19266. Brotherhood Savings & Trust Company (Pittsburg, PA)

Bank Information

Episode Type
Suspension → Closure
Bank Type
trust company
Start Date
October 16, 1926
Location
Pittsburg, Pennsylvania (40.441, -79.996)

Metadata

Model
gpt-5-mini
Short Digest
fcd43f97

Response Measures

None

Description

Bank was closed by the Pennsylvania state banking department in mid-October 1926 after a bond swindle (Charles E. Knapp) deprived the bank of about $102,000. Articles note the closure was to prevent a run, but no full depositor run is described; the institution was later placed in receivership and gone into dissolution by 1927. Corrected spelling of city to 'Pittsburgh' (articles show that spelling).

Events (2)
1. October 16, 1926 Receivership
Newspaper Excerpt
the state banking department... took over the affairs the institution; later references state funds were distributed to the bank receivers and other claimants and the bank is in process of dissolution (1927).
Source
newspapers
2. October 16, 1926 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank closed after disclosure of an alleged bond swindle in which about $102,000 of the bank's funds were lost by a swindler (Charles E. Knapp) and arrests of officers followed.
Newspaper Excerpt
Brotherhood Savings Trust Co. of Pittsburgh... failed to open for business today following disclosure alleged bond swindle... The bank was ordered closed the state banking department, which took over the affairs the institution after arrest five men
Source
newspapers

Newspaper Articles (9)
1. October 16, 1926 The Miami News Miami, FL
Article from The Miami News, October 16, 1926

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Article Text

OFFICIALS HELD SUSPENSION OF LABOR BANK Alleged $102,000 Fraud Revealed as Depository Closed PITTSBURGH, Oct. Brotherhood Savings Trust Co. of Pittsburgh, Labor bank, failed to open for business today following disclosure alleged bond swindle involving $102,000 the bank's funds. The bank was ordered closed the state banking department, which took over the affairs the institution after arrest five men, including three officers the bank, connection with the alleged swindle. Those and held for investigation the William Kelly, vice Nelson, and Frank Redman and Bennie Pittsburgh. Charles E. Knapp, 59, of burgh, former being sought by authorities connection with the missing funds. Arrests were made inforsecretly given to detectives that bonds approximately $640,000 delivered McCrady's office before yesterday had not arrived at midnight. Derefused to divulge the name of their informant. Redman, who is not depositor the bank, indorsed note for $102,000, police to complete the $320,000 needed by Diamond and himself payment for the securities. The money, McCrady stated last night, was delivered Knapp terday, who had been introduced him by Redman, McCrady said, and Knapp was have purchased the bonds and returned with them to MoCrady's office. The supposed bond salesman's absence at the specified time did not alarm McCrady said. did not notify police, believing Knapp unavoidably detained. TAX LAW HEARING SET Oct. supreme court Nov. 22 the date for oral arguments Florida's fight against the of the federal heritance tax law, Attorney General Johnson advised in letter from solicitor general of the United States.

2. October 16, 1926 Biddeford-Saco Journal Biddeford, ME
Article from Biddeford-Saco Journal, October 16, 1926

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BANK FAILS. ARRESTED Pittsburgh, Oct. Brotherhood Savings Trust Co. of Pittsburgh labor bank. failed open for business today after disclosure of alleged bond swindle. inof the funds. The bank ordered closed after arrest of including officers the bank connection with the alleged swindle.

