Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1891-06-15

was the United States attorney for Phila-
delphia) and the bank examiner himself
were the only persons who bad knowledge
the inde ebtedness on the Lucss estate and
Of the conveyance Of property which, %
far - report shows, made good the sum
absHacted. II 10 also 10 be observed in
Mr.. Dfew's opinion. presumably upon con-
sultation with the gentlemen named and
upon their advice, il 10 important that
NO publicity be given to the affair
until the bank 10 fully Yehabiliatased
Upon receipt Of this report the comptroller
vas confronted with grave responsibility.
The entire country had recently passed
through . crisis. caused BY severe none
tary ssrinaency, which had made abs olutely
necessary the issuing Of clearing house
ceftiacste 10 three great sesboard cities.
The uneasiness caused BY this situa-
ton 10 greatly aggravated in Philadelphia
by reason Of the failure Of several large
private and state banking houses, and BY .
run made upon the Keystone National bank
in December. under the effects OF which Il
was still suffering. Fur these reasons the
stu stion was one requiring the most con-
siderate and careful treatment and anything
tending to shake returning confidence 10
the financial situations was 70 be studiously
avoided. The renewal Of . run upon the
Keystone National bank might have in
volved other banking Institutions and pro-
duced widespread disaster. II 10 also true
that the Keystone National bank passed
through severe cIisis In December and
had been able to weather the storm with
5000 600 less assets than they had when
this report reached the comptroller.
II 10 evident that the comptroller could
not as this time lawfully have closed the
bank. nor could he even have levied an
assessment to make good the impairment
Of the capital, - none existed, according
to this report. The danger was for the
time past, and the comptroller decided TO
await the arrival Of Mr.. Drew, ON Jan. ~,
the day following the receipt Of his letter.
Il was represented to the comptroller by
Mr.. Drew at this interview that, in his
judgment and In the opinion Of the clearing
mouse committee, the property conveyed to
the bank BY the Lucas estate was equal in
value TO the indebtedness concealed; in any
event creditors Of the bank were entirely
safe, and prompt eff rts would be made 20
replenish the cash by deposits Of $500 600
10 be made BY the leading directors and
stot kholders, which should place IL In funds
Further aud later reports from Drew con-
vinced The comptroller that the board Of
directors were slow in pu ting matters In q
satisfactory condition. 50 on March 7th he
levied an assessment Of $3.50 COO upon the
share holders. On promise from the c)m-
mittee Of directors Of the bank that the
assessment would be paid within = week.
On March IA, Mr.. Drew complsined Of
little sctive support from the directors
On ,be effort to fehabilitate the bsnk
This reached the comptroller on the 18th,
and three days later he closed the bank.
The bank then remained in charge Of the
examiner for fifty-one days. In regard to
the delay in appointiog . receiver, Mr..
Lscey says 1t 10 not done immediately be-
Cause IL wss the duty Of the comptroller to
facilitate the resumption Of business by the
bank.
Il was important, considering sll business
AID municipal notifications which the
failure involved, that plenty time be given
for developments, in order to avoid the
appointments Of some proper interested
persons. No person, he says. can show
any creditor or stockholder, that IL damaged
to The extent Of one dollar by reason OF the
delay.
Ths comptroller states thst Postmaster
General Wansmaker never directly or
indirectly solicited one days delay in the
closing Of the bank, nor in the appointment
Of . receiver, except ~ appears in the tele-
gram hereinafter quoted. 10 fact ! have
met him but once duriaa the present
year. That meeting wss on the 2lat day
Of March, at the suggestion and ia
presence Of Hon. A. b. Nestleto-, Il en-
acting - secretary OF the treasury. Thi,
Interview Vas the day after the Keystone
bank failed sad The failure discussed. He
subsequently confirmed the information
derived from Marsh, and said he held ~
pledge, ceftifcstes representing about 2500
shares Of stock in the Key stone bank snd
he had declined to surrender them unless
the Lucas estate would pay him the
suouats due. urged him 70 use bis in-
fuence in cid Of the efforts being msds 70
reopen the bark. He promised TO look
into the matter the same night on his re-
turn to Philadelphia, and teiegrsphed Mr..
Drew to call upon lin With . statement Of
the assets ard liabilities Of the bank and 10
facilitate in every way possible his taking
scttve inte1et In schemes for reorganiz ation.
failed In my attempt to enlist him 10 the
entrfpRi,s, and % ended all communication
between us on any suejecs connected With
the banks aaaifs. excepting the rsceipt Of
the following telegram from the postofice
d. pntment:
Hox EDwARp 8. LACEY. Comptroller:
| MIR. Marsh, Of the Keystone Bank came
down last right TO say that IL was reported
that you intended 70 sppoins receiver Of
tbs Key store Bank uoless there va
sometting more def1i:e done today.
believe nothing would suaef from giving
them "a hours longer, ~ the end Of which
they may put on paper somstbiog more
definite 70 be presented {, you. From
vhat he cay they are getting alang pretty
we'll In securing subscriptions 10 the Des
stock. / would recommend that the ap.
| pointment Of receiver be dsfsrssd Say
oas day. until be had On opportunity 70
state somethicg more deflcits.
(5isnsd ] JoHs WAsAnAkEs.
In cusciadipg his sta1sns Il Mr.. Lscey
ssys Y II deem II my duty 70 ssy, In nj
| opinion, the several reports mHds by th4
bank examiner did NOS ref Ct the true cor
ditisn Of the bank under con.idefation
The degree Of blame, II any, which prop
e1ly sttsches Mr.. Drew, 10 yet - b ssceT
lts nsd. Hs Il sntttl a, by rsssel Of hi
1sg sEd hitherto acceptable service, 10 al
4 iapaxtAl invesjeaiion end fsif hearing
He hes recently been - fully employed B,
Fsasea Of ~ failure of the Ksysteao o.,
6psing Garden tsnks thas Il hes = ye
been inpfscticshls 70 giye tbs constdsea
tn which ~ Importance dsnaeds In d
| Dsanafns hs has BEEN dtfecsed y euepsn
sm0inatioas until ths facts have besn sst
/ nittsd ~ ceaciusioa ssached."
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