The Penn Bank Failure
Jessica Cox, independent historian and history writer
In 1884, as iron manufacturing peaked and steel began its ascent, Pittsburgh grew rich. The economic Panic of 1873 had been left far behind, and record numbers of local depositors were entrusting their earnings to interest-bearing accounts rather than mason jars or mattresses. Thus, the sudden, spectacular collapse of the Penn Bank was seen as “one of the most marked instances of the overconfidence of both the people and the bankers in the history of Pittsburg.”[i]
T he Pennsylvania Bank, which occupied a triangular building at the corner of Wood Street and Liberty Avenues, had been organized amidst the 1873 Panic but quickly became one of the largest banks in the city. Its president, William N. Riddle, was a young, highly respected financier and a prominent early member of the Duquesne Club, being one of eleven signers of the Club’s original charter of incorporation in 1881. Born in Armstrong County in 1842, Riddle had moved to Pittsburgh in 1849 and graduated from Duff’s Business College in 1862. He then obtained a job “roll[ing] oil barrels on the river wharf,”[ii] where he learned the rudiments of Western Pennsylvania’s burgeoning crude oil industry. In 1871, Riddle became a bookkeeper at the Union National Bank downtown.
Two years later, the brand-new Penn Bank hired him as its first cashier, and only nine years later, he became the bank’s president. Known to all as “Billy,”[iii] one acquaintance noted that he “had a fuller vocabulary and a freer flow of profanity than any other man who stood behind a bank counter.”[iv] But Billy may have used forceful language to compensate for poor health, being described as a “pale, slender”[v] man, borne down with lung problems and acute neuralgia, for which he took a pharmacopeia of medicines. Depositors, however, saw only the strengths of the Penn Bank and so were stunned on May 21, 1884, when the bank suddenly closed its doors, drew its blinds and posted a notice on the door:
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