First Second National Bank (Pittsburg, PA)

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RUN ON SAVINGS BANKS

PITTSBURG, July 7.-Following the news of the closing of the FirstSecond National bank a steady run started on the Pittsburg Bank for Savings, which is also controlled by the Kuhn interests.

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[Bulletin] PITTSBURG, July 7.- C. C. Murray was this afternoon appointed receiver for the FirstSecond National bank.

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CLOSING OF BANK INVOLVES40 MILLIONS One of the Oldest Institutions in Pittsburg Ordered by U. S. Comptroller to Suspend. PITTSBURG, July 7.-The FirstSecond National Bank of Pittsburg, one of the city's oldest banking institutions, closed its doors to-day by direction of the Acting Comptroller of the Currency. The amount involved is said to be between $24,000,000 and $40,000,000. One report is that the amount will reach $200,000,000. The Pittsburg Clearing House had a special meeting last night to consider the impending failure and today another conference was held. Hundreds of depositors, many of them foreigners employed in the great steel mills, flocked to the bank early to-day but a squad of police kept every one moving. The First and Second National, Banks combined last March and OCcupied a new 25-story building. A typewritten notice on the doors stated the institution was in the hands of National Bank Examiner Samuel M. Hann and Sheriff Smith. A director of the bank to-day made the following statement: "The officers and directors are a unit in maintaining that a great injustice has been done and that the bank is solvent at this moment. We are also convinced that all claims will be paid in full. If the Treasury Department, operating through the Comptroller of the Currency, had not interfered and had not subjected the bank to a rigid examination by special examiners who were not able to judge values of property and securities in this community, we would have been able to work out to success our problems."

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ALLIED BANK CLOSED, AND WATERWORKS CO. GOES INTO RECEIVERSHIP DISPUTE WITH TREASURY Closing of These Great Institutions Said to Be Climax to Long Quarrel as to Value of Assets By Associated Press. PITTSBURG, Pa., July 7.-FirstSecond National Bank, a consolidated institution, and one of the largest in the country, was closed today by order of the comptroller of currency. The First National Bank of McKeesport, Pa., an allied institution also closed. W. S. Kuhn and J. S. Kuhn brothers. own the controlling interest in bot banks, also the American waterworks and Guarantee company, which owns forty waterworks plants in various parts of the country. Late this afternoon, attorneys asked appointment of a receiver by the Federal Court for the waterworks company, also for the firm of J. S. and W. S. Kuhn, incorporated. The receivers appointed for the waterworks company: J. 8. Kuhn, W. S. Kuhn, J. H. Purdy, Samuel Bailey Jr. and for the Kuhn Company: J. K. Duff. The First-Second National Bank has deposits of $30,000,000, the capital stock is $3,400,000. The closing comes as the climax of a long quarrel with the treasury over the value of assets. On June 4. the reserve was more than $2,000,000 below the legal requirement. A run began today on the Pittsburg bank for savings, of which J. S. Kuhn is president.

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PITTSBURG IS NOT DISTURBED OVER FAILURE NO INDICATION OF ANXIETY OVER SUSPENSION OF THE FIRST-SECOND BANK. (BY ASSOCIATED PRESS) PITTSBURGH July 8.-When the day opened in the Pittsburgh banking district today there was little to indicate that there had been a day of anxiety and excitement in the finan cial world because of he failure of the First-Second National Bank of Pitts. burgh, and the First National Bank of McKeesport yesterday, and the appointing of receivers for W. S. and J. S. Kuhn, incorporated, and the Amerlean Water Works and Guaranty Company. The run on the Pittsburgh bank for savings started yesterday, was resumed today. Depositors were paid fifty dollars at once and notices of thirty, in sixty and ninety days were required for larger amounts. Kuhns Resigned Presidency. PITTSBURGH, Pa., July 8.-J. S. and W. S. Kuhn today resigned as president and vice president respectively of the Pittsburgh Bank for Savings against which a run is being ditected. Officers immediately elected to take charge of the bank are: W. J. Jones, president; L. M. Plumer, vice president: A. N. Coegtley, secretary and treasurer. The comptroller of currency to-day formally closed the First Bank of McKeesport

