The Birmingham age-herald., 1913-07-08
McAdoO's Statement

Washington, July 7.=Secretary Nc
Adoo, in statement tonight, declared
that the general banking condition in
Pittsburg, as well as in the entire
country, was strong and sound. and
that he expected no further trouble
as a result of the failure of the Pitts
burg First-Second National bank,
1.-The failure of the Pittsburg bank is
simply a sporadic case of unsound
banking and has no other Significance.
the secretary said. He added that the
reoeivership for this institution re-
| moved a long standing "sore spot" in
the Pittsburg situation, leaving the
general condition in that city sound.
| The secretary will make a sweeping
Investigation of the causes of the fail
ure of the big bank and probably Will
call upon the department of justice TO
assist the treasury in unearthing any
possible Irregularities in connection
with the collapse
1t developed tonight that one fact
which drew the critical attention and
suspicion of the treasury department to
the banks condition was "a discrepancy
of nearly $2,000,000 between the sworn
report to the comptroller of the cur
rency as to the banks condition on
June 4, and what should have been a
true copy of this report published by
the bank in the newspapers of Pitts
burg. The law requires every bank
to publish its reports to the comp
troller of the currency in response to
his call in local newspapers so the pub
lie may know the facts.
The report to the comptroller showed
assets and liabilities aggregating s39,-
997,34710 each. while as given to the
Pittsburg newspapers for publication
the report placed these totals at $685.
1895 $3.50. the s1.S93,460.n difference
representing rdiscounts or borrowed
money. Officials declared that this was
illegal.
Capital Impaired
Reports to the department indicated
that one-third of the So, 400, 900 capital
stock of the bank has been impaired
and that the surplus and profits have
been wiped out While details are
report to the comptroller of the cur
rency, indicate that at this rate the
losses might reach $3.000,0G0
Secretary McAdoo issued this state
ment:
'"rhe acting comptroller of the cur
rency took charge of the First-Second
National bank of Pittsburg today he,
cause its directors at meeting held
in Pittsburg yesterday expressed their
inability to make good an Impairment
of it's capital and decided that the wise
thing for all interests was for the act
ing comptroller to take the situation
in hand. The Pittsburg clearing house
associa tion, which has had the matter
under consideration for several DAYS.
had, in the meantime. also decided that
| 1T was inexpedient to furnish the
amount OF assistance required to keep
the bank going.
"This bank. which was handed down
from the last administration, has for
some time been sore spot in the
local situation, and its liquidation he
came inevitable.
The Kuhns of Pittsburg were inter-
ested in the First-Second National
bank and also in the First National
bank of McKeesport. The latter also
closed its doors as a result of the for
mer's failure, The general banking
condition in Pittsburg is sound, and no
further trouble with banks Is ex-
pected.
The acting comptroller had no alterna-
tive in the circumstances but to take
charge of the Flrst-Second National bank.
in order to prevent the withdrawal of
large deposits, which had already begun.
and to secure for the small depositors
equal treatment with the large ones.
Everything will be done by the acting
comptroller to further prompt liquidation
of the banks assets so that the depositors
may be paid with the least possible delay.
THE recent reports of the national
banks to the comptroller of the currency
show sound and strong condition
throughout the country. The failure of
the Pittsburg bank IL simply a sporadic
case of unsound banking and has no
other significance"
The critical eyes of government exam
iners had been on the First National bank
of Pittsburg for several years and ON the
consolidated F'irst-Second ever since the
amalgamation in March. Suspicion was
increased when 1t was discovered by the
June call of the comptroller of the eur
rcney that the legal reserve OF the insti-
tuition was deficit by $2,1l500O and that
the statement of condition of the bank as
presented to the comptroller and as pub-
lished in the newspapers were different.
The sworn reports submitted to tbe
comptroller on June 4 showed resources
and liabilities as follows:
Resources:
Loans and DISCOUNTS $17, ,237,S1254
United States and other bonds and Sc
curities, 81, ,039. 1880
Real estate owned, $1,71s, 732.69
Due from banks and bankers, Sc. .712 255. .O4.
Cash and cash items. x3 31O6.567 so
Redemption fund and other amounts
due from United treasurer, y1s2, 500.
Total $39. .997, ,347.1o.
Liabilities:
Capital stock, s3.400,QO0
surplus and profits. 1850, ,06s. As
Circulation notes, 81 49,, 100.