The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-06-03
THE PENN BANK WRECK.
A Statement from President Riddle
duplicating the Directors.
Transactions in Oil for the Benefit of the
Bank Said to Have Been Taken Adj
vantage 0f-the Charges Denied.


Penn Bank and the causes which led to the col
lapse. In il he charges the bank directors with
being concerned in the oil pool which wrecked
the bank, and tells how the failure was brought
about. He recites how the position of the pres
idency was forced on him, and how he soon dis
covered that the loans on oil collateral exceeded
the collateral at the low prices then ruling. He
complained to Cashier Reiber and the
vice president whom he had told to
have these accounts made up, and
told them he did not see what they could do,
less, by personal exertion, they got lot of peo-
pie to buy enough oil to put prices up, and buy
enough the banks account to make good
these accounts. II told Mr. Reiber," said he,
land told part of the board. viz: F. R. Laugh
lin, j. O. Brown, A. NJ Cavitt and Major Swear
engen of my intention, and told all of them
that l would not then, or at any other time, buy
a single barrel for myself. had only wish to
make up these accounts. 1 went East and
the board knew the nature of my
errand, and had lot Of people
there to buy and lot here to buy. The sole
purpose of this scheme was the profits of the
bank. had no individual interest in the vent
ure at all. In May, 1882, very large lot of oil
was bought, and the price advanced, In the
midst of this was again taken sick. That was
the time these accounts, named in the papers as
fictitious accounts, were made. Some were to
go to the bank to make up for these old
back accounts, and others were for individuals
who hoped for profit which they would divide
Now then, | want to say that these directors did
know all about this. After went to New York
to get such parties as l could to
buy oil with parties here and in Oil City, l told
thaca nf tha Of
They bought oil individually at times that l in
dictated, as their accounts with the bank will
show. One of the parties that transacted bust
ness through me on their individual account as
their accounts i'll the bank will show. was Mr..
Hopkins. bought oil for F. B. Laughlin, and
with his consent it was put into an account in
the bank, as F. B. Laughlin No. g. and still
stands there undivided, nothing having been
said as to where the profits should go.
l once bought oil on his account
and gave him onefourth, r. NJ
Kennedy one-fourth the Penn Bank
one fourth to make up these accounts, and G.
l.. Reiber one fourth to make up the accounts of
two friends overdrawn. That account still
stands there charged with loss-that is the
account known as Hill e. CO."
Among other directors who bought oil upon
information received directly or indirectly from
me was J. o. Brown, on his individual account,
A NJ. Cavatt on his individual account, and
believe his account still stands overdrawn for
part of the amount A. A. Hutchinson
also bought on his own account S.
Severance r.. bought q on Co. his own lac, &C,
Van Voorhees,, attorney for the bank, also
bought large amount on information received
from me. George G Davis did buy, or talked of
buying and inquired every day as to the pros
poets both of myself and Mr.. Reiber. Mr..
Swearengen talked frequently about these trans
actions and casually inquired how they were
getting along, as he passed through ON his way
to New York and Oil City, and accounts were
being charged for handling. Mr.. McMullen also
bought large amounts of oil for himself and my
self representing the bank, he doing
it with no special intention of
gain for himself, simply intending to put it
there that it might benefit the bank and with
this transaction is charged the account of Will
son & Co.
THE account of Watson & Co. was an ae-
count made and suggested by Mr.. T. j. Watson
himself the benefit of this account was TO go
half to the bank for the use of these old ac-
counts. The first transaction was the transfer
Of some oil from Oil City to this place through
this accounts aid; also, the transfers thereafter
made were through this account When the
time came to SELL all amounts that had passed
through this account were charged up against it.
1.-The accounts of r. NJ. Kennedy No and
r. M. Kennedy on account of principal were
bought by his consent, and mostly by his di-
rections, and for my account in the bank, he to
get one half and to get one-half towards max
ing up this account as stated and to this &C
count he made sundry checks sundry orders
and sundry notes, but left it in a general way
in my charge The account of Brown & Co.,
from parties in Philadelphia and part of it from
j. r. Keene. That account stands balanced
so that there is nothing further concern
ing it known During July, 1883,
it was found necessary to sell not only great
portion of this oil, but q great portion of our
customers oil held as collateral, and this was
done. l told Mr.. Laughlin on the day it was
done, and he was good enough to help me all he
could! | told him then and there that didn't
see how could stand it much longer as my
strength was being taxed seemingly beyond hui
man endurance. Many of the individuals who
had received information to buy at low rates sold
at high rates and took money to the credit of
their account.
During the time this oil was bought it
was currently circulated at the ex-
change that this was only little pool
to make up some bad accounts at the Penn Bank,
and this was the case. 1t was work enough to
have attempted to do such an act and try to make
this money for these accounts, and particularly
so when prices had reached the limit of our in
tention That might keep faith with others, l
insisted upon all that had to do with not sell
ing, but many individuals did sell in spite of
promises not to do so.'
Continuing, he asserts that the accounts of
many of the directors We're overdrawn at times
from $40, 900 TO over 100000 Two days before
the suspension the condition of the bank in
money WAS comfortable, but many people with
malicious intent gave out such reports as caused
a run, and compelled the bank to close
All his stock and deposits amounting to $780, 900,
he says, was left for the depositors, but the di-
rectors, without his permission, appropriated
them for their own security.
The staten ent created intense excitement, and
the newspaper Offices were surrounded with
people of all classes. who iostled and crowded
each other in their eagerness to obtain copies
The directors implicated Indignantly deny the al
legations made, but Riddle claims that the books
now in the hands of the assignee will fully cor
roborate his statement. Riddles condition is
much worse to-day, and his physicians fear more
hemorrhages,
An official statement from the Penn Bank
directors made tonight, characterzes Riddles
allegations as false in every particular They
assert that they knew nothing of the oil specu-
lations until after the bank suspended. The
hearing of Cashier Reiber and ThomasJ Watson
is postponed till Monday.