19106. Mutual Bank of Philadelphia (Philadelphia, PA)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
April 2, 1892
Location
Philadelphia, Pennsylvania (39.952, -75.164)

Metadata

Model
gpt-5-mini
Short Digest
8b06efec

Response Measures

None

Description

Newspaper accounts (Aug 1892) describe the Mutual Bank of Philadelphia as financially embarrassed; the Pennsylvania state bank examiner had closed the bank and proceedings for a receiver were commenced in early April 1892. Articles discuss stockholders advancing funds to avert receivership but also state the bank was placed in the hands of a receiver. There is discussion of concern about a possible run if a receiver were appointed, but the coverage does not describe a discrete depositor run prior to suspension. Classified as suspension_closure (suspension by government action leading to receivership/closure).

Events (2)
1. April 2, 1892 Suspension
Cause
Government Action
Cause Details
Pennsylvania state bank examiner closed the bank and commenced receivership proceedings after examination found impairment of assets.
Newspaper Excerpt
April 2, 1892, the bank, being financially embarrassed, was in the hands of the Pennsylvania State bank examiner, who had commenced proceedings for a receiver.
Source
newspapers
2. April 4, 1892 Receivership
Newspaper Excerpt
On April 4, 1892, the directors held a meeting ... a message being sent to Mark C. Davis: 'Come here at once and bring $150,000 without fail. Trouble.' ... This money Davis paid over to the defendant Hayes, who was cashier of the Philadelphia Mutual. The funds went into the hands of the bank examiner ... to make good the depleted capital of the bank.
Source
newspapers

Newspaper Articles (7)
1. August 12, 1892 Rock Island Daily Argus Rock Island, IL
Article from Rock Island Daily Argus, August 12, 1892

Click image to open full size in new tab

Article Text

HAD TO FIGHT THE OLD LINES. Explaining the Heavy Expenses-Funds and Banks-Somerby Testifies. The heavy expense account was due to legislative lobbying in fighting the old line insurance companies' efforts to overthrow the order in eastern states three years. ago. In regard to the Mutual bank of Philadelphia he said that Somerby has but $3,200 stock in it, though he is its vice president and director. He had no power to either put the order's money in it or draw it out. All the stockholders are members of the order. He admitted that there were $500,000 of the order's funds in the bank when the crash of the Spring Garden and Keystone banks came, and when the court ordered that $170,000 be put into the bank the supreme officers put that much more of the order's funds in rather than lose what it had. There is now, he said, some $700,000 of the order's funds in the bank. "There is," said he, "more money there than there ought to be, but it does not strike me that it is the proper thing to appoint a receiver to wreck this institution or to draw that money out all at once." Asserts That the Order Is Solvent. He declared that the point upon which the suit turned was its present solvency, not the possibility of future insolvency, and stated that on Jan. 1 last it had in its benefit fund more than a million, in its general fund more than $15,000; in its reserve fund $1,400,000, or total assets of $2,100,000, nearly will cash. Since then its assets have increased until it now has $2,486,374, with an income of $250,000 per month from assessments, which usually run $2 per month. With its power of assessment it could pay all it will be re-

2. August 13, 1892 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, August 13, 1892

Click image to open full size in new tab

Article Text

It Giyes Bonds for the Order's Officers and These Bonds Are Left in Charge of the Bank's Cashier. Making the Supreme Sitting Practically a Self-Perpetuating Body. Somerby's Confession as to Corrupting Legislators-Davis and Walker OustedHeins and His Testimony. YESTERDAY'S DEVELOPMENTS. They Were Numerous, and Possess the Deep est Interest for Iron Hall Members. The developments in the Iron Hall case were too numerous yesterday to be summed up. Suffice it to say that every line of the testimony presented below makes "mighty interestin' readin'." Supreme Justice Somerby made admissions on the stand which disclose a remarkably loose (to express it mildly) method of handling the millions belonging to the members of the Iron Hall. His testimony has developed: First-That the Iron Hall is interested, partly as depositor and partly as "donor" in the Mutual Bank of Philadelphia to the extent of $713,000. Second-That the stock of this bank is owned by a clique of supreme officers of the order. Third-That its capital was originally "wind," to be paid out of its earnings. Fourth-That its stock was partly paid for "money in the bank." Fifth-That in April last the bank's assets became impaired and the State Commissioner of Banking required a cash contribution of $170,000 from the stockholders to prevent it from going into the hands of a receiver. Sixth-That the supreme officers of the order donated $170,000 of the order's funds to themselves, as stockholders of the bank, and thus made good the impairment. Seventh-That this bank furnishes the bonds for many of the fiduciary officers of the order, and that its cashier. Mr. Hays, in his capacity as a trustee of the order, has charge of these bonds. Eighth-That Somerby has no bond and has bad none for two years, but one is now ready for approval, while one of the two bondsmen of Supreme Cashier Davis 18 dead. Ninth-That the order has assets (nearly all cash) of over $2,600,000. including the $713,000 supposed to be in the Mutual bank. Tenth-That the order's constitution has been violated to make the present Supreme Sitting. many members of which were elected at meetings attended by Somerby, practically self perpetuating. Eleventh-That the constitution has been violated in not informing the membership of a session of this sitting at which Somerby's salary was raised and certain changes made in the constitution. These are the most material points elicited from Mr. Somerby, and they certainly speak in very strong terms of his management of an institution with an income of three millions of dollars per year, and involving the interests of seventy thousand people. In addition, it has been shown that in a speech before the executive committee Somerby stated that in lobbying in legislatures he had spent large sums, and had thrown himself liable to imprisonment So much for one day in court. Outside of court it is reported upon good authority that this self-perpetuating Supreme Sitting yesterday voted to oust supreme officers Davis and Walker, because they are suspected of complicity in bringing this suit.

