The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-09-01
DIRECTORS DID NOT
MEET FOR 8 YEARS
Sensational Developments in
PhiIadeI phia Bank Case
DIRECTORS SURELY KNEW
Attack On Clearing House Association
for Not Coming to Rescue Causes
Them to State Unpleas-
ant Truths.

Philadelphia. August 31.-Reeeiver
George ]. Earle, Jr, of the Real Estate
Trust company is directing his efforts
towards ascertaining If other officials or
employees of the bank had guilty knowl-
edge of President Nipples transactions.
Before any of the loans were paid 10
Segal or other borrowers, it was Treas
urer North's duty to approve them and
Auditor Hill, Mr.. Earle points out, in
examining the accounts must have OBJ
served the extensive amounts paid to one
man. No intimation was given by either
to the directors of the large loans made
to Segal
1t was learned from one of the directors
that Hill was Nipples personal choice for
auditor and that Hills method of audit
ing seems to have been to check up the
securities ordered by Mr.. Nipple and then
place his seal or approval upon the total
amount of the various loans. This state
ment was then presented to the directors.
smarfihg under the criticisms of the clear
house association for it's failure to help
prevent the collapse of the trust COM
pany, members of that body stated that
when the directors asked for aid they had
nothing to offer as security. He said that
they admitted that the company's books
had not been examined by the state bank
examiners for three years, and that no
regular meeting of the directors had been
held for two and half years.
Sensational Developments Continue.
Additional developments, sensational in
character, continue to crop out in con-
nection with the Real Estate Trust com
pany. Today 1t became known publicly
for the first time since the suspension of
the trust company that there had not
been a meeting of the directors of the
failed bank for nearly three years, every
detail having been left to the late presi-
dent, Frank K. Nipple. It was this which
caused the Clearing House association
to hesitate about coming to the aid of the
company Tuesday. During the meeting
of the clearing house banks Joseph Def.
Junlxin counsel for the Real Estate Trust
company, was asked:
when was your company last examined
| by the state board?"
About three years ago. slowly replied
Mr. Junl1ns
This frank admission caused a mild SEN
sation among the bankers present, but
when he was asked
when did the directors of the trust
company last examine its affairs?" his
answer mot for more than two and d
| half years. caused the men who guide
the affairs of Phlladelphias financial in
stitutions to gasp.
Clearing House Defends Itself.
Criticism of the members of the clearing
house association was responsible for
this information being disclosed today by
one of the leading members of the as
/ ISOLATION.
over half of the directors of the COM
pany have stated that the company could
have been saved had the local bankers
advanced 100000.
/ A member of the clearing house assocla-
ton said:
| 1.-THE directors of the trust company did
not appear to know whether the shortage
was $5,00O,000 or $4,000 900, and 1t would
have been folly for us to have advanced
| the cash when the affairs of the bank
were in such a condition Mr.. Junkins
could not tell us why the state board of
examiners and the board of directors Of
| the trust company had failed to do their
duty for nearly three years.
1.-THE three directors who came before
us had absolutely nothing to offer in re-
! turn for the $7,O00,0O0 but dead sea fruit.
| When asked II they would pledge their
fortunes to make good losses that the
allied banks might sustain by going 1t
blind, their answer was painful silence.
| Under such circumstances the clearing
| house could not aid the trust company"