Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-09-04

other clerks knew of the irregularities OF the
! oil deal and of the probably worthless over
directors as a board or otherwise. Some ex.
cuse may be made for the tellers and book
| keepers and clerks as they seem to have
believed that the bank and its directors were
in oil speculation, that when they obeyed
| Riddles orders they were obeying the direc-
| tors; they should have made certain that
each director knew, or they should have
| resigned Audit occasions were undoubt-
| etlly prepared for by putting culpable mat
| ters in apparent good shape in full faith that
the Auditing Committee would not be criti-
| cal or inluisitive, and yet the Auditing Com
| mittee seemed to have performed their
| duties very much as Auditing Committees
| do in other banks, with such full faith in the
officers that no important examination was
made.
But did thedirectors fail to exercise reas-
| enable care, for want of which the losses
occurred? 1t seems to me that unless in
| formed otherwise the directors had n right
| TO assume that the weekly statements made
| to them were correct, and showed a correct
account of deposits. The directors who
| from time to time composed the auditing
committee were certainly easily deceived,
| but still they were deceived, and the average
| committee would be deceived in about the
| same way, If the officers continue to do SO.
Were they bound to suspect fraud and look
| at the individual ledger? Unless some sus-
pieious circumstances were known to them,
Che weight of evidence is that it is not
4
without consideration the suggestion that
| they have no right to do so, and when a
bank officer 1ntimates that director should
not examine any account in the ledger,
it is time for the removal of such
officer. The depositor who would
object to it needs watching as well. II We
were to decide this case on hrst impressions
We would say there was grave negligence or
want of the ordinary care man OF intel
ligence would take of his own business.
Tested, however, by the rules laid down by
the Chief Justice in the case of Briggs versus
Sheppard, l4l q. s., ii would seem otherwise.
These men, us stockholders and depositors,
had their own money largely at stake in the
yet they evidently believed in the manage
ment of Riddle and the solvency of the
bank Confidence is usually of slow growth,
but when grown and matured it is very
vigorous and hard to uproot Bank business
must necessarily be carried on largely on
faith in the executive officers and clerks.
Neither President nor cashier, norany other
officer alone, can long carry on pecuations
in bank. There must be collusion, or
failure on the part of others to perform their
duties.
WHY THE MASTER IS SUSTAINED.
The Master, with the living witnesses be-
fore him, has found in favor of the defend
ants: vet we are not clear that he is wrong
in his findings of fact on this question. His
law is supported by the latest decisions of
the highest court in the nation, and we feel
bound to follow that ruling. Whatever Of
excuse there might have been for the direc- \
tors not suspecting the condition of their 4
bank up to the date of the first suspension,
it seems to US that between that time
and the reoDening of the bank, addi-
tional circumstances occurred that should
have put any intelligent man among the di-
rectors on brief examination by himself or
some independent officers, or have required
a report from other clerks and officers that
would have revealed the rotten condition of
affairs. and that they were negligent in not
dOin hY1t is M nxid hot IN
debtedness was increased by the opening.
Had they known of the condition it would
have been their duty to have promptly
taken measures for the equal distribution of
assets among the creditors and not have
permitted them to be given to favored
few. But they did not believe that the bank
lied to them, and without the slightest per
sonal examination. After they were po-
litely told by the other banks that their
best assets were no good, they showed their
notes to the amount S2S9, ,000 and expect
ing to continue business borrowed for
this bank money which 1t could not
borrow on all its assets. We do not under
stand the law to hold them liable for their
percentage of losses by this opening of the
bank, from May % to May 26, but as counsel
we find the facts and find that the loss to the
remaining creditors from May % to May 26
inclusive, by this action was $295.000. James |
H. Hopkins was notorfously absent from the
James Herdman was in infirm health and
physically unable to attend to the business.
Philip Reymer was also in inf1rm health.
Frank Rohm was not director at the time.
Under the rulings in Briggs VS. Sheppard,
they would be relieved.
Jacob Reymer stated yesterday to a DIS
PATCH reporter that no importance need be |
attached to the filing Of the executions yes
terday against Philip Reymer, as nothing
further would be done. When asked whether |
his action had been Influenced by the pend |
ing decision in the Penn Bank case he said |
that that had been the sole cause of the pro-
ceeding, and now that the decision has been I
made and is favorable to the directors, there |
would be no further developments, as his |
action had been taken merely to protect !
himself in the event of an adverse finding in |
the Penn Bank case. Mr. Reymer wished |
the impression corrected that the firm of |
Reymer Bros. had been in any way affected |
by recent failures. |
Philip Reymer who is on his way home |
from Europe, is expected in New York to- |
|