Evening star. [volume] (Washington, D.C.) 1854-1972, 1891-06-23
KEYSTONE BANK AFFAIRS.
Correspondence Between Examiner Drew
and Controller Lacey.

and Controller Lacey.
The official copy of all the CORES pondence be.
tween Controller Lacey, Bank Examiner Drew
and others. with reference to the affairs of the
Keystone Bank of Philadelphia. which was sent to
Mayor Stuart OF that city last. week and bv him
transmitted to councils in vestigating commit
tee, was given out for publication last night by
Chairman Van Osten of that committee The
correspondence is voiuminous, covering nearly
100 pages of typewriter copy, and much of it
has already been published through the reports
of the proceedings of the investigating COM
mittee and the statements Of the people con-
nected with the bank.
The first letter is from Mr.. Drew to Con-
troller Lacey and gives the result of his exam
nation of the banks affairs when he paid his
official visit on January 8 and when he was in
formed of the deficiency of $500 600. which had
been distracted by President Lucas. He also
gives in detail the measures he took to recover
the money from the Lucas estate and the sue
cess he met with IN obtaining the banks build
ing and portion OF the property at the sea
shore. He says that Marsh was ignorantly led
into the irregular transactions while cashier by
President Lucas and that the latter. on his
death bed, exacted a promise from Marsh to
continue the deception under representations
that the money distracted would soon be re-
turned to the bank from the result of the Lucas
enterprises.
Following this letter at frequent intervals
were letters and kilograms in reference to the
condition of the bank and of the efforts being
made to reorganize. On February Is Mr. Drew
wrote that he was about to make statement
Of the affairs of the bank to the board of
directors. and asked for written instruc tions
upon which he could act On the following day
he sent full statement of the condition of the
bank to the controller and with it the state
ment that it would take very long time to
fully elucidate the methods by which SO large
part OF the capital stock had been distracted
without disclosing the deficit in the books. He
added that he had been led to believe that
Marsh had only been the tool of a designing
chief. but late developments had made him
entertain suspicious of him.
Under date of February % Drew wrote that
II II was decided to assess the stockholders the
notice of assessment should be preceded by the
strongest advice TO the directors to have the
money paid in before the fact should be made
public and thus prevent run on the bank. In
reply the controller urged that prompt meas
ures be taken to rehabilitate the bank. and, I'M
less some other way could be found at once, he
would order an assessment of the stock to be
made at once.
After the assessment of S25, 900 had been
made there were a number of communications
passed IN reference to the payment, and. after
his patience had been exhausted the control
Ter telegraphed Drew, on March 10, to visit the
bank in the morning and wait his instructions.
On March 20 the telegram was sent directing
the bank to be closed.
On the same day Drew telegraphed to the
controller urging the appointment of a receiver
without delay and suggested the name of Mr..
Lynch. He also wrote long letter to his chief
giving an account of his actions in closing the
bank in detail and announced that the directors
and stockholders had been disappointed at the
sudden action of the controller, but after dis
cussing the matter had agreed that the action
was the best for all. On the following day he
wrote that there were strong probabilities that
the bank would be reorganized by wealthy men
who had signitied their intention of taking up
the matter.
On the same day Mr.. Lacey sent to Drew
the following telegram. marked confidential:
Call at the southeast corner of Sth and Spruce
streets at s o clock this evening, and give Mr..
W. close estimate of assets and liabilities. En-
courage all efforts to reopen the bank an | give
out no Information except such as will cOnduce
to that end, and then with great care"
The controller was informed frequently of
the various steps which were being taken to re-
organize the bank. all of which have been pub
lished from time to time.
On March % Drew wrote private letter to
Mr.. Lacey. in which he advised that no action
be taken against Marsh. as his services were in
dlspensable toward the investigation. Previous
to Marsh's arrest numerous letters and tele-
grams passed In reference to reorganization. II
one OF which Drew announced that Postmaster
Field had consented to accept the presidency.
butt was contradlcted next cay as his business
partners objected.
On May Mr.. Bardsley started to Washington
to confer with the controller but received q
telegram at Baltimore that Marsh had been ar
rested and he returned at once. The corre-
spondence closes with the kilograms from the
controller announcing the appointment Of Mr..
lardley as receiver Of the bank.