3. October 17, 1926 The Omaha Daily News Omaha, NE
Article from The Omaha Daily News, October 17, 1926

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Article Text

FOUR ARE JAILED AS $102,000 GOES FOR BOND DEAL Institution Still Solvent; Closed Only to Prevent Run. ASSETS CALLED AMPLE though solvent, Pittsburgh's only co-operative bank was closed today due to its part in a $320,000 bond swindle. At the same time search throughout the east was started for Charles E. Knapp, who persuaded the president of the Brotherhood Savings and Trust company to in vest $102,000 of the bank's funds in bonds Knapp was selling. Otner "contributors" raised the pool to Knapp disappeared with the money when he went to get the bonds. R. A. McRady. president of the bank, and three other persons were arrested and charged with embezzlement. $2.000,000 Deal. McRady' claim that Knapp said he had $2,000,000 in bonds for sale at half price has created a sensa tion, and may be of far reaching importance. Authorities here beheve the bonds were stolen Besides McRady, those arrested William Kelly, vice president of the bank and president of the Carpenter's' union of Pittsburgh, said to have placed $37,500 of the union's funds in the pool to buy the bonds. J. L. Nelson, treasurer of the bank. Frank T Redmond. Run Prevented. The bank was taken over by the state department to prevent a run on the institution which Inevitably would have followed as hundreds of depositors gathered around the building. eager to withdraw their money The bank, founded in 1923, has never flourished. but is solvent even should its loss of $102,000 never be recovered. Its assets to day were given at $750,000 while deposits totaled only $500,000. The city police hearing of the four men arrested in connection with the case was postponed until Tuesday.

4. October 17, 1926 The Roanoke Times Roanoke, VA
Article from The Roanoke Times, October 17, 1926

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(Continued From Page One.) that Charles selfMcCrady invest $102,000 the funds bonds which Knapp was selling. Knapp interested scheme and the purchase his bonds Knapp according had bonds which he would sell for half But when the money was given set get bonds, he disappeared. Knapp been the Whethinterested the group his known. believed that may ramifications reaching farther this bank president said the fund contributed to Knapp raised Bank funds, Carpenters' by McCrady said he bag money day The two entered taxicab. but McCrady left to go barber Knapp the He has not his arrest. Insisted had While full credence given his story, has made the of the alleged bonds one the main police Rumors that the bonds belonged banker but they are by brought Maloney for and accused the state department. They were held ball $50,000 Hough, for for Neison city police hearing was When news the bond action became known around building eager the taking protect has never its placed while deposits total only $500.news of the swindle the He became that Knapp did not intend return the arrest McCrady and the others followed. The Brotherhood Savings Trust bong only Pittsburgh. depositors many its are unions. 1923 capital Deposits total charter and the surplus zation was increased to $500,000

5. October 19, 1926 Green Bay Press-Gazette Green Bay, WI
Article from Green Bay Press-Gazette, October 19, 1926

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OFFER $1,000 REWARD FOR BANK SWINDLER PITTSBU Pa Search for Charles Knapp. who disappeared Friday with in cash centered upon today with offer reward for the alleged and ten per cent of all found on Meanwhole additional information charging were ferred three officials of the Brotherhood and Trust com pany which closed after Knapp's disappearance with the nearly a third of the bank

6. March 15, 1927 New Britain Herald New Britain, CT
Article from New Britain Herald, March 15, 1927

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Man Who Wrecked Bank Puts Up No Defense Pittsburgh, March 15 (UP) Charles E. Knapp. central figure in the $32,000 bond swindle which wrecked the Brotherhood Savings and Trust company here, threw himself on the mercy of the court today when he pleaded "no defense" to a charge of larceny in connection with the bank's loss of $102,000. Knapp was fined $500 and sentenced to three and one-half years in the penitentiary, the maximum, by Judge Harry H. Rowand. Edward Goodfellow, on whose farm the bulk of the money was recovered, pleaded "no defense" of recelving stolen goods but sentence was suspended pending a physician's report on Goodfellow's health. The bank was Pittsburgh's only labor bank. It is now in the process of dissolution.

