty fair catalogue Of errors,
to be sure; and quite enough to account for the
failure of any bank. Some other little traits
are needed to finish the tableau None of the
directors or officers Of the bank, except Mr..
Allibone, the President, had the least know
ledge of the affairs of the institution, or any
suspicion that it was not earning the dividends
1t paid and on the verge of insolvency. The
directors, indeed, paid 30 little attention to
their duties that seven of them, on the LIST of
January, 1857, certified that the bank had
"$3, $50 1854 bills discounted, bills Of exchange
and loans on hand, when, in point of fact, the
amount was but s2,697, 2O5. They took the
Presidents word for the figures, they say.
These same directors testify under oath that
they know nothing about the accounts ofthe bank.
Nobody, indeed, appears to understand them.
Several of them, including George Peabody's,
are Gin such utter confusion that it seems i'm
possible to unravel them" 1t is impossible to
resist the impression that they were not intend.
ed to be understood. Mr.. Allibone's manage
ment of the bank business will justify the be-
lief. His private account and his account as
President were so iumbled together that they
can hardly be disentangled; charges against the
individual and charges against the bank seem
to have been Unfortunately made to either.
His efforts to extricate the bank from trouble
were of similar character He paid usurious
interest on deposits discounted bills at the le-
gal rate and sold them at from 81 to q per cent
discount, bought coupons bonds at rs and sold
them at 81, and so on. He "put himself in the
hands of large depositors and money dealers
who used their power without mercy"
After this it may be hoped that we shall hear
nc more highfown defences of the late
President and Directors of the Pennsylva-
MIA Bank. The report exculpates the former
from the charge of absolutely robbing the bank
but such gross Encouragement, recklessness
and fatal fnanciering are, to all practical in
tents and purposes but little better.
A curious passage in the report is one which
alludes to charge against the bank of SIS, 900,
"given as compensation to an individual for SER
vices rendered in effecting the sale of the bank
ing house to the government for
post Office" We believe that the sale
of the building in question was in fact
made for sum over fifty thousand dollars more
than any one else would have given for it and
that the person who received the $4,000 from
| the bank was Mr.. Miller, the Postmaster Of Phi
ladelphia under Judge Campbell, and great
favorite of that member of Mr.. Pierce's Cabinet
Another passage brings the same party into
view again. One Of the bookkeepers, in 1858,
we are told "was in collision with Mr.. Fey,
and allowed him to overdraw his account some
s7O,OOo"-which still remains on the books a
loss to the bank. This Mr.. Fey is the brother
in-law Of the same ex-Postmaster General
Campbell. We notice that Mr. Florence, mem
Der of Congress from Pennsylvania has moved
for Congressional committee Of inquiry into
the alleged circumstances Of the purchase Of
the Pennsylvania Bank building for a Post
Office, which makes about the seventh commit
tee of inquiry into charges Of corruption now
before the present Congress.
On the whole the revelations which have fol-
lowed the failure of the Bank of Pennsyl-
vania-of which this report is probably the
last-will remind one very forcibly of the
old United States Bank. Neither the inan-
cial morals nor the financial ability OF our
brethren in Philadelphia seem to have
improved much since that institution broke
down under the weight of corruption and mis-.
management. And with the recollection Of its
history just refreshed in our memories by the
equally scandalous exposures brought cot by
the downfall Of the Bank Of Pennsylvania, one
cannot help inquiring whether they have in
Pennsylvania any more banks of the some sort
left.
The State Commissioners report sententiously
that their labors have satisfied them that bank
reports made under oath are not always relia-
ble The idea has occurred to one or two other
persons also. Transferring our view from
Pennsylvania to this State, we may go further
than the Pennsylvania Commissioners and say
positively that not only do our hank state
ments fail TO command the Implicit reliance
which they ought, but the events Of the past fall