Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-12-28
TYRONE ALL TORN UP
Over a Coming Meeting of Creditors
of the Broken Bank.
THE SYSTEM THAT WRECKED II
Furnishes q Topic For Disclosures That
Are Sensational.
WILDCAT BANKING IN PENNSYLVANIA
ESPECIAL TELEGRAM TO THE DISPATCH, ,

| WILDCAT BANKING In PENNSILfANll
| ESPECIAL TELEGRAM TO THE DIsPArcH.1
TYRONE, Dec 27.-Affairs with the stock
holders of the wrecked Tyrone Bank ar
| coming to head, and suits are being en-
| tered against the officers of the defunct in
stitution daily. To-day a notice, posted OF
the doors Of the institution, reads as fol
lows: "a meeting of the creditors of thu
defrnct Tyrone Bank will be held in thu
Naus Opera House Monday, December %
situation. Let there be rally of everyone
interested, as matters of the first import
ance will come up for consideration. At
tached to the notice were the signatures OF
committee consisting of 16 business men
and firms, all leading depositors
The Stockholders Want to Know.
At the meeting tomorrow afternoon the
depositors propose to inquire closely into
the disposition of the Tyrone Gas and
Water stock, which was supposed to be in
the bank at the time of the closing, but was
not accounted for in the statement issued.
This stock was worth fully 100000. Then
the matter of the transfers of properties by
Messrs. Hooper and Guyer, stockholders,
will receive attention, and it is plainly
stated that there will be objections filed to
this way of disposing of the assets of the
bankers. It is reported tonight that At
torney A. A. Stevens has been named as
assignee of the bank, and strong objections
will be made to this choice, owing to the
close relations he bears with the principal
stockholders.
Another important matter that will come
up for consideration at the meeting to-mor-
row is the report that Guyer conveyed his
residence in this city to his brother-in-law
in Baltimore in deed dated about one year
ago: also that the brother-in-law conveyed
the property back to his sister, Mrs. Guyer,
recently.
Stakeholder A. B. Hoover, of the sus-
pended bank, has recovered all his. property
and has turned it over as personal assets
for the benefit of the depositors, who are
greatly encouraged and still hope to receive
their deposits in full. No doubt the real
situation will be developed at the meeting
of the depositors to be held Monday after
noon. %
The States Wildcat Banks.
. A Harrisburg special to the New York
one of the 200 or more private banking in
stitutions doing business in Pennsylvania
uncurbed by any law, is the fourth concern
of the kind that has gone under within
the past four months. 1t is the
natural result of the irresponsible
wildcat banking system of the State
which the Legislature has persistently
refused to place under legal restraint 1t
is as easy to start bank in Pennsylvania
as 1t is to start grocery. All that it is
necessary to do is to hire room and put up
q sign that there is bank within, and there
you are The only law relating to these
banks is one requiring them to make an
annual report to the Auditor-General and
pay to the State a tax of 3 per cent on their
net earnings, which must be declared under
oath.
Many of the banks are located in small
towns, remote from any national or reg
ularly incorporated State banks, and are the
sole repositories of the savings Of the COM
by which they are supported. To
establish them no authority from the State
is required. They have no capital stock,
and are not required to- register, make
returns to the State of the amount
of capital invested, or furnish state
ments to any person of their assets
and liabilities. There are no means OF
knowing tUc stlHOuEt VI nOHeY tueSe DdUhS
hold on deposit in the aggregate, but II of
them that failed in the course of few years
past lost for their depositors 81, 500, 900, and
from that it may be inferred that the total
amount of credulous persons money held
by the lot is very 1arse-certainly not less
than $40, ,000,0 900 at very conservative esti-
mate.
No Law to Reach Them.
The only department that has any sur
veillance over the wildcat banks is the
Auditor Generals, and. in the absence of
any restrictive law, that is only passive.
The only Auditor General who ever brought
10 the attention of the Legislature the dam
gerous privileges of the system under which
lhese institutions exist, and urged the i'm
portance of immediate action in the interest
of sound financial principles, was Jerome
Niles. who, in fact, began his efforts in
hat direction while a member of the
State Senate, and before he became the
lead of the Auditing Department. His
ast annual report exposed the absurdity,
langer, and iniquity of the system by quot |
ng largely from the reports of the private |
bankers made to him. Beside being re-
luired to report their earnings, the banks
must also report their expenses. Auditor |
General Niles quotations from the reports |
showed that a regular and very comprehen-
i've item in all these reports of fexpenses was |
loss in exchange" and that either nearly |
,ne-half OF the enterprising bankers per-
ured themselves to save tax on their net |
earnings or that these institutions were in a |
of bankruptcy. While no
detailed statements of this kind have been |
,laced before the Legislature in such peril |
rent and convincing shape by either of |
he Auditor Generals who have handled |
he subject since General Niles, there is no
eason to suppose that the situation is in |
my way changed. In that report 80 of the /
'anks were quoted as returning net loss |
or the fiscal year; A made affidavit that |
heir income was less than $500, and % |
wore that they had made less than 81, 900.
What the Returns Show.
Bv the returns they made of interest paid |
ii showed that they must have had MANY
thousands OF dollars OF other peoples |
money in their custody. One of these
'anks reported that it had paid nearly S22,-
100 in interest for the year, but that the net
Profits ON its business was only S1O5 81,
making its State tax So 15 A Tioga county
'anker swore gravely that his gross earnings
nd expenses Tailed to a cent, each being
=, 220 10. A York county bank made the
'usinesslike statement that, while its gross
ncome was only S26,OOO, it lost dur
ng the year S11, 800 by exchange
nd discounting notes, nearly as much as it
'aid out in interest on deposit. By the
worn statement Of Columbia county bank
he interest paid on deposits during the
ear lacked only few dollars of the amount