7. May 12, 1927 The Pittsburgh Post Pittsburgh, PA
Article from The Pittsburgh Post, May 12, 1927

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Knapp Jury Finds Verdict in Four Hours PHILLIPS RAPS DEFENDANTS AS ALL CROOKED (Continued From Page One.) he not in bank." position to didn't dare to take the $140,000. but an apparently legitimate loan would pass the bank trict Council note for this amount went in as the assets of the though wasn't worth the paper written He explained why this was handled as was it went on the books showby saying to people who ing as note had ample and any bank aminer have it was but loan at but was the bank for money was McCrady and the banking say that any who does such an act to deceive bank examis liable to HAND MONEY TRANSACTION. Then Phillips passed on to the $25.000 hand money given to Knapp as evidence of good faith and by him to McCrady "Kelly (W. Kelly, defendant) said was part of the $37,500 of the penters' Phillips said, "but said was money that was given him Maybe anyhow shown $9,000 worth of bonds out of almost worth he was dickering for it apparently occur to him that the bonds have been queer He was not even interested enough the second batch coupons. Ho secret service man investigate them and he was satisfied. REFERS TO FOLLY. whole in this case can summed up in damn fool and got trimmed, he knew that who goes into deal every man who handed the money over was prejudicing the Brotherhood Savings and Trust Company McCrady said they were expecting run on the bank momentarily, at any but after banking on tober Charles E. Knapp walk away with all the cash in the bank on gamble that he would help was to the and it defrauded the If wants to be fool that's his business as long as he uses his own McCrady never saw this money again until it counted at detective After Knapp failed to show up the appointed time, he waited in his office for an hour for hours doing not the police giving Knapp more time to get the planted and there might been another purpose this fact that Knapp is time has to do this The of the willing to turn and over to had with the bank and in that guilty of a this indictment and they should be found guilty sank into his chair seemingly by his strenuous of arraignment the five defendants. DEFENDS M'CRADY. Attorney Marshall opened his address by that "is thoroughly that the had not of case spiracy He pointed out how Crady had taking stand over his that had hide that he wanted to tell the jury he did and why he did it amount of money involved the only remarkable thing about this Marshall "otherwise it is just what has been taking place for years, people buying gold bricks for the brick around to the treasury to sell for real value, and the machines in $1 bill and out this case all over the of money being the only markable thing." is not case of civil liability against McCrady. who studied many years to master his profession: Squire Redman in old age, Kelly who trusted McCrady implicity, and Nelson have proved what kind of man the question of whether they conspired togetherman has right to know what he charged rich or white or colored. old or has the right to be informed as to the charge and these are charged with conspiring to cheat and defraud the and Trust Company and the only thing they are At this Marshall rupted by Phillips and after conversation Marshall read the other and to the dice of the Brotherhood Savings and Trust Company TRIED TO SAVE BANK Marshall contin"that the fifteenth of tober. certain large amount, was given Knapp for the purpose of assisting the Brotherhood Savings & Trust that to defraud was al ready 1926 have been closed had not McCrady. in trying to protect the and got hold of Dr. Morrow of the to get him to the "Every step took to was help the You don't judge man by he but he does," and he passed the testimony of Crady in which said that R. state bank had told him weeks after the bank closed that we known the facts in this case, the would not have been statement uncontradicted on the record." declared Marwe had the facts we found would not made the told an anecdotal story of Judge the of point which was that the jury is correct in its findings 99 times out of 100. PRAISES PRESIDENT. "Why these being cases Marshall clean up record, that's all-all the evidence to points one president like at air, he his fortune the then this opportunity He had taken the money out of his pocket to liver almost $16,000 more at other times save the bank -always striving to He thought he saw chance and he took it. Did act like man? Anybody that's crab "If in this case McCrady cannot practice his he will be disbarred, took the stand, though. to tell all his connection It," and he then swung to McCrady's attitude in the entire case take all the blame, fool' was what McCrady told the stand and more forcibly later, but not being tried for being fool. Thousands and thousands of people have been fooled with gold swamp lands in New sey and Florida-as Barnum said there's one born every minute, but then consider that none of us are Marshall then digressed to Knapp. "Knapp," said, "has paid his penalhe was guilty