Milford chronicle., 1906-08-31
BIG BANK FAILURE
In. PHILADELPHIA
Bad Loans Caused Real Estate Trust
Go. to Close It's Doors.
DEAD PRESIDENT RESPONSIBLE

Philadelphia, Aug. 29-Unable to
meet its obligations because of the
large amount of money loaned on in
Euficient security by its president now
dead the Real Estate Trust Company
OF Philadelphia, which up to last Sat
urday was considered one of the
strongest financial institutions in the
city closed its DOORS Soon after the
doors were closed George H. Earle,
Jr., a prominent fnancier was ap-
pointed receiver. The liabilities of the
company are placed at S10,000,0 600
against which there are quick assets
of about SS5OO,O00 and collateral of
about $4,000, 900 which is not negotia-
bic or readily convertible. The doubt
ful collateral is held mostly as security
for loans Of about S5,3OO,000 made to
Adolf Segal. a promoter of this city.
The man responsible for the failure
was Frank K, Nipple one Of Philadel-
phia's best known citizens. who died
suddenly last Friday morning in his
country home at Bryn Mawr. near
here. under circumstances which, in
the light of the developments, lead to
the suspicion that he may have com
mitted suicide. Mr.. Nipple, in addi-
tion to being president of the Real
Estate Trust company. was treasurer
of the board of trustees of the General
Assembly of the Presbyterian church
in the United States and of several
other church funds. and was a director
of the Franklin National Bank. Re
Gently Mr.. Nipples accounts of the |
Presbyterian church were examined |
by certified accountants and were |
found to be correct but it cannot be
stated positively whether all the Sc
curities belonging to the General As.
sembly are intact, although it is hoped
they are.
Some Bad Loans.
For the loans Nipple accepted as
collateral securities of the Majestic
Hotel, big new apartment house op-
Grated by Segal; the Swedish Steel
company of Lancaster Pa. and the
Pennsylvania Sugar Refining com
pany of this city. The steel company
and the sugar refining concern have
never been placed in operation Segal
claims the collateral he gave is good.
and that he will meet all his obIiga
tions. There are others to whom Hip
pie loaned money on insufficient secur-
ity, but their names have not been
made public and the sums are not be-
lieved to be large.
FaIsified His Reports. ;
How far Nipple benefited in the
loans made or whether he was merely
the tool of others is yet to be deter ,
mined. All the directors are remain
ing silent on that point, and also on
the question of whether there will =,
be any criminal prosecutions. In order -.
to hide the true condition of the com y.
pany and save himself Nipple resOrted
to the Justification of his reports, which :,
we're accepted as true by the directors. =
He used what the receiver termed a :,
double system" of making reports -
When the state bank examiner called "
Nipple presented to him good securi- a
les to Offset the loans made, and when u
he president made his reports to the u
directors he would show them a bun u
lie Of other securities and other paper, II
nd along with these he would exhibit q
he certificate of the bank examiner 81
Which showed that the accounts the III
Xaminer had Investigated were cor 10
ect. The directors, supposing the Sc 10
urities shown them were the same. co
pproved the reports. VI
Directors Learn True Conditions. IN
AS soon as the directors learned of 70
ne sudden death of President Nipple ti'
ley began an investigation of his af- p,
airs and were shocked when they
armed the true condition of the com w
any. This was after the close of busi-
ess on Friday. A meeting of the
1ard was hurriedly called, and it was We
ecided to instruct the officers of the ella
INK that all deposits received after ter
e opening of business Saturday ke
orning should be set aside and de- be,
lsited with the Franklin National suC
ank in the names of the individuals the
esenting the money. This was done ag,
absolve the directors from criminal Re
for receiving money after Lat
ey knew the trust company was in car
went On Monday more than $780, ma
0 was deposited by patrons of the leg
nix, which was practically offset by hay
thdrawals by persons who had heard
mors Of the company's condition.
le money deposited since Saturday n
II, however, not be returned to the ed
positors. but will lie in the FraDkIin hoI
tional Bank until the courts have
,ided whether it should be paid ben
ek. maj
While the depositors were supposed Hat
placing their money with the Real Ira
tate Trust company the directors bee
re making strenuous efforts to tide n.
institution over the difficulty. Ap- g
cation papers for a temporary re- ~
yer we're prepared and left at the taot 1aas
ces of the trust company, after 80.
ich the directors went to the meet 49,
of the Clearing House Association
make a last appeal for help. The :.