President Hipple's suicide was initially suppressed to avoid a run; receiver George H. Earle, Jr. appointed.
Events (5)
1.August 28, 1906Run
Cause
Bank Specific Adverse Info
Cause Details
Heavy loans and alleged falsified books by president Hipple and massive bad loans to promoter Adolph Segal prompted depositor panic and crowding.
Measures
Directors instructed deposits received after opening to be set aside and deposited with Franklin National Bank in name of depositors; Clearing House guarantee sought.
Newspaper Excerpt
The news of the closing of the Real Estate Trust Co. spread like wild-fire, and a few minutes after the announcement was made that the doors would be closed a mob of several hundred depositors had collected at Broad and Chestnut streets, trying to get in to the bank.
Source
newspapers
same day
2.August 28, 1906Suspension
Cause
Bank Specific Adverse Info
Cause Details
Institution's insolvency exposed after Hipple's death revealed falsified books and huge bad loans; directors decided to suspend payments.
Newspaper Excerpt
Vice President Houston telephoned to the bank to suspend business and send the receivership papers to court.
Source
newspapers
+1 day
3.August 29, 1906Receivership
Newspaper Excerpt
George H. Earle, Jr, who has been appointed temporary receiver of the Real Estate Trust Co, ... Receiver Earle took charge of the affairs of the Real Estate Trust company, which Tuesday failed because of the heavy loans made by Frank K. Hipple ... upon insufficient security.
Source
newspapers
+15 days
4.September 13, 1906Reopening
Newspaper Excerpt
Receiver Earle to-day reopened the Real Estate Trust Company to receive deposits.
Source
newspapers
+49 days
5.November 1, 1906Reopening
Newspaper Excerpt
The doors of the Real Estate Trust company were opened this morning and the institution, which suspended August 28, resumed its place among the big banks of the city.
Source
newspapers
Newspaper Articles (25)
1.August 29, 1906Daily Kennebec JournalAugusta, ME
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Article Text
He replied: "I have no reason to be-
lieve otherwise, but cannot say posi-
tively."
For the loans to Adolf Segal, Hipple
accepted as collateral securities of the
Majestic hotel, a new apartment house
operated by Segal, the Swedish Steel
Co. of Lancaster Pa., and the Pennsyl-
vania Sugar Refining Co. of this city.
The Steel Co. and the sugar refining
concern have never been placed in op-
eration. Segal claims the collateral he
gave is good and that he will meet all
his obligations.
There are others to whom Hipple
loaned money on alleged insufficient
security, but their names have not
been made public and the sums are
not believed to be large. How far Hip-
ple benefitted in the loans made or
whether he was merely the tool of
other has not yet been determined.
All the directors are remaining si-
lent on that point and also on the
question of whether there will be any
criminal proceedings.
In order to hide the true conditions
of the company and save himself Hip-
ple resorted to the falsification of his
books which were accepted as true by
the directors. He used what they usu-
ally term "a double system of making
a report." When the state bank exam-
iner called Hipple presented to him se-
curities to offset the loans made and
when the president made his report to
the directors he would show them a
bundle of other securities and other
paper and along with these he would
exhibit the certificate of the bank ex-
aminer which showed that the ac-
counts the examiner had investigated
were correct. The directors, supposing
the securities shown them were the
same, approved the reports.
Among these directors are Dr. S.
Weir Mitchell, the eminent author;
John D. Converse of the Baldwin Locu-
motive Works and one of the most
prominent laymen in the Presbyterian
church in the United States; John F.
Betz, the millionaire brewer; William
A. Patton, assistant to President Cas-
satt of the Pennsylvania Railroad;
Judge W. W. Porter; R. Dale Benson,
president of the Penn Fire Ins. Co.;
Joseph Dunkin, Edward R. Borden;
Samuel Houston, who is also vice
president of the company, and Former
State Senator J. Bayard Henry and
Frank C. Roberts.
As soon as the directors learned of
the sudden death of President Hipple
they began an investigation of his af-
fairs and were shocked when they
learned the true condition of the com-
pany. This was after the close of
business Friday. A meeting of the
board was hurriedly called and ti was
decided to instruct the officers of the
bank that all deposits received after
the opening of business Saturday
morning should be set aside and de-
posited with the Franklin National
Bank, in the name of the individuals
presenting the money. This was done
to absolve the directors from criminal
proceedings for receiving money after
they knew the Trust Company was in-
volved.
On Monday morning more than $150,000
was deposited by patrons of the bank
which was practically offset by with-
drawals by persons who had heard ru-
mors of the company's conditions. The
money deposited since Saturday will,
however, not be returned to the deposi-
tors until the courts have decided wheth-
er it should be paid back.