of larceny admire man who is good sport and takes his "Like Houdini, Knapp came along. rolled up his and said," Marshall continued, have bonds- brings the coupons and says that if they are no the Federal Reserve Bank at Cleveland will know The past-due coupons were through and paid, showing the bonds on the crooked The department of justice would down get the had the bonds they McCrady led to believe that the bonds were all was crafty trying to put through the scheme- goldbricked and fooled He got $25,000 from them. came back and said that the man who had the bonds wouldn't deal is the he will deal for they said to themselves 'He must be on the he brought our Then Knapp went to money experienced in the bond business Mr. Dinkey is Knapp fools him. Knapp has his there no Knapp was fooling them Rome its York France had had its Tex and Pittsburgh had its He has the penthe penalty PLEADS FOR CLIENTS. "If you these men sending leaned over the rail of the jury and "It's the first degree for Kelly and poor old just to their doom. Because McCrady of to to the that you find all of them not guilty and the be put the county. appreciates the mistake he made: these suffered. all more or less If believe the scriptures all born McCrady on the stand am reif am find guilty They had right to take the from the officers of money the bank were empowered to and has produced no evidence to the The commonwealth didn't produce the of the bank to disprove that they had authority simply were taking the poor bank by the hand help it Let us thank our forefathers that they government where the judgment of 12 such you jurors passes on the guilt of its Do unto these men as Mr. would do were on the find them not shall concluded. Addressing jury in behalf of his client, W. generally for all the Lencher declared soul of this case consists of two faith.' Lencher briefly the story of the bond swindle and declared that the burden of proof rested there bad faith and the proves this, then they are if there good faith, then cannot be convicted." he "are not the are he declared. and to illustrate his point told during this Frank W. Jackson, puty bank had flagrant although he had the books of the bank, slept with them in fact, but testified that in limited search of them he had not found any thing on the with reference to the purchase of $102,500 worth of Liberty bonds and didn't find the record of August 31, 1926, where in compliance with from the banking the of the to sell for. eign and buy Liberty "Jackson slipped Lencher clared, an honest and can't convict people of honest you mistakes." POINTS TO DINKEY. "Dinkey and Cunningham are names standing high in the financial Lencher "and Charles Dinkey believed to the tune of 000. He connected with one of the biggest financial houses in the Knapp knew McCrady knew that Dinkey Cunningham believedthe banker it looked so good that he invested not other people's money. but his car attorneys and believed in the propobecause did We can all be guys and good would have been better?" he asked the "This man Knapp in cold you been willing to trust who brought back and said 'thank you. I'm sorry, the deal gave the money back Can you say that men are for lieving a man like this? KELLY TRUSTED McCRADY. "Kelly relied on McCrady absolutely Why wouldn't he? You jurors saw like Chancellor judges other men in the business social life of Pittsburgh attest to his honesty and integrity Kelly saw give $16,000 he didn't want the name McCrady with a ing bank you say beyond any reasonable that Kelly did in bad The names he heard Dinkey and the others Kelly Don't convict man from the bottom of his believed his with PRICHARD PLEADS FOR KNAPP. Attorney Charles B. brief He moved the of that to find not be by the the motion He offered trial in pleaded to the of growing out of the Prichard there proven and asked that Knapp. who stands charged with the be found not he did not admit that he guilty but pleaded no He pointed out that his paying the penalty for he and asked name and fair that he be found guilty of the conspiracy ASKS NELSON'S FREEDOM Homer in of addressed the He said that time Nelson about the and the sation he had with the on the He Nelson of the ing the doing his daily and he make out the he simply lowed the in He pointed out that during the connecting Nelson charge and asked that client be not guilty charge the A large attorneys were spectators at the trial said that without of one the clearest and most heard the courts. his outlined the law in the and the resume of the in showed that had grasped of the highly complicated by the UNDER GREAT STRAIN. All of the the great strain the hours dragged by heard from the jury The red on a jury verdict lit up and a of and to the but another jury which of defendants in the under of the other He from 18 to years in the ern the fact that the jury failed to by the time The he the first day of the trial has Mrs Knapp, who has stuck by him through all his his side at every moment that Sheriff E. charge of permit All of the defendants except who taken back the lingered in passed around that there would be no verdict until court opens morning

