The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1891-06-20
SLOW In FINDING on.
Mr.. LACEY EXPLAINS ABOUT
THE KEYSTONE BANK.
The cosnpu oIicr says He Had No
Reason 10 KNOW That Marsh
was q Swindicr.

WARRINGTON June lo.--AIter carcfnl
incarnation and after submission 10 his
superiors the statement OF the Hon. T..
:. Lacey, comptroller OF the currency,
relative 10 the downfall OF the Key
stone bank OF Philadelphia, has been
made public by Secretary OF the Treas
ury Foster, 90 whom II Is addressed.
IL is a voluminous document contain
ing 5000 words, and cores
pondence and papers bearing upon the
Quaker City's financial scandal
The statement, which is In the form
| Of "A communication TO Secretary Eos
ter, bears date June 10, ana runs sub
s~tantially as follows;
.sSir: have the honor to submit
herewith "A statement of the facts lead
mo mn 10 the final closing of the Key
stone National bank and the appoint
ment of "A receiver therefor.
..The first information received by
me I'm reference to what has been
1 known as the Lucas defaulcation was
contained in a communication adj
dressed 10 me by William l.. Drew,
bank examiner for Philadelphia, dated
Jan. "a, 1891. and received by me on the
Goth Of the same month, The follow
ing is "A copy of the communication:
" Sir: On entering on the examina-
ton OF the keystone National ban of
this city I was informed by the presi-
lent that there would be disclosed "A
hitherto cffectually concealed debt 70
hand of its late president, John G..
Lucas, amounting TO S6OO,OOO. This
confession has been fully verified by
subsequent Developments made by me
in examining the bank.
LIT appears that Mr.. Marsh,
formerly the cashier OF the bank. was
at first ignorantly led into the irregular
transactions by the president, and that
the latter, on his deathbed, exacted "a
promise from Mr.. Marsh 10 continue
the deception under representations
that the money distracted would soon
be returned 10 the bank from the re-
suits of MIR. Lucas enterprise.
1T appears that Mr.. Lucas. during
his presidency of the bank, had, with
the c%onnivancc Of the cashier. MIR.
Marsh. now president of the bank, car
ried out by adroit manipulation of the
accounts of the bank for a series OF
years a scheme for systematic ahstrac-
tion from the bank OF large sums to
assist his speculations In real estate at
spring Lake and Sea Girt, y. j., as
I well as i'm the construction of the large
building on Chestnut street here, now
occupied In part by the nank. The
method of -conccalment of this large
diversion of the banks funds seems 10
have been 10 charge the amounts taken
20 the general account of deposits and
TO SO alter individr | balances on the
ledgers as To maze their aggregate
credits tit the general account at the
time of the examination.
Mr.. Lacey says he should not be
blamed for allowing Marsh TO remain
In office 81 long after his confession
He supposed that Drew and United
States Attorney Read would do what
ever was necessary in the way Of prose
cutting Marsh IL circumstances war
ranted IL. Mr.. Lacey further says that
MIR. Wanamaker never suggested delay
in the appointment OF a receiver. cX-
cept 20 send him IA telegram April 20
saying hat no harm would be done by
delaying the appointment twenty-four
hours longer.
In concluding Mr.. Lacey says:
III deem il my duty To say that inmy
opinion the several reports made ~
the bank examiner did not reflect the
true condition OF the bank under con
sidcration. The degree of blame, IL
any, which properly attaches TO Mr..
Drew is yet To be ascertained.
I'm the meantime, however. he has
been directed To suspend examieations
until the facts are submitted and a
conclusion reached"