197d83f5559401faAccommodated withdrawals, Public signal of financial health, Partial suspension, Full suspension, Books examined
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McKeesport, Pa., Bank Closes, Also. PITTSBURG, July 7.-The First National Bank of McKeesport closed its doors at 10:30 this morning. The following unsigned notice was posted on the door of the institution: "On account of the First-Second National Bank of Pittsburg asking for a reeciver it is thought best for all of our depositors to close this bank for the present."
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McKeesport, Pa., Bank Closes, Also. PITTSBURG, July 7.-The First National Bank of McKeesport closed its doors at 10:30 this morning. The following unsigned notice was posted on the door of the institution: "On account of the First-Second National Bank of Pittsburg asking for a reeciver it is thought best for all of our depositors to close this bank for the present."
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CLOSINGOF1ST-2DNATL.BANK, PITTSBURG, IS FAR REACHING. Three Other Institutions Close Doors and Ask Receivers=J. H. Kuho, Pres. First Has Interest in All--Trouble with Treasury Dept. Is the Cause. were taken to protect the American Pittsburg, July 7.-The First-Second National Bank of Pittsburg, the Water Works and Guarantee Co. and First National Bank of McKeesport, the Kuhn's banking house and applia neighboring city, the American Wacation was made in the federal court, ter Works and Guarantee Co., and the this afternoon, for receivers for both Banking house of J. S. and W. S. institutions. Throughout the day, Kuhn, Inc., of this city, were forced into the hands of receivers, today, a statement of the bank's and affected through the failure of the first named companies' affairs was awaited with institution to open its doors, this feverish anxiety, but none was forthmorning. coming until tonight, when Mr. Kane The closing of the First-Second Namade a formal statement. No statetional Bank was ordered by the depment of the condition of the bank was obtainable subsequent to the one isuty comptroller of the currency, T. sned, June 4, on the last bank call of P. Kane, after every effort had been the comptroller. made to meet the government reTonight, Mr. Kane issued the followquirements as to the legal reserve. ing: The Kuhn banking house has exten"At a meeting of the directors of sive interests in irrigation projects throughout the West and mines and (Continued on Page Twelve.) street traction systems throughout western Pennsylvania, besides being a dominant factor in the American Water Works and Guarantee Co. 000000000000 W. S. Kuhn was president of the OPE First-Second National Bank, vice president and director in the banking house and vice president and director New Colon of the American Water Works and Guarantee Co., besides being a direcGRAY-McDON tor of the McKeesport Bank. J. E. Kuhn was a director of the First-Second National Bank, president Wednesday E and director of the American Wtaer Works and Guarantee Co., president and director of the McKeesport Bank High Class Motion and chairman of the board of direcAn tors of the banking house. When it was learned that the banks would have to suspend business, steps
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Concerns Them Several Big in and Near City, NO DEPOSITORS TO LOSE, SAY OFFICIALS Investments in Irrigation and Waterworks Enterprises Led to Embarrassment for Ready Money (BY MORNING JOURNAL SPECIAL LEAGED WIRE Pittsburgh, July 7.-The First-Second National Bank of Pittsburgh, the First National Bank of McKeesport, a bank of a neighboring city, the AmerIcan Waterworks and Guarantee company, and the banking house of J. S. and W. S. Kuhn, Inc., of this city, were forced into the hands of receivers today, through the failure of the its first named institution to open doors this morning The closing of the First-Second No tional bank was ordered by the deputy P comptroller of the currency, T. Kane, after every effort had been made to meet the government requirements as to the legal reserve. The Kunn banking house has extensive interests in Irrigation projects throughout the west, and mines and street traction systems throughout western Pennsylvania, besides being a dominant factor in the American Waterworks and Guarantee company. W. S. Kuhn was president of the First-Second National bank vice president and director in the banking house. and vice president and director of the American Waterworks and a Guarantee company. besides being director of the McKeesport bank. J.S. Kuhn was a director of the First-Second National bank, president and director of the American Water works and Guarantee company. president and director of the McKeesport bank and chairman of the board of directors of the banking house When it was learned that the banks would have to suspend business, steps were taken to protect the American Waterworks and Guarantee company, and the Kuhns' banking house, and application was made in the federal court this afternoon for receivers for both institutions Throughout the day a statement of the banks and effected companies affairs was awaited with feverish anx lety, but none was forthcoming until tonight. when Mr Kane mad a for the mal statement. No statement of condition of the bank was obtainable subsequent to the one issued June 4 on the last bank call of the comptrol ler. Tonight, Mr. Kane issued the following: "At a meeting of the directors of First-Second National bank held on Sunday, the condition of the bank and the results of the recent invest gation of the