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SECRE TARY M'ADOO MAKES STATEMENT DEFUNCT BANK A SORE SPOT HANDED DOWN FROM LAST ADMINISTRATION. SITUATION IS GOOD MERELY SPORADIC CASE OF UNSOUND BANKING AND NO FURTHER TROUBLE IN PITTSBURG EXPECTED. WASHINGTON, July 7.-Secretary of the Treasury McAdoo late today issued the following statement on the closing of the First-Second National bank of Pittsburg, and the First National bank of McKeesport: "The acting comptroller of the currency took charge of the First-Second National bank of Pittsburg today because its directors in a meeting held at Pittsburg yesterday expressed their inability to make good an impairment of its capital and decided that the wise thing for all interests was for the acting comptroller to take the situation in hand. The Pittsburg Clearing House association, which has had the matter under consideration for sev. eral days, had in the meantime also decided that it was inexpedient to furrish the amount of assistance required to keep the bank going. Sore Spot For Some Time. "This bank. which was handed down from the last administration. has for some time been a sore spot in the local situation and its liquidation became Inevitable. "The general banking situation In Pittsburg is sound and no further trouble with banks is expected. "The acting comptroller has no alternative in the circumstances but to take charge of the First-Second National bank in order to prevent the withdrawal of large accounts which has already begun and to secure for the small depositors equal treatment with the lenge -- maill

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Despite the announcement by treasury officials and financiers that banking conditions here are sound, the run which started on the Pittsburg Savings Bank continued yesterday. The institution is controlled by the Kuhn interests, owners of majority of stock in the First-Second National Bank which closed its doors here.

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DEPOSITORS TO BE PAID FULLY HOPEFUL VIEW IS TAKEN Financial Situation Seems Brighter Following Failure of Pittsburg First-Second National Bank-Directors Reorganize-Kuhn Interests Eliminated. PITTSBURG, July 9.-A more hopeful view was taken of the financial situation, following the failure of the First-Second National bank. It is now expected the depositors will be paid in full. The board of directors of the bank are reorganized and the Kuhn interests will be eliminated before the bank is reopened. Agents of the treasury department are investigating charges that dummy loans were made. W. S. Kuhn, president of the institution, is expected to arrive some time today to assist in straightening out affairs. An application for receivers was made in the federal court for the six subsidiaries of the American Waterworks and Guaranty company.

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good balance

Bankers said it had been many years since the failure of a bank outside of New York caused so much interest in Wal street. One banker said that it had been known for some time that the old First National bank of Pittsburg was weak, but it was believed that its acquisition by the Second National would elim. inate the weakness. At the New York office of J. S. and W. S. Kuhn, incorporated, it was said nothing official had been received from the main office in Pittsburg. Appointment of receivers for the American Waterworks and Guarantee company follows closely an offering by J. S. and W. S. Kuhn, incorporated, of $2,450,000 6 per cent gold notes of the Hydro Electric company of West Virginia. The principal and interest of these notes are guaranted by the American Waterworks and Guarantee company.

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RECEIVERS ASKED FOR KUHN BRANCHES

(By Associated Press.) Pittsburg, July 9.-Petitions were presented to the Federal Court today asking receivers for six subsidiary firms of the American Waterworks & Guarantee Co. One of the Kuhn interests affected by the closing of the First-Second National Bank of this city.

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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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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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BANKING OUTLOOK IS BETTER United Press PITTSBURG, July 9.-The bank situation is clearing. W. S. Kuhn has returned from the east and is assisting in the straightening out of affairs. It is expected that all depositors will be paid in full. The board of directors of the First-Second National bank will be reorganized and Kuhn's interest eliminated. The government is investigating the charges of "dummy" loans made. A receivership is asked by the Federal Court for six subsidaries of the American Water Works and Guaranty Company.

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WAITS EXAMINER'S REPORT

McAdoo Not Yet .Ready to Set McReynolds on Pittsburg Bank. Washington, July 9.- Secretary McAdoo to-night decided to await the report of the national bank examiner, Samuel Hann, who has been investigating the failed First-Second National Bank, of Fittsburg, before calling upon Attorney General McReynolds to take up the question of whether the National Bank Act was violated in any of the operation 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 satisfacttorily. He said the run on the Pittsburg bank for saving 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, with the Pittsburg bank, reported that arrangements were being made to resume business within a week.