While the depositors were supposedly
placing their money with the Real Es-
tate Trust Co., the directors were mak-
ing strenuous effort to bridge the insti-
tution over the difficulty. All day yes-
terday they worked, but it became appar-
ent shortly after noon today that the
crash was inevitable. Application papers
for a temporary receiver were prepared
and left at the offices of the Trust Co.,
after which the directors went to the
meeting of the Clearing House Associa-
tion to make a last appeal for help.
There were probably 30 bank presidents
at the Clearing House to meet the di-
rectors of the Trust Co. The latter stat-
ed that they needed $7,000,000, but the
best the banks could do was to guaran-
tee $3,500,000. This was not enough, and
as all other means for getting money
had failed, Vice President Houseton tel-
ephoned to the bank to suspend busi-
ness and send the receivership papers to
court. In an incredibly short time the
story was on the street and created great
consternation. Hundreds of persons
gathered on the streets about the build-
(Continued on Page Two.)
cess. He has made friends and has spent money lavishly. George H. Earle, Jr, who has been appointed temporary receiver of the Real Estate Trust Co, is one of the best known figures in the financial world, and has had experience in straightening out the tangled affairs of a number of financial wrecks. Mr Earle for a time managed the Philadelphia Record and is credited with being mainly instrumental in securing upwards of $2,500,002 for the property when it was sold at receiver's sale. He is president of the Pennsylvania Warehousing and Safe Deposit Co, the Finance Co of Pennsylvania, Market Street aNtional bank and Tradesmen National bank.
3.August 30, 1906Evening JournalWilmington, DE
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Article Text
Special to The Evening Journal. PHILADELPHIA, Aug. 30.-Coroner King, of Norristown, aP., this morning admitted that Frank K. Hipple, late president of the Philadelphia Real Estate Trust Company, committed suicide by blowing out his brains. The coroner stated that he had suppressed the facts to prevent a run on the banking institution.
Philadelphia, Aug. 30. - Coroner King of Montgomery county admitted today that Frank Hipple, president of the Real Estate Trust company. who was found dead in his home last Friday, committed suicide. Coroner King said he decided to suppress the fact for a few days in order to prevent a run on the trust company. The coroner stated that Hipple placed the muzzle of a 38 caliber revolver in his mouth and shot himself. Plan To Get Money Back Philadelphia, Aug. 30. - Receiver Earle said today that a plan of reorganization of the Real Estate Trust company was to ask the creditors to take preferred stock in the trust company for their claims and to appoint their own officers in the company. This, he felt assured. would
A Case of Suicide. Philadelphia, Pa., Aug. 30.-Coroner King, of Montgomery county, admitted today that Frank Hipple, president of the Real Estate Trust Co., who was found dead in his nome last Friday, committed suicide. Coroner King said he decided to suppress the fact for a few days in order to prevent a run on the Trust company. He stated that Hipple placed the muzzle of a 38-caliber revolver in his mouth and shot himself.
6.August 31, 1906Barton County DemocratGreat Bend, KS
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Article Text
President Hipple Suicides. Philadelphia, Pa., August 30.Coroner King after an inquest over the body of President Hipple, of the Real Estate Trust Co., announced that Hipple committed suicide by shooting himself in the head. King says he, suppressed the suicide seven days to prevent a run on the bank, at the request of a number of the directors and members of Mr. Hipple's family. He thought the directors would have time to make up the deficits if they were given time, and thus help the depositors. Hipple killed himself in his bath room by placing the revolver in his mouth the ball lodging in"his brain and leaving no external wound.
7.August 31, 1906The Stark County DemocratCanton, OH
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Article Text
lof the proceedings. What was done, however, was not allowed to leak out, until the official announcement of the suspension was made known at the close of the meeting by the vice president, S. F. Houston.
The Real Estate Trust company, southeast corner of Broad and Chestnut streets was incorporated in 1885. The full capital is $1,500,000, and the surplus and profits a like sum.
The news of the closing of the Real Estate Trust Co. spread like wild-fire, and a few minutes after the announcement was made that the doors would be closed a mob of several hundred depositors had collected at Broad and Chestnut streets, trying to get in to the bank. M. S. Colling-wood, assistant treasurer, denied that there had been a run on the bank or that it had been necessary to send over to the Franklin bank to get currency to meet the demand,
The city had about $380,000 on deposit in the company.