bank examiner were dis cussed After full consideration the directors declared their inability to make good the bank's impaired cap. Ital and without dissent decided that it would be best for the protection of depositors and all other interests to have the comptroller of the currency take charge and to arrange for th liquidation of the bank "The Pittsburgh clearing house committee, which has been engaged for the last four days In going over the affairs of the bank with the ex1 aminers and in making n cireful estigation as to 11s condition, refused o furnish funds maffident to institu the bank in keeping its door open and agreed under the circumstances there was no alternative to the cours recommended by the bank's directors The officers of the bank have expressed to the department the belief that there will ultimately be but little if any loss to the Lank's depositors The liquidation of the bank. and the Distribution of its assets will proceed is expeditiously as possible," After a protracted meeting of the Pittsburgh clearing house association his institution tonight issued this statement: "The closing of the First-Second National bank by the deputy comproller of the currency, was not entirely unexpected by this association nd it was therefore prepared for the risis. The members of the clearing house are all in good condition and ve believe that the banks and trust companies in the city of Pittsburgh, is a whole, are prepared for any emergency. It will take several days o arrange for the transfer of accounts and the proper and careful handling of checks made upon the First-Second National bank. We herefore ask the indulgence of the public and request that they will help in every way possible to assist in the solution of the problem which confronts the clearing house commitee and the banks. During the arly hours of the day, run was made on the Pittsburgh Bank of Savings, another Kuhn instiution, because of the climax in the ffairs of the First-Second National. 11 demands up to $50 were paid ithout question and notice for largr amounts was asked, running thir: sixty and ninety days, according 0 the amount demanded by the de-
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First-Second National of Pittsburgh Forced to Close Doors. SOON FOLLOWED BY TWO OTHERS First National of McKeesport and Bank of J. S. & W. S. Kuhn, Inc., Are Caught-Receiver Appointed for American Water Works and Guarantee Company. Pittsburgh, July 7.-The First-Second National Bank of Pittaburgh, the First National Bank of McKeesport, a neighboring city: the American Water Works and Guarantee Company and the banking-house of J. S. & W. S. Kuhn, Incorporated, of this city, were forced into the hands of receivers to-day through the failure of the first named institution to open its doors this morning. The closing of the First-Second National Bank was ordered by the deputy comptroller of currency, T. P. Kane, after every effort had been made to meet the government requirements as to the legal reserve. The Kuhn banking-house has extensive interests in Irrigation projects throughout the West and in mines and street traction systems throughout Western Pennsylvania, besides being a dominant figure In the American Water Works and Guarantee Company. W. S. Kuhn is president of the FirstSecond National Bank, vice-president and director in the banking-house and vice-president and director of the American Water Works and Guarantee Company, besides a director of the McKeesport bank. J. S. Kuhn is a director of the FirstSecond National Bank, president and director of the American Water Works and Guarantee Company, president and director of the McKeesport bank and chairman of the board of directors of the banking-house. Receivers Asked For. When it was learned that the banks would have to suspend business, steps were taken to protect the American Water Works and Guarantee Company and the Kuhn's banking-house, and application was made in the Federal court this afternoon for receivers for both Institutions. Throughout the day a statement of the banks and affected companies' affairs was awaited with feverish anxiety, but none was forthcoming until tonight. when Mr. Kuhn made a formal statement. No statement of the condition of the bank was obtainable subsequent to the one issued June 4 on the last bank call of the comptroller. The June 4 statement was as follows: Resources: Loans and discounts. $15,704,901.16. Overdrafts, secured and unsecured. $2,571.76. United States bonds to secure circulation, $1,900,000. United States bonds to secure United States deposits, $171,000. United States bonds on hand, $16,000. Premium of united bonds, $10,121.26. Bonds, securities, etc., $8,549,236.95. Banking furniture and lixtures, $176,755.04. Other real estate owned. $4,541,977.65. Due from national banks (not reserve agents). $1,178,987.06 Due from State banks and bankers, $1,316,820.23. Due from approved reserve agents, $4,216,447.75 Checks and other cash items. $160.076.23. Exchanges for clearing house, $693,230.42. Notes of other national banks, $360,000. Fractional paper currency, nickels and cents, $13,237.88. Lawful money reserve in bank, via.: Specie and legal tender notes, $1,S.1.023. Redemption fund with United States Treasury (5 per cent of circulation), 95 per cent. Due from United States treasurer other than 5 per cent redemption fund, $87,500. Total, $38,103,856.39. Other Side of Ledger. Liabilities: Capital stock paid in, $3,400,000. Surplus fund, $1,700,000. Undivided profits, less expenses and taxes paid, $250,068.45. National bank notes outstanding, (Continued on Second Page.)