3. August 15, 1892 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, August 15, 1892

Click image to open full size in new tab

Article Text

TO SAVE THAT POT O' MONEY Why the Iron Hall Officials and Attorneys Have Gone to Philadelphia. They Want to Secure that $713,000 of the Order's Money, if Possible, Before the Receivership Case Proceeds. As the Journal stated exclusively yesterday, the scene of activity in the Iron Hall trouble has been temporarily transferred from this city to Philadelphia. On Saturday atternoon, R. O. Hawkins, of counsel for the plaintiffs, Charles W. Smith and Louis Newberger, of counsel for the defendants, Supreme Cashier Davis and expert accountant John Hines left for Philadelphia. On a later train at night Supreme Justice Somerby, Dr. Youngbusband and a number of the other supreme trustees left for the same destination, Though all parties to the secret conference in Judge Taylor's private room Saturday morning are still close-mouthed there is no longer any doubt that its result was an agreement to save the Mutual Bank of Philadelphia and the Iron Hall funds, $713,000, that are in it. if possible. In the examination of the bank by State Superintendent Krumbhaar and expert Hines, it is said by the Philadelphia newspapers that the fact was developed that the order is credited upon the bank's books with only about $350,000. while at the same time Mr. Somerby admitted on the stand that the order had in the bank $713,000 of which $170,000 had been donated to the stockholders. But even this should leave a credit there of $540,000, besides the $94,000 or $88,000 recently sent to its cashier. Hays, his capacity of supreme trustee, to be invested. Early this morning Somerby and the rest of the party leaving on the night train will reach Philadelphia. What steps have been agreed upon to protect the order's money there have not been divulged, butit is certain that the case in court will not proceed further until the danger of the funds suffering from a run on the bank in case a receiver 18 appointed is past. And, in this connection, it is generally believed that a rece ver will be appointed. The solvency of the order for a year or two yet is conceded, but the general impression is that the damaging admissions of Somerby about the $170,000 gift to this private bank, and as to the general looseness in conducting the order's attairs will cause the order to take charge of it, at least until the members are given an opportunity to elect a new Supreme Sitting and this body new officers.

