Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-10-21
FEDERAL BANK FAILS
Big Pittsburg Concern Goes
Under.
DRIVE AT ITS STOCK
MEETING OF THE DIRECTORS
LAST NIGHT
At Which It Was Decided Not to Open
for Business This Morn
ing.

PlTTSBCRG, Pa, October 21-The
doors of the Federal National Bank were
not opened for business this morning.
The following notice was posted in ex-
PLANTATION:
Closed by the authority of the con-
troller of the currency John B. Cum
ninSham, receiver
Some such action as this has been with
in the possibilities for the past two days.
forecasted by the determined raid made
upon the institutions stock on the Pitts
burg stock exchange The positive state
ments, however, of the president ]. A.
Langftt, to the effect that the bank
was not in need of money and that it's
losses would not affect it's capital or sur
pius dld much toward allaying distrust
on the part of it's depositors and prevent
ing run.
The closing of the bank was decided
upon at a meeting of the directors last
night. Which did not break up until .
O'Clock this morning At that hour none
of the officials would make a statement
and locally the outcome of the meeting
was not generally known until the re-
celEer $ notice was posted at o'clock.
A United States Depository.
The bank is a United States depository
ana reported on hand September $4,000
Of United States deposits
1he stock of the company has been
subjected to sharp declines on the Pitts
burg exchange this week On Monday
the stock sold down from 10 to s.. but
was forced up again to iO1. Al day yes-
teftay 1t SagSeG, and the closing quota
tons We're 80 BID and 81 asked a nllr1ber
OF transactions having been made at so
The course of the stock has attracted
much attention. and numerous adverse re-
ports We're in circulation but they were
promptly and fully denied by President 7
"A. Langlitt He stated yesterday evening
that the bank has suffered only one pos
sibie loss. that of $1,000 for which it
held notes of the Eastern Tube Company
of GAINESVILLE, Ohio. That company is in the
hands of a receiver and a plan of reorpani-
Iaton Is being worked out, he said, and the
banks loss on that account may be small
The closing Of the Federal National Bank
mad apparently but little effect Oh the local
stock exchange. Trading was light but
lrm at about yesterdays closing quota
tions.
No Unusual Action Expected
No dealings in any Of the local bank
stocks were recorded during the first hours
trading and unusual action is looked
for today.
In a general way banking officials of the
city feel confident that the Federal National
Banks trouble will be confined to itself
and will not disturb any other financial in
Stitution.
Receiver Cunningham thinks it may be
two or three days before he can make a
statement of the banks condition
Up to II o'clock neither President Lang
fit nor any of the directors have arrived
at the bank, and a statement as to the
cause of the failure has not been made
public.
Depositors Will Be Fully Paid.
Robert s. Smith president of the Union
National Bank, and president of the Pitts
burg Clearing House Association, said:
There is not the slightest reason for
any alarm, and if people will only keep
cool there will be no trouble l was
sured last night by President Langfitt that
every depositor would get every dollar due.
and i believe the statement. The bank
has some excellent assets, and there seems
to be no reason why depositors should not
get all coming to them. 1t is possible that
some small country banks which DO bus-
ness through the Federal National may be
temporarily embarrassed but even at that,
it will be only temporary
Bankers and brokers are of the opinion
that the closing of the bank until its af
fairs can be adjusted was the best thing
to do under the circumstances. The talk
about the bank affairs has been a drag
to the market, and the belief is that the
action of the directors will have n good
effect on the general stua ton rather than
an injurious effect.
Statement by the President.
Following is the signed statement of ].
a. Langfitt, president of the Federal Ma
tiona Bank:
THE Federal National Bank has final
ly yielded to the combined assaults of it's
stockholders and deposition and has closed
it's doors until arrangements can be male
to discharge all depositors claims. The
question of reopening will then be de-
cided.
when the business depression came on,
the stockholders, from necessity or fear,
began throwing the stock upon the market.
The stock issue was large and the market
weak Thereupon disquieting rumors
sprang into birth, groundless, baseless and,
perhaps in some cases. malicious. These
increased the weakness of the stock and
the weakness increased the rumors until
our splendid list of depositors took fright,
and the rapid withdrawal OF moneys began
and increased in volume daily until, de-
spite our best efforts to call in loans and
provide funds the bank could longer
meet the demands upon it and drastic
measures became necessary. Our dem md
loans could not all be collected forthwith
and our time notes had not yet matured.
Last night. the directors believing such
course to be the proper one under the cir
cumstances, ordered the bank to be closed
temporarily and requested the controller of
the currency to take charge.
'Pwo weeks ago our deposits exceeded
four million dollars and until yesterday,
NIlei tIle uOouS CANT, we ndu maintained
our full legal reserves. Nobody has de-
faulted, Suicided, or absconded. The
board of directors are and have been al
ways loyal to the bank and In full accord
and harmony.
Have Had No Actual Losses.
1--WE have had no actual losses. and with
one exception, our combined probable losses
up to date would not aggregate one-half Of
per cent of our capital.
1.-The exception referred to Is our claim
against the Eastern Tube Company, which
may or may not result in loss, and even If
a total loss should there ensue, 1t could be
paid in full out of our undivided profits Of
S160000 without touching either our capital
of 81 O0oO00. or surplus of 100000.
The officers and directors are but the
servants of the stockholders and trustees
for the depositors They have tried their
utmost to prevent this climax-this acme of
financial stupidity and money madness.
When all other efforts failed to stem the
tide they sought the financial help of the
committee of associated banks of Pitts
burg, and received most courteous and
kindly sympathy and advice.
when our doors closed we had approx