The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-07-14
THINKS P|IIsBQRG
BANK nlSnAhAGED
ACTING CoNTR0LLER OF Gun
RENCY KANE SAYS REPORT
II BEING FRAMED.
ACTION MAY BE TAKEN
FORMER CONTROLLER MURRAY
SAYS CARE WAS USED IN
APPROVING PLANS
FOR MERGER.
ACTION MAY BE TAKEN

WASHINGTON, July 13.--The re-
port of special examiners as to indi-
cations Of criminal violations of law
found in the First Second National
bank is now in the course of prep
aration by them, according to Act
ing Controller of the Currency Kane.
/. will be referred to the department
of justice as soon as completed. 4
Until this il done no one has au-
thority to say what prosecutions may
be undertaken. Such information
would come from the department of
justice rather than from this office,
said Mr.. Kane.
Responsibility Not Fixed.
i That the bank was grossly mis-
managed. he says is beyond doubt.
No attempt to pass upon the con-
duct of President James S. Kuhn and
Vice President w S. Kuhn. he states,
or of any other official or director
of the wrecked institution has been
made by the Office of the controller
of the currency. Nor has 1t been
attempted to fix responsibility for the
failure of the bank before the COM
rlete records have been received.
While the First National bank of
Pittshurg was known to have been
In an unsatisfactory condition" con-
tlnued Mr.. Kane, 1.-The action of the
former controller in approving its
consolidation with the Second Ma
tional bank gave color to the pre-
sumption that its trouble had been
cleaned up, and under the circum-
stances this office did not feel justi-
fed in refusing To approve the First
Second National bank as reserve
agent for other banks,
1t was for the purpose of deter
mining what the true condition was
that the examination of the First
Second National bank by Examiners
Mann and Smith was ordered by me.
and the extent of the losses and the
inability Of the directors and share
holders to make them good did not
become known to me until confer
ence was had with the examiners and
directors OF the bank in Pittsburg
week ago,
In Criminal Cases.
examiners and receivers of ma
tional banks and instructed. wherever
they find conditions indicating Grim
inal acts on the part of officers or
employees Of banking institutions. 10
make a special report of such indl~
cations to the controller of the cur
rencq. Wherever the facts disclose
close conditions of such character as
to warrant immediate action they are
required to furnish the ditriCt attor-
ney for the district in which the bank
Is located with a copy OF this report
in order that the department OF jus
ttce may take such action as II deems
proper under the circumstances.
I I'm the event that examiners re-
ports do not furnish complete case
against the suspected officer director
or employe. the department Of Justice
{ fa1 n a
further investigation and report. The
department Of justice acts upon the
/ finding OF such agent.
at is not within the province of the
/ controller to determine what prose
cutions shall be instituted. This Of
( flee, Of course, acts in cooperation
( with the department Of justice in fur
nishing all possible Information as to
such matters"
/ Lawrence O. Murray. former CON
troller of the currency, has issued
statement as TO the situation in regard
/ TO the defunt First-Second National
! Bank of Pittshurg at the time of Its
consolidation, when he was controller
Mr. Murray. who has been absent
! from Washington during the time the
! troubles Of the bank closed by the
treasury department have been aired
in his statement declares that he gave
careful consideration to the merger
plan OF the two banks before APPROX
! ing ii. He saws. in part:
Was Under Criticism.
/ When | became controller I'VE
years ago the First National bank. of
Pittsburg. was under criticism. The
situation was in the office when j
went there--it did not develop during
my term. After I became controller
the bank was forced 10 charge off one
million and a quarter in losses and
just before the consolidation the bank
charged off over eight hundred thou
sand more, so that during my term
more than two million losses We're
forced out of the bank. That Is a
tremendous cleanup in a bank of
that capital and surplus. and 1t was
done in about two years.
| after the first charge off OF losses
of a million an da quarter the bank
still had capital Of a million. surplus
OF a million and some undivided pro-
fits The book value of the stock
therefore showed over 5000 a share.
In the report of the examiner Just be-