Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1891-06-18
Secretary Foster Makes Public the
Report of the Controller of
the Treasury.
The Document Contains a Full Ac-
count of the Investigation of
the Banks Affairs.
Mr.. Lacey Takes Occasion to Defend
Himsely Against Public Crit
clSm of His Actions.

WASHINGTON, June 15.-After careful
preparation and after submission to his
superiors the statement of the Hon. T..
S. Lacey, comptroller of the currency,
relative to the downfall of the Key
stone bank of Philadelphia, has been
made public by Secretary of the Treas
ury Foster, to whom it is addressed.
1t is a voluminous document, contain
ing 5000 words, and embodies CORES
pondence and papers bearing upon the
Quaker City's financial scandal.
The statement. which is in the form
of a communication to Secretary Fos-
ter, bears date June 10, and runs sub
stantially as follows:
''Sir: | have the honor to submit
herewith statement of the facts lead
| ing up to the final closing of the Key
stone National bank and the appoint
ment of a receiver therefor.
1.-THE first information received by
me in reference to what has been
known as the Lucas defaulcation was
contained in a communication adj
dressed to me by William p Drew,
bank examiner for Philadelphia, dated
Jan. "A, 1891, and received by me on tho
Goth of the same month, The follow
ing is copy of the communication:
Sir: On entering on the examine
ton of the Keystone National bank Of
this city | was informed by the presi-
dent that there would be disclosed 3
hitherto effectually concealed debt to
hand of it's late president, John @.
Lucas, amounting to 100000. This
confession has been fully verified by
subsequent developments made by me
in examining the bank.
"'It appears that Mr. Marsh,
formerly the cashier of the bank was
at first ignorantly led into the irregular
transactions by the president, and that
the latter, on his deathbed, exacted q
promise from Mr.. Marsh to continue
the deception under representations
that the money distracted would soon
be returned to the bank from the re-
suits of Mr.. Lucas enterprise
cit appears that Mr.. Lucas, during
his presidency of the bank, had, with
the connivance of the cashier, Mr..
Marsh. now president of the bank, car
ried out by adroit manipulation of the
accounts of the bank for series of
years scheme for systematic abstrac-
ton from the bank of large sums to
assist his speculations in real estate at
spring Lake and Sea Grit, n. j., as
well do LII OllC COliSUl uCGlOH VI UIC ldl 20
building on Chestnut street here, now
occupied in part by the bank. The
method of concealment of this large
diversion of the banks funds seems to
have been to charge the amounts taken
to the general account of deposits and
to so alter individual balances on the
1edgerS as to make their aggregate
credits fit the general account at the
time of the examination.
Mr.. Lacey says he should not be
blamed for allowing Marsh to remain
in Office so long after his confession.
He supposed that Drew and United
States Attorney Read would do what
ever was necessary in the way of prose-
cutting Marsh if circumstances war
ranted it. Mr.. Lacey further says that
Mr.. Wanamaker never suggested delay
in the appointment of a receiver, ex-
cept to send him telegram April 80
saying that no harm would be done by
delaying the appointment twenty-four
hours longer.
In concluding Mr.. Lacey says:
81 deem it my duty to say that in my
opinion the several reports made by
the bank examiner did not reflect the
true condition of the bank under con-
sideration. The degree of blame, if
any, VIII; properly attaches to Mr..
Drew is be ascertained
SIN the meantime, however, he has
been directed to suspend examinations
until the facts are submitted and
| conclusion reached"