The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1891-06-19
Mr.. R.LACEY'SSTATEMENT
He Says Drew Did Not Report
Correctly.
THE BANKS TRUEsTATE CONCEALED

But whether This Was Done Intention
ally or Carlcssiy the Controller Does
Not Hazard an Opinion-The Examiner
Pleaded for Delay in His Early Letters.
WASHINGTON, June 15-The statement
prepared by Controller Lacey and sent to
Mayor Stuart, of Philadelphia, on the
course pursued by him with the Keystone
bank of that city has just been made pub
lie. The statement includes the letter Of
Bank Examiner Drew of Jan. "a, notify
ing him of the 1900, 900 0defalcation of Lucas,
the late president of the bank. In this
letter Mr. Drew explains how by adroit
manipulation of the accounts Of the bank
Lucas, with the assistance of Marsh, the
former cashier of the bank, abstracted
large sums of money from the bank to use
in speculations in real estate. Marsh, he
reported, was ignorantly led into these
transactions, and promised Lucas when
the latter was on his deathbed to continue
the deception under representations that
the money distracted would soon be re-
turned to the bank from the result of L,i-
cas- enterprises.
Drew Pleaded for Marsh.
Drew also reported that there was no
evidence that Marsh had profited by these
irregularities. He closed by hoping that
no publicity be given to the affair until
the bank should be rehabilitated or all
efforts to that end were found futile. Ac-
companying this letter was preliminary
statement of the banks condition, which
left the capital stock of half a million in
tact and a net surplus of S55,Sl9. Later
on-Jan. 27-Mr. Drew in an interview
with the controller at Washington stated
that in his judgment and in the opinion of
the clearing house committee the property
conveyed to the bank by the Lucas estate
was equal in value to the indebtedness
which had been concealed, and that in any
event the creditors of the bank were en-
tirely safe; also that to sever Marsh's con-
nection with the bank would excite sus-
picion, and that Marsh was thoroughly re-
pentent and was actuated by an ardent
desire to do all in his power to assist the
bank in recovering any sums which had
been improperly taken from it.
why He Did Not Close the Bank.
Mr.. Lacey says he did not close the bank
for the reason that he had no lawful
authority to do so upon the facts sub
mitted, and for the further reason that he
was advised by Bank Examiner Drew
that the capital of the bank was unim-
paired; that the creditors were therefore
fully protected and that prompt efforts
would be made to replenish the cash by
deposits of s300,OO to be made by the lead
ing directors and stockholders, which
eli al, - a.
assets became available. Further and
later reports from Drew convinced the
comptroller that the board of directors were
slow in putting matters in a satisfactory
condition, so OH March he levied an
assessment of $3.50, 900 upon the sharehold-
ers on the promise from committee of
directors of the bank that the assessment
would be paid within week. On March
Mr.. Drew complained of little active
support from the directors on the effort to
iehabilitate the bank. This reached the
comptroller on the 10th, and three days
later he closed the bank The bank then
remained in charge of the examiner for
ffty-one days. ...
Lacey Answers His Critics.
In answer to criticisms for delay in ap-
pointing receiver, Mr.. Lacey says it was
not made Immediately because it was the
duty of the comptroller to facilitate re-
sumption of business by the bank. 1t was
important, considering all the business and
municipal ramifications which the failure
involved, that plenty of time be given for
developments, in order to avoid the ap-
pointment Of some improper and inter-
ested person. No person, he says, can
show that any creditor, debtor or stock
holder has been damaged to the extent of
one dollar by reason of the delay.
What Mr.. Wanamaker Did.
The controller states that Postmaster
General Wanamaker ''never directly or in
directly suggested or solicited one days
delay in the closing of the bank, nor in
the appointment of receiver, except as
appears by the telegram hereinafter
quoted. In fact, have met him but once
during the present year. and that meeting
was on March 81, at the suggestion and in
the presence of Hon. A. b. Nettleton, then
acting secretary Of the treasury. This in
terview was the day after the Keystone
bank was closed, and the failure was fully
discussed.
HE substantially confirmed the infor-
nation | received from Mr.. Marsh, and
said that he held AS II pledge certificates
representing about $500 shares of stock in
Cne heySuOHe Dank, anN thaC he mad de-
clined to surrender them unless the Lucas
estate would pay him the amount his due
| urged him to use his influence in aid OF
the efforts being made to reopen the bank
He promised to look into the matter the
same night on his return to Philadelphia,
and telegraphed Mr.. Drew to call upon
him with statement of the assets and
Liabilities of the bank and to facilitate in
every way possible his taking an active in
terest in the schemes for reorganization. /
failed, however, in my attempt to enlist
him in the enterprise, and so ended all
communication between us on any sub
ject connected with the banks affairs, ex-
cepting the receipt of the following tele-
gram: ...t ...|
Mr.. Wanamaker's Telegram.
POsToFFICE DEPARTMENT.,
WAsHINGToN, ID. c., April z, 1891.
Hon. Edward 5 Lacey Controller
Mr.. Marsh, of the Keystone bank came down
last night to say that it was reported you
intend to appoint a receiver Of the keystone
unless something more definite was done to-
day. believe nothing would suffer from Civ
ing them twenty four hours longer at the end
or which they may put ON paper something