4. August 17, 1892 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, August 17, 1892

Click image to open full size in new tab

Article Text

WALKER TALKS RIGHT OUT. Thinks a Receiver Should and Will Be Appointed for the Order, Supreme Accountant Walker, of the Order of the Iron Hall, was asked yesterday afternoon by a Journal reporter what effect the appointment of & receiver for the bank will have on the Iron Hall order. "It means good-bye to the Iron Hall," said he. "A receiver will be appointed. The attorneys and others who went to Philadelphia were to have been back here by to-morrow (Wednesday) morning. when the case was to have been taken up again, but in the morning a continuance for another day will be asked, as the attorneys will not get back until Thursday morning. I do not believe another witness will be placed on the stand. I think the evidence of Mr. Somerby and the preliminary statement before the court, made by Judge Howe, were sufficient grounds for the appointment of a receiver. It's awful! It's a bad state of affairs. Here Mr. Davis and myself have had to stand, during the past few weeks, all kinds of abuse because, it was claimed, we had given more information to the plaintiffs in the suit than to the defense. Isaid to Mr. Somerby: 'If the affairs of the Iron Hall are being conducted honestly, it is not going to hurt anybody to give out information about the order; and if it is found that disbonesty is a chief factor in running the affairs it 18 the proper time for an honest man to get up and say so.' My office and the books of my office are open to the inspection of anybody, because they are all right." "Do you know the amount of the liabilIties of the Mutual Bank of Philadelphia?" "No, I do not." said Mr. Walker. with an injured air. "I know, however, that there has been placed in the bank $720,000 of Iron Hall funds, while the bank only has the order credited with about $430,000. Now that the bank has been placed in the hands of a receiver, 1 suppose the stockhol ders will have to make the deficiency good, and that whatever per cent. is required to make good the amount due the Iron Hall Ly the bank will be levied on the stock. Everything I have is invested in that bank and in the Iron Hall building fund, and I suppose I will have to go out and hunt a new job." "Did the Haughville branch to-day denand the amount of its reserve fund in the arder's hands?" "Oh, no," said Mr. Walker, with a shake of his head. "They can't do that. You lee they turned their reserve fund over in lots for us to invest. and if they did denand it they couldn't get it until it came out of the investment. The money doesn't belong to them-it belongs to the order, and they are simply the trustees of the fund." About this time the reporter and Mr. Walker were joined by a member of the Iron Hall who proved to a stockholder in the Mutnal Bank. He holds $10,000 paidup stock and seemed to be very much perturbed. "What do you think about the failure of "Oh d-n that bank!" was his disgusted and unceremonious reply. "If I get a chance to go on the witnessstand" said Mr. Walker, "I will have a few things to say. I will give some idea about how this order has been run. With the Royal Arcanum Order or the Knights of Honor any member can look at the books and information about the condition or the order is sent out to the members from the office, but it's different here. Mr. Somerby looks after such things." From what a Journal reporter ascertained yesterday, from a reliable source, it was known here not only by the members of the executive committee of the order but by the attorneys, as early as Saturday, that the Philadelphia bank would make an assignment. A member of the executive committee said yesterday, when asked about the bank failure: "Ob. that's no news to us; we knew about that last Saturday." It is believed that this knowledge on the part of the attorneys was what caused the sudden breaking off of the trial Saturday and the subsequent trip to Philadelphia.

5. August 17, 1892 St. Paul Daily Globe Saint Paul, MN
Article from St. Paul Daily Globe, August 17, 1892

Click image to open full size in new tab

Article Text

Accountant Walker Mad. INDIANAPOLIS, Aug. 16.-Supreme Accountant Walker, of the Iron Hall, was asked tonight by a reporter what effect the appointment of a receiver will have on the Iron Hall order. "It means good-by to the Iron Hall," said he, "if a receiver will be appointed. 1 think the evidence of Mr. Somerby and the preliminary statement before the court made by Judge Howe were sufficient grounds for the appointment of a receiver." *Do you know the amount of the liabilities of the Mutual Bank of Philadelphia?" "No, I do not," said Mr. Walker, with aninjured air. "I know, however, that there has been placed in the bank $720,000 of the Iron Hall's funds, while the bank only has the order credited with about $430,000. Now that the bank has been placed in the hands of a receiver, 1 suppose the stockholders will have to make the deficiency good and that whatever per cent is required to make the amount due the Iron hall by the bank will be levied on the stock. If 1 get a chance to go on the witness stand I will have a few things to say. 1 will give some idea about how this order has been run. With the Royal Arcanum order, or the Knights