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Both the Officials of the Defunct Bank and the Clearing House Association Issue Statements. FOUR INSTITUTIONS IN HANDS OF RECEIVERS Press Agent is Responsible For Charge That Government is to Blame But it is Quickly Recalled. PITTSBURGH, July 8. The FirstSecond National bank of Pittsburgh, the First National bank of McKeesport, a neighboring city, the American Water Works and Guarantee Co. and the banking house of J. S. and W. S. Kuhn, inc., of this city, were forced into the hands of receivers Monday, through the failure of the first named institution to open its doors Monday morning. The closing of the First-Second National bank was ordered by the deputy comptroller of the currency, T. P. Kane, after every effort had been made to meet the government requirements as to the legal reserve. The Kuhn banking house has extensive interests in irrigation projects throughout the west, and mines and street traction systems throughout western Pennsylvania, besides being a dominant factor in the American Water Works and Guarantee Co. W. S. Kuhn was president of the First-Second National bank, vice president and director in the banking house, and vice president and director of the American Water Works and Guarantee Co., besides being a director of the McKeesport bank. J. S. Kuhn was a director of the First-Second National bank, president and director of the American Water Works and Guarantee Co., president and director of the McKeesport bank and chairman of the board of directors of the banking house. When it was learned that the banks would have to suspend business steps were taken to protect the American Water Works and Guarantee Co. and the Kuhn's banking house and application was made in the federal court Monday afternoon for receivers for both institutions. Throughout the day a statement of the banks and affected companies' affairs was awaited with feverish anxiety, but none was forthcoming until Monday night when Mr. Kane made a formal statement. No statement of the condition of the bank was obtainable subsequent to the one issued June 4. on the last bank call of the comptroller. Issue Statement. Monday night Mr. Kane issued the following: 'At a meeting of the directors of the First-Second National bank held on Sunday, the condition of the bank and the results of the recent investigation of the bank examiners were discussed. After full consideration, the directors declared their inability to make good the bank's impaired capital and without dissent decided that it would be best for the protection of depositors and all other interests to have the comptroller of the currency to take charge and to arrange for the liquidation of the bank. "The Pittsburgh clearing house committee, which has been engaged for the past four days in going over the affairs of the bank with the examiners and, in making a careful investigation as to its condition, refused to furnish funds sufficient to justify the bank in keeping its doors open, and agreed under the circumstances there was no alternative to the course recommended by the bank's directors. 'The officers of the bank have expressed to the department the belief that there will ultimately be but little if any loss to the bank's depositors. of the bank, distribution The liquidation of and the its assets will proceed as expeditiously as possible. a clearing house Pittsburgh After protracted meeting association of the this institution Monday night issued this statement: Was Not Unexpected. "The closing of the First-Second National bank by the deputy comptroller of the currency was not tirely unexpected by this association enand it was therefore prepared for the crisis. The members of the clearing house are all in good condition and we believe that the banks and trust companies in the city of a are emergency. as whole, prepared Pittsburgh, for any It will take several days to arrange for the transfer of accounts and the proper and careful handling of checks made on the First-Second National bank. We therefore ask the indulgence of the public and will help in to assist in the of that possible they every solution request way the problem which confronts the banks." clearing house committee and the During the early hours of the day, a Bank run was made on the Pittsburgh for Savings, another Kuhn infairs stitution. because of the climax of afof the First-Second up to $50 All without demands question, and notice were National. paid larger amounts were asked. running for 30. 60 and 90 days, according to the This amount demanded by the depositor. institution also made a ment that it had $5,000,000 in stateThe and any quick emergency. assets and was prepared cash for before the closing of run the was banking over hours, and it is not thought iety over this institution need any be anx- felt. which The former Two Banks First Merged. National bank, was accredited as one of the strongest banks in the country was
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RUN ON KUHN BANK CONTINUES TREASURY OFFICIALS SAY KUHN REFUSED TO ACCEPT GOVERNMENT ASSISTANCE BANKS WERE MISMANAGED ANOTHER RECEIVER FOR AMERICAN WATERWORKS COMPANY APPOINTED Pittsburgh, July 8.-Pittsburgh's one day flurry in financial circles caused by the bank failures of yesterday, apparently was a matter of history at noon today. The failure of the First-Second National Bank of Pittsburgh and the First National of McKeesport with the subsequent receiverships for the American Waterworks and Guarantee company and the banking firm of J. S. and W. S. Kuhn company who were dominant factors in the former institutions, it was established by noon today would have no deleterious effect upon other financial institutions. The run on the Pittsburgh Bank for Savings,a Kuhn institution which started yesterday, seemed to abate shortly after the announcement that J. S. and W. S. Kuhn had resigned from the presidency and vice presidency of the bank. Contemplated meetings of the clearing house association were called off about midday when it definitely decided that all its member banks were in desirable condition and in need of no assistance which if required, was forthcoming from New York, Chicago and St. Louis. The following officers of the Pittsburg Bank and Savings were elected: W. J. Jones, president; L. M. Plumer. vice president; A. N. Voegtley, secretary and treasurer. In the United States district court, today Judge Charles P. Orr appointed Fred G. Kay as the fourth receiver for the American Waterworks and Guarantee company. W. J. Jones, formerly treasurer of the Pittsburgh Bank for Savings, but today made president of the institution, said after his election: "The Kuhns have entirely withdrawn from the bank. As it was they were only nominal heads of the organization. There is no question about out bank. We are backed by many Pittsburgh banks and we have support of the clearing house."
