Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1891-06-15
The Comptroller Of Currency States
the Facts which led 10 the
Closing Of u.
MARSH ienoaANrLy LEO AsraAy
~ LUCAS.
Lacey Closed the Bank 10 Ascertain the
Amount To be Made Up By
Assessment.
~ Tslsuaph to tho ssvs
IACrS's STATEMENT.
A Document usisii,. tn the Downfall
OF the Keystone uanh.


OF the Keystone nanh.
WAIisurOs, June ii.-Af,or care.
fui preparation, aud after the submits
sion 10 his superior, the statement Of
Comptroller Of Currency Lacey, rvla.
tive 10 the downfall Of the Keystone
Hank u Philadelphia, has been made
public by the secretary " the treasury,
10 whom II IL addressed. IL u n ynlu.
miuOus document, contaiuing 300
words, aud cmhOdles tho corrcsIun.
dencc aud papers hearing upon tho
Quaker City'a financlafscandnl.
Thc statement, which IA In the form
Of communication 10 Secretary Eos.
ter. bcAp datc Of June 10Th, aud runs
substantially NJ follows
81 have the honor 10 submit here.
with statement Of tho facts leading
up 10 the final closing Of the Keystone
national tank aud the appointment Of
q receiver therefor.
The fifst information received by mo
In reference 10 what has been known
~ Lucas dcinlcati1n, was contained
ina communication addressed N me
by Bank Examiner Drew from phila.
dulphln, dated January -, 1871, and
received by mo January 9th.
~ TBis COMMUNICATION
Sir. brow rays thai on entering upon
the examination Of tho Kcystonu bank
on the 9TH lust. he was Informed by
the president that there would be de.
clossd, hitherto ciicctually concealed,
n debt 20 the hank u H. late president,
John &. Lucas, amounting 10 s11O,O11.
"Mr. Dfuw then explained how by
ndrolt manipulation u the accounts Of
the bank Lucas, with tho assistance
Of Marsh, tho former cashier Of the
hank, distracted large sums Of money
from the bank 10 use In speculnlions In
rial eetat. Mt Spring Lake and sea
Ulrt, New Jersey, and tho conatruc.
ton u n large building In Philadelphia
now occupied In part by H. hank.
"ro protect the bank NJ far as POSI-.
bio Drrw took measures, with IN. a-.
fislAnc- Of District Attorney Reed, 10
secure for tho bank, without publicity.
whatever property belonged 10 the
rstAt. u Lucas, and succeeded In oh.
tanning IN. property used by tho hank
~ n banking house for s225, 600 and the
property o, Spring l.hk, aud Sea Ultt.
Mnuh, Drew reported, was ignofantly
led Into thc.. transactions and prom.
lsed Luca. when the latter was
oS ms pEaTIlnED
10 continue the deception under repre-.
fcntatlOn- that the money attlfaclci
wouIi soon bo returned 10 tho bank
from tho result u Lucas enterprises.
Hu also reported that there was no
evidence that Marah had proft.d by
these Irregularities. Drew closed by
stating that beyond tho Director u the
bank, seven members Of tho clearing
house committee, counsel on either
side aud himself no ono had any
knowledge or suspicion, 20 far ~ he
could say, that the bank was In any
trouble, and he earnestly hoped no
publicity would be- given 10 the affair
until nflpr the bank should he fohahll.
ltnted or efforts 10 that .ni wuf, found
futlle.D Accompanying this letter was
the preliminary staicmento OF tn. hank's
condition, which, after remembering
all probable lors,s, LETT capital stock
Of $500, 900 Intact aud net surplus OF
Sia,sip. UPON IN. receipt Of THIS 70,
port the comptroller was confronted
with y grave responsibility,
L,cey's statement uhcn frNets 70
tho
FINANCIAL srRiNdENoY
ut many points aud refers TO tho cal
amitous result that might have fol'
lowed Immediately upon tho disclosure
OF tho situation Of afrestlng President
Mafrh. The Keystone National bank
had passed through severe crisis va
December and hal been able u
weather tho storm with soO0,0ll lees
nfsuls than IL had whom tliih report
reached tho comptroller, IL IA evident
that the comptroller could not ~ thlH
time lawfully have closed the hank,
nor could lac have even levied hn as
eensment 10 make good the impaired
capital, as mono existed according To
THE report.
January gJth Mr. Drew came 10
Washington aud In the Interview WIN
the comptroller stated that Ia hi. Judg'
in.nt and ia the opinion u the clearing
hotiss committee, the pfoporty conveyed
n tho hank by tho Lucas estate was
eoual I'm value q the Indebtedness
xyhi,h had been concealed aud that
In any event the creditors ~ tho bank
were entirely safe. IL was, honsNn,,
deemed necessary that additional hinda
Nluulu br llNAth W " NNhh - -
serve had been deficient for large
mart oi the time, since the run was IN
December, and while tho real estate
conveyed 10 tho bank would ultimately
produce sum equal 10 W" ueht Nhlnh
Il was 10 llquidAte, that the cash OF tue
bank needed 10 no promptly relhloroou'
either by the sal, Of the real estaiv OF a
reduction VI II. liv. discounts. ~ was
therefore, after very serious considera'
lion, deemed beet for the bank, for ~
creditors, for other banking i'tsocia'
tlons and for the city Of PhilAdelphla,
whose treasurer hnd an active account
IN the bank, that Drew should
CONTINUE THE EXANnEATioN
OF ia. bank and promptly place ~
assistant, Mr.. Jones, In charge 81 !he
hooks, with tho understanding mat ",
active directors Of the bank shouiu
visit Il daily. A..
Under these conditions and for These
Teasons, tho comptroller did MOI lnslr,
upon tho immediate Resignation o'
President MgTsh, although II was us
tinctly understood that he was 70 re-
main only 10 long aa his services WEI
absolutely required In adjusting 'hs
Irregularities which had grown W
under his management ~ he was
since tho death Of Lucas, the oniy W,
son living who was conycIsant VIII
the on.ration. which resulted w uisas