Rensselaer Semi-Weekly Republican, Volume 39, Number 2, Rensselaer, Jasper County, 7 September 1906 — BIG BANK WRECKED. [ARTICLE]

BIG BANK WRECKED.

A PHILADELPHIA CONCERN IN $7,000,000 FAILURE. Real Estate and Trust Company Goes Down with a Crash—Millions Are Gone; President a Suicide—Mach The,Real Estate Trust Company, the second largest concern of its kind in Philadelphia, suspended business shortly after 2 o’clock Tuesday afternoon becanse of inability to meet obligations to the amount of $7,000,000. THereaTe Teportg of gross misuses of the institution’s millions and criminal prosecutions ure-possible. The hank is the depository for more than $1,000,000 of the funds of the Presbyterian church, $380,000 in tax receipts of the city of Philadelphia and $175,000 of cash of the State of Pennsylvania. The" failure, which is reekonedMEiJe'' greatest in the history of Philadelphia, was due primarily to the suicide Friday of -tiie president of the trust company, Frank H. Hippie. Mr. Hippie, according to the diagnosis made at the time by his physician arid the coroner of Norristown, died of hemorrhage of the brain, but it lias sincte been authoritatively stated that he had taken a dose of laudanum and then gotten Into a filled bath tub, where he w;rs found, apparently drowned. Mr.' Hippie whs one of the best known financiers of the city, was identified also with many charitable and religious institations and was regarded as most conservative. lie was treasurer of the board of trustees of the general assembly of the Presbyterian church, treasurer of the sustenation committee of the synod of Pennsylvania, treasurer of the Presbyterian hospital there and American treasurer of the western section of the Alliance of Reformed Churches holding the Presbyterian system. .Large sums belonging to these: bodies will be tied up or entirely lost in the failure. Mr. Hippie’s financial downfall was due largely to his advancing of money of the bank in aid of enterprises of Adolph Segal, owner of the Majestic 'hotel and a promoter known for the boldness of his operations. Friends of the dead banker express the belief that Sfcgal exercised a hypnotic influence over him. Deficit May Be Million*. The liabilities of the trust company are placed at $10,000,000, against which ■there are quick assets of about $3,500,000 and collateral of about $8,000,000, which is not negotiable or readily cbnvertible. The doubtful collateral is held as security for loans of about $5,300,000 made to Segal. In addition there are loans*of $2,000,000 made to others by Hippie and hidden from the ■directors.

The announcement of the suspension of the trust company followed a meeting of the representatives of the banks and trust companies forming the clearing house association, at which unsuccessful efforts were made to obtain pledges of money enough to help the Real Estate Trust Company ov.er its difficulties, j

There had 1 been rumors that the Hippie estate was badly tangled. Until al most the hour of the failure, however, the fact that the trust company held large amounts of paper of doubtful value was kept a secret, in the hope that the local financiers would agree to underwrite notes and securities belonging to the concern anfi its directors, so as to cover the $7,000,000 needed. Those who attended the clearinghouse meeting, however, subscribed only half of this foreseeing no other source of rflff for the present, the officers of the company immediately applied for the appointment of a receiver. The application was heard by Judge Audenreid, and he appointed George H. Earle, Jr., president of the Finance Company of Philadelphia, as temporary receiver, fixing his bond at sl,000,000. Immediately after the closing of the bank’s doors a crowd of 300 depositors blocked the entrance and clamored for admission. It was necessary to call a squad of policemen to calm them, but there was no attempt at violence. A run had been In progress since the bank opened in the morning, due to rumors ns to the stability of the institution, which were circulated persistently nfter the death of Mr. Hippie. The demands of the depositors did not cause alarm, however, until after noon, when they became so clamorous ns to hasten the suspension of the bank. * The board of publication of the Fresbyterlan church, which had between SIB,OOO and $20,000 on deposit with the trust company, made an effort to withdraw the money, but failed by three minutes. Hearing rumors of tbe unstable condition of the company, members of tbe board notified tbe officials of their Intention to transfer the account to_ the Philadelphia National Bank. A representative of the latter Institution made all haste to the ofik-e of the trust company *nnd arrived thre* minutes after the doors had closed.