New-York tribune., 1906-08-29
RUINS BANK AND DIES
Continued from first page


Franklin National Bank until the courts have
decided whether it should be paid back.
While the depositors were supposedly placing
their money with the Real Estate Trust Com
pany the directors were making strenuous eff
forts TO tide the institution over the difficulty
All day yesterday they worked, but it became
apparent shortly after noon to-day that the
crash was inevitable. Application papers for a
temporary receiver were prepared and left at
the offices Of the trust company after which
the directors went to the meeting of the Clear
ing House Association to make a last appeal
for help.
The newspapers were aware of the trend of
events and had men stationed at the bank
building ready TO flash the closing of the bank,
IL IL occurred There were probably fifty bank
presidents at the Clearing House to meet the
directors OF the trust company. The latter
stated that they needed s7,OOO.OOO but the best
the banks could do to guarantee s35OO.OOO.
This was not enough. and. as all other means
for getting money had failed Vice President
Houston telephoned to the bank TO suspend
business and send the receivership papers to
court.
In an incredibly short time the story was
the street and created great CONSERVATION.
Hundreds Of persons gathered about the build
ing. clamoring for Information. and the crowd
grew so great that detail Of police was sent
for to clear the street. There was no disorder
The application for the receiver says that the
company has paid up capital of s1,5OO, ,O0O an
apparent surplus of an equal amount, and de-
posits of about 100000 The assets consist
OF real estate in Philadelphia, loans upon coll
lateral upon demand and time, and other
securities.
WRECKED BY PRESIDENT NIPPLE.
President Nipple. the application says. 'by
false reports to the directors of the loans made
by him, brought about the condition OF the COM
pany, which was first discovered by the officers
of the bank subsequent to the death Of the
president"
The court then appointed Mr.. Earle receiver,
and he entered security to the amount of ST.
100000. After his appointment Mr.. Earle held
lengthy conference with the directors and
officers of the company. at which the receiver
was put in possession Of the condition of the
company, far as the officials Of the concern
could inform him.
John H. Michener, president of the Clearing
House Association. tonight said the failure Of
the assOcia ton to subscribe the S7,O00000 guar
antee fund requested by the Real Estate Trust
Company due to insufficient security. The
trust company he said. offered S2,9OO.OOO in
gilt edged securities, a two-thirds interest in
the trust company's building, valued at $2.-
100000, and S5,4O0o0O securities from Adolf
Segal, valued by the directors of the trust COM
pany at S3O00O0O The Clearing House Asso-
citation did not regard the SegaI securities as
worth more than $1,OG0OOO, and declined to
subscribe than total of 100000. un-
less the remaining securities were more sub
stantial.
Samuel F. Houston. vice-president of the
company. said tonight that no other banking
institution in this any other city would be
in &6a Iea CT O%a1 IV-4J
security was given for whatever money was
borrowed from other banks
He said he hoped the company would be able
to resume business, but would make no pre-
diction on that point.
The board Of publication OF the Presbyterian
Church. which had $4,000 and $4,000 on de-
posit with the Real Estate Trust Company.
made effort to withdraw the money, but
failed by three minutes. Hearing rumors OF
the unstable condition of the trust company
members of the board informed the officials of
their intention to transfer the account 70 the
Philadelphia National Bank. A representative
Of the latter institution made all haste 10 the
Office of the trust company. and arrived there
three minutes after the doors had closed.
The board of ministerial relief Of the Pres
byterian Church had $4,000 deposited with the
trust company.
According to last Mays minutes OF the Pres
byterian General Assembly. Mr.. Nipple, as treas
urer Of the board OF trustees. had IN his charge
funds amounting to S9e3S96
MANY WOMEN DEPOsITORs
The failure undoubtedly means that hundreds
OF persona have cut short their vacations and are
hurryfng back from seashore and mountain re-
sorts The institution was favorite depository
for women and for well-tO-do men who make use
of purely personal accounts. The company was
particularly attentive to this class of business,
I and perhaps other bank in the city was
careful always TO provide its women clients with
clean. new money, even to the nickels.
For some days the books had been undergo
ing thorough examination, but the clerks sup
posed this was due to a curious defalcation
which was recently brought to light. but which
kept quiet. A young boOkkeeper invented
a new and ingenious system OF stealing which
puzzled the bank officials and is said to have
aroused serious apprehension because of the
difficulty in detecting or tracing It.
His method was to forge the name of a de-
positor whose accounts were posted by him.
To cover the forgery he would by a mental
total, being careful not to enter the amount of
the bogus check After having secured the
money he would tear up the bogus check when
it reached his hands. BY this method the ledger
and "scratcher'' always agreed and the books
balanced
Recently, while the forger was at luncheon
another clerk entered a number of checks IN the
formers ledger. including that had been
forged, and the scheme was thus detected So
far it is known not more than $1,000 was stolen
from the bank by the clever young forger
The Real Estate Trust Company's last report
was made on May &c At that time the institu-
tion's condition was given as follows:
RESOURCES