The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-02-03
The Failure OF the Bank OF PennsylvsnSs-
Bank Management.

0onk QAoua8euAonVs
We publish elsewhere report of meeting Of
the stockholders OF the Bank of Pennsylvania
which took place ut Philadelphia on the lsi Of
February. The report OF the directors wse
presented it presents pretty full view of the
history and condition of the bank, and winds up
with the recommendation that its property
should be assigned for the benefit of its stock
holders A stakeholder naturally expressed
wish that 'the destroyers of an old institution
like the Bank of Pennsylvania should not go
nameless and unscathed''; and accordingly the
meeting was adjourned to meet again on Wednes-
day, on which occasion some thorough exposure
of the frauds which have ruined the bank will
probably be canvassed.
In reality, no exposure could he more crush
ing than the statements made in the reports of
the directors. In counting up their assets, they
find $ll9,266 In checks and notes OF an insol-
vent house, (which Mr.. Allbone's brother was
O member "of this gum only $l2, $50 was dis
counted by the Board" Another asset was the
paper of an ex-lirectOr of the bank for $l46-
SlS:. and the directors shave no knowledge
how this paper came into the possession of the
bank" Another asset was the notes Of railway
company for S2s9, 900, discounted without the
knowledge Of the Board" In fact this Board
Of Directors might just as we'll have been in
Kamschatka OF Timbuctoo for any good they
did to the bank or anything they seem to have
known about the business they were elected to
superintend They seem to have been just as
well posted in regard to the liabilities of the
bank as to its assets The bank sold bills re-
ceivable to an amount of Sl7S,l2S: and the di-
rectors cannot tell whether this trifing little
sum was ever accounted for. They were in fact,
such thorough know nOthings in reference to the
transactions of the bank that according to their
own confession their President could borrow a
hundred thousand dollars on the credit of the
bank, and use the money himself without awak-
ening suspicion in any ones mind.
OF course we must not be understood as en-
dorsing the directors charges against the late
President, Mr.. Allibone When that gentleman
has made his defence we shall be better able to
see what basis there exists for the wholesale
accusations of fraud and dishonesty which these
directors bring against their late colleague and
chief But whether these accusations are true
OF whether they are false, the fact none the less
remains that these directors Of the Bank of Penn
sylvania most Of them, it seems, men Of charac-
ter and standing, paid 30 little attention to, and
knew so little about the business of the bank,
that the stockholders could be robbed or every
side and finally ruined without their entertain
ing the least suspicion Of what was going on.
II this is what they were chosen for, then the
popular notion of bank government is very far
from the truth.
For our part we regret to think that the
Bank of Pennsylvania is not the only financial
institution in the country which is managed so
loosely that its success would be prodigy, and
its ruin natural event. Banks could he
named much nearer home whose directors know
no more about the concerns of the institution
over which they are set than these Philadelphia
gentlemen. Nor would the parallel stop here.
If the statements embodied in the Bank of
Pennsylvania report are correct, that institu-
ton seems to have chiefly existed for the benefit
of small clique of fortunate individuals who
were either in the direction themselves or had
friend in It.; the vulgar herd of stockholders
and dealers were not expected 10 need the as
sstance or to claim the favors &C the bank
This, also, is feature which may be recognized
in some banks not located in Philadelphia.
There are institutions IN this city which have
been started by enterprising men simply in
order to get DISCOUNTS that Il to say, indi-
viduals who have not enough money for their own
business and cannot borrow what they want, have
undertaken to supply their necessities by enter
ing into the business Of lending 10 others: an
operation which may be considered one of the
particularly bright maneuvres of finance
homeopathic dodge in banking.
II is perhaps rather 60 I've regretted that our
banks should have gone through the crisis 80
handsomely and so boastingy, in defiance Of
slaw, az they did. IL would have done come of
them good to be hauled over the Goals II
would have been instructive TO see what pro-
portion Of the total discounts of any bank was
given to the directors and their relatives, and
what average balance they kept. Whether IL be
true that the great commercial banks will give a
man 100000 discounts on an average cash bal
ance of $40, 900, so that in fact person with
ten thousand dollars in cash and good deal of
brass may do q business of c million o. two in
the course Of year, il may be worth while at
some future time to inquire: meanwhile. for the
present the banks are masters Of the situation
and can defy criticism.
Hos. MAssA GREELEY's CARD.-The Hon.
(. sIot..