The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1884-02-15
The Pacific Bank.
What the Petitioners Aliege i'm their Me-
mortal 20 Congress.
Boston journal, Friday, Feb. 14l

Boston Journal, Friday, Feb l49
The petition for Congressional investiga-
tion of the conduct of Government officers in
connection with the failure of the Pacific Bank
contains some serious allegations. The petit
tion was opened for signatures this morning at
the Office of W. A. Paine, Secretary OF the
stockhoder5' committee, and few names
have already been appended The memorial
first sets forth the circumstances Of the fail
ure, the original vote to increase the capital
stock from 100000 to 81 100000. and the fact
shatonly $461, 300 was paid in. 1t is then al
legged as follows:
"rhat John J. Knox, Comptroller of the
Currency, well knew that only said S46l 300
had been paid in and informed the Directors
of said bank, Immediately after said banks
suspension that the capital of said bank was
only $500, 600; that the said John j. KNOX,
Comptroller OF the Currency, in concert with
said Directors, and without the knowledge or
consent of the sbarehol ders of said bank. or oi
the parties who had paid in said @46l 300 on
account of said $500,000 increased capitil, on
the twelfth day of December, 1881, advised
said Directors to vote to reduce the capital.
which they had voted To increase by $4,000
to the amount act lallv paid in AS Aforesaid, OF
accnnnt of said $500, 900, to wit: to the amount
of $46l ,300 that when said Directors bad
voted as said John j. Knox had advised, but
without the know ledge Of the shareholders or
OF the persons who had paid in said S461, 800
on account of said increase of $500 900, ano
when said directors had thus illegally reduced
said increased capital, and bad voted, also L.
legally, to increase the capital of said bank D.
said amount OF $461. 800 actually paid in, said
Jonn j. Knox, Comptroller OF the Currency,
illegally consented 10 said increase OF capital
last aforesaid, SO Illegally made. about one
month after said bank had become insovent:
that the said Knox, knowing that said bank
was insolvent, issued to said bank and to said
directors certificate permitting and author
iZDg said last-mentioned illegal increase o
capital, thus aiding and abettiDg said director
in their fraudulent atte npt to change
the relations of those who ad paid in their
money on account of portion of said in
creased c ,pital OF $500 900, from that OF cred
itors of said bank to that of shareholders there
in, without their knowledge or consent, and
thus appropri 4ting their money to the pay
ment of other creditors of the bank, and at
tempting thereby to defraud them still fur
ther oy making them liable as shareholders 10
an assessment of one hnndIed per cent. upon
said fraudulently increased capital, for the
purpose of paying the other creditors
OF the bank That on the tenth day
of January, 1882, at meeting OF the share
holders of said bank, said Daniel Needham, as
such bank examiner, stated to said share
holders that said bank could be made solvent
aud could resume business II said shareholders
would vote to assess one hundred per mt. on
the shares of said bank; aud the president OF
of said Daniel Needhsm AMI of said Lewis
Coleman and of the other directors, one VIM.
j. Best, in concert with and in the presence
and bearing of said Daniel Needham, made
statements to the same effect; and said Need
ham, Coleman and Best assured said share
holders that, if they would vote aud pay such
assessment, they would save all the amount 50
| paid ia and from twenty-five to fifty per cent.
of the par value of their shares; that said
Needham, Coleman and Best, for the purpose
| of enforcing their StAtamauta and a0vca.
| cured speeches to be made to said sharehold-
| ers, to the same effect, by sundry persons who
| pretended to act for the advantage and benefit
of the shareholders, whereas they we're 10 col
luson with the said directors, and said Need
ham and Best, to induce the shareholders to
vote and pay such assessment, so that they, the
colluding parties, might be paid their claims as
depositors 10 or creditors of said bank;
| stock of said bank 100 per cent. was
| passed by the shareh, lders, incitsd BIZ
and believing in the false Statements afore-
| said, OF said Daniel Needham, Lewis Coleman,
| William j. Best and said parties colluding
| with them; and SAID Coleman aud Best ano
said collading parties, and Edmund @. Whit.
