Los Angeles herald., 1906-08-29
CRASH INVOLVES
CHURCH FUNDS
PRESBYTERlANS HAD MONEYS
WITH HlPPLE
cortlrued from narr ono.

ports which were accepted as true b!
the directors. He Used what the re
ceiver termed double system o
making reports.
When the state bank examiner callet
Nipple presented to him good securl
ties to- Offset the loans made and whel
the president made his reports TO tn,
directors he would show them bundle
Of other securities and other papers
and along with these he would exhibit
the certificate of the bank examined
which showed that the accounts The
examiner had investigated were cor.
rect. The directors, supposing the se'
curities shown them were the same
approved the reports.
Directors Widely Known
Among the directors are; DR.. s.
Weir Mitchell, the eminent authors
John II. Converse Of the Baldwin Loco
motive works and one of the most
prominent laymen in the Presbyterian
church i'm the United States: John s.
Betz the millionaire brewer: William
A. Patton, assistant to President Cas-
satt of the Pennsylvania railroad;
former Superior Court Judge w. w.
Porter. r. Dales Benson. president 81
the pennsylvania Fire Insurance COM
pany: Joseph d. Jenkins, an attorney;
Edward p. Borden, Samuel f. Houston,
who is also vice president of the COM
pany; former State Senator ]. Bayard,
Henry and Frank C. Roberts.
As soon as the directors heard 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
hiISiuPSG on Friday
A meeting of the board was hurriedly
called and it was decided to instruct
the officers Of the bank that all de-
posits received after the opening of
business Saturday morning should be
set aside and deposited with the Frank
lin National bank in the names of the
individuals presenting the money.
Avert Criminal Proceedings
This was done to absolve the direct
ors from criminal proceedings for re-
ceiving money after they knew the
trust company was insolvent.
While the depositors were supposed
ly placing their money with the Real
Estate Trust company, the directors
were making strenuous efforts to tide
the institution over the difficulty. All
day they worked, but it became ap-
parent 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 company, after
which the directors went to the meet
ing of the clearing 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, if it occurred.
Fifty Presidents Meet
There were fifty bank presidents at
the clearing house to meet the directors
of the trust company.
The latter stated that they needed
81, 900, 900, but the best the banks could
do was to guarantee $3,500,000. This
was not enough and as all other means
for raising money had failed, Upper
Houston telephoned to the bank to
suspend the receivership papers to
court.
In a short timelthe story was on the
streets and created great consterna-
tion. Hundreds of persons gathered
about the building clamoring for in
formation and the crowd grew so great
that a detail Of police was sent for to
clear the street There was no disor-
der.
Deposits of Ten Millions
The application for the receiver says
the company has paid up capital OF
s., 500. 000 an apparent surplus of an
equal amount and deposits of about
$40, ,O00, 900. The assets consist of real
estate in Philadelphia, loans on collat-
eral OH demand and on time and other
securities.
John H. Converse was greatly shock
ed by the failure. He was an intimate
friend of Mr.. Nipple and was associat-
ed with him not only in business, but
in the affairs of the Presbyterian
church.
Asked if he thought the failure bad
one, Mr.. Converse said:
"I cannot tell this now, but l am
hoping for the best
Mr.. Converse, who is chairman of
the trustees of the general assembly of
the Presbyterian church, was asked for
a definite statement regarding the
funds and securities of the church, but
said that he cculd not give one at this
time.
1.-The best I can say" he said. sis
that l believe the securities of the trus-
tees ire safe.
THE auditor employed by the COM
pany went over the trust funds and
other securities of the company, which
amount to more than $26,0O0000, and
found them intact. The papers of the
trustees of the church are among these
accounts. l would like 1t understood
that the funds of the trustees are all
kept invested as far as possible and
that very little cash is kept on hand
Whatever amount of cash was in the
bank was small and will not be a serl-
GUS loss, If loss at ALL"
Clearing House Statement
John M. Michener. president of the
clearing house association. in an inter.
view tonight said that the failure of the
association to subscribe the $1,000 0Ol
guarantee fund requested by the Rea
Estate Trust company was due to insuf
ficient security. The trust company, h,
said, offered $29,000,000 in git-edgec
securities, a two-thirds interest In tn,
trust companys building, valued a
50, 100000, and $1,000, 900 securities from
Adolph Segal, valued by the directors
of the trust company at $3,000.000 Thi
clearing house association did not regarC
the Segal securities as worth NOR,
than $1,00O,O0O and declined to subscrib'
more than total of $4,000000 unless th,
remaining securities We're more sub
satntial,