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BANK CRASH HAS SMALL EFFECT ON FINANCIAL PITTSBURG Failure of First-Second National With $32,000,000 Deposits and Subsidiary Houses Makes Small Stir. TREASURY OFFICIAL SAYS MISMANAGEMENT Pittsburgh, July 8.-Pittsburgh's one-day flurry in financial circles caused by the bank failures of yesterday apparently was a matter of history at noon today. The failure of the First-Second National Bank of Pittsburgh and the First National of McKeesport, with the subsequent receiverships for the American Waterworks and Guarantee company and the banking firm of J. 8. and W. 8. Kuhn company. who were dominant factors in the former institutions, it was established by noon would have no deleterious effect upon other financial Institutions. The run on the Pitsburgh s Bank for Savings, a Kuhn Institution. which started yesterday, seemed to abate shortly after the announcement that J. S. and W. 8. Kuhn had resigned from the presidency and vice prestdency of the bank. Contemplated meetings of the Clearing House association were called off about midday when it definitely decided that all its member banks were in desirable condition and in need of no assistance which, If required. was fortheoming from New York, Chicago and St. Louis. In the United States district court today Judge Charles P. Orr appointed Fred G. Kay as the fourth receiver for the American Waterworks and Guarantee company. W. J. Jones, formerly treasurer of the Pittsburgh Bank for Savings, but today made president of the institution, said after his election: "The Kuhna have entirely withdrawn from the bank. As it was they were only the nominal heads of the organization. "There is no question about our bank. We are backed by many Pittsburgh banks and we s have the support of the clearing . house
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PITTSBURGH FLURRY SUBSIDES Pittsburgh, Pa.. July 8.-Pittsburgh's one day flurry in financial circles caused by the bank failures of yesterday apparently was a malter of history at noon today. The the First-Second and the bank failure of of Pittsburgh First national naof McKeesport with receiverships for o sequent tional the the Ameri- com- subcan Waterworks and Guarantee pany and the banking firm of J. S. d and W. S. Kuhn company who were s dominant factors in the former in stitutions. established by noon t today would here no deleterious of 1. feet upon other financial instituo tions. The run on the Pittsburgh for savC Ings. N Kuhn Institution which star ted yesterday. seemed to abate ahortly after the announcement that .1. 8. and W. S. Kuhn had resigned from the presidency and vice presidency : of the bank. e Contemplated meetings of the : clearing house association were called off about midday when It definN Itely decided that all its member's banks were in destrable condition. K and in need of no assistance which o If required was forthcoming from o New York. Chicago and St. Louis o In the United States district court : today Judke Charles P. Orr appointR ed Frad G. Kay as the fourth receiv: er for the American Waterworks and N Guaranter company. W. J. Jones formerly treasurer of the Pittsburgh bank for savings. bu: : today made president of the institu. o tion. maid after his election: d The Kuhna have entirely with drawn form the bank As it was they were only the nominal heads of the organization. There is no question about our d bank. We are backed by many of y. the Pittsburgh banks and we have the support of the clearing house. Pittsburgh. Pa., July -Financial Pittsburgh showed little outward evidence today of yesterday's crash et circles involving the IN First-Second are in banking of the National fail ⑆ Bank with $32,000,000 of deposits. the First National Bank of McKen et allied Institution. and the to of receivers appointment port. an Guarantes for the American Waterworks et company. the largest concern of Its TM kind in the country. and for the to banking house of J. 8. and W. S Kuhn. Incorporated Nothing unusual was observed about other banks of the city except she Pittsburgh Bank of Savings. an dother bank controlled by J. S. and et W. 8. Kuhn. who controlled the me1. Jority of stock in the two banks that " yesterday as institution suspended the Savings The that run was on he the failures yesterday was pt but the same renumed started by today method to as adopted yesterday was pursued he day All depositors were paid $50 as of once and notice of 20. GO and 90 in days for larger amounts were re c. quired. x. IC J. S. and W 8. Kuhn today re1. signed as president and vice presi⑉ dent of the Pittsburgh Bank of Say TC Ingr The following officers were elected: " w 8. Jones. president 1. M n vice president: A. Vock! Plumer. N. ley. secretary and treasurer The treasury department yester day offered the solvent Pittsburg" banks $5,000,000 of government de he posits to meet any emergency. but n. the offer was declined because the e. banks were in a position to meet the situation as he The entire capital and surplus of d. the First. Second bank. amounting to re $5,500,000. has probably been wiped of out but officers of the bank have assured the government that depos Id iters will be paid in full or nearly din full. ke of McKeesport. Pa. July S The ⑉ First National Bank of McKeesport controlled by J. S. and W. S. Kuhn.