8.August 31, 1906Evening JournalWilmington, DE
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AIDED ADDICKS IN GAS SCHEME Now Lawson Says Hipple Was His Ally in Bay State Gas Under date line of Boston, August 29, Thomas W. Lawson states that Frank K Hipple, late president of the defunct Real Estate Trust Company, of Philadelphia, was an ally of J. Edward Addicks in his Bay State gas scheme. Upon this subject Lawson talks as follows: "I deem it necessary to call attention to some facts in regard to the failure yesterday of the Real Estate Trust Company, of Philadelphia. "Hipple, president of the Real Estate Trust Company, was an ally of Addicks. Through the company Addicks put the gigantic Bay State Gas jugglery. "The Real Estate Trust Company was the institution whence came the $1,000,000,000 issue of Bay State stock. When this deal began there were but 100,000 shares outstanding. Presently it began to pour forth in such quantities that Wall street proceeded to investigate, "At every stage the inquiry ran into the Real Estate Trust Company and the 'say so' that the transaction was right. Finally a New York house laid before the exchange over 160,000 shares of the stock, and Bay State shares were thrown out of the New York and Boston Exchanges. Even then. there was no whisper against the integrity of the Real Estate Trust Company. So powerful, in fact, was this company that it brazenly continued to issue and guarantee the honesty of the product of Addicks' printing press until no man knew or could ascertain the amount of Bay State stock outstanding. To Addicks Personally When the receiver came into Bay State affairs it was discovered that there had been issued to Addicks personally, in a single day, 100 full books of certificates, amounting to $75,000,000. Yet there was no mention of the Real Estate Trust Company. "In 1896 it became necessary to turn over the Bay State Company to other people, and it was decided to elect Nathan Matthews, of Boston, its presiF dent, to save the whole structure of Addicks from a sudden blow. It was necessary that the Real Estate Trust Company certify to all the different documents. "So all hands went to Philadelphia, Addicks called up Hipple. 'Very sick in bed' came back the answer. 'Bosh,' said the only American who has been able to make gold eagles from passing windstorms "He marched the entire party up to Hipple's house, and he, with one of the e lawyers and the sick man in bed, were, for all of Addicks' purposes, the entire Real Estate Trust Company. All the e papers were properly certified and h guarantees given."
The failure of the Philadeiphia Real Datate Trust company, yesterday, has emphasized the fact so often announced by the press of the country, in telegrams and editorials, that realty speculation in most sections has run riot. In the adjoining column is presented a good article on the subject from the Chicago Financial World. It is well for Albuquerque that this craze has not struck this city. Realty here is in good demand, and there is considerable movement, but there has been no boom and fortunately there seems no danger of inflated speculation.
10.September 3, 1906Alexandria GazetteAlexandria, VA
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Article Text
Men who were involved with Frank K. Hipple in the wrecking of the Real Estate Trust Company in Philadelphia are to be brought to account, it is reported. Receiver Earle put certain evidence in the hands of the district attorney yesterday looking to that end.
11.September 4, 1906Arizona RepublicanPhoenix, AZ
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therefor. All indebtedness will be fully met on call from the receiver." Discussing the liabilities of the directors. John H. Converse, head of the Baldwin Lecomotive works and one of the board of directors, said today: "That which was done in the case of the Real Estate Trust company would be possible, under existing laws and regulations, in the affairs of any other trust company in Philadelphia. The directors went through the forms that are observed by other boards of directors. The fault is with the present system, which must be radically changed before it may safely be said that another real estate trust crash is out of the question." Mr. Converse denied a statement that the directors had held but one meeting in two years.
# MOB ATTACKS HIPPLE'S SON.
Police Rescue Heir of the Bank Wrecker.
Hipple's son had a rough experience Wednesday in Philadelphia when he emerged from the bank building. A man in the crowd saw him and shouted: "There goes the son of a rogue who said he had no faith in men who smoke cigars and chew tobacco." Immediately the mob took up the cry and made a rush for Hipple. For a few moments it looked as though he would be roughly handled, but the police succeeded in beating the mob back and rescuing the frightened man from its wrath. He was hustled into a carriage and taken away.
Receiver George H. Earle, Jr., Wednesday took charge of the affairs of the Real Estate Trust company, which Tuesday failed because of the heavy loans made by Frank K. Hipple, late president, to Adolph Segal, a promoter, upon insufficient security. Until Mr. Earle completes his investigation the exact condition of the company's affairs cannot be told. The receiver, however, expressed the belief that the trust funds are intact. John H. Converse, a director of the company, one of the foremost Presbyterian laymen in the country, upon whose petition the receiver was appointed, said he was satisfied that the securities of the various Presbyterian church boards are safe.
