Los Angeles herald., 1891-06-15


directing him to give an estimate of the
exact value OF the resources and an es-
innate of the discount upon each class
of investments.
MY object in this is, if possible -
wrote Lacey, ito arrive at precisely the
amount of the. deficiency necessary to
make up by assessment upon the capital
stock. | should be glad to see any COM
mittee of the board which may visit
Washington, but can conceive no better
way to put the institution in frst-class
shape than that suggested by me. One
thing is certain that some action is i'm
peratively necessary, and the sooner it
is taken the better will be the result"
The next communication referring to
this matter seems to have been the final
and formal report as developed by the
examination which had been in pro-
gress continually since Lacey's commu-
nication of January Gath. This was
dated February 28th, and reached him
March I'd.
"Havipg duly considered all the items
stated in this report" says Lacey, sit
became apparent that an impairment
OF capital existed to the extent of at
least $3.50, 900. Whereupon, under date
of March 7th, levied an assessment of
$250,000 upon the association, to make
good the impairment of capital to that
AMOUNT .....t
This assessment was levied under a
positive promise made by committee
that visited Lacey that the amount as
sessed would be paid in one week at the
most.
On March 18th Lacey had not been
oIx &c hn 1f L1
ment, and on that date wrote Drew ask
ing what had been done. On March
18th Drew replied, saying: 1.-THE
board has not as yet sinaugurated
any measures to obtain the assessment,
and no portion has been paid in. Al
though the old board was reelected in
January last, several of them failed de-
signedly to qualify, or have rendered
their designations, among them ID. p.
Nichols, whom had hoped would ac-
cept, for the time being, at least, the
vice. presidency, and who is president of
the Central Trust company. l have
earnestly endeavored to supply the va
cancies in the board with other desira-
BILE men, but, under the circumstances,
few such are available"
Drew adds: "Outside OF the account
OF the city treasurer, who has all along
endeavored to assist 30 far as he could
by putting every day checks in the
bank to cover so far as possible his
drafts next day, through other banks.
or the keystone National bank, indi-
vidual deposits have diminished since
February 18th, a little more than $2,000,-
900. A large amount could be
collected from overdrafts and
overdue papers, and, in short,
if the directors of the bank would, as l
repeatedly suggested, take the work
into their own hands, intead of placing
it on the president, who is absorbed in
other matters necessarily connected
with the conduct OF the bank under the
present embarrassing circumstances.
from these sources within short time"
This letter by Drew concludes thus.
Il am greatly disappointed in finding
directors in the effort to rehabilitate the
bank"
The above reached Lacey on the 18th,
and three days later he closed the bank.
s'The bank was closed on the 10th of
March," continues Lacey, "and did
not reopen for business. The order to
close was given after an interview with
Marsh. He informed me of the fact
that certificates representing about
$500 shares of stock in the
keystone National bank had
been improperly delivered to John
Wanamaker during the lifetime of John
G. Lucas, and negotiations for the sur
render and cancellation or the same had
failed, forit the reason that Wanamaker
claimed to hold them as pledge for the
payment of certain sum OF money due
from the estate OF John G. Lucas, and
he declined to surrender the stock until
the debt was paid.
"The comptroller has been criticized
for three things: Z
"First-For having allowed Marsh to
remain in Office after his confession,
and not causing his arrest.
Second For delay in closing the
bank.
"Third-For delay in appointing re-
ceiver.
Gas to the first matter complained of
I have this to say: That
am nowhere charged with any
responsibility in connection with
criminal prosecutions, and a bank
examiner is held to have done his duty
as soon as he lays before the United
States attorney any facts involving
crime which may come to his knowledge
in the discharge OF his duties. Every bank
examiner is instructed and expected to
do this, and / could not avoid the con-
clusion that Drew had discharged his
duty after reading his letter of January
oath, in which he says he was assisted
in securing settlement with the Lucas
estate by United States District Attor
ney Read.
81 had right to suppose that from
that time on 10 the final arrest that the
United States district attorney was
fully informed as to Marsh's conduct;
also the clearinghouse committee, with
the directors OF the bank, who were
really the responsible parties, and not
the examiner.
"Second-For delay in closing the
bank. Idesire to say the comptroller is
governed by the provisions of the act of
June 30, 1876. The entire force of the
criticism is narrowed down to this:
That the comptroller, conscious of the
exercise of the discretion imposed upon
him by the statute, decided that
it was wisest and best to impose the
lighter of the two penalties which the
law provides, and give the bank four
teen days in which to pay an assess
ment. under section 5305, rather than
Immediately order it closed, with all
that such disaster means.
"Third-For delay in appointing a re-
ceiVer. This criticism is of very little