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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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Tension in Pittsburgh Over

Pittsburg, July 11.-Conditions in financial circles have 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 has subsided.

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BANK REOPENS McKeesport Bank is Again Transacting Business. PITTSBURG, Pa., July 15.-The First National Bank of McKeesport, opened its doors today after a week's suspension because of the failure of the First Second National Bank of this city, $

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Fisher Here in Bank's Interests.

Walter L. Fisher of Chicago, former Secretary of the Interior, arrived in Washington today. He said at the Shoreham Hotel, where he is staying, that he came on business connected with the First-Second National Bbank of Pittsburgh, which recently went into the hands of a receiver. Mr. Fisher represents one of the stockholders of the bank.

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Plan Reopening of Pittsburgh Bank

PITTSBURGH, Sept. 10.-Stockholders with claims in excess of $25,000 held a meeting and formed a tentative plan for the rehabitation of the First-Second National bank, of Pittsburgh, one of the largest banks in the city, which recently tailed. The plan was not given to the public in its entirety, but if approved by a committee, is to be submitted to the receiver of the bank, C. C. Murray.

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May Renew Business

Pittsburgh, Pa., September 13Stockholders of the First-Second National Bank of Pittsburgh. with claims in excess of $25,000, have formed a tentative plan for the rehbilitation of that institution, which recently failed. The plan will not be made public until approved by the bank's receiver.

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Chase Bank Sued for $100,000.

Suit has been entered in the United States District Court against the Chase National Bank by Receiver Murray of the First-Second National Bank of Pittsburgh to recover $100,000. In his complaint Murray charges that the Chase Bank entered into a conspiracy with the Westinghouse Electric and Manufacturing Company to evade payment of $100,000, which, according to the plaintiff, is due to the Pittsburgh bank on a note transaction.

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Application will be made soon to the Treasury Department by the First-Second National Bank of Pittsburgh for permission to resume business. Stockholders have subscribed to enough stock to bring about the rehabilitation of the institution which will begin operation with a capital of $4,000,000 and a surplus of $1,000,000. This bank, in which, the Kuhns of Pittsburgh were the largest shareholders, when it closed Its doors. forced the receivership for the American Water Works and Guarantee Company.

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of the American Guaranty & Water company when the First-Second National bank of Pittsburg was closed by the comptroller of the currency.

"The work which was started by the Kuhns on new irrigation projects in Idaho prior to the receivership is being completed. The Crane Creek project and the Sunnyside project, both in the vicinity of Weiser, are being pushed to completion at this time. The bonds upon these two projects were taken by Missouri and Kansas bankers who visited the land and were favorably impressed with the irrigation possibilities."-Statesman.

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WANT TO REOPEN BANK

Representatives of First-Second National, Pittsburgh, Present Request. Representatives of the First-Second National Bank of Pittsburgh, put in a receiver's hands last July, conferred yesterday with M. C. Elliott, attorney for the controller of the currency, in charge of insolvent national banks, with a view to obtaining consent to reopen that institution. No decision was reached at the conference, but it was predicted that the FirstSecond will be permitted to reopen shortly. There has been a long-continued effort on the part of Pittsburghers interested to reopen the bank, but heretofore it has been prevented. Charles Starek, national bank examiner in the New York city district, recently was sent to Pittsburgh by Controller Williams to try to straighten out the tangle.

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BANK REOPENS DOORS

First-Second National of Pittsburgh Resumes Business. John Skelton Williams, controller of the currency, announced yesterday that the First-Second National Bank of Pittsburgh would reopen for business tomorrow with a new management and new board of directors. The capital of the reorganized bank is $4,000,000, with a surplus of $950,000. Controller Williams said "the receiver is turning over to the reorganized bank all the assets and property in his charge. The government is redepositing the balance of funds collected for its account since it closed its doors in July, last, amounting to more than $12,700,000. The First-Second National Bank of Pittsburgh, in deposits and total liabili-