The Presbyterian hospital, of which Mr. Hipple was treasurer, Wednesday elected the Fidelity Trust company as his successor, and through that concern learned that the institution's securities, amounting to $1,500,000, are intact.
While it is believed the securities of the board of trustees of the general assembly are equally safe, it will be necessary to elect a new treasurer before the fact can be determined.
It developed Wednesday that Mr. Hipple had on deposit for various Presbyterian organizations $150,000 in cash. Included in this was the sum of $10,000 deposited by the Women's Foreign Missionary society to be used for rebuilding the home for rescued Chinese slave girls in San Francisco, destroyed by the earthquake.
13.September 7, 1906Daily Kennebec JournalAugusta, ME
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# HIPPLE'S METHODS.
(Continued from Page One.)
yesterday on charges of aiding in the wrecking of the company, was held before Magistrate Kockersperger today. District Attorney Bell in outlining his case, said that he would prove that the accused men with Hipple were engaged in a gigantic conspiracy to defraud the Trust Co., and that a result of their acts more than $5,000,000 was realized. At the conclusion of the hearing the three prisoners were held for trial, their bail being renewed.
To determine the responsibility of the directors of the wrecked Real Estate Trust Co., State Banking Commissioner Berkey came here today and appointed as special bank examiners Charles M. Vollum and Meyer Goldsmith, expert registered accountants, who with the consent of Receiver Earle will begin a thorough examination of the assets and liabilities of the concern.
Receiver Earle tonight after a conference with company directors issued a statement announcing that the hopes soon to re-open the bank and that all depositors will be protected. Mr. Earle says the directors will help reorganize the company, but he did not say how much money they have guaranteed. The preliminary hearing of Adolph Segal, the promoter, William F. North, treasurer, and Marshall S. Collingwood, assistant treasurer of the real Estate Trust Co., took place today and the three were held in heavy bail for trial.
The evidence presented through witnesses by District Attorney Bell at the hearing of Segal, North and Collingwood today exposed the methods by which Segal and Hipple wrecked the company. The most damaging testimony was that to the effect that both Hipple and Segal had repeatedly overdrawn their accounts with the knowledge of the treasurer and assistant treasurer.
On the day Hipple died there was an overdraft of $64,000 against the president, which was converted by Collingwood into a loan showing Hipple's account to be apparently straight. These overdrafts of Hipple and Segal at times amounted to more than $800,000. There was on deposit in the bank approximately $7,000,000, and the loans made to Segal amounted to $5,309,200. Segal's equity in the Segal Sugar Refinery is 49 per cent. of the stock. This has been handed to Mr. Earle, who is desirous of securing control of the remaining 51 per cent. It is rumored he will bring suit against the American Sugar Refining Co. under the Sherman act.
14.September 12, 1906Alexandria GazetteAlexandria, VA
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Bank Reorganizing. Philadelphia Sept. 2.-Reorganiza tion of the Real Estate Trust Company upon & plan which will be generally satisfactory was assured yesterday when the directors of the broken institution accepted the suggestions made by George H Earle, jr., the receiver, in their entirety, and these suggestions were approved by counsel for the receivers and for the directors. The plan is being printed, and will be mailed tomorrow to the 6,000 depositors in the company. The crime of forgery was fastened upon Frank K. Hipple, the suicide president of the company, by the conclusion of the inquiry made into the Shwartz and Wabell notes for $198,000. The inquiry was made by District Attorney Bell and by his assistant, Joseph H. Taalane Crooked financiering received a new twist when the District Attorney revealed the process by which Hipple boosted the bonds of the American-Swedish Crucible Steel Company from $500,000, the original issue, to $5,000,000
15.September 13, 1906Evening JournalWilmington, DE
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EARLE OPENS TRUST CO. By Our Own Wire, Publishers' Press. PHILADELPHIA, Pa., Sept. 13.-Receiver Carle to-day reopened the Real Estate Trust Company to receive deposits.
16.September 13, 1906Alexandria GazetteAlexandria, VA
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Real Estate Trust Co. Reopened. Philadelphia, Sept. 13.-The - receiver today reopened the Real Estate Trust Company to receive deposits.
17.September 13, 1906Mrs. GrundyTracy City, TN
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The coroner in Philadelphia now says that Frank D. Hipple, late president of the Real Estate Trust company, that failed, committed suicide by blowing out his brains. It was reported at the time that Hipple died from heart failure. The coroner says he suppressed the truth for fear of a run on the banking institutions.
