Evening journal., 1906-08-29
BIG BANKING FIRM
HAS GONE UNDER
lcontInued iroln Tirst Pagel

a list OF bogus loans. Ine real loans
were never seen by the directors. The
bogus loans were supposed to be good
ones. git-edged. To the auditor maxi
ing examinations Of the cOmpanys
loans Nipple would present a list of
what appeared to be hrst-class loans
in every respect, and these the auditor
would certify as correct. TO the board
OF directors Nipple would take the au-
ditors certificate that the loans were
correct and the directors at their reg
ular meetings would unsuspectingly
and unhesitatingly pass them.
In reality Nipple loaned the COM
pany's money to an amount corre-
spending exactly with the bogus list
on collateral of doubtful value. not ne
gotidble or readily convertible Nei-
ther the auditor nor the directors ever
saw Hipple's real list Of speculative
loans 1t was not until they began an
examination of Nipples accounts after
his death that the directors were dis
abused Of his hallucination. The first
shock to their belief i'm their presidents
integrity came with the discovery that
loans which they had supposed TO be
lgilt-edged had not been made at all,
Then Nipples private list Of loans
came TO light. To their horror and
amazement the directors. themselves
among the most prominent OF Phfadel-
phia capitalists and with exalted no.
/ tons OF financial ethics. foun that
their companys money had been going
out under their very noses into the in
satiable nav Of speculative schemes
which they would have discounten-
anced and upon collateral in which
they would not have invested.
Church Funds Involved.
Dr. w. H. Roberts. stated clerk of the
General Assembly Of the Presbyterian
Church who is at Mount Pocono. said
he was greatly shocked at the news Of
the failure. In addition 70 the deposits
of the General Assembly the Real Es-
tate Trust Company also had about
$3.50 OF funds placed there by Dr.
Roberts as stated clerk The Presby-
terian Hospital OF Philadelphia and the
Presbyterian Board of Relief he said,
also had sums of money I'm the failed
institution
DR.. Roberts was asked If he could
say whether the securities of the Cen
leral Assembly, amounting TO S963,S96
in Nipples custody We're intact. He
replied:
Il have no reason to believe other
wise. but cannot say positively"
Were those securities in such shape
that they might have been hypothecat-
ed or transferred" p"
Il do not know positively as to that
but I do not think that they were"
For the loans TO Adolf Segal, Nipple
accepted as collateral securities Of the
Majestic Hotel, a big new apartment
house. operated by Segal: the Swedish
Steel Company. of Lancaster. Pa. ane
the Pennsylvania Sugar Refining Com.
. pany, of this city.
, The steel company and the sugar re-
O.. fning concern have never been place,
b i'm operation. 'Segal claims the coliat
eral he gave is good. and that he viii
meet all his obligations There ar
: others 10 whom Nipple loaned none!
on insufficient security but their name
have not been made public. The SUM
are not believed TO be large.
JussIsd With Securities.
How far Nipple benefited in the loans
made or whether he was merely thu
tool of others is yet to be determined
on that point and also on the question
. Of whether there will be any crimina
prosecutions. In order to hide the tru,
condition of the company and save
himself Hipple resorted to the falsi
fication Of his reports, which were ac
cepted as true by the directors.
The directors, supposing the secur
, tiles shown them were the same, ap
proved the reports. Among these di
rectors are DIR. S. Weir Mitchell. tn
eminent author; John II. Converse, o
the Baldwin Locomotive Works AM
one OF the most prominent laymen ia
tho Preehyteriau Church in the Unite'
States John B. Bctz. the mllionlir
brewer. William a. Patton. as~istan
, 90 President 'as.ait of the Fannss
iria 7tfroad. founcr superior "nus
lua-e ~. "a Porter Is. naie ben~or
president of thr rorrssh ania iirc in
suranes Compaus Joseph Dcl JuihiI
, an attorney. Edward p Borden. Sam
uol f. Houston. VITO S. ALSO vioe-pros
,dcW 90 lho company i0naer sisf
Senator J Bayor1 Henry aud Fran
C. Roberts, "a mechanical engineer. an
brother of the Rev Dr. Roberts.
4 Midnight Directors Meeting.
As soon as the directors learned O
f the sudden death OF President Hippl
e. they began an investigation Of his az
fairs and were shocked when the
g learned the true condition. OF the com
.pany. This was after the close of bus
g mess on Friday. A meeting of tn
board was hurriedly called at-lnidnigh
= Saturday. and it was decided TO I'm
r. struct the officers of the bank that "a
j. deposits received after the opening q
N business Saturday morning should b
: set aside and deposited with tn
Franklin National Bank I'm the name
of the individuals presenting IN
money.
. This was done to absolve the direc
u tors from criminal proceedings for re
- ceiving money after they knew tn
trust company was insolvent.
on Monday more than Si6e 600 wa
deposited by the patrons of the banl
which was practically offset by with
ldrawals by persons who had hesrd ru
lmors of the company's condition. Tn
q money deposited since Saturday vii
q however. not be returned 10 the depos
y itors but will lie in the Franklin y a
tional Bank until the courts have -
u cided whether it should be paid back
While the depositors were supposed
placing their money with the Real rs
l. tate Trust Company the directors wer
J. pnalinor efranuous efforts to tide In