Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1906-08-29

He replied: II have no reason to be-
leve otherwise, but cannot say posi-
lively"
For the loans to Adolf Segal, Nipple
accepted as collateral securities of tbs
Majestic hotel, a new apartment house
operated by Segal, the Swedish Steel
Co. of Lancaster Pa, and the Pennsyl-
vania Sugar Refining Co. of this city.
The Steel Co. and the sugar refining
concern have never been placed in OPP
GRAFTON. Segal claims the collateral he
gave is good and that he will meet all
mis- obligations.
There are others to whom Nipple
loaned money on alleged insufficient
security. but their names have not
been made public and the sums are
not believed to be large. How far Hip
pie benefited in the loans made or
whether he was merely the tool of
other has not yet been determined.
All the directors are remaining 81
lent on that point and also on the
question of whether there will be any
criminal proceedings.
In order to hide the true conditions
Of the company and save himself Hip
Jle resorted to the Justification Of his
books which We're accepted as true by
the directors. He used what they usu-
ally term "a double system of making
a report" When the state bank exam
iner called Nipple presented to him Sc
curities to offset the loans made and
when the president made his report to
the directors he would show them a
bundle of other securities and other
paper and along with these he would
exhibit the certificate of the bank cX-
aminer which showed that the &C
counts the examiner had investigated
were correct. The directors, surprising
the securities shown them were the
same, approved the reports.
Among these directors are Dr. S.
Weir Mitchell, the eminent author;
John D. Converse of the Baldwin Loci
motive Works and one of the most
prominent laymen in the Presbyterian
church in the United States; John F..
Betz the millionaire brewer; William
A. Patton. assistant to President Cas-
satt Of the Pennsylvania Railroad:
Judge w. w. Porter; r. Dale Benson,
president of the Penn Fire ms. Co.;
Joseph Dunkin, Edward r. Borden;
Samuel Houston. who is also vice
president of the company, and Former
State Senator J. Bayard Henry and
Frank c. Roberts.
AS soon as the directors learned of
the sudden death of President Nipple
they began an investigation of his af-
fairs and were shocked when they
learned the true condition of the COM
pany This was after the close of
business Friday. A meeting of the
board was hurriedly called and ii was
decided to instruct the officers of the
bank that all deposits received after
the opening of business Saturday
morning should be set aside and de-
posted with the Franklin National
Bank. in the name of the individuals
presenting the money. This was done
to absolve the directors from criminal
proceedings for receiving money after
they knew the Trust Company was in
volved.
On Monday morning more than s15o. 900
was deposited by patrons CT the bank
| which was practically offset by with
drawals by persons who had heard r1,-
mors of the company's conditions. The
money deposited since Saturday will
however. not be returned to the deposi-
wi uhh!i thc toui - nave decided Wneth-
er it should be paid back.
While the depositors were supposedly
placing their money with the Real Es-
tate Trust Co. the directors were max
ing strenuous effort to bridge the insti-
| tuition over the difficulty. All day yes
terday they worked, but it became appar-
| ent shortly after noon today that the
crash was inevitable. Application papers
| for a temporary receiver were prepared
and left at the offices of the Trust Co.
after which the directors went to the
meeting of the Clearing House Associa-
| ticn to make last appeal for help.
There were probably % bank presidents
at the Clearing House to meet the di-
rectors of the Trust Co. The latter stat
ed that they needed s.,0CoOoO. hut the
best the banks could do was to guaran-
tee $780, 600 This was not enough. and
as all other means for getting money
had failed, Vice President Houseton tel
ephcned to the bank to suspend bust
mess and send the receivership papers tC
court. In an incredibly short time The
lstory was on the street and created grea
CONSERVATION. Hundreds of person.
gathered on the streets about the build
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