Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1884-06-04
The Penn Bank.

The Penn Bank of Pittsburgh has
definitely failed for large amount,
supposed to be at least two millions.
The assignee, Mr. Warner, who took
possession. last Thursday, found but
fifteen thousand dollars in the vaults,
and saws it will take him month 10
complete his examination Of the books.
1t looks as though the fifteen hundred
depositoTs would lose everything as a
clause in the charter of the Bank pro-
vides that no stockkolder or officer shall
be assessed, or liable for any purpose
whatever, for any greater sum than the
face of the stock held by such stock
holder or officer.
The bank was ruined by its officers
speculating in oil. A gentleman who
has played at speculating in oil, and
who watched the Penn bank syndicate
closely, gives the following history OF
its transactions:
When the market struck the ffties
they bought oil heavily, and it was
Reiber's boast that he made big money,
and the whole crowd were ahead ofthe
deal. Along in the spring of 1888 Mr..
Riddle conceived the brilliant idea of
working the market on bigger deal
than had eyer before been attempted.
He got his friends together and laid
his plans before them, and they were
fully approved. He went to New York
and negotiated loan OF $4,000, 600.
They took certain brokers into their con-
fidence, and among them were Thomas
J. Watson, S. B. Thompson, John 2.
Beal, and perhaps others They began
buying oil in the nineties, and ran the
price up rapidly, until it got to sl.10.
After it passed the dollar line the up
ward course was hard to keep up, and
they had to take On heap Of oil to
move it single cent 1t was part
Of the agreement that no member of
the pool should sell his oil without the
knowledge and consent Of his compan-
ions. They finally forced the price up
to S1.244, having bought all the way
up in order to bring it about. At this
iuncture some of the pool thought the
oil ought to be sold, but were oVerTul-
ed, and in one case, where the owner
had borrowed money upon which to
carry it, Mr.. Riddle gave his check for
the amount rather than let the oil be
sold. Just when the top was reached,
the Standard Oil Company, which had
not before interfered, stepped in and
broke the market to about $l.04, the
syndicate people resisting desperately
but Intellectually. At this point the
S2,000,000 loan upon which the syndi-
Gates operations were based was call
ed, and to their disgust they discover
ed that the lender was the Standard
Oil Company. They had been
badly hit by the decline, the cost OF
their oil averaging far above the price
then ruling, but the Standard people
were inexorabe in demanding q settle
ment. They finally agreed to take
the syndicate's oil at 90 cents or below
it, in order to freeze the pool out. A
settlement was made on this basis, and
the syndicate lost barrel of money on
the deal. They didn't all loose, howev
ever. One Of them, who had plenty Of
money of his own, was among those
who wanted 10 sell when the market
passed 81 20, but was refused permis-
sion to do 80. Through friend on
the floor he quietly sold shorts against
bis oil in the pool, and then went to
New York and repeated the operation
there, so that he came out Of the deal
with profit, and was one of the very
few who did so. When he returned to
Pittsburgh the market was down to
about s. o. or 81 06, and the managers
allowed him to take his oil and fill his
short contracts with it. From that
time to this the Penn Bank crowd have
been taking desperate chances in the
oil market to win back sufficient money
to plug up the hole they had made In
the Banks funds, and getting in deeper
and deeper every time. DO know who
composed the syndicate? Yes, w. n.
Riddle, Cashier Reiber, john =. Beal,
Robert NJ Kennedy, NJ. X. McMul-
len, Jacob r. Walter, Joseph o.
Brown, Thos. J. Watson, few people
in the oil regions, some in New York
and some in Chicago"