| ney, who had been appointed Cashier Of said
bank by said Directors, continually repeated
| to the shareholders and others the statements
made JAM 10, 1882, to induce said shareholders
/ and others TO pay such assessment, all of said
| parties named and described well knowing, at
| the time they made and repeated such state
/ lu6ub5g tubt buoy were IalS6 Auu budb LQ0 uauK
| was hopeessly insolvent, and would be insol-
| vent even though the whole of the sum
| sessed, to wit, 1851 300, were paid in-snd
| there was paid in ON account of such assess
M MT the amount of $742,800. That on the
| eighteenth day OF March. 1882, said DanieI
| Nsedham, as such Bank Examiner, in charge
| OF said bank by the authority of said John j.
| Knox, and with official consent Of said JohD
! j. Knox, permitted and authorized said bank
| to resume business, and thereby represeu ted to
ahQFahnlnaFQ tn annn a Qt,otl md f..
| the pnblic, that said Dauk was solvent aud able
| TO pay all Its debts, aud the said bank did re-
| sume business and Continued to do business un-
I'll the 20tn day of M 4y, 1882, when 1t again sus-
| pended buslness, being insolvent and unable to
1 pay the legal demands upon il, and Was soon
| thereafter placed by said John j. Knox, as
Comptroller OF the Currency, in the hands of
| Lln M. Price of New Jersey, as the
| celver thereof; that the said bank has been
found by said Price to be hopelessly insolvent,
| and 10 have been insolvent- at aud long before
the 18th day OF September, 1881, when said
| directors voted to increase the capital by
| 1000, and on the 18th day of Novem Der,
| 1851, aud on the 13sh day of December, 1881,
when said Kuox authorized said directors
| frauduently TO increase the capital thereof rs
aforesaid, by adding thereto the S46l, 300 paid
| III on account OF the increase of $500,000, aAd
| on the 18th day of March, 1882, when said
| Needham aud said Kuox authorized said bank
| 10 resume business aud to mold itself out to
| the public as sound and solvent, and your
| memorIalists aver that SAID Nsedham and
said Knox knew, or were bound officially to
| know, tAat said bank was insolvent at the
| different dates aforesaid, and were bound by
their offices to do no act. official or otherwise,
/ which should tend to deceive the shareholders
or the public, or to change or effect IN
| any way the existing relations between any OF
The various parties interested IN the affairs OF
| said bank"
The facts of assessment suits to recover, etc.,
| are then SGT forth, and il is alleged tn at Dan
al N.aAr k.Fa, :.
OF raid bank, aided and abstted said di-
rectors by his culpaOe neglect Of duty,
| II not by positive acts, III defraadlng
SAID shareholders and creditors aud that
said Needham and said Knox aided the eaid
| directors In defrauding said shareholders aud
credltors-tne said KnJx oy author,ng the IL
legal Increase of capital after said bsuk was
| known by him to be- insolvent, aud the said
| Needham, by the assurances he made persUuai-
ly, aud those aade by said Coleman, Best and
others, which he approved and SANCTIONED at
Tie shareholders meeting ON the ten,h of j all
uary, 1882; and, notwithstanding said miscoB-
duct III aud ubh ness Tor the office, said Daniel
| Needham has b ECU retained by said Knox in
SAID utics OF bank examiner until tue present
| ume. And your memorisi Is respectfully
represent that the affairs of said
bank, both before its first suspension and af-
terwards up to this time, have been conducted
in manner which Is a reprUach TO the bank
ing system of the country, 10 the reputation Of
the officers of the government, as well as a
grievous injury to the shareholders and credi-
tors OF the bank.
Wherefore, your memonslists respectfully
| pray that you will cause an investigation to be
made of the affairs of said bank, aud of the
conduct of The government officers in connec-
tion therewitb, III order that the banking laws
may be SO amended AS to prevent, rs far as pos
| sible, the recurrence of such frauds and mis-
conduct, and to project the interests of share
holders and creditors of national banks, and to
make those who commit such acts as have been
set forth ciyilly and cIiminally responsible
{. therefor"
The petition will be presented to the House
in few weeks by Congressman Morse.
A BOwdoin Farmer Swindled.
Some six weeks ago a man giving his name