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DEPOSITORS STOP RUN ON THE BANK Secretary McAdoo Hurrying Investigation of Affairs of Pittsburgh Institution. a Pittsburgh, July 9-When the Pittsburgh Bank for Savings opened for business today the run that was started on Monday on the closing of the doors of the First-Scened National Bank was resumed, but in less volume than on the two preceeding days. All the tellers' windows were thrown open for the convenience of those desiring to withdraw deposits from the bank. Those who came to deposit found much difficulty in being waited on quickly, and complaints from these, laid with J. J. Jones, who was yesterday elected president, was a demonstration of the confidence in the bank. He reiterated that the bank was prepared to meet the most exacting situation. Secretary McAdoo today continued preparations to refer the question of alleged irregularities in the FirstSecond National Bank to Attorney General McReynolds for investigation. Comptroller Kane declared today that information concerning the government's surveillance of the bank leaked out and one big depositor withdrew $200,000 last Saturday. Government officials then learned that other big depositors contemplated making heavy withdrawals Monday. To prevent the large depositors from gaining the advantage of saving their deposits at the expense of small depositois who were not aware of the circumstances the government refused to let the bank open. The First National Bank of McKeesport, which suspended a few hours after the First-Second National Bank was closed, is arranging for resumption of it's re-opening. The directors of this bank will be reorganized and the Kuhn interest eliminated before it is re-opened.
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BANK CONDITIONS NOW NORMAL PITTSBURGH BANKERS OPTIMISTIC AS RESULT OF STATEMENT OF SECRETARY M'ADOO. Situation Has Clarified to the Extent That Offers of Assistsistance Have All Been Declined. PITTSBURGH, Pa., July 8.-To the decisive and sharp-cut statement of Secretary of the Treasury McAdoo, issued last night, is attributed the res. toration of almost normal conditions in financial Pittsburgh to-night, despite the closng of the doors of the First Second National Bank yesterday, an institution that had been accredited one of the strongest in the country. While the situation was tense in the financial world yesterday, and little information as to possible developments was obtainable. the flat state ment of facts of the Secretary of the Treasury served to develop an overnight optimism that grew in magnitude as to-day advanced. The closing of the First-Second was naturally followed by suspension of its affiliated banks. the First National of McKeesport and the appointment of receiverships for the banking house of J. S & W S. Kuhn, Inc. whose principals were the majority stock. holders of both institutions and a like action with the American Water Works & Guarantee Company, an enterprise fathered by the Kuhn interests. Another Kuhn interest that was atfected, the Pittsburgh Bank for Savings suffered somewhat from the complication. a run being started on it yesterday, chiefly by small depositors This was continued to somewhat greater magnitude early today but it appeared to abate as the day wore on. Crowds assembled about the bank building, and the sidewalk about the building was roped off. with mounted police prancing their horses within the lines of the sidewalk The crowds were forced outside the ropes into the middle of the street, where they soon filtered away to be replaced by others, most of whom event. ually proved to be the curious specta(Continued on Page Eight.)
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Small Depositors Aided. Information concerning the government's surveillance of the bank leaked out, and one big depositor withdrew $200,000 last Saturday. Government officials then learned that other big depositors contemplated making heavy withdrawals on Monday. To prevent the large depositors from gaining the advantage of saving their deposits at the expense of little depositors who were not aware of the circumstances the government refused to let the bank open. "The First National Bank of McKeesport, which suspended a few hours after the First-Second National Bank was closed," said Mr. Kane, "is arranging for resumption of business in a few days. "The bank is in a good condition, and there was no reason why it should have closed other than because of the run that started on it by reason of the Kuhn connections with the bank. The board of directors of this bank will be reorganized and the Kuhn interest eliminated before the bank is reopened."
