The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-01-23
BANKING IN CALIFORNIA.
4 SEQUEL or THE FATLURE or THE
B1NK or CfLTFORNIf.
Careless nrd Fraudulent Handling Of Inn !
mcuse sums at Mouc,-Priucciy Loans ON |
Poor SccuriV strange Revelations.

Poor security strange Revelations.
SAN FRANCIsCO, Jan. Zone OF the
most wonderful circumstances connected with
the ilurc Of the Bank OF California was the
remarkable retircnco Of the managers Of the
bank as To what had become Of The money. The
actual deficiency has never been known, but
was ponulrrly set down at about sixteen mil
lions Of dollars. No statement Of Its condition
has ever been made, and although the bank still
continues a show OF business In winding IN the
old affairs, depostors ard creditors have never
been favored with any exhlbit over the sigma
lures of It's officers. Lately, however, some
light has been thrown upon this dark subject,
and send YOU a statement OF facts, that you
may see the liberal spirit in which the banking
business has been conducted In this Queen City
OF the Pacific slope.
For some time previous to the failure OF the
b nix, william Burling, a well-known stock
broker, had borrowed at various tunes and from
sundry institutions and individuals, large sums
Of money upon the security of stocS Of the
Bark OF California. Burlue gave his own notes
for these loans, and handed the money as re-
ccivcd to W. c. Ra'ston, the President OF tile
bank for the use Of the Institution. when the
bank failed, and lialston was drowned. Durlna's
notes were out for sigiO,oOO. secured 10y 1e,iO)
shares of the stock If the bank. when. from
bank, were worthless: and In addition thereto
1t WI. foon discovered TINT tho majority of the
share. h,nothccltcd ~ Durlins wete not regular
but over issued shares.
FIFTY CENTS ON THE DOLLAR.
Rurling r. Qucs'cd the officers ol the bank 90
&c. mp and return to him his notes, and TO re-
sumo possession " the stock. G,ting TO submit
To e. loss OF Sl2jOn, TO bring about thlt. to him.
do-trt le result. This they refused to du. but
upon irqyiry and remark being made nv the
holders OF the notes. as TO the char cfcr Ot their
secui tho Hon. WIFI lm sharon, United Stat
Sen tor fNr Nevada. and one or the DIRECTOR Of
tine bank. took up IN" note, and held thcm
against liurlng He iid not, however, py the
Obtained rote for $3ji with 3Jl0 shares Of
stock. for Sl,,.tNJ, or nftv cents on the dollar.
The trustees then cancelled enough geniine
stock To provide for the over issue. aud Burling
was notified to pay Sl.~NUO. aud take ESQ
shares Of stock. MhrreupDn. he sought legal
advice, ANA McAllster a liersin, prominent
attorneys. prepared cpmpi int, In which VIII
liam and lanes W. Burning were plaintiffs. and
ID -. Minis. u. j. IHllaut, ilam Aivlrd. N.
lunnc George ~. Howard. willtlm sharon
John . n, l.. Sachs. and william Norris, the
directors Of Z e bank, were defendants.
This cOuTliiut set form that thu plaintiffs
were stock rockers, and the owners of l2.5lO
shares Of the pltal stock Of the Bank Of Cali
futnid; That previous 10 IT. failure the bank hHi
acash capi. 4 OF Sjlp.0D, aud reserve fund nj
Sl,oJ nOl, ana did large aud lucrative u-in. s=;
that FOR thrrc years prior tn tho failure, I the
bank the director omitted and uerl'c'ed t.
Ieri0rn the duty imposed upou ,hcu by law,
and Gid not surer,i.e the affairs OF the bank, or
know now or upon what security ifs funds were
loaned. but allowed the eutre management To
fli into The hands Of William C. R,l-ton, the
Into President e the bank, and ther"hv tecame
legally tc-ponsihle for All ~ said tal-ton'- aci-
that during TIE taree ye'rS aforesaid sod ll,ls-
ton comwited sunny vastelul ana fraudulent
tcts, among them being:
FRAUDULLSr sHAREs AND fOANs.
lie caused t. he over issued 0Nv shares OF the
capt. 1 sock of the hank, watch were false,
lie allowed one ". If. l.. Birnes. n person
without pCcuniaN responsibility. 10 "Nerdraw
hi- account without security Tor Sli3OD.