18.September 14, 1906Omaha Daily BeeOmaha, NE
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Receiver Earle's plan to reorganize the Philadelphia Real Estate Trust company will probably meet with favor from all persons except those called upon to put up the cash.
19.September 14, 1906The Paducah Evening SunPaducah, KY
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Trust Company Reopens. Philadelphia, Sept. 14.- Receiver Earle today reabened the Real Estate Trust comu ay to receive deposits.
20.September 29, 1906The SunNew York, NY
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Except from very rare and exceptional causes, such as sudden panics or runs due to false rumors, there is never any reasonable excuse for the failure of a bank or trust company. It is almost always the result of inexcusable folly and incompetence, or dishonesty and fraud, and often due to all of these combined. When a bank does fail it is the fault of the board of directors. - Comptroller of the Currency RIDGELY.
As the failure of the Real Estate Trust Company was not due to a panic or to false rumors, and as Mr. RIDGELY was speaking to Philadelphia bankers, he must have had that institution in mind.
21.October 26, 1906Alexandria GazetteAlexandria, VA
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The Real Estate Trust Company. Philadelphis, Oct. 26 -George H Earle was today discharged at his own request," as receiver of the Real Estata Trust Company, and the company will reopen its doors Nov. 1st.
22.November 1, 1906The Paducah Evening SunPaducah, KY
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Real Estate Trust Co. Philadelphia, Nov. 1. - The doors of the Real Estate Trust company were opened this morning and the institution, which suspended August 28, resumed its place among the big banks of the city.
23.December 21, 1906New-York TribuneNew York, NY
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WOULD SUE THE SUGAR TRUST. Pennsylvania Company Alleges Its Operation as Refinery Was Illegally Prevented. Philadelphia, Dec. 20.-George H. Earle, jr., receiver for the Pennsylvania Sugar Refinery, presented a petition in the Common Pleas Court here to-day asking permission to bring suit for damages against the American Sugar Refining Compary for illegal exercise of its control of a majority of the stock of the Pennsylvania company in preventing the operation of the refinery of the company. Mr. Earle was appointed receiver of the Pennsylvania Sugar Refinery Company after the collapse of the Real Estate Trust Company, when it was found that stock of the refining company had been given to the trust company as security by Adolph Segal. Mr. Earle asks authority to have the trust company, as trustee under the mortgage securing $3,000,000 of bonds of the sugar company, to foreclose. The receiver says: My investigations show that Gustav E. Kissel, of New York, surreptitiously acting as agent for the Sugar Trust, made a loan to Adolph Segal and got trust securities and bonds of the Pennsylvania Refinery Company and, with John E. Parsons, held a controlling interest in the board of managers of the company and voted to make the refinery inoperative. The conduct of the alleged trust, Mr. Earle says, has not only been illegal, but criminal, and he seeks authority to bring action. Its conduct, he alleges, contributed to the failure of the Real Estate Trust Company.
Philadelphia, Pa., Dec. 21.-Their desire to thwart the threatening ambitions of Adolph Segal, the wizard promoter who inspired the Sugar trust and certain of its New York agents to form a conspiracy that led to the ruin of Frank K. Hipple and the looting and wrecking of the Real Estate Trust company, was the sensational charge made today in behalf of George H. Earle, receiver of the Pennsylvania Sugar Refining company and president of the reorganized trust company. Net Spun by Sugar Trust. In direct terms, the entire net of crime that caused the suicide of Hipple and the downfall of the big financial institution is alleged to have been spun by the Sugar trust, its officers or agents. The men connected with the trust directly named as the active conspirators are Gustave Kissel, John E. Parsons and Theodore A. Havemeyer, all of New York city. Leave to Proceed. Mr. Earle was granted leave to proceed at once, civilly or criminally, against the big trust and the men named. Not only will millions in damages be asked, but action will be taken to force the dissolution of the corporation that has a monopoly on the sugar products of the United States.
# Will Bring Suits For $20,000,000.
PHILADELPHIA, Jan. 14.-Suits for $20,000,000 will be brought against the sugar trust by Receiver Earle, who alleges it entered into a conspiracy that wrecked the Real Estate Trust company of Philadelphia and drove President Hipple to suicide.
Bank runs are almost always and everywhere a deterioration of bank fundamentals.
But not for you.
You are the measure-zero exception: great fundamentals, solid bank, and yet the Diamond Dybvig fairy spread its rumor. Depositors woke up. Your collateral was not prepositioned. The Clearinghouse had it for you.
Do not pass Go. Do not collect $200. Go directly to jail… or worse.
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Real Estate Trust Company · Episode ID 2439269091280
