Pawtucket tribune. (Pawtucket, R.I.) 1890-189?, 1891-11-07
FRENCH GETS BAIL.
Suspicion That He In
tended to Leave.
NATIONAL BANKING LAW.
Many Defects Brought TO Light by
the Maverick Bank Affair.

BosroN, Nov. 7.-Colonel French ~ n
free man again. at least for the present.
Judge Nelson fixed the amount of bail at
$50, 900, which was furnished by John Stet-
son, the banker.
Mr.. Beal of the Second National bank,
who has been appointed receiver of the
Maver ck. will not take charge Of that
banks affairs, in ali pr, bybility, before
next Monday. All the assets must be in
vsntoried before he can give his receipt for
them, and this will take time. The enor-
nous mail Of the institution has been
coming in daily and piling up, and its
disposition il Cne of the obstacles which
the receiver will have TO overcome at the
outset.
A lien has been placed on Mr.. Potter's
new residence on Fairfield street, which is
In his wife's name, byJames A. Flanagan,
n carpenter and builder. This is TO secure
the payment of S6490 for labor and ma
terials on this house, contracted for as he
alleges, by Asa p. Potter, as agent for his
wife.
District Attorney Allen has explained
his motive for requiring such heavy
bail in Colonel French's case. He was
informed, he says, that the prisoner was
Intending to Leave the state.
and as the information came from most
reliable sources, he Immediately demanded
an increase in the bail Mr. Allen will
now make an effort to have Mr.. Potter's
bail increased.
Comptroller Lacey arrived in town yes
terday. He WIS met by President Beal,
the Maverick bank receiver, and together
they went TO the Maverick bank. There
they met Examiner Ever and the clearing
house committee. Mr.. Lacey would see
nobody except those having business with
the bank.
A despatch from London states that
''the Bank of Ireland Is not paying Maver
ick Bank drafts, waiting information.
Since the suspension of the Maverick
National bank aud the discovery of the
misappropriation and alleged embezzle
ment OF its funds by its president and
directors, there has been much criticism Of
The National Ranking Law
and the way in which it is administered
But the principal fault that is found with
tho law by those who are the best informed
as to its working, is the allowance of in
terest on deposits. The effect of this is, in
reality, the paying out of per cent from
the % per cent reserve fund which the law
requires per cent. as interest and an
estimated ! per cent. loss Of earnings on
the idle money. Further than this, it is
claimed the paying Of interest on deposits
has tendency to advance rates by the
competition thus created, and to meet this,
doubtful paper is accepted ana loans be-
come practically mere speculation.
The downfall of the Maverick bank was
undoubtedly due largely to the reckless
ness with which loans were made on in
sufficient security. AS to the enforcement
of the law, there seems TO be but one opin-
ion. The law has provided every safeguard
possible for the public, and competent and
presumably trustworthy officers are ap-
pointed to see that it is carried into effect.
Did they do their duty, there appears to
be no doubt that such a disaster as the
wrecking of the Maverick bank would be
well-nigh impossible. For u year at least
the Maverick bank has beea regarded with
dstrust by the conservative bankers and
financial men Of Boston. There is abun-
daut testimony that this is the fact An
other thing that seems equally clear is
that Examiner Magruder was
Acquainted with the Reckless Manner
in which the business was done, and
kept Comptroller Lacey informed of the
speculations with the banks funds by the
directors. Mr.. Magruder's reports are on
file in the Office of the comptroller, who in
sists that they are confidential disclosures
with which the public has nothing to do,
and he refuses to give them TO the press.
IL is intinated by the president of Bos-
ton bank that thirty days before the Nav
srck bank was closed, Mr.. Magruder had
insisted upon immediate action being
taken for the protection of the interest of
desositors, but its president, Potter, made
a hesty visit To Washington and obtained
Comptroller Lacey's consent to continue
business for another month.
1t should be noted as an excuse for the
system of interest on deposits by the ma
tional banks that they have been driven to
this course by trust companies and private
bankers. Manufacturing concerns, rail
road companies, municipalities and other
corporations, whose treasures are large,
had been gradually Withdrawing their de-
posits from the national banks and giving
them to the competing institutions who
had set the fashion.