Ito suffered John M,Cul!ou-h. tue actor, to
lie permitted william NJ stewar; TO overdraw
SO 40. Wei knowing hat, Lac B.rncs Gnd Mc-
CAlilu-u, he WAS unable to paw.
lie loaned to the kimo,l Manuf curing COM
panl, corp ration ia which lie wds a principal
ho leo n,d 10 tue Ai--inn Woo'cn Nils. a cor
porAiion in Whicn lac Was ,lso principal stock
lie loaned To- tho Montgomery Street Roal Es-
tate A-Snsttt 10. IN wnirn lac. became 4 . .,,i.
stuckhulder, $40 u 90. None Of these corr ORA
t'uu- gave security or had properly OF assets
available for repay nenf.
III took an used and expended Tor his own
PURPOSES. without security, iJniU0.
And yet Notwithstanding thls w'steful expen-
dtfu e, tue directors allowed during three year,
TIE sum OF SlsN!Vj 10 he paid To tue stock
holders as dtVideuds, purportiug to be II the
surplus earnings OF the bank, at "a time when II
was hop~lessly insolycut aud 10, these means a
sum more than equal to tie entire capital and
assets 81 tho cank "as lost AMI squludered. ana
the plaintiffs stock thereby rendered Of no
lue, and Therefore they ask jIdgucnt agtiust
tnc-o def ndants Individually for tho amount
1nis comp amt was VERY carefully drawn. and
being printed. each deiep1int WIS furnished
W h COPY; nd uIon consult ition II was de-
cided To- return u Hrling his notes. and scce
his coutiibutipn OF Sl25NO. When the case was
sett ed, tue ere te.t pans were taken T. pre-
printed copies OF the compl lint being carefully
collected counted. aud pat away. Inc subject,
however, Il. = teen freely discussed In business
circles, tut the iniileuce Of the bank, ana the
fear Of saving anything To iniure the country,
Las kept II out Of tue news papers.
GOLD AND SILVER.
Another little incident connected with the
failure, has been Carefully guarded from public
remark Among the multifarious posse
SONS OF the bank was the San Francisco
colo nnd silver Refinery, large and very
prOhiaile establishment. a part OF whose bust
ness WAS "parting" bullion. The bar of bul-
lion coming from the mines are composed Of
st mped thereon 10y nssayers employed bv tho
mines controlled 10y the bank tina bought tae
bullion from the mining companies. or course
tuese hssayer- never uNclstainoed The value, and
any little error IN the other direction was a
ptoht to the refinery, whose business II was to
seiarate the gold from the silver ana make re-
turn 81 the origin Il stamped value. shortly be
fore the inlure Of the bank, Flood O'liren, If
tue consolidated virginia mine, deposited In
the refinery Sl2.0,OOO worth Of oars To be parted
but when IN due course after the failure they
sent for them, there were no bars to be found,
and II Appeared That they had been sold by
kalston aud tho money usec in the bank
shortly after II was announced that Flood a
q lren had purchased 81 the bank the refinery
the acid works connected herewith, the Scby
snot tower nnd lead works, the SeUy metal
lurgiral works, nnd the Sriby country seat. n
handsome estate In san Mateo county, thee
later properties having come To the bank from
the estate Of Ihomps III. Selby, liteiy decreased,
wnlch owed the bank SijJ,OOO 30 that Flood q
u Bren got nearly tue value II their bars
though doubtless they would have preferred
their property In IT'S original form.
Aud yet another. On the night OF the fail
ure OF the back at the hour OF midnight
there was hauled from the refinery To the United
states Mint no less than six tons Of silver bul-
non. whether this treasure lad been allowed
To remain in the refinery 70 be counted as baIl,
assets for bookkeeping pu rpOses. or whether the
United states officials delight to trans tct their
transfers ia darkness, depunent saith not.
SIR1hGE HILLCCIN1TION