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BANK PLUNDERERS FACE PROSECUTION McAdoo Turns Kuhn Cases Over to Attorney General-Kane Raps Ex-Comptroller Murray. Washington, July 10. -Secretary McAdoo before the close of the day expects to ask Attorney General McReynolds to investigate alleged irregularities in regard to the closing of the First-Second National bank of Pittsburgh and determine whether the National bank act has been violated. Sufficient facts have been collected by the treasury department, it is said, to warrant immediate intervention by the department of justice. H. Scores Murray. Thomas P. Kane, acting comptroller of the currency. who returned today from Pittsburgh, where he closed the First-Second National bank. declared that the First National bank of that city should have been "cleaned up or closed up" at the time of its merger with the Second National bank severa! months ago. The merger was authorized by Lawrence O. Murray, former comptroller of the currency At that time. Mr. Kane declared today. the First National's capital was badly impaired and the bank was notified last December that its impaired capital must be restored. The comptroller added that the condition of the bank had been long well known in banking circles in Pittsburgh, New York and elsewhere. 'The closing of the bank clears the banking and financial atmosphere of Pittsburgh. Outside of this institution the banking conditions there are excellent and there is no cause for any further anxietv. said he. McKeesport Bank Safe. "The First National bank of McKeesport. which suspended a few hours after the First-Second National bank was closed. is arranging for resumption of business in a few days. The bank is in a good condition and there was no reason why it should have closed other than the run started on it by reason of the Kuhn connection with FirstSecond bank. The directors of this bank will reorganize and the Kuhn element be eliminated before it Is reopened. News Leaked Out. Details of the causes which induced the treasury department to close the bank Monday morning became known today with the return of Comptroller Kane. He declared that information concerning the government's surveillance of the bank leaked out and one big depositor withdiew $200,000 last Saturday Government officials then learned that other big depositors contemplated making heavy withdrawals Monday. To prevent the large depositors from gaining the advantage of saving their deposits at the expense of little depositors who were not aware of the circumstances, the government refused to let the bank open.
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To Await Report Washington, July 9.-Secretary MeAdoo tonight decided to await the report of the national bank examiner, Samuel Hann, who has been investigating the failed First-Second National bank of Pittsburg, before calling upon Attorney General McReynolds to take up the question of whether the national bank act was violated in any of the operations of the institution. Immediate reference of the situation to the department of justice was considered by the treasury department early in the day, but this plan was changed to conform to the usual procedure. Examiner Hann expected to leave Pittsburg Saturday night for Baltimore -his regular station-to prepare a report to Thomas P. Kane, acting comptroller of the currency, on the results of the inspection of the books of the bank made by himself and Examiner Sherrill Smith. A copy of this report will be furnished, according to present plans, to Attorney General McReynolds and United States Attorney Jordan of Pittsburg. Chairman McKnight of the Pittsburg Clearing House association advised Mr. Kane over the long distance telephone late today that the banking conditions in Pittsburg were clearing up satisfactorily. He said the run on the Pittsburg bank for savings had practically subsided and that some of the money withdrawn was coming back. National Bank Examiner Williams, in charge of the First National bank of McKeesport, Pa., which closed its doors simultaneously with the Pittsburg bank, reported that arrangements were being made to resume business within a week.
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Conditions Normal. PITTSBURGH July 9.-Conditions in financial circles at the closing hour today had. to all appearances, reached normal. The run on the Pittsburgh bank for savings, which was started by the closing of the First-Second National on Monday, had entirely sub sided early in the afternoon. after a resumption of the run this morning had caused some slight anxiety. Further developments of affairs of the First-Second National were not looked for until Receiver C. C. Murray had had an opportunity to organize his force necessary in the liquidation of the institution. It was not expected that depositors would receive any dividend before the expiration of two months The First National Bank of McKeesport is expected to reopen within a week after a reorganization of its officers and directorate with the elimination of the Kuhn interests. which held the majority of the stock of the First-Second National bank. Other Receiverships. Application was granted by Federal Judge C. P. Orr to-day for receiver ships for six subsidiary companies of the American Water Works and Guarantee Company The companies are the United Coal. The Somerset (Continued on Page Nine.)
