Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-09-14
FIXING THE BLAME
FOR THE FAILURE OF THE PENN BANK
YEARS AGO.
Judge Hice Makes His Report to Court
The Responsibility Placed Upon Presi-
dent Riddle nud Cashier Reber-Dut es

Judge Hice Makes His Report to Court
The Responsibility Placed Upon Presi-
dent Riddle and Cash or Reiber-Dnt es
of Bank Directors Def ed.
Old citizens will remember that once
upon time the Penn Bank, of this city,
attempted to butt the Standard Oil Com
pany off the track. There was great crash,
aud the splinters have been flying ever since,
the last ofthem landing yesterday, being the
report made to Common Pleas Court No 2
by Judge Hice, of Beaver, master in'the
suit entered six years ago by DR.. E. W.
Swentzell, Elias j. Unger ct al against the
Penn Bank, Henry Warner, assignee;
William N. Riddle, President; George L.
Reiber, Cashier; f. B. Laughlin, Vice
President; james Herdman, james H.
Hopkins. D. W. G. Carroll, T. Brent
Swearingen, Samuel Severance, Philip
Reyner, A. W. Cavitt, A. A. Hutchison and
10. Brown, Directors. Five years ago Judge
Hice began the taking of testimony. 1t
was concluded two years ago, and since then
Judge Hice has been cogitating. While
the report is not comforting to the plaintiffs,
some people have predicted for some time
past that it would be just about what it is.
Judge Hiel finds that Riddle (now dead) and
Reiber are liable to the assignee to the extent
of the overdrafts and balances shown on
fictitious accounts which entered into the oil
speculation, either by both or by Riddle
with Reiber's knowledge, and dismisses the
bill as to the directory. This is the SUBJ
stance contained in 68 pages typewriter
legal-cap.
Judge Hice reviews the history and or
ganization of the defunct bank IN detail.
He describes the false assessments and deal
ings in oil of the President and cashier,
gives the deposits and reviews the run on
and failure Of the bank, and then goes on to
say:
1t is doubtless true that Riddle had general
direction of the business. was the dominating
spirit in its transactions, and these accounts
and the manner OF keeping them were doubt.
less the result of his instructions 1t is evident
that Reiber knew of the character of these ac-
counts, the purpose for which they
were kept and that they were being
used as means and cover for draw
ing large sums of money from the bank.
These were clear violations of the duties OF the
cashier. As to the other defendants. they
could only be held because OF their negligence
and the want of exercise of proper care as di-
rectors. Negligence was the absence of
proper care. Their services were gratuitous.
and il any advantage resulted to them it was
indirectly as stockholders of the bank. 1t was
not contemplated that they would give whole
or even a considerable part Of their
time and attention to it. The officers
and employees had the immediate management
and the care required of the directors was that
of an ordinarily prudent man. As to the pub
lished weekly statement the directors were not
negligent. They were justified in relying on
the integrity of Riddle. As to the overdrafts
the directors could not be charged with want
of proper discretion. As to the competency Of
Riddle. Reber and the other subordinates, no
question is raised. As to their honesty outside
of the bank nothing has been charged. Riddle
and Reiber were always trusted by
the directors 1t was not required
that director be an expert or
a competent bookkeeper. but to see that the
weekly, daily land monthly statements CORE
sponded with the general balances upon the
books. II director had gone over the books,
being q competent accountant, he might have
found the frauds, but there is no law requiring
this To do this would impose duty which
should be paid for by banks.
A decree in accord with the finding is
recommended.