New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-07-08
Department of Justice Investi-
eating Closing of Pittsburgh
Bank and Other Kuhn
Concerns.
STATEMENTS DO NOT TALLY
Receivers in Charge of First
Second National, First Ma
tional of McKeesport, Amer
lean Waterworks Co. and
J. S. g. w. S. Kuhn, Inc.
From The Tribune Bureau.

From The Tribune Bureau.l
Washington, July I.-Criminal prose
cution Of those responsible for alleged
| irregularities in connection with the
failure of the First Second National
Bank OF Pittsburgh. which closed is
doors to-day, may ~esult from an in
vestigation which was begun tonight
by the Department of Justice at the
request Of the cretary Of the Treas
ury.
High officials Of the Department Of
Justice strongly intimate that criminal
liability attaches TO the manipulation
of statements setting forth the condi-
tion of the banks finances. Discrep-
ancies in the statements filed with the
department and those published by the
| bank were discovered late this after
noon, and the scope Of the investiga-
tion was idcned to include this phase
Of the failure.
The bant's report to the Controller
as of June { showed assets and liabili-
ties aggregating $39997,347 10 each.
while. S given to the Pittsburgh news
papers for publication, he report
placed these totals at $3S, l03.S .SS6 so.
the 81 ,S93, AGO II difference representing
rediscounts or borrowed money. OH
cials declared that this was illegal
Reports 10 the dep; -tment indicate
that one-third Of the 81. 10000 capital
stock Of the bank has been impaired.
and that the surplus and profits have
been wiped out. While details are
lacking, estimates based on the last re-
port TO the Controller OF the Currency
Indicate that at this rate the losses
might reach S3.OoO,o00.
Sporadic" Says MeAdoo.
Secretary McAdoo was emphatic in
asserting that the failure Of the
jain 10 Slulpis n EPbi sili'
case Of unsound banking and has no
ether significance" He also declared
that the recent reports of the national
banks TO the Controller Of the Cur
rency showed a sound and strong con-
dition throughout the country.
Regarding the situation in Pitts
burgh, 1t Was declared that the city
would be much better off with the
elimination OF the failed bank from
the Clearing House. as the institution
has been a menace for several years
and the source Of considerable trou-
BILE
Authorization for the consolidation
OF the First National Bank with the
Second National Bank. the latter al
ways regarded as a sound institution.
was given before March 4. according
10 Secretary McAdoo. although the de-
tails Of the merger were not COM
pleted until March II. Conditions had
been acute in regard 10 the bank for
several weeks, and the failure was not
unexpected by Treasury Department
officials in touch with the situation.
Secretary McAdoo made the follow
ing statement this evening, following
telephone talk with John SHELTON
williams, Assistant Secretary of the
Treasury, who was in Pittsburgh with
Thomas +. Kane, acting Controller or
the Currency.
THE acting Controller Of the Cur
rency took charge OF the First-Second
National Bank of Pittsburgh to-day
because its directors, at meeting
held in Pittsburgh yesterday, ex-
pressed their inability to make good
an impairment OF its capital and de
cided that the wise thing for all in
terests was for the acting Controller
TO take the situation in hand. The
Pittsburgh Clearing House Association.
which has had the matter under con-
sideration for several days, had, in the
mean time, also decided that 1t was
inexpedient to furnish the amount OF
assistance required to keep the bank
going.