Rock Island daily Argus. (Rock Island, Ill.) 1886-1893, 1891-11-06
LACEY'S DEFENSE.
The Currency Comptroller and
Maverick Bank.
OFFICIAL ACTION IN THE MATTER.

He Claims to Have Been Over-Cautieus
Rather Than Otherwise-An Extra Ex-
animation Made and the Bank Kept
Open on Advice from the Boston Clear
ing House-Unsafe Methods That Were
Not Contrary to Law-French Goes to
Jail for Want of Bail.
WASHINGTON, Nov 6.-Mr. Lacey is be-
sieged with inquiries concerning the
charges and counter-charges over the
big Maverick bank failurein Boston. He
is reluctant to talk, but in view OF the
charge that Bank Examiner McGruder
reported the bank insolvent last January,
and urged that it be closed up Mr.. Lacey
yesterday said:
in January last Bank Examiner McGruder
reported to ire that the directors of the Maver-
lex National .nk were indorsing, in his judg
ment, too much of the paper discounted by
that bank. There is no law TO prevent this
One director can indorse all the paper of his
bank if be wants to. but it is, of course unwise
and unsafe, and Immediately wrote the bank
admonishing = not to do so any more"
Ordered a Special Examination.
ibid Examiner McGruder, in that report,
say he was not satisfied with the securities
held by the hank and did you reply that you
would he responsible for the bank"
mo, sir. Ii made no such statement in II
or any other report, and i, of course, made no
such reply. On the contrary, l not only ad-
monished the bank, but in August ordered
special examination of its condition al
though Bank Examiner McGruder reported
that it was Improving and apparently thought
the examination could Just as well be deferred
until the regular time came around in January
next.
Still on Too Much Paper.
"As a result of ti,e thirty days examination
which he then made Bank Examiner McCiru-
der reported about the middle of September
that the dire Stors were on too much paper
and also, believe that there was small ex-
cess of loans above the statutory hmits-a
thing which is apt TO happen, especially in
New York and Boston. with banks having
small capital and large business. But neither
in that report nor the January report did MIR.
McGruder report that there were any losses
which would impair the capital, any ac-
count or fact indicating prospective insolv-
ency. Apparently the paper which the bank
had discounted was all good and apparently
the securities were satisfactory.
President Potter's Promises.
Nevertheless. wrote President Potter
again and he came here and spent half day
in my Office, going over the details of the bu
ness with me. and promised in thirty days
from that time. which was about Sept. 81. to
have it all Strengthened out. All this time
bank. In fact the bank examiner reported in
September, rs lac had all along, that it was
improving. ! had ordered the semi-annual
special examination in August, not because
had any new Information or any special reas q.
but ont of abundant caution. After President
Potter left. p.9nising to set right the only
wrong thing ported, | heard nothing more
that was unfavorabie until after the suicide of
Evans.
Only an Administrative Officer.
"Then learned that the Winthrop National
bank had declined to accept the certified
check of the Maverick National hank, and that
it was regarded as in danger. From that day
have had the hank examiner watching for
the first act of insolvency which would justify
the closing % the bank, and have been in con-
sCant consultation with the clearing house
committee, whose local knowledge was far
more extensiv- and accurate than mine, and
who were probably better judges of the banks
local discounts. securities, etc. / ad-
Iuinistrative, judicial legislative officer
] can only do what the national hank act says
/ can do. no more, and this is just what have
done in this case.
Did rhat He Thought Right.
IF had closed the bank against the advice
of the clearing house committee, which as
late Friday last sent word TO me that il
ought not TO be closed. would have been crit
icised more severely than | am now. / have
done in this case, as in every her, just what
! thought was right and shall not be disturbed
by unjust crit ;csms"