New-York tribune., 1906-09-07
OVERDRAFTS OF SSOO,OOO
Damaging Testimony Giuen at
Philadelphia Hearing.

and Meyer Goldsmith expert registered ac-
cOuntants. who. with the consent of Receiver
Earle. will Tomorrow begin thorough exami-
nation OF the assets and liabilities of the defunct
concern
Receiver Earle tonight. after conference
with the directors of the trust company, issued
statement. announcing that he hoped soon to
reopen the doors of the bank and that all de-
positors would he protected. Mr.. Earle said that
the directors had responded TO his solicitations
10 help reorganize the company, but he did not
state what amount Of money they had guar
anteed.
The preliminary hearing of AdO1ph Segal. the
promoter. William F. North. treasurer and Mar
shall s COllingwOOd. assistant treasurer. OF the
Real Estate Trust Company. took place to-day.
and the three were held in heavy bail for trial.
Before appointing Messrs- VOllum and Gold
smith Mr.. Berkey had conference with Re
ceiver Earle and on obtaining the assurance
of the receiver that he would gladly welcome
any assistance that the State Banking Com
missioner might give him Mr. Berkey at once
instructed the accountants to begin their in
vestigatiOn tomorrow. II his examination sus-
tanned the falsity Of the reports. Mr.. Berkey de-
clared. he would proceed against the directors
and make issue of their responsibility. which
has never been decided by the courts of this
state.
bank Monday and Tuesday, after the direc-
tors knew that il was insOvent. were allowed TO
withdraw their deposits to-day. There were 4l4
deposits. and of this number 1873 were returned
THE COURTROOM CROWDED.
At the hearing before Magistrate KOchersper-
ger the courtroom was crowded with men we'll
known in the financial world. SegaI. the prin-
cipa; living figure in the case. surrounded
by several attorneys with whom he frequently
consulted.
District Attorney Bell. in outlining his case.
said he would prove that the accused men with
Nipple were engaged in a gigantic conspiracy
TO defraud the trust company. and that as
result Os their acts more than S5,OO,tO had
heen abstracted from the institution and en-
bezzled for the use of one man-AdOlph Segal.
The active persons in the conspiracy. he said,
were Nipple and SegaL The passive agents were
North and CoIlingwood. he continued. who wick
edIy and wrongfuIy stood by and saw the others
loot the institution and never gave a warning.
Mr.. Bell said the institution had $500 depOs-
itOTs, and the deposits amounted 10 between
So. 100000 and S7.OOOO00 Among the depOsitOrs
were Segal as treasurer for his various COM
panies and Nipple and between them they had
frequently Overdrawn their accounts from $780,
600 TO more than $4,000
Hipple's plan was TO give a memorandum 10
the cashier for various sums and the overdrafts
would be carried on the books as cash accounts.
Then from time to time, the District Attorney
said. Nipple would go through the hollow pre-
tence of making a loan. using wildcat securi-
ties. and thus reduce the amount OF the over
drafts. This carried on for four or FIVE
years. until now the amount Of money borrowed
by Segal amounts 10 S5,3O92OO for which there
is nothing to show but the wildcat securities
TELLS OF FREQUENT OvERDRAFTs.
Robert .. Ghrskey. cashier of the trust COM
pany. the first witness. told of frequent over
drafts by either Segal. individually or as treas
urer OF one of his companies or Hipple He
regularly took the overdraft checks 10 HippIe
who would grow pale. pace the floor and then
say: Well. / guess will have TO paw this"
The Hippe and SegaI overdrafts were inter
mingled, he said and We're carried in one en-
velope as cash account. The total amount was
at times more than $4,000 He said:
These Overdrafts worI led me- and 7 frequently
told North about them. He always referred me
10 Nipple. Sometimes | went to COllinsvOOd the
assistant treasurer, who agreed with me thai the
overdrafts not sound business He knew
what was going on and often referred 10 Segal
as the devils deputy. once told Nipple that
worry, the next day he expected to realize
Sl,OOOO,D on the sale OF a sugar refinery At
another time told him of the low cash account
and was assured that the next day he expected
50, 100000 and that he would then have more
money on hand than we could invest. When the
Overdrafts became too great Nipple would come
10 me with a loan check showing that the com
pany had made a loan. He would take the mem
Orandum of Overdraft and give me the loan
check thus showing that the money overdraxn
had been loaned. These loan checks were all on
companies with which Segal was identified.
WORRIED SICK OVER CONDITION
George II. Earle. jr. receiver for the trust
company, testified that ne had examined all Off
GERS to learn whether they were conversant with
the true condition of the company. In interro-
eating Treasurer North. Mr. Earle said the
treasurer told him he knew the concerns condi-
ton and was worried sick it, North said
he did not report it. as he understood the direc-
tors were aware of the institutions condition
because he had made reports to President Nipple
and he supposed the president had informed the
directors. Mr..
Edgar Featherson. paying teller. corroborated
the testimony of GhrislEey regarding the over
drafts. Before paying the amounts called for on
the checks handed in by Nipple or SegaI he first
consulted North and Collingwood. but could get
no definite advice from them. On one occasion
he went to COllingwoOd with one of Segars
checks to See whether he should pay IT, Col
IingwOod looked at it. shrugged his shoulders
and walked away, saying Some more of that
rascaTs work"
The day Nipple died. he said there was an
overdraft Of S64 800 standing against Nipples
name. COllingWoOd, as soon al he learned OF MS
death converted the Overdraft into loan, thus
showing on the books that Hipple had not over
drawn his account
Joseph Esherick, tr.. formerly general book
keeper of the trust company, and now collateral
loan clerk, said that the rule OF the institution
was that no loan could he made without the
approval OF either the president. treasurer or
assistant treasurer. Nipple very often came 10
him and handed him securities, mostly on Segafs
companies, for loans that Hipple himself had
approved. The aggregate amount OF the loans
was 50 300. 200. the security for which was bonds
and stocks Of the Segal companies Esherick