The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1891-06-15
LACEY EXPLAINS.
shifting tho Blame for Failing to Close
tho Keystone Ennk.


tho Keystone Eank.
WAsHNGToa, June H.--Secre.ary Foster
has made public tho statement of Comp
troileF of the Currency Lacsy In regard to
tho scanda1 connected with the downfall Of
the Keystone National bnnls of Philadel-
phia. Comptroller Lacey says his first in
formation OF the Lucas defalcation was
from communication from Bank
examiner Drew on January "a last. Drew
SAID In his communication thnt on entering
upon nm examination OF tho keystone bank
~ Jannary 8 he was told by the president
concealed debt of 100000 due the concern
from lts late president, John 9. Lucas.
Drew also explained how, by adroit manip-
ulation OF the accounts of the bank, Lucas,
with tho assistance of Cashier Marsh, took
large sums of money from the bank to use
in real estnto speculations Mt Spring Lake
and Sea Girt, n. j., and the construction Of
pied IN part by the bank. To protect the
bank as far ns possible, Dew, with the as
siatance of United States District Attorney
Kead, took measures to secure without pub
,licitv, property belonging to the Lucas estate.
de obtained the bank building worth
S225.O 900. and property at Spring Lake and
sea Gilt. The idea was to keep quiet the
fact that the bank WAS in trouble until it
could be rehabititated or effects to that
end were found futile. Marsh, Drew re-
ported, was ignorantly led into these trans
actions and promised Lucas when the latter
WAS on his doath-bed to continue the de-
ception under representations that the
to the bank from the result of Lucas en-
terprises. He also reported that there was
no evidence thnt Marsh had
prohted by these Irregularities.
The preliminary statement of the banks
condition. accompanying Drew's letter,
after considering all probable losses, left
the capital stock of $50O,OOO intact and a
net surplus of $53.e1S.
Comptroller Lacey reyerts to the grave
responsibility that confronted him. He
says the financial stringency was such that
calamitous results might have followed a
disclosure of the banks condition or the
oustlnR of President Marsh. The keystone
bank, he says. passed through severe cri-
sis in December. and weathered the storm
with $60O,oo0 less assets than it had when
its report reached the comptroller. It is
evident. the comptroller says, that he could
not at this time have lawfully closed the
bank, nor could he have ever levied an as
sessment to make good the impaired capi-
tai, as mono existed, according to the re-
port.
In an interview with the comptroller in
opinion and that of the clearing house
committee that the property conveyed by
the Lucas estate equalled in value the in
debtedness which had been conceded, but
that additional funds should be placed in
the bank, as its revenue had been deficient
for large part of the time since the run in
December. 1t was therefore deemed best
for the bank and its creditors, for other
banking associations, and for the city oi
Philadelphia, whose treasurer had I'll
amount there, that Drew should continue
his account and that Marsh should CON
tinue president just SO long as his services
were necessary in adjusting the irregulari-
ties which had grown up under his manage
mens, anu as he was the only person living
who was convelsant with the operations
which had resulted 30 disastrously to the
BANK. When the examination developed
that the capital was impaired $780, 0.00O an
assessment was levied by the comptroller on
March to make it good. This was to be
paid in week, but was not. The directors
OF the board who had been reelected either
failed to qualify or resigned. Drew re-
ported to the comptroller that the city
treasurer tried to assist the bank as far as
proper by deposting check every day to
cover his drafts next day. D-ew's letter OF
March 16 concludes thus: II am greatly
disappointed in finding 30 little active sup.
rehabilitate the bank.'' .s.n. -
The comptroller declares that Drew u1l
his duty il assisting to secure the settle
ment with the Lucas estate, and blames
the delay in closing the bank on the di-
rector. He says: ''Ihe comptroller in the
conscious exercise of the discretion imposed
OH him by the statute, decided that it was
wlsest and best to impose the lighter of the
two penalties which the law provides, and
give the bank fourteen days in which to
pay the assessment rather than immediately v
order 1t closed with all that such disaster
means."
Marsh informed the comptroller that GER
t1ticates representing 1000 shares of stock
in the Keystone National bank had been
improperly delivered to John Wanumake r
during the Lifetime of John @. Lucas, and
negotiations for their surrender and can
collation. had failed for the reason that
John Wanamakar claimed to hold them as
a pledge for the payment OF money due him
from the Lucas estate. Marsh also said
Wanamaker declined to surrender the stock
until the debt WAS paid.
In conclusion the comptroller SAYS: "In
Justice to ono whose name has been
brought into tho discussion of this failure.
desire to say that John Wanamaker has
mover. directly or indirectly. suggested OF
solicited one days delay in the closing of
the bank or the appointment of receiver.
LII laCt, J. laV5 nleG NM DuG once Uurlu 2
the present year, and that meeting was on
the 2lst day of March, at the suggestion
and in the presence of A. b. Nettleton, act
ing secretary of the treasury. He said he
held as a pledge certificates representing
about 800 shares of stock in the keystone
bank. l urged him to use his influence i'll
the efforts being made to reopen the bank
| failed, however, in my attempt to enlist
him in the enterprise, and 30 ended all
communication between us excepting
the following telegram, dated Washington,
April 29 Marsh came down last night to
say 1t was reported you intend to appoint a
receiver unless something more definite
was done to-day. / believe nothing more
definite was dono to-day. / believe moth
ing would suffer from giving them twenty
four hours longer, at the end of which they
may put on pa. er something more definite
to be presented TO yon. From what he says
they are getting along pretty we'll III secur-
ing subscriptions to tho new stock.
would recommend that the appointment of
Il receiver be deferred. say one day, until
he has an opportunity to state something
more definite. John WANAMAKER.'
The bank was closed March and the re-
ceivar appointed Maya.
Enrdsley VIII Tell All.
PuILADELpIuA. June 14.-John Bardsley
proposes to make "A full and complete state
ment of his transaction with the public
funds when he appenrs in court ueyt weak