8. July 19, 1927 The Pittsburgh Press Pittsburgh, PA
Article from The Pittsburgh Press, July 19, 1927

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REWARD IS HELD UP Head of Defunct Bank Balks on Paying Offer. Roland A. McCrady. former president of the Brotherhood Savings & Trust Co., made plain today that he did not intend to pay the reward he offered last fall for the return of the money with which Charles E. Knapp vanished until which McCrady claims, is returned to him. This $9,050.76 was ordered held back yesterday by Judge Thomas J. Ford, while kept in safe deposit box since it was in October was distributed to the bank receivers and other claimants. Judge Ford ordered the one item withheld pending the outcome of suits against McCrady and others involved in the case. McCrady admitted the aggregate reward was approximately $18,000, but refused to commit himself on how, when, or whom he would pay if the $9,050.76 were returned.

9. July 29, 1927 The Poultney Journal Poultney, VT
Article from The Poultney Journal, July 29, 1927

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GENERAL LABOR NEWS One hundred and fifty thousand textile workers at Lodz, Poland, struck in protest against working all day Saturday. United Mine Workers have appealed to the Supreme Court of the United States on injunction restraining them from persuading nonunion miners to Join union and go on strike. The Amoskeag Manufacturing company, Manchester. N. H., announced that the annual summer shutdown of ten days or two weeks will include Labor day. At present about 10,000 workers are employed. Workmen for the Pittsburgh Terminal Coal corporation commenced replacement of roofs on homes of miners In Coverdale that had been torn off In an effort to force the strikers to vacate the company houses. Ohio's coal mines, closed since April 1. because of wage differences, reopened July 15, either on union or nonunion basis, with the November (1917) scale of $5 per day in effect, according to decision of the Ohio Mine Operators' association. The American Federation of Labor Is ready to assist "in every way possible" the Amalgamated Association of Street and Electric Railway Employees in Its appeal to the Supreme court of the United States in the cases growing out of the Indianapolis street railway strike in 1926, William Green, president of the federation, announced. Withdrawal of Mitten Management, Inc., from the proposed alliance with the Brotherhood of Locomotive Engineers in the operation of the latter's financial institutions and other interis announced by Dr. A. Mitten. Opposition from within the brotherhood was given as the reason for abandonment of the plan. Recommendations that the railroads of the country give sympathetic consideration to the problem of stability of employment not only as matter of fairness to employees but also because it tends to promote efficiency and economy in operation, are contained in report made public by the Association of Railway Executives. The Vesta Coal company, a subsidiary of the Jones & Laughlin Steel company, is preparing to reopen its Denbo mine at Fredericktown, Washington county, Pa., on the "open-shop" basis, according to word received by headquarters of the United Mine Workers of America. The Denbo mine employs over 1,000 men when running full time. Agreement of several mine owners in central competitive fields (Illinois, Indiana and a part of Ohio) to the demands of the miners, and resumption of work those mines were cited by Harry Fishwick, Illinois president of the union, as an argument against the miners' acceptance of the wage cut demanded by the Illinois Coal Operators' association. A proposal has been made for the amalgamation of the three great BritIsh rallway trade unions, total membership of 370,000. The amalgamation would embrace membership of 250,000 in the National Union of Railwaymen, 70,000 in the Association of Locomotive Engineers and Firemen and 50,000 members of the Railway Mail Clerks' association. J. H. Thomas, colonial secretary in the late British Labor government, who is general secretary of the National Union of Railwaymen, sald general strike was the wrong way to achieve the right thing. He declared the general strike called in May. 1926, had cost the National Union of Railwaymen £1.800,000 ($9,000,000). which had been taken out of its reserve fund. However, the union was again economically sound, he added. William A. Magee. former mayor of Pittsburgh. and counsel for the Brotherhood Savings & Trust company, announced that negotiations looking to the reorganization of the bank with the aid of E. Mitten, president of the Philadelphia Rapid Transit company. were being made. The bank was closed by the state banking department after it had been swindled of $125,000 in the now famous Knapp liberty bond "bargain sale." It was the only labor bank in Pittsburgh.