The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1876-05-10
BANK OF CALIFORNIA.


TESTIMONY OF DIRECTIONS AND STOCK
HoLDERs-RALsroN's ACTUAL INDEBTEDNESS
FULLY srATED--THE MANIPULATION OF THE
SPRING VALLEY STOCK DxscRIBED
SAN FRAxcrsco May .. 1875
The civil suit in which the propretors Of the bulletin
newspaper sought damages against the publisher Of the
Alta California for libel. growing ont Of publications in
reference the failure of the Bank OF California has
been commenced BY the taking OF the dispositions Of
several witnesses
d. o. Mills, long director aud President OF tho
bank, testified that its capital IS. 100000 at the
date of the suspension August last and it's surplus
reported the books. was 81, 600 900 additional;
by the books the liabilities OF the bank ~ the time Of
suspension about $l4, 600 O00 and the nominal
assets good, bad and indifferent, something
SO, 00o 000 the failure considered to have been
caused by the mismanagcment OF the then President,
Mr.. Raiston; from the reports OF the committee and
Board OF Directors Mr. Ralson was q large debtor to
the bank: the reports made It not far from
$4,000, 600; tho Indebtedness was reported to
arise from various sources; there was ono
large deficiency IN tho refinery account;
It amounted TO from S. 600 coo to 81 $50 00o being
ovcrdrafts by Mr. Raston's checks; this deficiency
stood the books OF the bank debit against the
refinery; the refinery was supposed to owe that
money, and the committee reported that tho money
not owing by the refinery, but hal been used by
Mr.. Ralston; the bank owned the most OF tho
refinery and It was considered TO be under
Mr.. Ralsion's control MS President OF tho bank;
other deficiencies arose through certificates or
deposit, what reported be certificates OF de-
post, where the money bad not been paid into tho
bank; this amounted $3.50, 900; It reported by
tho committee that the moneys had been used by Mr.
Ralston for his own private account; he had signed
the certificates, but they had been registered
passed through the books tho balance Of tho indcbt-
edncss reported as having been mainly carried in
tho bank on cash tags OF Mr.. Ralston, and before
the Suspension accounted for other bills discounted
bills unavailable and Endorsed by Mr. Ralston were con-
sidcrcd part OF his Indebtedness; tho money was
supposed to have COMO Mr.. Ralson for his private
purposes; those concealed from the dircc-
and other officials and they did not appear In tho
reml- annual examinations in Juno and July. Being
asked II money was not sent into the bank in advance
OF these examinations for the purpose OF bcing counted
and showing large amount and then sent out again,
being on loan, Mr.. Mills without denying the intima.
ton OF the question, roplied:"l cannot speak from
my own knowledge"
In reply to further questions the witness csti.
mated that there left Of the so 900 900 capital
and reserve fund from 600 to $l50U 900 OF avail
able assets the capital was impaired to tho extent Of at
least So 500 000 the fund proved be nominal
the bank sold to Mr. Sharon, the United States Sen.
ator. and since the SUSPENSION upward OF 81 O00 900
Of Indebtedness for ST. 900 money and $500 900
contingent; they Appropriated tho Indebtedness lot
Raston) nj something S. 600, 000 AMI with the
concurrence OF the Board this Indebtedness was sold
TO MIR. Sharon tho terms already indicated; tho
contingent 100000 Is regarded by the bank only
nominal asset; the Indebtedness sold to Sharon was
Ralstons Indebtedness To the bank; dividends at the
rate Of ono per cent month had boon regularly paid
by the bank during the last three years-out OF tho
general deposits the witness presumed.
George II. Howard sworn:-Was director OF the
Bank Of California in August last and Is such still;
OF the failure Of the bank the large amount
Of money withdrawn by MIR. Ralston; tho committee
stated this amount 10 be som where in tho neigh.
bornood OF 1880 900; It was understood that
he took this Tor his private purposes,
without tho knowledge OF tho directors; wit
elected only at tho last meeting OF tho
Board prior TO tho failure; no knew nothing OF the
purpose of making tho stock which genuine
stock stand as good stock; other mismanagement
on the part of Mr. Raston accounting for the failure
he cited unsecured loans OF large sums Of money to H.
+. Williams and Hon. W. N Stewart; there also
small loan to McCrcllish, Of the Alta these unsecured
loans he supposed wcrc legitimate they all stood
the books OF the bank. The witness confirmed MIR.
from the refinery by Mr. Raston, which the bank had
To mako good.
Michael Reese sworn :-Hnd been a stakeholder in
the Bank OF California tor two years past holds COO
shares held 100 shares also collateral for loans Of
500 600 to Moses Ellis and $l50000 to Brrling Bros. ;
he supposed when he made the loans that the stock be-
longcd TO the parties pledgng It, but after the bank
Mr.. Ralston; witness said he knew the of the
bank failure; he had occasion TO examine and found
the money all gone ne believed Ar. Ralston had used
IL for his own uses.