6. August 19, 1892 The Bennington Banner Bennington, VT
Article from The Bennington Banner, August 19, 1892

Click image to open full size in new tab

Article Text

THE IRON HALL EXPOSURE. Those officers of the Iron Hall in this vicinity who were so prompt to come forward with declarations that the proceedings at Indianapolis were a conspiracy against the order, that it was impossible for the supreme officers to have made way with any considerable part of the funds because they were under heavy bonds and the machinery was such that they could not get hold of the money, and that the money of the order had not been placed on deposit in any Philadelphia bank, will be inclined to rub their eyes when they read the admissions of Mr. Somerby, made under oath before the Indianapolis court. Among other interesting things they will learn that Mr. Somerby is not now and has not at any time been under bonds; that if his associates in the management of the order are under bonds he has only a very hazy idea what they are; and that the funds of the order have been handled by Somerby and his associates with the utmost recklessness and without any check. Nor is this the worst. Mr. Somerby admits that the funds of the order were used to bolster up a bank in Philadelphia of which he and other officers of Iron Hall had acquired possession, and that on one occasion, when the bank was in straits, $170,000 of the money of the Iron Hall was turned over to the bank as "a donation" to the stockholders. Here is a bit of the report of Mr. Somerby's testimony on this point: "Tell me how the Iron Hall used the $170,000?" "I think it was on a Saturday when the Bank Examiner of Philadelphia closed the Mutual Bank of Philadelphia and made an examination. We had every reason to believe it was an attempt to ruin the Iron Hall. "After an investigation it was discovered that a large amount of the order's funds were on deposit. If the bank went into the Receiver's hands it would entail a heavy loss on the order. "A meeting was called. M. C. Davis was there from Indianapolis. It was concluded if the bank was wrecked, it meant a receiver for the order. We had to do something. The assets were scanned and we agreed to protect the Cashier if the order would donate $170,000, which would tide over the bank and saye the order. This was to be donated to the stockholders. "This act was done voluntarily by M. C. Davis, who agreed to furnish the money outside of the Iron Hall if the Iron Hall would protect him." We will not dwell at present upon reports of other misappropriations of the funds of the order reaching an enormous total. The transactions confessed by President Somerby are sufficient to show in what manner he and the other officers regarded the funds in their hands and with what recklessness they used them. At no time, according to his admission, were the large balances to the credit of the order invested in any solvent interestbearing securities for the benefit of the order. What was done with a part his testimony makes clear. To what speculative or dishonest uses the rest was put we may learn later. It is to be remembered that the Iron Hall was the first of the endowment orders, the most numerous in its membership and by far the most powerful. Its strength and its success have all along been pointed to as demonstrating the possibilities of the endowment system. Mr. Somerby has been the foremost orator at all the great meetings called to protest against adverse legislation, and the machinery, membership and funds of the order have been used tirelessly to bolster up and perpetuate the endowment idea. The disclosures at Indianapolis account for Mr. Somerby's zeal in these directions. They will be a heavy blow to the thousands of dupes, many of them persons of intelligence and sanity in most matters, who, through good report

7. June 18, 1895 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, June 18, 1895

Click image to open full size in new tab

Article Text

SUPREMERS GO FREE JUDGE M'CRAY NOLLIES INDICTMENTS AGAINST IRON HALLERS. 001 oTHo Claims that Somerby et A1. Were Not Amenable to the Laws of Indiana. The charges against the supreme officers of the Iron Hall for misappropriating the funds of the order have been dismissed in the Criminal Court. The men indicted Oct. 16, 1892, for embezzling $200,000 belonging to the Order of the Iron Hall were Freeman D. Somerby, Mark C. Davis, Amos H. Hosmer, Joseph Gladding, J. henry Hayes, E. W. Rouse, C. H. Baker and J. H. Eckersley. The indictment against Mark C. Davis, supreme cashier, was quashed several months ago for want of prosecution. At the same time a motion was filed in the Criminal Court to quash the indictment against Freeman D. Somerby, the attorney contending that three consecutive terms of the Criminal Court had passed without any attempt having been made to prosecute the case. Judge McCray declined to dismiss the charge at the time. He held that Somerby, not having invaded the jurisdiction of this court, there could have been no proceedings against him. The action of the court yesterday was based on the contention that all of the defendants save Davis were residents of the State of Pennsylvania at the time the alleged offense was committed, and consequently were not amenable to the laws of Indiana. Also, that the alleged embezzlement was committed in the State of New York, and if prosecution was to follow the act it would have to be made in the courts of that State. Yesterday's proceedings were brought by attorney E. T. Dickey, the representative of Freeman D. Somerby. Attorney Dickey appeared in the Criminal Court armed with the official notes of the grand jury which indicted the men and an affidavit from Howland Evans, official stenographer of the United States Court. April 2, 1892, Mr. Evans was employed in the office of the Iron Hall in this city. His affidavit set out the following facts: All of the eight defendants were stockholders in the Mutual Bank of Philadelphias April 2, 1892, the bank, being financially embarrassed, was in the hands of the Pennsylvania State ba k examiner, who had commenced proceedings for a receiver. At the time there was over $400,000 Iron Hall funds on deposit in the institution. April 4, 1892, the directors held a meeting which resulted in the following message being sent to Mark C. Davis, the supreme cashier: "Come here at once and bring $150,000 without fail. Trouble. Will explain by personal interview. H. G. Williams." The affidavit further said that Davis, on the receipt of the telegram, drew two checks of $75.000 each, payable to his order. These checks Davis did not sign until he reached Philadelphia. From there he went to New York and cashed two checks for $75,000 each and another for $50,000. This money Davis paid over to the defendant Hayes, who was cashier of the Philadelphia Mutual. The funds went into the hands of the bank examiner with the explanation that the money had been raised by the stockholders to make good the depleted capital of the bank. The affiant was of the belief that the defendants, with the exception of Davis, were not in the State of Indiana April 2, 1892, nor were they residents of this State two months prior to this date. These facts being presented, Judge McCray consulted with prosecutor Wiltsie andathen announced that the indictments would be nollied. Prosecutor Wiltsie was of the opinion that the men could not be convicted were they tried here. He said, however, that new indictments could bei returned at any time the