Evening journal., 1891-06-13
Did Controller Lacey Know All
About the Bank?
EXAMINER JONES SAYS he DID.

Jones, who Is very close to Bank Examiner
Drew, was on the stand, and gave the com
mittee information regarding Controller
Of the Currency Lacey's knowledge Of the
affairs Of the Keystone National bank
that has hitherto been kept carefully
guarded. This was that ON the 18th day
Of last February Controller Lacey wus
in this city aud personally visited the Key.
stone bank building aud was shown the
books and given a full insight into its con.
dition as known at that time by Bank
Examiner Drew.
wsga stnl Another SensatIon.
Another sensation was the statement
made by General Louis Wagner, the ex.
director Of public works. This statement
connected the name Of Assistant Secretary
OF the Treasury Nettleton with the attempt
to make Nelson L. Evans, director Of the
Spring Garden National bank, receiver az
the broken Keystone bank. Assistant Es
aminer Jones', when called 10 the stand
told when and how the keystone had been
examined, The discrepancy in t he ledger
Of the Keystone was first discovered by
him on Jan. ., 1891, but not by any infor
nation furnished by Examiner Drew.
But Lawrence Kept 1T work.
After the discovery nothing he said, was
done 10 stop Lawrence from attending to
his usual duties except to see that he made
no more false entries. On Feb ,, he said
he, by orders OF the examiner, took official
charge Of the books Of the bank Even
after the bank examiner took charge OF the
bank deposits we're received From Feb
5 to March 20 he did not know what was
done about discounts, but did know that
depositors were allowed to check out their
deposits II they saw fit. After the com
mittee had asked all the questions they
wished Assistant Bank Examiner Jones
said;
Lacey wns Wen Posted.
There is another thing which wish 20
state. Upon Feb. 70 Controller Lacey
was in this city. There was reception
held at the Hotel Lafayette which he at.
tended After it was over Bank Examiner
Drew brought Controller Lacey over Ia
the Keystone bank, and showed him the
books and explained TO him the condition
Of affairs as we then knew them to exist
! explained the padding Of the New York
/ Banking exchange accounts, and / IN
formed him ofthe due bills which had beer
| found. The difference found in the ledger
and the stock and bond accounts for which
the Lucas estate was held responsible AZ
that time was thoroughly explained 4
him. Controller Lacey understood al
that time AL about the Lucas defalcation
/ which al that time was understood 70 be
/ 5000, 600. Then the assets were considered
and Controller Lacey called the Sea Giri
and Spring Lake property worth 500 OOi
instead of 100000"
IL Caused a Sensation.
This statement Of Mr.. Jones caused q
| great sensation, as Controller Lacey's visit
to the bank had been kept q close secret
and Bank Examiner Drew has never, un
/ der the severe cross-examination he ha.
been subjected to, allowed himself TO Civ,
the slightest intimation Of It. Mr. Jone.
also stated that as an expert he did not be
lieye N was possible TO tell by the books o
| the Keystone bank how much OF the def
cit in the Keystone bank occurred befor,
John g. Lucas death and how much hat
occurred since.
General Louis wagner's Testimony.
Ex. Director Of Public Works Louis Wag
ner, who was asked to become president o
the Keystone bank at the time il was pro
posed TO reorganize il, testified that hi,
1 IohuttNAOu WIN biit nlhlltI arose lnFpuEi
his asking City Treasurer Bardsley TO men
tion him for the receivership. The DAY
after his conversation with Bardsley
which was on April 2, he received a letter
/ from Examiner Drew asking him to call
at the bank and upon doing so Mr. Drew
| asked him how he would like to be made
| president. He considered the matter foI
ten days, and then declined. He said that
4 ha fF1A he Il al 4.
but that Controller Lacey was willing tc
allow 5000, 600 for the good will Of the bank
and 1900, 900 would be subscribed At that
time they showed bills receivable for $780,.
600 or $500 900, and assets for about the
same amount. The bifls receivable which
he examined he considered worth about
sixty cents on the dollar, and the Sea Giri
/ property, regarding which he was we'll in
formed, he learned was worth about fifty
cents on the dollar. Mr.. Drew told him d
the overissue Of stock, but said that il had
all been called in. At that time he con
sidered it would take million dollars to
reorganize the bank.
| General Wagner, in concluding his testi-
mony, said: II was satisfied az the time
that something was wrong, but neither
Bardsley nor Young would tell us what it
was. While at the bank said TO Ex-
aminer Drew: Nelson r. Evans, OF the
/ Spring Garden bank, hear is to be made
receiver, as / understand Wanamaker is
backing him. Drew answered, i guess
not, and then said, that explains some
/ thing about the accounts OF the Spring
Garden bank, which did not understand
Assistant Secretary Of the Treasury Net
tleton is great friend Of Evans. Nettle,
ton has been a heavy borrower at the
| Spring Garden bank"
Another Big Shortage Of Bardsley.
Several other witnesses were examined
including Samuel b. Rowley. the presi-
| dent Of the Hero Fruit Glass Jar company,
and the father-in-law of Cashier Kennedy,
Of the Spring Garden bank. The com
mittee tried to elicit from him the admis-
sion that some of Bardsley's money went
| into the concern, but was unsuccessful.
Before the committee adjourned TO go
into executive session Mayor Stuart's
private secretary, Louis Betiler, arrived
with message TO the members Of the
/ committee. IL contained the report Of the
experts who are now investigating the ac-
counts Of John Bardsley and created an
other sensation. The experts reported
that they have discovered another en-
bezzlement of City Treasurer Bardsley
and that it amounted TO 100000.
This is in addition to all sums hitherto
reported. The missing $4,000 is money
} which the state had paid over to John