Telegram-herald. ([Grand Rapids, Mich.) 18??-1892, 1891-06-16
HI HAS EXPLAINED ALL
ComPtroiler Lacey speaks on the
Keystone BANK Affair.
WisiAiEER IS FULLY EyOyERATED
The fasfftatssa Wsala Have Been Closed
sooner b. al kx.mia<E
DEs~s statement Bs<A
EIslsaains

ftisas - made pubic IL Il a very
lengthy document. making forty pages
OF type-wrItten matter. 1t states
thas his first information was a
communication from Bank Examiner
Drew dated January "a. IN which he
stated that the accounts OF the bank
showed a hitherto concealed debt
- its late president. Lucas. of
s60o. GOO. which had been con-
eealed by manipulation Of the ac-
counts for a series OF years by
changing the accounts taken by
Lucas 70 the general accounts OF de-
positors and so altering the individual
accounts on the ledger as 10 make the
aggregate credits 1T the general ac-
count This has been done with the
conntyzncs of Marsh, who was cashier
during Lucas life time and who be-
came president AZ his death
The report Of Examiner Drew showed
that property OF the Lucas estate valued
a. s225. 600 had been secured through
the assistance of the United States
district attorney, and that IL was
hoped more might be added TO it.
lie added that the directors ex-
pressed a desire 20 raise $500, 900 more
10 put into the bank. tie also stated
that Marsh had promised Lucas on his
deathbod to continue the deception in
the assurance that profits from in
vestments made by Lucas with the alb
strasted funds would replace the entire
amount
Comptroller Lacey states that he
recognized that the responsibility was
~ - .~ -
delay because of promises that the
amount would be made good by the di-
rectorS. and that an immediate closing
of the bank would proably cause
a renewal OF the serious financial
troubles and monetary strinsency
through which the country had but re-
Gently passed and produce widespread
disaster. Nor could he have lawfully
closed the bank. as IL did rot then ap-
pear that It's capital was impaired.
He had entire confidence in Bank
Examiner Drew, who was one of the
oldest examiners, having served under
Compt-ouers Knox. Cannon. Trenholm
and Lacey. lie urged the examiner to
complete his examination and present
revised statement of the condition Of
the bank
On February - he received this re-
port, which disclosed an impairment Of
capital of $l25, 600 but did not indicate
insolvency. rs IL still left the assets of
the bank $685. The report stated
that the examiner was not fully salts
tied with the course OF Marsh and that
he had for day or two been forced to
entertain suspicious Of him. 1t stated
that n committee OF the directors would
shortly visit the comptroller.
The comptroller on March received
final aud formal itemized report of
the condition of the bank and then
levied an assessment Of $3.50, 900 on the
association 20 make good the impair
ment of the capital. announcing that
unless Ii was met receiver would be
appointed A committee from the bank
had in the meantime assured the comp
troller that this would be met within
one week.
On March IA the examiner reported
that none of the amount had been paid
in and that several of the directors
elected ia January had failed To qualify
aud did not seem inclined TO zeal
ously cooperate. He had also been
unable to supply the vacancies
In the board OF directors He added
that the city treasurer had cudeavored
To- aid the bank as far as he properly
could bv putting in checks daily rs far
as possible to cover the next days
drafts through other banks.
To this Comptroller Lacey replied on
March II that unless the payment of
81 ha mt
was made in FIVE days he would take
peremptory action On March 10
Marsh visited the comptroller and
after a statement from him the comp
,roller ordered the bank closed. He
also consulted Nh. department of JUS
tice a. TO the arrest Of Marsh. but was
ndvised against IL. as 10 was not thought
a man who voluntarily confessed the
Lucas dcfalcation and made trip To
Washington 10 give details would at
temp. TO Zee.
As 20 the delay In closing the bank.
he had no power to do SO until an inn
pairmsut OF capital and failure to-
make the same good was shown. or he
Is satisfied of the insolvency of the
bank Az soon as tbs point was
reached the bank was closed. He
also refers again 20 the disas-
,rous effect that an earlier action
would have had on the general finances
Of the country IN the unsettled condi-
ton following the financial troubles
last winter. The delay ia appointing
n receiver was only such "a was neccS-
sary and usual IN selecting a proper
man for the position.
The comptroller states very explicit
iy that Mr. Wanamaker. although
holding $500 shares of the bank which
he had received from Lucas as pledged
certificates. never directly or indirect
" suggested delay in closing the bank
or appointment cf q receiver. except in
ore telegram on April 3 - which he
said that Marsh had indicated good
progress in securing subscriptions, and
that one DAYS delay in the appoint
usns OF a RECEIVER would be advisable
Mr. Lacey says lie should not be
blamed for allowing Marsh 10 remain
90 office 50 long after his con
fessieu. RE supposed that Drew
and United states Attorney Read
would do whatever was nee~s-
sarv Tn the way OF prosecuting Marsh
a. circumstances warranted IL Mr.
Lacey further saws that Mr.. Wara-
maker never suggested delay IN he sp-
rointlnent of a receiver except u send
s-sn (. telegraph April - saying thar
no harm would be doos By delaying ths
appointment twenty-forr hours longer
Tie closes ~ saying that Bank Ex