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WILL PROSECUTE BANK OFFICIALS Startling Evidence Before McAdoo Concerning Recent Bank Failure. WAS MISMANAGED Clerks and Others in the Pittsburgh Bank Were Given Big Loans. Washington, July 9.-Startling evidence of mismanagement of the FirstSecond National Bank of Pittsburgh is believed to have been brought here today by Comptroller of the Currency T. T. Kane. as the result of a personal investigation of the bank's affairs. Mr. Kane laid before Secretary of the Theasury McAdoo facts which, it is reported, shows conclusively that many large loans were made to clerks, stenographers and bookkeepers in the bank and other dummies. The Secretary refused to make these facts public, but immediately communicated some of the more serious ones to the Department of Justice. Treasurery officials seem confident that criminal prosecution will soon be begun, but whether W. S. and J. S. Kuhn, president and director respectively of the wrecked institution, will depend upon further developments. National bank examiners are still at work on the books and until they report fully no criminal proceedings will be started. Attorney General MacReynold's agents are, however, already trying to place the responsibility for the conditions which have been brought to his attention. That the Kuhns must withdraw their interests from the First National Bank of McKeesport, Pa., before it can be reopened, is the determination already reached by Treasury officials. The run on this institution was caused solely, it is said, by the connection of the Kuhns with it.
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EVIDENCE WARRANTS IMMEDIATE INTERVENTION IN PITTSBURG AFFAIRS. MERGER CAUSE OF CRITICISM Acting Comptroller Says First National's Capital Was Impaired at Time of Consolidation With Second National. Washington, July 10.-Secretary McAdoo has asked Attorney-General McReynolds to investigate alleged irregularities in connection with the closing of the First-Second National bank of Pittsburg and determine whether the national bank act has been violated. Sufficient facts have been collected by the treasury department, it is said, to warrant immediate intervention by the department of justice. Thomas P. Kane, acting comptroller of the currency, who has returned from Pittsburg, declared the First National bank of that city should have been "cleaned up or closed up" at the time of its merger with the Second National several months ago. The merger was authorized by Lawrence O. Murray, former comptroller of the currency. At that time, Kane declared the First National's capital was badly impaired and the bank was notified last December that its impaired capital must be restored. The comptroller added that the condition of the bank had been long well known in banking circles in Pittsburg, New York and elsewhere. "The First National Bank, of McKeesport, which suspended a few hours after the First-Second National Bank was closed, is arranging for resumption of business in a few days," said Kane. "The bank is in a good condition and there was no reason why it should have closed other than because of the run that started by reason of the Kuhn connection with the bank. The board of directors of this bank will be reorganized and the Kuhn interest eliminated before it is reopened." Kane said information concerning the government's surveillance of the First-Second National leaked out and one big depositor withdrew $200,000 last Saturday. Government officials then learned that other big depositors contemplated making heavy withdrawals Monday. To prevent the large depositors from gaining the advantage of saving their deposits at the expense of little depositors, who were not aware of the circumstances, the government refused to let the bank open. "But why do you operate now, doctor?" "He is recovering SO rapidly we can't afford to wait."--Life.
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Startling Disclosures, [Special to The Times-Dispatch.] Washington, July 9.-Startling evidence of criminal mismanagement of the First-Second National Bank of Pittsburgh is believed to have been brought here to-day by Comptroller of the Currency T. R. Kane as the result of a personal investigation of the bank's affairs. Mr. Kane laid before Secretary of the Treasury McAdoo facts which, It is reported, show conclusively that many large loans were made to clerks, stenographers and bookkeepers in the bank. and other dummies. The secretary refused to make these facts public, but immediately communicated some of the more serious ones to the Department of Justice. Treasury officials seem confident that criminal prosecutions will soon be begun, but whether against W. S. and J. S. Kuhn, president and director, respectively, of the wrecked institution, will depend upon further developments. National bank examiners are still at work on the books, and until they report fully, no criminal proceedings will be started. Attorney-General McReynolds's agents are, however, already trying to trace the responsibility for the conditions which have been brought to his attention. After a conference with Comptroller Kane, Secretary McAdoo said: "There is every reason to believe that many large loans were made by the First-Second National Bank to dummies in the office, and the Department of Justice is informed of certain facts, It is for the Attorney-General to say whether any of these irregularities are criminal. "Mr. Kane assures me that the situation in Pittsburgh is clearing up rapidly. The failure is regarded by many financial men of that city as a sort of blessing in disguise, because it has put an end to conditions which had threatened for months to become serious and create panicky conditions." "The First-Second National Bank should have been closed instead of mergal last spring." was a startling statement made by Comptrolled Kane on his return here. He gave no reasons further than to refer to the condition of the bank for the past two years. That the Kuhns must withdraw their interests from the First National Bank of McKeesport, Pa., before It can be reopened is the determination already reached by treasury officials. The run on this Institution was caused solely, it is said, by the connection of the Kuhns with it.
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PITTSBURG DON'T WANT $5,000,000 FROM GOVERNMENT Pittsburg, July 9.-The conditions of financial circles at the closing hour were normal to all appearances. The run on the Pitsburg Savings bank, which started with the closing Monday of the First-Second National bank, ended early this afternoon. Further developments concerning the affairs of the First-Second National bank are not looked for until C. C. Murray, the receiver, has organized a force necessary in the liquidation of the institution. The First National bank of McKeesport is expected to reopen within a week after a reorganization of the officers and the elimination of the Kuhn interests. The application was granted by Judge Orr for the receivership of six coal companies, subsidiaries of the American Waterworks and Guarantee company.
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BIG NATIONAL BANK FAILS. Unable to Keep Reserve Demanded by United States. Pittsburgh, Pa., July 8.-The First-Second National bank of Pittsburgh, the First National bank of McKeesport, a neighboring city, the American Waterworks and Guarantee company and the banking house of J. W. & W. S. Kuhn, Inc., of this city were forced into the hands of receivers today through the failure of the first named institution to open its doors this morning. The closing of the First-Second National bank was ordered by Deputy Comptroller of the Currency T. P. Kane after every effort had been made to meet the government requirement as to the legal reserve. The Kuhn banking house had extensive interests in irrigation projects throughout the west and mines and street traction systems throughout western. Pennsylvania, besides being a dominant factor in the American Water Works Guarantee company.
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GENERAL. Bachelor criminals outnumber the married ones in New York in the ratio of nearly 3 to 1, as is shown in the annual report of the chief clerk of the district attorney's office. An unidentified negro who had attacked a young white girl at Bonifay, Fla., was taken by a mob from a train on which county officers were hurrying him to Pensacol and was hanged to a telegraph pole and then shot. That Attorney General McReynolds had full knowledge of the almost incredible depravity of the CaminettiDiggs white slave cases before he ordered the postponement of the trials and that he was implored by United States District Attorney McNab of San Francisco not to countenance delay is revealed by the records. With every available man from Mill Valley and the surrounding country, reinforced by troops from the Presidio at San Francisco and Fort Baker on the fire line, combatting with backfire the half-mile front of the forest blaze which swept down Mount Tam alpias, Calif., the authorities ex pressed confidence that they would be able to save Mill Valley and near by resort towns from destruction. The First-Second National Bank of Pittsburg, the First National Bank of McKeesport. a neighboring city, the American Waterworks and Guarntee Company and the banking house of J. S. and W. S. Kuhn, incorporated, of Pittsburg, Pa., were forced into the hands of receivers through failure of the first-named institution to open its doors. The failure involves $150,000,000. In a quiet ceremony, attended only by immediate relatives, Mrs. Barry Sullivan, of Denver, became the bride of Albrecht von Schroeder of Boston at the summer home of the bride's father, Chester S. Morey, at Harbor Point, Mich. Officials of one of the larger packing plants at the Chicago stockyards will not frown in future when an ex: perienced stenographer announces her resignation and intention to marry. Instead, they will write out a check for $25 to be presented the day after the wedding.
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PITTSBURG QUIET PITTSBURG, Pa., July 3.-Pittsurg's one-day flurry in financial cirles caused by the bank failures of esterday apparently was a matter of istory at noon today. The failure of the First-Second National Bank of Pittsburg and the First National of McKeesport, with the ubsequent receiverships for the American Waterworks and Guaranse Company, and the banking firm of J. S. & W. S. Kuhn Company, who vere dominant factors in the former nstitutions, it was established by 10on today would have no deleterious effect on other financial instutions. The run on the Pittsburg bank for savings, a Kuhn institution, which tarted yésterday, seemed materially o abate shortly after the announcenent that J. S. and W. S. Kuhn had resigned from the presidency and vice-presidency of the bank. Contemplated meetings of the Clearing-House Association were called off about midday, when it was deinitely decided that all its member banks were in desirable condition and in need of no assistance, which, if required, was forthcoming from New York, Chicago and St. Louis. United States District Attorney Jordan said he had had no communiation from Washington regarding any phase of the financial situation or in connection with any financial or ndustrial institution. Expected statements from J. S. Kuhn on any phase of the situation vere not forthcoming during the day.
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McKeesport Bank Opens After Week of Inactivity McKEESPORT, Pa., July 15.-The First National Bank, closed for over a week, reopened here before 8 o'clock today. There was no run on it or excitement of any kind. Depositors will be paid on demand.